CASE NO. - Supreme Court of Ohio and the Ohio Judicial … Counsel for Appellee Ohio Motor Vehicle...

IN THE SUPREME COURT OF OHIOCOLUMBUS, OHIO

ROBERT FLEISHER, et al.

Appellants,

vs.

FORD MOTOR COMPANY, et al.

Appellees.

CASE NO.

(Appeal from the Tenth Appellate District,Case No. 09AP-139)

(Administrative Appeal from the FranklinCounty Court of Common Pleas,Case No. 08CVF-08-12330)

(Administrative Appeal from the OhioMotor Vehicle Dealers Board,Case No. 08-03-MVDB-341-JT)

APPELLANTS ROBERT FLEISHER AND FRANKLIN PARK LINCOLN-MERCURY, INC.'SMEMORANDUM IN SUPPORT OF JURISDICTION

Christopher M. DeVito (0047118)(Counsel of Record)Alexander J. Kipp (0081655)Morganstern, MacAdams & DeVito Co., L.P.A.623 West Saint Clair AvenueCleveland, OH 44113(216) 687-1212 or 621-4244(216) 621-2951 - Facsimilecdevito a mmd-law.com

Counsel for Appellants Robert Fleisherand Franklin Park Lincoln-Mercury, Inc.

Frank A. HamidiCourtney S. LawDickinson Wright, PLLC500 Woodward Avenue, Suite 4000Detroit, MI 48226(313) 223-3104(313) 223-3598 - FacsimileFHamidi dickinsonwright.com

h .H

Attor0 ey for Ap^^ll^^ F!C panyon

r#

Scott A. Campbell (0064974)Samir B. Dahman (0082647)Thompson Hine LLP41 South High Street, Suite 1700Columbus, OH 43215(614) 469-3317(614) 469-3361 - FacsimileSamir Dahmana,ThompsonHine.com

Attorneys for Appellee Ford Motor Company

Jay F. McKirahan (0003223)Wahnn & Associates6300 Frantz RoadDublin, OH 43017(614) 764-7440(614) 764-0091 - Facsimilewhannassoc(@,rroh1o.com

Attorney for Appellee Brondes FordMaumee, Inc.

John E. PattersonAssistant Attorney General30 East Broad Street, 26'h FloorColumbus, OH 43215-3418(614) 466-2980(614) 728-9470 - Facsimileipatterson(@,aq.state.oh.us

Counsel for Appellee Ohio Motor VehicleDealers Board

TABLE OF CONTENTS

Page

EXPLANATION OF WHY THIS CASE INVOLVES A SUBSTANTIAL CONSTITUTIONALQUESTION AND WHY IT IS ONE OF PUBLIC AND GREAT GENERAL INTEREST . . . . . . . . . . . . . . . 1

STATEMENT OF THE CASE AND FACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

ARGUMENT IN SUPPORT OF PROPOSITIONS OF LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Proposition of Law No. I: Does an administrative tribunal violate the Constitutional right todue process by using a summary disposition procedure NOT authorized by the statutoryframework enacted by the Ohio General Assembly? . . . .^ . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Proposition of Law No. II: Does a reviewing court violate the Constitutional right to dueprocess by (1) failing to broadly and liberally construe remedial laws according to their plainreading and (2) failing to defer to the fact finder's resolution of conflicting evidence? ......... 7

Proposition of Law No. I II: Does a district court of appeal violate the Constitutional right todue process by (1) failing to review and determine all enumerated assignments of error, whichare not moot, andlor ( 2) failing to resolve en banc internal conflicts brought to the attentionof the appellate panel? ....................................................... 10

CONCLUSION .................................................................... 14

PROOF OF SERVICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

APPENDIX Appx. Page

DECISION AND JOURNAL ENTRY OF THE TENTH DISTRICT COURT OF APPEALS(August 24, 2009) ............................................................ 1

DECISION AND JOURNAL ENTRY OF THE FRANKLIN COUNTY COURT OF COMMON

PLEAS (January 6, 2009) ............... ...................................... 10

OHIO MOTOR VEHICLE DEALERS BOARD (2-1) ORDER ACCEPTING REPORT ANDRECOMMENDATION OF HEARING EXAMINER (August 13, 2008) . . . . . . . . . . . . . . . . . . . . 27

REPORT AND RECOMMENDATION OF HEARING EXAMINER FOR THE OHIO MOTORVEHICLE DEALERS BOARD (June 25, 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

EXPLANATION OF WHY THIS CASE INVOLVES A SUBSTANTIAL CONSTITUTIONALQUESTION AND WHY IT IS ONE OF PUBLIC AND GREAT GENERAL INTEREST

"No State shall ... deprive any person of life,libeity, or property without due process oflaw."'

"The judiciary is a safeguard of our libertyand of our property under the Constitution."2

"The history of liberty has largely been thehistory of the observance of proceduralsafeguards."3

The legal questions to be determined in this matter affect all citizens in the State of Ohio regarding

their Constitutional due process right to have disputes resolved on their merits. The resolution of the first

proposition of law involves the procedural safeguards enacted by the Ohio legislature to insure administrative

agencies provide the due process right to have matters determined only through authorized means, not by a

summary disposition procedure without a hearing. The acceptance and review of this legal issue obviously

affects the Appellants, but more impoitantly, will affect all litigants, presently and in the future, before all

administrative tribunals in the State of Ohio. It is also a case of first impression for the Ohio Supreme Court.

However, other sister-state's highest courts, Federal courts, and Ohio courts of appeal have reviewed and

opined on this Constitutional due process legal question. Thus, the issue is ripe for review, analysis, and a

determination establishing Ohio's public policy involving (1) a novel question of procedure and (2) the

application or extension of Constitutional rights or principals 4

` Constitution of the United States, Fourteenth Amendment, Section 1.

2 Justice Charles Evans Hughes, Sr. (1862-1948), speech at Elmira, New York [May 3, 1907].

' McNabb v. United States, 318 U.S. 332, 347 (1943), Felix Frankfurter [1882-1965].

a Noble v. Cofwell (1989), 44 Ohio St.3d 92, 94; State v. Bolan (1971), 27 Ohio St.2d 15, 17.

1

The second proposition of law involves (1) the public interest in broadly and liberally construing

remedial laws and (2) the fundamental principal limiting the scope of appellate review by deferring to the fact

finder's (i.e. jury, judge, administrative tribunal) resolution of contested evidence. This case concerns the Ohio

Dealer Act (R.C. Chapter 4517) and the public's interest in regulating the automobile manufacturer/dealer

industry for the public's benefit.5 Proposition of Law No. I I also regards the appeal process and is based upon

the American jurisprudence doctrine that the fact finder is in the best position to determine disputed issues,

not an appellate court reviewing a cold record of the underlying proceedings. Obviously, this Constitutional

procedural issue affects all pending and future litigation before reviewing courts. In addition to its public and

Constitutional importance, the second proposition also is one of great general interest because automobile

dealership substantially affect Ohio's economy.s

The third proposition of law involves the legal issue requiring district courts of appeal to address and

determine all assignments of error in writing, if they are not moot, to potentially allow further appellate review

by this Honorable Supreme Court.' This proposition of law affects all Ohio litigants before district courts of

appeal and insures resolution of conflicts on the merits, throughout the entire litigation process. At a minimum,

this Honorable Court should accept discretionary jurisdicBon in order to remand the matter to have the Tenth

District Court of Appeals resolve the five ( 5) assignments of error which were never addressed and which are

' The framers of the Ohio Constitution determined that "public interest" refers to cases in whichsome "state, county or city, some public body" are involved. Proceedings and Debates of the Constitution-al Convention of 1912, C. B. Galbreath, Secretary, Clarence E. Walker, Reporter, F. J. Heer Printing Co.,Columbus, OH (1912), Vol. 1, p. 1030. Since there is a public entity involved in this case (i.e. State MotorVehicle Dealers Board), a substantial public interest is present.

6 Ohio is home to approximately 1,600 new franchise dealerships which (1) generated over $26billion dollars in sales revenue (i.e. 23.3% of the total retail sales in Ohio), (2) collected $127.6 milliondollars in sales tax (i.e. 15.5% of the total sales tax collections in Ohio), and (3) employ 46,394 citizens andpaid $1.82 billion dollars in wages (i.e. 4.6% of Ohio's retail work force and 9.5% of the total retail payroll inOhio). Ohio Automobile Dealers Association Economic Impact Study (2002).

' Chriss v. Springfield Twp. (1999), 43 Ohio St.3d 83, 84, 538 N.E.2d 406.

2

not moot. Accepting discretionary jurisdiction, for the limited purpose of remanding to the Tenth District to fully

resolve the legal issues presented for review, will promote Ohio's public policy of having litigation resolved on

the merits, instead of being determined through omissions and failure to follow the Appellate Rules of

Procedure. Chriss v. Springfield, supra.

Discretionary jurisdiction of the entire case should be granted in order to fully address the three (3)

propositions of law: (1) the Constitutional due process right requiring administrative tribunals to follow only the

procedures authorized by the Ohio legislature, (2) Ohio's public policy to broadly construe remedial laws (i.e.

Ohio Dealer Act) and the fundamental right to have the fact finder resolve conflicting evidence, and (3) App.

R. 12(A)'s requirement to determine all assignments of error presented for review, if not moot, and the

Supreme Court mandate to convene an en banc hearing to resolve internal conflicts.

STATEMENT OF THE CASE AND FACTS

This matter involves an administrative appeal filed by the automobile dealership Franklin Park Lincoln-

Mercury, Inc. and its owner Mr. Robert Fleisher (hereinafter "Franklin Park" or "Appellants"). Franklin Park

appealed the State of Ohio, Motor Vehicle Dealer Board's (hereinafter "Board") two-to-one (2-1) order of

August 13, 2008. (App. p. 27). Franklin Park named the automobile manufacturer, Ford Motor Company

(hereinafter "Ford"), as Appellee and the intervening party, Brondes Lincoln-Mercury (hereinafter "Brondes"),

as Appellee from the administrative proceeding and subsequent appeals to the common pleas and appellate

district court.

Appellants are seeking to secure their right to an administrative protest before the Board regarding

Brondes' Purchase Agreement ^re-conditioned upon the relocation of a Lincoln-Mercury dealership to

Brondes' existing Ford location. The Ohio Dealer Act requires notice and the right to protest if the proposed

transferee (i.e. Brondes) does not intend to engage in business at the same location. R.C. 4517.50(C)(2). The

Purchase Agreement contained the conditions precedent that (1) the Board would allow the proposed

3

relocation of Lincoln-Mercury dealership and (2) the expiration of the applicable protest time period set forth

in R.C. 4517.50 (i.e. right to protest relocation) without any protest being filed. (App. p. 47, ¶¶ 7.1.3 and 7.1.4).

In this matter, Ford sent notice of a change in ownership to Franklin Park, but concealed Brondes' intent to

relocate as established by the pre-conditions in the Purchase Agreement. (App. p. 55). Ford's intentional

omission deprived Franklin Park of its statutory right to file a protest and require Ford to demonstrate good

cause at a hearing on the merits before the Board. R.C. 4517.50, .51, and .57.

Ford and Brondes argued that the matter was subject to exceptions within the Ohio Dealer Act (R.C.

Chapter 4517) and that Franklin Park was not entitled to notice, the right to protest, or a hearing. Only limited

discovery, for purposes of a dispositive motion, was allowed at the administrative level. The Hearing Examiner

only accepted summary judgment briefing, although not authorized by the Ohio Dealer Act, and never held a

hearing on the merits as required by R.C. 4517.57(A).

From the evidence submitted by Franklin Park, the Hearing Examiner made the dispositive factual

determination that "the purpose, intent and reality of the Purchase Agreement was to replace Rouen as a

Lincoln-Mercury dealer with Brondes and allow Brondes to relocate the former Rouen Lincoln-Mercury

dealership to Brondes' existing Ford dealership location." (App, pgs. 32-33, R&R ¶¶ 2, 5, 7, and 8).

Nevertheless, the Hearing Examiner failed to apply the plain language of the statute8 to his factual

determination. The Hearing Examiner held that Franklin Park did not have a right to notice or to a protest

because no additional dealership was being added. The hearing examiner never considered Franklin Park's

legal argument that the Ohio DealerAct's plain reading also applies to relocations. The Board, in a two-to-one

(2-l^ decision, affirmed the Reportand Recommendation of the Hearing Examinerwithoutfurtherexplanation.

Franklin Park appealed to the Franklin Court of Common Pleas. The common pleas court failed to

defer to the factual findings made by the Hearing Examiner and the Board. Instead, the common pleas court

8 R.C. 4517.50(C)(2).

4

substituted its judgment (from facts determined by a magistrate judge during a subsequent injunction hearing)

and made factual findings o osite the Hearing Examinerand Board's determination regarding Brondes' intent

NOT to engage in business at the same location but to relocate. (App. pgs. 17-18).

Franklin Park appealed to the Tenth District Court of Appeals and setforth six (6) assignments of error.

The Tenth District only determined the second assignment of error and never reviewed or determined the five

other assignments of error presented for review, (App. p. 8, ¶ 20). Franklin Park timely filed an application

for reconsideration requesting the five (5) remaining assignments of error be determined in writing because

they were not moot. The Tenth District's pratial determination of the second assignment of error did not

dispose of the procedural irregularities and other legal assignments of error, which would have voided and

reversed the lower tribunal's decisions. Franklin Park also timely moved for a hearing en banc because the

Tenth District decision conflicted with prior determinations involving the statutory interpretation of the Ohio

Dealer Act. Remedial laws are required to be broadly construed in order to promote the rights and remedies

statutorily enacted. Otherwise, the legislature's intent and Ohio citizens' protections could be circumvented,

which would undermine the express public policy enumerated by the Ohio Dealer Act law.

Franklin Park is timely submitting its Notice of Appeal and Memorandum in Support of Jurisdiction

because the determination of the three (3) propositions of law will affect all pending and future litigants in the

State of Ohio. Two of the propositions of law involve questions of first impression for the Ohio Supreme Court.

Specifically, the Constitutional right to due process requires administrative tribunals to follow only the

procedures authorized by the legislature, not through summary dispositions. Furthermore, the propositions

of law involve Ohio's public policy to broadly construe remedial laws and the legal tenet limiting appeal courts'

scope of review by deferring to the resolution of conflicting evidence to the fact finder (i.e. jury, judge,

administrative tribunal, etc.). Finally, the legal propositions of law have public, great general interest, and

involve substantial Constitutional questions requiring appellate district courts' review and determination of all

5

the specific assignments of error set forth for review, if not moot. This requirement insures that litigants have

a full and fair opportunity to test the determinations and rulings made by lower tribunals throughout the entire

legal process.

ARGUMENT IN SUPPORT OF PROPOSITIONS OF LAW

Proposition of Law No. t: Does an administrative tribunal violate the Constitutional right to dueprocess by using a summary disposition procedure NOT authorized by the statutory frameworkenacted by the Ohio General Assembly?

Proposition of Law No. I is a case of first impression for the Ohio Supreme Court. The Tenth District

Court of Appeals has only tangentially addressed the issue through the case of In re Blue Flame Energy Corp.,

171 Ohio App.3d 514, 871 N.E.2d 1227, 2006-Ohio-6892, ¶ 15, explaining that the Rules of Civil Procedure

do NOT apply to "adjudicatory proceedings before administrative agencies." (Citations omitted). Similarly, the

Sixth Appellate District held that "unless specific statutes or rules required their application in administrative

proceedings, the Ohio Rules of Civil Procedure apply only to court proceedings." (Citations omitted).

international8hd. of Electrical Workers, Local Union No. 8 v. Vaughn Industries, inc., 156 Ohio App.3d 644,

808 N.E.2d 434, 2004-Ohio-1655, ¶ 35. The Ohio Supreme Court has never specifically addressed this

important legal issue governing administrative tribunals and their limited scope of authority. It should be

axiomatic that administrative tribunals only have the power conferred to them by the Ohio legislature.

Inconsistent actions beyond their limited authority are void. This Constitutional precept of due process has

never been directly reviewed, analyzed, and decided by the Ohio Supreme Court.

However, sister-state's highest courts have reviewed and determined this fundamental procedural

safeguard. A Federal court and sister-state court of appeals have also analyzed and authored decisions on

this substantial Constitutional due process legal issue. These decisions are persuasive and demonstrate the

need forthe Ohio Supreme Court to now accept jurisdiction in order to review and determine this issue for Ohio

litigants.

6

The Arizona Supreme Court has directly addressed this exact issue and held that an order granting

summary judgment, which was not authorized by the administrative procedure act, was "void" because it was

not an authorized procedure by the statute. Arizona State Tax Commission v. Phelps Dodge Corp., 116 Ariz.

175, 568 P.2d 1073 (1977). Similarly, the Nebraska Supreme Court has held that an administrative agency

lacks authority to enter summary judgment, if the statute covering the proceeding did not authorize the use of

a summary judgment procedure. The Nebraska Supreme Court explained that "absent statutory grant, an

administrative agency does not have the authority to grant summary judgment in the contested case ...... Big

John's Billiards, Inc. v. Balka, 254 Neb. 528, 577 N.W.2d 294 (1998). A Federal court and a North Carolina

court which have examined, reviewed, and addressed this issue have also held that unless the administrative

statute authorizes the use of a summary judgment procedure, it is not a valid order (i.e. a hearing must be

conducted in orderto protect the litigant's due process rights). See In re B.L.H., 190 N.C.App.142, 660 S.E.2d

255 (2008) and PDK Labs Inc, v. Ashcroft, 338 F.Supp.2d 1(D.D.C., 2004).

