Hawkins v. Ford Motor Co.
| Decision Date | 14 October 1999 |
| Docket Number | No. 92,503.,92,503. |
| Citation | 748 So.2d 993 |
| Parties | Dwayne HAWKINS and Millard G. Ripley, Appellants, v. FORD MOTOR COMPANY, Appellee. |
| Court | Florida Supreme Court |
Daniel E. Myers and Walter E. Forehand of Myers, Forehand & Fuller, Tallahassee, Florida, for Appellant
Dean Bunch of Sutherland, Asbill & Brennan LLP, Tallahassee, Florida, and John H. Fleming, Thomas W. Curvin and Amy K. Doyle of Sutherland, Asbill & Brennan LLP, Atlanta, Georgia, for Appellee.
James D. Adams of Adams & Quinton, P.A., Boca Raton, Florida, for South Florida Automobile and Truck Dealers Association and Greater Tampa Bay Automobile Dealers Association, Amici Curiae.
Wade L. Hopping of Hopping, Green, Sams & Smith, P.A., Tallahassee, Florida, Charles H. Lockwood II, Vice President and General Counsel, Association of International Automobile Manufacturers, Inc., and Daniel L. Goldberg and Alicia L. Downey, Boston, Massachusetts, for International Automobile Manufacturers, Inc. and American Automobile Manufacturers Association, Amici Curiae.
We have for review a question of Florida law certified by the United States Court of Appeals for the Eleventh Circuit in Hawkins v. Ford Motor Co., 135 F.3d 1443 (11th Cir.1998), that is determinative of a cause pending in that court and for which there is no controlling precedent. Specifically, the Eleventh Circuit has certified the following question to this Court:
Does Fla. Stat. § 320.643(2)(a) provide the exclusive basis for objection by a motor vehicle manufacturer to the proposed transfer of all the equity in interest in a motor vehicle dealership?
Hawkins, 135 F.3d at 1445. We have jurisdiction. See Art. V, § 3(b)(6), Fla. Const. To more accurately reflect the facts at issue in this case, we rephrase the certified question as follows:
Does section 320.643(2)(a), Florida Statutes (1993), provide the exclusive basis for objection by a motor vehicle manufacturer to a proposed transfer of all the equity interest in a corporate motor vehicle dealership?
As explained more fully below, we answer the rephrased certified question in the negative and hold that the entire transaction must be analyzed and multiple statutory provisions considered depending on the structure of the entire transaction which, as here, may involve both a transfer of all the equity interest in a corporate motor vehicle dealership and a change in executive management control of that dealership.1 On August 4, 1994, Dwayne Hawkins (Hawkins) and Millard Ripley (Ripley) entered into a stock purchase agreement with Wilson Davis, Sr. (Davis), Wade Bodiford (Bodiford), and Wilson Davis Ford, Inc. (Wilson Davis Ford),2 a Plant City, Florida, corporate motor vehicle dealership operating under a sales and service agreement with Ford Motor Company (Ford).3 Davis was the eighty percent stockholder and president of Wilson Davis Ford, and Bodiford was the general manager and twenty percent stockholder of that corporation. Under the terms of the agreement, Davis and Bodiford were to sell Hawkins and Ripley all of the stock in Wilson Davis Ford. The terms of the agreement also provided, in relevant part, that (1) Davis would resign as the "Dealer Operator" of Wilson Davis Ford; and (2) the agreement was contingent upon Ford's approval of the "Buyer" becoming the new "Dealer Operator" of Wilson Davis Ford, with the term "Buyer" being defined as including both Ripley and Hawkins.
On August 12, 1994, pursuant to section 320.643, Florida Statutes (1993), Davis and Bodiford notified Ford by letter of their intent to transfer ownership in Wilson Davis Ford. On the same day, pursuant to section 320.644, Florida Statutes (1993), Wilson Davis Ford (by letter signed by Davis and Bodiford) notified Ford of its intent to change its executive management. According to the letter explaining this change of executive management, Davis would no longer be president of Wilson Davis Ford and Bodiford no longer the general manager; Hawkins would become the new chairman of Wilson Davis Ford and Ripley the new dealer-operator. Along with these notices, Hawkins and Ripley supplied Ford with a letter indicating that they agreed to comply with the terms of the franchise agreement, and they supplied Ford with applications that (1) indicated that Hawkins would own eighty percent of Wilson Davis Ford and Ripley would own twenty percent; and (2) contained full statements of Hawkins' and Ripley's associations with other motor vehicle dealerships.
