Hathorn v. Dana Motor

[Cite as Hathorn v. Dana Motor, 2016-Ohio-5110.]
IN THE COURT OF APPEALS
FIRST APPELLATE DISTRICT OF OHIO
HAMILTON COUNTY, OHIO
ROBIN HATHORN, : APPEAL NO. C-150363
TRIAL NO. A-1200426
and :
WILLIAM BLOUNT, : O P I N I O N.
Plaintiffs-Appellants, :
vs. :
DANA MOTOR CO., LLC., :
and :
HCHT, LLC., :
Defendants-Appellees. :
Civil Appeal From: Hamilton County Court of Common Pleas
Judgment Appealed From Is: Affirmed
Date of Judgment Entry on Appeal: July 27, 2016
Freaking & Betz, LLC, Randolph Freaking and Brian P. Gillan, and Jacobs, Kleinman,
Seibel & McNally Co, L.P.A., and Mark J. Byrne, for Plaintiffs-Appellants,
Keating, Meuthing & Klekamp, James R. Matthews, Joseph M. Callow and William
N. Minor, for Defendants-Appellees.
OHIO FIRST DISTRICT COURT OF APPEALS
S TAUTBERG , Judge.
{¶1} Plaintiffs-appellants Robin Hathorn and William Blount filed a class-
action lawsuit against defendants-appellees Dana Motor Co., LLC, and HCHT, LLC.,
(collectively “Dana Motor”) alleging violations of the Ohio Consumer Sales Practices
Act (“CSPA”), fraud, and breach of contract. They also asserted a claim entitled
“breach of the duty of good faith and fair dealing.”1 Hathorn and Blount’s claims
stemmed from allegations that Dana Motor repeatedly overcharged them, and a
putative class of thousands of individuals, for motor oil, transmission fluid, coolant,
power-steering fluid, differential fluid, washer fluid, transfer-case fluid, and brake
fluid. Hathorn and Blount further alleged that Dana Motor repeatedly charged them
and putative class members for “DriveSure Krex,” and/or a “BG Flush Kit” even
though these products were not used in their respective automobiles.
{¶2} The parties filed cross-motions for summary judgment. Hathorn and
Blount moved the trial court for summary judgment only as those claims pertained to
Dana Motor’s allegedly unlawful sale of motor oil. Dana Motor moved for summary
judgment on all of Hathorn and Blount’s claims. The trial court granted Dana Motor’s
motion. We note that, on appeal, Hathorn and Blount challenge the trial court’s
judgment only as it pertains to motor oil sales, in particular. We therefore limit our
analysis accordingly.
Facts
{¶3} Dana Motor is in the business of selling and servicing Mercedes Benz
automobiles. Hathorn and Blount, Mercedes Benz owners, were service customers at
Dana Motor. In support of their respective motions for summary judgment, the
1 Hathorn and Blount withdrew this claim during briefing of the motion for summary judgment and
we will not address it here.
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OHIO FIRST DISTRICT COURT OF APPEALS
parties submitted to the court copies of Dana Motor invoices. On those invoices
relating to motor oil sales, Hathorn contended that the invoices showed that she had
been charged for eight units (presumably quarts) of motor oil. Hathorn claimed that
her car only held seven and one-half quarts of motor oil. When Hathorn had an oil
change, however, it was part of a specific service package in which other services—e.g.
tire rotation and vehicle inspections—were provided.
{¶4} The invoices charging Blount for motor oil showed that Dana Motor had
allegedly charged Blount for nine units of motor oil. Blount claimed that his car held
only eight and one-half quarts of motor oil. As with Hathorn, Blount’s oil changes
were a component of a service package in which other services were provided.
{¶5} In support of their motion for summary judgment, Dana Motor argued,
in part, that the number of quarts of motor oil listed on Hathorn’s and Blount’s
invoices was irrelevant because Hathorn and Blount had each paid a preset “menu
price” for a bundled service package that included a motor oil change. According to an
affidavit of Matthew Fairbanks, who had personally updated Dana Motor’s “menu
pricing system,” for every service interval and each make and model of Mercedes Benz
automobile, he combined the necessary parts, fluids, and labor to create one total
service-package price to be offered to the customer. Fairbanks stated that, under this
pricing system, “the customer pays one total price for the service package and all that it
encompasses, instead of being charged for individual items and labor.”
{¶6} Other evidence submitted to the court established that Dana Motor’s
billing software allowed and utilized whole units of fluids, only, and the billing
software would not allow fractional numbers to be entered into the system.