This substantial Constitutional question involves the due process right to a hearing on the merits and

should be directly addressed by this Honorable Supreme Court of Ohio. In this matter, the Board's summary

disposition, through the UNauthorized summary disposition procedure, is void. In order to assure all

administrative litigants' right to a decision on the merits, discretionary jurisdiction should be accepted so this

Constitutional procedural due process question can be fully briefed and addressed by the Ohio Supreme Court,

as a case of first impression, and to establish Ohio's public policy consistent with her sister-states.

Proposition of Law No. II: Does a reviewing court violate the Constitutional right to due process by (1)failing to broadly and liberally construe remedial laws according to their plain reading and (2) failingto defer to the fact finder's resolution of conflicting evidence?

Even though the Ohio Supreme Court has never addressed the remedial nature of the Ohio Dealer

Act (R.C. Chapter 4517), sister-state's highest courts have reviewed this exact issue. The Supreme Courts

of Alabama, Texas, and New Mexico have all considered and held that their similar state motor vehicle dealer

7

franchise laws are remedial and must be broadly and liberally construed in order to advance the interest of the

dealer and the general public.9 There also exists at least one Federal court decision which has reviewed the

Ohio DealerAct and held that the DealerAct is a "remedial statute obviously intended to place franchisees and

dealers on a more equal playing field." Michael Mercure v. General Motors Corp., U.S.D.C., N.D. of Ohio,

Case No. 4:02CV2124 (March 17, 2003).

The second proposition of law, regarding the Ohio Dealer Act, also is a case of first impression forthe

Ohio Supreme Court. TherehavebeenmultipleOhloappellatecourtdecisionsexpresslyholdingthattheOhio

Dealer Act is a remedial statute and must be broadly and liberally construed in order to promote its objective

and to assist the parties in obtaining justice. However, the Ohio Supreme Court has never reviewed and

decided this public and substantial general interest question. For example, the Ninth District Court of Appeals

in Earl Evans Chevrolet, Inc. v. General Motors Corp. (1991), 74 Ohio App.3d 266, 276 and Nissan Motor

Corp. v. Dever, 2000 WL 311915, **7 (Ohio App. 10'h Dist.), specifically referenced R.C. 1.11 and held that

the Ohio Dealer Act is remedial and must be liberally and broadly construed in order to promote the legislative

enactment and to insure justice.

Additionally, the United States Congress in 1956 enacted legislation regulating the relationship

between automobile manufacturers and dealerships in order to protect the public and the substantial general

interest states have in regulating these franchise relationships.t0 Again in 2002, Congress, through the Senate,

enacted further legislation regulating this important public interest and reaffirmed a dealership's right to sue

manufacturers through state franchise acts, which had been enacted in all fifty (50) states, in order to protect

' Edwards v. Kia Motors of America, Inc. (Ala., 2008), 8 So.3d 277; Subaru of America, Inc. v.David McDavid Nissan, Inc. (Tex., 2002), 84 S.W.3d 212; Key v. Chrysler Motors Corp. (1998), 127 N.M.38, 976 P.2d 523.

10 Senate Report No. 84-2073 (1956).

8

dealerships and the general public." Finally, the protection and regulation of automobile dealerships today

remains of vital public and great general interest as exemplified by the recent Presidential orders and

Congressional laws enacted to maintain and regulate the relationship between automobile dealerships and

manufacturers for the public's interest.12

The United States Supreme Court has also accepted jurisdiction and reviewed the issue of whether

the California State Motor Vehicle Dealer Franchise Act is remedial and/or Constitutional. The U.S. Supreme

Court's acceptance of jurisdiction demonstrates the public and great general interest involved in regulating the

automobile manufacturer and dealership relationship for all American citizens, including Ohio residents.

The Ohio Supreme Court should acceptjurisdiction to review, analyze, and determine whether litigants

underthe Ohio DealerActare afforded the same remedial protection as other administrative litigants, pursuant

to remedial legislation enacted by the Ohio General Assembly, and other state franchise laws.t3

Proposition of Law No. II also involves an issue arp tlal> addressed by this Honorable Court almost

thirty (30) years ago. In University of Cincinnati v, Conrad, 63 Ohio St.2d (1980), 108, 111, 407 N.E.2d 1265,

the Ohio Supreme Court explained that "the court of common pleas must give due deference to the

administrative resolution of evidentiary conflicts," Sister-state's highest courts have similarly reviewed,

analyzed, and held that reviewing courts must defer to the administrative agencies' findings of fact and

resolution of evidentiary conflicts.'^ Obviously, this is an important American procedural precept addressed

Senate Report No. 107-266 (2002).

2 Troubled Asset Relief Program ("TARP"), Public Law 110-343; Emergency EconomicStabilization Act of 2008 [over $25 billion in loans to automakers and their financing arms as of February 9,2009, and additional loans and commitments subsequently provided to General Motors, General MotorsAcceptance Corp., Chrysler Motors, Chrysler Financial, and Fiat to protect the public interest).

" New Motor Vehicle 8d. of California v. Orrin W. Fox Co., 434 U.S. 1345, 98 S.Ct. 359 (1977).

Liddy v. Lamone (2006), 398 Md. 233, 919 A.2d 1276; Cobb v. West Virginia Human RightsCom'n (2005), 217 W.Va. 761, 619 S.E.2d 274; Ottenia v. State ex rel. Wyoming Worker's CompensationDiv. (Wyoming 1998), 968 P.2d 41; In re Michael (D.C., 1992), 610 A.2d 231.

9

by the Ohio Supreme Court and sister-state's highest courts. It appropriate to again review, analyze, and

reaffirm this doctrine of appellate review in order to protect administrative litigants' Constitutional due process

rights through the appeal process, including appeals from the Motor Vehicle Dealers Board.

Accepting discretionary jurisdiction would reinforce the necessity for reviewing courts NOT to substitute

their judgment with opposite facts as compared to the lower courts and administrative agencies' factual

determination. This matter would also allow the Supreme Court to address the important Ohio public policy

requiring remedial laws to be broadly construed in order to promote the General Assembly's enumerated

protections and Ohio citizens' rights.

Proposition of Law No. III: Does a district court of appeal violate the Constitutional right to dueprocess by (1) failing to review and determine all enumerated assignments of error, which are notmoot, andlor (2) failing to resolve en banc internal conflicts brought to the attention of the appellatepanel?

Proposition of Law No. III involves the Appellate Rules of Procedure and Supreme Court

pronouncements admonishing appellate district courts (1) to determine in writing all assignments of error as

required by App. R. 12(A) and (2) to resolve all conflicts, within the appellate district, en banc. Both of these

legal issues promotejudicial economy and insurethe Constitutional due process rightto a meaningful hearing,

through the checks and balances on lower tribunals, by appellate district courts in the State of Ohio.

Although the Ohio Supreme Court has recently reviewed and addressed both of these issues

separately, they have never been reviewed, analyzed, and determined in the same decision. This matter

provides an opportunity to fully address both these appellate review legal issues, in one case, and clarify

Ohio's public policy requiring appellate district courts to follow the Appellate Rules of Procedure.

This Honorable Court has explained that Ohio's Civil Rules serve "as a road map for bench and bar"

and must be followed by judges in order "to promote the efficient administration of justice." Baker v. McKnight,

4 Ohio St.3d 125, 447 N.E.2d 104 (1983). Other states' highest courts have similarly addressed this issue and

10

required lower courts' strict adherence to the civil and appellate rules, in order to avoid chaos, and preserve

trust in the American judicial proceedings.

The Alaskan highest court has explained as follows:

"The mechanism for protecting and maintaining the decisional integrity of our judicial systemis found in the statutes and rules which govern the procedures to be followed by the parties,attorneys and judges. The purposeful or reckless disregard of those procedural safeguardswhich results in the deprivation of substantive rights constitutes an impermissible corruptionof court process."

Mallonee v. Growe, 502 P.2d 432, 439 (1972). Recently, Maryland's highest court held that the civil and

appellate rules are "precise rubrics'established to promote the orderly and efficient administration of justice

and [that they] are to be read and followed"' by both the bench and bar. King v. State, 400 Md. 419, 929 A.2d

169 (2007). See also, Kansas Supreme Court: "Cases must be conducted in court according to the rules of

civil procedure established ... or chaos would reign in the administration of justice." Citizens'Building & Loan

Ass'n of Emporia v. Spencer, 141 Kan, 849, 44 P.2d 901 (1935).

In this matter, the Ohio Constitution has vested the Supreme Court with the authority to promulgate

and enforce rules of civil procedure for trial and appellate courts. Section 5(B), Article IV of the Ohio

Constitution, The Ohio Supreme Court has explained that courts of appeal must "comply with the rule [App.

R.12(A)] and state reasons for its decision so that the parties would not have to speculate on legal and other

obstacles to be overcome on appeal to this Court [Supreme]." Chriss v. Springfield Twp. (1999), 43 Ohio St.3d

83, 84, 538 N.E.2d 406.15 Each assignment of error must be decided in writing by courts of appeal so the

Supreme Court may determine "whether there was any merit to the claims of prejudicial error presented to the

courts of appeal by the assignments of error as a predicate" to an appeal to the Ohio Supreme Court.

Lumbermens UnderwritingAlliance v. American ExcelsiorCorp. (1973), 33 Ohio St.3d 37, 40, 294 N.E.2d 224.

15 See also, State v. Kelly, 103 Ohio St.3d 1461, 815 N.E.2d 677 (Table), 2004-Ohio-5056 andInsurance Co. of North America v. Automatic Sprinkler Corp. of America (1981), 67 Ohio St.2d 91, 97-98,423 N.E.2d 151, 155-156.

11

In this matter, there were six (6) assignments of error presented for review. The Tenth District only

partially addressed Assignmentof Error No. II and failed to address the remaining five (5) assignments of error.

The one Assignment of Error (No. II) addressed by the panel failed to ff^ address all the legal and factual

arguments presented to the court of appeal for review and determination. The five (5) other assignments of

error are not moot. They relate to procedural due process legal issues presented for review and could be

dispositive of the outcome of the appeal. They should be addressed separately upon their merits in order to

promote justice, equity, judicial economy, and promote Ohio's public policy of having issues resolved upon the

merits, not on mere procedural technicalities. LaNeve v. Atlas Recycling, Inc., 119 Ohio St, 3d 324, 2008-Ohio-

3921.

Ohio law is clear that a procedurally improper judgment is voidable and properly challenged directly

on appeal. In re J.J., 111 Ohio St.3d 205, 2006-Ohio-5484, ¶ 16; GMAC, LLC v. Greene, Tenth Dist. Case

No. 08AP-295, 2008-Ohio-4461, ¶ 26. The review and determination of the procedural irregularities set forth

in the separate assignments of error would vacate the Board and trial court's orders.16 The separate and

enumerated assignments of error are not moot and should be determined.

The Ohio Supreme Court also requires that if "two or more of the court's decisions are in conflict, they

must convene en banc to resolve the conflict."" (Emphasis added). The "en banc proceeding is necessary

in such situations to promote uniformity, finality, and predictability within appellate districts."18 The Supreme

Court has recently admonished the Eighth District for not convening an en banc hearing to resolve an

16 The Board's order may also be void because it failed to follow the statutory procedure requiringa hearing and instead used a summary judgment procedure not authorized by the legislature. Pack v.West Clermont School District Board of Education (1985), 24 Ohio 1 Misc.2d; Schisler v. H&R Investments(June 12, 1991), Fifth Dist. Case No. CA-2815, 1991 WL 115987.

" McFadden v. Cleveland State University, 120 Ohio St.3d, 54, 208-Ohio-4914, 896 N.E.2d 672, ¶19.

'x Greenspan v. Third Federal Savings & Loan Association, 2009-Ohio-3508, ¶ 22.

12

intradistrict conflict." In this matter, the Tenth District decision contains multiple intradistrict conflicts and

requires an en banc hearing, with all eight ( 8) Judges of the Tenth District, to resolve the legal issues currently

in dispute.

Ohio's public policy furthermore warrants an en banc hearing to resolve this intradistrict conflict. Many

administrative appeals, like the matter herein from the Ohio Motor Vehicle Dealer Board ("Board"), are limited

and required to be filed only with the Franklin Court of Common Pleas and the Tenth District20 There will never

be a conflict between the various court of appeals districts regarding Board and other administrative agency

appeal issues. An en banc proceeding is required to resolve the intradistrict conflict for pending and future

administrative litigants in the State of Ohio.

Alternatively, and at a minimum, this Honorable Court should accept the discretionary appeal for the

limited purpose of remanding this matter back to the Tenth District so it can address in writing the five (5)

assignments of error never reviewed and determined. Franklin Park set forth various procedural and due

process assignments of error demonstrating that the lower tribunals' decisions were void and reversible. The

Tenth District ignored these separate assignments of error and failed to address the enumerated legal issues

presented for review. The Tenth District unfortunately put the cart before the horse and only determined a

subsequent legal argument regarding statutory interpretation of the Ohio Dealer Act, Franklin Park properly

presented separate assignments of errorfor review, involving the improper procedure of a summary disposition

at the administrative level, which would make the Board order void. Franklin Park properly set forth separate

assignments of error, involving the common pleas court's failure to defer to the administrative agency's fact

finding, which would also reverse the Board's order. Franklin Park's separate assignments of error also raised

Greenspan v. Third Federal Savings & Loan Association, 2009-Ohio-3508, ¶ 24.

2° Flynn v. General Motors Corp., 2003-Ohio-6729, ¶ 8.

13

the issue of statutory construction, requiring remedial acts to be broadly construed in order not to circumvent

the legislation's intent, which were never addressed by the Tenth District Court of Appeals' decision,

CONCLUSION

For all the reasons set forth above, a discretionary appeal should be accepted. This case involves

legal questions of first impression for the Ohio Supreme Court. Additionally, the three propositions of law

involve substantial Constitutional questions of procedural due process which must be afforded administrative

litigants and all parties involved in the appellate process at the common pleas and district court of appeals

levels. This matter is of public and great general interest because it involves the Ohio Motor Vehicle Dealer

Act, which is remedial legislation enacted to protect the citizens of the State of Ohio by leveling the playing field

between automobile manufacturers and dealerships. All fifty (50) states and the Federal government have

enacted similar legislation because itgreatly affects every state and the Nation's economy. The U.S. Supreme

Court and sister-state's highest courts have accepted discretionary jurisdiction in orderto promote the remedial

franchise legislation's intended purpose and to establish their state's public policy to regulate the automobile

industry for the benefit of their constituents. Franklin Park respectfully requests this discretionary appeal be

allowed so that all three of the propositions of law may be fully briefed, analyzed, and a decision issued to

establish Ohio's public policy on these important Constitutional and public issues.

Respectfully submitted,

By:Ch ' her M. DeVito (0047118)(Counsel of Record)Alexander J, Kipp (0081655)


14

PROOF OF SERVICE

A true copy of the foregoing Appellants Robert Fleisherand Franklin Park Lincoln-Mercury, Inc.'sMemorandum in Support of Jurisdiction has been served via U.S. mail, postage prepaid, this 16" day ofSeptember, 2009, to the following:

Frank A. HamidiCourtney S. LawDickinson Wright, PLLC500 Woodward Avenue, Suite 4000Detroit, MI 48226

-and-

Scott A. CampbellSamir B. DahmanThompson Hine LLP41 South High Street, Suite 1700Columbus, OH 43215

Attorneys forAppellee Ford Motor Company

(also via email)

(via email gnl )

Jay F. McKirahan ( also via email)Wahnn & Associates6300 Frantz RoadDublin, OH 43017

Attorney for Appellee Brondes Ford Maumee, Inc.

John E. Patterson, Esq.Assistant Attorney General30 East Broad Street, 26'h FloorColumbus, OH 43215-3418

Counsel for Appellee Ohio Motor Vehicle Dealers Board

Christopher M. DeVito (0047118)Alexander J. Kipp (0081655)Morganstern, MacAdams & DeVito Co., L,P.A.


C:\LAW\Pleading\FranklinParkL-M.Ford\Supreme CourtlMemo in Supp of Jurls.wpd

15

n^^ L.I r LU fiuu v( CuuJ

IN THE COURT OF APPEALS OF OHIO

TENTH APPELLATE DISTRICT MIT AUG `t€ PPp 12; 04

C^EMi 0r COURTS

Robert Fleisher et al.,

Appella nts-Appe lla nts, No. 09AP-139(C.P.C. No. 08 CV 012330)

V.

Ford Motor Company et al.,

Appellees-Appellees.

D E C I S I 0 N

Rendered on August 4, 2009

TYACK, J

{Tl}

(REGULAR CALENDAR)

Morganstem, MacAdams & DeVito Co., LPA, Christopher M.DeVito and AtexanderJ. Kipp, for appellants.

Whann & Associates, LLC, and Jay F. McKirahan, forappellee Brondes Ford Maumee, Ltd.

Thompson Nine LLP, Scott A. Campbell and Samir B.Dahman; Dickinson Wright, PLLC, Frank A. Hamidi andCourtney S. Law, for appellee Ford Motor Co.

APPEAL from the Franklin County Court of Common Pleas.

This is an administrative appeal, from the Ohio Motor Vehicle Dealer Board

("Board"). Robert Fleisher is the owner of Franklin Park Lincoln-Mercury, a Toledo-area

new car dealership in operation since 1977. Fleisher appeals from the Board's decision

all(kNving another same-line dealer to relocate its business within eight miles of Fleisher.

The Board's decision was affirmed by the trial court.

No. 09AP-139 2

112} Fleisher assigns six errors for our consideration:

{q[3}

[I.] The Court Erred as a Matter of Law and DeprivedAppellants of Their Constitutional Right to a Full Hearing onthe Merits.

[II.] As a Matter of Law, Ford's Claimed Exemption(s) Do NotApply.

[III.] The Court Erred in Finding That the Proposed TransfereeIntended to Engage in Business at the Existing DealershipLocation.

[IV.] As a Matter of Law, the Ohio Dealer Act DefinitionSection Supports the Determination That a ProposedTransferee is Not an Existing Dealer.

