Pearson v. Ford Motor Co.

694 So. 2d 61, 1997 WL 174345
CourtDistrict Court of Appeal of Florida
DecidedApril 14, 1997
Docket96-1066
StatusPublished
Cited by22 cases

This text of 694 So. 2d 61 (Pearson v. Ford Motor Co.) 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
Pearson v. Ford Motor Co., 694 So. 2d 61, 1997 WL 174345 (Fla. Ct. App. 1997).

Opinion

694 So.2d 61 (1997)

Gary J. PEARSON, Individually and on Behalf of the State of Florida and the Florida Department of Highway Safety and Motor Vehicles for the Use and Benefit of Gary J. Pearson, Appellant,
v.
FORD MOTOR COMPANY, Ford Motor Credit Company, Ford Leasing Development Company, Fort Walton Beach Lincoln-Mercury, Inc., and Beal Parkway Lincoln-Mercury, Inc., Appellees.

No. 96-1066.

District Court of Appeal of Florida, First District.

April 14, 1997.
Rehearing Denied May 28, 1997.

*63 Steven B. Bauman and James W. Grimsley of Smith, Grimsley, Bauman, Pinkerton, Petermann, Saxer & Wells, Fort Walton Beach; Kenneth L. Funderburk of Funderburk, Day & Lane, Phenix City, AL, for appellant.

John H. Fleming, Patricia B. Cunningham, and Ann G. Fort of Sutherland, Asbill & Brennan, Atlanta, GA; Bruce A. McDonald of McDonald, Fleming, Moorhead & Ferguson, Pensacola, for appellees.

WOLF, Judge.

Gary Pearson appeals a final order granting final summary judgment on all counts of a ten-count complaint in favor of appellees, Ford Motor Co. (Ford), Ford Motor Credit Co. (Ford Credit), Ford Leasing Co. (Ford Leasing), and Ft. Walton Beach Lincoln-Mercury, Inc. (FWBLM). We that find material issues of fact exist precluding summary judgment as to the counts alleging breach of contract, fraud, conversion, trespass, and breach of good faith. We, therefore, reverse the order regarding these counts, but affirm as to the remaining counts of interference with corporate governance (lender liability and fraud), breach of fiduciary duty of lender liability, and violations of the Florida Automobile Dealers' Day in Court Act (Florida ADDA).[1]

FACTS

Gary J. Pearson is an African American who once was president, operator, and shareholder of FWBLM. This action arises from a number of agreements between Ford and appellant, as well as agreements between appellant and FWBLM, regarding a car dealership. As part of its efforts to increase the number of minority owners, Ford operates a dealer development program in which it assists minorities in acquiring and operating dealerships. Appellant was already employed by Ford when he filed a prospective dealer application in February 1983. Pearson and Ford entered an agreement for Pearson to participate in the dealer development program on July 12, 1983. Ford provided $320,000.00 in capital for the new dealership, and Pearson placed $80,000 in escrow for six months. During the initial six months, Pearson would operate the dealership as a salaried employee of FWBLM.

On February 1, 1984, Pearson entered into a dealer development agreement with Ford and a management agreement with FWBLM. The dealer development agreement and the management agreement were terminable at will by either party with proper *64 notice. The FWBLM board of directors was made up of Pearson and three individuals appointed by Ford. Pearson was selected to be president. Pursuant to the dealer development agreement, Ford received 1,600 shares of convertible preferred stock in FWBLM, and Pearson received 800 shares of common stock (from his $80,000 in escrow). The agreement provided that if the dealership was profitable, a portion of Pearson's share of the profits would be used to gradually purchase Ford's preferred stock in FWBLM and convert it into common stock. However, Pearson could purchase the stock only from the profits, not with any other funds. Under this plan, if the dealership was profitable under his management, Pearson would eventually own the dealership. See Pearson v. Ford Motor Co., 865 F.Supp. 1504, 1506 (N.D.Fla.1994), aff'd, 68 F.3d 1301 (11th Cir.1995).

Each year, starting in 1983 (prior to Pearson's ownership), FWBLM entered into sales and service agreements with Ford to sell Mercury and Lincoln models. The dealership was profitable in 1984, 1985, and 1986. Pearson acquired 79% of the total stock in FWBLM by the end of 1986. However, by 1988, the dealership had lost so much money that Pearson's ownership interest had declined to 34 percent of the total stock. The dealership continued to incur operating losses in 1989 and 1990.

Originally, the dealership was operated from a facility leased from the previous Lincoln-Mercury dealer. Upon expiration of this lease in 1988, the dealership relocated onto a site on Beal Parkway. Defendant Ford Leasing purchased the land, constructed the buildings, and leased the site to FWBLM. It was around this time when disputes began to arise between appellant and appellees. Ford provided the dealership with more than one million dollars in additional capitalization during the time Pearson operated it. Because of these losses, Pearson's common stock in FWBLM had no value as of the end of 1989 until the time he was terminated.

The board of directors of FWBLM voted on February 26, 1991, to terminate Pearson as president of FWBLM and operator/manager of the dealership. FWBLM provided no written notice prior to the termination of the management agreement. At the same time, Ford terminated the dealer development agreement. FWBLM continued its operations until its assets were purchased by Beal Parkway Lincoln-Mercury, Inc. in October 1991.

Pearson filed suit in federal court, alleging violations of state and federal law. Pearson, supra. The federal courts granted summary judgment, finding that appellant had no standing under the federal Automobile Dealer's Day in Court Act because appellant was not a dealer under the federal act. The federal court refused to consider the supplemental state claims.

Pearson filed a ten-count complaint in the first judicial circuit court on January 27, 1995, against Ford, FWBLM, Ford Leasing Development Co., Ford Motor Credit, and Beal Parkway Lincoln-Mercury. The trial court granted summary judgment as to all counts. A final judgment was entered as to all defendants except Beal Parkway Lincoln-Mercury. The parties stipulated that if, after appeal, there were no causes of action remaining against the Ford defendants in which there was a possibility of injunctive relief, Pearson would dismiss Beal Parkway Lincoln-Mercury as a defendant. This appeal followed.

The trial court correctly found that counts II-IV, interference with corporate governance (lender liability), interference with corporate governance (fraud), and breach of fiduciary duty (lender duty), were barred by the statute of limitations. The acts alleged supporting these counts all occurred at least four years prior to the date the complaint was filed. §§ 95.11, 95.031, Fla.Stat. (1995). We affirm the order as to these counts without further comment.

FLORIDA ADDA

We also affirm summary judgment as to count IX of the complaint, violation of the Florida ADDA. We agree with the trial court's finding that appellant was not a "motor vehicle dealer" under the Florida ADDA. Appellant alleges violation of section 320.641, unfair cancellation of franchise agreements; section 320.645, restriction upon ownership of *65 dealership by licensee; section 320.695, injunction; and section 320.697, civil damages. Section 320.641[2] requires a licensee, in this case Ford, to give written notice to the Florida Department of Highway Safety & Motor Vehicles (DHSMV) and the "motor vehicle dealer" when it intends to discontinue or modify a franchise agreement at least 90 days prior to the effective date of the change and give the reasons for the change.

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Bluebook (online)
694 So. 2d 61, 1997 WL 174345, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pearson-v-ford-motor-co-fladistctapp-1997.