New York Vehicle and Traffic Law § 465 requires automobile manufacturers to honor warranty agreements with customers and to compensate franchised dealers for labor and parts associated with warranty repair services at a rate that “shall not be less than the price and rate charged by the franchised motor vehicle dealers in the community or marketing area for like services to non-warranty and/or non-service contract customers, provided such price and rate are reasonable.” N.Y. Veh. & Traf. Law § 465. The principal issue rаised by this appeal is whether a franchised dealership that over many years consistently submitted claims and accepted reimbursement at a manufacturer’s standard rate, without ever seeking additional compensation, may thereafter hold the manufacturer liable under Section 465 for additional compensation on past claims, or whether its initial requests for and acquiescence in reimbursement at the standard rate preclude relief.
The plaintiffs in this diversity action are New York car dealerships who sued defendant-appellee Gеneral Motors Corporation (“GM”) under Section 465 and their franchise agreements with the company, claiming that GM’s standard reimbursement rate for warranty repair parts is too low under the statute. The parties proceeded to discovery solely on the claims of plaintiff-appellant Fulton Chevrolet-Cadillac Co., Inc. (“Fulton”), and GM successfully moved for summary judgment dismissing Fulton’s claims. This appeal followed.
Background
GM is a Delaware corporation that manufactures and distributes automobiles in the United States through a network of authorized dealers operating under thе trade names Buick, Chevrolet, Pontiac, GMC Truck, Hummer, and Cadillac. Since 1981, Fulton has been an authorized Cadillac and Chevrolet dealer in Middle-town, New York, pursuant to a series of franchise agreements with GM.
Like most automotive manufacturers, GM warrants certain parts, systems, and accessories in connection with the retail sale of its cars and reimburses franchised dealers for performing repair work under these warranties. In order to be reimbursed for parts and labor provided in connection with a warranty repair, dealers must submit a claim to GM using a comрuterized system called the Warranty Information Network System (“WINS”). 1 To use this program, which allows GM to reimburse dealers across the country based on a uniform methodology, a dealer electronically inputs into a computer certain information about the work performed in connection with a warranty repair job. The dealer is not required to submit underlying repair orders, but must input the repair order number and date, the vehicle identification number of the car under repair, the vehicle’s mileage, the applicable “labor operation” number, the рrimary failed part number, and the parts reimbursement amount. The “Line Total,” which reflects the total amount of reim *152 bursement the dealer is requesting for the warranty repair, is then calculated automatically by the dealer’s computer pursuant to a GM-specifíed formula, and the dealer is given the opportunity to review the Line Total before submitting the claim.
WINS typically reviews, approves, and pays warranty claims automatically without any individual review by a GM employee. The system will not approve a claim automatically, however, if it does not fall within certain parameters, for example, if it seeks reimbursement for repair parts in an amount that exceeds a certain ceiling. That ceiling is determined pursuant to a GM-specified formula, which involves multiplying the dealer list prices for the parts being used in the repair by a standard parts markup for the dealer. The standard parts markup used by WINS for most dealers in the United States currently is forty percent. Hence, for most dealers, a reimbursement claim will not be approved automatically by WINS if it seeks more than 140 percent of the dealer list рrices for the parts used in the repair.
Although most claims submitted through WINS are processed in this way, there are several mechanisms for bypassing the automated procedure and seeking reimbursement at a higher rate than that allowed by the ordinary WINS formula. For example, if a dealer wants a GM employee to review an individual reimbursement claim, it can “H-route” the claim via the WINS program to its GM service representative and include comments explaining why individualized review is desired and seeking permission to submit a claim for reimbursement at a higher rate. In additiоn, dealers may submit “P” code claims when a warranty repair requires more parts than the limit provided for by the associated labor operation. WINS allows a dealer also to submit a “case add credit” in circumstances where it seeks additional reimbursement on a previously submitted claim.
Dealers may submit warranty reimbursement claims via WINS at any time. The program processes standard claims twice per week, and provides dealers with “claims memos” on the day following such processing. These memos report the disposition of any warranty claims submitted during the last cycle. Approximately ninety percent of warranty claims are approved upon initial submission, and ordinarily are paid within ten days. If a dealer is unhappy with the disposition of a claim, however, it can resubmit the claim using the H-route procedure and include comments explaining the dealer’s dissatisfaction. The dealer also may appeal directly to its service representative, or invoke certain dispute resolution procedures described in its franchise agreement with GM.