[V.] The Court Erred as Matter of Law by Failing to Grant anAutomatic Stay Pursuant to R.C. 4517.50(B).

[Vl.] A Motion for Summary Judgment is Not Authorized bythe Ohio Dealer Act and Not Procedurally Proper in OhioAdministrative Proceedings.

In February 2008, Rouen Automotive Group, Inc., which operated another

Lincoln-Mercury dealership approximately 8.5 miles south of Fleisher's dealership,

entered into a contract to sell its business to a third area dealer, Brondes Ford Maumee,

Ltd. Brondes' dealership was approximately one-half mile north of Rouen (eight miles

from Fleisher's dealership). The contract was conditioned on the manufacturer's approval

of a relocation of the Rouen dealership to the existing Brondes location. Essentially, the

combined effect of this acquisition placed a new car dealership selling both Ford and

Lincoln-Mercury brands within eight miles of Fleisher's Lincoln-Mercury dealership.

114} On February 7, 2008, Ford gave written notice to Fleisher: "We hereby are

notifying you that Mike Rouen, Rouen Lincoln-Mercury, Maumee, Ohio has entered into a

buy-sell agreement to sell his Lincoln-Mercury dealership to Phil Brondes, Maumee,

a

No. 09AP-139 3

Ohio." Ford neglected to tell Fleisher that they were planning to co-locate both

dealerships at the current Brondes location.

{y[5} Brondes took over the Rouen dealership, and conducted business at that

location for about one business day. Then, on March 1, 2008, Brondes relocated its

newly acquired Lincoln-Mercury dealership to its existing Ford dealership location.

{16} On March 13, 2008, Fleisher instituted a notice of protest with the Ohio

Motor Vehicle Dealer Board, alleging that Ford violated the Ohio Motor Vehicle Dealers

Act by failing to provide Fleisher with proper notice of the relocation, and failing to

establish good cause to support the relocation. On April 28, 2008, Fleisher filed an

emergency motion with the Board to enforce the automatic injunction under R.C.

4517.50(B). Ford filed a response to Fleisher's motion for injunction, and filed a motion to

dismiss the proceeding.

117} Without holding an evidentiary hearing, on June 25, 2008, a hearing

examiner for the Board issued a report recommending that Fleisher's protest be

dismissed. The hearing examiner based his decision on a finding that the relocation did

not establish an additional motor vehicle dealer within Fleisher's relevant market area.

The hearing examiner also found that because the relocation was less than one mile, the

notice requirements in R.C. 4517.50 did not apply. As a result of these findings, Fleisher

had no right to protest.

1181 Fleisher filed objections to the hearing examiner's report, but the Board

nonetheless voted to confirm the report on August 13, 2008. On August 27, 2008,

Fleisher filed a timely notice of appeal with the Franklin County Court of Common Pleas.

3

No. 09AP-139 4

On January 5, 2009, the trial court issued its decision upholding the Board's disposition.

Fleisher, then, brought this appeal.

(y[91 Appeals from administrative agencies are governed by R.C. 119.12. After

hearing the parties, and reviewing the evidence, the court may affirm the agency's order

provided that it is supported by reliable, probative, and substantial evidence, and is in

accordance with law. See, e.g., Pons v. Ohio State Med. Bd. (1993), 66 Ohio St.3d 619,

621. If the court finds otherwise, the court may reverse, vacate, or modify the agency's

order or make such other ruling as is supported by reliable, probative, and substantial

evidence and is in accordance with law.

{q(10} At this level of review, the common pleas court must give due deference to

the administrative resolution of any evidentiary conflicts. Univ. of Cincinnati v. Conrad

(1980), 63 Ohio St.2d 108, 111. This does not mean, however, that the agency's

evidentiary findings are conclusive. Id. For example, if a witness's testimony is

inconsistent, or if the witness was impeached using a prior inconsistent statement, the

common pleas court may properly decide that this testimony should be given no weight.

See id. The trial court's review of legal questions is de novo. See Ohio Historical Soc. v.

State Emp. Relations Bd. (1993), 66 Ohio St.3d 466, 471.

{9[11} At the court of appeals, our review is more limited than that of the trial court.

We review the record to determine, only, whether the trial court has abused its discretion

as to evidentiary issues. See id. An abuse of discretion is more than an error of

judgment; rather, it implies that the trial court's attitude was unreasonable, arbitrary, or

unconscionable. Blakemore v. Blakemore (1983), 5 Ohio St.3d 217. We cannot

substitute our judgment for that of the trial court, or that of the agency. Absent an abuse

4

No. 09AP-139 5

of discretion, we must affirm the judgment of the trial court. Pons, supra (citing Lorain

City Sd. of Edn. v. State Emp. Relations 8d. (1988), 40 Ohio St.3d 257, 260-61; Rossford

Exempted Village Sch. Dist. Bd. of Edn. v. State Bd. of Edn. (1992), 63 Ohio St.3d 705,

707).

{y[12} Because it is dispositive of the entire case, we will first address the second

assigned error, which turns on the following statutory language in the Ohio Motor Vehicle

Dealers Act:

(A) Except as provided in division (C) of this section, when afranchisor seeks to enter into a franchise to establish anadditional new motor vehicle dealer in, or relocate an existingnew motor vehicle dealer at a location in, a relevant marketarea where the same line-make of motor vehicle is thenrepresented, the franchisor shall first give notice * * * to themotor vehicle dealers board and to each franchisee of suchline-make in the relevant market area of the franchisor'sintention to establish an additional new motor vehicle dealerin, or relocate an existing new motor vehicle dealer at alocation in, that relevant market area. Each notice shall setfor the specific grounds for the proposed establishment of anadditional motor vehicle dealer or relocation of an existingmotor vehicle dealer. Within fifteen days after receiving thenotice * * * the franchisee of the same line-make may file withthe board a protest against the establishment or relocation ofthe proposed new motor vehicle dealer. When such a protesthas been filed, the board shall inform the franchisor that atimely protest has been filed and that hearing is requiredpursuant to [R.C. 4517.57]. * * *

(B) No franchisor shall establish an additional new motorvehicle dealer or relocate an existing new motor vehicledealer before giving notice as required in division (A) of thissection or before the holding of a hearing on any protest filedunder this section, and no franchisor shall establish orrelocate such a dealership after the hearing if the boarddetermines that there is good cause for not permitting the newmotor vehicle dealer to be established or relocated.

No. 09AP-139 6

(C) Division (A) of this section does not apply to any of thefollowing:

(1) The relocation of an existing new motor vehicle dealerwithin one mile from the existing location;

(2) The sale or transfer of an existing new motor vehicledealer where the transferee proposes to engage in businessat the same location[.]

R.C. 4517.50.

{113} Thus, R.C. 4517.50(A) prohibits Ford from opening a new dealership, or

relocating an existing dealership without first giving notice to any existing same-line

dealerships within the relevant market area. But R.C. 4517.50(C) creates two exceptions,

both of which were found to apply under the facts in this case.

, {3[14} Specifically with regard to R.C. 4517.50(C)(1), it is undisputed that the new

Brondes dealership was less than one mile away from the existing Brondes dealership.

Thus, R.C. 4517.50(C)(1) exempted Ford from the notice requirement in section (A).

1115} The Board and the common pleas court also had sufficient evidence to find

"that the deal between Brondes and Rouen was for the sale or transfer of an existing new

motor vehicle dealer," and that Brondes did propose to engage in business at the existing

Rouen location albeit only briefly. (Trial court's decision, at 8.) Thus, R.C. 4517.50(C)(2)

also exempted Ford from the notice requirement in section (A).

{q[16} Fleisher and Franklin Park complain about the fact that Ford neglected to

include notice of the proposed relocation in its letter giving notice of the proposed

transfer. (Appellants' brief, at 12-13.)

°* * Ford misleads Franklin Park into believing that Brondesintended to engage in business at the existing Rouenlocation, when Ford knew that Brondes intended to move the

6

No. 09AP-139 7

Lincoln-Mercury dealership to the Brondes Ford location at1511 Reynold[s] Road and create a [dualed] dealership withthe existing Brondes Ford franchise. * * * Ford's intentionalmisrepresentation appears specifically intended to concealand circumvent the statutory requirement [provided by R.C.4517.50(A)].

Id. at 14.

{117} Appellants then cite case law purporting to condemn acts such as these.

See Mercure v. Gen. Motors Corp. (Mar. 17, 2003), N.D.Ohio No. 4:02CV2124, slip

opinion at 12 ("GM may not circumvent the intent and purpose of a remedial statute

obviously intended to place franchisees and dealers on a more equal playing field.") But

the facts in Mercure are clearly different from the facts here, because in this case, the

franchisor's conduct falls squarely within a statutory exception.

(9[18} Indeed, Ford's letter did not fully communicate what was occurring.

However, the statute does not guard against such conduct. The statute is clear and

unambiguous. The legislature intended to exempt certain kinds of transfers and

relocations from the notice requirement in R.C. 4517.50(A), including relocations of less

than one mile, and transfers where the transferee proposes to engage business at the

existing location. The statute does not place a requirement on the length of time that a

transferee conducts business at the existing location.

(y[19} To adopt appellants' interpretation of R.C. 4517.50, we would have to

superimpose a tacit, good-faith requirement therein. We would also have to add a time

requirement for engaging in business, after the legislature chose not to do so. Although

this might seem like a reasonable action for a court to take, given the specificity with

which the legislature created the two exemptions in section (C), this court would be

No. 09AP-139 8

legislating from the bench, were we to superimpose a time requirement for operating a

business into the statute. We chose not to do so generally, and specifically in this case.

{120} Having found that either exemption in R.C. 4517.50(C) applies to the

transaction at issue in this case, we overrule the second assignment of error. The first,

third, fourth, fifth, and sixth assignments of error are thereby rendered moot.

(g[21} Accordingly, we affirm the judgment of the Franklin County Court of

Common Pleas.

Judgment affirmed.

FRENCH, P.J., and BRYANT, J., concur.

S

2.0622 - Z44

IN THE COURT OF APPEALS OF OHIO

TENTH APPELLATE DISTRICT

Robert Fleisher et al.,

Appellants-Appellants,

fiSHflni.Ity 4yCEA^

?^4kUG-4 PM !2- 0.5

CLEftY i;r CpUaS

No. 09AP-139(C.P.C. No. 08 CV 012330)

V .(REGULAR CALENDAR)

Ford Motor Company et al.,

Appellees-Appellees.

JUDGMENT ENTRY

For the reasons stated in the decision of this court rendered herein on

August 4, 2009, appellants' second assignment of error is overruled rendering the first,

third, fourth, fifth and sixth assignments of error moot. Therefore, it is the judgment and

order of this court that the judgment of the Franklin County Court of Common Pleas is

affirmed. Costs shall be assessed against appeilants.

TYACK, J., FRENCH, P.J., & BRYANT, J.

gygeJud G. Gary ac4

14

9

RECEIVED 1AN 08 2009

IN THE COURT OF COMMON PLEAS, FI^^1^TiI:INy^Q^^Y, OHIO

ROBERT FLEISHER, ET AL., 2,10 )An `& AF91 ; r,^^ase

Appellant,CLER^ 0F COU^C^FQ8-12330

Judge: Hoganv.

FORD MOTOR COMPANY,

Appellee,

AND

BRONDES LINCOLN-MERCURY

Appellee-Intervenar

DECISION ON MERITS OF ADMINISTRATIVE APPEAL

Rendered this ot4day of 2009

HOGAN,JUDGE

This matter is before this Court due to an administrative appeal filed by Robert Fleisher

and Franklin Park Lincoln-Mercury, Inc. (hereinafter referred to as the Appellants.) The

Appellants appealed the State of Ohio, Motor Vehicle Dealers Board's (hereinafter referred to as

the Board) Order of August 12, 2008. The Appellants named Ford Motor Company (hereinafter

referred to as Ford) as Appellee and the part ies have consented to the intervention of Brondes

Lincoln-Mercury (hereinafter referred to as Brondes) as an interested party. For the reasons that

follow, this Court AFFIRMS the decision of the Board and DISMISSES the appeal of the

Appellants:

1. STATEMENT OF THE CASF

Appellants are attempting to secure the right to protest the purchase and subsequent

relocation of a Lincohi-Mercury dealership by Brondes. Appellants claimed that they had a right

10

to notice and a right to protest. Ford and Brondes argued that the matter was subject to

exceptions within the law and the Appellants were not entitled to notice or protest, The Board

determined that Appellants did not have a xight of protest. Appellants now claim that the

Board's Order was in error.

II. STATEMENT OF THE FACTS

Al Procedural History:

Appellants filed their administrative appeal on August 27, 2008. The Appellants named

Ford. At the administrative appeal Brondes intervened. Brondes has also made an appearance in

this litigation to protect its interest. The Appellants appealed from the Board's Order issued on

August 12, 2008, and mailed to the parties on August 13, 2008. The Board's Order upheld the

Hearing Officer's determination that the Appellants did not have a right of protest.

On the date of the filing of the Appellants' Notice of Appeal the Appellants filed a

Motion for Temporary Restraining Order. That matter was briefed and the non-moving parties

had the opportunity to file memorandum contra. The Court addressed the request for a

temporary restraining order at a conference of September 30, 2008, where representatives of all

sides were present. The Court denied the request of the Appellants. The matter was then

referred to a Magistrate to conduct a preliminary injunction hearing.

The preliminary injunction hearing was commenced and concluded on November 13,

2008. All relevant parties appeared and presented evidence in the presence of a court reporter.

Witnesses were called and documents were entered into the record. After the hearing the

Magistrate rendered his decision dated November 17, 2008. The Magistrate found that the

Appellants failed to meet their burden of proof and therefore a preliminary injunction was not

Case No. OSCVF08-12330

granted. No objections werefiled by the parties in regard to the Magistrate's decision. The

Magistrate's decision was adopted by this Court by an Entry filed on December 1, 2008.

Not briefed by the parties was the issue concerning the use of a preliminary, injunctionin

an administrative appeal. Upon reflection, the Appellants' request for injunetive relief may have

been a nullity. However, given the Magistrate's decision, adopted by this Court, that an

injunction was not warranted, this. Court need not address this issue.

The parties have now filed their merit Briefs concerning the administrative appeal. This

matter is ready for review.

BjUnderlin¢ Factual History:

This Court is mindful of the fact that this is an Administrative Appeal. Hence, as it

relates to the Appellants' appeal, the facts known during the administrative process are the facts

relevant to this Court's decision.

Appellants are parties who operate a Lincoln-Mercury dealership at 5272 Monroe Street,

Toledo, Ohio. There was another Lincoln-Mercury dealership operating at 1369 Conant Street in

Maumee, Ohio. That dealership was owned by Rouen. Brondes had/has a number of

dealerships. One is a Ford dealership that is located at 1511 Reynolds Road, Maumee, Ohio.

It is undisputed that the Rouen dealership was within ten miles of the Appellants'

Lincoln-Mercury dealership. It is also undisputed that the Rouen dealership was less then one

mile away from Brondes' Ford dealership.

Rouen and Brondes entered into contract negotiations in order for Brondes to purchase

the Rouen Lincoln-Mercury dealership. Pursuant to the relationship of the parties, Ford was

made aware of the proposed purchase and Brondes and Rouen had to have Ford's consent to

some of the contract's terms.

Case No. 08CVF08-12330 I

The contract eventually approved by Ford and signed by Brondes and Rouen indicated

that Brondes would operate the Lincoln-Mercury dealership at the Rouen location for whatever

time was required to secure the ability of Brondes to relocate the dealersht^ to Brondes' Ford

dealership. Clearly, Appellants were not a party to the contract between Rouen and Brondes..

The contract between Rouen and Brondes contained the following language:

4.12 Rouen shall permit Brondes to occupy the dealership premises rent free for thepurpose of operating a Lincoln Mercury dealership after the approval by the OhioBureau of Motor Vehicles of Brondes' Application for Certified Copy (SecondaryLocation) at 1361 Conant Street, Maurnea, Ohio for the sale of Lincoln Mercurypassenger vehicles by Brondes and the issuance of a pemtit therefore and until theapproval by the Ohio Bureau of Motor Vehicles of Brondes' Application forAddress Change for a change of address for the Lincoln Mercury perndt referencedin subsection 7.1.2 above from 1361 Conant Street, Mauniee, Ohio to 1511 S.Reynolds Road, Maumee, Ohio and Rouen shall provide, at its expense, all utilitiesto the dealership premises during such period and, if Brondes is required by theOhio Bureau of Motor Vehicles to have access to a repair and service facility for thedealership prenvses during such period, Rouen shall make its nearby repair andservice facility available to Brondes at no cost to Brondes.

Brondes did operate at the location of thc Rouen dealership for a number of days and did

business at that location before it relocated the Lincoln-Mercury dealership to Brondes' Ford

dealership located at 1511 Reynolds Road, Maumee, Ohio.

Appellants requested the opporfunity to protest at the administrative level. The Board

initially denied that request due to its interpretation of R.C. §4517.50. The Appellants persisted

and the Board decided to give the Appellants the opportunity to make their case that, under the

facts of this transaction, R.C. §4517.50(A) applied and they had the right to protest.

A Hearing Examiner was assigned to the matter and instructed to review the arguments

and evidence of the parties as it related to the issue of whether or not the Appellants had a right

to protest. A hearing was conducted and evidence and arguments were received. The Hearing

Examiner issued his Report and Recommendation on June 19, 2008. He found that there did not

1 3Case No. 08CVF08-12330

exist a right of protest because the actions of Ford, Brondes and Rouen fell within the exceptions

as noted in R.C. §4517.50(C).

Appellants appealed the matter to the Board. OnAugust 12, 2008, the Board issued its

Order adopting the Report and Recommendations. The Appellants timely appealed that Order

to this Court.

