Hawkins v. Ford Motor Company

135 F.3d 1443

• Court: Court of Appeals for the Eleventh Circuit
• Decided: March 2, 1998
• Docket: 96-2306
• Status: Published

Opinion

PUBLISH

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

_______________

No. 96-2306 _______________

D. C. Docket No. 95-55-CIV-T-21-E

DWAYNE HAWKINS, MILLARD G. RIPLEY,

Plaintiffs-Appellants,

versus

FORD MOTOR COMPANY,

Defendant-Appellee.

______________________________

Appeal from the United States District Court for the Middle District of Florida ______________________________ (March 2, 1998)

Before BIRCH, Circuit Judge, FAY, Senior Circuit Judge, and COHILL*, Senior District Judge.

* Honorable Maurice B. Cohill, Jr., Senior U.S. District Judge for the Western District of Pennsylvania, sitting by designation. PER CURIAM:

CERTIFICATION FROM THE UNITED

STATES COURT OF APPEALS FOR THE

ELEVENTH CIRCUIT TO THE SUPREME COURT

OF FLORIDA PURSUANT TO ARTICLE 5,

SECTION 3(b)(6) OF THE FLORIDA

CONSTITUTION.

TO THE SUPREME COURT OF FLORIDA AND

ITS HONORABLE JUSTICES:

This case comes to the United States

Court of Appeals for the Eleventh Circuit

on appeal from the United States District

2 Court for the Middle District of Florida.

Because this case presents unresolved questions of Florida law that

are determinative of this appeal, we defer our decision pending

certification of several issues posed by the parties to the Supreme

Court of Florida. See Gossard v. Adia Services, Inc., 120 F.3d 1 1229, 1230 (11th Cir. 1997). Therefore, we certify

the following question of law, based on the

background recited below, to the Supreme

Court of Florida for instruction.

I. FACTS

1 The present case was consolidated on appeal with Morse v. Ford Motor Co., Case No. 96-3633, also on appeal from the Middle District of Florida. With respect to the issues of law central to this case and on substantially similar facts, the district court judges came to opposite conclusions. Due to a settlement agreement between the parties, the appeal in Morse was dismissed prior to this court's certification.

3 This case arose from the attempt of

plaintiffs, Dwayne Hawkins and Millard G.

Ripley, to purchase all the stock from the

owners of a company, Wilson Davis Ford,

Inc., which operated as a motor vehicle

dealer under a franchise agreement with

Ford Motor Company ("Ford"), a motor

vehicle manufacturer. The sellers of this

stock gave notice of an intent to

transfer ownership pursuant to Fla. Stat.

§ 320.643, and Wilson Davis Ford, Inc. gave

notice of an intent to change its 4 executive management pursuant to Fla.

Stat. § 320.644, from the sellers, Davis and

Bodiford, to the proposed purchasers of the

stock, Hawkins and Ripley. Ford responded

to this notice by filing a verified

complaint with the Florida Department of

Highway Safety and Motor Vehicles

("DHSMV") opposing both the proposed

transfer under section 320.643 and the

proposed change of management under

section 320.644.

5 With respect to its opposition to the

proposed transfer of stock, Ford's

complaint alleged several deficiencies in

the financial qualifications of Hawkins

and Ripley and several performance

deficiencies of a Lincoln-Mercury

dealership in which Hawkins had an

ownership interest; these deficiencies,

according to Ford, rendered Hawkins

ineligible to meet Ford's reasonable

standards for executive management.

With respect to the proposed change of 6 management, Ford's complaint alleged

these same deficiencies.

Following the filing of Ford's complaint

in the DHSMV, the contract to sell the stock

was terminated and the administrative

proceeding was dismissed as moot.

Plaintiffs subsequently brought this action

in federal district court and alleged, inter

alia, that Ford had violated Fla. Stat. §

320.643, in opposing the transfer of equity

to Hawkins and Ripley by means of a

complaint that was facially deficient. 7 II. CONTENTIONS

Hawkins and Ripley submit that by its

express provisions, notwithstanding the

terms of a franchise agreement, Fla. Stat.

§ 320.643(2)(a) governs the prospective

transfer of shares in a motor vehicle

dealership. Under this section, according to

the plaintiffs, Ford could object to such a

transfer only on the basis that the

proposed transferee was not of good moral

character. Ford's verified complaint did not

allege that either Hawkins or Ripley was 8 not of good moral character. Consequently,

because Ford's complaint did not oppose the

transfer on grounds permitted by section

320.643(2)(a), Ford's complaint was facially

insufficient and Ford's opposition was in

violation of the statute. Ford argues

that in the case of a proposed complete

transfer of equity interest leading also to

a change of executive management, the

practical effect of such a transfer will be

the transfer of the franchise agreement.

Ford suggests that the Florida Dealer Act 9 read as a whole, giving full effect to all

statutory provisions, permits

consideration of business qualifications as

well as moral character of a proposed

transferee where the proposal at issue is

to transfer 100% of the stock to a third

party. Ford further urges that a proposed

transfer of a franchise agreement is

regulated by the terms of Fla. Stat. §

320.643(1), under which a manufacturer

may object to a proposed transfer on

grounds that the transferee is not 10 financially qualified or does not meet a

manufacturer's uniformly applied

reasonable standards or qualifications

with respect to executive management.

Consequently, Ford contends that it

properly could object to the management

experience and financial qualifications

of Hawkins and Ripley, as it did in its

verified complaint to the DHSMV.

In the trial court in this case, the

district court agreed with Ford and held as

a matter of law that "when transfer of 11 100% of stock is contemplated, the

provisions regarding transfer of a

franchise agreement and change in

executive management control should

apply." The district court reached the

opposite legal conclusion with respect to

Morse, however, and determined that only

section 320.643(2)(a) applies to the

proposed transfer of 100% of the stock and,

as a result, that only moral character may

be considered as grounds for an objection

to such a transfer. 12 III. QUESTION TO BE CERTIFIED

Does Fla. Stat. § 320.643(2)(a) provide

the exclusive basis for objection by a

motor vehicle manufacturer to the

proposed transfer of all the equity in

interest in a motor vehicle dealership?

Our statement of the question to be certified is intended as a

guide and is not meant to restrict the scope of inquiry by the

Supreme Court of Florida. The entire record of this case, together

with copies of the briefs, shall be transmitted to the court.

QUESTION CERTIFIED.