State ex rel. Cordray v. Midway Motor Sales, Inc. , 122 Ohio St. 3d 234 ( 2009 )

[Cite as State ex rel. Cordray v. Midway Motor Sales, Inc., 122 Ohio St.3d 234, 2009-Ohio-
2610.]
THE STATE EX REL. CORDRAY, APPELLEE, v. MIDWAY MOTOR SALES, INC. ET
AL.; GENERAL MOTORS ACCEPTANCE CORPORATION, APPELLANT.
[Cite as State ex rel. Cordray v. Midway Motor Sales, Inc.,
122 Ohio St.3d 234, 2009-Ohio-2610.]
Motor vehicle sales — R.C. 4505.06(C)(1) — Certificates of title — Odometer
disclosures — R.C. 4549.46(A) does not impose strict criminal liability —
Previous-owner exception.
(No. 2008-1451 — Submitted April 7, 2009 — Decided June 10, 2009.)
APPEAL from the Court of Appeals for Franklin County,
No. 07AP-744, 2008-Ohio-2799.
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SYLLABUS OF THE COURT
1. R.C. 4549.46(A) incorporates the odometer disclosure requirements set forth
in R.C. 4505.06 and is not a strict-liability statute. Liability can be
imposed only if it is established that the defendant knowingly violated the
statute.
2. The previous-owner exception found in R.C. 4549.46(A) applies to a transferor
regardless of when a previous owner tampered with the odometer.
__________________
O’CONNOR, J.
{¶ 1} This appeal involves the construction of R.C. 4549.46(A).
Appellant, General Motors Acceptance Corporation (n.k.a. GMAC, LLC), asserts
that R.C. 4549.46(A) is a not a strict-liability statute, because strict liability
cannot be reconciled with the mandatory odometer disclosure affidavit
promulgated pursuant to statute by the registrar of motor vehicles, which requires
a knowledge-based certification of the odometer reading. Appellant alternatively
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argues that even if R.C. 4549.46(A) is held to be a strict-liability statute, the
previous-owner exception in R.C. 4549.46(A) does not contain a temporal
requirement and is therefore available to GMAC.
{¶ 2} Conversely, appellee, Richard Cordray, attorney general of Ohio,1
contends that R.C. 4549.46(A) plainly indicates a purpose to impose strict
liability. Appellee further maintains that the previous-owner exception applies
only when the tampering party owned the vehicle at the time it tampered with the
odometer.
{¶ 3} We hold that R.C. 4549.46(A) incorporates the odometer
disclosure requirements set forth in R.C. 4505.06 and is not a strict-liability
statute. Liability can be imposed only if it is established that the defendant
knowingly violated the statute. We further hold that the previous-owner
exception found in R.C. 4549.46(A) applies to a transferor regardless of when a
previous owner tampered with the odometer.
{¶ 4} We therefore reverse the judgment of the court of appeals and
remand this matter to the trial court for further proceedings consistent with this
court’s opinion.
Relevant Background
{¶ 5} Midway Motor Sales, Inc. purchased vehicles from General
Motors Corporation for sale or lease at its dealership.2 General Motors issued the
manufacturer’s certificate of origin in Midway’s name, thereby making Midway
the owner of the vehicles. Midway leased a fleet of these vehicles to Modern
Building Supply, Inc. under lease agreements with specified mileage limits, which
were typically 30,000 miles.
1. This suit was filed by former Attorney General Jim Petro, and the appeal to this court named
Attorney General Nancy Rogers as appellee before she was succeeded by Attorney General
Richard Cordray.
2. Midway was a codefendant in this action but subsequently filed for bankruptcy. Midway is not
a party to this appeal.
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January Term, 2009
{¶ 6} GMAC is a financial institution that extends wholesale floor-plan
financing to automobile dealers such as Midway. Pursuant to its agreement with
GMAC, Midway thereafter assigned the Modern Building Supply lease
agreements and sold the leased vehicles to GMAC. GMAC never had possession
of the vehicles.
{¶ 7} Unbeknownst to GMAC, Midway and Modern Building Supply
had entered into secret lease arrangements allowing Modern Building Supply
significantly greater mileage limits than specified in the lease agreements
assigned to GMAC. As a result, the leased vehicles had mileage in excess of the
30,000-mile limit at the end of the lease periods. In an apparent effort to conceal
the excess mileage from GMAC, Midway retrieved the leased vehicles at the end
of the lease periods and altered the odometers on the vehicles.
{¶ 8} Without knowing that the odometers had been tampered with,
GMAC sold the vehicles at dealer-only auctions. In order to transfer ownership
of each car, GMAC was required to complete an odometer disclosure affidavit to
certify the amount of mileage on the vehicle. GMAC completed the required
odometer disclosure affidavits for the vehicles by using the mileage amounts
disclosed on the lessee’s written odometer disclosure statements. GMAC relied
upon the accuracy of the lessee’s disclosure statements and had no knowledge that
the odometers had been altered.
