Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION—1st Cir.: Ford avoids Maine motor vehicle dealer law claims, (Jul 10, 2025)

By Patricia K. Ruiz, J.D.

The appellants alleged Ford Motor Company violated state and federal law in connection with failed negotiations over ownership of a family-controlled dealership.

The U.S. Court of Appeals for the First Circuit affirmed the dismissal of claims filed by Ford dealership owners under the Maine motor vehicle dealer law—the Maine Business Practices Between Motor Vehicle Manufacturers, Distributors and Dealers Act (Dealers Act). The appellate court determined that the lower court did not err in ruling that a decision by the Maine Motor Vehicle Franchise Board on the same issues had preclusive effect, barring the claims under res judicata. The appellate court also declined to disturb the district court’s rulings on the dealership owners’ tortious interference and breach of contract claims (Better Way Ford, LLC v. Ford Motor Co., No. 24-1379 (1st Cir. July 1, 2025)).

In 2016, Tucker Cianchette secured a multimillion-dollar judgment in Maine Superior Court against his father and stepmother (Eric and Peggy Cianchette) and two limited liability companies—PET, LLC, and Cianchette Family, LLC. Tucker brought his lawsuit after Eric and Peggy backed out of a 2015 agreement with Tucker that would have given him sole control of PET. In 2021, after the defendants in the 2016 suit unsuccessfully challenged the judgment against them, Eric, Peggy, Cianchette Family, and PET’s successor company—Better Way Ford, LLC—filed a suit of their own. The lawsuit alleged that the Ford Motor Company (Ford) violated state and federal law in connection with the failed 2015 negotiations between Tucker, Peggy, and Eric over their membership interests in PET and through Ford’s employees giving false testimony in Tucker’s 2016 suit. The federal district court in Maine dismissed all of the claims against Ford, and the defendants appealed.

Agreements. In 2013, PET purchased a Ford dealership in Yarmouth, Maine—Casco Bay Motors—with Ford’s approval. At the time, PET had three members: Peggy, Eric, and Tucker. PET purchased the dealership after Tucker, who worked at the dealership as a manager, approached Eric and Peggy for help with meeting capital requirements imposed by Ford and FMCC on prospective buyers. Because Tucker could not meet the requirements on his own, he proposed that Eric and Peggy invest and personally guarantee the required capital and that he manage and operate the dealership. Eric and Peggy eventually agreed, and the three secured Ford’s approval of PET’s purchase of the dealership, conditioned on PET’s signing of a sales and service agreement (SSA). Additionally, Ford required that PET enter into an agreement with FMCC to secure wholesale inventory financing (“floor plan financing”). FMCC required that Eric personally guarantee PET’s indebtedness to FMCC to obtain the financing. Two years later, Peggy, Eric, and Tucker entered into an agreement to change the membership of PET (“membership purchase agreement.”) Under the agreement, Tucker would purchase Eric’s and Peggy’s membership interests in PET, thereby becoming the sole member. PET would retain ownership of Casco Bay Motors.

To finance his purchase, Tucker proposed that PET take out a $5 million loan and proposed that his own membership interest in PET serve as collateral for the loan. Tucker also entered an agreement to purchase the real estate on which Casco Bay Motors was located (“real estate agreement”), which was owned by Cianchette family. The closings envisioned by the membership purchase agreement and the real estate agreement were contingent upon the other; the agreements were also conditioned on Tucker obtaining a complete release of Eric’s personal guaranty of PET’s indebtedness to MFCC for floor plan financing. Prior to the scheduled closings, Eric and Peggy decided not to close the deal with Tucker, leading to the filing of Tucker’s 2016 lawsuit.

Administrative proceedings. In 2021, state administrative proceedings began when Eric, Peggy, and Better Way Ford filed a petition against Ford and its subsidiary Ford Motor Credit Company (FMCC), which was later dropped as a defendant, with the Maine Motor Vehicle Franchise Board. The petition alleged Ford and FMCC violated section 1174 of the Dealers Act during the 2015 dealings in which Tucker sought to buy out Eric and Peggy’s membership interests in PET and the follow-on 2016 lawsuit in which Tucker sued Eric, Peggy, PET, and Chianchette Family for their allegedly unlawful actions in causing the breakdown in his 2015 agreement to acquire Peggy and Eric’s membership interests in PET. Specifically, they alleged: (1) Ford engaged in an arbitrary, bad faith, and unconscionable course of conduct; (2) Ford discriminated and used unreasonable, arbitrary, and unfair performance standards; and (3) FMCC discriminated and engaged in an arbitrary, bad faith, and unconscionable course of conduct.

In their administrative petition, Eric, Peggy, and Better Way Ford alleged that, during the negotiations over the 2015 transaction with Tucker, Ford and FMCC misrepresented to Tucker that he was permitted to pledge his then-present membership interest in PET to effectuate the transaction, even though such permission was contrary to Ford’s capital requirements. They also alleged that FMCC employees misrepresented to Tucker, Peggy, and Eric that a signed version of a letter FMCC provided would have released any extant liability of Eric to FMCC, satisfying the release requirements. They further alleged that Tucker would not have filed the 2016 lawsuit but for these intentional or recklessly false statements. The petition also alleged that, during the 2016 lawsuit, Ford “improperly tipped the scales of justice in favor of Tucker” when its employee made false statements in her testimony at trial. In 2023, the Board issued an order denying the petition, ruling that the petitioners had not established that Ford or FMCC violated the Dealers Act.

