Andy Mohr W., Inc. v. Office of the Ind. Sec'y of State

• Decision Date: 13 August 2015
• Docket Number: No. 49A02–1411–PL–812.,49A02–1411–PL–812.
• Citation: 41 N.E.3d 704
• Parties: ANDY MOHR WEST, INC. d/b/a Andy Mohr Toyota, Butler Motors, Inc. d/b/a Butler Toyota, and TW Toy, Inc. d/b/a Tom Wood Toyota, Appellants–Petitioners, v. OFFICE OF the INDIANA SECRETARY OF STATE, Auto Dealer Services Division, and Carol Mihalik, in her representative capacity as Securities Commissioner of the Auto Dealer Services Division, and Toyota Motor Sales, U.S.A., Inc., Appellees–Respondents.
• Court: Indiana Appellate Court

41 N.E.3d 704

ANDY MOHR WEST, INC. d/b/a Andy Mohr Toyota, Butler Motors, Inc. d/b/a Butler Toyota, and TW Toy, Inc. d/b/a Tom Wood Toyota, Appellants–Petitioners

v.OFFICE OF the INDIANA SECRETARY OF STATE, Auto Dealer Services Division, and Carol Mihalik, in her representative capacity as Securities Commissioner of the Auto Dealer Services Division, and Toyota Motor Sales, U.S.A., Inc., Appellees–Respondents.

No. 49A02–1411–PL–812.

Court of Appeals of Indiana.

Aug. 13, 2015.

Geoffrey M. Grodner, Kendra G. Gjerdingen, Mallor Grodner LLP, Bloomington, IN, Attorneys for Appellants.

Gregory F. Zoeller, Attorney General of Indiana, Kyle Hunter, Deputy Attorney General, John C. Trimble, Brett Y. Hoy, Lewis Wagner, LLP, Indianapolis, IN, Steven A. McKelvey, Jr., Nelson Mullins Riley & Scarborough LLP, Columbia, SC, Attorneys for Appellees.

NAJAM, Judge.

Statement of the Case

[1] Andy Mohr West, Inc. d/b/a Andy Mohr Toyota (Andy Mohr), Butler Motors, Inc. d/b/a Butler Toyota (Butler), and TW Toy, Inc. d/b/a Tom Wood Toyota (Tom Wood) (collectively, the Dealers) appeal the trial court's judgment affirming the dismissal of declaratory judgment actions the Dealers had filed with the Auto Dealer Services Division of the Office of the Secretary of State (the Division). According to the Dealers' filings with the Division, Toyota Motor Sales, U.S.A., Inc. (Toyota) proposed to relocate Ed Martin Toyota (Ed Martin) from Anderson, Indiana, to Fishers, Indiana, which the Dealers alleged was without good cause. The Division dismissed the Dealers' claims after it interpreted recently enacted provisions of the Indiana Code to deny the Dealers standing. This appeal presents a question of first impression regarding an interpretation of the Indiana Dealer Services statutes. See Ind.Code §§ 9–32.

[2] As the Supreme Court of the United States has reminded us, “[a] fair reading of legislation demands a fair understanding of the legislative plan.” King v. Burwell, ––– U.S. ––––, 135 S.Ct. 2480, 192 L.Ed.2d 483, 2015 WL 2473448 at *15 (June 25, 2015). Here, the legislative plan as it relates to the proposed relocation of a new-motor-vehicle (NMV) dealer into a new market evinces our legislature's intent that the Division review the effects of the proposed relocation on the marketplace before the relocation may be approved. We conclude, however, that the Division's interpretation of the relevant statutes is inconsistent with the economic rationale of the legislative plan and is not, therefore, a reasonably correct interpretation of the statutes. Instead, the Division has misconstrued the relevant statutes to deny the Dealers standing and potential remedies. In its interpretation, the Division has either disregarded or overlooked the plain text of relevant statutory provisions and, in so doing, has rendered those provisions meaningless. We reverse the trial court's judgment and remand to the Division for further proceedings on the Dealers' claims against Toyota.

Facts and Procedural History

[3] The facts underlying this appeal are not in dispute. Ed Martin is an NMV dealer and has been operating out of Anderson in Madison County for a number of years. Ed Martin is licensed in Indiana to serve as a Toyota dealer. Around September 27, 2013, Toyota informed each of the Dealers, which are also NMV dealers, that it intended to relocate Ed Martin from Anderson to Fishers. Fishers is located in Hamilton County, which has a population in excess of 100,000 people.

[4] The Dealers engaged Toyota in negotiations to avoid the relocation of Ed Martin, but those discussions eventually broke down. As such, on December 23, 2013, Butler filed with the Division its protest against the relocation of Ed Martin and its request for declaratory judgment. Tom Wood and Andy Mohr filed similar requests shortly thereafter. Collectively, the Dealers' requests sought to have the Division determine whether good cause existed for the proposed move of Ed Martin. Subsequently, Toyota moved to dismiss the Dealers' requests on the ground that the Dealers each lacked standing to file their requests with the Division.

