# FCA US LLC v. Secretary of State > Superior Court of Maine · October 2, 2017 URL: https://www.frixlaw.com/law-library/cases/10811237 ## Case - **Court:** Superior Court of Maine - **Decided:** October 2, 2017 - **Precedential status:** Unpublished - **Opinion:** Opinion - **Judges:** M. Michaela Murphy - **Cited by:** 0 later opinions in the Frix Law Library ## Citator (automated) - No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases. - Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10811237 ## Opinion text ., STATE OF MAINE BUSINESS AND CONSUMER COURT CUMBERLAND, ss Location: Portland Docket No,: BCD-AP-16-03 / ) FCA USLLC, ) ) Petitioner, ) ORDER ON FCA US LLC's ) M.R. Civ. P, SOC APPEAL v. ) ) MATTHEW DUNLAP, in his capacity as ) Secretary of State of the State of Maine, & ) DARLING'S, ) ) Respondents. ) Petitioner FCA US LLC appeals the Maine Motor Vehicle Franchise Board's (the "B0a1·d") Order On Remand dated October 14, 2016, FCA is represented by Attorneys Robert D. Cultice and Daniel Rosenthal. Attorneys Judy Metcalf and Noreen Patient represent Respondent Darling's. Intervener Maine Auto Dealers Association is represented by Attorney Matthew Warner. I. Background a. Facts This action arises from the question of whether 10 M.R.S. § 1176 allows Darling's and FCA to enter an agreement requiring Darling's to provide verification of the retail rate customarily charged for labor beyond the posting requirement found in Section 1176 for the purpose of reimbursement fol' warranty work perf9rroed. The parties' agreement required further documentation on the part of Darling's in order to receive reimbursement for warranty repair work peiformed on behalf of FCA. Fwther 1 details of the history of the dispute may be found in the Comt's Order on FCA US LLC's M.R. Civ. P, 80C Appeal dated June 6, 2016. b. Remand In the Court's Order on FCA US LLC's M.R. Civ. P. 80C Appeal dated June 6, 2016, the Court found that the legislative intent of the statute was to make the posting of the retail rate customarily charged in a place conspicuous to the deale1·'s customers determinative ofthe rate by which the dealerships would be reimbursed for warranty work performed on behalf of manufacturers. The Court remanded the matter to the Maine Motor Vehicle Franchise Board with instl'uctions to find whether the statute perntltted the parties to contract to require the dealers to provide further verification of the retail rate customarily charged. On remand, the Board determined that even where terms requiring further verification of the retail rate customarily charged appeared in Dealer agreements, "§ 1182 precludes enforcement of such requirements." (Order on Remand, Oct. 14, 2016 at 2). FCA appeals from the Board's determination. II, Standard of Review Board decisions appealed to the Superio1· Court pursuant to 10 M.R.S.A. § 1189­ B(I) are reviewed fol' e11·ors of law. When the claimed error involves the interpretation of a statute, the Couit reviews the Board's interpretation de nova. See Ford Motor Co. Y, Darltng's, 2014 ME 7, ~ 15, 86 A.3d 35. "When the dispute involves an agency's inte1pretation of a statute administered by it, the agency's interpretation, although not conclusive, is entitled to great deference and will be upheld unless the statute plainly compels a contrary result." Wood v, Superintendent ofIns., 638 A.2d 67, 70 (Me. 1994) 2 (quotation omitted). If the stalute is ambiguous, the Coult reviews whether the agency's construction is reasonable. Guilford Transp. Indus. v. Pub. Utils. Comm 'n, 2000 ME 31, 111, 746 A.2d 910 (citation omitted). Here, the Board administers Section 1176 and its interpretation thereof is entitled to deference unless the statute compels a contrnry result. See 10 M.R.S.A. § 1188(1), (2) (the Board shall "review written complaints filed with the [BJoard by persons complaining of conduct governed by this chapter" and the Board shall "issue written decisions and may issue orders to a franchisee or franchisor in violation of this chapter"), III. Discussion The Court previously determined that the statute was ambiguous as to whether the . contract terms requiring verification of the retail rate customarily charged were prohibited. On remand, the Board found that any requirements of proof of the retail rate customarily charged for labor performed other than