Maitland v. Ford Motor Co.

103 Ohio St. 3d 463
CourtOhio Supreme Court
DecidedNovember 10, 2004
DocketNo. 2003-1284
StatusPublished
Cited by67 cases

This text of 103 Ohio St. 3d 463 (Maitland v. Ford Motor Co.) is published on Counsel Stack Legal Research, covering Ohio Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Maitland v. Ford Motor Co., 103 Ohio St. 3d 463 (Ohio 2004).

Opinions

Lundberg Stratton, J.

{¶ 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 [464]*464Lemon Law and constitute a deceptive and unconscionable act under Ohio’s Consumer Sales Practices Act (“CSPA”).

{¶ 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 R.C. 1345.72(B), 1345.02 and 1345.03. Plaintiffs also alleged that defendants committed fraud by failing to disclose that prevailing consumers were entitled to a full refund.

{¶ 3} Plaintiffs filed their claims individually and, pursuant to Civ.R. 23, on behalf of a class of “all persons and entities who purchased or leased a vehicle from Defendants on or after August 15, 1988 and: (1) who have submitted claims under the Ohio Lemon Law Statute, R.C. § 1345.71 et seq.; (2) whose vehicles were determined to be nonconforming vehicles through settlement or arbitration award; and (3) who received less than a full statutory refund due to Defendants’ unlawful application of a reasonable use deduction formula allowing a set-off for miles driven.”

{¶ 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 replacement 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 purchase 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 Civ.R. 12(B)(6) for failure to state a claim for which relief may be granted. They alleged (1) that plaintiffs accepted the arbitration decisions and had settled their claims, barring any further civil action under the Lemon Law, (2) that the settlement and the [465]*465arbitration process regulated by the Attorney General does not constitute an unfair or deceptive sales practice under the CSPA, and (3) that the plaintiffs did not allege elements of a prima facie claim of fraud.

{¶ 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 R.C. 1345.75 for additional damages. In addition, the court held that the Attorney General had authorized the use of the mileage setoff, so it could not constitute a deceptive act in violation of CSPA, and that plaintiffs failed to assert a claim of fraud.

{¶ 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 refund 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 court reversed and remanded, finding that the plaintiffs were entitled, pursuant to R.C. 1345.75, to bring a civil action for noncompliance and to assert a claim under R.C. 1345.02 and 1345.03. The court affirmed the dismissal of the fraud claim.

{¶ 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 Civ.R. 12(B)(6) for failure to state a claim for relief. When reviewing a Civ.R. 12(B)(6) motion to dismiss, we must accept the material allegations of the complaint as true and make all reasonable inferences in favor of the plaintiffs. For the moving defendants to prevail, it must appear from the face of the complaint that the plaintiffs can prove no set of facts that would entitle them to relief. Vail v. Plain Dealer Publishing Co. (1995), 72 Ohio St.3d 279, 280, 649 N.E.2d 182; State ex rel. Hanson v. Guernsey Cty. Bd. of Commrs. (1992), 65 Ohio St.3d 545, 548, 605 N.E.2d 378.

{¶ 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, R.C. 1345.71 et seq., enacted in 1987, was designed to give a purchaser greater leverage in seeking redress when his or her new auto [466]*466turns out to be a “lemon.” Royster v. Toyota Motor Sales, U.S.A., Inc. (2001), 92 Ohio St.3d 327, 750 N.E.2d 531; Julian B. Bell III, Comment, Ohio’s Lemon Law: Ohio Joins the Rest of the Nation in Waging War 'Against the Automobile Limited Warranty (1989), 57 U.Cin.L.Rev. 1015, 1028. The law places a clear duty upon a manufacturer or its agents to make any necessary repairs so that a new vehicle conforms to the applicable express warranties even after the warranty has expired. R.C. 1345.72(A). If the manufacturer or seller cannot make the vehicle conform after a reasonable number of attempts, then the consumer may elect to either replace the vehicle or be refunded its full purchase price. R.C. 1345.72(B).

{¶ 14} The Lemon Law provides the purchaser with a statutory cause of action if the manufacturer does not comply with R.C. 1345.72. However, the consumer must first resort to an informal dispute-resolution process if one exists. R.C. 1345.77.

{¶ 15} R.C. 1345.77(A) directs the Attorney General to adopt rules to establish and qualify an “informal dispute resolution mechanism” to resolve warranty disputes that may arise between the consumer and manufacturer. The Attorney General promulgated Ohio Adm.Code 109:4-4-01 et seq., which governs the establishment and operation of informal dispute settlement boards aimed at settling warranty disputes. The rules allow the manufacturer to establish an informal dispute-settlement board. Ohio Adm.Code 109:4-4-02.

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Bluebook (online)
103 Ohio St. 3d 463, Counsel Stack Legal Research, https://law.counselstack.com/opinion/maitland-v-ford-motor-co-ohio-2004.