Court Opinion

ID: 4102814
Source: CourtListenerOpinion
Date Created: 2016-11-29 16:08:21.957746+00
Date Added: 2024-06-11T08:50:02.134825
License: Public Domain

MAINE	SUPREME	JUDICIAL	COURT	                                                     Reporter	of	Decisions	
Decision:	 2016	ME	171	
Docket:	   BCD-14-433	
Argued:	   September	17,	2015	
Decided:	  November	29,	2016	
	
Panel:	    SAUFLEY,	C.J.,	and	MEAD,	GORMAN,	JABAR,	and	HJELM,	JJ.	
	
	
                                    FORD	MOTOR	COMPANY	
                                              	
                                             v.	
                                              	
                                       DARLING’S	et	al.	
	
	
HJELM,	J.	

        [¶1]		This	is	the	second	appeal	in	a	long-running	dispute	arising	out	of	

the	 franchise	 relationship	 between	 Ford	 Motor	 Company	 and	 Darling’s,	 an	

automobile	 dealer	 located	 in	 Bangor.	 	 See	 Ford	 Motor	 Company	 v.	 Darling’s	

(Ford	 I),	 2014	ME	 7,	 86	A.3d	 35.	 	 The	 relationship	 is	 subject	 to	 the	 Business	

Practices	Between	Motor	Vehicle	Manufacturers,	Distributors,	and	Dealers	Act	

(Dealers	Act),	10	M.R.S.	§§	1171	to	1190-A	(2015).1		In	Ford	I,	we	affirmed	the	

portion	 of	 a	 judgment	 entered	 in	 the	 Business	 and	 Consumer	 Docket	 (BCD)	

(Nivison,	 J.)	 that	 concluded	 that	 Ford	 violated	 the	 Dealers	 Act	 by	 failing	 to	

provide	Darling’s	with	proper	notice	of	a	franchise	modification.		We	vacated	

    1		All	citations	to	the	Dealers	Act	are	made	to	the	statute	currently	in	effect,	10	M.R.S.	§§	1171	to	

1190-A	(2015).		The	Dealers	Act	has	been	amended	since	this	case	was	initiated	in	2006,	though	not	
in	any	way	that	affects	this	appeal.		See,	e.g.,	P.L.	2015,	ch.	329,	§§	C-1	to	C-4	(emergency,	effective	
July	12,	2015)	(codified	at	10	M.R.S.	§§	1174(3)(U)-(W)	(2015)).	
2	

an	 award	 of	 damages	 that	 had	 been	 issued	 to	 Darling’s	 by	 the	 Maine	 Motor	

Vehicle	 Franchise	 Board,	 however,	 because	 the	 Board	 does	 not	 have	

jurisdiction	 over	 that	 issue.	 	 Accordingly,	 we	 remanded	 the	 matter	 for	 a	

determination	of	damages	by	a	jury.	

         [¶2]	 	 On	 remand,	 following	 a	 two-day	 jury	 trial,	 the	 court	 (Murphy,	 J.)	

entered	 a	 judgment	 awarding	 Darling’s	 damages	 of	 $154,695.81	 based	 on	

Ford’s	 violation	 of	 the	 statutory	 notice	 provision.	 	 Darling’s	 and	 the	 Maine	

Automobile	 Dealers	 Association	 (MADA)	 now	 appeal	 from	 that	 decision,	

arguing	that	the	court	erred	by	limiting	Darling’s	damages	claim	to	a	270-day	

period	 and	 by	 reducing	 those	 damages	 based	 on	 certain	 payments	 that	

Darling’s	received	from	Ford.		Ford	cross-appeals,	arguing	that	if	we	remand	

this	matter	for	a	new	trial,	Ford	should	be	entitled	to	present	evidence	that	it	

had	“good	cause”	to	modify	the	franchise,	which	would	either	further	limit	or	

foreclose	 any	 recovery	 by	 Darling’s.2	 	 We	 affirm	 the	 judgment	 in	 part	 but	

vacate	in	part	and	remand	to	the	BCD	for	a	new	trial	on	the	issue	of	damages.		

     2		Ford	also	argues	that	if	this	matter	is	remanded,	Ford	should	be	entitled	to	present	evidence	

that	 Darling’s	 had	 actual	 notice	 of	 the	 proposed	 franchise	 modification	 and	 failed	 to	 mitigate	 its	
damages	by	filing	a	protest	with	the	Board.		This	argument	is	not	persuasive	and	we	do	not	address	
it	 further.	 	 See	Ford	 Motor	 Company	 v.	 Darling’s	 (Ford	 I),	 2014	 ME	 7,	 ¶¶	 30-31,	 86	A.3d	 35	
(concluding	 that	 strict	 compliance	 with	 the	 notice	 requirement	 established	 in	 10	 M.R.S.	
§	1174(3)(B)	is	mandatory).			
                                                                                                          3	

                                          I.		BACKGROUND	

        [¶3]		The	following	facts,	set	out	in	part	in	Ford	I,	2014	ME	7,	86	A.3d	35,	

bear	on	the	issues	raised	in	this	appeal.			

        [¶4]	 	 Ford	 Motor	 Company,	 a	 manufacturer/franchisor,	 sells	

automobiles	 through	 contractual	 agreements	 with	 dealers/franchisees	 such	

as	 Darling’s.	 	 In	 1989,	 Darling’s	 and	 Ford	 entered	 into	 a	 service	 and	 sales	

agreement	 under	 which	 Darling’s	 became	 an	 authorized	 Ford	 dealer	 and	

obtained	the	right	to	sell	Ford	vehicles	and	products.		

        [¶5]	 	 In	 2000,	 Ford	 created	 the	 Blue	 Oval	 Certified	 (BOC)	 program,	

which	provided	a	special	certification	to	dealers	that	met	customer	approval	

standards	 and	 entitled	 those	 dealers	 to	 receive	 a	 1.25%	 cash	 bonus	 on	 the	

retail	price	of	each	vehicle	the	dealer	sold.		Darling’s	became	certified	as	a	BOC	

dealer	in	2001.		In	August	2004,	Ford	announced	that	it	would	discontinue	the	

1.25%	 payments	 effective	 April	 1,	 2005.3	 	 After	 Ford	 stopped	 making	 BOC	

payments,	 it	 introduced	 new	 incentive	 programs	 including	 an	 “Accelerated	

Sales	Challenge”	(ASC).		

   3		 Although,	 in	 Ford	 I,	 2014	 ME	 7,	 ¶	 5,	 86	A.3d	 35,	 we	 stated	 that	 the	 BOC	 program	 was	
terminated,	 the	 record	 now	 before	 us	 reveals	 that	 certain	 aspects	 of	 the	 BOC	 program	 actually	
continued	 after	 April	 1,	 2005;	 Ford	 terminated	 only	 that	 aspect	 of	 the	 program	 providing	 1.25%	
incentive	payments	to	certified	dealers	on	the	purchase	price	of	each	vehicle	sold.			
4	

      [¶6]		In	response	to	Ford’s	actions,	in	December	2006	Darling’s	filed	a	

twelve-count	 complaint	 with	 the	 Maine	 Motor	 Vehicle	 Franchise	 Board,	

see	10	M.R.S.	§	1188(1),	alleging	that	Ford	had	committed	various	violations	of	

the	Dealers	Act.		Darling’s	alleged,	among	other	things,	that	Ford’s	termination	

of	BOC	payments	constituted	a	modification	of	the	franchise	that	substantially	

and	 adversely	 affected	 Darling’s	 rights,	 obligations,	 investment	 or	 return	 on	

investment,	and	that	Ford	therefore	violated	10	M.R.S.	§	1174(3)(B)	by	failing	

to	provide	Darling’s	with	proper	notice	of	the	modification.		Because	of	Ford’s	

statutory	 violation,	 Darling’s	 sought	 damages	 equal	 to	 the	 loss	 of	 what	 it	

described	in	its	complaint	as	contract-based	BOC	payments	that	Ford	failed	to	

make.		

