General Motors Corp. v. Darling's, No. CIV.01-151-B-S.

• Decision Date: 24 August 2004
• Docket Number: No. CIV.01-151-B-S.
• Citation: 330 F.Supp.2d 9
• Parties: GENERAL MOTORS CORPORATION Plaintiff, v. DARLING'S d/b/a Darling's Auto Mall, Defendant.
• Court: U.S. District Court — District of Maine

330 F.Supp.2d 9

GENERAL MOTORS CORPORATION Plaintiff, v. DARLING'S d/b/a Darling's Auto Mall, Defendant.

No. CIV.01-151-B-S.

United States District Court, D. Maine.

August 24, 2004.

Daniel L. Goldberg, Bingham McCutchen LLP, Boston, MA, Frederick J. Badger, Jr., Richardson, Whitman, Large & Badger, Bangor, MA, James C. McGrath, Bingham McCutchen LLP, Boston, MA, for General Motors Corp.

Judy Metcalf, Eaton Peabody, Brunswick, MA, for Darling's, dba Darling's Auto Mall.

ORDER ON MOTION TO AMEND JUDGMENT

SINGAL, Chief Judge.

On July 13, 2004, this Court rendered judgment in favor of Plaintiff General Motors ("GM") on all counts of the complaint and counterclaim then remaining. The factual and legal bases for the decision were set forth in Findings of Fact and Conclusions of Law issued the same day. GM has now filed a motion to amend the judgment (Docket # 89), seeking a further declaration of the parties' respective rights and obligations. For the reasons set forth below, the motion is GRANTED IN PART and DENIED IN PART. As requested by GM, the Court clarifies its previous ruling, but to the extent GM requests an additional declaration that it may reverse reimbursement to Darling's after the expiration of the statutory period for approval or disapproval of a warranty reimbursement claim, the Court cannot assent.

BACKGROUND

The Court limns only the facts essential to the resolution of this motion: a more thorough description of the disputes between the parties can be found in this Court's Findings of Fact and Conclusions of Law. The parties to this action are GM, an automobile manufacturer, and its franchisee, Darling's, an automobile dealer. The contractual relationship between GM and Darling's obligates Darling's to perform warranty repairs on qualified vehicles at the owner's request. The warranty repairs are performed at no cost to the customer, and GM reimburses Darling's for the expenses incurred in performing such repairs. General Motors processes and pays warranty reimbursement claims electronically. A dealer's electronic claim includes data about the repairs performed and the vehicle repaired. GM's computer system reviews the information provided by the dealer, and if the vehicle and repair data matches the computer's parameters for payment, funds are electronically transferred to the dealer. Although the process is somewhat more complicated when the dealer requests supplemental reimbursement pursuant to Maine statute (this is discussed in great detail in the Findings of Fact and Conclusions of Law), the main point for purposes of the present motion is that the manufacturer performs a cursory review of the dealer's request for reimbursement, then pays the claim.

The contract that governs the parties' relationship provides GM with certain rights to review warranty claims submitted by the dealer after they are paid, and to charge back amounts that were improperly paid. Maine statute, on the other hand, currently provides that:

Any claim made by a franchisee for compensation for parts provided or for reimbursement for labor performed in satisfaction of a warranty must be paid within 60 days of its approval. All the claims must be either approved or disapproved within 60 days of their receipt. A claim may be submitted within 90 days after the performance of services.

10 M.R.S.A. § 1176 (2004).¹ In its Findings of Fact and Conclusions of Law, this Court concluded that GM was entitled to exercise its contractual rights to audit and chargeback during the statutory period for approval or disapproval of a warranty reimbursement claim, but expressed no opinion as to whether GM could exercise those rights outside the sixty-day statutory period. In its motion to amend the judgment, GM seeks a decision on this question. Darling's opposes the motion.

DISCUSSION

In the Findings of Fact and Conclusions of Law, the Court declined to address the question of whether GM may charge back amounts previously paid after the expiration of the statutory period for approval or disapproval of warranty reimbursement claims. However, GM correctly points out in its motion to amend that its declaratory judgment complaint requested a full declaration that "section 1176 of the Maine Dealer Act does not prohibit GM from exercising its contractual right to audit paid warranty claims and charge back improperly paid amounts," and that there is in fact a present controversy between the parties as to whether GM may exercise its contractual rights outside of the statutory period. To the extent GM seeks additional clarification of its rights, GM's motion to amend the judgment is GRANTED. As for the substantive issues presented in Count III of the Complaint, the Court concludes, for the reasons set forth below, that section 1176 does not permit GM to charge back amounts previously paid after the expiration of the statutory period. Thus, to the extent GM seeks a declaration to the contrary, the...