STATE OF MAINE SUPERIOR COURT
HANCOCK, ss CIVIL ACTION DOCKET NO. AP-2003-17 AP-2003-18 AP-2003-19 ~ oy AP-2003-20 - fi f° i i H AAl- zy mt rl DARLING’S, ) d/b/a DARLING’S AUTO MALL ) ) ) Plaintiff/Appellee ) ) v. ) DECISION AND ) ORDER DAIMLER CHRYSLER MOTORS ) COMPANY, LLC, ) ove ) ) Defendant/Appellant)
BIN Bu oe
This matter is before the Court on the Defendant’s, Daimler Chrysler Motors Company LLC (herein, Chrysler”) appeal pursuant to Rule 76D of the Maine Rules of Civil Procedure from judgment entered by the District Court on September-3,-2003, in favor of the Plaintiff, Darling’s. Chrysler contends that Darling’s is not entitled to supplemental reimbursement for these four warranty claims because Darling’s failed to provide sufficient or reasonable documentation to verify these claims pursuant to 10 M.R.S.A. §1176.’ A hearing was held on this matter on March 26, 2004.
1 The United States District Court in addressing the long, complex, and litigious history of the enactment of 10 MLR.S.A. §1176 described the following ongoing dispute, which is present here:
the Manufacturers and Dealers have been engaged for nearly three decades in Maine in an elaborate and contentious game of economic, political, and legal chess. The battle lines in this dispute have been drawn over how much money the Dealers will receive
hack from the Manufacturers when performing work Under manufacturer warranty.
Since the parties themselves have been unable over the course of the last three decades to negotiate satisfactorily their conflicting positions in the warranty reimbursement area they have each periodically sought to enlist the support of the legislative and judicial arms of government. Each legislative action has been followed by resort to the judicial branch, spawning new legislation and new judicial rulings, a seemingly never endin cycle, perfectly exemplified by the instant case. °
Alliance of Automobi Aluance of Automobile Manufacturers vy. Gwadosky 2004) (J. Woodcock). urers v. Gwadosky, docket number 03-154-B-W, *3-4 (D. Me., Feb. 13 Background
This appeal concerns a motor vehicle dealer’s requests for “supplemental” reimbursement from the manufacturer for warranty repairs pursuant to 14 M.R.S.A. §§7481 et seq. and 10 M.R.S.A. §1176 (warranty reimbursement between motor vehicle franchisor and franchisee). Essentially, the dispute arises from Darling’s submissions of claims for warranty reimbursement, which were not fully allowed by Chrysler. Darling’s is now seeking to recover the difference between the amount paid by Chrysler and the amount which represented Darling’s’ alleged customary charges for labor and parts charged on non-warranty work.
Darling’s routinely submits claims for warranty reimbursement through Chrysler’s computerized system, the Dealer Information Access Link (DIAL), through which Darling’s received reimbursement on the four claims at issue. Darling’s also submitted an additional claim for “supplemental reimbursement” on these four claims at issue, which Chrysler denied, stating Darling’s “intentionally” failed to provide sufficient information to make it practicable for Chrysler to match these claims to Darling’s prior submissions through DIAL and to verify that they were properly payable.
Darling’s is a franchisee of Chrysler at its Ellsworth location. As such, the
provisions of Maine’s auto franchise act (10 M.R.S.A. §§1171 et seq.) apply here.
However, only §1176is at issue on this appeal Chrysler through DIAL. The data that a dealer may input into the DIAL system is limited by fixed variables, which a dealer is unable to adjust. The DIAL system contains a fixed variable for labor reimbursement requests. The DIAL system applies Chrysler’s own flat rate time manual. Darling’s uses a different flat-rate manual, the Motor Times Manual, to determine the cost of labor.
The Motor Time Manual uses different time allowances for various repairs than the Chrysler time manual. Darling’s’ Motor Time Manual only fixes the time allowance, not the hourly rate. The DIAL system does not recognize the Motor Manual time allowances. Therefore, after putting its preliminary submissions into the DIAL system, Darling’s submitted a supplemental claim to recover the difference between the amount paid by Chrysler (determined by the Chrysler time manual) and the amount which represented Darling’s customary charges for labor (determined by the Motor Manual) and parts charged on its non-warranty work.
