“Prima Facie” ≠ “Only”: The First Circuit Confirms That § 1173 of the Maine Dealers Act Does Not Bar the Res Judicata Effect of Franchise Board Decisions

I. Introduction

Better Way Ford, LLC v. Ford Motor Company, No. 24-1379 (1st Cir. July 1, 2025), grows out of an extended family dispute over a Ford dealership in Yarmouth, Maine, and the subsequent legal skirmishes that followed.

The appellants—Peggy and Eric Cianchette, their real-estate entity Cianchette Family, LLC, and the dealership’s successor Better Way Ford, LLC—filed a 2021 lawsuit alleging that Ford’s conduct during a failed 2015 ownership transfer, and its employees’ testimony in a related 2016 state-court suit, violated multiple state and federal laws. When the U.S. District Court dismissed every claim under Rule 12(b)(6), the plaintiffs appealed. The Court of Appeals for the First Circuit affirmed, issuing a lengthy opinion that crystallises several doctrinal points, most notably:

1. The evidentiary-pleading bar for civil perjury claims under Maine law;
2. The scope of the implied covenant of good faith and fair dealing under Michigan contract law in franchise settings; and
3. (Crucially) the interaction between Maine Motor Vehicle Franchise Board (“the Board”) decisions and the doctrine of res judicata, construing 10 M.R.S. § 1173 of the Dealers Act.

II. Summary of the Judgment

• Civil Perjury: Plaintiffs failed to plausibly allege that Ford employee Ann McDonough’s trial testimony was false, or that information proving falsity was unavailable before judgment. Claims dismissed.
• Dealers Act (10 M.R.S. § 1174): Prior adverse Board order bars relitigation. The Court rejects the argument that § 1173’s “prima facie evidence” language disables res judicata.
• Breach of Contract: Michigan law will not imply a duty of good faith to override express SSA language granting Ford sole approval authority for ownership changes.
• Tortious Interference: Alleged misrepresentations were either not plausibly false or, if false, not justifiably relied upon. Claims dismissed.
• Result: District Court’s judgment of dismissal affirmed in full.

III. Analysis

A. Precedents Cited and Their Influence

• Bean v. Cummings, 939 A.2d 676 (Me. 2008) & Spickler v. Greenberg, 644 A.2d 469 (Me. 1994) – Set the elements and clear-and-convincing burden for civil perjury.
• 20 Thames St. LLC v. Ocean State Job Lot of Maine, 252 A.3d 516 (Me. 2021) – Maine’s modern articulation of res judicata; adopted by the First Circuit to measure preclusion of the Board decision.
• Reed v. Secretary of State, 232 A.3d 202 (Me. 2020) & Rubin v. Josephson, 478 A.2d 665 (Me. 1984) – Common-law presumption that statutes do not silently abrogate existing doctrines.
• Hubbard Chevrolet Co. v. General Motors Corp., 873 F.2d 873 (5th Cir. 1989) & Stephenson v. Allstate, 328 F.3d 822 (6th Cir. 2003) – Franchise contracts granting sole discretion negate implied duties.
• Twombly/Iqbal line – Pleadings must plausibly allege each element; the court may examine documents incorporated by reference to test plausibility.

B. The Court’s Legal Reasoning

1. Civil Perjury – Plausibility and “Information Unavailable” Requirements

Maine law requires a plaintiff not only to allege falsity and scienter, but also to allege that evidence of falsity was “unavailable” before the original judgment. By comparing McDonough’s allegedly inconsistent statements from the 2016 trial and later Board proceedings, the Court concluded that:

• The statements, when viewed in full context, were not plausibly contradictory.
• Plaintiffs’ counsel was aware of potential authorization issues at sidebar during the 2016 trial, defeating the “information unavailable” element.