{¶ 9} After many of the leased vehicles had been sold at auction, GMAC
discovered that Midway had tampered with the odometers. GMAC reported this
information to the attorney general. GMAC complied with the attorney general’s
requests for information and assisted in the investigation into Midway’s conduct.
GMAC also implemented a remediation plan and compensated the owners of the
affected vehicles by either buying each vehicle back or paying a monetary
adjustment for the mileage discrepancy.
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{¶ 10} The attorney general commenced this lawsuit in the Franklin
County Court of Common Pleas against Midway and GMAC pursuant to the
authority vested in him by the Consumer Sales Practices Act, R.C. Chapter 1345,
and the Odometer and Rollback Disclosure Act, R.C. 4549.41 et seq. The
attorney general asserted several claims against both Midway and GMAC.
Pertinent to the instant appeal, the attorney general alleged that GMAC had
violated R.C. 4549.46 by failing to provide the true odometer disclosures required
by R.C. 4505.06. GMAC denied the allegations and filed a counterclaim alleging
abuse of process and seeking a declaratory judgment regarding the rights and
obligations of GMAC and the attorney general under R.C. 4549.46.
{¶ 11} The attorney general moved for summary judgment against GMAC
with regard to his allegation that GMAC had violated R.C. 4549.46. The trial
court granted the attorney general’s motion for partial summary judgment. The
trial court held that R.C. 4549.46 is a strict-liability statute and that GMAC’s lack
of knowledge of the odometer tampering was therefore irrelevant. The trial court
further held that the previous-owner exception relieves a transferor from strict
liability only if the tampering occurred before the transferor’s ownership.
{¶ 12} GMAC appealed to the Tenth District Court of Appeals, and the
court affirmed the trial court’s judgment. State ex rel. Rogers v. Midway Motor
Sales, Inc., 10th Dist. No. 07AP-744, 2008-Ohio-2799. Relying on its own
precedent and that from various Ohio appellate courts holding that R.C. 4549.46
is a strict-liability statute, the court rejected GMAC’s arguments to the contrary.
Id. at ¶ 17. The court further noted that if its interpretation of R.C. 4549.46 as a
strict-liability statute was misguided, the resolution rested with this court or the
legislature. Id. With regard to the previous-owner exception in R.C. 4549.46, the
Tenth District adopted the trial court’s holding that the exception is triggered only
when the odometer tampering occurred before the transferor’s ownership of the
vehicle. Id. at ¶ 23–29.
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January Term, 2009
{¶ 13} The case is now before us on our acceptance of a discretionary
appeal. State ex rel. Rogers v. Midway Motor Sales, Inc., 119 Ohio St.3d 1485,
2008-Ohio-5273, 894 N.E.2d 1243.
Analysis
A. Construction of R.C. 4549.46(A)
{¶ 14} Initially, we are called upon to decide whether R.C. 4549.46(A) is
a strict-liability statute. The attorney general and the lower courts rely on Flint v.
Ohio Bell Tel. Co. (1982), 2 Ohio App.3d 136, 2 OBR 150, 440 N.E.2d 1244, and
its progeny for the proposition that R.C. 4549.46 is a strict-liability statute. The
Flint court did not consider the issue presented herein, namely, whether R.C.
4549.46(A) incorporates the knowledge element in the odometer disclosure
affidavit that is prescribed by the registrar in accordance with R.C. 4505.06(C)(1).
We hold that it does and thus distinguish Flint.
{¶ 15} The primary goal in construing a statute is to ascertain and give
effect to the intent of the legislature. State v. Hairston, 101 Ohio St.3d 308, 2004-
Ohio-969, 804 N.E.2d 471, ¶ 11. In interpreting a statute, this court has held that
“the intent of the law-makers is to be sought first of all in the language employed,
and if the words be free from ambiguity and doubt, and express plainly, clearly
and distinctly, the sense of the law-making body, there is no occasion to resort to
other means of interpretation.” Slingluff v. Weaver (1902), 66 Ohio St. 621, 64
N.E. 574, paragraph two of the syllabus.
{¶ 16} We find that the language of R.C. 4549.46(A) is plain and
unambiguous. R.C. 4549.46(A) governs Ohio odometer violations and provides
as follows: “No transferor shall fail to provide the true and complete odometer
disclosures required by section 4505.06 of the Revised Code.” R.C. 4549.46(A)
clearly incorporates R.C. 4505.06 in that it requires a transferor to make the
odometer disclosure required by R.C. 4505.06. Our focus therefore shifts to what
type of odometer disclosure is required by R.C. 4505.06.