These four claims were tried together before the District Court on June 18, 2003. On July 18, 2003, both parties submitted post-trial briefs. On August 4, 2003, the District Court issued a Memorandum of Decision, but reserved judgment and invited Darling’s to supplement the record regarding its practice of adding 8% to its labor charges to Chrysler. Darling’s’ counsel submitted a letter explaining the 8% charge.” Chrysler objected to the Court’s consideration of this letter, arguing it was an “untimely, non- evidentiary, post-trial supplementation of the record.” The District Court issued a memorandum stating it was satisfied with Darling’s explanation, and on September 3,
2003, the Court entered Judgment in Darling’s favor on all four claims.
* The letter stated the 8% charge is a miscellaneous material fee that is added to the customer’s bill as an 8% labor charge (capped at $40.00) to cover disposal of hazardous materials. verify that it charges its non- ~“warTanty customers the same rates that it charges Chrysler; (2) not requiring Darling’s to provide the vehicle identification number (VIN) for each vehicle repaired so that Chrysler can match the supplemental requests to Darling’s’ DIAL submissions; (3) permitting Darling’s to use the Motor Times Manual to calculate labor charges; and (4) permitting Darling’s to explain the 8% charge after the close of
evidence.
Discussion
A. Standard of Review Pursuant to Rule 76D of the Maine Rules of Civil Procedure Chrysler may appeal only on questions of law. Furthermore, “[a]ny findings of fact of the District Court shall not be set aside unless Clearly erroneous.” M.R.Civ.P. 76D. Thus, unless the District - Court® committed an error of law in concluding that the rate of reimbursement claimed by - Darling’s was appropriate, the Motor Manual used by Darling’s to determine the labor rate is legally permissible, that Darling’s charged the same rates for warranty and non- Warranty work, and that Darling’s complied with the verification required by 10 M.R.S.A. §1176, then the judgment must be affirmed. See é.g. Buffington v. Arnheiter, 576 A.2d 751, 752 (Me. 1990) (holding that an appeal by a party from a District Court
judgment to the Superior Court is restricted to questions of law).
> See Darling’s Auto Mall v. Daimler Chrysler Motors, docket numbers 02-SC-193, 02-SC- 194, 02-SC- 213, and 02-SC-214 (Me. Dist. Ct., September 3, 2003) (J. Staples).
B. Maine Statutory Law I. “Particularized Claim” Requirement of 10 M.R.S.A. $1176 The State of Maine regulates warranty reimbursement levels by statute. See 10 MLR.S.A. 811765 Chrysler contends that Darling’s failed to provide sufficient or reasonable documentation to verify its supplemental claims as required by §1176; therefore, Darling’s is not entitled to supplemental reimbursement. Specifically, Chrysler
argues that Darling’s needed to submit the vehicle identification number (VIN) for each
verification requirement of $1176.
Oe
* The term “particularized claim” does not appear in §1 176, but it is a term often used to describe the requirements of §1176,
5 10M.R.S.A. §1176, entitled “Warranty” provides in pertinent part as follows:
Free access — add to your briefcase to read the full text and ask questions with AI
STATE OF MAINE SUPERIOR COURT
HANCOCK, ss CIVIL ACTION DOCKET NO. AP-2003-17 AP-2003-18 AP-2003-19 ~ oy AP-2003-20 - fi f° i i H AAl- zy mt rl DARLING’S, ) d/b/a DARLING’S AUTO MALL ) ) ) Plaintiff/Appellee ) ) v. ) DECISION AND ) ORDER DAIMLER CHRYSLER MOTORS ) COMPANY, LLC, ) ove ) ) Defendant/Appellant)
BIN Bu oe
This matter is before the Court on the Defendant’s, Daimler Chrysler Motors Company LLC (herein, Chrysler”) appeal pursuant to Rule 76D of the Maine Rules of Civil Procedure from judgment entered by the District Court on September-3,-2003, in favor of the Plaintiff, Darling’s. Chrysler contends that Darling’s is not entitled to supplemental reimbursement for these four warranty claims because Darling’s failed to provide sufficient or reasonable documentation to verify these claims pursuant to 10 M.R.S.A. §1176.’ A hearing was held on this matter on March 26, 2004.
