Darling's Auto Mall v. Gen. Motors LLC.

• Decision Date: 31 March 2016
• Docket Number: Docket No. Pen–15–82.
• Citation: 2016 ME 48,135 A.3d 819
• Parties: DARLING'S AUTO MALL v. GENERAL MOTORS LLC.
• Court: Maine Supreme Court

135 A.3d 819

2016 ME 48

DARLING'S AUTO MALL

v.GENERAL MOTORS LLC.

Docket No. Pen–15–82.

Supreme Judicial Court of Maine.

Argued Dec. 10, 2015.

Decided March 31, 2016.

Judy A.S. Metcalf, Esq.(orally), Eaton Peabody, Brunswick, for appellant Darling's Auto Mall.

Joshua A. Randlett, Esq., and Frederick J. Badger Jr.(orally), Richardson, Whitman, Large & Badger, Bangor, for appelleeGeneral Motors LLC.

Panel: SAUFLEY, C.J., and MEAD, GORMAN, JABAR, and HJELM, JJ.

MEAD, J.

[¶ 1] Darling's Auto Mall (Darling's or Darling's Auto) appeals from a judgment entered by the Superior Court(Penobscot County, Alexander, J. ) in favor of General Motors LLC following a jury trial on a small claims action.On appeal, Darling's contends that the court(1) improperly granted a jury trial de novo; (2) erred in denying Darling's Auto's motion for judgment as a matter of law; and (3) committed prejudicial error by rejecting Darling's Auto's proposed jury instructions.We affirm the judgment.

I.BACKGROUND

[¶ 2] Viewed in the light most favorable to the jury's verdict, the evidence in the record supports the following facts.State v. Diana,2014 ME 45, ¶ 2, 89 A.3d 132.Darling's is a GM franchisee and authorized dealer in Ellsworth.Pursuant to a Dealer Sales and Service Agreement between Darling's and GM, Darling's performs warranty repairs on qualified GM vehicles and, in exchange, GM reimburses Darling's for the labor and parts in connection with the warranty repairs.

[¶ 3] Darling's, through the Dealer Sales and Service Agreement, is bound to perform warranty repairs in accordance with the provisions outlined in GM's Service Policies and Procedures Manual.In addition to the agreement, the franchise relationship is regulated by the Business Practices Between Motor Vehicle Manufacturers, Distributors and Dealers Act (Dealers Act), see10 M.R.S. §§ 1171 to 1190–A(2015).¹In the event of a conflict between the terms of an agreement and the Dealers Act, the Dealers Act controls.See10 M.R.S. § 1178(“Written or oral agreements between a manufacturer, wholesaler or distributor with a motor vehicle dealer including ... policies and procedures agreements ... servicing contracts, and all other such agreements ... are subject to this chapter.”);10 M.R.S. § 1182(“Any contract or part thereof or practice thereunder in violation of any provision of this chapter shall be deemed against public policy and shall be void and unenforceable.”).

[¶ 4] On January 11, 2013, and on April 18, 2013, Darling's filed two small claims actions in District Court(Ellsworth).In both claims, Darling's alleged that it had been underpaid by GM for certain warranty repairs in violation of the Dealers Act—specifically the warranty reimbursement statute, 10 M.R.S. § 1176.The discrepancy between the price paid by GM and the price demanded by Darling's was based on differing interpretations of section 1176, which provides, in pertinent part:

If a motor vehicle franchisor requires or permits a motor vehicle franchisee to perform labor or provide parts in satisfaction of a warranty created by the franchisor, the franchisor shall ... reimburse the franchisee for any parts so provided at the retail rate customarily charged by that franchisee for the same parts when not provided in satisfaction of a warranty....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 service repair orders, whichever is less in terms of total cost, covering repairs made no more than 180 days before the submission and declaring the average percentage markup.The average percentage markup so declared is the retail rate....

10 M.R.S. § 1176(emphasis added).Thus, pursuant to the statute, GM, the franchisor, must reimburse Darling's, the franchisee, for parts at Darling's Auto's established markup rate.The parties do not dispute that Darling's has an established markup rate of 91.7% on its parts, but disagree about whether “core charges” need to be reimbursed at the 91.7% markup rate.