All authorized GM dealers throughout the United States use WINS tо submit warranty reimbursement claims. GM processes and pays approximately 48 million claims through WINS each year. During 2003, GM approved about 1.9 million claims from New York dealers, which accounted for approximately $183 million in reimbursements.
Since 1996, Fulton regularly has submitted warranty reimbursement claims to GM. In the five-year period from 1999 to 2004, it submitted approximately 22,000 claims, which resulted in compensation from GM in excess of $3.8 million. Fulton’s Dealer Sales and Service Agreement with GM provides that “Dealer ... agrees to timely submit true and accurate applications or claims fоr payments.” According to the deposition testimony of Fulton’s owner, Jonathan Worts, each of the claims submitted by Fulton since 1996 was true and accurate.
*153 Fulton concedes that while it occasionally submitted H-route requests for unusual or additional labor costs, it never sought additional payment for parts or otherwise requested that GM reimburse it for warranty parts at a higher markup than the forty-percent rate used by WINS for automatic claim processing. Indeed, the parties know of no New York GM dealer that has submitted an individual warranty claim seeking in excess of GM’s stаndard rate for parts reimbursement. 2 Fulton insists that such a request would be futile. The record shows, however, that GM has received such claims from dealers in other states, such as Illinois, Maine, and New Jersey, either through WINS or by letter, and typically has honored them after verifying what the appropriate rate of reimbursement should be. Indeed, Worts owns a Chevrolet dealership in New Jersey that requested a higher rate in accordance with New Jersey law. Since 1999, this dealership has been able to use a special WINS code to receive reimbursement at this higher rate.
On July 16, 2001, ten present and former GM dealers in New York filed a complaint against GM. On December 18, 2002, they filed an amended complaint, adding Fulton and seven other plaintiffs, one of which subsequently dismissed its claims voluntarily. The gist of the amended complaint is that the standard forty-percent parts markup used by WINS is approximately thirty percentage points below the parts markup used by dealers in plaintiffs’ community for non-warranty repairs. 3 The complaint alleges also that because WINS allows a dealer to submit only limited information about a warranty repair, it is “designed to frustrate any attempt to add additional information or add more particular information,” such that “if a dealer attempts to input a reimbursement rate other than the rate that GM’s computer sets as a default, that dealer’s claim cannot be processed.” Accordingly, plaintiffs allege, GM’s requirement that dealers use WINS to submit reimbursement claims has led to systematic undercompen-sation for warranty repair parts since 1992, when New York Vehicle and Traffic *154 Law § 465 was amended to require reimbursement at the rate prevailing in the dealer’s community for nоn-warranty repair parts. 4
The dealers asserted claims under Section 465 as well as a provision of GM’s standard franchise agreement requiring the company to comply with all applicable laws. The dealers seek, inter alia, incremental payment on previously submitted claims based on what they allegedly would have been paid had GM used a proper markup for parts, as well as an injunction barring GM from using its standard, nationwide formula to determine reimbursement amounts for warranty repairs performed by New York dealers.
Fulton was chosen as the test plaintiff and thе parties proceeded to discovery only on Fulton’s claims, which revealed the above undisputed facts. GM moved for summary judgment, denying any violation of Section 465, but arguing also that Fulton is precluded from suing under the statute because it has requested and accepted payment based on the standard forty-percent parts markup rate without complaint since 1996. The district court granted the motion and dismissed Fulton’s claims.
Tom Rice Buick-Pontiac GMC Truck, Inc. v. Gen. Motors Corp.,
No. 01 Civ. 6410(NRB),
Discussion
We review a district court’s grant of summary judgment
de novo,
viewing the facts in the light most favorable to the nonmoving party and resolving all factual ambiguities in its favor.
Singh v. City of New York,
This appeal hinges primarily on a single question of law; whether Fulton’s consistent requests for and acceptance of payment at GM’s standard warranty reimbursement rate, without asking for more or notifying GM of its belief that a higher rate might be warranted under Vehicle and Traffic Law § 465, precludes recovery of additional payment under the statute for past claims. Neither the New York Court of Appeals nor any intermediate New York appellate court has addressed this question. “In the absence of authoritative law from the state’s highest court, we must either (1) predict how the New York Court of Appeals would resolve the state law question, or, if state law is so uncertain that we can make no reasonable prediction, (2) certify the question to the New York Court of Appeals for a definitive resolution.”
DiBella v. Hopkins,
Our cardinal function in interpreting a New York statute is to ascertain and give effect to the intent of the legislature.