      [¶7]	 	 In	 May	 2008,	 the	 Board	 issued	 a	 decision	 concluding	 that	 Ford	

violated	the	Dealers	Act	because	it	had	not	given	Darling’s	the	type	of	notice	of	

the	 decision	 that	 was	 statutorily	 required	 in	 order	 to	 discontinue	 the	 BOC	

payments.	 	 The	 Board	 imposed	 a	 civil	 penalty	 of	 $10,000	 and	 awarded	

Darling’s	damages	of	$145,223.08.		Those	damages	represented	the	amount	of	

BOC	 payments	 that	 Darling’s	 would	 have	 earned	 during	 a	 270-day	 period	

beginning	on	April	1,	2005,	when	Ford	stopped	making	the	payments,	less	the	

amount	 that	 Darling’s	 had	 earned	 through	 other	 incentive	 programs,	
                                                                                                               5	

including	the	ASC	program,	during	that	same	period.		The	Board	arrived	at	the	

270-day	damages	period	by	combining	the	ninety-day	period	within	which	a	

dealer	 may	 file	 a	 protest	 with	 the	 Board	 after	 receiving	 notice	 of	 a	

manufacturer’s	 proposed	 modification	 of	 the	 franchise	 with	 the	 subsequent	

180-day	period	within	which	the	Board	must	decide	the	matter.		See	10	M.R.S.	

§	1174(3)(B).			

        [¶8]		Pursuant	to	M.R.	Civ.	P.	80C,	both	Ford	and	Darling’s	filed	separate	

petitions	 in	 the	 Superior	 Court	 for	 review	 of	 the	 Board’s	 decision.4	 	 Among	

other	 things,	 Ford	 sought	 modification	 and	 reversal	 of	 the	 Board’s	 decision	

regarding	the	adequacy	of	Ford’s	notice	to	Darling’s,	and	Darling’s	argued	that	

the	 Board	 erred	 by	 limiting	 its	 recovery	 to	 damages	 incurred	 during	 the	

270-day	statutory	period	and	also	by	offsetting	those	damages	by	the	amount	

Darling’s	received	through	other	sales	incentive	programs.		The	petitions	were	

consolidated	 and	 transferred	 to	 the	 BCD.	 	 There,	 MADA	 sought	 and	 was	

granted	intervenor	status.			

        [¶9]	 	 In	 March	 2011,	 a	 jury	 trial	 was	 held	 on	 the	 factual	 question	 of	

whether	 discontinuation	 of	 the	 BOC	 payments	 constituted	 a	 modification	 of	

   4	 	 In	 their	 respective	 petitions	 for	 judicial	 review,	 Ford	 and	 Darling’s	 named	 the	 Secretary	 of	

State	as	a	party	because,	pursuant	to	10	M.R.S.	§	1187(7),	the	Secretary	of	State	is	responsible	for	
operating	and	administering	the	Board.		Ford	I,	2014	ME	7,	¶	8	n.4,	86	A.3d	35.		The	Secretary	of	
State	did	not	participate	in	either	the	2012	appeal	or	the	present	appeal.		
6	

the	franchise	that	had	a	substantial	and	adverse	effect	on	Darling’s	investment	

or	return	on	investment,	and	the	jury	returned	a	verdict	favorable	to	Darling’s.		

By	agreement	of	the	parties,	the	court	(Nivison,	J.)	did	not	submit	the	issue	of	

damages	 to	 the	 jury	 but	 rather	 exercised	 its	 appellate	 jurisdiction	 and	

reviewed	 the	 administrative	 record	 to	 determine	 whether	 that	 record	

supported	 the	 Board’s	 damages	 award.	 	 Based	 on	 the	 jury’s	 verdict	 and	 the	

court’s	legal	conclusion	that	Ford	failed	to	provide	notice	to	Darling’s	in	a	way	

that	complied	with	section	1174(3)(B),	the	court	issued	orders	affirming	both	

the	Board’s	award	of	one	civil	penalty	pursuant	to	10	M.R.S.	§	1171-B(3)	and	

the	Board’s	damages	award.		

       [¶10]		On	appeal	by	Darling’s	and	MADA,	and	cross-appeal	by	Ford,	we	

affirmed	 most	aspects	of	 the	 judgment,	 including	 the	 conclusions	that	 Ford’s	

termination	of	BOC	payments	was	a	franchise	modification	that	triggered	the	

ninety-day	 notice	 requirement	 under	 the	 Dealers	 Act,	 and	 that	 Ford	 did	 not	

satisfy	 that	 requirement.	 	 See	 Ford	 I,	 2014	 ME	 7,	 ¶¶	 27,	 31,	 86	 A.3d	 35.	 	 We	

held,	however,	that	pursuant	to	10	M.R.S.	§	1188,	the	Board	lacks	jurisdiction	

to	 award	 damages	 for	 violations	 of	 the	 Act.	 	 Id.	¶¶	43,	 46.	 	 We	 therefore	

vacated	that	portion	of	the	judgment	affirming	the	Board’s	award	of	damages	
                                                                                       7	

and	remanded	the	matter	to	the	BCD	for	a	determination	of	damages	by	a	jury.		

Id.	¶¶	3,	48.	

      [¶11]	 	 Despite	 the	 Board’s	 finding,	 which	 we	 affirmed	 in	 Ford	 I,	 that	

Ford	 had	 not	 provided	 Darling’s	 with	 effective	 notice	 of	 the	 franchise	

modification,	 Ford	 chose	 to	 not	 cure	 the	 problem.	 	 During	 the	 remand	

proceedings,	Ford	explained	to	the	court	that	for	“business	reasons”	it	had	not	

given	 Darling’s	 statutorily	 sufficient	 notice	 so	 as	 to	 not	 invite	 similar	

challenges	from	other	dealers.		The	consequence	of	Ford’s	continuing	refusal	

to	provide	the	required	notice	was	that	Darling’s	did	not	have	an	opportunity	

to	 file	 a	 protest,	 which	 would	 have	 triggered	 the	 Board’s	 responsibility	 to	

determine	 whether	 there	 was	 good	 cause	 for	 the	 proposed	 franchise	

modification.	 	 See	 10	 M.R.S.	 §	 1174(3)(B).	 	 Nonetheless,	 Ford	 argued	 that	 it	

should	be	entitled	to	present	evidence	of	whether	it	had	good	cause	to	modify	

the	franchise	as	a	part	of	the	trial	on	the	issue	of	damages.			

      [¶12]	 	 In	 response,	 Darling’s	 moved	 in	 limine	 for	 a	 court	 order	

precluding	Ford	from	arguing	that	it	had	good	cause	to	modify	the	franchise.		

The	 court	 granted	 Darling’s	 motion,	 concluding	 that	 whether	 Ford	 had	 good	

cause	 for	 the	 termination	 was	 not	 relevant	 to	 the	 determination	 of	 damages	

because	 Ford	 had	 not	 satisfied	 the	 statutory	 prerequisite	 necessary	 to	 raise	
8	

that	 issue—namely,	 providing	 Darling’s	 with	 proper	 notice	 of	 the	

modification.		The	court	further	concluded	that	“[a]llowing	Ford	to	adjudicate	

the	 question	 of	 ‘good	 cause’	 absent	 compliance	 with	 section	 1174(3)(B)’s	

notice	requirement	would	run	counter”	to	the	purpose	of	the	Dealers	Act.	