1 The United States District Court in addressing the long, complex, and litigious history of the enactment of 10 MLR.S.A. §1176 described the following ongoing dispute, which is present here:
the Manufacturers and Dealers have been engaged for nearly three decades in Maine in an elaborate and contentious game of economic, political, and legal chess. The battle lines in this dispute have been drawn over how much money the Dealers will receive
hack from the Manufacturers when performing work Under manufacturer warranty.
Since the parties themselves have been unable over the course of the last three decades to negotiate satisfactorily their conflicting positions in the warranty reimbursement area they have each periodically sought to enlist the support of the legislative and judicial arms of government. Each legislative action has been followed by resort to the judicial branch, spawning new legislation and new judicial rulings, a seemingly never endin cycle, perfectly exemplified by the instant case. °
Alliance of Automobi Aluance of Automobile Manufacturers vy. Gwadosky 2004) (J. Woodcock). urers v. Gwadosky, docket number 03-154-B-W, *3-4 (D. Me., Feb. 13 Background
This appeal concerns a motor vehicle dealer’s requests for “supplemental” reimbursement from the manufacturer for warranty repairs pursuant to 14 M.R.S.A. §§7481 et seq. and 10 M.R.S.A. §1176 (warranty reimbursement between motor vehicle franchisor and franchisee). Essentially, the dispute arises from Darling’s submissions of claims for warranty reimbursement, which were not fully allowed by Chrysler. Darling’s is now seeking to recover the difference between the amount paid by Chrysler and the amount which represented Darling’s’ alleged customary charges for labor and parts charged on non-warranty work.
Darling’s routinely submits claims for warranty reimbursement through Chrysler’s computerized system, the Dealer Information Access Link (DIAL), through which Darling’s received reimbursement on the four claims at issue. Darling’s also submitted an additional claim for “supplemental reimbursement” on these four claims at issue, which Chrysler denied, stating Darling’s “intentionally” failed to provide sufficient information to make it practicable for Chrysler to match these claims to Darling’s prior submissions through DIAL and to verify that they were properly payable.
Darling’s is a franchisee of Chrysler at its Ellsworth location. As such, the
provisions of Maine’s auto franchise act (10 M.R.S.A. §§1171 et seq.) apply here.
However, only §1176is at issue on this appeal Chrysler through DIAL. The data that a dealer may input into the DIAL system is limited by fixed variables, which a dealer is unable to adjust. The DIAL system contains a fixed variable for labor reimbursement requests. The DIAL system applies Chrysler’s own flat rate time manual. Darling’s uses a different flat-rate manual, the Motor Times Manual, to determine the cost of labor.
The Motor Time Manual uses different time allowances for various repairs than the Chrysler time manual. Darling’s’ Motor Time Manual only fixes the time allowance, not the hourly rate. The DIAL system does not recognize the Motor Manual time allowances. Therefore, after putting its preliminary submissions into the DIAL system, Darling’s submitted a supplemental claim to recover the difference between the amount paid by Chrysler (determined by the Chrysler time manual) and the amount which represented Darling’s customary charges for labor (determined by the Motor Manual) and parts charged on its non-warranty work.
These four claims were tried together before the District Court on June 18, 2003. On July 18, 2003, both parties submitted post-trial briefs. On August 4, 2003, the District Court issued a Memorandum of Decision, but reserved judgment and invited Darling’s to supplement the record regarding its practice of adding 8% to its labor charges to Chrysler. Darling’s’ counsel submitted a letter explaining the 8% charge.” Chrysler objected to the Court’s consideration of this letter, arguing it was an “untimely, non- evidentiary, post-trial supplementation of the record.” The District Court issued a memorandum stating it was satisfied with Darling’s explanation, and on September 3,
2003, the Court entered Judgment in Darling’s favor on all four claims.