After considering the proposed transaction, Ford determined that it was unacceptable and filed a verified complaint with the Florida Department of Highway Safety and Motor Vehicles (the DHSMV). In the complaint, Ford opposed both the proposed transfer of stock and the proposed change of executive management. With respect to its opposition to the proposed transfer of stock, Ford's complaint alleged several deficiencies in the financial qualifications of Hawkins and Ripley and several performance deficiencies of a Lincoln-Mercury dealership in which Hawkins had an ownership interest; these deficiencies, according to Ford, rendered Hawkins ineligible to meet Ford's reasonable standards for executive management. However, Ford did not challenge either Hawkins' or Ripley's moral character. With respect to the proposed change of executive management control, Ford's complaint alleged the same deficiencies, again not challenging either Hawkins' or Ripley's moral character.
Subsequent to the filing of Ford's complaint with the DHSMV, the stock purchase agreement was terminated4 and the proceedings before the DHSMV were dismissed as moot. Hawkins and Ripley then filed suit in federal district court alleging, in pertinent part, that Ford had violated section 320.643, by opposing the transfer of stock to Hawkins and Ripley by means of a complaint that was facially deficient. Specifically, Hawkins and Ripley asserted that, notwithstanding the terms of the franchise agreement, the express terms of section 320.643(2)(a) governed the prospective transfer of stock in a motor vehicle dealership. Under section 320.643(2)(a), Hawkins and Ripley argued, Ford could object to the transfer of stock in Wilson Davis Ford only on the basis that Hawkins and Ripley were not of good moral character. Hawkins and Ripley noted that Ford's verified complaint did not challenge their moral character. Consequently, Hawkins and Ripley alleged that Ford's opposition to the proposed transfer of stock was in violation of section 320.643(2)(a).
In response to Hawkins' and Ripley's claims, Ford argued that where a proposed transfer of 100 percent of the equity interest in a motor vehicle dealer also leads to a change of executive management, the practical effect of such a transfer would be the transfer of the franchise agreement. Because of this alleged practical effect, Ford argued that the proposed transfer at issue would be regulated by the terms of sections 320.643(1) and 320.644, under which a manufacturer may object to a proposed transfer of a franchise agreement or change in executive management control based on business experience, lack of good moral character, or both. Consequently, Ford contended that it properly could object to the management experience and financial qualifications of Hawkins and Ripley, as it did in its verified complaint to the DHSMV.
After considering the parties' arguments, the district court agreed with Ford and held as a matter of law that "when transfer of 100% of stock is contemplated, the provisions regarding transfer of a franchise agreement and change in executive management control should apply." See Hawkins, 135 F.3d at 1445
(). However, another judge in the same district court reached the opposite conclusion in Morse v. Ford Motor Co., No. 94-1013-CIV-T-17C, 1996 WL 420837, at *2-*3 (M.D.Fla. June 7, 1996), determining that only section 320.643(2)(a) applies to the proposed transfer of 100 percent of stock and, as a result, that only moral character may be considered as grounds for an objection to such a transfer. Appeals from the district court's decisions in Hawkins and Morse were consolidated before the Eleventh Circuit, but Morse was dismissed due to a settlement agreement. See Hawkins, 135 F.3d at 1444 n. 1. After being presented with the parties' arguments on appeal, the Eleventh Circuit certified the question, now rephrased, which is currently pending before this Court for determination.5
To answer the rephrased certified question, we must determine the legislative intent governing the relationship among sections 320.643(1), 320.643(2), and 320.644. To ascertain this legislative intent, we must first consider the plain language of those statutory sections. See, e.g., Forsythe v. Longboat Key Beach Erosion Control Dist, 604 So.2d 452, 454 (Fla. 1992)
(). Section 320.643(1), Florida Statutes (1993), provides:
(1) A motor vehicle dealer shall not transfer, assign, or sell a franchise agreement to another person unless the dealer first notifies the licensee[6]of his decision to make such transfer, by written notice setting forth the prospective transferee's name, address, financial qualification, and business experience during the previous 5 years. The licensee shall, in writing, within 60 days after receipt of such notice, inform the dealer either of his approval of the transfer, assignment, or sale or of the unacceptability of the proposed transferee, setting forth the material reasons for the rejection. If the licensee does not so inform the dealer within the 60-day period, its approval of the proposed transfer is deemed granted. No such transfer, assignment, or sale will be valid unless the transferee agrees in writing to comply with all requirements of the franchise then...
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