      [¶13]		Additionally,	the	court	issued	a	pretrial	ruling	that,	as	a	matter	of	

law,	 Darling’s	 damages	 arising	 from	 Ford’s	 violation	 of	 the	 statutory	 notice	

provision	 are	 limited	 to	 the	 270-day	 period	 following	 the	 discontinuation	 of	

BOC	 payments	 on	 April	 1,	 2005.	 	 The	 court	 also	 ruled	 that	 the	 jury	 would	

decide	 as	 a	 factual	 issue	 whether	 payments	 made	 under	 new	 sales	 incentive	

programs	 were	 a	 substitute	 for	 the	 discontinued	 payments	 under	 the	 BOC	

program,	and	that	Ford	was	entitled	to	present	evidence	on	that	issue.	

      [¶14]	 	 A	 two-day	 jury	 trial	 was	 held	 in	 September	 2014,	 where	 the	

parties	 stipulated	 that	 if	 the	 BOC	 payments	 had	 continued	 for	 the	 270-day	

period	 beginning	 April	 1,	 2005,	 Darling’s	 would	 have	 received	 the	 sum	 of	

$212,570.81	from	Ford,	and	that	during	that	same	period,	Darling’s	received	

incentive	payments	of	$57,875	under	the	ASC	program.		The	court	instructed	

the	 jury	 that	 Ford’s	 liability	 had	 already	 been	 established,	 but	 that	 Darling’s	

had	the	burden	of	proving	damages	resulting	from	Ford’s	statutory	violation.		
                                                                                                           9	

The	 court	 also	 instructed	 the	 jury	 on	 the	 issue	 of	 substitute	 payments	 as	 an	

offset	to	Ford’s	discontinuation	of	payments	under	the	BOC	program.			

        [¶15]	 	 The	 jury	 returned	 a	 verdict	 that	 determined	 gross	 damages,	

consistent	 with	 the	 parties’	 stipulation,	 equivalent	 to	 the	 amount	 of	 BOC	

payments	 that	 Ford	 did	 not	 pay	 Darling’s	 for	 270	 days.	 	 The	 jury	 also	 found	

that	 during	 that	 period,	 Darling’s	 received	 incentive	 payments	 of	 $57,875	

under	 the	 ASC	 program,	 and	 that	 those	 payments	 were	 a	 substitute	 for	 the	

BOC	 payments.	 	 Based	 on	 the	 jury’s	 findings,	 the	 court	 issued	 a	 judgment	

reducing	 the	 gross	 damages	 awarded	 to	 Darling’s	 by	 the	 amount	 it	 received	

under	the	ASC	program,	for	a	net	damage	award	of	$154,695.81.		Darling’s	and	

MADA	 appealed,	 and	 Ford	 cross-appealed,	 pursuant	 to	 14	 M.R.S.	 §	 1851	

(2015)	and	M.R.	App.	P.	2.			

                                           II.		DISCUSSION	

        [¶16]	 	 The	 sole	 issue	 on	 appeal	 is	 determining	 the	 proper	 analysis	 to	

calculate	 any	 damages	 made	 available	 pursuant	 to	 the	 Dealers	 Act	 arising	

from	 Ford’s	 violation	 of	 the	 notice	 requirement	 established	 in	 10	M.R.S.	

§	1174(3)(B).5		Questions	of	statutory	interpretation	and	the	proper	measure	

    5		None	of	the	parties	argues	that	Ford	I	adjudicated	the	question	of	whether	Darling’s	damages	

claim	 is	 limited	 to	 a	 270-day	 loss	 of	 BOC	 benefits.	 	 Further,	 any	 such	 argument	 would	 not	 be	
persuasive.		Although	throughout	this	proceeding—including	in	Ford	I—Darling’s	has	argued	that	it	
is	entitled	to	recover	damages	based	on	Ford’s	denial	of	BOC	benefits	for	more	than	270	days,	our	
10	

of	 damages	 are	 matters	 of	 law	 that	 we	 consider	 de	 novo.	 	 See	Woodworth	 v.	

Gaddis,	2012	ME	138,	¶	14,	58	A.3d	1109	(statutory	interpretation);	Estate	of	

Wilde,	1998	ME	55,	¶	7,	708	A.2d	273	(measure	of	damages).	

        [¶17]	 	 We	 address	 in	 turn	 the	 parties’	 arguments	 concerning	 (A)	 the	

damages	 period,	 which	 includes	 Ford’s	 argument	 that	 it	 is	 entitled	 to	 argue	

good	cause	to	eliminate	or	limit	an	award	of	damages,	and	(B)	the	reduction	in	

damages	 awarded	 to	 Darling’s	 based	 on	 substitute	 payments	 under	 the	 ASC	

program.	

A.	     Damages	Period	Pursuant	to	Section	1174(3)(B)	

        [¶18]		Because	the	parties’	dispute	about	the	scope	of	damages	rests	on	

the	interpretation	of	section	1174(3)(B),	we	first	review	the	statute	in	light	of	

the	parties’	arguments,	and	we	then	analyze	the	meaning	of	the	Legislature’s	

words	as	they	apply	here.	

discussion	 of	 damages	 in	 Ford	 I	 was	 limited	 to	 the	 question	 of	 whether,	 when	 a	 manufacturer	
violates	 section	 1174(3)(B),	 the	 Board	 has	 jurisdiction	 to	 determine	 a	 dealer’s	 damages.	 	 We	
concluded	that	it	does	not,	and	we	therefore	remanded	the	case	to	allow	a	jury	to	assess	damages.		
Ford	I,	2014	ME	7,	¶¶	46,	48,	86	A.3d	35.		Consequently,	Ford	I	did	not	present	an	occasion	for	us	to	
address	 the	 merits	 of	 any	 argument	 relating	 to	 the	 actual	 calculation	 of	 damages,	 and	 we	 did	 not	
reach	that	issue.	
                                                                                      11	

      1.	    Statutory	Framework	and	Arguments	on	Appeal	

      [¶19]		Title	10	M.R.S.	§	1173	creates	a	private	cause	of	action	for	dealers	

seeking	 damages	 when	 a	 manufacturer	 engages	 in	 certain	 unfair	 and	

deceptive	trade	practices.		Specifically,	the	statute	provides	that	

     [a]ny	franchisee	or	motor	vehicle	dealer	who	suffers	financial	loss	
     of	 money	 or	 property,	 real	 or	 personal,	 or	 who	 has	 been	
     otherwise	adversely	affected	as	a	result	of	the	use	or	employment	
     by	a	franchisor	of	an	unfair	method	of	competition	or	an	unfair	or	
     deceptive	 act	 or	 any	 practice	 declared	 unlawful	 by	 this	 chapter	
     may	 bring	 an	 action	 for	 damages	 and	 equitable	 relief,	 including	
     injunctive	relief.	
     	
10	M.R.S.	§	1173.	
	
     [¶20]		The	acts	constituting	“unfair	methods	of	competition”	and	“unfair	

and	deceptive	practices,”	which	give	rise	to	a	section	1173	claim	for	damages,	

are	 defined	 in	 section	 1174.	 	 The	 pertinent	 aspect	 of	 that	 statute,	 which	 is	

found	 in	 section	 1174(3)(B),	 establishes	 that	 a	 manufacturer	 engages	 in	 an	

“unfair	 method[]	 of	 competition”	 and	 an	 “unfair	 and	 deceptive	 practice[]”	

when	the	manufacturer	

      threaten[s]	or	attempt[s]	to	modify	a	franchise	during	the	term	of	
      the	franchise	or	upon	its	renewal,	if	the	modification	substantially	
      and	 adversely	 affects	 the	 motor	 vehicle	 dealer’s	 rights,	
      obligations,	 investment	 or	 return	 on	 investment,	 without	 giving	
      90	 days’	 written	 notice	 by	 certified	 mail	 of	 the	 proposed	
      modification	to	the	motor	vehicle	dealer,	unless	the	modification	
      is	required	by	law	or	board	order.	
      	
