Bob Krihwan Pontiac-GMC Truck, Inc. v. Gen. Motors Corp.
| Decision Date | 20 September 2001 |
| Docket Number | No. 01AP-317.,01AP-317. |
| Citation | 763 NE 2d 1253 |
| Parties | BOB KRIHWAN PONTIAC-GMC TRUCK, INC., Appellant, v. GENERAL MOTORS CORPORATION, Appellee. |
| Court | Ohio Court of Appeals |
Phillips Law Firm, Inc., Robert S. Kasier; Paxton & Associates and Robert C. Paxton II, for appellant.
Jones, Day, Reavis and Paul Zavala, for appellee.
On January 31, 1997, and pursuant to R.C. 4517.54(B), General Motors Corporation ("GM") sent Bob Krihwan Pontiac-GMC Truck, Inc. ("dealership") a certified letter notifying the dealership of GM's intent to terminate the Dealers Sales and Service Agreement ("franchise agreement") between it and the dealership. The basis for the proposed termination was the felony conviction of Robert
Krihwan, the majority shareholder of the dealership. The dealership filed a protest of the proposed termination with the Motor Vehicle Dealers Board ("board"), asserting that GM did not have good cause to terminate the franchise agreement.
A hearing was conducted before a hearing examiner. On December 1, 1999, the hearing examiner issued a report and recommendation, concluding that GM had good cause to terminate the franchise agreement based on Krihwan's felony conviction for tax evasion.1 Accordingly, the hearing examiner recommended that the dealership's protest be denied.
On January 3, 2000, the board adopted the hearing examiner's report and recommendation by operation of law. On January 5, 2000, the dealership appealed the board's order to the Franklin County Court of Common Pleas. On this same date, the dealership filed a motion to stay the board's order pending the appeal. GM filed a memorandum contra.
On January 19, 2000, the common pleas court rendered a decision denying the dealership's motion for a stay. The dealership filed a motion for reconsideration, which was denied on February 18, 2000.
The dealership appealed the denial of the motion for a stay to this court. On January 30, 2001, this court affirmed the common pleas court's denial of the motion to stay the board's order. The dealership's application for reconsideration was denied.
In the interim, the parties filed briefs with the common pleas court on the merits of the appeal from the board's order. On March 13, 2001, the common pleas court rendered a decision and judgment entry affirming the board's order.
On March 15, 2001, the dealership filed a notice of appeal to this court. On March 27, 2001, the dealership filed an application for a stay or an injunction of the common pleas court's judgment. The dealership asserted that it was GM's intention to terminate the franchise agreement on March 29, 2001, absent a stay. On March 28, 2001, this court denied the dealership's motion for a stay or an injunction pending appeal. The dealership appealed to the Supreme Court of Ohio and filed a motion for an immediate stay of our decision denying a stay or an injunction. The Supreme Court denied the motion on April 4, 2001.
On May 9, 2001, GM filed a motion to dismiss the instant appeal. The dealership has filed a memorandum contra. GM asserts that this appeal is moot because, pursuant to the board's finding that good cause existed to terminate the franchise agreement, it terminated the franchise agreement on March 29, 2001.
GM contends that the franchise agreement no longer exists, and this appeal is therefore moot.
The dealership argues, in part, that it sought a stay of the board's order from the common pleas court but that this was denied, and this court subsequently affirmed the denial. The dealership contends that granting GM's motion to dismiss would effectively deprive the dealership of its administrative appeal rights.
It is a well-established principle of law that a satisfaction of judgment renders an appeal from such judgment moot. Blodgett v. Blodgett (1990), 49 Ohio St.3d 243, 245, 551 N.E.2d 1249. Where the court rendering judgment has jurisdiction of the subject-matter of the action and of the parties, fraud has not intervened, and the judgment is voluntarily paid and satisfied, payment puts an end to the controversy and takes away from the defendant the right to appeal or prosecute error or even to move for vacation of judgment. Rauch v. Noble (1959), 169 Ohio St. 314, 316, 8 O.O.2d 315, 159 N.E.2d 451, quoting Lynch v. Lakewood City School Dist. Bd. of Edn. (1927), 116 Ohio St. 361, 156 N.E. 188, paragraph three of the syllabus.