Abrams v. Ford Motor Co.,
1. Every franchisor shall properly fulfill any warranty agreement and/or franchisor’s service contract and shall compensate each of its franchised motor vehicle dealers for warranty parts and labor in amounts which reflect fair and reasonable compensation for such work. All warranty claims and/or claims under a franchisor’s service contract made by franchised motor vehicle dealers shall be paid within thirty days following their approval provided, however, that the franchisor retains the right to audit such claims for a period of two years following the submission thereof, and to charge back any amounts paid on falsе, fraudulent, incorrect or unsubstantiated claims. For parts ... and labor reimbursement, fair and reasonable compensation shall not be less than the price and rate charged by the franchised motor vehicle dealers in the community or marketing area for like services to non-warranty and/or non-service contract customers, provided such price and rate are reasonable.
2. All warranty claims shall be either approved or disapproved within thirty days after their receipt. When any such claim is disapproved the franchised motor vеhicle dealer shall be notified in writing of its disapproval within said period. Each such notice shall state the specific grounds upon which the disapproval is based.
N.Y Yeh. & Traf. Law § 465. 5
Section 465 plainly imposes on manufacturer-franchisors the obligation to reimburse franchised motor vehicle dealers for warranty repair parts “in amounts which reflect fair and reasonable compensation.” The statute likewise plainly contemplates that franchisees will submit claims for such compensation. Because Fulton requested payment on past warranty reimbursement claims, the issue here is whether GM’s payment of the requested amount discharged its duty to pay under the statute, or whether it had an additional obligation to pay more, regardless of what was requested. That is, we must determine whether a “claim” for purposes of Section 465 is a demand for money in a particular amount, such that it is “paid” when the demanded amount is disbursed, or whether a “claim” more generally is a simple request for money, not necessarily for any particular amount, such that it is “paid” only when the statutory rate is given, regardless of the amount actually requеsted.
Relying principally on
Ralph Oldsmobile Inc. v. General Motors Corp.,
No. 99 Civ. 4567(AGS),
The relevant dictionary definition of “claim” is “a demand for compensation, benefits, or payment” in conformity with a law or contract, and also “the amount or payment of such a demand.” Webster’s Third New International Dictionary 414 (2002) (emphasis added). A claim is thus not only “[a] demand for payment in accordance with an insurance policy or other formal arrangement,” but also “[t]he sum of money demanded.” The American Heritage Dictionary of the English Language 341 (4th ed.2000) (emphasis added). We conclude that the most natural and obvious understanding of “claim” in the context of Section 465 is a request for reimbursement in a specific amount.
This reading makes sense of Section 465’s broader context. By its plain terms, the statute obliges a manufacturer not only to provide fair and reasonable compensation for warranty parts, but also: (1) to approve or disapprove all warranty claims “within thirty days after their receipt”; (2) to notify the dealer in writing of any disapproved claim within the thirty day period, “staffing] the specific grounds upon which the disapproval is based”; and (3) to pay approved claims “within thirty days following their approval.” N.Y. Veh. & Traf. Law § 465. Though it is possible to read this language as contemplating the submission of claims without regard to amount, the more natural construction of these provisions is that they together provide a mechanism by which dealers and manufacturers can identify and communicate openly about areas of disagreement as to what constitutes “fair and reasonable compensation.” But this requires that dealers submit claims not in the abstract, but for specific amounts. Otherwise it is hard to fathom how a manufacturer might approve or disapprove the claim in most cases, much less provide reasons for its rejection.
Cf. Darling’s v. Ford Motor Co.,
Furthermore, the New York Court of Appeals instructs courts to construe New York statutes in ways that “avoid objectionable, unreasonable or absurd consequences.”
Long v. State,
We note also, as did the district court, that allowing Fulton to reopen closed accounts by means of a lawsuit and to disturb previously paid claims would undermine a number of common law principles recognized in New York, such as the doctrines of account stated,
see Rodkinson v. Haecker,
Finally, our conclusion is bolstered by the decisions of several courts interpreting analogous statutes in other jurisdictions.
See Woods v. MONY Legacy Life Ins. Co.,
Accordingly, we hold that Fulton may not recover under New York Vehiclе and Traffic Law § 465 for additional sums on previously paid warranty claims, absent evidence that it submitted claims for additional payment and that these claims were rejected by GM contrary to the statute’s mandate. Fulton’s belief that submitting such claims would have been futile is belied by the record, which shows that GM provides numerous means for a dealer to request additional compensation beyond what is allowed by the standard WINS formula, such as the H-route, P code, and “case add credit” procedures, not to mention the possibility of simply writing a letter to a regional GM reрresentative. Furthermore, because we conclude that a dealer may not hold a manufacturer liable under Section 465 for additional compensation without first having submitted a claim for such payment, and because there is no evidence that Fulton has done so, it follows that Fulton is precluded from receiving the prospective relief it seeks. It follows as well that the district court properly granted summary judgment dismissing Fulton’s contract claim, which is derivative of its claim under Section 465.