{¶7} After briefing and arguments by the parties, the trial court entered
summary judgment in favor of Dana Motor on all claims. In pertinent part, the trial
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OHIO FIRST DISTRICT COURT OF APPEALS
court determined that (1) Hathorn and Blount’s CSPA claims failed because there was
nothing deceptive or unconscionable about Dana Motor’s billing practices, and (2)
Hathorn and Blount’s breach of contract claims were barred by the “Voluntary
Payment Doctrine.”
{¶8} In their sole assignment of error, Hathorn and Blount now argue that
the trial court erred in entering summary judgment in favor of Dana Motor. We review
the granting of summary judgment de novo. Grafton v. Ohio Edison Co., 77 Ohio St. 3d
102, 105, 671 N.E.2d 241 (1996). Summary judgment is appropriate when (1) there is
no genuine issue of material fact, (2) the moving party is entitled to judgment as a
matter of law, and (3) the evidence, when viewed in favor of the nonmoving party,
permits only one reasonable conclusion and that conclusion is adverse to the
nonmoving party. Civ.R. 56(C); Grafton; State ex rel. Howard v. Ferreri, 70 Ohio
St.3d 587, 589, 639 N.E.2d 1189 (1994).
Fairbanks’s Affidavit
{¶9} As an initial matter, we address an argument raised by Hathorn and
Blount that the trial court should have disregarded Fairbanks’s affidavit. Hathorn and
Blount contend that, because Dana Motor did not identify Fairbanks as a witness in
discovery, they never had an opportunity to depose him and were “sandbagged.”
{¶10} Hathorn and Blount cite no authority in support of this argument. The
record does not reflect, nor do Hathorn and Blount argue, that any deadline for
naming witnesses had passed. Further, they could have, but did not, move the trial
court under Civ.R. 56(F) for more time to conduct discovery before responding to
Dana Motor’s motion.
{¶11} Upon a review of the record, we can find no grounds for the trial court to
have disregarded Fairbanks’s affidavit. This argument has no merit.
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OHIO FIRST DISTRICT COURT OF APPEALS
The Ohio Consumer Sales Practices Act
{¶12} Hathorn and Blount next contend that the trial court should not have
entered summary judgment on their CSPA claims. The CSPA “prohibits unfair or
deceptive acts and unconscionable acts or practices by suppliers in consumer
transactions.” Einhorn v. Ford Motor Co., 48 Ohio St. 3d 27, 29, 548 N.E.2d 933
(1990); see R.C. 1345.02 and 1345.03. Hathorn and Blount claim that there remain
genuine issues of material fact concerning whether Dana Motor’s sale of motor oil was
both deceptive and unconscionable.
{¶13} An act is deceptive if it “ ‘has the likelihood of inducing in the mind of
the consumer a belief which is not in accord with the facts.’ ” Funk v. Montgomery
AMC/Jeep/Renault, 66 Ohio App. 3d 815, 823, 586 N.E.2d 1113 (1st Dist.1990), citing
Brown v. Bredenbeck, Franklin C.P. No. 74CV-09-3493, 1975 Ohio Misc. LEXIS 124,
*5 (July 24, 1975). R.C. 1345.02(B) contains a nonexhaustive list of acts that are
considered “deceptive.” Hathorn and Blount argue that Dana Motor acted deceptively
under R.C. 1345.02(B)(6) because Dana Motor induced them to believe that they were
receiving more motor oil than they actually were. See R.C. 1345.02(B)(6). Hathorn
and Blount also claim that, by overbilling them for motor oil, Dana Motor acted
deceptively by representing that a “specific price advantage” existed that did not. See
R.C. 1345.02(B)(8).
{¶14} In support of these claims, Hathorn and Blount contend that Dana
Motor’s itemized billing led them to believe that they had received more motor oil than
they actually did because their invoices listed a greater amount of motor oil than their
respective cars could hold. The trial court determined, and we agree, that Hathorn and
Blount’s argument is flawed in that it ignores that “they purchased a service at a fixed
price” and did not purchase “the individual components comprising the service.”
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OHIO FIRST DISTRICT COURT OF APPEALS
{¶15} According to Fairbanks, who was responsible for updating Dana
Motor’s menu pricing system, he combined the necessary parts, labor, and fluid for a
given service package—such as a 5,000-mile service check—to ultimately come up with
one total price for the service package. Fairbanks stated:
When a customer brings a car to the dealership for service, the Service
Advisor opens the menu pricing system on the ADP [billing] software
and first enters the chassis number of the vehicle. * * * The Service
Advisor must then select a service. The list of model variants will then
appear, and after the model variant is selected, a detailed list of parts,
products and anticipated labor hours will appear for the service. In
addition to the detailed list of parts, products and labor hours, a total
price will be generated for the customer.
