Fixed Ops Magazine - 2023 Vol20 04 - 20

FEATURE BY LEONARD A. BELLAVIA, ESQ.
WARRANTY
REIMBURSEMENT
ADVOCATE
Overcoming Manufacturer Efforts To Defeat Dealer
Requests For Retail Reimbursement
R
etail Warranty Reimbursement statutes have
been passed by state legislatures in all fifty
(50) states to protect the more than 17,000
franchised new car dealers in this country and to enforce
their rights with respect to reimbursement at
retail rates. Of course, each state has its own unique
considerations and state-specific provisions; however,
the general intent and objectives of the statutes are to
ensure fair and reasonable compensation for dealers
for their parts and labor warranty claims. See e.g., NY
CLS Veh & Tr § 465, Mass. Ann. Laws Ch. 93B § 9, Ky
Rev. Stat. § 190.046, Nev. Rev. Stat. Ann. § 482.36385,
A.R.S. § 28-4451.
These statutes were further constructed as a means to
sustain fairness and to safeguard dealers against unfair
and predatory practices " amidst business relationships
with perceived bargaining disparities. " GM, LLC v. Bur.
of Professional & Occupational Affairs, 654 Pa. 66, 212
A3d 40 [2019]. Courts have regularly enforced statutes
supporting the proposition that manufacturers are prohibited
from " engaging in any action which is arbitrary,
20
in bad faith or unconscionable and which causes damage
to [motor vehicle dealers or the public]. " GMC v.
Darling's, 324 F. Supp. 2d 257 [D Me 2004], citing Me.
Rev. Stat. Ann. Tit. 10 § 1174. As will be discussed herein,
we have encountered an alarming trend of misconduct
by manufacturers, which are attempting to take advantage
of dealers by improperly rolling back previously
approved parts markup rate increases. This wrongdoing
is clearly contrary to the designated purpose of the
relevant statutes and is a key development to follow at
this time.
By way of background, and as promulgated in each
state's applicable statutes, manufacturers shall reimburse
and compensate dealers for both parts and labor
at rates " no less than the price and rate charged by
the franchised motor vehicle dealer for like services
to non-warranty and/or non-service contract customers. "
NY CLS Veh & Tr § 465(1). Pursuant to the Illinois
statute, " [a]dequate and fair compensation requires
the manufacturer to pay each dealer no less than the
amount the retail customer pays for the same services

Fixed Ops Magazine - 2023 Vol20 04

Table of Contents for the Digital Edition of Fixed Ops Magazine - 2023 Vol20 04

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