[5] On February 25, 2014, the Division entered Findings of Fact, Conclusions of Taw, Judgment, and Final Order with respect to each of the Dealers. The Division determined that the relevant market area that would apply to Ed Martin's relocated dealership consisted of a six-mile radius around that proposed location¹ pursuant to Indiana Code Section 9–32–2–20(1). Because each of the Dealers was located outside of that radius, the Division concluded that each Dealer lacked standing to file its declaratory judgment action. The Dealers petitioned the trial court for judicial review of the Division's judgment, and, after consolidating the Dealers' petitions, the court affirmed the Division's judgment. This appeal ensued.

Discussion and Decision

Standard of Review

[6] This appeal involves a question of an agency's interpretation of the Indiana Code. As we have explained:

“An interpretation of a statute by an administrative agency charged with the duty of enforcing the statute is entitled to great weight, unless this interpretation would be inconsistent with the statute itself. ” LTV Steel Co. v. Griffin, 730 N.E.2d 1251, 1257 (Ind.2000).... “Deference to an agency's interpretation of a statute becomes a consideration when a statute is ambiguous and susceptible of more than one reasonable interpretation.” State v. Young, 855 N.E.2d 329, 335 (Ind.Ct.App.2006). When a court is faced with two reasonable interpretations of a statute, one of which is supplied by an administrative agency charged with enforcing the statute, the court should defer to the agency. Id. If a court determines that an agency's interpretation is reasonable, it should terminate its analysis and not address the reasonableness of the other party's proposed interpretation. Id. ... However, an agency's incorrect interpretation of a statute is entitled to no weight. Peabody Coal Co. v. Ind. Dep't of Natural Res., 606 N.E.2d 1306, 1308 (Ind.Ct.App.1992). If an agency misconstrues a statute, there is no reasonable basis for the agency's ultimate action and the trial court is required to reverse the agency's action as being arbitrary and capricious. Id.

Pierce v. Dep't of Corr., 885 N.E.2d 77, 89 (Ind.Ct.App.2008) (emphases added). Further, insofar as this appeal is from the judgment of a trial court, “[i]t is well established that, where ‘only a paper record has been presented to the trial court, we are in as good a position as the trial court ... and will employ de novo review....’ ” Norris Ave. Prof'l Bldg. P'ship v. Coordinated Health, LLC, 28 N.E.3d 296, 298 (Ind.Ct.App.2015) (quoting Munster v. Groce, 829 N.E.2d 52, 57 (Ind.Ct.App.2005) ) (omissions original to Norris ), trans. denied.

[7] The only issue on appeal is whether the agency's interpretation of the relevant statutes is reasonably correct. The Indiana Supreme Court has long recognized the “basic principle” that

the foremost objective of the rules of statutory construction is to determine and effect the true intent of the legislature.

It is also well settled that the legislative intent as ascertained from an Act as a whole will prevail over the strict literal meaning of any word or term used therein. When the court is called upon to construe words in a single section of a statute, it must construe them with due regard for all other sections of the act and with due regard for the intent of the legislature in order that the spirit and purpose of the statute be carried out.

Park 100 Dev. Co. v. Ind. Dep't of State Revenue, 429 N.E.2d 220, 222–23 (Ind.1981) (citations omitted). Accordingly, in interpreting statutes “no part should be held to be meaningless if it can be reconciled with the rest” of the statutory language. Siwinski v. Town of Ogden Dunes, 949 N.E.2d 825, 828 (Ind.2011). Moreover, “[s]tatutes relating to the same general subject matter are in pari materia (on the same subject) and should be construed together so as to produce a harmonious statutory scheme.” Klotz v. Hoyt, 900 N.E.2d 1, 5 (Ind.2009).

Overview of the Relevant Statutes

[8] Here, the dispute between the parties began shortly after Toyota had informed the Dealers of Toyota's intent to relocate Ed Martin from Anderson to Fishers. Toyota issued these notices pursuant to Indiana Code Section 9–32–13–24(d), which states:

Before a franchisor enters into a franchise establishing or relocating a[n NMV] dealer within a relevant market area where the same line make is represented, the franchisor shall give written notice to each [NMV] dealer of the same line make in the relevant market area of the franchisor's intention to establish an additional dealer or to relocate an existing dealer within that relevant market area.

The Dealers objected to Toyota's plan, and, after negotiations with Toyota failed, the Dealers each filed a declaratory judgment action before the Division pursuant to Indiana Code Section 9–32–13–24(e), which states:

Not later than thirty (30) days after:

(1) receiving the notice provided for in subsection (d); or

(2) the end of any appeal procedure provided by the franchisor;

a[n NMV] dealer may bring a declaratory judgment action before the division to determine whether good cause exists for the establishing or relocating of a proposed [NMV] dealer. If an action is filed under this section, the franchisor may not establish or relocate the proposed [NMV] dealer until the division has rendered a decision on the matter. An action brought under this section shall be given precedence over all other matters pending before the division.

(Emphasis added.)

[9] The very next provision of the Indiana Code states that, in determining “whether good cause exists for establishing or relocating an additional [NMV] dealer for the same line make,” the Division:

shall take into consideration the existing circumstances, including the following:

(1) Permanency of the investment.

(2) Effect on the retail new

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