Mike Smith Pontiac, GMC, Inc. v. Mercedes-Benz of North America, Inc., MERCEDES-BENZ

• Decision Date: 21 September 1994
• Docket Number: MERCEDES-BENZ,No. 92-3124,92-3124
• Citation: 32 F.3d 528
• Parties: MIKE SMITH PONTIAC, GMC, INC., Plaintiff-Counterdefendant-Appellant, Cross-Appellee, v.OF NORTH AMERICA, INC., Defendant-Counterclaimant, Counterdefendant-Appellee, Cross-Appellee, Cross-Appellant, Federal Insurance Company, Defendant-Counterclaimant, Terry Taylor; Terry Taylor Investments, Inc.; Billy Grubbs, Counterdefendants-Appellants.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 528

32 F.3d 528

MIKE SMITH PONTIAC, GMC, INC. Plaintiff-Counterdefendant-Appellant, Cross-Appellee, v. MERCEDES-BENZ OF NORTH AMERICA, INC. Defendant-Counterclaimant Counterdefendant-Appellee Cross-Appellee, Cross-Appellant, Federal Insurance Company, Defendant-Counterclaimant, Terry Taylor; Terry Taylor Investments, Inc.; Billy Grubbs, Counterdefendants-Appellants.

No. 92-3124.

United States Court of Appeals, Eleventh Circuit.

Sept. 21, 1994.

Alan C. Sundberg, F. Townsend Hawkes, Carlton, Fields, Ward, Emmanuel, Smith & Cutler, P.A., Tallahassee, FL, Coble Barkin, Gordon, Morris & Reynolds, P.A., Law Office of James D. Adams, Boca Raton, FL, for Terry Taylor, et al.

David E. Peterson, Terry C. Young, John A. Reed, Lowndes, Drosdick, Doster, Kantor & Reed, P.A., Orlando, FL, for Mike Smith Pontiac, GMC, Inc.

William J. Dunaj, Teresa Ragatz, Mershon, Sawyer, Johnston, Dunwody & Cole, Miami, FL, for Mercedes.

Appeals from the United States District Court for the Middle District of Florida.

Before BLACK and BARKETT, Circuit Judges, and HILL, Senior Circuit Judge.

BARKETT, Circuit Judge:

Appellants, Cross-Appellees Mike Smith Pontiac GMC, Inc. (MSP) and Terry Taylor, Billy Grubbs and Terry Taylor Investments (collectively, Taylor) appeal the district court's summary judgment that the Florida Automobile Dealer's Act, Section 320.697, Florida Statutes (1985) does not mandate a treble damage award. Appellee, Cross-Appellant Mercedes-Benz of North America, Inc. (Mercedes-Benz) cross-appeals the district court's summary judgment that Mercedes-Benz violated Sec. 320.643 and that Sec. 320.697 provides standing to a prospective purchaser of an automobile dealership. We reverse the district court's decision that the award of treble damages be left to the jury's discretion. In all other respects, we affirm.

ISSUES

The complaint in this case was brought pursuant to the Florida Automobile Dealer's Act (the Act), which provides, in pertinent part, that "[a]ny person who has suffered pecuniary loss or who has been adversely affected because of a violation of Secs. 320.60-320.70 ... has a cause of action ... and may

recover damages ... in an amount equal to 3 times the pecuniary loss." Sec. 320.697. There are three issues we must decide in this case. The first is whether the district court erred in holding that appellant, Taylor, has standing to bring a claim under Sec. 320.697. The second issue is whether the district court erred in declaring that Mercedes-Benz violated Sec. 320.643. In the event we answer the second question in the affirmative, we must decide whether the district court erred in finding that Florida Statutes Sec. 320.697 does not mandate the trebling of damages.

FACTS

In July 1983, appellant MSP and appellee Mercedes-Benz entered into a Mercedes-Benz Passenger Car Dealer Agreement (Dealer Agreement), which permitted MSP to sell and service Mercedes-Benz automobiles. The agreement subsequently was extended to December 31, 1985. Jerome Ginsburg (Ginsburg) owned seventy-five percent of MSP's stock and Mike Smith (Smith), the dealer-operator, owned twenty-five percent. In July 1985, a dispute arose between Ginsburg and Smith prompting Ginsburg to oust Smith from the dealership with the use of undated letters of resignation previously executed by Smith. In light of this dispute, Mercedes-Benz invoked Paragraph 15D(g) of the Dealer Agreement, which allows for termination due to any disagreements between the dealer operators and owners that adversely affect the dealer's business and continue for three months after Mercedes-Benz notifies the dealer that the disagreement must be resolved. On October 23, 1985, Mercedes-Benz notified MSP of its intent to terminate the Dealer Agreement because MSP had not sufficiently resolved the management dispute. ¹

Pursuant to Sec. 320.641, MSP filed an administrative complaint with the Department of Highway Safety and Motor Vehicles (Department), claiming unfair termination of the Dealer Agreement. In October 1985, before the final hearing on the termination action, MSP proposed a transfer of the franchise to Ronald Cutler (Cutler). On December 15, 1986, pursuant to Sec. 320.643, Mercedes-Benz filed an administrative complaint challenging the proposed transfer of the franchise to Cutler.