12	

The	 statute	 further	 provides	 that	 “[w]ithin	 the	 90-day	 notice	 period,	 the	

motor	 vehicle	 dealer	 may	 file	 with	 the	 board	 and	 serve	 notice	 upon	 the	

manufacturer	 a	 protest	 requesting	 a	 determination	 of	 whether	 there	 is	 good	

cause	for	permitting	the	proposed	modification.”		10	M.R.S.	§	1174(3)(B).		If	a	

protest	is	filed,	“[t]he	board	shall	promptly	schedule	a	hearing	and	decide	the	

matter	 within	 180	 days.”	 	 Id.	 	 At	 the	 hearing,	 “[t]he	 manufacturer	 has	 the	

burden	of	proving	good	cause,”	and	“[t]he	proposed	modification	may	not	take	

effect	pending	the	determination	of	the	matter.”		Id.	

	     [¶21]		As	we	held	in	Ford	I,	when	Ford	discontinued	the	BOC	payments,	

it	was	required	to	provide	Darling’s	with	notice	of	that	development	but	failed	

to	do	so	in	a	statutorily	sufficient	way.		2014	ME	7,	¶¶	27,	31,	86	A.3d	35.		All	

of	 the	 parties	 now	 engage	 in	 an	 analysis	 that	 equates	 Ford’s	 violation	 of	

section	 1174(3)(B)	 with	 a	 claim	 for	 breach	 of	 contract,	 so	 that	 section	 1173	

would	allow	Darling’s	to	recover	the	contract-based	payments	it	would	have	

received	 had	 Ford	 complied	 with	 the	 statute.	 	 See	 infra	 n.6.	 	 The	 point	 of	

contention	 centers	 on	 how	 long	 damages	 resulting	 from	 Ford’s	 statutory	

violation	continue	to	accrue.	

      [¶22]	 	 Darling’s	 and	 MADA	 argue	 that	 when	 a	 manufacturer	 violates	

section	 1174(3)(B),	 the	 statute	 unambiguously	 allows	 a	 dealer	 to	 recover	
                                                                                     13	

damages	for	a	period	in	excess	of	the	270	days	allowed	for	a	dealer’s	protest	

and	the	issuance	of	the	Board’s	decision.		Further,	they	contend	that	pursuant	

to	 the	 statute’s	 plain	 terms,	 Ford’s	 proposed	 modification	 of	 the	 parties’	

franchise	 cannot	 take	 effect	 unless	 Ford	 satisfies	 the	 notice	 provision.		

Darling’s	 and	 MADA	 argue	 that	 because	 Ford	 has	 not	 done	 so,	 Ford’s	

obligation	 to	 make	 BOC	 payments	 continues	 and	 that	 Darling’s	 is	 entitled	 to	

damages	 for	 payments	 that	 Ford	 did	 not	 make	 from	 April	 1,	 2005,	 to	 the	

present.			

      [¶23]		For	its	part,	Ford	argues	that	section	1174(3)(B)	does	not	specify	

how	 long	 damages	 continue	 to	 accrue	 and	 that,	 based	 on	 common	 law	

contract	 principles,	 Darling’s	 damages	 should	 be	 limited	 to	 the	 270-day	

notice-and-decision	 period.	 	 Alternatively,	 Ford	 argues	 that	 if	 Darling’s	 is	

entitled	to	recover	damages	for	more	than	270	days,	Ford	must	be	allowed	to	

present	 evidence	 that	 it	 had	 good	 cause	 to	 modify	 the	 franchise,	 which,	 if	

proved,	 would	 foreclose	 any	 recovery	 beyond	 the	 time	 allowed	 for	 a	 protest	

and	administrative	decision.			

      2.	     Statutory	Analysis	

      [¶24]		“Our	main	objective	in	construing	statutes	is	to	discern	and	give	

effect	 to	 the	 Legislature’s	 intent.”	 	 Acadia	 Motors,	 Inc.	 v.	 Ford	 Motor	 Co.,	
14	

2002	ME	102,	¶	10,	799	A.2d	1228.		To	determine	that	intent,	we	first	look	to	

the	 “statute’s	 plain	 meaning	 and	 the	 entire	 statutory	 scheme	 of	 which	 the	

provision	 at	 issue	 forms	 a	 part.”	 	 Samsara	 Mem’l	 Trust	 v.	 Kelly,	 Remmel	

&	Zimmerman,	 2014	 ME	 107,	 ¶	42,	 102	 A.3d	 757.	 	 We	 construe	 a	 statute’s	

plain	language	“by	taking	into	account	the	subject	matter	and	purposes	of	the	

statute,	 and	 the	 consequences	 of	 a	 particular	 interpretation.”	 	 Dickau	 v.	 Vt.	

Mut.	 Ins.	 Co.,	 2014	 ME	 158,	 ¶	 21,	 107	 A.3d	 621.	 	 Accordingly,	 we	 reject	

interpretations	 that	 are	 “inimical	 to	 the	 public	 interest”	 or	 that	 produce	

absurd	 or	 illogical	 results.	 	 Id.	 (quotation	 marks	 omitted).	 	 Further,	 “[a]ll	

words	in	a	statute	are	to	be	given	meaning,	and	no	words	are	to	be	treated	as	

surplusage	 if	 they	 can	 be	 reasonably	 construed.”	 	 Hickson	 v.	 Vescom	 Corp.,	

2014	 ME	 27,	 ¶	 15,	 87	A.3d	704	 (quotation	 marks	 omitted).	 	 Only	 if	 the	

meaning	of	a	statute	is	ambiguous	do	we	consider	extrinsic	information	such	

as	legislative	history.		See	MaineToday	Media,	Inc.	v.	State,	2013	ME	100,	¶	6,	

82	A.3d	104.	

      [¶25]	 	 We	 conclude	 that	 when	 a	 manufacturer	 unilaterally	 modifies	 a	

franchise	 in	 violation	 of	 section	 1174(3)(B),	 the	 Dealers	 Act	 does	 not	 create	
                                                                                                             15	

any	temporal	limitations	on	damages	to	which	a	dealer	is	entitled	pursuant	to	

section	1173.6	

        [¶26]	 	 As	 we	 explained	 in	 Ford	 I,	 2014	 ME	 7,	 ¶¶	 28-31,	 86	A.3d	35,	

section	1174(3)(B)	prohibits	manufacturers	from	“threatening	or	attempting	

to	modify	a	franchise	.	.	.	[in	a	manner	that]	substantially	and	adversely	affects	

[a]	.	.	.	dealer’s	rights,	obligations,	investment	or	return	on	investment,”	unless	

the	manufacturer	provides	the	dealer	with	ninety	days’	written	notice	of	the	

modification	 by	 certified	 mail.	 	 10	M.R.S.	 §	1174(3)(B).	 	 If	 a	 manufacturer	

complies	 with	 the	 statute,	 its	 proposed	 modification	 is	 automatically	 stayed	

during	 the	 ninety-day	 notice	 period.	 	 See	 id.	 	 Further,	 if	 during	 that	 period	 a	

dealer	 then	 invokes	 its	 right	 to	 administrative	 oversight	 by	 filing	 a	 protest	

with	 the	 Board,	 the	 stay	 continues	 during	 the	 pendency	 of	 the	 protest	

   6		Our	inquiry	here	focuses	only	on	damages	arising	from	a	manufacturer’s	unlawful	unilateral	

modification	 of	 a	 franchise	 in	 violation	 of	 section	 1174(3)(B).	 	 We	 do	 not	 address	 the	 temporal	
scope	or	proper	measure	of	damages	arising	from	other	types	of	“unfair	methods	of	competition”	
and	“unfair	and	deceptive	practices”	defined	in	section	1174.			

