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The
Legal Defense Fund: Case
Developments
The
Legal Defense Fund provides the resources for OADA and its
members to pursue cases where the cost to an individual dealer
to litigate the issue would be prohibitive, but the outcome
could have a substantial impact on the dealer body.
We
want our members to understand the role of the Legal Defense
Fund in protecting dealers’ rights.
Here is a summary of two cases we have supported :
Recent
Ohio
Supreme Court Decisions:
Craig
L. Whitaker v. Montrose Toyota:
This
case was in litigation since 2002 and was appealed all the way
to the Ohio Supreme Court.
The case also spawned legislation (SB 117), which
itself became subject to litigation.
LDF funds were used both to support the dealership in
this case and to support the legislature in its attempts to
defend SB 117 from an unconstitutional veto.
Whitaker
began with a claim by the consumer that he was defrauded in a
spot delivery transaction.
When he sued, the jury rendered a verdict in favor of
the consumer in the amount of $105,000 which was subsequently
trebled ($315,000) pursuant to the remedies available under
the CSPA. The
consumer was awarded $367.15 for a claim of conversion and
attorney fees in the amount of $155,056.70 were also awarded
by the court.
The
dealership appealed the award and asked LDF for assistance.
LDF paid for an amicus curiae brief filed by OADA in
support of the dealership which argued that non-economic
damages were not available pursuant to the Ohio Consumer Sales
Practices Act.
On
appeal, the Ninth District Court of Appeals found in favor of
the dealership, indicating that in
its previous decisions, this District had determined that
plaintiffs may recover only economic damages under the CSPA.
The Court of Appeals found that Plaintiff did not provide
competent, credible evidence supporting an award of economic
damages on his CSPA claim and reversed the judgment of
$315,000, instructing the lower court to award statutory
damages only. Statutory
damages are equal to $200 per violation; Montrose Toyota was
found to have eleven violations of the CSPA.
Therefore, statutory damages of $2200.00 were awarded
to the Plaintiff. The
Court of Appeals also reversed the award of attorney fees.
The
Plaintiff appealed the decision to the Ohio Supreme Court,
which chose to hear the case.
Again, LDF funds were used to pay for an amicus curiae
brief so that OADA could support the dealership’s arguments
that non-economic damages were not available under the CSPA.
The
Ohio Supreme Court announced its decision on November 8th,
2006 indicating that consumers could
collect more than economic damages for violations of the
Consumer Sales Practices Act.
The Court’s decision meant that consumers could
collect unlimited damages for intangible injuries such as pain
and suffering and embarrassment.
The
Ohio Supreme Court sent the case back to the Appellate Court
to determine if the evidence supports an award of $105,000.
The Appellate Court decision announced in late December
2007 was a victory for the dealership.
The Court found that the evidence did not support an
award of $105,000 and sent the decision back to the Court of
Common Pleas to award statutory damages only.
Why
was this case important?
The Supreme Court’s decision significantly
expanded the scope of damages which could be obtained, making
settlement of claims more difficult and the likelihood of
larger damage awards at trial much more likely. Because of
this danger, OADA worked with the legislature to introduce
corrective legislation which clearly limited non-economic
damages in CSPA cases. That
legislation required LDF assistance…
Ohio
General Assembly vs. Ohio Secretary of State, Jennifer
Brunner: In
December 2006, the Ohio General Assembly passed SB 117 which
addressed the availability of non-economic damages in CSPA
lawsuits. SB 117
provided that non-economic damages are available in CSPA
lawsuits, but caps non-economic damages at a maximum of
$5000.00. Furthermore,
it clarified that only actual economic damages may be trebled
(tripled).
SB
117 became the subject of a constitutional challenge after it
was filed without signature by out-going Governor Taft on his
last day in office. Jennifer
Brunner opined that time was still available for
Governor-Elect Strickland to veto SB 117 on his first day in
office and “unfiled” SB 117 when he requested it.
Secretary
of State Brunner’s actions became the subject of a
constitutional challenge and OADA supported the legislature in
its efforts to thwart her unconstitutional efforts to veto the
law. LDF funds
were used to pay for a brief which was submitted to the Ohio
Supreme Court. LDF
recognized that this issue was important to our members for
two reasons: (1)
SB 117 limited non-economic damages in CSPA cases,
thereby reducing the likelihood of excessive awards to
plaintiffs; and (2) The legislative process must be respected
and cannot be circumvented by those who disagree with
particular legislation.
The
Supreme Court of Ohio heard the case on May 1st,
2007 and announced its decision that SB 117 could not be
un-filed and vetoed. It
therefore became effective on April 5th, 2008.
Later, the Court reconsidered its decision insofar as
the effective date was concerned and stated that it became
effective August 1st, 2008.
A referendum to overturn SB 117 failed.
LDF
was happy to support both the Ohio General Assembly and
Whitaker in these two intertwined cases.
Now all dealers will benefit from the outcome, as CSPA
claims will be limited to actual economic damages, which may
be trebled, and non-economic damages (if proved), which are
capped at $5000 and cannot be trebled.
For
more information concerning the Ohio Automobile Dealers
Association Legal Defense Fund, contact Charlie Howard at
(614) 766-9100 or (800)686-9100 or choward@oada.com. |
