An administrative law judge in New York has sided with a Maserati dealership in a lawsuit over whether changes to incentive programs constitute modifications to a franchise agreement.
Wide World Maserati in Spring Valley, N.Y., argued in a New York court last month that when Maserati North America reduced holdback payments to the dealership on sold vehicles, the change qualified as a franchise modification, regulated by New York's dealership law, as revised in 2009.
In the wake of the judge's ruling, the burden is on Maserati North America to prove that its holdback and incentive-program changes are not "unfair" under New York law, meaning that they do not "substantially and adversely affect a dealer's rights, obligations, investment or return on investment."
A lawyer familiar with the case who did not participate in it said the decision wasn't necessarily precedent setting, in part because of the specifics of the New York law.
But the result of the unusual legal challenge to changes in an automaker's payments to its dealers is likely to be noticed by other courts, he said.
Last year, Maserati North America revised its 15-year-old bonus program so that the guaranteed holdback dropped to 2 percent from 4 percent previously. Holdback is a portion of the difference between the sticker price and the invoice price that the automaker holds back when the dealership buys the vehicle, and then returns to the dealership later, say quarterly, after the vehicle is sold. The amount is usually expressed as a percentage of the sticker price.