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PENNSYLVANIA AUTOMOTIVE ASSOCIATION v. COMMONWEALTH PENNSYLVANIA (11/30/88)

decided: November 30, 1988.

PENNSYLVANIA AUTOMOTIVE ASSOCIATION, PETITIONER
v.
COMMONWEALTH OF PENNSYLVANIA, STATE BOARD OF VEHICLE MANUFACTURERS, DEALERS AND SALESPERSONS, PETERSON, HOWELL AND HEATHER, INC., D/B/A PENNSYLVANIA LIMITED BROKERS, AND PENNSYLVANIA CREDIT UNION LEAGUE, RESPONDENTS



Appeal from the Order of the State Board of Vehicle Manufacturers, Dealers and Salespersons in the case of In The Matter of An Application for a Broker's License filed by Peterson, Howell & Heather, Inc., d/b/a Pennsylvania Limited Brokers, File No. 87 60 0677.

COUNSEL

Margaret M. Stuski, with her, C. Grainger Bowman and Stephen A. Moore, McNees, Wallace and Nurick, for Petitioner.

April L. McClaine, Counsel, State Board of Vehicle Manufacturers, Dealers and Salespersons, with her, Joyce McKeever, Chief Counsel, Bureau of Professional and Occupational Affairs, and Velma A. Boozer, Chief Counsel, Department of State, for respondent, State Board of Vehicle Manufacturers, Dealers and Salespersons.

Joseph P. Green, Jr., Duffy & Green, for respondent, Peterson, Howell & Heather, Inc.

Francis J. Capaldo, for respondent, Pennsylvania Credit Union League.

Judges Doyle and Palladino, and Senior Judge Barbieri, sitting as a panel of three. Opinion by Judge Palladino. Judge MacPhail did not participate in the decision in this case.

Author: Palladino

[ 121 Pa. Commw. Page 354]

The Pennsylvania Automotive Association (Petitioner) appeals from an adjudication and order of the State Board of Manufacturers, Dealers and Salespersons (Board) which deemed the application for a broker's license filed by Peterson, Howell and Heather, Inc., d/b/a Pennsylvania Limited Brokers (PH&H), withdrawn because the Board lacked jurisdiction over PH&H's Fleet Power Purchasing Program.

The Fleet Power Purchasing Program was the product of a consulting contract between PH&H and CMCI Corporation (CMCI), a national organization which provides marketing programs to individual credit unions. CMCI paid PH&H a consulting fee to develop a marketing program that would create a network of dealers that would agree to sell new cars to credit union members at attractive prices. PH&H developed the Fleet Power Purchasing Program and recruited dealers willing to participate in the program. The Fleet Power Purchasing Program creates a network of licensed franchised vehicle dealers willing to sell vehicles to members of credit unions, referred by credit unions, for no more than the manufacturer's invoice amount plus a 2 per cent mark-up of the invoice amount.

Dealers participating in the Fleet Power Purchasing Program enter into a standard written agreement with

[ 121 Pa. Commw. Page 355]

PH&H (PH&H Dealer Agreement). In addition to setting the maximum sales price for a vehicle at two percent above the manufacturer's invoice amount, the PH&H Dealer Agreement provides that a dealer may not solicit the purchase of dealer installed items such as undercoating, rustproofing, paint sealant and fabric protector by the customer and may not sell the customer any financing, servicing contracts or extended warranties. The PH&H Dealer Agreement also provides that the dealer must make an offer to buy the purchaser's used vehicle, and if the offered price is not accepted, the dealer must provide storage of the purchaser's used vehicle for up to thirty days.

PH&H has no contact with individual credit union members and no agreement with any credit union or credit union league. Under the program, the purchaser deals directly with a salesman designated by the dealer and not with PH&H. PH&H is not authorized to consummate a sale on behalf of a dealer and dealers pay no fees to PH&H. PH&H audits each ...


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