When Dwayne Hawkins made a lunch date with a Ferrari marketing executive in July 1994, he thought they would discuss his dealership's growing Florida market and how he might sell more than the required 12 cars a year.
Instead, Ferrari of North America Inc. told Hawkins his Crown Ferrari Inc. franchise in St. Petersburg was being terminated.
Hawkins said he was told that a Ferrari demographic study suggested his region wouldn't even support a 12-car year.
That's when Hawkins, who has 24 franchises in three states and said he has never been terminated, learned the power of the mandatory binding arbitration clause inserted into his 1985 franchise contract.
That clause is more powerful than Florida's Dealer Franchise Act, which is pre-empted by the arbitration clause, according to a ruling by a U.S. District Court judge in New York.
"Ferrari calculated my geographic area wrong by excluding Orlando and Sarasota, and that's why I'm being terminated," contended Hawkins, who retains the franchise while fighting Ferrari's action. He also sells Jaguar, Mercedes-Benz and Audi models at the dealership.
Carl Chiappa, a lawyer for Ferrari, said there are other reasons for the termination, but he declined to discuss Hawkins' situation in detail.
The point, Hawkins said, is that there's …
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