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{¶ 17} R.C. 4505.06(C)(1) contains the following directive to the
registrar: “The registrar shall prescribe an affidavit in which the transferor shall
swear to the true selling price and, except as provided in this division, the true
odometer reading of the motor vehicle.”
{¶ 18} The affidavit prescribed by the registrar contains the following
language:
{¶ 19} “I (we) certify to the best of my (our) knowledge that the odometer
now reads , miles and is the actual mileage of the vehicle unless one of
the following statements is checked.
{¶ 20} “ The mileage stated is in excess of the mechanical limits.
{¶ 21} “ The odometer reading is not the actual mileage.”
{¶ 22} Thus, the affidavit calls for a knowledge-based certification of the
odometer reading. The affidavit is printed on the back of the certificate of title
and is the only means available for disclosing an odometer reading. A transferor
is required to use the registrar’s affidavit.
{¶ 23} The odometer disclosure affidavit was created in accordance with
the statutory authority bestowed upon the registrar by R.C. 4505.06. An
administrative regulation issued pursuant to statutory authority has the force and
effect of law. State ex rel. Cuyahoga Cty. Hosp. v. Bur. of Workers' Comp.
(1986), 27 Ohio St.3d 25, 28, 27 OBR 442, 500 N.E.2d 1370. Conversely, a
regulation is invalid if it is not authorized: an administrative rule cannot add or
subtract from a legislative enactment. See, e.g., Hoffman v. State Med. Bd., 113
Ohio St.3d 376, 2007-Ohio-2201, 865 N.E.2d 1259, ¶ 17. The registrar did not
promulgate a rule that adds to or subtracts from the Odometer Rollback and
Disclosure Act. Rather, a legislative enactment empowered the registrar to
prescribe the odometer disclosure affidavit. The affidavit therefore has the force
and effect of law.
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January Term, 2009
{¶ 24} The affidavit complies with the statutory directive. At no time
since the inception of the affidavit has the General Assembly repudiated the
affidavit by enacting legislation directing the removal of the knowledge element
from the form. It is not the judiciary’s province to nullify the statutorily
prescribed affidavit. Therefore, we hold that the affidavit created by the registrar
has the force and effect of law and is an extension of R.C. 4505.06 that is
explicitly incorporated in R.C. 4549.46(A).
{¶ 25} The odometer disclosure affidavit authorized by R.C. 4505.06
relates to and is incorporated into R.C. 4549.46(A). Because we are faced with
two related statutory provisions, R.C. 4549.46(A) and 4505.06 must be read in
pari materia. Maxfield v. Brooks (1924), 110 Ohio St. 566, 144 N.E. 725,
paragraph two of the syllabus. In reading statutes in pari materia and construing
them together, this court must give a reasonable construction that provides the
proper effect to each statute. Id. All provisions of the Revised Code bearing
upon the same subject matter should be construed harmoniously unless they are
irreconcilable. Couts v. Rose (1950), 152 Ohio St. 458, 461, 40 O.O.482, 90
N.E.2d 139.
{¶ 26} In construing R.C. 4549.46(A) and the registrar’s affidavit
promulgated pursuant to R.C. 4505.06(C)(1), we find that the harmonious
construction of the provisions is that the legislature intended for transferors to be
liable only for knowing violations of the odometer disclosure statute. Any other
reading of the two statutes cannot be reconciled. In fact, if we were to read the
statutes any other way, the odometer disclosure affidavit would be rendered
meaningless.
{¶ 27} We therefore hold that the plain language of R.C. 4549.46(A),
through its incorporation of R.C. 4505.06, clearly indicates a purpose to impose
liability only for knowing violations of R.C. 4549.46(A). Because the meaning of
the statute is evident from the plain language of R.C. 4549.46(A), it is
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unnecessary to resort to other means of interpretation such as legislative history,
public policy, or other provisions of the Odometer Rollback and Disclosure Act.
{¶ 28} This result is consistent with this court’s precedent analyzing
whether a criminal statute imposes strict liability. The General Assembly
established the test for determining strict criminal liability in R.C. 2901.21(B).3
That statute provides: “When the section defining an offense does not specify any
degree of culpability, and plainly indicates a purpose to impose strict criminal
liability for the conduct described in the section, then culpability is not required
for a person to be guilty of the offense.”
{¶ 29} In determining whether a statute imposes strict liability, this court
holds: “It is not enough that the General Assembly in fact intended imposition of
liability without proof of mental culpability. Rather the General Assembly must
plainly indicate that intention in the language of the statute.” State v. Collins
(2000), 89 Ohio St.3d 524, 530, 733 N.E.2d 1118.
{¶ 30} As set forth above, R.C. 4549.46(A) specifies the degree of mental
culpability by virtue of the affidavit prescribed by the registrar pursuant to R.C.
