Frye v. Am. Honda Motor Co.
| Decision Date | 21 March 2022 |
| Docket Number | 20CA011641 |
| Citation | 2022 Ohio 878 |
| Court | Ohio Court of Appeals |
| Parties | KIRTLUND C. FRYE, et al. Appellants v. AMERICAN HONDA MOTOR CO., INC., et al. Appellees |
APPEAL FROM JUDGMENT ENTERED IN THE COURT OF COMMON PLEAS COUNTY OF LORAIN, OHIO CASE No. 20CV200331
KEITH A. SAVIDGE, JEFFREY S. MOELLER, and AMELIA J. LEONARD Attorneys at Law, for Appellants.
CHRISTOPHER M. DEVITO, Attorney at Law, for Appellants.
ORVILLE REED and CHRISTOPHER A. TIPPING, Attorneys at Law for Appellee.
S. KEITH HUTTO and STEVEN B. MCFARLAND, Attorneys at Law, for Appellee.
RICHARD D. PANZA, RACHELLE K. ZIDAR, and MATTHEW W. NAKON, Attorneys at Law, for Appellees.
ANGELA D. LYDON, Attorney at Law, for Appellees.
DECISION AND JOURNAL ENTRY
{¶1} Kirtlund C. Frye and Sunnyside Automotive appeal the judgment of the Lorain County Court of Common Pleas dismissing their complaint for declaratory judgment and injunctive relief. We affirm.
{¶2} In 2019, Sunnyside Automotive, owned by Kirtlund Frye (collectively "Frye"), entered into an asset purchase agreement with Jack Matia and Matia Motors, Inc. (collectively "Matia") to purchase and transfer Matia Motors' assets to Sunnyside Automotive. American Honda Motor Company ("AHM") notified the parties that it was not approving the sale and transfer. Frye filed a protest with the Ohio Motor Vehicles Dealers Board ("OBD") pursuant to R.C. 4517.01 et seq. alleging that AHM lacked sufficient good cause to deny the transfer.
{¶3} After the protest was filed, Frye learned that Matia intended to sell the Matia Motors' assets to Joey Huang, the owner of several other automobile dealerships. In an attempt to stop this transfer, Frye filed a motion with the OBD to stay AHM's approval of this sale. The hearing officer denied the motion to stay, stating that R.C. 4517.56(D) did not provide the OBD with authority to issue a stay.
{¶4} In January 2020, Frye filed its complaint against American Honda Motor Co., Inc., Jack Matia, and Matia Motors, Inc., seeking a declaratory judgment and temporary, preliminary, and permanent injunctive relief. Soon thereafter, the dealership was transferred from Matia to Mr. Huang, and an amended complaint was subsequently filed adding Elyria Motor LLC dba Great Lakes Honda West. Frye sought relief in the form of "[a]n order declaring that the automatic stay applicable to Dealer Board Agreements set forth in [R.C] 4517.56(D) [was] applicable * * *."
{¶5} The trial court denied Frye's motion for a temporary restraining order and set the matter for a preliminary injunction hearing. Prior to the hearing, Matia filed a motion to dismiss, with subsequent briefing by the other parties. In February 2020, a hearing was held before the magistrate, who heard arguments but did not take evidence, instead continuing the hearing pending a ruling on the motion to dismiss. On April 29, 2020, the trial court issued a ruling that granted the motion to dismiss. Frye now appeals, raising four assignments of error.
{¶6} In the first assignment of error, Frye argues the trial court erred in determining there was no automatic stay of automobile franchise transfers under R.C. 4517.56(D). Frye contends that the statute should be interpreted to give effect to the legislature's intent to protect against abusive franchisors, and that such an interpretation would include an automatic stay of transfers under R.C. 4517.56(D) pending the determination of an administrative protest of a refusal to consent to a previously agreed transfer.