the statuto1ily required posting of the · rate would be in violation of Chapter 204 of Title 10 of the Maine Revised Statutes and therefore "deemed against public policy and . , , void and unenforceable," 10 M.R.S. § 1182. This interpretation of statute is reasonable, therefore, the Cou1t defers to the expertise of the Bciard. In this case, the Court has already found that the legislative intent of the statute was to level the power inequality between manufacturers and dealers with 1·espect to reimbursement for warranty repairs performed. It would produce an absurd result if manufacturel's were able to use their superior bargaining power to contractually eliminate the safeguards set out by the Legislature. The Court defers to the Board's interpretation of statute and affirms the decision of the Board. 3 IV. Conclusion The Court af:firrns the decision of the Maine Motor Vehicle Franchise Board. Dated: Michaela Mutphy Justice, Business & C01 Entered on the Docket: ~ / Y(I] . Copies sent via Mail_ _Electronically;/' 4 FCA US LLC. v. Matthew Dunlap, in his capacity as Secretary of State of the State of Maine, and Darling's BCD-AP-16-03 Plaintiff FCA US LLC. Daniel Rosenthal, Esq. One Canal Plaza Portland, ME 04101 Defendants Matthew Dunlap, in his capacity as Secretary of State of the State of Maine William Laubenstein, AAG. 6 State Hours Station Augusta, ME 04333 Darling's Judy Metcalf, Esq. PO Box 9 Brunswick, ME 04011 STATE OF MAINE BUSINESS AND CONSUMER COURT CUMBERLAND, ss Locnt ion: Portland Docket No.: BCD-AP-16-03 / ) FCA US LLC, ) ) Petitioner, ) ORDER ON FCA US LLC's ) M.R. Ctv. P. BOC APPEAL v. ) ) MATTHEW DUNLAP, in his capacity as ) Secreta1y of State of the State of Maine, & ) DARLING'S, ) ) Respondents. ) Petitioner FCA US LLC ("FCA") appeals from the Maine Motor Vehicle Franchise Board's Orde1· on Cross Mot ions for Judgment on the Pleadings (the "Order") and the Finni Order that incorporates the Order (the "Pinal Ord el'"). At the heart of the parties' dispute is the meaning of, and proof required to demonstrnte, the ((retail rate custonrnr!ly charged" for labor that Darling's perfonns on no1H-varnmty repairs. Darling's rirgues llrnt the Board did not el'l' when it determined that the retail rate customarily charged for non-wmmnty labor is established by the dealer/franchisee posting its rate in a pince conspici10us to its re!ail customers. FCA contends lhnt this interpretation conflicts ,vith the plain language of l OM.R.S.A. § 1176 ("Section I 176"), misintel'prets relevnt1t case law, and produces absurd res,1lts by permitting dealers to receive reimbursement for ,vmrnnty labor at the posted rnte even if ti.mt rnte was never charged to non-warrnnty customers. I. Background Darling's is a duly nuthorized franchisee of PCA. (R. 116, 151.) Pmsuant to its obligations as n FCA franchisee, Darling's perfol'!ns wmrnnty repairs, including the provision of pnrls and the perfornrnnce of labor 011 qualified FCA vehicles. (R. 116, 152.) Darling's ancl other Maine automobile dealers are entitled to reimbursement for such war1·anly repairs by nrnnufocturers as required by Maine lnw. With respect to reimbursement for labor on warranty repairs, Maine lnw provides, in pertinent part, that: [T]he franchisor shall reimburse the frnnchisee for iiny lnbor so performed ot the re(nil rnle customarily charged by that franchisee fo1· the sc1me labor when not performed in satisfaction of a wmrnnty; as long as the franchisee's rate for labor not performed in satisfoclion or a wat·1·nnly is routinely posted in a place conspicuous to i Is service customer. IO M.R.S.A. § 1176 (2015). On or nbout November 1, 2013, Darling's alleges that it posted new hourly labor rates for repnirs performed for its non-,vi:irnmty retai I customers at its Augusta location and provided FCA proof of its posting. (R. 120-121.) After November 1, 2013, Dm'lit1g's submitted "Supplemental Clnims" to FCA demanding the difference between the hourly labol' rate paid by FCA and Darling's posted hourly labor rate al the Augusta location. 