The issue presented here centers on the voluntariness of the so-called satisfaction of the judgment. The dealership did not voluntarily "satisfy" the judgment herein. We acknowledge that this case is somewhat different from an ordinary civil action wherein judgment is rendered, for example, in favor of one party for an amount of money. In such case, the judgment is satisfied, in essence, by the losing party's paying the money. Here, the judgment of the board, affirmed by the common pleas court, was simply that under R.C. 4517.54, GM had good cause to terminate the franchise agreement. The judgment was not for the termination itself of such agreement. However, pursuant to the judgment, GM had the right to terminate the franchise agreement, which it apparently did on March 29, 2001, during the pendency of this appeal.
Obviously, this "satisfaction" was not voluntary on the part of the dealership. Courts have stated that a party is deemed to have acted voluntarily in satisfying a judgment when the party fails to seek a stay order prior to the judgment's being satisfied. See Hagood v. Gail (1995), 105 Ohio App.3d 780, 790, 664 N.E.2d 1373, discretionary appeal not allowed in (1996), 74 Ohio St.3d 1499, 659 N.E.2d 314; Harbourtown Properties, Inc. v. Citizens Fed. Bank (Nov. 10, 1997), Franklin App. No. 97APE03-328, unreported, 1997 WL 710510, citing Kelm v. Hess (1983), 8 Ohio App.3d 448, 8 OBR 572, 457 N.E.2d 911; LaFarciola v. Elbert (Dec. 8, 1999), Lorain App. No. 98CA007134, unreported, 1999 WL 1215115, discretionary appeal not allowed in (2000), 88 Ohio St.3d 1492, 727 N.E.2d 599. In the case at bar, the dealership attempted to gain a stay of the
board's order but was unsuccessful. GM was then able to proceed to unilaterally terminate the franchise agreement.
The fact that the dealership did not successfully gain a stay of the board's order does not render the termination of the franchise agreement, arguably a satisfaction of the judgment, voluntary on the part of the dealership. Indeed, the dealership, unlike the appellants in the cases cited above, did attempt to stay the board's order and, therefore, did not voluntarily satisfy the judgment.
In addition, appellant points out that unlike stays issued under Civ.R. 62, which can be obtained as a matter of right if an adequate bond is given, stays sought under R.C. 119.12 require that the court find "unusual hardship" to the appellant. In affirming the common pleas court's denial of the dealership's motion for a stay, this court stated that one factor in determining whether an unusual hardship has been shown is whether the appellant can show a strong or substantial likelihood of success on the merits. Bob Krihwan Pontiac-GMC Truck, Inc. v. Gen. Motors Corp. (2001), 141 Ohio App.3d 777, 783, 753 N.E.2d 864. While we do not take issue with the standard applied in determining unusual hardship, we do recognize the result in a situation, such as the one presented here, where a requested stay cannot be obtained and the judgment is satisfied during the pendency of an appeal on the merits. In such a situation, the ruling on the stay request in effect determines the merits of any possible appeal from the underlying administrative order.
Notwithstanding this, however, the mootness principle set forth in Rauch and Lynch requires that the satisfaction of judgment be voluntary. Here, appellant attempted to gain a stay of the board's order but was unsuccessful. Hence, the "satisfaction" obtained by GM in the form of terminating the franchise agreement was not voluntary on the part of the dealership. Therefore, the instant appeal is not rendered moot.
In addition, GM argues that this appeal is barred by the doctrine of res judicata. GM asserts that the dealership did not appeal this court's affirmance of the stay denial to the Supreme Court, and GM was therefore able to proceed with the termination of the franchise agreement. GM argues that, accordingly, the dealership is barred by res judicata from arguing in this appeal that the termination was improper.
GM's arguments are not well taken. The issue in the previous appeal to this court was whether the denial of a stay was proper. The issues here involve the merits of the underlying administrative order. Therefore, the doctrine of res judicata is not implicated.
For all of the above reasons, GM's motion to dismiss the appeal is denied.
We now address the merits of the dealership's appeal. The dealership (hereinafter "appellant") has assigned the following errors for our consideration:
In its first assignment of error, appellant contends that the common pleas court should have remanded the matter to the board so that the board could exercise its discretion in determining whether good cause had been shown by GM (hereinafter "appellee"). Appellant asserts that the board's order was based on the common pleas court decision in Gen. Motors Corp. v. Ohio Motor Vehicle Dealers Bd. (Jan. 29, 1999), Franklin C.P. No. 97CVF-06-6045, unreported ("Zinn"). In that case, the common pleas court held, in essence, that a felony conviction constitutes good cause per se to terminate a franchise agreement. Appellant states that given...
To continue reading
Request your trial