Amended complaint. After the Board issued its decision, the appellants amended their complaint in their 2021 lawsuit against Ford and FMCC, dropping FMCC as a defendant and narrowing their legal claims against Ford. It alleged Ford breached its contractual obligations under the 2013 SSA, resulting in damages to Better Way Ford as a party to that agreement and to Peggy and Eric as intended beneficiaries. It also alleged Ford tortuously interfered with the membership purchase agreement and the real estate contract. In support of these claims, the amended complaint largely reiterated the factual allegations set forth in the parties’ petition to the Board. The amended complaint also included new factual allegations regarding the alleged perjury. On appeal of the district court’s dismissal, the appellate court declined to disturb the district court’s dismissal of their perjury claim.

Dealers Act claim. The district court dismissed the appellants’ Dealers Act claims under the doctrine of res judicata, which, in Maine, prevents parties from relitigating claims if: (1) the same parties or their privies are involved in both actions; (2) a valid final judgment was entered in the prior action; and (3) the matters presented for decision in the second action were, or might have been, litigated in the first action. The appellants argued that the Board’s ruling as to their Dealers Act claims may not be given res judicata effect for either of two reasons.

First, the appellants cited a provision of the Dealers Act stating that an order rendered against a person under the Dealers Act is regarded as prima facie evidence against the person. The appellants argued that this provision permits a Board order to be regarded at most as prima facie evidence in a later suit, precluding the district court from giving the Board order in the case res judicata effect. The appellate court disagreed, finding that the language of the statute does not prevent a Board order from being given preclusive effect. Instead, it merely ensures that the Board’s findings have at least evidentiary value, even if the elements of preclusion are not satisfied. Further, the provision’s prima facie evidence language applies to a wide array of final judgments, orders, and decrees. The court stated that, if it accepted the appellants’ view, judgments in any civil, criminal, or administrative proceeding under U.S. antitrust laws, the Federal Trade Commission Act, the Maine Revised Statutes, or the Dealers Act would be robbed of their preclusive effect.

Second, the appellants argued there are differences in the availability of evidence in Board proceedings compared to federal court. They argued that the Board proceedings should not be given preclusive effect because, under Maine and First Circuit precedent, collateral estoppel should not preclude a claim where a party may benefit from substantial differences in the availability or admissibility of evidence. However, the court found the district court did not rely on collateral estoppel but res judicata. Further, the appellants failed to cite any authority suggesting that the evidentiary differences identified would bar the application of res judicata in the case. Thus, the court found no reason to disturb the district court’s ruling on this ground.

Breach of contract claims. The appellants challenged the district court’s dismissal of their breach of contract claims, which they premised on section 24(a) of the SSA. The appellants alleged that Ford breached its obligations under this provision by leading Tucker to believe it would not enforce the standards contained in the 2013 SSA in connection with Tucker’s attempt to purchase Peggy’s and Eric’s ownership interests in Casco Bay Ford. Under Michigan law, which governed the breach of contract claims under Maine’s choice of law rules, they alleged, this conduct constituted a violation of Ford’s implied duty of good faith and fair dealing. The district court dismissed these claims because it concluded that, under Michigan law, the implied duty of good faith and fair dealing has no role to play in the case, as this implied covenant cannot be used to override the express terms of a contract, including when a contract unambiguously grants one party sole approval authority over specified changes to the relationship.

The appellants argued the district court erred because no terms governing approval appear in the SSA and that, in the absence of any such terms, the SSA is ambiguous and the implied covenant of good faith and fair dealing applies. However, the court found the SSA does include terms governing approval, providing that Ford “expressly reserves the right to select the dealers with whom it will enter into [sales and service] agreements so as to maintain as high quality a dealer organization as possible.” The appellate court declined to disturb the district court’s ruling on this basis.

Tortious interference. The appellants challenged the dismissal of their tortious interference with contract claims, alleging that Ford interfered with the membership purchase agreement and the real estate contract when it “misrepresented its franchise standards in connection with Tucker’s attempt to purchase Peggy and Eric’s ownership in the Casco Bay Ford dealership” and acted in bad faith with respect to that transaction. In general, tortious interference with contract requires proof of three elements: (1) the existence of a valid contract; (2) interference with that contract; and (3) damages proximately caused by the interference. Finding that the appellants failed to make “some effort at developed argumentation,” the appellate court considered this argument waived.

The Case is No. 24-1379.

Judge: Barron, D.

Attorneys: Timothy Joseph Bryant (Preti Flaherty Beliveau & Pachios Chartered LLP) for Better Way Ford, LLC. William J. Conroy (Campbell Conroy & O'Neil, P.C.) for Ford Motor Co.

Companies: Better Way Ford, LLC; Ford Motor Co.

Cases: FranchisingDistribution MaineNews MassachusettsNews NewHampshireNews PuertoRicoNews RhodeIslandNews