    We	further	note	that	throughout	these	proceedings,	the	distinction	between	Darling’s	claim	for	
statutory	damages	and	its	potential	claim	for	contract-based	damages	has	been	blurred.		This	began	
with	Darling’s	request	in	its	2006	complaint	for	an	award	of	damages	equal	to	the	amount	of	what	it	
characterized	 as	 lost	 contract-based	 payments	 under	 the	 BOC	 program	 because	 of	 Ford’s	 alleged	
failure	 to	 comply	 with	 section	 1174(3)(B).	 	 And,	 in	 particular,	 on	 this	 appeal	 the	 parties	 do	 not	
distinguish	 between	 statutory	 and	 contract	 damages	 but	 rather	 treat	 them	 as	 coextensive.		
Consequently,	 in	 this	 case	 we	 do	 not	 address	 the	 application	 of	 the	 Dealers	 Act	 to	 a	 claim	 for	
statutory	damages	pursuant	to	section	1173	that	the	parties	do	not	view	as	fully	overlapping	with	a	
claim	for	breach	of	contract.				
16	

proceedings,	which	the	Board	must	complete	“within	180	days	from	the	date	

the	protest	is	filed.”		Id.	

       [¶27]		Given	this	statutory	process,	had	Ford	complied	with	the	notice	

provision	 and	 had	 Darling’s	 filed	 a	 protest	 that	 proved	 to	 be	 unsuccessful,	

Ford	 would	 have	 had	 to	 continue	 making	 BOC	 payments	 to	 Darling’s	 for	 no	

more	 than	 270	 days.	 	 Here,	 however,	 Ford	 did	 not	 comply	 with	 the	 statutory	

requirements	and,	by	failing	to	comply	with	the	statute,	it	has	allowed	the	BOC	

program	 to	 remain	 unmodified	 throughout	 the	 course	 of	 this	 litigation.		

Despite	its	noncompliance,	under	Ford’s	interpretation	of	section	1174(3)(B),	

the	extent	of	its	liability	to	Darling’s	would	be	no	more	than	if	it	had	complied	

with	 the	 law.	 	 Ford’s	 reading	 thus	 significantly	 diminishes	 the	 incentive	 for	

manufacturers	 to	 comply	 with	 section	 1174(3)(B):	 as	 Ford	 construes	 the	

statute,	the	only	possible	consequence	for	unlawful	and	deceptive	conduct—

beyond	the	payment	of	any	benefits	to	which	a	dealer	would	be	entitled	even	

if	 the	 manufacturer	 provided	 sufficient	 notice—would	 be	 a	 civil	 penalty	 of	

$1,000	to	$10,000,	see	10	M.R.S.	§	1171-B(3),	which	is	payable	to	the	State	and	

not	to	the	dealership	that	was	actually	harmed.		This	is	an	absurd	or	illogical	

result	 that	 we	 seek	 to	 avoid	 when	 examining	 a	 statute’s	 plain	 meaning.	 	 Cf.	

State	 v.	 Brown,	 2014	ME	79,	 ¶	30,	 95	 A.3d	 82	 (refusing	 to	 construe	 a	 civil	
                                                                                                               17	

penalty	 provision	 in	 a	 way	 that	 would	 allow	 a	 seller	 to	 repeatedly	 violate	 a	

statute	without	consequence,	because	such	a	result	would	be	illogical).			

        [¶28]	 	 In	 addition	 to	 being	 illogical,	 Ford’s	 interpretation	 renders	

superfluous	the	statutory	language	that	provides	dealers	with	the	opportunity	

to	 file	 a	 protest	 and	 request	 a	 good	 cause	 determination	 from	 the	 Board.		

Under	 Ford’s	 reading,	 a	 dealer’s	 protest	 and	 the	 Board’s	 good	 cause	

determination	would	be	meaningless,	because	even	if	the	Board	found	that	a	

manufacturer	 lacked	 good	 cause,	 the	 manufacturer	 could	 ignore	 that	

determination	 and	 unilaterally	 modify	 the	 franchise—in	 other	 words,	

persisting	 in	 unfair	 and	 deceptive	 conduct	 that	 violates	 the	 Dealers	 Act,	

leaving	 the	 dealer	 without	 any	 additional	 recourse.7	 	 This	 would	 not	 only	

    7		In	support	of	its	argument	that	a	manufacturer	may	unilaterally	modify	a	franchise	regardless	

of	 the	 outcome	 of	 the	 administrative	 process,	 Ford	 relies	 on	 our	 statement	 in	 Ford	 I	 that	 “Ford’s	
‘violation’	was	its	use	of	an	unfair	or	deceptive	practice	(i.e.,	substantially	and	adversely	modifying	
the	franchise	without	providing	the	required	notice),	not	its	failure	to	make	each	of	its	contractual	
payments.”		2014	ME	7,	¶	50,	86	A.3d	35.		That	language,	however,	merely	framed	our	conclusion	
that	the	Board’s	imposition	of	a	single	civil	penalty	against	Ford	was	not	improper,	see	id.,	and	does	
not	support	the	argument	that	Darling’s	damages	should	always	be	limited	to	270	days,	see	Forsythe	
v.	 Sun	 Life	 Fin.,	 Inc.,	 475	F.	Supp.	2d	 122,	 124-25	 (D.	 Mass.	 2007)	 (concluding	 that	 a	 one-time	
statutory	violation	resulted	in	“ongoing	damages”	accruing	through	the	time	of	trial	and	judgment);	
Waterville	 Indus.	 v.	 Fin.	 Auth.	 of	 Me.,	 2000	 ME	 138,	 ¶	 23,	 758	 A.2d	 986	 (stating	 that	 a	 one-time	
breach	of	contract	may	result	in	continuing	damages).			
     	
     Additionally,	contrary	to	Ford’s	contention,	we	did	not	decide	in	Ford	I	that	manufacturers	may	
unilaterally	 modify	 franchise	 relationships	 at	 any	 time	 notwithstanding	 a	 failure	 to	 comply	 with	
section	1174(3)(B).		Although	we	stated	that	pursuant	to	the	parties’	service	and	sales	agreement	
“Ford	could	unilaterally	issue	new	terms	and	conditions,”	we	ultimately	held	that	its	right	to	do	so	
was	 circumscribed	 by	 the	 procedural	 requirement	 of	 proper	 notice	 as	 established	 in	 section	
1174(3)(B).		Ford	I,	2014	ME	7,	¶¶	26-27,	86	A.3d	35.		Moreover,	as	discussed	above,	see	supra	n.5,	
we	did	not	address	the	measure	of	damages	flowing	from	such	a	violation.	
18	

prejudice	dealers	by	depriving	them	of	a	meaningful	opportunity	to	challenge	

proposed	franchise	modifications,	but	it	would	also	functionally	substitute	the	

manufacturer	for	the	Board	as	the	ultimate	decision-maker	on	whether	“good	

cause”	 exists.	 	 We	 decline	 to	 construe	 section	 1174(3)(B)	 in	 a	 way	 that	

renders	significant	portions	of	it	meaningless.	

