Court Opinion

ID: 5949883
Source: CourtListenerOpinion
Date Created: 2022-01-13 06:17:02.865058+00
Date Added: 2024-06-11T08:47:37.163943
License: Public Domain

Levine, J.
(concurring in part and dissenting in part). I disagree with so much of the majority’s decision that reverses the dismissal of plaintiff’s first cause of action in the amended *172complaint and grants judgment thereon. The statutory provision upon which that cause of action is based unequivocally requires that, before a supplier is obliged to repurchase a dealer’s inventory upon termination of the dealership, a prior dealer agreement must have been entered into "wherein the dealer agrees to maintain an inventory of equipment or repair parts” (General Business Law § 696-f [1] [emphasis supplied]). To my mind, the statutory language is clear and unambiguous in imposing the statutory obligation to repurchase inventory only when there was a binding commitment in the dealer agreement requiring the dealer to "maintain” some kind of inventory, as Supreme Court properly held.
Any possible doubts as to the foregoing meaning of General Business Law § 696-f (1) should be completely dispelled by its legislative history. It was proposed in response to "many complaints received from dealers of farm equipment claiming unfair treatment in their relationship with the manufacturers” (letter from Sen. Kehoe, Bill Jacket, L 1988, ch 688). According to the Senate sponsor, the objective of the legislation was "to provide for the contents of franchise agreements regarding the sale of [farm] equipment” (mem of Sen. Kehoe, Bill Jacket, L 1988, ch 688 [emphasis supplied]). The trade association representing the dealers in farm equipment throughout the State (presumably including plaintiff) wrote an extensive "Statement of Need” in promoting this legislation. Its memorandum states:
"More often than not, a dealer agreement requires a dealer to stock a certain dollar amount of repair parts and whole-goods, commensurate with what the supplier believes to be necessary for the dealer to properly sell and service the equipment * * *
"If the dealer is to be expected to stock the inventory of machinery and parts the supplier stipulates to he necessary for opening a dealership, the supplier should be required to repurchase inventory at the time of termination as prescribed for in this legislation.” (Bill Jacket, L 1988, ch 688 [emphasis supplied].)
The foregoing clearly demonstrates that the legislation was designed to protect farm equipment dealers from certain abuses by farm equipment manufacturers and suppliers, among which was requiring dealers to agree to maintain a certain level of inventory as a condition for granting a franchise dealership in the manufacturers’ farm equipment and parts.
*173There is not a shred of evidence in the record that plaintiff was required to maintain any particular inventory as a condition for being permitted to act as an authorized dealer in defendant’s products. Indeed, plaintiff’s president conceded that he was never required to place "stocking orders” by defendant and that, for the last nine years that plaintiff’s business was in operation, defendant’s representative never checked his inventory and never told him what specific parts to stock:
"When he became my territory manager, he knew that I was a good dealer and that I took care of business and he didn’t really have to go over and do that, because he knew what the situation was.
"Q. He knew that you had expertise in the field, correct?
"A. That’s right.
"Q. And he knew that you were capable of deciding what you needed to service your customers; is that right?
"A. That’s correct * * *
"Q. And you were able to rely on your business expertise to know how to take care of your customers; is that correct?
"A. That’s correct.
"Q. And you knew what you needed in order to keep those customers happy; is that correct?
"A. Yes.”
Plaintiff’s president further conceded that, except for questions he might have on the prospective need for replacement of parts on newly introduced products of defendant, there were no discussions with defendant’s sales representatives regarding plaintiff’s inventory needs of defendant’s products or parts:
"Q. And it wasn’t necessary for you to rely on any suggestions from the Clay people, with the single exception of using their expertise to familiarize you with a new piece of equipment; is that correct?
"A. We would go sit down and look at a piece of equipment and then decide what we needed to stock.
"Q. A new piece, correct?
"A. Right. When Clay introduced a new piece of equipment, we would sit down and go over what we needed to stock, to keep the customer happy.
"Q. And then you would make the decision based on infor*174mation received from Mr. Woods about what parts likely needed to be replaced; is that correct?
"A. That’s correct.”
Thus, the evidence upon which the majority relies to invoke the application of the statutory mandate for repurchasing inventory proves nothing more than a vague understanding that plaintiff would have some of defendant’s products and parts on hand to sell to customers, the quantity of which was completely within plaintiff’s discretion; also, that on some few occasions plaintiff would have a totally noncoercive discussion of its inventory needs regarding a new product with a customer representative of defendant, following which plaintiff would "agree” to add to its inventory of parts for defendant’s new product by doing nothing more than placing a specific order.
In my view, the majority’s application of the statute based upon the foregoing facts transforms General Business Law § 696-f (1) from a remedial enactment to protect farm equipment dealers from manufacturers’ and suppliers’ abuses in mandating inventory levels in franchise agreements, into a provision making farm equipment manufacturers and suppliers general guarantors against their dealers’ financial losses on unsold inventory. Indeed, I cannot conceive of any dealership arrangement which, under the majority’s construction of the statute, would not give rise to an obligation to purchase inventory upon termination of the dealership. This enlarges the rights and remedies of farm equipment and parts dealers far beyond what was intended by this legislation. I would, therefore, affirm so much of the judgment as dismissed plaintiff’s first cause of action in the amended complaint.
Mikoll, J. P., Mahoney and Casey, JJ., concur with Harvey, J.; Levine, J., concurs in part and dissents in part in a separate opinion.
Ordered that the judgment is modified, on the law and the facts, with costs to plaintiff, by reversing so much thereof as dismissed plaintiff’s first cause of action in the amended complaint and awarded defendant interest on its counterclaim in the sum of $688.80; judgment is directed in favor of plaintiff on said cause of action and matter remitted to the Supreme Court for further proceedings not inconsistent with this court’s decision; and, as so modified, affirmed.