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L.P. v. American Honda Motor Co., Inc.

Supreme Court of New Hampshire

August 22, 2014

Autofair 1477, L.P.
v.
American Honda Motor Company, Inc

Argued April 3, 2014.

Page 1165

Hillsborough-northern judicial district.

Holmes Law Offices PLLC, of Concord ( Gregory A. Holmes on the brief and orally), for the plaintiff.

Campbell Campbell Edwards & Conroy, P.C., of Boston, Massachusetts ( James M. Campbell on the brief and orally), for the defendant.

LYNN, J. DALIANIS, C.J., and HICKS, CONBOY, and BASSETT, JJ., concurred.

OPINION

Page 1166

Lynn, J.

The plaintiff, Autofair 1477, L.P., doing business as Autofair Honda (Autofair), appeals an order of the Superior Court ( Garfunkel, J.) denying its motion for summary judgment and granting summary judgment to the defendant, American Honda Motor Company, Inc. (AHM), on the plaintiff's petition for attorney's fees. We affirm.

The following facts are drawn from the record or are otherwise undisputed. AHM, located in Torrance, California, is a manufacturer and distributor of Honda brand automobiles. Autofair is an authorized Honda dealer located in Manchester. The relationship between the parties, pursuant to which AHM supplies new vehicles that it manufactured to Autofair for sale, is governed by the Automobile Dealer Sales and Service Agreement (the Agreement). Under the Agreement, Autofair is obligated to perform warranty work on Honda vehicles pursuant to AHM's Service Operations Manual, and AHM later reimburses Autofair for that work. However, AHM may later charge back any amount paid for a warranty repair if, as the result of a warranty audit, AHM determines that Autofair did not follow AHM's policies and procedures. Both parties are also subject to the provisions of RSA chapter 357-C (2009 & Supp. 2013) (the Dealership Act), which regulates the business practices between motor vehicle manufacturers, distributors, and dealers.

In November 2010, AHM performed a warranty audit at Autofair, after which it proposed $45,733.02 of chargebacks and a potential escrow reversal of $54,571.17 for claimed warranty work that deviated from AHM's policies and procedures. AHM did not debit Autofair's account for these amounts. Autofair filed an " internal appeal" with AHM, contesting the escrow reversal and $30,001.51 of the proposed chargebacks. After review, AHM reduced the amount of the proposed chargebacks to $43,957.94.

[166 N.H. 601] In February 2011, Autofair filed a protest with the New Hampshire Motor Vehicle Industry Board (the Board) pursuant to the Dealership Act. Even though AHM had neither debited Autofair's account nor held any disputed funds in escrow, Autofair specifically requested a " finding and ruling that the warranty audit charge backs and the [proposed] escrow violate RSA 357-C:4 and RSA 357-C:5, that the audit charge backs be reversed, and the escrow funds released."

Prior to a final hearing before the Board, the parties had ongoing discussions and reduced the disputed amount to $29,729.92, and Autofair withdrew its request for relief regarding the proposed escrow.[1] The Board conducted a hearing in October 2011. Following the hearing, in a written order, the Board affirmatively ruled on whether Autofair had reasonably substantiated each of the 123 claims still at issue, and thus whether AHM was entitled to charge back the amounts associated with each claim. In total, the Board determined that AHM was entitled to charge back claims totaling $1,032.13, but not the remaining $28,697.79 of disputed claims. The Board also stated that because " Honda has paid the claims, and not held ...


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