[¶ 5] A core charge, also known as an exchange charge, is a type of deposit that a dealer pays to a manufacturer, in addition to the regular wholesale price, to buy a replacement part for use in a warranty repair.The amount of the core charge is refunded to the dealer when the dealer returns the removed defective part to the manufacturer, who may then remanufacture the defective part.It is the usual industry practice, including at the Darling's dealerships, for invoices to list core charges separately from the part's retail price after applying the markup rate.Notably, Darling's nonwarranty customers do not actually pay the core charge; rather, customers are debited and simultaneously credited the core charge upon payment.Although the GM Service Policies and Procedures Manual unequivocally provides that core charges are not subject to markup for reimbursement purposes, Darling's contends that section 1176, which supersedes the terms of the contract in the event of a conflict, requires GM to pay a markup on core charges because the statute contains “no exceptions” for any component of a part's price.

[¶ 6] On April 18, 2013, and on July 31, 2013, the District Court(Mallonee, J. ) found in favor of Darling's on both small claims, reasoning that “[i]n order to obtain a given part, [Darling's] has to pay both the nominal cost of the part and the designated core charge.The two together comprise one amount of dollars [Darling's] has to pay in order ... to secure the part.”The court's decision therefore required GM to reimburse Darling's for core charges at the 91.7% markup rate.GM appealed the decision as to both claims and requested a jury trial de novo pursuant to M.R.S.C.P. 11(d)(2).

[¶ 7] On December 26, 2013, the court consolidated the two actions and granted GM's request for a jury trial de novo.The court found that a jury trial was warranted because a genuine issue of material fact existed as to the “competing factual positions on what the price of the parts were as charged.”On January 7 and 8, 2015, the court(Penobscot County, Alexander, J. ) held a jury trial.At the conclusion of the trial, the court, over Darling's Auto's objection, instructed the jury, in pertinent part:

Question number five: Did the price that Darling's paid for the part include or exclude the exchange charge—and that's also the core charge—you've heard the term exchange charge or core charge been used here again.If you find that Darling's has proven it more likely than not, proven by a preponderance of the evidence, that the price that Darling's paid for the part included the exchange charge, answer that question include.If you find they have not proven that by a preponderance of the evidence or that you in fact find that the price they paid excluded the exchange charge, you would answer that question exclude on that one.So, if it is proven by a preponderance of the evidence that the price they paid for the part included the exchange charge, you would answer include.If you find that is not proven by a preponderance of the evidence or if you find that in fact the price that Darling's paid excluded the exchange charge, you would answer that question exclude.

[¶ 8] On January 8, 2015, the jury found that the price Darling's paid for the parts excluded the core charge and the court entered a judgment in favor of GM.On January 20, 2015, Darling's filed a motion for judgment as a matter of law pursuant to M.R. Civ. P. 50(b), contending that section 1176, by its plain terms, does not provide an exception for core charges.The court denied the motion on February 4, 2015, and Darling's timely appealed.

II.DISCUSSION

A.Jury Trial De Novo

[¶ 9]Maine Rule of Small Claim Procedure11(d)(2) provides that

[a]defendant who seeks a jury trial de novo shall briefly state the grounds of the appeal and demand a jury trial in writing on the notice of appeal and shall file with the notice an affidavit or affidavits meeting the requirements of Rule 56(e) of the Maine Rules of Civil Procedure, and setting forth specific facts showing that there is a genuine issue of material fact as to which there is a right to trial by jury.

Darling's contends that the court erred in granting a jury trial de novo because there was no dispute “that the price paid by Darling's is the total price shown on the invoice.”A court's decision to grant a jury trial de novo, however, is not an appealable determination.

[¶ 10]We have observed that a trial court's decision to deny or grant a request for a jury trial de novo is very similar to a decision to grant or deny a motion for summary judgment.SeeGoodell v. Andy's Barn,518 A.2d 719, 720(Me.1986).A court's decision denying a request for a jury trial de novo is akin to a decision granting a motion for summary judgment because both involve a determination that no genuine issue of material fact exists.Conversely, a decision to grant a request for a jury trial de novo and a decision to deny a motion for summary judgment each requires a determination that a genuine issue of material fact does exist.Thus, the grant of a jury trial de novo,...