       [¶29]	 	 Ford	 also	 points	 to	 the	 statutes	 of	 some	 other	 states,	 which,	

unlike	 Maine’s	 Dealers	 Act,	 expressly	 provide	 that	 when	 a	 dealer	 files	 a	

protest	 contesting	 a	 proposed	 franchise	 modification,	 the	 modification	 is	

ineffective	 absent	 a	 finding	 of	 good	 cause.	 	 See,	 e.g.,	 Cal.	 Veh.	 Code	

§	3060(b)(1)	(Deering,	LEXIS	through	ch.	893	of	the	2016	Reg.	Sess.	&	ch.	8	of	

the	 2015-16	 2nd	 Extraordinary	 Sess.)	 (providing	 that	 “the	 modification	 or	

replacement	 does	 not	 become	 effective	 until	 there	 is	 a	 finding	 by	 the	 board	

that	 there	 is	 good	 cause	 for	 the	 modification	 or	 replacement”	 (emphasis	

added));	815	Ill.	Comp.	Stat.	Ann.	710/4	(d)(6)(E)	(LEXIS	through	P.A.	99-904	

of	 the	 2016	 Reg.	 Legis.	 Sess.)	 (prohibiting	 a	 manufacturer	 from	 modifying	 a	

franchise	 “before	 the	 hearing	 process	 is	 concluded	.	 .	 .	 and	 thereafter,	 if	 the	

Board	determines	that	the	manufacturer	has	failed	to	meet	its	burden	of	proof	

and	 that	 good	 cause	 does	 not	 exist	 to	 allow	 the	 proposed	 action”	 (emphasis	

added)).	 	 Ford	 argues	 that	 because	 section	 1174(3)(B)	 provides	 only	 that	
                                                                                  19	

“[t]he	proposed	modification	may	not	take	effect	pending	the	determination	of	

the	 [protest],”	 10	 M.R.S.	 §	 1174(3)(B)	 (emphasis	 added),	 a	 manufacturer’s	

unilateral	franchise	modification	becomes	effective	under	Maine’s	Dealers	Act	

even	without	good	cause.			

      [¶30]		This	argument	is	not	persuasive	for	two	reasons.		First,	10	M.R.S.	

§	1182	provides	that	“[a]ny	contract	or	part	thereof	or	practice	thereunder	in	

violation	of	any	provision	of	[the	Dealers	Act]	shall	be	deemed	against	public	

policy	and	shall	be	void	and	unenforceable.”		(Emphases	added.)		A	proposed	

franchise	 modification	 is	 therefore	 ineffective	 absent	 full	 compliance	 with	

section	1174(3)(B).	

      [¶31]		Second,	the	Dealers	Act	was	enacted	to	address	the	“disparity	in	

bargaining	   power	    between	     automobile	    manufacturers	     and	    their	

dealers	.	.	.	[by]	protect[ing]	dealers	from	actions	by	manufacturers	that	were	

perceived	 as	 abusive	 and	 oppressive.”	 	 Acadia	 Motors	 v.	 Ford	 Motor	 Co.,	

844	F.	Supp.	 819,	 827-28	 (D.	Me.	 1994),	 rev’d	 on	 other	 grounds	 by	 44	 F.3d	

1050	(1st	Cir.	1995).		If	a	manufacturer	were	authorized	to	unilaterally	modify	

the	franchise	even	when	it	failed	to	comply	with	the	statutory	process	or	did	

not	demonstrate	good	cause	for	the	modification	after	a	dealer	filed	a	protest,	

the	 manufacturer’s	 action	 would	 reinstate	 the	 economic	 imbalance	 that	 the	
20	

Dealers	 Act	 is	 intended	 to	 eliminate.	 	 Cf.	 E.	 of	 Me.,	 Inc.	 v.	 Vintners	 Grp.,	 Ltd.,	

455	A.2d	 936,	 944	 (Me.	 1983)	 (holding	 that	 strict	 compliance	 with	 the	

procedural	 provisions	 in	 a	 similarly	 structured	 statute	 was	 necessary	 to	

effectuate	 the	 Legislature’s	 intent	 of	 reducing	 the	 disparity	 in	 bargaining	

power	between	wholesalers	and	suppliers).		Therefore,	when	read	in	light	of	

the	Dealers	Act’s	overall	“subject	matter	and	purpose[],”	Dickau,	2014	ME	158,	

¶	 21,	 107	 A.3d	 621,	 section	 1174(3)(B)	 makes	 contested	 franchise	

modifications	contingent	on	a	Board	finding	of	good	cause.	

        [¶32]		In	sum,	to	avoid	a	result	that	is	illogical	and	“inimical	to	the	public	

interest,”	id.	(quotation	marks	omitted),	we	conclude	that	pursuant	to	section	

1174(3)(B),	 a	 proposed	 franchise	 modification	 is	 ineffective	 unless	 the	

manufacturer	provides	proper	notice	 to	 the	 dealer,	 and	 either	 (1)	 the	 dealer	

does	not	file	a	protest	with	the	Board	within	ninety	days,	or	(2)	the	dealer	files	

a	 protest	 and	 the	 Board	 determines	 that	 good	 cause	 exists	 for	 the	

modification.8	 	 Because	 neither	 of	 these	 exceptions	 is	 present	 here,	 the	

   8		Ford	contends	that	when	the	statute	is	construed	in	this	way,	a	Board	finding	of	no	good	cause	

is	tantamount	to	a	permanent	injunction	against	a	franchise	modification,	and	that	the	Board	does	
not	 have	 the	 authority	 to	 award	 such	 equitable	 relief.	 	 See	 10	 M.R.S.	 §	1188	 (listing	 the	 Board’s	
duties);	 cf.	 Ford	 I,	 2014	 ME	 7,	 ¶¶	 43-46,	 86	 A.3d	 35	 (holding	 that	 pursuant	 to	 sections	 1173(1),	
1188,	 and	 1189-B,	 the	 courts,	 and	 not	 the	 Board,	 have	 the	 authority	 to	 award	 damages).	 	 This	
argument	 is	 not	 persuasive.	 	 As	 is	 noted	 above,	 see	 supra	 ¶	 29,	 Ford	 itself	 relies	 on	 analogous	
statutes	 from	 other	 jurisdictions	 that	 result	 in	 an	 ongoing	 administrative	 injunction	 against	 the	
implementation	 of	 a	 franchise	 modification	 when	 a	 board	 determines	 that	 the	 modification	 is	 not	
supported	by	good	cause.	
                                                                                       21	

franchise	modification	has	not	yet	been	implemented,	and	Ford’s	obligation	to	

pay	Darling’s	the	incentive	prescribed	by	the	BOC	program	remains	in	place.		

The	trial	court	therefore	erred	by	limiting	the	damages	period	to	the	270	days	

following	the	termination	of	BOC	payments	on	April	1,	2005.		

      3.	    Evidence	of	Good	Cause	

      [¶33]	 	 Having	 concluded	 that	 section	 1174(3)(B)	 does	 not	 create	

temporal	 limitations	 on	 Darling’s	 damages	 claim,	 we	 consider	 Ford’s	

contingent	argument	that	on	remand	it	should	be	entitled	to	present	evidence	

of	the	circumstances	that	would	have	existed	but	for	its	statutory	violation,	in	

order	to	prevent	Darling’s	from	receiving	a	windfall.		Specifically,	Ford	argues	

that	 it	 is	 entitled	 to	 present	 evidence	 that	 had	 it	 provided	 Darling’s	 with	

statutorily	proper	notice	of	the	proposed	franchise	modification,	and	that	had	

Darling’s	filed	a	protest,	the	Board	would	have	determined	that	Ford	had	good	

cause	to	implement	the	modification,	thereby	limiting	Darling’s	damages	to	no	

more	than	270	days.		For	two	reasons,	Ford’s	argument	is	not	persuasive.	

