Hal Artz Lincoln-Mercury, Inc. v. Ford Motor Co., Lincoln-Mercury Div.

• Decision Date: 19 December 1986
• Docket Number: LINCOLN-MERCURY,No. 86-120,INC,LINCOLN-MERCUR,86-120
• Citation: 28 Ohio St.3d 20,28 OBR 83,502 N.E.2d 590
• Parties: , 28 O.B.R. 83 HAL ARTZet al., Appellees, v. FORD MOTOR COMPANY,DIVISION, Appellant.
• Court: Ohio Supreme Court

Page 20

28 Ohio St.3d 20

502 N.E.2d 590, 28 O.B.R. 83

HAL ARTZ LINCOLN-MERCURY, INC. et al., Appellees, v. FORD MOTOR COMPANY, LINCOLN-MERCURY DIVISION, Appellant.

No. 86-120.

Supreme Court of Ohio.

Dec. 19, 1986.

Syllabus by the Court

1. A party will not be permitted to take advantage of an error which he himself invited or induced. (Lester v. Leuck [1943], 142 Ohio St. 91, 50 N.E.2d 145 , paragraph one of the syllabus, followed.)

2. Constitutional questions will not be decided until the necessity for a decision arises on the record before the court. (State, ex rel. Herbert, v. Ferguson [1944], 142 Ohio St. 496, 52 N.E.2d 980 , paragraph two of the syllabus, followed.)

3. Generally, administrative agencies have inherent authority to reconsider their own decisions since the power to decide in the first instance carries with it the power to reconsider. The agencies retain jurisdiction to set aside or otherwise reconsider their decisions until the actual institution of a court appeal or until expiration of the time for appeal, in the absence of specific statutory limitation to the contrary. (State, ex rel. Borsuk, v. Cleveland [1972], 28 Ohio St.2d 224, 277 N.E.2d 419 , paragraph one of the syllabus, followed.)

4. Application for rehearing or reconsideration of an administrative ruling is not itself a new proceeding but is merely another step in the proceeding in which the initial determination was made.

5. Absent contrary legislative intent, reconsidered administrative decisions are timely so long as the administrative action is conducted within a short and reasonable time period.

6. Where an application for rehearing of a decision of the Ohio Motor Vehicle Dealers Board is filed before a judicial appeal and prior to expiration of the statutory appeal period, the board may grant the application and rehear the cause so long as it renders its reconsidered decision within a short and reasonable time, not to exceed any statutory or administrative regulations restricting the exercise of reconsideration.

In 1983 appellant, Ford Motor Company, Lincoln-Mercury Division ("Ford"), issued statutory notification to the Motor Vehicle Dealers Board ("dealers board") of its intent to establish an automobile dealership in Orange Village, Ohio. ¹ Three existing Lincoln-Mercury dealers in the relevant market area ² filed protests to Ford's franchise proposal. Following a lengthy hearing on these protests, the board's hearing examiner issued a recommendation which would have partially upheld the existing dealers' protests. Following consideration of the record and hearing examiner's recommendation, the Motor Vehicle Dealers Board ³ initially ruled in Ford's favor and denied the protests in a two-to-one decision dated March 30, 1984. Thereafter, and within the statutorily prescribed fifteen-day period allowed for judicial appeal of board orders, the protestants moved the board for a rehearing and reconsideration. By this time, one of the members of the March 30, 1984 two-member majority panel had resigned. The dissenter to the March decision, David Mainwaring, chaired a meeting of the reconstituted board, which now consisted of two original board members plus one newly appointed member. On April 16, 1984, a hearing on appellees' application for reconsideration was held. This date would have been the protesting dealers' final day during which they could have filed a court appeal from the board's original order. However, the dealers chose to first pursue further administrative remedy by way of rehearing. At the hearing of the protesting dealer's application, and over appellant Ford's objection, the reconstituted board voted two-to-zero (one member not present) to allow rehearing and reconsideration. Having lost its argument to prevent reconsideration from occurring, Ford's counsel urged the panel for an extension of time in which to argue the merits. Although the board and the protesting dealers' indicated their readiness to proceed immediately, the board and protestants agreed that a short extension was appropriate. A new hearing on the merits was therefore scheduled to be held nine days from that time so that Ford could properly prepare and present its case.