M. STANDARD OF REVIEW

The following case law is compelling concerning the relevant issues in an administrative,

appeal:

The right of appeal from an administrative order is not an inherent right; rather, itis a right conferred by statute. Mudgett v. Ohio State Bd. of Emergency Med.Servs., Union App. No. 14-05-10, 2005-Ohio-6171, citing Arndt v. Scott (1955),72 Ohio L. Abs. 189, 134 N.E.2d 82. Where a statute confers a right of appeal, theappealing party must strictly adhere to the statutory conditions. Holmes v. UnionGospel Press (1980), 64 Ohio St.2d 187, 188, 414 N.E.2d 415.

Review by this Court of an administrative agency is governed by R.C. 119.12 and the multitude

of cases addressing that section.

The most often cited case is that of Univ. of Cincinnati v. Conrad (1980), 63 Ohio St. 2d

108, 407 N.E.2d 1265. The Conrad decision states that in an administrative appeal filed

pursuant to R.C. 119.12, the trial court must review the agency's order to determine whether it is

supported by reliable, probative and substantial evidence and is in accordance with law. The

Court stated at pages 111 and 112 that:

In undertaking this hybrid form of review, the Court of Common Pleas must givedue deference to the administrative resolution of evidentiary conflicts. Forexample, when the evidence before the court consists of conflicting testimony ofapproximately equal weight, the court should defer to the determination of theadministrative body, which, as the fact-fmder, had the opportunity to observe thedemeanor of the witnesses and weigh their credibility. However, the findings ofthe agency are by no means conclusive.

Where the court, in its appraisal of the evidence, detennines that there exist

14Case No. 08CVF08-12330

legally significant reasons for discrediting certain evidence relied upon by theadministrative body, and necessary to its detertnination, the court may reverse,vacate or modify the administrative order. Thus, where a witness' testimony isinternally inconsistent, or is impeached by evidence of a prior inconsistentstatement, the court may properly decide that such testimony should be given_noweight. Likewise, where it appears that the administrative detenninadon restsupon inferences improperly drawn from the evidence adduced, the court mayreverse the administrative order.

The Conrad case has been cited with approval numcrous times. Ohio Historical Soc. v.

State Emp. Relations Bd. (1993), 66 Ohio St. 3d 466, 471, 613 N.E.2d 591 noted

Conrad and stated that although a review of applicable law is de novo, the reviewing court

should defer to the agency's factual findings. See VFW Post 8586 v. Ohio Liquor Control

Comm. (1998), 83 Ohio St.3d 79, 82, 697 N.E.2d 655. However the de novo review of the law is

controlled by the following:

We recognize that generally a reviewing court will not intrude into areas ofadministrative discretion for the reason that a rebuttable presumption of validityattaches to actions of administrative agencies. Ohio Academy of Nursing Homes,Inc. v. Barry, supra, 56 Ohio St.3d at 129, 564 N.E.2d 686; and Ohio Academy ofNursing Homes, Inc. v. Creasy, supra, 1983 WL 3652, quoting Country ClubHome, Inc. v. Harder (1980), 228 Kan. 756, 763 and 771, 620 P.2d 1140. Stateagencies and their personnel, acting pursuant to a grant or delegation of authorityfrom the legislature, enjoy reasonable latitude with respect to decisions madewithin their administrative domain. Ohio State Pharmaceutical Assn. v. Creasy(S.D.Ohio 1984), 587 F.Supp. 698, 704. An agency's interpretation of a statutethaYgovems its actions should be given deference so long as the interpretation isnot irrational, unreasonable, or inconsistent with the statutory purpose. Ellis Ctr.for Long Term Care v. DeBuono (1998), 175 Misc.2d 443, 448, 669 N.Y.S.2d782. Similar deference should be given an agency's interpretation of the rules andregulations it is required to administer, unless that interpretation is unreasonableor conflicts with a statute covering the same subject. State ex rel. Celebrezze v.Natl. Lime & Stone Co. (1994), 68 Ohio St.3d 377, 382, 627 N.E.2d 538.

The agency's interpretation and application of its rules cannot be arbitrary,capricious or otherwise contrary to law, nor can the interpretation and applicationconstitute an abuse of discretion. See Ohio Academy of Nursing Homes, Inc. v.Barry, supra, 56 Ohio St.3d at 129, 564 N.E.2d 686. The agency must "articulate asatisfactory explanation for its action including a 'rational connection between thefacts found and the choice made.' " Motor Vehicle Manufacturers Assn. of theUnited States, Inc. v. State Farm Mut. Auto. Ins. Co. (1983), 463 U.S. 29, 43, 103

I'S

Case No. 08 C V F08-123 30

S.Ct. 2856, 77 L.Ed.2d 443, quoting Burlington Truck Lines, Inc. v. United States -(1962), 371 U.S. 156, 168, 83 S.Ct. 239, 9 L.Ed.2d 207.

A judicial review of that explanation must inquire whether the decision is baseduponrelevant_factors and whether there has been a clear error in judgrnent on theagency's part. Id. Among the indicia that agency action is arbitrary and capriciousare: (1) that the agency has relied on factors the legislature did not intend it toconsider; (2) that the agency failed to consider an important aspect of theproblem; (3) that the agency's explanation of its decision is contrary to theevidence before it; or (4) that the agency's action is implausible to an extent that itcaninot be attributed to agency expertise. Id. Morning View Care Center-Fulton v.Ohio Dept. ofHuman Serv., 148 Ohio App.3d 518 at 533 - 534, 2002-Ohio-2878

This appeal tarns on the application of the following statutory language:

4517.50 Notice of establishment of new dealer or relocation.(A) Except as provided in division (C) of this section, when a franchisor seeks

to enter into a franchise to establish an additional new motor vehicle dealer in, orrelocate an existing new motor vehicle dealer at a location in, a relevant marketarea where the same line-make of motor vehicle is then represented, thefranchisor shall first give notice in writing, by certified mail, to the motor vehicledealers board and to each franchisee of such line-make in the relevant market areaof the franchisor's intention to establish an additional new motor vehicle dealer in,or relocate an existing new motor vehicle dealer at a location in, that relevantmarket area. Each notice shall set forth the specific grounds for the proposedestablishment of an additional motor vehicle dealer or relocation of an existingmotor vehicle dealer. Within fifteen days after receiving the notice, or withinfifteen days after the conclusion of any appeal procedure provided by thefranchisor, whichever is later, the franchisee of the same line-make may file withthe board a protest against the establishment or relocation of the proposed newmotor vehicle dealer. When such a protest has been filed, the board shall informthe franchisor that a timely protest has been filed and that a hearing is requiredpursuant to section 4517.57 of the Revised Code. When more than one protest isfiled against the establishment or relocation of the same dealer, the board mayconsolidate the hearings to expedite disposition of the issue.

(B) No franchisor shall establish an additional new motor vehicle dealer orrelocate an existing new motor vehicle dealer before giving notice as required indivision (A) of this section or before the holding of a hearing on any protest filedunder this section, and no franchisor shall establish or relocate such a dealershipafter the hearing if the board determines that there is good cause for notpermitting the new motor vehicle dealer to be established or relocated.

(C) Division (A) of this section does not apply to any of the following:(1) The relocation of an existing new motor vehicle dealer within one mile

froni the existing location;

Case No. 08CVF08-12330

(2) The sale or transfer of an existing new motor vehicle dealer where thetransferee proposes to engage in business at the same location; (Emphasisadded)

From within this legal framework this Court will draw its conclusions.

IV. ARGUMENT OF COUNSEL

Appellants have claimed that they have been denied their right to protest the events that

took place during the purchase of Rouen by Brondes. Appellants have consistently argued that

some form of notice should have been given to the Appellants by Ford pursuant to R.C.

§4517.50(A) and that any limited notice given by Ford was defective. Ford and Brondes have

consistently maintained that the transaction that lead to Brondes' purchase of Rouen was not a

transaction that required notice because it fell squarely within an exception to the rule requiring

notice as found within R.C. §4517.50(C). Ford and Brondes' position was the position adopted

by the Board.

Appellants asserted a great number of claimed errors within their Brief However the

initial issue that this Court will address is whether the Hearing Officer and the Board correctly

interpret the statute. The Court is required to give deference to the Board's interpretation of its

controlling statutes, but it need give deference to the Board's Order because this Court holds

that the Board's and the Hearing Officers' interpretation of R.C. §4517.50 is the correct one.

Please note the following language from R.C. 4517.50(C):

(C) Division (A) of this section does not apply to any of the following:(1) The relocation of an existing new motor vehicle dealer within one mile

from the existing location;(2) The sale or transfer of an existing new motor vehicle dealer where the

transferee proposes to engage in business at the same location; (EmphasisAdded)

It is an undisputed fact that the deal between Brondes and Rouen was for the sale or transfer of

an existing new motor vehicle dealer. Furthermore, it is undisputed that from the terms of the


contract between Rouen and Brondes, Brondes proposed to engage in business at the. Rouen

location and did in fact engage in business at that location. Hence, R.C. §4517.50(C)(2)

exempted Ford from the notice requirement found within R.C. §4517.50(A).

Also, it is undisputed that the move of the new Brondes Lincoln-Mercury dealership to

the location of the existing Brondes Ford dealership was a move of less than one mile. That

move is therefore exempted by the elear language of R.C. §4517.50(C)(1). By statute no notice

was required to be given.

The clear language of R.C. §4517.50(A) & (C) does not place any limit on the number of

exceptions that might apply to a given transaction. The mere fact that the Rouen and Brondes

deal triggered two of the exceptions does not defeat Brondes' and Ford's argument that notice is

not required. There is no linuting language in the statute that would support such an argument.

Some of the arguments asserted by the Appellants read additional language into the

statute. Other arguments relied on cases that did not directly apply to the statute in questions:

i.e., R.C. §4517.50. As already indicated in this Court's Entry of December 1, 2008, an

independent review of the Magistrate's holdings was conducted and the Magistrate's conclusions

were adopted by this Court. Hence, this Court has already agreed to and adopted the following

legal reasoning:

To that end the Appellants' advanced a number of cases. Those cases have beenanalyze by this Magistrate and they do not support the Appellants' main argumentthat the Board failed to properly interpret R.C.§4517.50:

A great deal of the underlying appeal turns on the application of thecontrolling statutes. Most, if not all of this case rests on R.C. §4517.50.Appellants relied heavily on the Mercure, v, General Motors Corp., (March 17,2003, Case No: 4:02CV2124 U.S. District Court Northern District of Ohio) tosupport their argument that the Board's Decision was incorrect and that they didhave a right to protest.

The Mercure case dealt with a motion to dismiss that had been filed by thedefendant General Motors. Mercure had claimed that General Motors hadviolated the "good cause" and notice provision of R.C. §4517.56 and the "good

I


10

faith" provision of R.C. §4517.59. These claims stemmed from General Motorsrejection of Mercure's proposed sale and relocation of its truck dealership withColumbiana Buick. Columbian was the proposed purchaser of Mercure'sMidway Motor Sales dealership. Mercure also set forth additional claims fortortious interference with the contract,.breach of fiduciary duty and a request forspecific performance.

General Motors' motion asserted that the claims of Mercure failed to statea claim and that Mercure lacked standing. Mercure was a shareholder in MidwayMotor Sales. Midway was the other' named plaintiff. Mercure did not contestthose claims as to the tort and contract allegations and the court presumed thatMercure conceded those issues. Likewise, the court noted thatGeneral Motorsdid not request the dismissal of the specific performance claim and that issue wasremoved from the court's decision. That left the court with the issues of thestatutory claims and the breach of fiduciary duty and tortious interference withcontract claims.

The Mercure court noted that there existed a proposed sale of a`GM LightTruck' dealership in which Columbiana Buick would purchase the truckdealership from Midway Motor Sales. The terms of the contract showed thatMidway would continue to operate the truck dealership after the purchase.However, it was also clear that Columbiana would eventually relocate theoperation to Columbiana Ohio.

General Motors was given notice of the proposed buy/sell. Afteradditional documents were secured by General Motors, it submitted notice toColumbiana and Midway that their request was rejected. However, GeneralMotors also indicated that it would allow the sale of the truck dealership but itwould not allow the relocation to take place.

Columbian filed an administrative protest with the Board and GeneralMotors moved to have the protest dismissed. The Board held that there was noright to protest a rejection of a proposed relocation under Ohio law. Midway andMercure then filed the lawsuit in Federal court under the same facts.

The Mercure court applied the Civ.R. 12(B)(6) `appears beyond doubt'standard to General Motors' `Motion to Dismiss'. The standard used by theMercure court is the first issue that this Magistrate takes with the value of saiddecision. Clearly, the standard for a motion to dismiss is far removed from theapplicable standard to be applied by this Court in regard to the request for apreliminary injunction and or the likelihood that the Appellants will prevail ontheir administrative appeal. Hence, reliance on Mercure is weakened by thisobvious difference.

The Mercure court did address the Ohio Dealer Act. The Mercure courtfirst looked at R.C. §4517.56. Said statute is captioned "Transfer of Franchise tobe Disapproved Only for Good Cause". The statute establishes what must occurand the obligations of the parties concerning getting the manufacturer's consent.This Magistrate fails to see the relevance of that section of the Ohio Dealer Act tothe pending request for preliminary injunction and the administrative appealinstituted by the Appellants. That is also true concerning the good faith languageas contained within R.C. §4517.59.

1 14


11

This Magistrate is mindful that this is an administrative appeal. This is nota proceeding where Appellants have opted out of the administrative process andfiled a civil action directly against the Appellee. Mercure clearly is not on pointin that regard.

The facts of the case at bar indicatethat Appellee did not wrongfully denyAppellants proposed buy/sell agreement. Said section of the code would onlyapply in this case if it was Brondes and Rouen that had been harmed by the acts orinactions of Appellee. Also, Appellee. did not fail to terniinate, cancel or fail torenew a contract between Appellee and the Appellants. Therefore the primarysections debated in Mercure are not related to Appellants' appeal.

As it relates to R.C. §4517.50 the Mercure court dealt with GeneralMotors' hypothetical argument as to what could happen if the plaintiffs did have aright under R.C. §4517.56 to pursue their claims against General Motors.However the Mercure court rejected that argument because it was General Motorswho was attempting to split the buy/sell agreement between Midway andColumbiana in order to create the hypothetical argument that it was advancing.The Mercure court held that General Motors was trying to avoid the effectivenessof R.C. §4517.56 by splitting up the proposed buy/sale submitted by Midway andColumbiana.

Mercure is again not on point. The language, so heavily relied upon bythe Appellants is not relevant to the issues before this Courl. The "mayaccomplish in two separate acts what it is prohibited by Ohio Law fromaccomplishing in one act" speaks to General Motors right/duty to accept or rejecta proposed buy/sell. It has nothing to do with the legal interpretation ofRC.§4517.50. Mercure is not controlling, authoritative, compelling or beneficialto the issues of this appeal.

In response to the arguments of Appellants the Appellee and Brondes bothrelied on the following language from Staffilino v. Ohio Motor Vehicle DealersBoard, 1994 WL 183548 Tenth District May 12, 1994:

The first two assignments of error attack the sufficiency of thenotice given by General Motors to Staffilino about General Motor'sintention to approve the buy-sell agreement. While the brief noticeprovided in a letter might very well be insufficient in acircumstance where a truly new dealership was being established,the notice was sufficient where the transaction reflects the sale of adealership which will then operate at a location which is less thantwo hundred yards from the former place of business.

We note the provision of R.C. 4517.50(C) which reads:

"Division (A) of this section does not apply to therelocation of an existing new motor vehicle dealerwithin one mile from the existing location or to thesale or transfer of an existing new motor vehicledealer where the transferee proposes to engage inbusiness at the same location."

JLOCase No. 08CVF08-12330

12

The transaction here does not literally fall under either of thestatutory exceptions, but arauabiy the whole statutory urocesscould: have been avoided if Cervelli had opened for business forone day atthe former Marhefka location and then moved the

___dealershin five hundred feet away. For all practical purposes; theeffect of the sale of the dealership had to be known to Staffilinoupon General Motors advising Staffilino of the transaction. Inreality, the notice advised Staffilino that the situation was the sameas it had been for approximately seventy years-one Chevroletdealership was going to be operating in Martins ferry and adifferent one was to operate in Bellaire. The notice was notinsufficient under the circumstances. The first and secondassignments of error are overruled. (Emphasis Added)

What makes the Staffilino case compelling is that it is an administrative appealand not, as in the Mercure case, a direct suit under the Ohio Dealer Act.

At the Hearing the Appellants claimed that the language of Staff lino wasonly dicta. However, it is clear that the Staffilino court was addressing exactly theissues being raised by Appellee and Brondes. Furthermore, the Staffilino courtwas also directly interpreting R.C. §4517.50 and not some other section of theOhio Dealers Act. This Magistrate finds that the Staff lino opinion and dicta ismuch more compelling. Furthermore, this Magistrate has independentlydetermined that dicta of Staffilino is the correct interpretation of R.C. §4517.50

Pursuant to the pending action this Magistrate has reviewed the `Reportand Recommendation' of the Hearing Officer as rendered on June 25, 2008 andeventually adopted by the Board. The Hearing Officer reviewed R.C.§4517.50.The Hearing Officer noted that R.C.§4517.50(A) spoke to the addition of an`Additional' new motor vehicle dealer.

The Hearing Officer had determined that there were two Lincoln-Mercurydealers prior to the buy/sell and that there was going to only be two Lincoln-Mercury dealers after the buy/sell. The Hearing Officer then referenced thecorrect legal standard for reviewing language contained within a statute. TheHearing Officer held that the R.C.§4517.50(A) only applies when a manufactureintends to increases the number of dealerships within the 10 mile zone. TheHearing Officer concluded that the Appellants were not entitled to notice.

