American Honda Motor Co. v. Texas Department of Transportation-Motor Vehicle Division

47 S.W.3d 614, 2001 WL 256260
CourtCourt of Appeals of Texas
DecidedMay 17, 2001
Docket03-00-00557-CV
StatusPublished
Cited by20 cases

This text of 47 S.W.3d 614 (American Honda Motor Co. v. Texas Department of Transportation-Motor Vehicle Division) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
American Honda Motor Co. v. Texas Department of Transportation-Motor Vehicle Division, 47 S.W.3d 614, 2001 WL 256260 (Tex. Ct. App. 2001).

Opinion

PATTERSON, Justice.

American Honda Motor Co., Inc. appeals from the judgment of the district court affirming a final order of the Texas Motor Vehicle Board (the “Board”). 1 Following a complaint filed by Dupriest Automotive Co., Inc. (“Dupriest”) with the Board, alleging that Honda had violated section 5.02(b)(8) of the Texas Motor Vehicle Commission Code (the “Code”) by not allowing Dupriest to sell its Acura dealership, the Board issued an order denying relief to Dupriest but directing American Honda to pay a civil penalty of $10,000 for violation of the Code. 2 Because the Board lacked jurisdiction over Dupriest’s complaint which was filed under the authority of a statute no longer in effect, we reverse the judgment.

*617 FACTUAL AND PROCEDURAL BACKGROUND

Because the history of this dispute is lengthy and we do not write on a clean slate, we will summarize only the background relevant to this phase of the litigation. This dispute arises out of a franchise relationship between Honda and Dupriest. In 1991, when Dupriest purchased an existing Acura dealership in Amarillo, as a consequence of litigation between the former dealer and Honda, 3 Dupriest also entered into an agreement with Honda that included a provision barring Dupriest from combining its dealership with other lines of automobiles. In 1995, Dupriest proposed to sell its Acura dealership to a Honda dealer who wanted to move the dealership and sell both the Honda and Acura lines of automobiles, thus creating a “dual dealership”.at its location. But after Honda refused to allow the prospective purchaser to combine sales of two lines of automobiles at the facility, the prospective purchaser canceled its agreement with Du-priest. Suffering large financial losses, Dupriest ceased selling Aeuras in February 1996. Honda terminated Dupriest’s franchise in May 1996.

Without first filing a complaint with the Board, in May 1997 Dupriest sued Honda in district court for monetary damages, alleging that Honda’s refusal to approve the sale of the dealership to the prospective purchaser violated Code section 5.02(b)(8) in various respects. 4 Honda filed a motion for summary judgment on the-grounds, among others, that Dupriest had waived its claim by failing to file a protest with the Board. The trial court granted summary judgment in favor of Honda in August 1997.

On September 19, 1997, Dupriest filed the complaint currently at issue with the Board, alleging that Honda had failed to give effect to or attempted to prevent the sale of the dealership in violation of the Code. 5 Dupriest also appealed the district court’s judgment granting summary judgment to Honda. Holding that the Board had exclusive jurisdiction over Dupriest’s complaint, the court of appeals reversed the district court’s judgment and dismissed the cause for want of jurisdiction. Dupriest Auto., Inc. v. American Honda Motor Co., 980 S.W.2d 521, 524-25 (Tex.App.—Amarillo 1998), pet. denied per curiam, 10 S.W.3d 673 (Tex.2000). In a per curiam opinion, the supreme court denied Honda’s petition for review, observing that neither party “contended that under the doctrine of primary jurisdiction, proceedings in the trial court should be abated pending consideration of issues by the [Board].” American Honda Motor Co. v. Dupriest Auto., Inc., 10 S.W.3d 673, 673 (Tex.2000).

Meanwhile, the Board proceeded to a hearing on the merits of whether Honda violated section 5.02(b)(8) 6 by refusing to agree to Dupriest’s sale of his dealership to the prospective purchaser. After a two-day hearing, the administrative law judge (“ALJ”) found that Honda had violated the Code but denied relief to Dupriest. The

*618 ALJ concluded that Dupriest did not waive its right to bring a complaint before the Board by first bringing the action in district court and that the Code allowed only the aggrieved selling dealer — and not the distributor — the right to file a protest before the Board. The ALJ also concluded that the Board had the authority to issue a civil penalty because section 6.01(a) of the Code allowed the Board to assess a civil penalty “after a proceeding conducted in accordance with this Act ... that any person ... has violated any provision of this Act.” Tex.Rev.Civ.Stat.Ann. art. 4413(36), § 6.01(a) (West Supp.2001). Thus, once the dealer filed a complaint and notice of hearing, the ALJ found that no further notice was required to invoke the Board’s jurisdiction. Finding that “the question of a manufacturer’s alleged violation of such a Code provision goes to the very heart of the purpose of the TMVC Code [section] 3.01(a) for the Board to regulate all aspects of the distribution, sale, and leasing of motor vehicles,” the ALJ further concluded that the Board had authority to issue a civil penalty. In the alternative, however, the ALJ recommended that the matter be referred to the Enforcement Section of the Motor Vehicle Division of the Texas Department of Transportation.

The Board adopted the ALJ’s proposal for decision, finding that Honda had failed to give effect to and attempted to prevent the sale of Dupriest’s dealership without showing that the sale and transfer would be detrimental to the public or the representation of the manufacturer or distributor, thereby violating section 5.02(b)(8). The Board denied relief to Dupriest but entered its order assessing civil penalties against Honda. Adopting the findings of fact, conclusions of law, and reeommenda-tions contained in the proposal for decision, the Board assessed a penalty of $10,000 against Honda under section 6.01 of the Code. Id.

Honda brought this action for judicial review in the district court of Travis County. The district court upheld the Board’s order, and Honda appeals the district court’s judgment. Honda raises seven issues on appeal, contending first that the Board lacked jurisdiction because the statute under which Dupriest complained had been repealed. Alternatively, Honda argues that the Board exceeded the scope of its authority because it lacked jurisdiction once the prospective purchaser backed out of its agreement with Dupriest, cancelling the pending sale. In its other issues, Honda asserts that the Board’s order is erroneous in various respects. Because we find that the Board lacked jurisdiction, we reverse the judgment on that ground.

THE CONTROVERSY

The Statute

From 1989 until June 11, 1997, section 5.02(b)(8) of the Code provided that it was unlawful for an automobile manufacturer or distributor to:

Notwithstanding the terms of any franchise agreement, fail to give effect to or attempt to prevent any sale or transfer of a dealer, dealership or franchise or interest therein or

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47 S.W.3d 614, 2001 WL 256260, Counsel Stack Legal Research, https://law.counselstack.com/opinion/american-honda-motor-co-v-texas-department-of-transportation-motor-texapp-2001.