State v. Miner

331 N.W.2d 683, 1983 Iowa Sup. LEXIS 1448
CourtSupreme Court of Iowa
DecidedMarch 16, 1983
Docket67935
StatusPublished
Cited by18 cases

This text of 331 N.W.2d 683 (State v. Miner) is published on Counsel Stack Legal Research, covering Supreme Court of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State v. Miner, 331 N.W.2d 683, 1983 Iowa Sup. LEXIS 1448 (iowa 1983).

Opinion

McGIVERIN, Justice.

Defendant Jerry Miner appeals from a district court ruling which enjoined him from engaging in the business of brokering used motor vehicles at retail unless and until he is licensed by the Iowa Department of Transportation (DOT) as a used motor vehicle dealer under Iowa Code chapter 322 (1981). The injunction was stayed by the district court pending appeal. The many issues raised by defendant on appeal reflect two basic contentions: (1) Iowa Code section 322.3(2), which requires a person engaged in the business of selling used motor vehicles at retail to be licensed as a used motor vehicle dealer, does not apply to a broker of used cars; and (2) even if section 322.3(2) applies to brokers, its application to defendant’s business violates constitutional and statutory provisions. We find no merit in defendant’s arguments and affirm the district court’s grant of an injunction.

Prior to the filing of this equitable action by plaintiff State of Iowa seeking to enjoin defendant from brokering used motor vehicles at retail without a license, two separate criminal prosecutions were unsuccessfully brought by the State against defendant.

The State then brought this civil action seeking an injunction. Iowa Code § 322.11 (1981). The case was tried by the court upon submission of stipulated evidence. Defendant’s counterclaim for damages was denied and is not before us on appeal.

The essential facts of this case are not in dispute. In June 1980 defendant, who had previous experience as a licensed automobile dealer, launched his used car brokerage service under the name of “Wheels.” Defendant solicits private owners of motor vehicles who wish to sell their vehicles. The prospective seller and defendant enter into a listing agreement which for 60 days gives defendant the exclusive right to obtain a buyer. An initial fee of $25 is paid to defendant to cover the costs of advertising and showing the vehicle to prospective buyers. If the vehicle is sold, defendant receives a commission of at least $250.

Defendant does not purchase the vehicles himself nor does he obtain title to any of the vehicles; his role is solely that of a middleman. The business of “Wheels” is conducted from a small office. Defendant does not maintain any repair or service facilities for the vehicles he brokers and he *686 does not maintain a lot on which to display vehicles. However, he does have permission to park his clients’ cars on his office parking lot, and the evidence shows that he often parks cars on that portion of the lot which abuts the highway.

At trial the evidence showed that defendant had obtained 86 buyers of used motor vehicles who entered into a written contract with sellers who had listed their vehicles with “Wheels.” Fifteen of these transactions involved sellers or buyers who resided outside the state of Iowa.

After “Wheels” was in operation, defendant discussed licensing requirements with members of the DOT. He disregarded their assertions that even as a broker he was required to be licensed as a used motor vehicle dealer. At no time since he has been acting as a used car broker has defendant or his sole employee, Merlin Tritle, attempted to obtain a dealer’s license under chapter 322. Sections 322.4- 8 contain provisions concerning application for, issuance and maintenance of a dealer’s license. Section 322.4(7) also requires that the dealer furnish a surety bond in favor of any buyer of a motor vehicle damaged due to wrongdoing by the dealer in the sales transaction.

I. Applicability of section 322.3(2). Defendant contends that section 322.3(2) and its implementing regulations, 820 Iowa Admin.Code [07, D] ch. 10, do not and cannot apply to brokers of used cars because once licensed as a dealer, a broker lawfully could not broker motor vehicles and such an absurd and unreasonable result should be avoided. We find no merit in these contentions and agree with the district court’s decision.

The language of section 322.3(2) is undeniably broad. It provides that:

No person, other than a licensed dealer in new motor vehicles, shall engage in this state in the business of selling at retail used motor vehicles or represent or advertise that he is engaged or intends to engage in such business in this state unless and until the department has licensed such person as a used motor vehicle dealer in the state and has issued to the person a license in writing as in this chapter provided.

The DOT, pursuant to section 322.13 which gives it authority to prescribe rules, has adopted the following definition of “engage in this state in the business”: “... doing any of the following acts for purposes of sale of motor vehicles at retail; to acquire, sell, exchange, hold, offer, display, broker, accept on consignment or conduct a retail auction or to act as an agent for the purpose of doing any of the aforementioned acts.” 820 Iowa Admin.Code [07, D] § 10.-1(4). In section 322.3(2) the legislature expressly stated that no person shall “engage in this state in the business” of selling at retail used motor vehicles unless he is licensed as a used motor vehicle dealer. Therefore, the DOT in rule 10.1(4), in including brokering in the definition of the quoted phrase, was only verbalizing what section 322.3(2) had already directed. Brokers, such as defendant, are engaged in the business of selling motor vehicles at retail.

The inclusion of brokers in the category of persons required to obtain a dealer’s license in order to engage in the business of selling motor vehicles at retail also is consistent with the statutory provisions of other states. See e.g. Conn.Gen.Stat.Ann. § 14-52 (Supp.1982) (“No person, firm or corporation may engage in the business of the buying, selling, offering for sale or brokerage of any motor vehicle ... without having been issued either a new car dealer’s [or] a used car dealer’s ... license.”); Kan. Stat.Ann. § 8-2401(a) (Supp.1981) (“ ‘Vehicle dealer’ means any person who: ... (3) for commission, money or other thing of value is engaged in the business of bringing buyers and sellers of vehicles together.... ”); Wash.Rev.Code Ann. § 46.70.-011(3) (Supp.1982) (“ ‘Vehicle dealer’ means any person .. . engaged in the business of ... brokering ... the sale of new, or used vehicles.... ”).

When the Iowa statute and regulations are read together, the plain meaning of the two is that defendant must be licensed as a dealer to sell used cars at retail. In like manner, the Ohio Court of Appeals held *687 that the following statutory language required the licensing of brokers in that state: “No person shall engage in the business of displaying or selling at retail .. . motor vehicles in this state or assume to engage in such business without first having a license therefor.... ” Ohio Rev.Code Ann. § 4517.02 (1975).

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331 N.W.2d 683, 1983 Iowa Sup. LEXIS 1448, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-v-miner-iowa-1983.