The Hearing Officer then reviewed the move of the dealership from theoriginal Rouen address to the Brondes address. The Hearing Officer determinedthat notice is required for a relocation but that notice is exempted if in fact themove will be less then a mile. The Hearing Officer concluded that the Appelleewas exempted from the notice requirement of R.C. §4517.50(A) because of thelanguage contained within R.C. §4517.50(C) (1) that reads as follows:

(C) Division (A) of this section does not apply to any of thefollowing:

(1) The relocation of an existing new motor vehicle dealerwithin one mile from the existing location;


13

This Magistrate holds that the above rational of the Hearing Officer is logical: andin keeping with the statutory intent of the Ohio Dealers Act. Given that opinion,the Appellants' likelihood of success in this matter is highly suspect.(Magistrate's `Decision' Filed November 17, 2008 at pages 12 -18)

This Court wants to make it clear that it has reviewed the Briefs of the parties filed in support of

this appeal. After its review, this Court still holds that the Magistrate's legal analysis is correct

and is hereby re-adopted.

The Appellants continued to argue that R.C. §4517.50(A) contains a mandatory notice

requirements. However, R.C. §4517.50(A) starts with the following language:

4517.50 Notice of establishment of new dealer or relocation.(A) Excent as provided in division (Cl of this section..:(Emphasis added)

Clearly, if there is one or more exception, notice is never required. Hence, all of the claims made

by the Appellants that there existed a mandatory requirement are defeated by the exceptions.

Also, Appellants' claim that the notice that they did get was deficient is not relevant because, as

alreadystated, no notice was required.

The Appellants argued that the intent of the contract to both sell the Rouen dealership and

then relocate the Brondes Lincoln-Mercury dealership to the Brondes Ford dealership, was

inappropriate. Appellants claimed that Rouen, Brondes and Ford cannot contemplate such a

buy/sell/relocate. However, the only case relied upon by the Appellants to support their

argument was Mercury, supra and that case has already been distinguished.

This Court has reviewed the other cases relied upon by the parties and the argument of

counsel and it cannot find any prohibition in the case law or statute that would keep Rouen,

Brondes and Ford from structuring the deal as they did. Furthermore, there was no meaningful

hann to Appellants. 1'here were two Lincoln-Mercury dealerships before and there were two

after the transaction. The move of the dealership from one location to the other was less than

aLaCase No. 08CVF08-12330

14

one mile. The letter and the spirit of the law were not violated by the deal that was struck

between Rouen and Brondes. Ford did not breach any duty owed to the Appellants by agreeing

to the deal between Rouen and Brondes.

Furthermore, there is no language within R.C.0517.50 stating that the exemptions

contained within R.C. §4517.50(C) do not apply if the relocation ends up with a dual dealership.

To make that determination would be to read language into an otherwise unambiguous statute.

The Appellants established a propensity for reading language into the relevant statute. That was

evident when they also claimed that RC. §4517.50(B) contained an automatic stay. There is no

such language in the statute. The Appellants' arguments on these issues were misguided.

Appellants are correct that the case law states that the Ohio Dealer Act has been held to

be remedial in nature and therefore, when required, it should be liberally construed. But liberal

construction does not equate to the redrafting of the statute to insert new language. That is what

the Appellants are asking this Court to do and this Court will appropriately refrain from such

conduct.

Staying true to their arguments, the Appellants also claimed that the exemptions in R.C.

§4517.50 "are intended to be separate, stand alone justifications". (Appellants' Brief at 19) The

Appellants failed to support that statement with any case law or statute. This Court already

declined to adopt the Appellants' argument in regard to the exemptions. This Court fmds no

problem with a contract between two dealerships that contemplates both the buy/sell of an

existing franchise within a contract that also contemplates the moving of the franchise once

authority has been given by the Board. Ford is free to sanction such a contract without the need

to issue any notice as required by R.C. §4517.50(A) as long as one or more of the exemptions in

R.C. §4517.50(C) apply to the transaction.

JL3Case No. 08CVF08-12330

I Having found that the Board and the Hearing Officer did not misconstrue or misapply

R.C. §4517.50, the next question is, was their interpretation of the statute supported by reliable,

substantive, and.probative evidence? Here_it.is evident that at the administrative proceedings the

Board and the Hearing Officer had the contract between Brondes and Rouen. They had the map

with the locations of the relevant dealerships. The Board and Hearing Officer also had the

language of the statute. Hence, they had reliable, substantive, and probative evidence to support

the holding that the Appellants did not have a right to protest because Appellants did not even

have the right to notice as found within R.C. §4517.50.

One of the factual claims of the Appellants is the argument that the contract between

Rouen and Brondes contained language that protected the contracting parties from issues that

could arise if there was an administrative appeal. Appellants claim that that clause, i.e., §7.14 of

the contract, was an acknowledgment by Ford and Brondes that the Appellants were entitled to

protest: This argument fails for a number of reasons.

First, this Court has already held that the Board's interpretation of the statute is correct

and no notice is required. Hence, "any protest period" as contained within §7.14 of the contract

was never triggered. Second, the contract was not drafted to protect the Appellants and the

Appellants are not in privity with the contract. To claim that this clause was crafted to inure to

the benefit of the Appellants would be to hold that the Appellants were some form of a third

party beneficiary to the contract. Nothing could be further from the truth. Third, the import of

contractual language is a question of law and not of fact. Finally, even if the clause meant what

the Appellants assert that it meant, the contract clause could not create a right of notice when the

statute clearly does not grant one. By contract the parties could not force the Board to act when

the controlling statute did not require the Board to act..


The Appellants claimed that it was error for the Board to determine that Brondes did

propose or intend to engage in business at the Rouen location: However, there is ample evidence

in the record.at-the administrative level to support: a conclusion that-Brondes_did propose or

intend to engage to do business at the Rouen location. Brondes purchased signage, provided

telephone lines, sold a minimum of 2 cars and even received a license from the Board to do

business at the Rouen location, Appellants also overlook the clear meaning of the language of

the contract between Rouen and Brondes. If there had been any snag in the relocation of the

dealership to the Brondes Ford dealership, pursuant to the terms of the contract, Brondes was to

stay in the location of Rouen for the amount of time necessary to effectuate a relocation of the

dealership. Clearly, Brondes was willing to stay and work there for as long as necessary.

Appellants' argument on this point lacks merit.

Appellants also made an unsubstantiated claim that the entire deal was worked out

between Rouen, Brondes and Ford in order to mislead regulatory officials. This bold statement

is not supported by any evidence. In fact the evidence at the hearing would seein to reflect that

the contracting parties tried to follow the law and kept the Board well informed of their

intentions.

Ford, in its Brief, correctly pointed out that the Appellants really did not do anything to

directly contest the amount, type, or weight of the evidence that was provided to the Hearing

Officer and the Board. A review of Appellants' argument leads this Court to the same

conclusion.

This Court holds that the Order of the Board is supported by reliable, probative and

substantial evidence and is in accordance with law. Hence, Appellants' appeal lacks merit.

IA5Case No. O8C V F08-123 3 0

17 __

V. DECISION

The Appellants' Appeal lacks merit. The Order of the Board is supported by reliable,

probative and substantial evidence and. is in accordance with law. Appellants' appeal is

DISMISSED.

Counsel for the Appellee Ford SHALL prepare and subniit a Judgment Entry pursuant to

Local Rule 25.01.

Copies to:

Christopher M. DeVito, Esq.623 West Saint Clair AvenueCleveland, Ohio 44113-1204

Counsel for Appellant Robert Fleisher and Franklin Park Lincoln-Mercury, Inc

Jay F McKirahan, Esq.6300 Frantz RoadDublin, Ohio 43017

Counsel for Intervenor Brondes Lincoln-Mercury

Jennifer S. Roach, Esq.3900 Key Center127 Public SquareCleveland Ohio 44114-1291

Frank Hamidi, Esq.500 Woodward Avenue, Suite 4000Detroit, Michigan 48226

Counsel for Appellee Ford Motor Company

John E. Patterson, Esq.Assistant Attorney GeneralOhio Attotney General Executive Agencies30 E. Broad St. 26th Fl.Columbus, OH 43215-3428

Counsel for Ohio Motor Vehicle Dealers Board


^OHIO DEPARTMENT^ OF PUBLIC SAFETY

EUUCATION SERVICE • PROTECTICN

August 13, 2008

Christopher M. DeVito, Esq.Counsel for ProtestantMorganstern, MaeAdams & DeVito., L.P.A.623 West Saint Clair AvenueCleveland, OH 44113-1204By Fax and Certified Mail,#7006 0810 0003 5073 9584

Kathleen A. Lang, Esq.Frank Hamidi, Esq.Counselfor RespondentDickinson Wright PLLC500 Woodward Avenue, Suite 4000Detroit, MI 48226-3425By Fax and Certified Mail,#7006 0810 0003 5073 9560

Administration. Bureau of Motor Vehicles> EmergencyManagementqqency• Emergency Medical Services Division. Office of Criminal Ju¢ice Services• Ohio.Hameland Security. Ohio Investigative Unit• Ohio State Highway Patrol

Ted Strickland, GovemorHenry Guzman, Director

Mike RankinRegistrar

Bureau of Motor Vehicles1970 West Broad Street

P.O. Box 16520Columbus, Ohio 43216^6520

(614) 752-7600www.timv.ohio.gov

Robert C. Byerts, Esq.Counsel for ProtestantMyers & Fuller2822 Remington Green CircleTallahassee, FL 32308By Fax and Certified Mail,#7006 0810 0003 5073 9577

7ennifer S. Roach, Esq.Counsel for RespondentThompson Hine LLP3900 Key Center127 Public SquareCleveland, OH 44114By Fax and Certified Mail,#7006 0810 0003 5073 9553

Jay F. McKirahan, Esq.Counselfor Brondes Ford Maumee, Ltd.Whann & Associates6300 Frantz RoadDublin, OH 43017By Fax and Certified Mail,#7006 0810 0003 5073 9546

Addendum to Board's Order dated August 12, 2008

Re: Robert Fleisher and Franklin Park Lincoln-Mercury Inc. v. Ford Motor CompanyCase #08-03-MVDB-341-JT

Dear Mses. Lang and Roach and Messrs. Devito, Byerts, Hamidi, and McKirahan:

Board members Henry Curtis IV and R. Michael Taylor voted yes. Board member Brian Morrisvoted no.

Mission Statement°to savelives, loduce lnJudes andeconomicloss, to admtnfster Ohio's motor vehic7e faws and to preserve fhe sefety

and well6e(ng olall citlzens w7(h ihe mostcrost-e/fecth^ and servke-ortented methods avalla6le."

(aiD

If you have further questions regarding this matter, please direct them to 614-752-7969.

Sincerely,

MIKE RANKINSECRETARY

MR:CB:kc

c: John Patterson, Asst. Attorney General

OHIO MOTOR VEHICLE DEALERS BOARDPUBLIC MEMBERS

IN THE MATTER OF:ROBERT FLEISHER,

and

FRANKLIN PARK LINCOLN-MERCURY INC.Protestants,

vs.

FORD MOTOR COMPANY,Respondent

and

BRONDES LINCOLN-MERCURYRespondent-Intervenor

ORDER

CASE #08-03-MVDB-341-JT

TI-iis matter came on for consideration this 6th day of August, 2008, on the Report andRecommendation of Hearing Examiner John Tanoury in the above-captioned matter.

Having reviewed the Report and Recommendation of the Hearing Examiner, the Board herebyadopts the Reconunendation.

WI-IEREFORE, it is hereby ORDERED that the protest is DISMISSED.

R. MI HAEL TAYLOR

BRIAN MORRIS

CERTIFICATION

The State of Ohio, Motor Vehicle Dealers Board, ss:

1, the undersigned clerk of the Motor vehicle Dealers Board, hereby certify that the foregoing is atrue copy of the original order of the Motor Vehicle Dealers Board as entered upon the Board'sJoumal, a copy of which has been forwarded to the parties this date, the 1.2st day of August, 2008.

Clerk `

NOTICE

Where applicable, this decision may be appealed under the provisions of Chapter 119 of the OhioRevised Code by written notice of appeal setting forth the order appealed from and grounds ofappeal filed with this board and the appropriate court within fifteen days after the mailing of thisnotice.

30

CERTIIiICATE OF SERVICE

The undersigned hereby certifres that a copy of the foregoing has been sent to the parties set forthbelow in the manner indicated on this 12th day of August, 2008:

Christopher M. DeVito, Esq.Counselfor ProtestantMorganstem, MacAdams & DeVito., L.P.A.623 West Saint Clair AvenueCleveland, OH 44113-1204By Fax and Certified Mail,#7006 0810 0003 5073 9492

Robert C. Byerts, Esq.Counselfor.ProtestantMyers & Fuller2822 Remington Green CircleTallahassee, FL 32308By Fax and Certified Mail,#7006 0810 0003 5073 9508

Kathleen A. Lang, Esq.Frank Hamidi, Esq.Dickinson Wright PLLC500 Woodward Avenue, Suite 4000Detroit, MI 48226-3425By Fax and Certified Mail,#7006 0810 0003 5073 9515

Jay F. McKirahan, Esq.Counsel for Brondes Ford Maurnee, Ltd.Whann & Associates6300 Frantz RoadDublin, OH 43017By Fax and Certified Mail,#7006 0810 0003 5073 9539

Jennifer S. Roach, Esq.Counsel for RespondentThompson Hine LLP3900 Key Center127 Public SquareCleveland, OH 44114By Fax and Certified Mail,#7006 0810 0003 5073 9522

MOTOR VEHICLE DEALERS BOARDCI ER^L BUTTON, CL RK

^

STATE OF OHIOMOTOR VEHICLE DEALERS BOARD

In Re:

Robert Fleisher

and

Frankl'ni Park Lincoln-Mercury, Inc.

vs.

Ford Motor Company

Respondent.

Case No. 008-03-MVDB-341-JT

Hearing Officer Tanoury

^•

0

a

REPORT AND RECOMMENDATION OF HEARINGOFPICER RECOMMENDING DENIAL OF PROTESTANT'S

MOTION FOR INJUNCTIVE RELIEF AND RECOMMENDINGDISMISSAL OF THE PROTEST OF ROBERT FLEISI-IER

AND FRANKLIN PARK LINCOLN MERCURY

FINDINGS OF FACT

1. In February of 2008 Rouen Automotive Group hic. (Rouen) entered into an asset

purchase agreetnent with Brondes Ford Maumee, Ltd. (Brondes) whereby Brondes would

purchase most of the business assets of Rouen's Lincoln Mercury Dealership located at

1361 Conant Street, Maumee, Ohio. (Purchase Agreement, Exhibit 1 attached)

2. Pursuant to the Purchase Agreement Brondes purchase was conditioned, among

other things, on approval of its intended relocation of the Lincoln Mercury dealership to

1511 S. Reynolds Road, Maumee, Ohio. This address is the site of Brondes existing Ford

Dealership. (Exhibit 1, paragraph 7.1.3)

1

3. Both 1361 Conant Street, Maumee, Ohio and 1511 S. Reynolds Road Maumee,

Ohio are within the Relevant Market Area of Protestant's Lincoln Mercury Dealersbip.

(Affidavit of Robert Fleisher, Exhibit 2 attached).

4. 1361 Conant Street, Maumee, Ohio is less than one (1) mile from 1511 S.

Reynolds Road, Maumee, Ohio.

5. Ford Motor Comparry, Brondes and Rouen all understood and agreed that the

purchase by Brondes of Rouen's assets was for the purpose of Brondes becoming a

licensed New Lincoln Mercury Motor Vehicle Dealer and, as such, relocating the

Lincoln Mercury Dealership to Brondes S. Reynolds Road location.

6. Pursuant to the Purchase Agreement Rouen would relinquish its Lincoln Mercury

Dealership license and cease doing business in the Relevant market Area of Protestant.

7. The purpose, intent and reality of the Purchase Agreement was to replace Rouen

as a Lincoln Mercury Dealer with Brondes and allow Brondes to relocate the former

Rouen Lincoln Mercury Dealership to Brondes existing Ford Dealerslup location.

8. The intended result and the actual result of the Purchase Agreement with its

location change was to maintain two Lincoln Mercury Dealerships in the Relevant

Market Area; which is the identical number of New Lincoln Mereuay Motor Vehicle

Dealerships that existed in the Relevant Market Area prior to the Purchase Agreement.

(Exhibit 3 attached)

9. The Dealer Agreement between Protestant and Ford Motor Company does not

provide for an appeal of the actions complained of by Protestants and therefore filing an

appeal with the Dealer Policy Board of Ford is not required prior to filing an appropriate

protest pursuant to R. C 4517.50.

2

33

CONCLUSIONS OF LAW

'The statutory language of Revised Code 4517.50 is determinative of the issues

raised herein. That statute provides in relevant part:

Notice of proposed additional new vehicle dealer or of relocation;protests.

(A) Except as provided in division (C) of this section, when a franchisorseeks to enter into a franchise to establish an additional new motorvehicle dealer in, or relocate an existing new motor vehicle dealer at alocation in, a relevant market area where the same line-make of motorvehicle is then represented, the franchisor shall first give notice inwriting, by certified mail, to the motor vehicle dealers board aud toeach franchisee of such line-make in the relevant market area of thefranchisor's intention to establish an additional new motor vehicledealer in, or relocate an existing new motor vehicle dealer at a locationin, that relevant market area. Each notice shall set forth the specificgrounds for the proposed establishment of an additional motor vehicledealer or relocation of an existing motor vehicle dealer. Within fifteendays after receiving the notice, or witlun fifteen days after theconclusion of any appeal procedure provided by the franchisor,whichever is later, the francbisee of the same line-make may file withthe board a protest against the establishment or relocation of theproposed new motor vehicle dealer. When such a protest has beenfiled, the board shall inform the franchisor that a timely protest hasbeen filed and that a hearing is required pursuant to section 4517.57 ofthe Revised Code. When more than one protest is filed against theestablishment or relocation of the same dealer, the board mayconsolidate the hearings to expedite disposition of the issue.

