Florida court rules for automakers in first round of warranty pay case

Florida court rules for automakers in first round of warranty pay case

A Florida court has said automakers legal challenge of a state law requiring warranty reimbursement to their franchised dealers at retail rates can proceed. The final decision could have implications for franchised dealers nationwide.

In 2008, the Alliance of Automobile Manufacturers challenged a new Florida warranty reimbursement law– the second generation of an already existing law– that took effect earlier that year.

In particular, the manufacturers challenged two provisions: one saying manufacturers couldnt directly or indirectly recover the costs of compensating dealers for warranty reimbursement, and another requiring manufacturers to offer Florida dealers the same incentives and bonuses as dealers elsewhere in the country. (In other words, the law said manufacturers couldnt retaliate against Florida dealers for the states enhanced warranty reimbursement law as a way of avoiding compliance.)

The Florida Automobile Dealers Association filed a motion to dismiss the manufacturers action, and last week, the court for the most part denied the motion. That ruling indicates that the case will probably be resolved as a result of a summary judgment motion, predicts dealer attorney Mike Charapp of Charapp & Weiss, meaning the case will not go to trial.