      [¶34]	 	 First,	 Ford	 has	 always	 had	 the	 power	 to	 stop	 damages	 from	

accruing	 further	 by	 simply	 complying	 with	 the	 notice	 requirement	 of	 the	

statute,	 rather	 than	 by	 making	 what	 it	 described	 to	 the	 court	 as	 a	 business	

decision	 not	 to	 do	 so.	 	 Because	 Ford	 has	 chosen	 not	 to	 satisfy	 the	 statutory	
22	

prerequisite	 necessary	 to	 trigger	 the	 “good	 cause”	 determination,	 it	 is	 not	

entitled	 to	 present	 evidence	 of	 good	 cause	 at	 a	 trial	 on	 damages	 in	 order	 to	

limit	or	even	preclude	recovery	by	Darling’s.	

      [¶35]	 	 Second,	 section	 1174(3)(B)	 vests	 authority	 in	 the	 Board—and	

not	the	courts—to	make	the	good	cause	determination.		The	Board’s	members	

are	appointed	by	the	Governor	and	the	Secretary	of	State,	10	M.R.S.	§	1187(1),	

and	must	possess	“expertise	in	the	specialized	area	of	motor	vehicle	franchise	

relationships,”	 which	 enables	 them	 to	 “promptly	 resolve	 complex	 and	

time-consuming	 litigation,”	 Ford	 I,	 2014	 ME	 7,	 ¶	39,	 86	 A.3d	 35	 (quotation	

marks	omitted).		Additionally,	section	1187(1)	specifies	that	four	of	the	seven	

Board	 members	 must	 have	 experience	 as	 franchisees	 or	 franchisors,	 and	

another	member	must	be	“an	attorney	employed	by	the	Secretary	of	State	and	

assigned	 to	 the	 Bureau	 of	 Motor	 Vehicles.”	 	 Because	 of	 the	 professional	

background	 and	 expertise	 inherent	 in	 the	 Board	 membership,	 and	 the	

Legislature’s	 decision	 to	 vest	 in	 that	 body	 exclusive	 authority	 to	 make	 good	

cause	 determinations,	 a	 citizen	 jury	 could	 not	 be	 expected	 to	 make	 the	

specialized	determination	of	“good	cause”	on	a	de	novo	basis.	

      [¶36]	 	 A	 citizen	 jury	 also	 could	 not	 be	 expected	 to	 determine	 whether	

the	Board	 would	 have	 decided	 that	 good	 cause	 existed	 in	 the	 context	 of	 a	
                                                                                                                  23	

hypothetical	 administrative	 proceeding	 that	 never	 occurred.	 	 When	 a	

manufacturer	complies	with	the	Dealers	Act	and	provides	proper	notice	 of	a	

proposed	 franchise	 modification	 to	 a	 dealer,	 which	 then	 files	 a	 protest,	 the	

Board	 becomes	 responsible	 for	 making	 a	 “good	 cause”	 determination,	 see	

10	M.R.S.	§	1174(3)(B),	and	any	recourse	available	in	the	court	is	in	an	appeal	

of	 the	 Board’s	 decision,	 see	 id.	 §	1189-B.	 	 Thus,	 Ford’s	 argument	 that	 “good	

cause”	 can	 be	 litigated	 in	 court	 as	 an	 element	 of	 a	 trial	 on	 damages	

functionally	converts	an	appellate	issue	into	an	issue	of	initial	determination.9			

         [¶37]	 	 We	 cannot	 conclude	 that	 the	 Legislature	 intended	 such	 an	

attenuated	and	unwieldy	proceeding	that	ventures	into	a	hypothetical	world,	

because	a	judicial	proceeding	to	determine	that	issue	simply	cannot	replicate	

the	 intended	 process	 where	 a	 panel	 of	 experts	 is	 charged	 with	 resolving	 a	

commercial	 dispute.	 	 Cf.	 Immigration	 &	 Naturalization	 Serv.	 v.	 Ventura,	

537	U.S.	 12,	 16	 (2002)	 (stating	 that	 a	 court	 must	 not	 “intrude	 upon	 the	

   9		As	we	recognized	in	Ford	I,	in	proceedings	governed	by	the	Dealers	Act	the	court’s	jurisdiction	

can	 be	 either	 appellate	 or	 original.	 	 2014	 ME	 7,	 ¶¶	 19-22,	 86	 A.3d	 35.	 	 When	 a	 complaint	 is	 filed	
with	 the	 court,	 however,	 the	 judicial	 proceeding	 is	 stayed	 pending	 any	 related	 proceeding	 that	 is	
filed	 with	 the	 Board	 within	 sixty	 days	 after	 the	 court	 action	 is	 commenced;	 and	 if	 a	 party	 files	 a	
complaint	 with	 the	 Board	 in	 the	 first	 instance,	 that	 party	 is	 barred	 from	 filing	 a	 related	 action	 in	
court	while	the	administrative	action	is	pending.		Id.	¶	21	(discussing	the	interaction	between	the	
court	and	the	Board	pursuant	to	sections	1190	and	1190-A).		This	means	that	even	when	a	dealer	
seeks	judicial	rather	than	administrative	recourse,	the	administrative	process—which	includes	the	
Board’s	 determination	 of	 whether	 a	 manufacturer	 has	 demonstrated	 “good	 cause”	 to	 justify	 a	
franchise	modification—is	allowed	to	play	out	before	the	case	is	subject	to	final	adjudication	in	the	
courts.	
24	

domain	which	[the	Legislature]	has	exclusively	entrusted	to	an	administrative	

agency”	 (quotation	 marks	 omitted)).	 	 Accordingly,	 we	 conclude	 that	 Ford	 is	

not	 entitled	 to	 raise	 a	 “good	 cause”	 defense	 to	 avoid	 or	 limit	 its	 damages	 to	

Darling’s.	

B.	     Substitute	Transaction	

        [¶38]		Darling’s	and	MADA	next	contend	that	the	court	committed	legal	

error	 when	 it	 reduced	 the	 damages	 awarded	 to	 Darling’s	 by	 the	 amounts	 it	

received	 from	 Ford	 under	 the	 ASC	 program,	 based	 on	 the	 jury’s	 finding	 that	

those	 payments	 were	 a	 “substitute”	 or	 “replacement”	 for	 the	 BOC	 payments.		

Darling’s	 and	 MADA	 do	 not	 challenge	 the	 jury’s	 factual	 finding	 that	 the	 ASC	

program	 was	 a	 substitute	 for	 the	 BOC	 program.	 	 Rather,	 they	 challenge	 the	

court’s	legal	conclusion	that	the	substitute	payments	should	be	included	in	the	

calculation	of	net	damages.10			

        [¶39]	 	 The	 Legislature	 did	 not	 specify	 how	 damages	 recoverable	

pursuant	to	10	M.R.S.	§	1173	should	be	calculated.		Because	the	parties	have	

   10		As	an	initial	matter,	Darling’s	argues	that	pursuant	to	section	1174(3)(B),	the	issue	of	offsets	

or	substitute	payments	is	only	relevant	in	the	context	of	a	good	cause	proceeding	before	the	Board,	
and	does	not	bear	on	the	issue	of	damages.		Although	it	is	true	that	the	Board	may	consider	whether	
a	“proposed	modification	is	offset	by	other	modifications	beneficial”	to	the	dealer	in	making	a	good	
cause	determination,	10	M.R.S.	§	1174(3)(B)(6),	this	does	not	preclude	a	court	from	also	including	
offsets	 in	 its	 damages	 calculation	 especially	 when,	 as	 here,	 the	 statute	 does	 not	 specify	 how	
damages	accruing	within	a	particular	timeframe	should	be	calculated.	
                                                                                          25	

argued	their	positions	in	terms	of	contract	principles,	we	examine	the	issue	on	

that	basis.		See	supra	n.6.			

