GNYADA June 2019 Newsletter



reflecting the parties shared interest in vehicle sales.” This important case demonstrates that New York’s Franchise Law covers not only changes to the Dealer Agreement itself, but also extends to all aspects of the franchise relation- ship, including the all-important incentive programs. This case also demonstrates that mediation through DMV under the Franchise Law, con- tinues to be a successful venue for dealers to resolve their disputes with manufacturers. Wide World Maserati was represented by Russell McRory, James Westerlind, Mike McMahan, and Charles Gallaer of Arent Fox LLP, together with co-counsel, Jonathan P. Harvey of the Jonathan P. Harvey Law Firm PLLC of Albany, New York. GNYADA congratulates Arent Fox on this victory and thanks them for this article. procedures the dealership will adopt to ensure the VPP policy is implemented and maintained; and a series of actions the dealership will take throughout the lifecycle of VPPs, including those related to product selection, pricing, adver- tisement, presentation, sale, can- cellation and, when they arise, customer complaints. The guide, including an editable Microsoft Word version of the policy template, is available to NADA members at taryprotectionproducts n n

earn incentives included image and facility requirements, training requirements, CPO sales and off- lease purchase objectives, and parts purchase objectives that would increase substantially each successive quarter. The DMV Appeals Board found that these changes to the dealer agreement and the incentive program, “… taken separately and as a whole, appear to be adverse to the interest of the deal- erships, and in several instances, vio- late the Dealer Act.” In a lengthy and sweeping decision, the DMV Appeals Board found that “the pricing and payment structure, including terms and conditions upon which MNA sells vehicles to Wide World at wholesale and the policies and practices by which Wide World purchases and resells Maserati vehi- cles, including a dealer’s margin and wholesale pricing policy, may be deemed to be integral, constituent parts of the franchise arrangement, NADA has released the new, optional NADA/NAMAD/AIADA Model Dealership Voluntary Protection Products Policy to car and light-truck dealer members. This new resource, prepared in consultation with volun- tary protection product (VPP) experts throughout the industry, provides fran- chised dealers an optional policy tem- plate they can use to help ensure that their VPPs are marketed and offered to customers in a compliant, profes- sional and consumer-friendly manner. The template generally sets forth: n the dealership’s commitment to a transparent and professional VPP process;

In April, the DMV Appeals Board affirmed Wide World Maserati’s win in a precedent-setting opinion upholding New York’s franchise law. Following a trial in November, the Administrative Law Judge ruled that Maserati’s changes to the dealer agreement and their incentive pro- gram were unfair and therefore pro- hibited under the law. Among other things, Maserati’s new dealer agreement would have removed electric and hybrid vehicles from the franchise, changed the sales effectiveness standard, and required the dealer to release all claims that it currently has against Maserati. Maserati’s new incentive program would have reduced trading margins and replaced guaranteed holdback through a variable incentive program. Under the program, the dealer would have to earn incentive money by meeting various subjective and ever- changing objectives set unilaterally by Maserati. Some of the criteria to

NADA Releases Model Dealership Voluntary Protection Products Policy



Greater New York Automobile Dealers Association •

The Newsletter • June 2019

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