2. Res Judicata and § 1173 – “Is Regarded As” Means “At Least As”

The heart of the opinion is statutory interpretation. Section 1173 states that a “final judgment, order or decree” in an administrative proceeding “is regarded as prima facie evidence.” Plaintiffs argued this wording forbids treating the order as anything more than prima facie evidence—i.e., it negates preclusion. The First Circuit disagreed, citing:

• The statute calls the order a “final judgment,” a term historically carrying preclusive effect.
• Reading “is” as “only” would render “final judgment” an odd misnomer and create endless relitigation—not likely the Legislature’s intent.
• Maine doctrine disfavors construing statutes to silently upend common-law principles like res judicata absent “clear and explicit” language.

Hence, the Board’s unanimous denial of the petition bars the same parties from re-asserting the same Dealers Act claims in federal court.

3. Contract – Implied Covenant Cannot Rewrite Express Approval Clause

Michigan law recognises an implied duty of good faith only to “fill gaps,” not to contradict clear discretionary clauses. Section 24(a) of the 2013 Sales & Service Agreement expressly reserved Ford’s unilateral right to approve ownership changes. Plaintiffs’ attempt to convert that discretion into a “reasonable-approval” standard failed.

4. Tortious Interference – No Justifiable Reliance on Obvious Documents

Even if representations about releasing Eric’s guaranty were made, the contract documents themselves showed the release was inadequate. The Court applied Restatement (2d) § 541 comment (a): a recipient cannot “blindly rely” where falsity is patent upon “a cursory examination.” Since Tucker (and, derivatively, plaintiffs) could read the Guaranty Termination letter, reliance was not justifiable.

C. Impact of the Judgment

• Administrative Preclusion Strengthened. Maine dealers (and manufacturers) should recognise that losing before the Motor Vehicle Franchise Board will normally preclude subsequent civil litigation on the same statutory claims, whether state or federal.
• Strategic Front-loading. Parties must litigate state Dealers Act disputes fully at the Board stage, including discovery requests and evidentiary submissions, or risk forever losing the claim.
• Higher Bar for Civil Perjury. Litigants contemplating perjury suits must gather clear evidence and demonstrate why they lacked that evidence earlier; mere hindsight contradictions will be insufficient.
• Contract Drafting Signal. Franchise manufacturers can rely on sole-approval clauses; dealers cannot invoke good-faith doctrines to second-guess explicitly discretionary language.
• Due-Diligence Reminder. Parties claiming to have been misled must show that falsity was not obvious upon minimal inspection; sophisticated businesspeople have a duty to read governing documents.

IV. Complex Concepts Simplified

• Res Judicata vs. Collateral Estoppel: Res judicata (“claim preclusion”) bars entire claims that were or could have been raised; collateral estoppel (“issue preclusion”) bars re-litigation of specific issues actually decided. The Court applied the former.
• Prima Facie Evidence: Evidence that, unless rebutted, is sufficient to prove a fact. § 1173 simply guarantees that a Board order passes this evidentiary threshold; it does not strip other legal consequences.
• Civil Perjury (Maine): A tort action by a party injured by perjured testimony that produced an adverse judgment. Must show falsity, scienter, introduction by the opponent, and unavailability of proof before judgment.
• Implied Covenant of Good Faith and Fair Dealing: A default rule that parties will not destroy the other’s benefits under a contract; it cannot contradict an express grant of discretion.
• Justifiable Reliance: The fraud victim must act reasonably; when documents contradict statements, reliance is usually unjustified.

V. Conclusion

The First Circuit’s opinion is exhaustive and doctrinally significant. It cements the proposition that § 1173 of the Maine Dealers Act adds evidentiary heft but does not strip an administrative judgment of its preclusive force. By affirming dismissal at the pleading stage, the Court underscores the rigour of modern plausibility standards and the importance of contextual analysis of allegedly inconsistent statements. For franchisors and franchisees alike, Better Way Ford is a cautionary tale in strategic forum selection, careful contract drafting, and the perils of trying to re-fight battles already lost in specialised administrative tribunals.