{¶7} Because a trial court's interpretation of a statute presents us with a question of law, we review it on a de novo basis. State v. Crowe, 9th Dist. Summit No. 23192, 2006-Ohio-5526, ¶ 4. The cardinal rule of statutory construction requires a court to first look at the specific language of the statute itself and, if the meaning of the statute is unambiguous and definite, further interpretation is not necessary and a court must apply the statute as written. State v. Jordan, 89 Ohio St 3d 488, 492 (2000), quoting State ex rel Savarese v. Buckeye Local School Dist. Bd. of Edn., 74 Ohio St 3d 543, 545 (1996). Ambiguity exists only if the language of a statute is susceptible of more than one reasonable interpretation, and the facts and circumstances of a case do not permit a court to read ambiguity into a statute. Dunbar v. State, 136 Ohio St.3d 181, 2013-Ohio-2163, ¶ 16. "'[W]here the language of a statute is clear and unambiguous, it is the duty of the court to enforce the statute as written, making neither additions to the statute nor subtractions therefrom.'" State v. Knoble, 9th Dist. Lorain No. 08CA009359, 2008-Ohio-5004, ¶ 12, quoting Hubbard v. Canton City School Bd. of Edn., 97 Ohio St.3d 451, 2002-Ohio-6718, ¶ 14. "Thus, inquiry into legislative intent, legislative history, public policy, the consequences of an interpretation, or any other factors identified in R.C. 1.49 is inappropriate absent an initial finding that the language of the statute is, itself, capable of bearing more than one meaning." Dunbar at ¶ 16.
{¶8} R.C. 4517.56(D), which pertains to the transfer of a franchise, provides:
A franchisor shall not fail or refuse to approve the sale or transfer of the business and assets or all or a controlling interest of a new motor vehicle dealer to, or refuse to continue the franchise relationship with, the prospective transferee after the holding of a hearing on any protest if the board determines that good cause does not exist for the franchisor to fail or refuse to approve such a sale or transfer.
The trial court determined that the statute was unambiguous and did not contain an implied stay, and that the Plaintiffs were effectively asking the court to read language into that statute that was simply not there. This Court agrees with the trial court's analysis.
{¶9} We note that the legislature provided for implied stays elsewhere in the Ohio Automobile Dealers Act (R.C. 4517.01 et seq.). R.C. 4517.54, which pertains to the termination, cancellation, or non-renewal of a franchise by a franchisor, provides: "A franchisor shall not terminate, cancel, discontinue, or fail to renew a franchise before the holding of a hearing on any protest filed under this section, or after the hearing, if the board determines that good cause does not exist to terminate, cancel, discontinue, or not renew the franchise." R.C. 4517.54(D). Accordingly, when a franchisee files a protest to the termination, cancellation, or non-renewal of a franchise by a franchisor, the statute effectively creates an "automatic stay" by preventing a franchisor from terminating a franchise before the Board issues a decision on a protest. There is no equivalent provision under R.C. 4517.56(D) or elsewhere in R.C. 4517.56 that would prevent a separate transfer from occurring during the pendency of a protest under R.C. 4517.56. Likewise, there is no language under R.C. 4517.56 referring to, either directly or indirectly, an implied or automatic stay. Had the legislature intended to include a stay under R.C. 4517.56, it presumably would have included wording similar to the language used in R.C. 4517.54(D). Furthermore, none of the provisions of R.C. 4517.56 are rendered meaningless in the absence of such language. See Vought Industries, Inc. v. Tracy, 72 Ohio St.3d 261, 265-266 (1995).
{¶10} This Court finds no ambiguity within R.C. 4517.56 that would allow for further interpretation on the issue of an implied or automatic stay.
{¶11} Frye's first assignment of error is overruled.
{¶12} In the second assignment of error, Frye argues the trial court erred in concluding that it did not have equitable authority to stay further transfers during the pending determination of an administrative protest. We disagree.
{¶13} J. Bowers Constr. Co., Inc. v. Gilbert, 9th Dist. Summit No. 27044, 2014-Ohio-3576, ¶ 21.
{¶14} In its judgment entry, the trial court stated:
Here, the Plaintiffs are not attempting to use declaratory judgment and preliminary injunction to force Honda's compliance with the ODA. Instead, the Plaintiffs are trying to use declaratory judgment and injunction to compel Honda to comply with obligations they are asking the Court to read into the ODA which are not there. To do so would run afoul of the Court's obligation to apply and not interpret [R.C.] 4517.56(D), which the Court has found to be unambiguous.
The trial court also determined that R.C. 4517.65(B)'s election of remedies provision provided for two options: the filing of a protest to the OBD, or the filing of a court action for damages. On this basis, the trial court agreed with the decision of the Northern District Court of Ohio in Pasqualetti v. Kia Motors Am., Inc. determining that R.C. 4517.65(B)'s election of remedies precluded a prospective transferee from bringing a separate action for nonlegal remedies.[1] See Pasqualetti v. Kia Motors America, Inc., 663 F.Supp.2d 586, 594 (N.D. Ohio 2009).
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