       [¶40]	 	 Damages	 for	 a	 breach	 of	 contract	 are	 generally	 “based	 on	 the	

injured	 party’s	 expectation	 interest,	 defined	 as	 its	 interest	 in	 having	 the	

benefit	of	its	bargain	by	being	put	in	as	good	a	position	as	it	would	have	been	

in	had	the	contract	been	performed.”		Deering	Ice	Cream	Corp.	v.	Colombo,	Inc.,	

598	 A.2d	 454,	 456-57	 (Me.	 1991)	 (alterations	 omitted)	 (quotation	 marks	

omitted).	 	 This	 general	 measure	 of	 damages	 is	 subject	 to	 a	 number	 of	

limitations,	 including	 the	 principle	 that	 “[t]he	 damages	 awarded	 [to]	 the	

injured	 party	 should	 reflect	 .	 .	 .	 any	 net	 benefit	 that	 the	 injured	 party	 could	

reasonably	 realize	 as	 a	 result	 of	 the	 termination	 of	 the	 contract.”	 	 Id.	 	 This	

offset	to	damages	includes	the	benefits	received	by	an	injured	party	from	the	

party	in	breach,	when	those	benefits	are	offered	as	a	substitute	for	those	that	

the	injured	party	should	have	received	under	the	contract	and	the	offer	is	not	

“conditioned	 on	 surrender	 by	 the	 injured	 party	 of	 his	 claim	 for	 breach.”		

Restatement	(Second)	of	Contracts	§	350	cmt.	e,	illus.	14	(Am.	Law	Inst.	1981).		

And	 in	 fact,	 to	 mitigate	 damages,	 “the	 injured	 party	 is	 expected	 to	 make	

appropriate	 efforts	 to	 avoid	 loss	 by	 arranging	 a	 substitute	 transaction.”	 	 Id.	

cmt.	 c.	 	 “Whether	 an	 available	 alternative	 transaction	 is	 a	 suitable	 substitute	
26	

depends	on	all	the	circumstances,	including	the	similarity	of	the	performance	

and	the	times	and	places	that	they	would	be	rendered.”		Id.	cmt.	e.			

      [¶41]	 	 Here,	 the	 court	 instructed	 the	 jury	 to	 determine	 whether	 “the	

Accelerated	 Sales	 Challenge	 [was]	 a	 substitute	 or	 replacement	 for	 the	 Blue	

Oval	Payments.”		The	court’s	instructions	to	the	jury	correctly	stated	the	basic	

contract	 law	 principles	 described	 above	 and	 included	 the	 factors	 relevant	 to	

determining	whether	the	ASC	benefits	were	a	suitable	substitute	for	the	BOC	

benefits.	 	 Because	 the	 jury	 returned	 a	 verdict	 finding	 that	 the	 ASC	 program	

was	 a	 substitute	 transaction,	 the	 court	 properly	 reduced	 Darling’s	 gross	

damages	by	the	amounts	it	received	under	the	ASC	program.	

      [¶42]		Darling’s	and	MADA	argue	that	because	a	“proposed	modification	

may	 not	 take	 effect”	 during	 the	 270-day	 administrative	 notice-and-decision	

period,	10	M.R.S.	§	1174(3)(B),	Darling’s	was	entitled	to	recover	the	full	value	

of	 BOC	 payments	 due	 during	 that	 period.	 	 They	 assert	 that	 if	 Ford	 had	

complied	 with	 the	 statute,	 it	 would	 have	 been	 required	 to	 continue	 making	

BOC	payments	during	that	timeframe	in	addition	to	payments	due	under	any	

new	 sales	 incentive	 programs.	 	 Contrary	 to	 their	 contentions,	 however,	 the	

rule	 regarding	 substitute	 transactions	 applies	 when	 a	 breach	 has	 already	

occurred	and	provides	that	the	substitute	transaction	replaces	the	benefit	lost	
                                                                                     27	

as	a	result	of	the	breach.		Because	the	jury	here	found	that	the	ASC	program	

replaced	 the	 discontinued	 BOC	 payments,	 Darling’s	 was	 not	 entitled	 to	

payments	due	under	both	programs.	

      [¶43]	 	 The	 court	 therefore	 did	 not	 err	 by	 reducing	 Darling’s	 damages	

based	 on	 the	 jury’s	 finding	 that	 the	 ASC	 program	 constituted	 a	 substitute	

transaction.		

                                  III.		CONCLUSION	

      [¶44]	 	 We	 conclude	 that	 pursuant	 to	 the	 plain	 meaning	 of	 10	 M.R.S.	

§	1174(3)(B),	 a	 proposed	 modification	 of	 a	 franchise	 remains	 ineffective	

unless	 and	 until	 a	 manufacturer	 provides	 a	 dealer	 with	 written	 notice	 of	 the	

modification	in	conformity	with	the	statute,	which	is	necessary	to	trigger	the	

dealer’s	 opportunity	 to	 request	 a	 good	 cause	 determination	 by	 the	 Board.		

Because	 Ford	 has	 declined	 to	 satisfy	 the	 notice	 requirement,	 Darling’s	

damages	have	continued	to	accrue	from	April	1,	2005,	when	Ford	terminated	

the	 BOC	 payments,	 until	 the	 present.	 	 We	 therefore	 conclude	 that	 the	 court	

erred	as	a	matter	of	law	by	limiting	Darling’s	recovery	to	270	days	of	unpaid	

benefits,	 and	 we	 must	 remand	 for	 a	 new	 trial	 on	 damages.	 	 We	 further	

conclude,	 however,	 that	 the	 court	 did	 not	 commit	 legal	 error	 by	 reducing	

Darling’s	damages	by	the	amounts	it	received	under	the	ASC	program	because	
28	

the	 jury	 found	 that	 those	 payments	 were	 a	 suitable	 substitute	 for	 the	 BOC	

payments.		On	remand,	Ford	is	entitled	to	an	offset	of	any	damages	awarded	to	

Darling’s	 based	 on	 payments	 that	 Darling’s	 received	 pursuant	 to	 the	 ASC	

program.		

         The	entry	is:	

                            Judgment	 affirmed	 in	 part	 and	 vacated	 in	 part.		
                            Remanded	 to	 the	 Business	 and	 Consumer	
                            Docket	 for	 a	 new	 jury	 trial	 on	 the	 issue	 of	
                            damages.		
	     	     	               	    	      	
	
On	the	briefs:	
	
      Judy	 A.S.	 Metcalf,	 Esq.,	 and	 Noreen	 A.	 Patient,	 Esq.,	 Eaton	 Peabody,	
      Brunswick,	for	appellant	Darling’s		
      	
      Michael	Kaplan,	Esq.,	Preti,	Flaherty,	Beliveau	&	Pachios,	LLP,	Portland,	
      for	appellant	Maine	Automobile	Dealers	Association	
      	
      Daniel	 L.	 Rosenthal,	 Esq.,	 and	 Lee	 H.	 Bals,	 Esq.,	 Marcus,	 Clegg	 &	
      Mistretta,	P.A.,	Portland,	for	cross-appellant	Ford	Motor	Company	
      	
At	oral	argument:	
	
      Judy	A.S.	Metcalf,	Esq.,	for	appellant	Darling’s	
      	
      Michael	 Kaplan,	 Esq.,	 for	 appellant	 Maine	 Automobile	 Dealers	
      Association	
      	
      Jessica	 Ellsworth,	 Esq.,	 Hogan	 Lovells,	 Washington,	 D.C.,	 for	 cross-
      appellant	Ford	Motor	Company	
	
Business	&	Consumer	Docket	docket	numbers	AP-2008-01,	AP-2008-02	&	AP-2010-05	
FOR	CLERK	REFERENCE	ONLY