* The letter stated the 8% charge is a miscellaneous material fee that is added to the customer’s bill as an 8% labor charge (capped at $40.00) to cover disposal of hazardous materials. verify that it charges its non- ~“warTanty customers the same rates that it charges Chrysler; (2) not requiring Darling’s to provide the vehicle identification number (VIN) for each vehicle repaired so that Chrysler can match the supplemental requests to Darling’s’ DIAL submissions; (3) permitting Darling’s to use the Motor Times Manual to calculate labor charges; and (4) permitting Darling’s to explain the 8% charge after the close of
evidence.
Discussion
A. Standard of Review Pursuant to Rule 76D of the Maine Rules of Civil Procedure Chrysler may appeal only on questions of law. Furthermore, “[a]ny findings of fact of the District Court shall not be set aside unless Clearly erroneous.” M.R.Civ.P. 76D. Thus, unless the District - Court® committed an error of law in concluding that the rate of reimbursement claimed by - Darling’s was appropriate, the Motor Manual used by Darling’s to determine the labor rate is legally permissible, that Darling’s charged the same rates for warranty and non- Warranty work, and that Darling’s complied with the verification required by 10 M.R.S.A. §1176, then the judgment must be affirmed. See é.g. Buffington v. Arnheiter, 576 A.2d 751, 752 (Me. 1990) (holding that an appeal by a party from a District Court
judgment to the Superior Court is restricted to questions of law).
> See Darling’s Auto Mall v. Daimler Chrysler Motors, docket numbers 02-SC-193, 02-SC- 194, 02-SC- 213, and 02-SC-214 (Me. Dist. Ct., September 3, 2003) (J. Staples).
B. Maine Statutory Law I. “Particularized Claim” Requirement of 10 M.R.S.A. $1176 The State of Maine regulates warranty reimbursement levels by statute. See 10 MLR.S.A. 811765 Chrysler contends that Darling’s failed to provide sufficient or reasonable documentation to verify its supplemental claims as required by §1176; therefore, Darling’s is not entitled to supplemental reimbursement. Specifically, Chrysler
argues that Darling’s needed to submit the vehicle identification number (VIN) for each
verification requirement of $1176.
Oe
* The term “particularized claim” does not appear in §1 176, but it is a term often used to describe the requirements of §1176,
5 10M.R.S.A. §1176, entitled “Warranty” provides in pertinent part as follows:
labor when not performed in Satisfaction of a warranty; provided that the franchisee’s rate for labor not performed in Satisfaction of a warranty is routinely posted in a place
Any claim made by a franchisee for compensation for parts provided or for reimbursement for labor performed in satisfaction of a warranty must be paid within 30
warranty created by the franchisor by performing labor in a professional manner or by providing parts required in accordance with generally accepted standards.
The Court notes that §1176 was amended in the last Legislative session. The version applicable at the time of the small claims hearing is stated above. 1998 ME 132, 96; 719 A.2d 111 (stating that accomplishing the objectives of $1176 necessarily requires that a dealer submit a claim that is sufficiently individualized to enable a manufacturer to Satisfy its statutory obligations).
The Law Court has shed little light on the substance of a claim submitted bya dealer that is sufficiently individualized to enable a manufacturer to Satisfy its obligations
under §1176. In Acadia Motors, Inc. v. Ford Motor Co., the Law Court only tells us that
a dealer’s claim for reimbursement under §1176 simply for “all warranty parts” is — insufficient. 844 F. Supp. 819, 825 (D. Me. 1994), aff'd in part, rev’d in Part on other grounds, 44 F.3d 1050 1 Cir. 1995). On the other hand, a dealer’s claim for reimbursement under §1176, which specified the dealer’s original computerized claim number, the retail amount claimed, the amount the dealer received under the nationalized
system, the nature of the claim (parts or labor), and the difference between the amount received and the retail Price was held to be sufficient for the manufacturer to Satisfy its
statutory obligations. Darling’s v. Ford Motor Co., 1998 ME 232, 97,719 A.2d 111.