(B) No franchisor shall establish an additional new motor vehicle dealer orrelocate an existing new motor vehicle dealer before giving notice asrequired in division (A) of this section or before the holding of ahearing on any protest filed under this section, and no franchisor shallestablish or relocate such a dealership after the hearing if the boarddetermines that there is good cause for not permitting the new motorvehicle dealer to be established or relocated.

(C) Division (A) of this section does not apply to any of the following:(1) The relocation of an existing new motor vehicle dealer within one

mile from the existing location;(2) The sale or transfer of an existing new motor vehicle dealer where

the transferee proposes to engage in business at the same location;

3

(3) The relocation of an existing new motor vehicle dealer thatrelocates further from an existing line-make new motor vehicledealer although the relocation is within the same line-make newmotor vehicle dealer's relevant market area.

This statute requires, among other things, a Franchisor to give specific detailed

notice to New Motor Vehicle Dealers who operate in a Relevant Market Area when the

Franchisor intends to talce certain specific actions or approve certain specific changes to

the New Motor Vehicle Dealer landscape in that Relevant Market Area. When does a

Franchisor have to provide notice? The statute, in Division (A) provides the answer. It

states:

(A)........when a franchisor seeks to enter into a franchise to establish anADDITIONAL new motor vehicle dealer in a relevant market area wherethe same line-make of motor vehicles is already represented; or

when a franchisor seeks to relocate an existing new motor vehiele dealer ata location in a relevant market area where the same line-make of motorvehicles is represented.

Before there is any need to examine exceptions to the above requirements of a

franchisor to give notice or examine the specific information that is to be contained in

any notice to be provided, the Board must first determine if Ford Motor Company was

required, under the facts of this case, to give notice.

Words used in a statute, unless specifically defined in the statute or elsewhere are

to be given their common ordinary meaning for purposes of interpreting the statute.

Hoffman v. State Med. Bd., 2005 Ohio 3682, 2005 Ohio App. LEXIS 3372 (Ohio Ct.

App., July 21, 2005, Rendered), State v. Thomas, 2005 Ohio 2631, 2005 Ohio App.

LEXIS 2498 (Ohio Ct. App., May 26, 2005, Date of Announcement of Decision),

General Motors Corp., Cent. Foundry Div. v. Fockler, 75 Ohio App.3d 587, 1991 Ohio

App. LEXIS 3836 (Ohio Ct. App., August 16, 1991, Decided), Fraternal Order of Eagles

4

3500

vs. State, 2006 Ohio 5237, 2006 Ohio App. LEXIS 5202 (Ohio Ct. App., September 28,

2006, Date Joumalized). Nowhere in revised Code Chapter 4517 is there a definition of

the word ADDITIONAL as used in the first sentence of R.C. 4517.50. Hence it is to be

given its common, ordinary meaning. Both Merriam Webster and American Heritage

dictionaries define the term Additional as:

"resulting in an increase in amount or nurnber""1. The act or process of adding, espedially the process of computin.g withsets of nuinbers so as to find their sum.2. Something added, such as a room or section appended to a building."

Examining a thesaurus provides these altemate words for ADDITIONAL as:

"added, another, more, other"

From the common, everyday meaning of the word it is clear, as to the first

circumstance set out in R.C. 4517.50 (A) requiring notice by a franchisor, that it only

applies if the Franchisor (Ford Motor Company in this case) intends to enter into a

franchise agreement that will increase the number of like-make New Motor Vehicle

Dealers in the Relevant Market Area. '1 hat everyone concedes is not the case in the

matter before us. Both prior to the Rouen-Brondes Purchase Agreement as well as after

fulfillment of the Purchase Agreements terms, there remains the same number of like-

make, Lincoln Mercury new motor veliicle dealers in the Relevant Market Area.

Therefore, Ford Motor Company was not required to provide the notice set forth in

Division (A) of 4517.50 to Protestants mider the provision applicable to establishing an

ADDITIONAL new motor vehicle dealer in a Relevant Market Area.

The second circumstance wherein notice is required to be given occurs when a

franchisor seeks to relocate an existing new motor vehicle dealer to a location within a

Relevant Market Area where the same Like-make of motor vehicles is already

5

represented. This circumstance would only apply to the instant matter if we assumed that

Brondes was indeed an existing like-make motor vehicle dealer selling those like-make

motor vehicles (following the asset Purchase closing) at 1361 Conant Street Maumee,

Ohio. This being the case the second circumstance requiring Ford to give notice would

seem to apply to Brondes relocation to S. Reynolds Street in Maumee. However, given

that the relocation from 1361 Conant Street to 1511 S. Reynolds Street (both in Maumee)

is less than a mile it does not.

Division (C) of R.C. 4517.50 states that the notice requirements of Division (A)

do not apply if the relocation of an existing new motor vehicle dealer is to a location less

than one mile from its previous location. All parties concede that the distance between

the 1361 Conant Ave. location and the 1511 S. Reynolds location is less than a mile. As

such, Ford was not required to give Protestants the statutory notice set forth in Division

(A) because of this exception set forth in Division (C) (1).

The above reasoning and interpretation of R.C. 4517.50 is logical, rational and in

keeping with what would appear to be the statutory purpose of protecting an existing new

car dealer from having its Relevant Market Area saturated with competition without

allowing for some manner of protest.

First, under the uncontested facts of this case there is no increase in the number of

like-make new car dealers in Protestant's Relevant Market Area. Both prior to and after

the transactions and movements complained of there are two like-make new car

dealerships. Second, the relocation is within such a short distance of where the

dealership was previously located it is not likely, from a geographic point of view, to be

6 31

seen as poaching on Protestant's territory. Regardless of this fact, however, the statute

excepts notice requirements for these short distance moves.

Protestant's frustration would appear to be more centered on the fact that it now

has a competitor sh-onger, fresher and more of a threat than what previously existed.

However, the Motor Vehicle Dealer Act was enacted to give protections to dealers from

unfair conduct by Franchisers. Its purpose is not to assure that a Dealer bas weak

competition or to prevent a franchisor from replacing a weak non- performing dealer in

an area with a stronger dealer.

CONCLUSION

Given that no additional new motor vehicle dealer was established in Protestants'

Relevant Market Area and given that the relocation of the Brondes dealership from the

Conant Street address to the S. Reynolds road address was less than a mile, Ford Motor

Company was not required to provide the statutory notice set out in R.C.4517.50 (A). As

such, Protestant's protest is dismissed as is its Motion for Injunctive relief.

Respectfully submitted,

ol#fL. Tanoury (0023204) \1010 Old Henderson Road, Suite IColumbus, Ohio 43220614/447-1698Hearing Examiner

7

. CERTIPICATE OF SERVICE

I hereby certify that the original Report and Recommendation was sent to Mike

Rankin, Oliio Motor Vehicle Dealer Board, 1970 West Broad Street, P. O. Box 16520,

Columbus, Ohio 43216-6520 with copies to Robert C. Byertso, Myers & Fuller, 2822

Reinington Green Circle, Tallahassee, Florida 32308 and Christopher M. DeVito,

Morganstern, MacAdams & DeVito Co. LPA, 623 West Saint Clair Avenue, Cleveland,

Ohio 44113-1204, Attorneys for Protestants and Kathleen A. Lang and Frank A.

Hamidi, Dickinson Wright, PLLC, 500 Woodward Ave., Suite 4000, Detroit, Michigan

48226 and Jennifer S. Roach, Thompson Hine LLP, 3900 Key Center, 127 Public Square,

Cleveland, Ohio 44114, Attorneys for Ford Motor Company, and Jay F. McKirahan,

Whann & Associates, LLC, 6300 Frantz Road, Dublin, Ohio 43017, Attorney for

Brondes Ford Maumee Ltd., on this day of June, 2008.

o& L. Tanoury

8

341

ASSET PURCHASE AGREL"MCNTROUEN AUTOMOTIVE GROUP, INC. dba ROUEN LINCOLN MERCURY

This ASSET PURCHASE AGREEMENT ("Agreement") is made as of 5:00p. m.Maumee, Ohio local time on the 7`a day of February, 2008 by and between RouenAutomotive Group, Inc. dba Rouen Lincoln Mercury, an Ohio business corporation("Rouen") and Brondes Ford Maumee, Ltd. or its permissible assigns, an Ohio limitedliability company ("Brondes" ).

Backgronnd of Agreement

Rouen presently is a party to a dealer sales ^Lnd service agreement with the LincolnMercury Division of Ford Motor Company ("Lincoln Mercury") for Lincoln Mercurymotor vehicles and owns certain assets which it desires to sell and which Brondes desiresto purchase, which assets are used or useful in the operation of the Lincoln Mercurybusiness of Rouen.

Rouen currently operates the Lincoln Mercury business at 1361 Conant Street, Ivlaumee,Ohio ("dealership property")

The pazties are entering into this Agreement to set forth their understanding with respectto the transactions described herein.

Agreement

NOW, THEREFORE, in consideraLYon of the premises and the mutual promises andcovenants herein contained and intending to be legally bound, the parties hereto agrea asfollows:

1. PURCHASE OF ASSETS

1.1 Acquired Assets. Upon the terms and subject to the conditions set forth in thisAgreement, Rouen shall sell, assign, transfer and convey to I3rondes theAcquired Assets (as lierein defined) an,d Brondes sha11 purclrase and acquire theAcquired Assets. The Acquired Assets shall mean the following assets ofRouen:

1.1.1 All 2007 and 2008 model year Lincoln Mercury motor vehicles owned byRouen which (i) have never been titled or registered in connection with a saleat retail and (ii) have an unreported retail delivery card or the equivalentthereof and (iii) have 500 or fewer rniles on the odometer on the Closing Date.("New Motor'Vehicle Inventory"). For purposes of this Agreement, thedefinition of New Motor Vehicle Inventory shall also include those motorvehicles that meet the criteria set forth in the preceding sentence and havebeen ordered and prepai.d by Rouen but have not been received by Ro.uen.

Exhibit 1 40

1.1.2 The total number of vehicles to be sold by Rouen to Brondes pursuant tosubsections 1.1.1 shall not exceed Seventy (70).

1.1.3 All Lincoln Mercury specific special tools and diagnostic equipment, systemsand software (including but not limited to, essential tools and diagnosticequipment, systems and software acquired from Lincoln Mercury), LincolnMercury training and service books and manuals, aIl Li.ncoln Mercurysignage, and all Lincoln Mercury factory supplies display material, includingcar brochures.

1.1.4 All certificates, permits, approvals, and licenses, if and to the extentassignable by Rouen, pertaining to any of the Acquired Assets; the LincolnMercury new vehicle customer sales and service records; and the good willand going concem value of Rouen relating to the conduct of its operation ofits Lincoln Mercury dealership (collectively `ntangtbles") After the Closinglaate, Rouen shafl direct to Brondes all Lincoln Mercury new car salesinquirtes, Lincoln Mercury parts purchase inquiries, and Lincoln Mercurywarranty service inquiries.

1.2 Excluded Assets. The following asseGs and property of Rouen and are notincluded in the sale to Brondes and shall consiitute `°Erccluded Assets".

1.2.1 AIl cash, cash equivalents, securities and contracts in transit.1.2.2 All tinance and similar reserves.1.2.3 All accounts receivable of Rouen, including eustomer accounts receivable and

manufacturer accounts receivable.1.2.4 The "Rouen" trade name and all website domain names owned by Rouen.1.2.5 All office furni.ture and fixtures owned by Rouen and located at the Dealership

Properly and not otherwise included under the definition of Acquire Assets.1.2.6 All other assets whatsoever of Rouen except for the Acquired Assets.

2. ACQUIEIED ASSETS PTJRCHASE PRIC7E ANi3 PA'4Ttt4ENT

2.1 Acquired Assets Purchase Pzice. The purchase price for t.he Acquired Assets("Acquired Assets Purchase Price") shall be the sum of the following amounts describedin subsections 2.1.1 through 2.1.7, inclusive:

2.1.1 For the New Motor Vehicle Inventory: the value of New Motor VehicleTnventory shall be the "factory" invoice amount less factory holdback, less any model endallowances if consumer rebates should end on 2007 models. (i) the Lincoln Mercuryinvoice price for any factory-installed options which have been removed from any motorvehicles in the New Motor Vehicle Inventory; plus (x) Rouen's cost of dealer-installedand subcontractor-installed accessories and optional equipment and materials required forinstallation and (y) Rouen's cost for labor ( caleulated at Rouen's internal rates ) and itscostforsubc6ntractorinstallation.

2.1.2 For the New Motor Vehiele Inventory > 500 Miles: 11».s amount for suchvehicles shall be the value of the New Motor Vehicle Inventory as calculated pursuant to

2Exhibit 1

Section 2.1.1 above less fifteen cents ($.15 ) per .mile for each mile above 500 that suchvehicle posts on its odometer.

2.1.3 For the Intangibles and Lincoln Mercury specific special tools and diagnosticequipment, systems and software (including but not limited to, essential tools anddiagnostic equipment, systems and soflware acquired from Lincoln Mercury ), LincolnMercury training and service books and manuals, Lincoln Mercury signage, LincolnMercury factory supplied display material, including car brochures: Seven rIundredThousand Dollars ( $700,000.00 ).

2.2Payment of Acquired Assets Purchase Priee. Th.e Acquired Assets Purchase Priceshall be paid by in part by Broudes and in part by I.incoln Mercury and shaIl be paid toRouen by delivery of a cashier's check(s) or, at the option of Rouen, by confirmed wiretransfer(s) of immediately available funds on the Closing.Date.

2.3 Limited Assumption of Liabilities by Brondes.

2.3.1 On the Closing Date, Rouen shaII assign to Brondes and, subject to thefollowing, Brondes shall assume ( and indemnify and hold hamless Rouenthere from ) all rights and obligations of Rouen arising out of any contractsfor the sale and purchase of new Lincoln Mercury motor vehicles to bedelivered on or after the Closing Date ( the "Motor Vehicle Contracts").The Motor Vehicle Contracts to be assigned to and assumed by Brondes onthe Closing Date shall be listed in Schedule 2.3.1 which shali be attacbed tothis Agreement and thereby made a part of tbis Agreement. The obligationof Brondes to assume the Motor Vehicle Contracts shall be subject to thefollowing express conditions precedent:

2.3.1.1 Rouen must assign to Brondes on the Closing Date all customer depositsrelating to the Motor Vehicle Contracts;

2.3.1.2 All Motor Vehicle Contracts must provide for no loss to Brondes;2.3.1.3 No Motor Vehicle Contract shall allow for customer fmancing on any

basis other than nonrecourse to Rouen or Brondes; and2.3.1.4 All of Rouen's obligations to customers under the Motor Vehicle

Contracts being assigned to and assumed by Brondes sball be listed onSchedule 2.3.1 and, except as otherwise expressly agreed by Brondes,Rouen shall indemnify and hold Brondes harmless with respect to anydisputes with each such customer regarding dealer obligations to suchcustomer under any Motor Vehicle Contract with respect to anyobligations not fnlly listed on Schedule 2.3.1.

2.3.2 On the Closing Date, Brondes shall assume obligation to purchase and paywhen due any amounts relating to Lincoln Mercury motor vehicles, subjectto the limitation set forth in subsection 1.1.2. As to each such motorvehicle, within fifteen (15) days of its receipt from Lincoln Mercury of the"factory holdback" or any model end allowanccs if consumer rebatesshould end on 2007 models, Rouen shall pay to Brondes the amount of such"factory holdback".

3Exhibit 1

2.3.3 Brondes does not assume and shall not assume any debt, or otherobligation, or contract or lease, or any other liability whatsoever (includingtax liabilities) of Rouen of any kind or nature, absolute or contingent,known or unknown, incurred or arising out of transactions occurring priorto the Closing Date, except as described in subsections 2.3.1 and 2.3.2

3 CLOSING DATE AND PLACE

3.1 Closing Date. The consummation of the transactions referred to in this Agreement(the "Closing") shaIl occur on the Closing Date (the "Closing Date') which(provided all conditions precedent to Closing shall have been satisfied or waived onor before such date) shall be after the receipt from Lineo3n Mercury of therecognition and approval of Brondes as a l:.,incoln Mercury dealer, and assurancesacceptable to Brondes in Brondes reasonable discretion, that Brondes will be issueda standard dealer sales and service agreement by Lincoln Mercury to sell andservice Lincoln Mercury motor vehicles, vahere Brondes desires to operate theDealership, with terms and conditions acceptable to Brondes. Notwithstandinganything herein to the contrary, unless Rouen and Brondes agree otherwise, if theClosing has not occurred on or before February 29, 2008, then either patiy shallhave the right to terminate this Agreement by providing notice to the other partywhereupon, subject to the following, this Agreement shall become null and voidand of no fzu.tlzer force or effect. Notwithstanding the termination of thisAgreement, such termination shall be without prejudi.ce to party's rights andremedies as a result of any breach or default on the part of another par'cy. Time is ofthe essence and each and every provision of this Agreement.

3.2 ClosingPlace. Tbe Closing shall occur at 1377 Conant Street, Maumee, Ohio,commencing at 11:00 a.m,, local time, on the Closing Date or at such other time orlocation as Rouen and Brondes may agree.

4 REPRESENTATIONS, WARRANTIES AND COVENANTS OF ROi7FN

In order to induce Brondes to consummate the transactions referred to in this Agreement,and with the knowledge that Brondes is relying on the representations and warrantiesherein contained, Rouen represents, warrants and covenants to and with Brondes asfollows:

4.1 Rouen is a corporation which is organized and vatidly existing and in good standingunder the laws of the State of Ohio, and has full corporate power and authority toown or lease its assets and properties and conduct its business as now conducted.All of the issued and outstanding stock of Rouen is ownad by Rouen Motorworks,Ltd.