1 (R. 122.) Similarly, Darling's adopted the ADP Se1·ving Pricing Guides in determining its "flat n1te 1' labor times fo1· its Ellsw01ih location on or about November l, 2013. (R 124.) Darling's asserts that its adoption of the ADP Service Pricing Guides did not require any nlterntion to the posting at its Ellswol'th location becm1se the existing post already advised of alternative flat rntes for labol' operations. (R. 124-125.) After November I, 2013, Darling's submitted supplemental claims for its Ellsworth locEJtion to FCA seeking lhe difference between the warranty rate 1rnid by FCA and Darling's flat rate pricing. (R. 125.) FCA reciuested additional information regarding each repair for which a Supplementnl Claim was st1bmilted at both locations, but Darling's declined to provide the infonnation. (R.. 122, 125-126.) FCA rejected each of lhe Ellsworth £\!lei Ai1gustil 1 fn the alternative, Dal'llng's clemanclect the difference between the wmrnnty rate pllid by PCA and Darling's flat rntc pricing using the ADP Service Pricing Guides for warranty repairs. (R. 122.) 2 Supplemcntnl Claims and refused to pay Dm'iir1g's posted labor rate 011 warranty claims from both locations from November l 1 2013 through September 7, 2014. (R. 123 1 J25-126.) On or about September 8, 2014, Darling's again posted increased retail labor rates for its Augusta and EJ lsworth locations. (R. I27-I28) 13 1-132, 44 l.) FCA refused to pay the new rntes Darling's requested and continued to reimburse Dal'ling's at the rates established up to November J, 2013. (R. I30, 133 442.) 1 A. Procedmal History On March 3I,2014 FCA filed a co111p!aint in tbe United States District Comt for the 1 District of Maine. (R. 2, 8-16.) Pursuant to 10 M.R.SA. § 1190-A, Darling's commenced the Board action at issue in the present appeal nnd l'ilect a motion to stay the action commenced by FCA in the U.S. District Comt. (R. 39-81, 439.) The U.S. Dish'ict Colllt granted Dat!ing's motion to stay and remanded the matter to the Board for adj,1dicatio11. (R. 84-106, 439.) On November 25, 2014, Darling's filed its Second Amended Complaint. (R. I 16-136.) Thereafter, botll FCA and Darling's filed motions for judgmcn! on the pleadings regarding the warranty rnte FCA must reimbmsc Darling's at for labor. (R. !81-256, 260-283.) B. The Bonrd's Determinations On .Tune I6, 2015, the Board determined tlrnl, in contrnst to establishing a reimbursement rate for pmts, Section J 176 only requires "that a fnmchisee's non-warranty labor rate be rnutinc[y post[ed] ... in fl place conspicuous to its service customers." (R. 440.) In suppo1·t oft-J1is determination, !he Boi:ird discussed the Amended Recapitulmion of Previous Rulings and New Findings ofFact a11d Co11c/11sio11s c?f Lm,, (!he "Amended Recapitulat/011") that accompanied the United States District Comt for the District of Maine's Certificate of Questions of State Law to 3 the Law Court. (R. 442.)2 The Board focused on the Amended Recapitulathm's discussion of the legislative history of Section 1176 concluding that the statute was concerned with "autonrnkers' superior bargaining power" enabling them to "coerce dealers into accepting reimbursement af a rate significantly below what dealers routinely charge ordinary retail customers .... " (Id.) (quoting Darling's dlbla Darling's Bangor Ford v. Ford Motor Co., Docket No. 950398-B-I·l (D, Me. Apr. 1, 1998), Amended Recapit11/a1ion at 16- 17) (quoting Final Report 01· the Joint Standing Committee on Business Legislntion, on its stmly pursuant to Joinl Order H.P. 1459 ("Final Report"), at 4-5 (fon. 25, 1980)) (emphasis from Amended RecapU11/ation omitted). The Board noted that the Joint Standing Committee on Business Legislation concluded, in pertinent part, that: The legislative concern was labor chc1rges in general; there wns no suggestion that the concern was limited lo hourly rates . ,. [and that] the only equitnble method of express wmTauty reimbursement is rei..t.nbursement at the regular re/ail !'(ties .... We propose very simply that an automaker be reqi1ired to reimbmse a dealer for labor at the re/ail rate customarily clrnrged by the dealer for nonwarrnnly repairs ... There is only one condition that needs to be imposed to ensme that the dealer's rnte is bona fide-it should be routinely posted in a conspict1ous place." (R. 442) (A mended Recapitulation at 16-17) (quoting Finni Repo11 at 4-5). After briefly discussing the Law Comt's response to the Certified Question of the Maine Federnl District Court, the Bomd explnined tlrnt / 10 --- Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10811237. Public record. Not legal advice.