Miller v. Superior Court

50 Cal. App. 4th 1665, 58 Cal. Rptr. 2d 584, 96 Daily Journal DAR 14130, 96 Cal. Daily Op. Serv. 8573, 1996 Cal. App. LEXIS 1104
CourtCalifornia Court of Appeal
DecidedNovember 25, 1996
DocketG019178
StatusPublished
Cited by9 cases

This text of 50 Cal. App. 4th 1665 (Miller v. Superior Court) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Miller v. Superior Court, 50 Cal. App. 4th 1665, 58 Cal. Rptr. 2d 584, 96 Daily Journal DAR 14130, 96 Cal. Daily Op. Serv. 8573, 1996 Cal. App. LEXIS 1104 (Cal. Ct. App. 1996).

Opinion

*1668 Opinion

SILLS, P. J.

I. Introduction

Sometime after petitioners Ruth and Roger Miller bought a Honda dealership in Huntington Beach they were sued for not making payments to the sellers. The Millers then filed a cross-complaint against Honda 1 for fraud and unfair business practices. In essence, the Millers alleged that they could not make any money because they refused to bribe Honda executives to obtain their fair share of popular Honda models. On demurrer, the trial court stayed the cross-complaint indefinitely, pending review by an administrative agency known as the California New Motor Vehicle Board. 2 The Millers then brought this writ proceeding.

To this date, a solid phalanx of Court of Appeal decisions have held that all disputes between new car dealers and manufacturers must be litigated first with the New Motor Vehicle Board, not in state court. 3 (See Yamaha Motor Corp. v. Superior Court (1986)185 Cal.App.3d 1232 [230 Cal.Rptr. 382] (Yamaha I); Yamaha Motor Corp. v. Superior Court (1987) 195 Cal.App.3d 652 [240 Cal.Rptr. 806] (Yamaha II); Ray Fladeboe Lincoln-Mercury, Inc. v. New Motor Vehicle Bd. (1992) 10 Cal.App.4th 51 [12 Cal.Rptr.2d 598]; Mathew Zaheri Corp. v. Mitsubishi Motor Sales (1993) 17 Cal.App.4th 288 [21 Cal.Rptr.2d 325].) One decision, in dicta, has indicated to the contrary. (Ri-Joyce, Inc. v. New Motor Vehicle Bd. (1992) 2 Cal.App.4th 445, 455 [3 Cal.Rptr.2d 546].)

Given the authority already extant, this would ordinarily be an easy case. The trial court followed Yamaha I, Yamaha II, Ray Fladeboe and Mathew *1669 Zaheri (as it was bound to do under Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 455 [20 Cal.Rptr. 321, 369 P.2d 937]) and, under those decisions, reached a correct result. Here, however, the petitioners raise an issue not considered in any of the published decisions so far—their right to a jury trial. Intuitively at least, it would seem that if one has a right to a trial by jury, a requirement that one take a detour via an administrative agency which could, at best, only render an advisory decision on the dealer’s common law claims, is both a waste of time and, indeed, a “tax” on the right to a jury trial. 4

Well, not exactly. As explained by our Supreme Court, such detours may be justified under the doctrine of “primary jurisdiction” when there is a “paramount need for specialized agency review.” (See Farmers Ins. Exchange v. Superior Court (1992) 2 Cal.4th 377, 401 [6 Cal.Rptr.2d 487, 826 P.2d 730].) Under that doctrine, a trial court may avail itself of the specialized expertise of an administrative agency before hearing a matter—the agency in effect becomes a kind of special master for the trial court. Here, it appears that there may indeed be such a paramount need. However, because the trial court considered itself bound by the Court of Appeal decisions which stand for a per se rule that new car dealers must always seek agency review before presenting any court claims, the trial court did not exercise its discretion as to whether it desired the benefits of specialized agency review afforded by the primary jurisdiction doctrine. We therefore grant the requested writ to provide the trial court that opportunity.

II. Discussion

A. Prior Case Law on the Board’s Authority

A brief review of the Court of Appeal decisions is necessary to establish the context of the instant proceeding, and show why the trial court stayed all proceedings on the cross-complaint.

In Yamaha I, a motorcycle dealership sued a manufacturer for breach of a franchise agreement, breach of the implied covenant of good faith and fair dealing, and intentional interference with prospective business advantage because the manufacturer refused to sell a certain new product to the dealer, while at the same time selling to competing dealers in the area. The manufacturer’s demurrer was overruled, but the appellate court directed that it be sustained. The Court of Appeal styled the breach of contract action as, essentially, a challenge to a modification of the franchise agreement, and *1670 therefore squarely within the Board’s power to hear such protests. (See 185 Cal.App.3d at p. 1241, citing § 3060.) Because there was a need for a factual determination regarding whether there was good cause for any such franchise modification, and the Board was “the administrative forum authorized to make such determinations,” the court concluded that the dealer’s failure to exhaust its remedy with the Board precluded judicial relief. (Yamaha I, supra, 185 Cal.App.3d at p. 1242.)

In one paragraph at the end of the opinion, the court confronted the dealer’s claims that Yamaha had abandoned advertising and promotions of its other products in bad faith. The court reasoned that because the Board is empowered under section 3050, subdivision (c) to hear “any matter” concerning a new car or motorcycle dealer and its manufacturer, the dealer’s failure to exhaust administrative remedies was fatal as well. (Yamaha I, supra, 185 Cal.App.3d at pp. 1242-1243.)

Another panel in another district had occasion to consider the implications of Yamaha I in Yamaha II, decided almost a year later. There, a financing company sued a couple who were former motorcycle dealers for breach of finance agreement. The couple cross-complained against the manufacturer for a number of common law causes of action, including breach of contract, fraud, and interference with business relations. These claims were based on assertions that the manufacturer had unjustifiably terminated certain contracts, sued for past due amounts, and seized inventory, thus putting the dealers out of business; additionally, the manufacturer had interfered with their attempt to sell the dealership to a third party.

The manufacturer sought a writ of mandate requiring the trial court to sustain its demurrer, which the appellate court, as it had done in Yamaha I, granted. Once again, the “any matter” phrase in section 3050, subdivision (c) proved fatal to the dealers’ judicial action. There was “considerable overlap” between the allegations of the cross-complaint and activities within the purview of the Board.

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Bluebook (online)
50 Cal. App. 4th 1665, 58 Cal. Rptr. 2d 584, 96 Daily Journal DAR 14130, 96 Cal. Daily Op. Serv. 8573, 1996 Cal. App. LEXIS 1104, Counsel Stack Legal Research, https://law.counselstack.com/opinion/miller-v-superior-court-calctapp-1996.