4505.06(C)(1). Therefore, there is no absence of a mental state to indicate strict
liability because the mental state of a knowing odometer disclosure is
incorporated into the statute by the statutorily required affidavit.
{¶ 31} For the reasons stated above, we hold that R.C. 4549.46(A) is not a
strict-liability statute and that liability can be imposed only for a knowing
odometer disclosure violation.4
B. Previous-Owner Exception to Liability Under R.C. 4549.46(A)
3. Although the attorney general has pursued only civil liability against GMAC in this case, a
violation of R.C. 4549.46 is a felony of the fourth degree. R.C. 4549.46(D). Thus, the test for
strict criminal liability is applicable here.
4. Based upon our holding that R.C. 4549.46(A) is not a strict-liability statute, it is unnecessary to
address GMAC’s proposition relating to entrapment.
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January Term, 2009
{¶ 32} The next issue for our consideration is whether the previous-owner
defense in R.C. 4549.46(A) is available regardless of whether the previous owner
was the owner of the vehicle at the time the odometer tampering occurred. We
find that it is.
{¶ 33} An exception to liability under R.C. 4549.46 is set forth in the
second sentence of subsection (A) of the statute, which states the following:
{¶ 34} “The transferor of a motor vehicle is not in violation of this
division requiring a true odometer reading if the odometer reading is incorrect due
to a previous owner's violation of any of the provisions contained in sections
4549.42 to 4549.46 of the Revised Code, unless the transferor knows of or
recklessly disregards facts indicating the violation.”
{¶ 35} The Tenth District admittedly disregarded the plain and ordinary
meaning of this exception to liability. State ex rel. Rogers v. Midway Motor
Sales, Inc., 10th Dist. No. 07AP-744, 2008-Ohio-2799, ¶ 26. The appellate court
essentially rewrote the statute based upon its view that the legislature could not
have intended the result that a transferor is absolved of liability when a prior
owner altered an odometer, but not where a third party altered an odometer, even
though in either scenario the act took place during the transferor’s ownership. Id.We disagree.
{¶ 36} As noted above, the rule is that “the intent of the law-makers is to
be sought first of all in the language employed, and if the words be free from
ambiguity and doubt, and express plainly, clearly and distinctly, the sense of the
law-making body, there is no occasion to resort to other means of interpretation.”
Slingluff v. Weaver, 66 Ohio St. 621, 64 N.E. 574, at paragraph two of the
syllabus. The language employed in the previous-owner exception is plain and
unambiguous. There is no temporal requirement for a transferor to qualify for the
previous-owner exception. Such a requirement plainly does not exist in the
statute. Therefore, there is no occasion for the court to resort to other means of
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interpretation. This court would invade the province of the legislature and violate
separation of powers if it rewrote the statute to include a requirement that the
previous owner be the owner of the vehicle at the time of the odometer tampering.
See Arbino v. Johnson & Johnson, 116 Ohio St.3d 468, 2007-Ohio-6948, 880
N.E.2d 420, ¶ 21. This court will not engage in such a practice and leaves it to the
General Assembly to rewrite the statute if it deems it necessary.
{¶ 37} We therefore hold that the previous-owner exception found in R.C.
4549.46(A) applies to a transferor regardless of when a previous owner tampered
with the odometer.
Conclusion
{¶ 38} For the foregoing reasons, we hold that R.C. 4549.46(A)
incorporates the odometer disclosure requirements set forth in R.C. 4505.06 and is
not a strict-liability statute. Liability can be imposed only if it is established that
the defendant knowingly violated the statute.
{¶ 39} We further hold that the previous-owner exception found in R.C.
4549.46(A) applies to a transferor regardless of when a previous owner tampered
with the odometer.
{¶ 40} Accordingly, we reverse the judgment of the court of appeals and
remand this matter to the trial court for further proceedings consistent with this
court’s opinion.
Judgment reversed
and cause remanded.
MOYER, C.J., and PFEIFER, LUNDBERG STRATTON, O’DONNELL,
LANZINGER, and CUPP, JJ., concur.
__________________
Richard Cordray, Attorney General, Benjamin C. Mizer, Solicitor General,
Stephen P. Carney, Deputy Solicitor, and David M. Dembinski and Teresa A.
Heffernan, Assistant Attorneys General, for appellee.
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January Term, 2009
Carpenter, Lipps & Leland, L.L.P., Michael H. Carpenter, Jeffrey A.
Lipps, and Angela M. Paul Whitfield, for appellant.
Dreher Tomkies Scheiderer, L.L.P., Darrell L. Dreher, and Vanessa A.
Nelson, urging reversal for amici curiae American Financial Services Association
and Association of Consumer Vehicle Lessors, National Automobile Dealers
Association, and Ohio Automobile Dealers Association.
______________________
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