MERCEDES-BENZ OF NA v. Mike Smith Pontiac GMC, Inc.

561 So. 2d 620
CourtDistrict Court of Appeal of Florida
DecidedMay 3, 1990
Docket87-2041, 87-2042
StatusPublished
Cited by7 cases

This text of 561 So. 2d 620 (MERCEDES-BENZ OF NA v. Mike Smith Pontiac GMC, Inc.) is published on Counsel Stack Legal Research, covering District Court of Appeal of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
MERCEDES-BENZ OF NA v. Mike Smith Pontiac GMC, Inc., 561 So. 2d 620 (Fla. Ct. App. 1990).

Opinion

561 So.2d 620 (1990)

MERCEDES-BENZ OF NORTH AMERICA, a Florida Corporation, Appellant/Cross-Appellee,
v.
MIKE SMITH PONTIAC GMC, INC., a Florida Corporation, Appellee/Cross-Appellant,
v.
DEPARTMENT OF HIGHWAY SAFETY AND MOTOR VEHICLES, Appellee.
MERCEDES-BENZ OF NORTH AMERICA, INC., Appellant,
v.
MIKE SMITH PONTIAC GMC, INC., Jerome Z. Ginsburg, Ronald Cutler, Terry Taylor, Billy R. Grubbs, Terry Taylor Investments, Inc., and Department of Highway Safety and Motor Vehicles, Appellees.

Nos. 87-2041, 87-2042.

District Court of Appeal of Florida, First District.

May 3, 1990.
Rehearing Denied June 14, 1990.

William J. Dunaj and Teresa Ragatz of Mershon, Sawyer, Johnston, Dunwody & Cole, Miami, for appellant/cross-appellee.

John Radey and Mark Freund of Aurell, Radey, Hinkle & Thomas, Tallahassee, for appellees/cross-appellant.

MINER, Judge.

This case involves consolidated appeals and a cross appeal from two final orders of the Department of Highway Safety and Motor Vehicles (Department). In Case No. *621 87-2042, the Department dismissed with prejudice appellant's complaint which sought to prevent a proposed transfer in ownership of an automobile dealership. In Case No. 87-2041, the Department dismissed as moot an action brought by appellee which challenged appellant's termination of appellee's franchise. We affirm.

In July 1983, appellant, Mercedes-Benz of North America (MBNA), and appellee, Mike Smith Pontiac GMC, Inc. (MSP), entered into a Mercedes-Benz Passenger Car Dealer Agreement, which permitted MSP to sell and service Mercedes-Benz automobiles. When it expired on December 31, 1983, a new agreement was entered into to cover the two-year period from January 1, 1984 through December 31, 1985. Paragraph 15D(g) of the agreement provided as follows:

D. Dealer [MSP] and MBNA agree that the following acts or events, all within the control of the Dealer or originating from actions taken by Dealer or its management or owners, are so contrary to the spirit and purposes of this Dealer Agreement as to warrant its termination:
... .
(g) Any disagreement between or among the Dealer Operators or Owners of Dealer which in MBNA's opinion may adversely affect the conduct of Dealer's business or the interests of MBNA, providing the disagreement continues three (3) months after notice to Dealer by MBNA that the disagreement must be resolved.

In the summer of 1985 MBNA became aware of a dispute between MSP's dealeroperator and primary dealer-owner.[1] By letter dated July 1, 1985, MBNA invoked Paragraph 15D(g) and advised MSP to resolve its management dispute within ninety days or face possible termination of the franchise agreement. By October 23, the ninety day period had expired, and MBNA sent a letter informing MSP that insufficient progress had been made in resolving the management dispute. The letter, which was signed by a Vice President of MBNA, charged breaches of various provisions in addition to Paragraph 15D(g), and concluded as follows:

Therefore, in conformity with the Florida Franchise Practices Act, we hereby inform you of our intent to terminate your Mercedes-Benz Passenger Car Dealer Agreement on January 31, 1986 which is at least 90 days hence from the order to provide sufficient notice to affect the termination of the Agreement, we will extend the Dealer Agreement until January 31, 1986. This notice and extension is pursuant to the provisions of Paragraphs 15 and 16 of the Mercedes-Benz Passenger Car Dealer Agreement.[2]

On January 16, 1986, MSP filed an administrative complaint with the Department pursuant to section 320.641, Florida Statutes (1985), alleging unfair termination of the dealer agreement. Because the complaint was filed within the ninety day notice period, the dealer agreement continued in effect by operation of section 320.641(3), *622 Florida Statutes (1985),[3] until the termination dispute was resolved.

In October 1986, prior to the final hearing, MSP proposed a transfer of the dealership to appellee, Ronald Cutler. On December 12, one week after the final hearing, MBNA informed MSP that it found Cutler an unacceptable transferee and would not approve the proposed transfer. On December 15, MBNA filed an administrative complaint to challenge the proposed transfer. Although section 320.643(2), Florida Statutes (1985), was the basis for the complaint, MBNA asserted that it was not required to comply with the statute because its dealer agreement with MSP was executed prior to the statute's enactment. According to MBNA, the existing agreement was executed on January 1, 1984, and was therefore not subject to section 320.643(2) which came into effect on May 31, 1984. The hearing officer stayed MBNA's transfer challenge pending the outcome of MSP's termination proceeding.

The hearing officer issued his recommended order in the termination action on May 1, 1987. MBNA was justified in terminating the dealership based upon the management dispute within MSP. Apparently, negotiations had been ongoing between MBNA, MSP and the proposed transferee, because shortly after issuance of the recommended order MBNA filed a notification of status in its transfer challenge; according to MBNA, a transfer had been approved on modified terms, and its transfer challenge would become moot upon closing of the sale.

However, in June 1987, MSP informed MBNA that the proposed transfer would not take place; instead, MSP proposed a new transfer to appellees Terry Taylor, Billy Grubbs, and Terry Taylor Investments.[4] On August 28, 1987, MBNA, having previously abandoned its challenge to the Cutler transfer, filed a new complaint challenging the Taylor transfer. Again, MBNA's complaint was filed pursuant to section 320.643(2), and again, MBNA asserted that the statute could not be applied to its agreement with MSP. The complaint, which was verified by MBNA's President, did not allege that the Taylor transferees were unqualified, nor did it explain why MBNA found them unacceptable. In addition, the verification, which was required by section 320.643(2), merely stated: "I have read the above Complaint and, to the best of my knowledge, the allegations are true and correct." MSP responded with a motion to dismiss the complaint for its failure to challenge the qualifications of the proposed transferees, and for the inadequacy of the verification.

On November 9, 1987, the Department granted MSP's motion on the grounds asserted therein, and dismissed MBNA's complaint with prejudice. In addition, the Department entered a final order dismissing MSP's termination action as moot. According to the Department, MBNA failed to file a proper transfer challenge within the sixty day period prescribed by section 320.643(2). Consequently, the MSP agreement was amended by operation of law and the Taylor transferees were now the holders of the MBNA franchise. This appeal ensued.

On appeal, MBNA argues that the Department based the dismissal of the transfer challenge upon certain provisions in section 320.643, Florida Statutes, which *623 were not in existence at the time the parties executed the dealer agreement. MBNA points out that on January 1, 1984, when the two-year extension of the agreement became effective, there was no requirement that a licensee[5] file a verified complaint in order to prevent a proposed transfer of the dealership.

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Bluebook (online)
561 So. 2d 620, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mercedes-benz-of-na-v-mike-smith-pontiac-gmc-inc-fladistctapp-1990.