On May 1, 1987, the hearing officer concluded that termination of the Dealer Agreement due to MSP's violation of Paragraph 15D(g) would be appropriate. Before the Department completed its review of the hearing officer's Recommended Order, Mercedes-Benz notified the Department that it had approved the Cutler transfer, rendering the termination action moot. However, in June 1987, MSP notified Mercedes-Benz that the Cutler transfer would not take place, and instead, MSP proposed to transfer the franchise to appellants, Taylor. The circumstances surrounding this proposed transfer form the foundation of this lawsuit.

Mercedes-Benz filed a complaint with the Department challenging the Taylor transfer on August 28, 1987. However, Mercedes-Benz' transfer challenge did not address the qualifications of the proposed transferee as mandated by the statute. Instead, Mercedes-Benz objected on the ground that by approving the transfer it would open itself up to potential lawsuits brought by either Cutler or Smith, each claiming to be the rightful dealer. Because Mercedes-Benz challenged the transfer rather than the qualifications of the transferee, MSP filed a motion to dismiss the complaint which was granted on November 9, 1987. ²

Mercedes-Benz appealed the Department's ruling, contending, inter alia, that it properly opposed the Taylor transfer. The First District Court of Appeal affirmed the Department's order and found that amended Sec. 320.643 applied to Mercedes-Benz, that Mercedes-Benz improperly challenged the Taylor transfer, and thus that the transfer took place by operation of law. Mercedes-Benz of North America v. Mike Smith Pontiac

GMC, 561 So.2d 620, 625 (Fla. 1st DCA 1990). The Florida Supreme Court denied review of the case. Mercedes-Benz of North America, Inc. v. Mike Smith Pontiac GMC, Inc., 574 So.2d 142 (1990). Appellants brought this diversity action in federal court in the District of New Jersey. On Mercedes-Benz' motion, the action was transferred to the Middle District of Florida.

DISCUSSION

I. Standing of a Prospective Franchisee

Mercedes-Benz first contends that Taylor lacks standing to pursue a claim under Sec. 320.697 because the statute was not intended to provide a cause of action to a prospective franchisee. Taylor rejects this interpretation and argues that a plain reading of the statute makes clear that the legislature's use of the phrase "any person" was meant to include prospective franchisees. The question of whether a prospective franchisee has standing under Sec. 320.697 is one of first impression.

The rules of statutory construction dictate that "[w]hen the language of a statute is clear and unambiguous and conveys a clear and definite meaning, the statute must be given its plain and ordinary meaning." In re McCollam, 612 So.2d 572, 573 (Fla.1993); Birnholz v. 44 Wall Street Fund, Inc., 880 F.2d 335, 341 (11th Cir.1989). Absent an ambiguity, the statute's plain meaning prevails. Streeter v. Sullivan, 509 So.2d 268, 271 (Fla.1987); Holly v. Auld, 450 So.2d 217, 219 (Fla.1984). No further inquiry is required unless "an unreasonable or ridiculous conclusion would result from a failure to do so." In Re McCollam, 986 F.2d 436, 437 (11th Cir.1993) (quoting In re McCollam, 612 So.2d at 573).

Section 320.697 provides that "[a]ny person who has suffered pecuniary loss or who has been otherwise adversely affected because of a violation by a licensee of ss. 320.60-320.70 ... has a cause of action against the licensee for damages." The use of the phrase "any person" does not lend itself to ambiguity and this court finds none. The statute's plain meaning controls, and, accordingly, we find that the statute grants a potential franchisee standing to bring suit.

II. Did Mercedes-Benz Violate Sec. 320.643?

We next consider whether the state proceedings established that Mercedes-Benz violated Sec. 320.643 and whether the district court was correct in relying on these proceedings in granting partial summary judgment for MSP and Taylor on this issue.

a. Section 320.643

Section 320.643 provides a procedure through which a licensee may challenge a proposed transfer of an automobile dealership. Section 320.643(1) provides that within 60 days of receiving notice of a proposed transfer, a licensee "shall ... inform the dealer either of his approval of the transfer ... or of the unacceptability of the proposed transferee, setting forth the material reasons for the rejection." Sec. 320.643 (emphasis added). If the licensee wishes to object, it may "within 60 days following [notice], file with the [Department] a verified complaint for a determination that the proposed transferee is not a person qualified to be a transferee under this section." Fla.Stat. Sec. 320.643(1). An objection to a proposed transferee on grounds other than the transferee's "good moral character" or the transferee's failure to meet the licensee's "written, reasonable, and uniformly applied standards or qualifications ... relating to business experience of the [motor vehicle dealer's] executive management" is presumed to be unreasonable. Id.

Section 320.643(2)(a) provides that "a licensee shall not ... prevent ... any motor vehicle dealer ... from selling ... or otherwise disposing of ... the equity interest ... in such motor vehicle dealer to any other person ... unless the licensee proves at a hearing pursuant to this section that such transfer ... is to a person who is not, or whose controlling executive management is not, of good moral character." A licensee may file with the Department a complaint for a determination "that the proposed transferee is not a person qualified to be a...