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Rosado v. Ford Motor Company

July 23, 2003

WILLIAM ROSADO, APPELLEE IN NO. 02-3356; APPELLANT IN NO. 02-3357
v.
FORD MOTOR COMPANY, APPELLANT IN NO. 02-3356; APPELLEE IN NO. 02-3357



APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA (D.C. Civ. No. 00-cv-00046 District Judge: Honorable A. Richard Caputo

Before: Scirica, Chief Judge,*fn1 Ambro and Weis, Circuit Judges.

The opinion of the court was delivered by: Weis, Circuit Judge

PRECEDENTIAL

Argued April 23, 2003

OPINION OF THE COURT

In this appeal, we are asked to respond to a certified question of law — whether a prospective purchaser of an automobile dealership has standing to challenge the exercise of a manufacturer's right of first refusal. We conclude that the Pennsylvania Board of Vehicles Act grants only limited rights to a prospective purchaser and they have not been infringed. Accordingly, we answer in the negative and remand for appropriate disposition of the case.

In 1999, John S. Lopatto, Jr. and Ann S. Lopatto, the owners of a Ford distributorship in Plymouth, Pennsylvania, agreed to sell their business to the plaintiff William Rosado. The agreement included the purchase of the dealership assets and real estate for $545,000, less certain credits.

Pursuant to the terms of the franchise, the purchase agreement was submitted to defendant Ford Motor Company, which chose to exercise its contractual right of first refusal. In accordance with statutory provisions, Ford gave timely notice to Rosado and offered to pay his reasonable expenses incurred in connection with the aborted purchase agreement. In addition, the Lopattos offered to return the $5,000 non-refundable deposit that Rosado had paid to them. Ford assigned its rights under the agreement to another party in the area, who then purchased the dealership.

Rosado alleges that as a result the Lopattos received less compensation than they would have had they sold to him. However, the Lopattos do not dispute that they received all of the consideration that they were due under the terms of the Rosado agreement.

Rosado filed suit in state court and Ford removed to the District Court. The complaint asserted tortious interference with contractual rights and violations of the Pennsylvania Board of Vehicles Act, 63 P.S. §§ 818.16, and 818.12(b)(3). The statute limits a manufacturer's right of first refusal and prohibits unreasonable withholding of consent to the sale of a dealership.

The District Court granted summary judgment to Ford on the count alleging unreasonable withholding of consent, but concluded that plaintiff had standing to challenge Ford's right of first refusal. Consistent with that ruling, the Court also denied Ford's motion for summary judgment on Rosado's claim for tortious interference with contract. Pursuant to 28 U.S.C. § 1292(b), the Court certified as a controlling question of law "whether a prospective purchaser has standing to claim that the selling dealer did not receive the same or a greater consideration under § 818.16." We accepted the certification.

On appeal, in addition to denying Rosado's standing, Ford contends that its invocation of the right of first refusal did not constitute tortious interference with contract.

I.

The Pennsylvania Board of Vehicles Act is a comprehensive statute governing the relationship between automobile manufacturers and their franchise dealers. The Act prohibits a manufacturer from unreasonably withholding consent to the sale of a franchise to a qualified buyer. 63 P.S. ยง 818.12(b)(3). To further regulate transfers, the legislation was ...


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