Columbus partner Elizabeth McNellie authored an article,"Delray V. Yamaha And Pre-Existing Dealer Agreements," which appeared in the September 30, 2009, edition of Contract Law360.
McNellie's article focuses on the case of a Yamaha dealer, Motorsports of Delray LLC, which voluntarily terminated its dealer agreement with Yamaha Motor Corporation. Motorsports then claimed that it was entitled to "certain post-termination benefits from Yamaha, under Section 320.64(36)(a) of the Florida Statutes, including repurchase of its inventory, parts, signs and other things, which it had previously purchased from Yamaha." According to McNellie, "Yamaha resisted this request on the basis that the dealer agreement, which provided only for repurchase of current vehicle inventory, predated the statute, and that the dealer agreement between the parties should apply, rather than this later-enacted statute. Furthermore, Yamaha argued, any retroactive application of the repurchase statute, in derogation of the contract between the parties, would be unconstitutional."
McNellie continues: "The administrative law judge found that the post-termination benefits statute did not, by its own terms, apply retroactively to contracts that were in place prior to the enactment of the statute. Consequently, the contract between the parties controlled on the issue of what items Yamaha had to 'buy back' from Motorsports when it ceased to be a Yamaha dealer. The decision, therefore, did not reach the constitutional issue. This decision, if not overturned on appeal, however, means that motor vehicle manufacturers with Florida dealers will be bound by the statutory repurchase obligations only for dealers that have agreements entered into after July 1, 2006, the date upon which Section 320.64 became effective."
McNellie goes on to state that "while the Florida statute, and this ruling, only apply to Florida motor vehicle dealerships, the arguments about whether post-termination benefits are meant to apply retroactively or whether the imposition of post-termination obligations are an impermissible impairment of existing contracts are likely to arise in all of these states with new repurchase statutes." The article goes on to note that post-termination benefits vary by jurisdiction, so that the application of these new statutes "will determine whether the manufacturer or the dealer absorbs the often significant costs associated with a dealer ceasing to do business."