We note that it is unnecessary for us to decide the issue, about which the pаrties argue at length, whether a dealer or a manufacturer is in the best position to determine the rate charged in a dealer’s community for non-warranty repair parts. We hold only that a dealer may not recover additional sums on previously paid warranty claims, or secure an injunction ordering a manufacturer to reimburse at a higher rate than it customarily pays, absent evidence that the dealer submitted a claim for additional payment that was rejected by the manufacturer contrary to Section 465. Whether a manufacturer could disapprove such a claim, consistent with Section 465, on the ground that the dealer did not provide adequate information to establish its community rate for non-warranty repair parts is a question we leave for another day. 6
*159 Conclusion
We agree with the district court that an automobile manufacturer discharges its duty to provide fair and reasonable compensation for warranty repair parts under New York Vehicle and Traffic Law § 465 when it pays a warranty claim in the amount requested by the dealer. A manufacturer is not exposed to liability for failure to pay additiоnal amounts when the dealer requested and acquiesced in reimbursement at the manufacturer’s standard rate and never asked to be paid at a higher rate. We therefore affirm the district court’s grant of summary judgment dismissing Fulton’s claims.
Notes
. GM's standard franchise agreement — the Dealer Sales and Service Agreement — provides that reimbursement for warranty repair work "will be made according to policies in the Service Policies and Procedures Manual.” The manual describes the general requirements for submitting claims via an electronic repair order system, and directs dealers to a separate WINS Claim Processing Manual for more specific instructions.
. There is evidence that Karp Buick of Rock-ville Centre sent a letter to the Northeast Market Area Manager for GM on July 19, 1999, complaining generally that GM had paid too little for warranty parts under New York law, and demanding incremental payment on previously submitted claims as well as a higher reimbursement rate going forward. GM responded on September 8, 1999 that any dealer was “free to request an individualized assessment of its 'retail' markup at any time.” GM suggested that if Karр Buick wished to pursue this course, it should submit a series of recent repair orders as well as invoices showing its retail prices for repair parts, and that GM then would determine if the dealer was entitled to compensation at a higher rate going forward. GM declined, however, to give incremental reimbursement on past claims that no longer were timely under the franchise agreement. There is no evidence that Karp Buick used the procedure described in GM’s letter to attempt to establish a higher rate going forward, or that it submitted via WINS a timely request for additional reimbursement on previously paid claims.
In addition, on August 24 and September 11, 2001 respectively, Manfredi Auto Group of Staten Island and Bright Bay GMC Truck of Bay Shore sent letters to GM demanding that the company alter the WINS program to allow dealers to input more information into the computer and to request a higher reimbursement rate for parts than' that allowed by the standard formula. The record does not contain any responses from GM, or evidence that these dealers attempted to use the H-route, P code, or "case add credit” procedures fоr requesting additional reimbursement.
. Fulton now asserts that the standard forty-percent parts markup in fact is about thirty-five percentage points below the going non-warranty rate in Fulton’s community.
. Fulton has acknowledged that the statute of limitations on its claims is three years,
see
N.Y. C.P.L.R. § 214(2) (providing three-year limitations period for "an action to recover upon a liability ... imposed by statute”);
Tom Rice Buick-Pontiac GMC Truck, Inc. v. Gen. Motors Corp.,
No. 01 Civ. 6410(NRB),
. We note that N.Y. Veh. & Traf. Law § 465 was recently amended, effective January 1, 2009. See Act of Aug. 5, 2008, ch. 490, sec. 3, N.Y. Veh. & Traf. Law § 465, 2008 N.Y. Sess. Laws 1329, 1338-40 (McKinney). As these amendments do not become effective until January 1, 2009, however, we need not consider them here.
. We do note, however, that the amendments to N.Y. Veh. & Traf. Law § 465 discussed above create a mechanism by which a dealer may establish the price and rate they charge non-warranty customers for parts and claim such price and rate, including an average markup, as their reimbursement rate with the benefit of a rebuttable presumption that the claimed reimbursement rate is fair and reasonable. See Act of Aug. 5, 2008, ch. 490, sec. *159 3, N.Y. Veh. & Traf. Law § 465, 2008 N.Y. Sess. Laws 1329, 1338-40 (McKinney).