PALMETTO FORD TRUCK SALES, INC. D/B/A PALMETTO TRUCK CENTER, APPELLANT,
v.
STERLING TRUCK CORPORATION, APPELLEE; ASBELL TRUCK CENTER, INC., APPELLANT, V. STERLING TRUCK CORPORATION, APPELLEE; ATLANTIC FORD TRUCK SALES, INC. D/B/A ATLANTIC TRUCK CENTER, APPELLANT, V. STERLING TRUCK CORPORATION, APPELLEE
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Three truck franchise dealers challenged a decision by the Department of Highway Safety and Motor Vehicles dismissing their administrative complaints against Sterling Truck Corporation's decision to cease manufacturing the Sterling line-make. The court held that cessation of manufacturing may constitute a modification or termination of a franchise agreement under Florida law, entitling dealers to an administrative hearing to challenge whether the action violated statutory fairness requirements.
The court held that cessation of manufacturing of the Sterling line-make may properly be viewed as a modification or termination of the franchise agreement, and that dealers have the right to an administrative hearing upon receipt of a manufacturer's notice of intent to discontinue or modify in order to demonstrate whether such action violates sections 320.60-320.70, Florida Statutes. The mere fact of compliance with the franchise agreement does not preclude an administrative hearing.
[1] A motor vehicle dealer who receives a manufacturer's notice of intent to discontinue, cancel, not renew, modify, or replace a franchise agreement may petition for an admi…
[2] A manufacturer's decision to cease manufacturing a specific line-make of vehicles may be considered a modification or termination of existing franchise agreements.
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Join FLexlaw to unlock all legal intelligence“Any motor vehicle dealer who receives a notice of intent to discontinue, cancel, not renew, modify, or replace may, within the 90-day notice period, file a petition or complaint for a determination of whether such action is an unfair or prohibited discontinuation, cancellation, nonrenewal, modification, or replacement.”
The statutory provision granting dealers the right to petition for a fairness determination upon receipt of manufacturer's notice regarding discontinuation or modification.
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Join FLexlaw to unlock all legal intelligenceSterling Truck Corporation notified its franchise dealers of its decision to cease manufacturing the Sterling line-make of trucks. Three dealers—Palme…
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In this case, three franchise dealers for Sterling Truck Corporation petitioned the Department of Highway Safety and Motor Vehicles (DHSMV) for an administrative hearing pursuant to section 320.641(3), Florida Statutes (2008), which provides: “Any motor vehicle dealer who receives a notice of intent to discontinue, cancel, not renew, modify, or replace may, within the 90-day notice period, file a petition or complaint for a determination of whether such action is an unfair or prohibited discontinuation, cancellation, nonrenewal, modification, or replacement.” In their complaints, the dealers contended that Sterling Truck Corporation’s notice of its decision to cease manufacturing the Sterling line-make1 triggers hearing rights. The complaints alleged that the decision was made in bad faith, was not undertaken for good cause, and will result in an unfair or prohibited termination of the franchise agreements. In the final order under review, DHSMV dismissed the dealers’ complaints on grounds that section 320.641 contains no “clear manifestation of the Legislature’s intent to in any way limit a manufacturer’s right to choose to go out of business.”
DHSMV ruled in effect that the cessation of manufacturing operations never affords a dealer the right to petition for a fairness determination pursuant to section 320.641. While we agree DHSMV has no authority to order continued manufacture, we agree with the dealers that the decision to stop manufacturing Sterling trucks may properly be viewed as a modification, if not as an outright termination, of the franchise agreement. See Stadium Chrysler Jeep, L.L.C. v. DaimlerChrysler Motors Co., 324 F.Supp.2d 587 (D.N.J.2004); LaPosta Oldsmobile, Inc. v. Gen. Motors Corp., 426 F.Supp.2d 346 (N.D.W.V.2006). But see Hechler Chevrolet, Inc. v. Gen. Motors Corp., 230 Va. 396, 337 S.E.2d 744 (1985); L & B Truck Servs., Inc. v. Daimler Trucks N. Am. LLC, 2009 WL 3584346 (D.Vt.2009). We express no view on whether ceasing production of the Sterling line-make violates sections 320.60-320.70, or on whether the complaints in this case are pleaded with sufficient particularity. These issues were not reached below. But we conclude that the mere fact of compliance with the franchise agreement does not preclude an administrative hearing.2
*207Pursuant to section 320.641(3), Florida Statutes (2008), a dealer has the right to an administrative hearing, upon receipt of a manufacturer’s notice of intent to discontinue or modify, in order to show, if it can, that discontinuance or modification violates sections 320.60-320.70, Florida Statutes (2008).
Reversed and remanded.
WOLF, BENTON, and PADOVANO, JJ., concur.