Maitland v. Ford Motor Co.Maitland v. Ford Motor Co.
Lead Opinion
{¶ 1} We are asked to review the legal sufficiency of a complaint that alleges violations of Ohio’s Lemon Law and Consumer Sales Practices Act. Plaintiffsappellees allege that deductions for mileage or reasonable use against settlement or arbitration awards in the informal dispute-resolution process violate Ohio’s
{¶ 2} Plaintiffs-appellees, Beatrix Maitland, Elton J. Shaw, and Duane J. Adams, filed this action against defendants-appellants, Ford Motor Company, General Motors Corporation, and DaimlerChrysler Corporation, alleging that the three auto manufacturers had engaged in a scheme or course of conduct in which they withheld a setoff for the use of the vehicle from settlement or arbitration awards rather than refunding the full value of the vehicle, in violation of
{¶ 3} Plaintiffs filed their claims individually and, pursuant to
{¶ 4} Plaintiffs alleged that their individual claims are typical of the claims of all class members. Plaintiff-appellee Beatrix Maitland purchased a new 1998 vehicle that was manufactured by Ford. Maitland experienced repeated problems with the vehicle. Her dispute was submitted to a dispute-resolution board. The arbitrator determined that she was entitled to a replacеment or refund of her vehicle, less $1,222.18 for a “mileage/usage fee.”
{¶ 5} Plaintiff-appellee Elton J. Shaw purchased a new Pontiac vehicle that was manufactured by General Motors. Shaw experienced repeated problems with the vehicle. He agreed to arbitrate his dispute. The arbitrator determined that he was entitled to a replacement or refund of the purсhase price of his vehicle, less a deduction of $480.28 for “reasonable use.”
{¶ 6} Plaintiff-appellee Duane J. Adams leased a 1996 Dodge vehicle that was manufactured by DaimlerChrysler. Adams experienced repeated problems with the vehicle and he submitted an application to arbitrate his dispute. The arbitrator determined that he was entitled to a termination of his lease. A “mileage fee” of approximately $6,063.20 was deducted from the amount of Adams’s refund.
{¶ 7} Defendants moved to dismiss pursuant to
{¶ 8} The trial court granted the defendants’ motions to dismiss. The court held that the plaintiffs had accepted the settlement offers and were precluded from filing a civil action under
{¶ 9} The court of appeals, however, reversed the dismissal of the Lemon Law and CSPA claims and remanded the cause. It concluded that the Lemon Law did not authorize a setoff from the rеfund of the purchase price and that the Attorney General had no authority to sanction a setoff. Therefore, defendants’ use of the deduction violated the Lemon Law. The appellate court also concluded that plaintiffs had sufficiently stated a claim that the dispute-resolution board’s settlement offer of a refund minus the mileage deduction violated the CSPA. Thus, the cоurt reversed and remanded, finding that the plaintiffs were entitled, pursuant to
{¶ 10} The cause is before this court upon the acceptance of a discretionary appeal.
Standard of Review
{¶ 11} This ease comes to us having been dismissed pursuant to
{¶ 12} Therefore, we review the applicable law for each cause of action before us ^and determine whether the facts as alleged in the complaint would entitle plaintiffs to relief.
Lemon Law
{¶ 13} Ohio’s Lemon Law,
{¶ 14} The Lemon Law provides the purchaser with a statutory cause of action if the manufacturer does not comply with
{¶ 15}
{¶ 16} Since 1991,
(¶ 17} The board’s decision is binding on the manufacturer, but not on the consumer.
{¶ 18} The plaintiffs participated in the dispute-resolution process prior to litigation. They alleged that the proposed class members “received less than a
{¶ 19} Accepting the allegations in the complaint as true, we conclude that the plaintiffs’ receipt of funds constitutes their acceptance of a settlement offer or arbitration decision to resolve their warranty dispute. “[A] dispute shall be deemed settled when the board has ascertained from the consumer his or hеr acceptance of the offer and that the settlement has been fully implemented.”
{¶ 20} We agree with the trial court that the plaintiffs had the opportunity to reject the decision of the arbitration board and file a civil action under
{¶ 21} Nevеrtheless, the court of appeals determined that payment of less than the full statutory remedy provided in
{¶ 22} We find the court’s approach to be problematic. First, the appellate court equated the Lemon Law’s silence on the use of mileage setoffs to a prohibition. Next, the appellate court imposed its rationale upon an out-of-court, informal settlement process.
{¶ 23}
{¶ 24}
{¶ 25} After the Lemon Law went into effect, the Attorney General initiated a policy that expressly authorized qualified dispute-resolution boards to use a formula allowing a setoff for use of the vehicle. Defendants contend that they were following established рolicy by using the mileage setoff. Plaintiffs argue that Attorney General policy is not binding on a court of law.
{¶ 26} We presume that the General Assembly was aware of the policy that remained in place for years.
{¶ 27} Plaintiffs also argue that a setoff for mileage was included in the initial proposed Lemon Law legislation but deleted from the final enactment. According to plaintiffs, because the Gеneral Assembly specifically rejected the setoff, it is not permitted under any circumstance. We make no presumptions as to the
{¶ 28} The Lemon Law “is designed for self-help without protracted litigation.” Royster,
{¶ 29} Because the Lemon Law does not preclude a refund of less than the full purchase price in either settlement or the informal dispute-resolution process, we agree with the trial court that the plaintiffs’ cause of action based on the Lemon Law fails to state a claim for relief and should be dismissed.
Consumer Sales Practices Act
{¶ 30} The plaintiffs alleged:
{¶ 31} “Defendants committed unfair, deceptive and unconscionable acts and practice in violation of
{¶ 32} “a) Creating an arbitration process wherein the parties thereto are bound to rules allowing the use of a ‘set off for mileage or other deductions when awarding a refund; and
{¶ 33} “b) Not awarding a refund of the full purchase price, charges, costs and damages mandated by
{¶ 34} Because we have determined that the settlement and informal dispute-resolution processes are not bound by the remedies set forth in
{¶ 35} For the foregoing reasons, we reverse the judgment of the court of appeals regarding the Lemon Law and Consumer Sales Practices Act claims, and we reinstate the judgment of the trial court.
Judgment reversed.
Notes
. Until 1991, the rule referred to “remedies appropriate under the circumstances” instead of “remedies ordered by the panel” and listed “compensation for damages as a remedy.” 1987-1988 Ohio Monthly Record 438.
. This policy was changed in October 2000 by Attorney General Betty D. Montgomery. Certified informal dispute-resolution boards are no longer permitted to set off any amount for reasonable use against an award.
Dissenting Opinion
dissenting.
{¶ 36}
{¶ 37} “If the manufacturer, its agent, or its authorized dealer is unable to conform the motor vehicle to any applicable express warranty by repairing or correcting any nonconformity after a reasonable number of repair attempts, the manufacturer, at the consumer’s option and subject to division (D) of this section, either shall replace the motor vehicle with a new motor vehicle acceptable to the consumer or shall accept return of the vehicle from the consumer and refund each of the following:
{¶ 38} “(1) The full purchase price;
{¶ 39} “(2) All incidental damages, including, but not limited to, any fees charged by the lender or lessor for making or canceling the loan or lease, and any expenses incurred by the consumer as a result of the nonconformity, such as charges for towing, vehicle rental, meals, and lodging.”
{¶ 40} The plain language of
{¶ 41} The majority errs in equating the informal dispute-resolution mechanism (“IDRM”) required by
{¶ 42} Settlement offers for less value than contemplated by