In my capacity as a mediator and arbitrator of franchise disputes, I mediated a dispute between a customer of a car dealership, the dealership, and the manufacturer of a vehicle relating to the purchase of a high-performance vehicle. The customer had endless problems with the vehicle and decided to return it, but the dealership would not accept the vehicle because it was under the manufacturer’s warranty. The customer refused to make any further payments under the purchase agreement and simply abandoned the vehicle. The customer sued for damages, and the dealer counterclaimed for payments owing and damages. The manufacturer disclaimed any liability to the customer other than continuing to repair the vehicle.
After several hours of trying to reach a resolution, I met with each of the parties in private and eventually convinced the manufacturer to contribute to the settlement and the dealer to reduce the amount they were seeking and take back the vehicle. By convincing each of the parties that the amounts involved were not that significant compared to the cost of litigating this case between three parties, each party agreed, and a settlement agreement was executed between all three.
The lesson learned for a mediator is to listen carefully to all parties and discuss their options, which in many cases are better than litigating. Of course, the lawyers involved must also be practical in advising their respective clients rather than encouraging a long, costly, and uncertain lawsuit. Also, a settlement agreement or terms of settlement should be reduced to writing at the end of the mediation or as soon as possible afterwards.
Frank Zaid
Franchise mediator, arbitrator, business operations consultant, expert witness, ADR Chambers
