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LIBERTY LINCOLN-MERCURY, INC. v. FORD MOTOR CO.

March 13, 1996

LIBERTY LINCOLN-MERCURY, INC., Plaintiff,
v.
FORD MOTOR COMPANY, Defendant.



The opinion of the court was delivered by: BARRY

 BARRY, District Judge

 This matter comes before the court on the motion of defendant Ford Motor Company ("Ford") for partial summary judgment and for dismissal of certain counts of the amended complaint and the cross-motion of plaintiff Liberty Lincoln-Mercury ("Liberty") for partial summary judgment. This court held oral argument on the matter on March 5, 1996.

 I. STATEMENT OF THE CASE

 The facts surrounding this motion are not in dispute. Plaintiff became an authorized Lincoln-Mercury dealer on March 11, 1976, when plaintiff and defendant entered into standard Lincoln and Mercury Dealer Sales and Service Agreements (the "Agreements"). Pl.'s 12(g) Statement of Undisputed Facts ("Pl.'s 12(g) Statement"), P I.A.; Def.'s 12(g) Statement of Undisputed Facts ("Def.'s 12(g) Statement"), P 1. The Agreements were amended on May 7, 1979 to record a change in ownership interests in Liberty. Pl.'s 12(g) Statement, P I.B.

 Defendant warranties the vehicles it manufactures against manufacturing defects and damages, with the warranties running from defendant to purchasers of new Ford vehicles. Id. at II.A. Although the manufacturer issues the warranty, the Agreements require the dealer to perform the necessary warranty repairs (parts and labor) at no direct cost to the customer, whether or not the dealer had sold the vehicle to the particular purchaser. Id. at II.C. Thus, when a Ford vehicle is covered by the manufacturer's warranty, the owner may bring the vehicle to any franchised dealer and have the vehicle repaired at no cost to him or her.

 When a dealer repairs an automobile under warranty, the dealer submits a reimbursement claim to defendant for the parts and labor used in satisfying the warranty. Agreements (attached at Certif. of Robert X. Robertazzi ("Robertazzi Certif."), Exs. A, B.), P 4(b) (4), at 8. The amount of the reimbursement is determined by a schedule published in defendant's Warranty and Policy Manual ("Manual"), which is revised and reissued annually. Def.'s 12(g) Statement, PP 3-4. Currently, *fn1" defendant generally reimburses dealers at a standard rate of 40% above the dealer's cost for warranty parts on 1994 (or later) model year vehicles, 35% for 1993 model year vehicles, and 30% for earlier years' vehicles. *fn2" Id. at P 5; Robertazzi Certif., Ex. D. The Manual does not contemplate reimbursing dealers at a reasonable retail rate, or even at the suggested retail rate, which is 63% over cost for parts. Pl.'s 12(g) Statement, P II.G. If a dealer disagrees with the parts reimbursement issued, the Manual provides an appeal procedure whereby a dealer may challenge the amount of reimbursement. Warranty Manual (attached at Aff. of James W. Suhay, Ex. A), *fn3" 6.5-1.

 A bill which supplemented the New Jersey Franchise Practice Act ("NJFPA" or "Act") states,

 
If any motor vehicle franchise shall require or permit motor vehicle franchisees to perform services or provide parts in satisfaction of a warranty issued by the motor vehicle franchisor:
 
a. The motor vehicle franchisor shall reimburse each motor vehicle franchisee . . . for such parts as are supplied, in an amount equal to the prevailing retail price charged by such motor vehicle franchisee for such . . . parts in circumstances where such . . . parts are supplied other than pursuant to warranty.

 N.J. Stat. Ann. § 56:10-15. On December 12, 1992, plaintiff submitted a letter to defendant requesting an increase in its warranty parts reimbursement from 30% (the schedule reimbursement rate at the time) to retail markup, as required by the NJFPA. Robertazzi Certif., Ex. E.

 In July 1992, after plaintiff provided documentation for a sample of retail repairs, defendant agreed to reimburse plaintiff for warranty parts at plaintiff's retail rate, a mark-up of 77% over cost. Id., Ex. M; Def.'s 12(g) Statement, P 8. In order to recoup the costs incurred by complying with the NJFPA, however, defendant assessed -- and continues to assess -- a surcharge on new vehicles sold by plaintiff. Decl. of Philip Meilak ("Meilak Decl."), P 3. The surcharge is added to the cost of the vehicle after plaintiff sells the car to the customer. *fn4" Defendant concedes that this surcharge is utilized for the purpose of recovering the cost of reimbursing plaintiff for warranty parts at the retail rate. Id.

 Plaintiff filed suit against defendant on October 5, 1992, and this suit was dismissed without prejudice in May 1994. *fn5" Pl's 12(g) Statement, PP III.S., III.T. Plaintiff filed a Complaint in this matter on June 30, 1995 and amended it on July 7, 1995. The amended complaint alleges: 1) violation of the NJFPA, N.J. Stat. Ann. § 56:10-15, 2) violation of the NJFPA, N.J. Stat. Ann. § 56:10-7, 3) violation of the Automobile Dealer's Day in Court Act, 15 U.S.C. §§ 1221-1225, 4) violation of section 2(c) of the Robinson-Patman Act, 15 U.S.C. § 13(c), 5) breach of contract, 6) breach of the covenant of good faith and fair dealing, 7) unjust enrichment and conversion, 8) bad faith, 9) estoppel, and 10) quantum meruit.

 Defendant has moved to dismiss Counts One (in part), Two, Three, Four, Seven, Nine, and Ten. Defendant has also moved for partial summary judgment on Counts One (in part), Five, Six, and Eight. *fn6" Plaintiff has cross-moved for partial summary judgment as to liability on all Counts. For the reasons stated herein, the court grants plaintiff's motion for summary judgment as to liability since December, 1991, on Count One and defendant's motion to dismiss Count Four. Because the remedies sought by plaintiff under the remaining Counts are duplicative of those sought within these claims, *fn7" and because, at oral argument, ...


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