4.2 The execution and delivery of this Agreement and the performance by Rouen of itsobligations hereunder have been duly authorized by ail requisite corporate actionand have been approved by its shareholders and no further action or approval isrequired in order that this Agreement shaIl be binding upon it and enforceableagainst it in accordance with their terms, subject only to bankxaptcy, insolveney,

4.Exhibit 1 143

reorganization, moratorium and other laws or equitable principles affectingcreditors rights generally.

4.3 Rouen will have faled on or before the Closing Date with all appropriategovemmontal agencies (whether Federal, State or Local) aIl tax returns required tobe filed by it as of such date, all of which will have been prepared accurately and inconformity with all the laws and regulations applicable thereto. Without lir.nitingthe generality of the foregoing, Rouen will have filed all iricome tax; capital stocktax, employment and payroll tax, sales and use tax, and other tax returns and reportsrequired to be filed prior to the Closing Date with respect to aIl Federal, State and -Local taxes, and will have paid or wiIl thereafter pay as they become due (subject tobona fide contest or challenge to any assessment of same ) all taxes, penalties,interest, assessments, and deficiencies related thereto and related to the periodending on the Closing Date (herefnafter referred to as "°l'axes and Deficiencies" ),whether or not measured in whole or in part by net income, which at anytime, nowor hereafter, have been or shall be determined to be due, owing and payable withrespect to the existence and operation of Ronen and the conduct of its business up toand including the Closing Date.

4.4 On tlre Closing Date, subject to the last sentence of this subsection 4.4, Rouen willown and have good and marketable title to all of the Acquired Assets, free and clearof any mortgages, pledges, claims, liens, conditional sales or other agreements,leases, eneumbrances, rights, contracts or other charges of any nature (hereinaftercollectively referred to as "Liens and Encumbrances") other than such Liens andEncumbrances that have been granted under or attach to the Acquired Assets byvirtue of any of the Motor Vehicle Contracts. Rouen acknowledges that some or allof the A.equired Assets may be presently subject to Liens and Encumbrances whichRonen shall cause to be removed, satisfied and terminated on or before the ClosingDate so that all of tlie Acquised Assets will be sold, transferred and conveyed on theClosing Date to 13rondes free and clear of Liens and Encnmbrances other than theAccepted Liens and Encumbrances.

4.5 All of the Acquired Assets shall be sold, assigned and conveyed to I3rondes in goodoperating condition as of the Closing Date. Rouen shaIl deliver possession of theAcquired Assets to Srondes at the Dealership Property.

4.6 Except as listed on Scliedule 4.6 which is attached hereto and made part hereof:

4.6.1 There are no actions, suits, proceedings or investigations pending or to theIrnowledge of Rouen, threatened, at Law or in equity, before or by any Federal,State, Municipal or other governmental instnzmentality which may result in anymaterial adverse change in the Acquired Assets; and,

4.6.2 Rouen is not in default with respect to any order, writ, injunction or decree of anyFederal, state municipal or other governmental department commission, board,bureau or instrumentality that would materially and adversely affect its ability tocarry out the terms of this Agreement.

4.7 Subject to the next following sentences in this subsection 4.7, the execution andcarrying out of this Agreement and compliance with the provisions hereof by Rouenwill not violate, with or without the giving of notice and /or the passage of time, any

5Exhibit 1

provision of law and will not conflict with, or result in any breech of any terms,conditions or provisions of or constitnte a default under, or result in the creaflon ofany lien, charge or encumbrance upon any of the Acqu.ired Assets, pursuant to anycorporate charter, bylaw, indenture, mortgage, agreement or other instrument towhich Rouen is a party or by which it is bound. Notwithstanding the foregoing tothe contrary, Brondes acknowledges and understands that (i) it must be approved byLincoln Mercury as a Lincoln Mercury dealer; (ii) that Rouen has no right totransfer or assign its Lincoln Mercury dealer sales and servi.ce agreement toBrondes; and (iii.) tha execution and carrying out of tbis Agreement and compliancewith the provisions hereof by Rouen are expressly subject to Li.ncoln Mercury'srights under its dealer sales and service agreement with Rouen.

4.8 No broker, finder; agent or other person clainiurg to have acted in any such capacityfor or under the authority of Rouen entitled to any fee or commission arising out ofthe transactions completed herein other than professional fees for the attorneys andaccountants representing Rouen, which professional fees shall be paid solely byRouen.

4.9 Rouen has received no notices from Lincoln Mercury, oral or written, that LincolnMercury has exercised any right it may have under its dealer sales and serviceagreement with Rouen to tezminate such Agreement and Rouen has no reason tobelieve that Lincoln Mercury intends to exercise any right it may have to terminateits dealer sales and service agreement. Rouen shall promptly notify Brondes ifRouen receives any such notice of termination.

4.10 There is presently in force fire, theft and general casualty insurance covering theAcquired Assets for their full insurable value and Rouen shaJl maintain suchinsurance in force until the Closing Date.

4.11 No representation or warr.anty relating to Rouen contained in this Agreement, norany certifrcate furnished or to be furnished by Rouen pursuant to this Agreement orin comrection with the transactions contemplated hereby, contains or shall containany untrue statement of a material fact or omits or will omit to state a material factnecessary to make auy representation or warranty contained herein not misleading.

4.12 Rouen shall permit Brondes to occupy the dealership premises rent free for thepurpose of operating a Lincoln Mercury dealership after the approvai by the Ohio13ureau of Motor Vehicles of Brondes' Application for Certified Copy (SecondaryLocation) at 1361 Conant Street, Maumee, Ohio for the sale of Liricoln Mercurypassenger vehicles by Brondes and the issuance of a permit therefore and until theapproval by the Ohio Bureau of Motor Vehicles of Brondes' Application forAddress Change for a cbange of address for the Lincoln Mercury permit referencedin subsection 7.1.2 above from 1361 Conant Street, Maumee, Ohio to 1511 S.Reynolds Road, Maumee, Ohio and Rouen shall provide, at its expense, all utilitiesto the dealership premises during such period and, if Brondes is required by theOhio Bureau of Motor Veh.icles to have access to a repair and service facility for thedealership premises during such period, Rouen shall make its nearby repair andservice facility available to Brondes at no cost to Brondes.

4.13 Rouen has only one vehicle in the New Motor Vehicle Inventory with dealer-installed or subcontractor-installed accessories or optional equipment at the ti_me ofRouen's execution of thi.s Agreement and Rouen will not cause any such

6Exhibit 1

accessories or optional equipment to be installed on any other vehicles in the NewMotor Vehicle Inventory after the date of execution of this Agreement.

4.14 Rouen hereby assigns to Brandes any czedit due Rouen from Lincoln Mercury onthe return of Rouen's Lincoln Mercury signs to Lincoln Mercnry and Rouen andRouen hereby authorizes Lincoln Mercury to pay or credit such sign return directlyto Brondes.

5 REPRESENTATIONS, WARRA7:V I'IES AND COVENANTS OF BI.tONDFS

In order to induce Rouen to eonsummate the transactions referred to in this Agreement,and with the lmowledge that Rouen is relying on tbe representations, warranties andcovenants barein contained, Brondes represents, warrants and covenants to and withRouen as follows:

5.1 1'he execution and canying out of this Agreement and compliance wi.th theprovisions hereof by Brondes will not violate, with or without the giving noficeand/or the passage of time, any provision of law, and wiIl not conflict with, or resultin any breach of any of the terms, conditions or provisions of or constitute a defaultunder aiiy bylaw, indenture, mortgage, agreement or other instrument to whichBrondes is a party or by which he is bound.

52 Brondes has no knowledge of any matter or condition which might disqualify itfrom being approved as an authorized Lincoln Mercury dealer and has no actionpending or overtly threatened against it which might disqualify it from beingapproved as a Lincoln Mercury dealer.

5.3 After the execution and delivery of this Agreement, Brondes shall submit promptlyto Lincoln Mercury a completed dealer application package and thereafter shaIl usecommercially reasonable best efEorts to be approved by Lincoln Mercury as a newLincoln Mercury dealer.

5.4 Brondes has received reasouable assurance from Lincoln Mercury that lincolnMercury will pay a portion of the Acquired Assets Purchase Price and Brondes hasor is able to obtain the funds necessary to pay the balance of the Acquired AssetsPurchase Price to Rouen on or before the Closing Date in accordance with the termsof this Agreement.

5.5 No broker, finder, agent or other person claimirig to have acted in any such capacityfor or under the authority of Brondes is entitled to any fee or eonnnission arisingout of the transactions contemplated herein other than professional fee for theattorneys and accountants representing Brondes which professional fees shall bepaid solely by Brondes.

6 COVENANTS OF ROUEN

From and after the date of this Agreement and until the Closing Date, Rouan:

6.1 Shall carry on its Lincoln Mercury business in the ordinary course of business andin substantially the same manner and with like standards as heretofore and shall

7Exhibit 1

maintain its reputation as a L'meoln Mercury dealer on at least as high a level aspresentiy enjoyed;

6.2 Shall maintain its relationship with its Lincoln Mercury customers and suppliers;6.3 Shall use its best efforts to cooperate fully with Brondes and its employees or

agents in order to complete all taldng of inventories as required hereby;6.4 Shall comply in all material respects with all applicable Pederal, State and local

laws, ordinances, rules andregutations; and6.5 Cooperate with and assist Brondes to prepare aad submit Brondes' dealer

application package to Lincoln. Mercury and to obtain the approval by LincolnMercury in accordance with section 5.3 above.

7 CONDITIONS OF CLOSING

7.1 Conditions for the Benefit of Brondes. The obligations of Brondes under thisAgreement are subject to the satisfaction or waiver thereof by Brondes, (whichwaiver may only be given in a writing signed by Broudes that specifically refers tothe numbered subsection of this Agreement containing the condition that is waived)of the following express condition precedent on or before the Closing Date.

7.1.1 Brondes' receipt from Lincoln Mercury of the recognition and approval ofBrondes as a Lincoln Mercury dealer with assurances acceptable to Brondes thatBrondes wiIl be issued a standard dealer sales and service agreement by LincolnMercury to sell and service Lincoln Mercury motor vehicles at 1361 ConantSlreet, Maumee, Ohio or 1511 Reynolds Road, Maumee, Ohio, with terms andconditions acceptable to Brondes.

7.1.2 The approval by the Ohio Bureau of Motor Vebicles of Brondes' Appli.cation forCertified Copy (Secondary Location) at 1361 Conant Street, Maumee, Ohio forthe sale of Lincoln Mercury passenger vehicles by Brondes and the issuance of apermit therefor.

7.1.3 The approval by the Ohio Bureau of Motor Vehicles of Brondes' Appfication forAddress Change for a change of address for the Lincoln Mercury permitreferenced in subsection 7.1.2 above from 1361 Conant Street, Maumee, Ohio to1.511 S. Reynolds Road, Maumee, Ohi.o.

7.1.4 The expiration of any protest period available to a like make franchise holderunder section 4517.50 of the Ohio Revised Code with respect to the applicationand permit mentioned in subsection 7.1.2 or 7.1.3 with no protest pending.

7.2 Conditions for the Benefit of Rouen. The obligations of Rouen under thisAgreement are subject to the satisfaction, or the waiver thereof by Rouen(whichwaiver may only be given in a writing signed by Brondes that specifically refers tothe numbered subsection of this Agreement containing the condition that is waived)of the following express conditions on or before the Closing Date.

7.2.1 The approval of Lincoln Mercury pursuant to Section 3.1 hereof.7.2.2 The closing of the real estate sale transaction pending for 1361 Conant Street,

Maumee, Ohio.

Exhibit 1

8 CONS'Q117A.TTON OF CLOSING

8.1 Transactions of Rouen. At Closing, Rouen, contemporaneously with theperEormance by Brondes of his obligations to be performed at Closing, shall doandlor deliver the following:

81.1 Rouen shall execute and deliver all biIls of sale, assignments, titles, to Brondesand as shall be sufficient to convey and transfer to Broudes: (i) the AcquiredAssets and all of the right, title and interest of Rouen therein and thereto free andclear from aI1 liabilities, liens, restrictions and encumbrances of whatever nature,except Rouen's rights and obligations arising out of the Motor Vehicle Contracts.

8.1.2 Rouen shall deliver to Brondes (i) a bill of sale for the motor vehicles in the NewMotor Vehicle Inventory listing the serial numbers and invoice price for eachvehicle purchased by Brondes and ineluding as an attachment the factory invoicefor each motor vehicle and (ii) the manufacturer certificate or statement of originfor each such motor vehicle signed by the appropriate party.

8.1.3 A certified copy of the resolutions adopted by the shareholders of Rouenapproving and authorizing the execution and delivery of this Agreement and theconsummation of the transactions completed berein.

8.1.4 The assigument by Rouen of aâ. wairanties wbich are assignable and which arepresently in effect with respect to any of the Acquired Assets.

8.2 Transactions of Brondes. At the Closing, Brondes contemporaneously with theperformance by Rouen of its obligations to be performed at Closing, shall do and/ordeliver the following:

8.2.1 Brondes shall pay and canse Lincoln Mercury to pay the Acquired Asset PurchasePrice in accordance with the provisions at subsection 2.2.

8.2.2 If Brondes shall have assigned this Agreement, in whole or in part, to an entity aspermitted hereunder, a certified copy of the resolutions adopted by the Board ofDirectors and shareholders or members of such entity approving and authorizangthe assumption of this Agreement, in whole or in part, and the consummation ofthe transactions contemplated herein assumed by it.

POST AGREEMEN'I' DATE AND CLOSING DATE COVENANTS

From and after the Closing Date, as applicable, the parties hereto will be subject to thefollowing covenants and agreements:

9.1 At any time and from time to time after the Closing Date, upon request by Brondes,Rouen shall do, execute, acknowledge and deliver, or shall cause to be done,executed, aclmowledged and delivered, all such fiuther acts, bills of sale,assiguments, titles, transfers, conveyances and assurances as may be reasonablyrequired for better assigning, transferring, granting, conveying, assuring and

9Exhibit 1

confn:ming to Brondes (or its successors and assigns ), or for the aiding andassisting in the collection and reducing to possession of the Acquired Assets;

9.2 Rouen shaIl comply with any and all laws or regulations of the State of Ohioimposing payment, notification or reporting requirements relating to Ohio sales, useand franchise tax, as well as any and all other taxes for wbich liability can beimposed on a purehaser.

9.3 ALl representations, covenants, warranties and agreements made by Rouen in thisAgreement and in any written certi.ficate, schedule and exbibit attached hereto shallsurvive the Closing.

9.4 Rouen hereby agrees that from the date of execution of this Agreement until theDate of Closing, except as otherwise approved in writing by Brondes:

9.4.1 Rouen shatl refrain from (a) engaging in transactions other than in the ordinarycourse of business consistent with past business practice; or (b) malring orpermitting any amenciment or termination of any material contract,agreement orlicense to which Rouen is now a party other than in the ordinary course ofbusiness.

9.4.2 Roueu shall not subject any of the Acquired Assets to any mortgage, pledge, liencharge or encumbrance other than those already existing.

9.5 Nothin.g herein shall be deemed to require Brondes to retain any person orem.ployee of Rouen either prior to or after the Closing Date.

10 IDEMNIt'ICATION

10.1 ScoQ,e of Indemnification.

10.1.1 Rouen hcreby agrees jointly and severally to hold harmless and indemnifyBrondes and its successors and assigns, from and against any claim, action, loss,liability, damage, or cost and expense, including without limitation, reasonablcattorneys fees (hereinafter collectively referred to as "Losses"), resulting from orarising outof:

10.1.1.1 The imposition of transferee liabil'aty pursuant to laws relating to sales inbulk or otherwise, including liability to the State of Ohio or any other jurisdictionor entity;

10.1.1.2 Any breach or inaccuracy of any representation or warranty,nonperformance of any agreement, covenant, promise or obligation, on the part ofRouen contained in this Agreement, in a schedule or in any cerf:ifi.eate or otherdoournent delivered pursuant hereto or made in connection with the transactionscompleted hereby and any claims made against Rouen and/or its successors andassigns, relating to Rouen, based on events that occurred or circumstances thatexisted on or before the Closing Date (regardless of whether such Lossas relate toor arise out of laws enacted before, on or after the Closing Date) except claimsrelating to Motor Vehicle Contracts which are the responsibility of Brondespursuant to Section 2.3; and

10Exhibit 1

10.1.1.3 All actions, judgments, awards, claims, demands, causes of action, losses,damages, liabilities, costs and expenses (including reasonable attorneys fees and

expen'ses ) incident to any of the foregoing.

10.1.2 Brondes hereby agrees to indemnify, defend and hold Rouen harmless subsequentto Closing, from any and all claims, debts, demands, judgments, actions or causesof action asserted against Rouen which result from or azise out of any breach orinaccuracy of any representation or wasanty, nonperformance of any agreement,covenant, promi.se or obligation on the part of Brondes, or which accruesubsequent to Closing and which relate to Brondes operation on or after Closingthe business to which the Acquired Assets relate.

10.1.3 All representations, warranties and covenants contained in this Agreement shallsurvive Closing.

10.2 Requirement for Notice. In the event that any claim is asserted or action, suit, orproceeding is commenced agaiust a party hereto ("Indemnitee") which canreasonably bo expected to result in any liability or indemnity being imposed on theother party hereto, the Indemnitee shali exercise diligence and reasonable judgmentin defending or settling same and shall give notice thereof to such other party inwriting within a reasonable time following the assezfiion of the claim orcommencement of the action, suit or proceeding (but the failure or delay to give anysuch notice shall not relieve such party of any liability on account thereof except tothe extent such other party was materially prejudiced thereby). Such other partyshall have the opportunity to participate in (but not to control) the defense againstsuch claim, aet'ton, suit or proceeding and to participate in any negotiations withrespect thereto. The lndemnitee shaIl have control of any defense or.settlement,except that such other party shall have the right at any time to assume and prosecutothe defense or claim and to assume the control of the defense or settlement if itadmits in writing its liability to the 7ndemnitee hereunder with respect to suclimatter and provides adequate security to the Indemn.itee to assure the payment ofsuch liability to the lndemuitee.