The rehearing was held as agreed on April 25, 1984 during which oral arguments were made. By a two-to-one vote, the reconstituted board found, inter alia, that its previous decision was not supported by the record. Accordingly, a new order was issued on April 27, 1984 which upheld the dealers' protest. Essentially, the board found "good cause" not to allow the establishment of the requested dealership. ⁴

Ford timely appealed the board's decision to the Court of Common Pleas of Franklin County. ⁵ The trial court held that the board had lost jurisdiction to reconsider its initial decision approving Ford's proposed franchise. Its ruling was premised on language found in Troutman v. Mitchem (1984), 14 Ohio App.3d 463, 472 N.E.2d 69, and In re Appeal of Bidlack (1982), 3 Ohio App.3d 351, 445 N.E.2d 722. ⁶ Based on these two authorities, the common pleas court concluded that although the board's grant of reconsideration was timely, its second hearing and new order followed the statutory fifteen-day period allowed for the commencement of a court appeal. Hence, the trial judge found that the board's April 27, 1984 decision was null and void. The court therefore vacated the reconsidered order and remanded the cause to the dealers board with instructions to reinstate its original order.

The dealers board and protesting dealers appealed the trial judgment to the court of appeals. The court of appeals concluded that the board retained jurisdiction over the cause when it timely granted the motion to reconsider, thereby nullifying the original order. The reviewing court further noted that Ford was responsible for the brief delay in the proceedings because it requested "a continuance, as it was unprepared to proceed." The appeals court reasoned in part that it would not allow Ford to first move the board for a continuance and then predicate error on the board's grant of its own motion. The court of appeals unanimously reversed the lower court judgment and remanded the cause for further proceedings.

The cause is now before this court pursuant to the allowance of a motion to certify the record. ⁷

Baker & Hostetler, George W. Hariston, Richard W. Siehl and Daniel T. Kobil, Columbus, for appellees Hal Artz Lincoln-Mercury, Inc., Frank Nero Lincoln-Mercury, Inc., and Cross Roads Lincoln-Mercury, Inc.

Friedman & Chenette, Jeffrey H. Friedman, Frank A. Chenette and Perry R. Silverman, Cleveland, for appellee Hal Artz Lincoln-Mercury, Inc.

Anthony J. Celebrezze, Jr., Atty. Gen., LeQuita C. Hopgood and Simon B. Karas, Columbus, for appellee Motor Vehicle Dealers Board.

Porter, Wright, Morris & Arthur, Earl F. Morris, Joseph W. Ryan, Jr., Columbus, and David R. Larrouy, Dearborn, Mich., for appellant.

CELEBREZZE, Chief Justice.

The question presented in this appeal centers on whether the Motor Vehicle Dealers Board, by granting a motion for rehearing and reconsideration of an earlier order before a court appeal is filed and prior to expiration of the statutory fifteen-day appeal period, retains jurisdiction to rehear the cause and thereafter issue a reconsidered decision after the appeal period has expired. ⁸

Ford argues that the board's March 30 order was final and that the protesting dealers ignored their exclusive remedy of judicial appeal. Ford contends that the board's reconsidered decision, which was not actually entered within the fifteen-day appeal period, is a nullity because the agency's jurisdictional authority had ended. The appellate court's decision is erroneous, Ford asserts, because it creates undesirable pitfalls, such as the potential for indefinite postponement of the second decision. Without statutorily set time limits for reconsideration, Ford believes the administrative remedy could run afoul of due process guarantees.

Appellees counter that by granting the application for rehearing and reconsideration during the statutory appeal period, the board extended the time to render its new decision for a reasonable period of time--in this case for a period of time mutually agreed upon by the litigants and the board. Appellant Ford has not been deprived of due process, appellees point out, because it was Ford which in fact sought to delay the proceedings.

Appellee dealers board adds that the court of appeals' ruling is in accordance with recent case law of this court and is also consistent with other rehearing procedures of the dealers board set forth in the Ohio Administrative Code. See Ohio Adm.Code 4501:1-3-24. The board reasons that a holding contrary to the appellate court ruling would unduly rush administrative agencies which may properly grant reconsideration near the end of the statutory appeal period by forcing them to dash off a hasty merit decision without due deliberation. Lastly, appellees submit that the brief delay in this case was most reasonable and proper; that it was, in fact, made pursuant to Ford's own motion; and that the promptly reconsidered decision is sustainable.

The appellate court essentially held, consistent with the reasoning of our decision in State, ex rel. Baker, v. Dayton Malleable, Inc. (1983), 6 Ohio St.3d 1, 450 N.E.2d 1160, ⁹ that an administrative agency retains jurisdiction over a cause which has not been appealed when it agrees to reconsider the order within the statutory time limit to appeal. Further, the appellate court opined that once the agency's decision to rehear and reconsider is timely made, any new order of the board does not have to be issued within the period set to file a court appeal. The appellate court held that the board retained jurisdiction to enter a reconsidered ruling since appellees' timely application for rehearing was granted within the time set for judicial appeal, it was Ford which...