Darling’s d/b/a Darling’s Bangor Ford v. Ford Motor Co., 1998 ME 232,97, 719 A.2d
111.
Chrysler further argues that it is entitled to tequire Darling’s to submit 100 non- warranty customer-paid service repair orders to verify that Darling’s charges its non- warranty customers the same rates as it charges Chrysler. As support for its argument
that this request was reasonable, Chrysler relies on the Law Court’s decision in Darling’s
v. Ford Motor Co., 1998 ME 232, 719 A.2d 111° and points to the Legislature’s most
recent amendment to §1176.” The Court finds that Chrysler’ s argument must fail because at the time it denied Darling’s supplemental claims for reimbursement, §1176 was silent
as to suggested methods for a manufacturer to verify that the dealer charges the same
° In Darling’s v. Ford Motor Co., the Law Court held that §1176 does not prohibit a manufacturer from
710 M.R.S.A.81176 (2003) now contains the following amendment:
For purposes of this section, the retail rate customarily charged by the franchisee for parts may be established by submitting to the franchisor 100 sequential nonwarranty customer- paid service repair orders or 60 days of nonwarranty customer-paid repair service orders, whichever is less in terms of total Cost, Covering repairs made no more then 180 days before the submission and declaring the average percentage markup. Tates to both warranty and non-watranty customers. Moreover, this verification procedure is not required as a result of the Law Court’s ruling.
Furthermore, although not statutorily required to do so, Darling’s did send Chrysler a large number of receipts of retail sales to non-warranty customers to show Chrysler that Darling’s’ charges for parts were “provided at the retail rate customarily charged by the franchisee for the same parts when not provided in satisfaction of a
warranty.” 10 MLR.S.A. §1176. Moreover, Chrysler accepted the same verification when it paid the amount agreeable to it on the claims initially submitted through the DIAL system. Accordingly, the District Court did not err in concluding that §1176 did not require Darling’s to provide the verification requested by Chrysler.
2. Labor Retail Rate
The statute requires manufacturers to reimburse dealers for labor provided in the course of warranty work “at the retail Tate customarily charged by that franchisee for the same labor when not performed in satisfaction of a warranty; provided that the franchisee’s rate for labor . . . is routinely posted in a place of conspicuous to its service customer.” 10 MLR.S.A. §1176. Chrysler argues that the District Court erred in concluding that Darling’s was entitled to use of the “Motor Times Manual” to calculate its “inflated” labor charges to Chrysler. Chrysler further argues that Darling’s does not post all of its “inflated” labor rate information in the service department as required by statute. See Appellant’s Brief, pls.
The United States District Court determined that use of a flat rate manual, such as Darling’s Motor Times Manual comports with the legislative intent in enacting 10
MLR.S.A. §1176 and related Statutes. Darling’s v. Ford Motor Company, docket number
95-398-B-H, *14-18 (US. Dist. Ct., Me. 1998) VJ. Hornby) (attached as Appellant’s
Exhibit E). “Flat Rate Pricing,”* which results from the use of either Darling’s’ Motor
a
8 ce wos ” “Flat Rate Pricing,” as used here, refers to when a dealer consults sources for the number of hours to
Company, 1998 ME 232, §8, n.5, 719 A.2d 111; see also 29-A MRS.A. §1801(2).
” 29.4 MLR.S.A. §1805 (1996 & Supp. 1997) provides: 1. Form of notice. A Tepair facility must post the following notice in a place where it is reasonably
We can not install any used or rebuilt parts unless you specifically agree in advance. You cannot be charged any fee for exercising these rights. WE CHARGE $ PER HOUR FOR LABOR. (We round off the time to the nearest.)
2. Flat Rate. The notice must also contain the following if it applies: “We also charge a flat rate for some repairs. Our service manager will explain what a flat rate is and show you how much it may cost you. A flat-rate charge may not match the time actually Spent repairing your vehicle. PLEASE ASK US WHETHER WE WILL CHARGE YOU BY THE HOUR OR AT A FLAT RATE.”