10.3 1VIanner of Indemnification. Unless otherwise agreed to by the Indemnitee, allLosses shall be paid promptly in cash upon demand by the Indemnitee.

10.4 Defective Product Claims. It is specifically understood and agreed among theparties that Brondes shall not be responsible for any warranties (express or implied)for used motor vehicles, parts or labor sold by Rouen. All claims relating to suchwarranties received by Brondes shaII be promptly referred to Rouen.

11 EXPENSEES

11.1 Exnenses. Each party shaIl pay its own expenses incident to preparing for, enteringinto and carrying into effect this Agreement and the traasactions contemplatedhereby, except as specifrcally provided to the contrary herein.

12 RISKOF LOSS

11Exhibit I

12.1 The risk of loss of the Acquired Assets shall be borne by Rouen until the ClosingDate.

13 MISCELLANEOUS PROVISIONS

13.1 Notices. Any notice or other communication required or which may be givenhereunder shall be in writing and shall be deemed duly given when delivered inperson, or when mailed by certif ed (with the sender's receipt postmarked by apostal ernployee) or registered niai.l (in either case, with a copy by ordinary first-class mail) or express mail, or when sent by Federal Express or similar overnightdelivery service company, postage or express charges prepaid, in a securelywrapped envelope addressed to the intendedrecipient as follows:

Jf to Brondes:

PhiI7ip S. Brondes Jr,Brondes Ford Maumee, Ltd.1511 S. Reynolds RoadMaumee, Ohio 43537

With a copy to:Glenn L. RamboAnspach Meeks Ellenberger, LLP.300 Madison Suite 1600Toledo, Oluo 43602-2633

If to Rouen:

Michael 1. RouenRouen Moto,rworks, Ltd.1369 Conant Street / PO Box 1330Manmee, Ohio 43537-1330

The designation of the person to be so notified or the address of such person for thepurposes of such notice may be changed from time to time by notice hereunder.

13.2 Parkies in Interest. This Agreement shall be binding upon and inure to the benefrt ofthe parties herato and their respective heirs, successors, person.al representativesand permitted assigns, but sball not be assigned by Rouen without the writtenconsent of Brondes (which consent may be witbheld in the sole discretion ofBrondes) Rouen acknowledges that Brondes intends to form corporations orentities or utilize existing corporations or entities and assign his rights in thisAgreement to the corporations or entities. Brondes shall be permitted, without theconsent of Rouen to assign this Agrecment, in whole or part to corporations, entitiesor other persons as long as Brondes guarantees the obligations hereunder of suchcorporation, entity or other person.

12Exhibit 9

13.3 Entire Akreement. This Agreement along with the schedules and exhibits attachedhereto sets forth aIl of the promises, covenants, agreements, conditions andunderstandings by and ansong Brondes and Rouen with zespect to the subject matterhereof, and supersedes all prior contemporaneous agreements and understandings,indueements or conditions, express or implied, oral or written, with respect hereto,except as contained herein. Moreover, no waiver by any party of any condition, orof the breach of any tezm, covenant, represenfation or warranty contained in thisAgreement, whether by conduct or othezwise, in any one or more instances, shall bedeemed or construed as a further or continuing waiver of any such condition orbreach or a waiver of any other condition or of the breach of any term, covenant,representation or warranty set forth in this Agreement.

13.4 Amendments. This Agreement may not be amended, modified, superseded,canceled, renewed or extended except by a written instrument or docnment signedby aIl parties hereto.

13.5 Schedule and Exhibits. Concurrently with the execution of this Agreement, theparties have at[ached to this Agreement certain schedules and exhibits referredherein, whicli schedules and exhibits are hereby made a part hereof by referencethereto. Certain schedules shall be attached hereto after the execution hereof andshaIl be true, accurate and complete as of the date of attacluxient.

13.6 Controlling Law. This Agreement shall be governed by and constiued inaccordance with the laws of the State of Ohio.

13.7 Captions. The captions of the various sections, subsections and clauses are solelyfor the convenience of the parfles hereto and shall not control or affect the meaningor construc8.on of this Agreement.

13.8 Counterparts. This Agreement may be executed in one or more counterparts, eachof wbich shall constitute an original Agreement bnt all of which together shallconstitute one and the same instrument

13.9 Uniform Tax Treatment. Brondes and Rouen agree that the allocation ofconsideration set forth herein shall be used by them for all tax purposes, includingbut not limited to, repozting pursuant to Section 1060 of the 7ntemal Revenue Codeof 1986, as amended. In preparing and filing IRD Form 8594 ("Asset AcquisitionStatement Under Section 1060"), Brondes and Rouen shall report that the allocationof consideration set forth herein and the fair market value of the assets to whichsuch consideration is allocated is the same. Prior to filing Forms 8594 with respectto the transaction described herein, Brondes and Rouen shall provide to one anothera hv.e and correct copy of the Forms 8594 which each intends to file with respect tothis transaction.

The balance of this page is intentionaIly blank. The next gaae is the signature pa.ee.

Exhibit 113

S'a

APR-22-08 TUE 12:32 Pt1 FRANKLIN PARK LM

04/22/20190 12;13 12166212951FAX NO. 4198820141 P. 02

idMP CO L,PA PAGE 01

STATE OF OHIOMOTOR VRNtCLE DEALERS BOARD

tN Rl.

PROTEST BY ROBERT F'LE15tiL•R

AND

FRANKLIN PARK LINCOI.N-M[RCURY,INC,

PROTE57ANTSr

vs.

FORD MOTOR COMPANY

RESPONDtNT,))

CASE NO. 000-03-MV06-341-JT

HEARING OFFICER JOHN TANOURY

AFFIpAVft OF R{'1BER7 PLEISNER

i, Robett J, Ftoisher, taeing frrst duly ewotn and under the penalty of petjury, aver as

follows:

1. My name Is Robert J, Fleisher, and I am over the age of twenty-ang,

2, 1 arn the President ot Frankitn Park Lincoln Mercury Inc,

3. i am the approved Dealer Principal by Fon1 Motor Company (°Ford"j for FranWin

Park Lincoln Morcury, located in Tatsdo, Qhio,

4 Neither I nor Franklin Park Lincoln Mer>;ury has ever received notice fram Ford

Motor Campany or any other person odvisfng of the relocation of the Lineoln Mercury dealership,

tornicrly operated by Rouen Lincoln Mercury, from 936i Conant Street to 1511 Reynolds Road in

Tolodo. Ohio

5. The sole correspondence I received from Ford regarding the former Rouen deater-

ship odvised oniy that Rouen Lincoln Mercury had entered lnta a buy.seit agreer>,ent with Phil

DrondUy. A copy is attaohed hereto as Cxhibi! I I was not olherv+ise advised Uy Ford Molor Co. of

ar'iy oppodunuy to protest the retocation.

Exhibit 2 S3.v.wnN-Xwn^.ywu.,,n, x.-xrr..F•,.u,. MLLWn.FauN+jvlrNAN„d

.011 /z2f2nf,R 12:I3 I21f,6212951 MMD Cr) LPA PM;E 02

6, Che ftouen•FSroncles buysell agreement, obtained via subpoena, stales that one

or the condiiions of clasing tho purchase would be the ex irati^n of any protest perlod available to

a Iiko make franchise hoitler under section 4517.50 of the phio aevisod Code with rEspect to the

appli.r,ations and penniis lor f3rondes to operate the Lincoln Merr;ury dealership at Conant Street

and then change its address to Reynolds Road with no protest pending, A copy of the pertinent

porl is eRxhed herefo as Exhibit 2.

7. Upon inionnally Icarning of the proposed relocation I promptiy initiated a proceed•

ing wiih (he Ford Draior Policy floard, by leiler daled February 28, 20a8, protesting the move and

requestod that f=ord stay any approval of the proposed relocation, Ford doclined to do so,

t}. According to rorrespondence signed by Phil 9randeS and Michael Rouen, a c.opy

or wnhich I rrcelved from Mr. Rouen via subpoena, this buy-sell agreement was consummated

February 29, 2008,

9 Both the Conant Street locatlon and the Reynolds street location are within the ten

(10) milo Reievant Mark Area ("RMA") of the locafion of Franklin Park Llncoln Mercury.

10. A Lincoln Mercury Franchise operated by Brorides is r,urrently selling and servlC-

ing Lincoln and Mtrrcury vohlcles ai the 1511 Reynolds Road addres5, without prior notic,e of ihe

rtlocaiion,

I dcclare under penally of perjury under the laws ot the Unifed States that the foregofng Is

true nnd correci.

Exer,uled on April 21, 20013, atToledo, qliio.

ROF3LFZT J. -FLEISNER

S'WQRW TO BEFORF M<•= and subscribed in m p.sence this ^`^ day of April, 20D8.

^ . . ^ ^f?.^^^^^/t .F'Ai Fi1CIA A. TtiiEGzK;3 Notary Public

'No1.uy l pPA^ -Srato otGiiloy Coinmissinn Lxpires ©,11--2011

PF,B 19 08 TUE 11:30 AM rRANKLI (J PRRK LM FAX N0, 4198820141

1YI E Ft C L9RY

Ford I,ancoltz Vlercuey Sales Operafioars

Qefroit Region1555 F'airlano Drivoltllen Park, MI 4£1109

1^ctintary 7, 2008

Mr. Rob,^rt hl2ibhcrIWklin Park 1,M

5272 Monroc Sk.'I'olocio, UtC. 43623

I:)War Mr. FlciFhcr:

F. 02 PU

'1'hC purposc oI'this letter is to provida you wriltonnotico in accordancc with Oliio I_nw. 'I'he law requirus us tonotlfy you bf aii otwnershlp change oPnnother 1_incoln Me.rcury dcalcrship in tlto markct Wc herclay arenoiifyir^gyou thut Miko koucn, Roucn T.ineoln Mercmy, Mauuiee, Ohio has entcrcd `vito a buy soll a^rccivaattn sell hit; l,incoln Mercury dcalcrship to I'hil llirondes, MnnumeC, Oliia.

Sineerely, ^

Kurt 13rinktnsnRcgiou a l?v9 rtrkct Rcprescatat ion Mian al;cr

Cc; Ohio 73MV --Dc;nicr LiccnsingAlttt: ,icl`fcry Coleman1970 W. T3road SlrccfC"nlnuibus, (')11 43723-1101

Iirondcs 1'ord Maumt:cntfn: Phil f3rondcs15 11 Rcynolds RnadMziunicc, Oi-1 43537

> c^ 1 ^ `^ ^^ c^G °1

f

^^•^•,,,,^ OHIO BUREAU OF MOTOR VEHICLES

b; ^s STATEMENT OF MANUFAGTURER/DISTRIBUTOR FRANCHISE

1. PLEASE PRINT LEGIBLY OR TYPE THE FOLLOWING INFORMATIONMANUFF URERIUIS 5IBUTOR NAM OF BUSINESS

î^2U /r1^TO2_ r^t r4^3 fADDRESS

^/^ gpo Fkc^c4^r'rè A^^ ^,eCITY

beE9;e eo^2ni

L-MAIL ADDRE.SSIVVE9 SITE

Gr^ww, fd2D,STATE ZIP CO E_

^z^z ^_,2. THE ABOVE MANUFACTURER OR DISTRIBUTOR HEREBY CERTIFIES TIiAT THE FOLLOWING DISTRIBUTORIDEALER IS

DULY AUTHORIZED TO DISTRIBUT8ISELL THE MAKES INDICATED IN #4:EY,AGT NAM F DISTRIBt TOWOEAIE}^

CôNâf .Li%i4G'p1'YADDRESS

131^ / G'oIYaxy fPERMITNUMBER

5 ^^TCITY STATE 71P OD ^ COt1NTYâ73, USING A BLACK PEN, SHADE IN A BOX IN EACH COLUMN, UNDER DEALERSHIP COUNTY, TO INDICATE Ti-tE COUNTY

NUMBER IN WHICH YOUR DEALERSHIP IS LOCATED, SEE CHART BELOW FOR THE APPROPRIATE COUNTY NUMBER.

UI AONA"v 5 COSHOCTON ]I HAMILTON 40 LOGaW 01 N03L2 10 9TAfi5_

ol ALLfN 11 1UWÔRG ]t HNiLOGK d]

_

tOIUJN

^

al OiIPWA n 91llR_T

6]

__

q5h1ANU _m cNVAMOGi 31 IUIIGIN 4A LUCA9 US YAIIlDIIIG -]n 1Nt11.0W1 __

01 ASHTAe01A ID GARKE 21 NAIUlIG011 59 hNGI50N 0•i PGNtY 10 TUSCARRVlA,S_

ASHFN9 2l OFtIANCE 35 HENRY C'I MWOVIING 0.5 PICrcAWAY 90 IR11?4

fA

_

AucL11kE 21 CEIAWARE NIGHIAHU 51 FWVON fiU PI0.E UI YeWY!'Ri

01 o=u,bflT 1z LRIE j 7 ItCC%N16 G2 M11114 07 PCRTAeE Gi WIT09

0U pitOWN 2J FAIFFIEID sU ItOt1,E5 FO

_

AMGS 69 PPt'OIE Oi 5'lAMEN

03 oui1SR Bs FAYERti qH 1illRINl Sp NJICER W YI1RwA G WAS{fIHGT011

10 CRAROLL 25 WNNBLIN 10 JAONSOI' 55

.,_

N•AIM IY pIDHV.NU 05

._..

YIAYNE

11 GHA}RAICN

_

]B FNLTON A1 JfffEq50tl SY MJNiOE 71 11095 06 IMiWAA'9

12 AAH% 21 GAL . Ii NNOX NTGOIkRYMJ 13 eANUVSKY 0 NtlON

li GLERl.S^NT ZB

_

GCMIG4 91 LiNE E9 tMRGAN ]l SCIOTO 99 YIYANIlOT

il GLINT011 YD GN:ENE U IiWqENGE .p FqW}OW YI SFNECM1

15

_

Cq.U'+HWIA 30 cUENISEY 45 t1CMIi1G pp MJSXINGUM 15 s11EIBY BA nIROPSTATF

4. LIST AUTHORIZED MAKES (DO NOT LIST MODELS):

Butler Co.= oB

DEALERSHIPCOUNTY

A. hAAKE B. VEf IICLE TYPE A. MAKE B. VEH[CLE TYPE

5. Is there arlother authorizod dea{er selling the sa rpe make of vehicle(s) wltttin a ten (10) mile radius of the abovenamed dealor7 25 mile radius RV Dealers YES qNO If yes li;t dealer name and address: _

UEALER L-/`,/Y/VFlY'^N _^â^ LINI^ti/l

AOORES3 ! CITY STATE ZIP C^ ^^ ^7^ oN4oe 5ê^^ ^ ^©Ge1?° df^6. Has dealer in PF5 been notified, pursuant to Chapter 4517 of the Ohio revised Code, of the nevr franchise

appointment? [)(YES q NO If yes, give date of notification _Q7C - 6- 6 c4 __

1/Url BMV 4319

Completion of this form and signaturee by both parties, afrirm that a franchise exists between the Manu(acturerlDistributorand Distributor/Dealer in accordance with ORG Sections 4517.64, and 4517.50 -4517.65. Pursuant to ORG 4517.23, theappropriate party shall notify the BMV of any change in status of such contracUagreement within 15 days after suchchange.

x Lft..t /_-- :SIGNATURE

ASSISTANT SE ETARY

o^ l'i /^ p 7aCj

DATE ~

S. NOTARY:Sworn to before me and subscribed in my presence this _7;7:^^ day of

(SEAL) '

9. Signatura of DistributorslDealership's owner, partner, officer, member, ortrustee liste

10. NOTARY:Sworn to before me and subscribed

(SEAL)x .)^NOTARY PU

IMPORTANT tNFORMATION

GCF.NJA Fl^ MWO

-t^MY COMMISSID17 ^--gfJt^$H'elulY, 4'^r.Q1,i Jn"a 41. ehio

ii^ s'fin1m1^?i+g W 0 GTelmtlon aiL

> This form must be on file with the Ohio Bureau of Motor Vehicles, Dealer Licensirig Section,before transactional sales may be made.

Forms tnay be mailed or faxed. `!'o locate the appropriate fax nuniber for your county, pleasevisit www.Oh)oAutoDealere,com. Frorn the home page click on Contract Dealer Licensing, clickon HERE under "by Telephone or Fax" then click on the county in which the distributorldealer,listed in #2, is located,

o Ohio Revised Code 4517.23 requires the appropriate party to notify the Dealer LicensingSection of any change in status of such contractlagreement within 15 days after such change.

All sections must be completed and returned-

NOTE: ALTERED FORMS WILL NOT BE ACCEPTED,

If Mailing, Mail to:Ohio Bureau of Motor Vehicles Attn: Dealer Licensing Section, P.O. Box 16521, Columbus, Ohio

43216-6521

www.OhioAu toDealers.conr

Exhibit 3

Manufacturer'slDistributors authorized agent listed in #1

^ MITNICK ^^^NOTARY PUBLIC-STATE OF MICHIG<d•,

COUNTY OF OAKLANDin fdQCnmmtsslon Expires JU4Y 9, 2013Aclmg In Ihe Counly of

aLto^DATE

trs 11 ^ day of ^^ 4s rv a+_^/ o$-__

CASE NO. - Supreme Court of Ohio and the Ohio Judicial … Counsel for Appellee Ohio Motor Vehicle...

Documents

Transcript of CASE NO. - Supreme Court of Ohio and the Ohio Judicial … Counsel for Appellee Ohio Motor Vehicle...