3. Availability of guide. The notice must also contain the following: - “The current edition of the National Automobile Dealer’s Association Official Used Car Guide
New England Edition is available for your review upon request.” notification requirements of §1805,
The Court finds that Darling’s use of the Motor Times Manual, which is
same rates for warranty and non-warranty work. The record shows that Darling’s posted its labor rate information in the service department as required by 10 M.R.S.A. §1176 and
29-A MLR.S.A. §1805(1)."°
Tequirements; therefore, it argues Darling’s is not entitled to reimbursement on its supplemental claims for warranty work. Specifically, Chrysler argues that the Motor Times Manual does not include a charge for all repairs and that in those instances Darling’s falls back on Chrysler’s time manual and inflates the charges by 33-50%, Chrysler contends that in these instances Darling’s must provide its own time manual to the consumer and explain that it inflates its charges. Chrysler contends that based on these facts Darling’s did not comply with the Statutory posting requirements,
The Court finds that Chrysler’s argument must fail. 10 M.R.S.A. §1176 only requires dealers to notify their consumers about their labor Pricing practices. 29-4 MR.S.A. §1805(1) requires dealers to post a notice that specifies the hourly charge. §1805(2) only directs dealers to notify consumers when flat rate
not dispute that Darling’s posted notice of its labor PLCINg Practices in accordance with §1805, rather Chrysler disputes Darling’s reliance on the Motor Times Manual. §1805(2) does not require Darling’s to provide its customers with Chrysler’s own time manual as Chrysler contends. The Court finds that Darling’s has complied with the statutory posting requirements.
10 3. 8% Miscellaneous Materials Fee
Chrysler argues that the District Court erred as a matter of law by allowing Darling’s to supplement the record after the close of evidence to explain its practice of adding an 8% miscellaneous materials fee to its labor charges in its claims for Supplemental reimbursement. Once the District Court received Darling’s explanation, the Court concluded that Darling’s had complied with $1176.
Maine Rule of Small Claims Procedure 6(b) governs the rules of evidence at a small claims hearing in District Court and states the following procedure:
(b) Evidence. The rules of evidence, other than those with respect to
privileges, shall not apply. The court may receive any oral or
documentary evidence, not privileged, but may exclude any irrelevant,
immaterial, or unduly repetitious evidence. The court shall assist in
developing all relevant facts. The hearing shall be conducted in a manner
designed to provide the parties with full opportunity to present their claims
and defenses.
The District Court’s post-hearing inquiry to clear up the ambiguity of the 8% miscellaneous materials fee on Darling’s labor charges in its supplemental claims for reimbursement is consistent with the informality of small claims practice where the rules
of evidence (other than privileges) do not apply. The District Court did not commit an
error of law in allowing Darling’s to submit a post-hearing explanation’ of this 8% fee.
‘Mr. Darling submitted the following explanation to the District Court: The miscellaneous materials fee is an additional 8% labor charge (capped at $40.00) that we add to the customer’s bill to cover disposal of hazardous materials (oil, dirty rags,
contaminated gasoline, etc.), cleaning solvents, adhesives, fasteners, etc.”
See Appellant’s Brief, Exhibit B.
11 Conclusion
The District Court correctly concluded that the rate of reimbursement claimed by Darling’s was appropriate, the Motor Times Manual used by Darling’s to determine the labor rate is legally permissible, that Darling’s charged the same rates for warranty and
non-warranty work, and that Darling’s complied with the verification required by 10
MLR.S.A. 81176. Accordingly, the entry is: Appeal DENIED. Decision of the Ellsworth District Court AFFIRMED.
The Clerk may incorporate this Decision and Order into the docket by reference.
DATED: W\ay 10, 200%, (has 7 Tek
Justj jce, Maine Superior Court
FILED & ENTERED
MAY 10 2004
SUPERIOR COURT HANCOCK COUNTY