This menu pricing system enables the Service Advisor to give the
customer the “out the door” price, as it will not change between the time
the quote is given and when the service is actually performed. In other
words, if the cost of a particular part goes up, Dana Motors’ [sic] margins
will go down because the price of the part is already accounted for in the
menu pricing system.
{¶16} Hathorn and Blount never alleged or claimed that they purchased
individual quarts of motor oil, a la carte, from Dana Motor. Their invoices all indicated
that they purchased service packages specific to mileage intervals. According to
Fairbanks’s affidavit, these service packages were menu-priced. Under menu pricing,
the customer was offered a fixed price for a bundle of services that included all labor,
parts, and fluids. There is no evidence that Hathorn and Blount were led to believe
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OHIO FIRST DISTRICT COURT OF APPEALS
that they were purchasing individual quarts of motor oil instead of a service package
that included an oil change and all that it entailed.
{¶17} Hathorn and Blount claim that Dana Motor’s own witnesses
contradicted Fairbanks’s statements. We fail to see how. While it is true that multiple
witnesses testified in their depositions that Dana Motor’s billing software billed in
whole units, none of these witnesses testified about how this interacted with menu
pricing or service packages. According to Fairbanks, the menu price did not change
from the start of service to the end—the price was therefore not based on the amount
of fluids actually used. The customers agreed to pay the quoted price for the agreed
upon services. There is nothing in the record to contradict this. Further, deposition
testimony from other witnesses corroborated Fairbanks’s testimony that Dana Motor
offered menu pricing to its customers. One witness, former Dana Motor service
advisor Larry Molloy, confirmed that all oil changes were menu-priced. Molloy
admitted that he did not know how the menu pricing system worked. Another witness,
Dana Motor’s parts manager, Rick Crain, testified that service customers were shown a
“service menu” when they came in, and that the menu detailed recommended
maintenance packages. Hathorn and Blount’s own witness, Dana Motor parts advisor
Wesley Nichols, confirmed that Dana Motor used a menu pricing system.
{¶18} Based on this evidence, we hold that the trial court correctly concluded
that there was no genuine issue of fact concerning whether Dana Motor acted in a
deceptive manner. Hathorn and Blount got what they paid for—a service package that
included a motor oil change for a fixed price. Compare Kelly v. Ford Motor Co., 137
Ohio App. 3d 12, 738 N.E.2d 9 (1st Dist.2000) (the failure to itemize certain fees in an
automobile lease was not deceptive or unfair under the CSPA because appellants were
not misled as to the total cost of the lease).
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OHIO FIRST DISTRICT COURT OF APPEALS
{¶19} Nor do we find an issue of fact regarding whether Dana Motor’s billing
practices were unconscionable. “ ‘Unconscionable acts or practices’ relate to a supplier
manipulating a consumer’s understanding of the nature of the transaction at issue.”
Johnson v. Microsoft Corp., 106 Ohio St. 3d 278, 2005-Ohio-4985, 834 N.E.2d 791, ¶
24. To determine whether an act is unconscionable, R.C. 1345.03 sets forth a number
of circumstances that a court should consider.
{¶20} In this case, Hathorn and Blount claim that Dana Motor acted
unconscionably because they knowingly took unfair advantage of them by
overcharging for motor oil. R.C. 1345.03 sets forth a number of “circumstances” that a
trial court should consider in determining whether an act is unconscionable.
Presumably, Hathorn and Blount rely on R.C. 1345.03(B)(1). That code section
provides that a court should consider whether a supplier has “knowingly taken
advantage of the inability of the consumer reasonably to protect the consumer’s
interests because of the consumer’s * * * inability to understand the language of an
agreement.” R.C. 1345.03(B)(1). There is nothing in the record to show that Dana
Motor engaged in this type of behavior. Hathorn and Blount make no other allegations
specifically pertaining to Dana Motor acting “unconscionably.” And we find no other
circumstances listed in R.C. 1345.03 to exist. This argument therefore has no merit.
Fraud
{¶21} Hathorn and Blount next contend that the trial court erred when it
entered summary judgment in favor of Dana Motor on their fraud claim. The elements
of fraud are (1) a representation, or concealment where there is a duty to disclose, (2)
that is material to the transaction, (3) made falsely, with knowledge or reckless
disregard of its falsity, (4) with the intent of misleading another into relying on it, (5)
justifiable reliance on the misrepresentation or concealment, and (6) damages
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OHIO FIRST DISTRICT COURT OF APPEALS
proximately caused by the reliance. Rose v. Zaring Homes, 122 Ohio App. 3d 739, 744,
702 N.E.2d 952 (1st Dist.1997), citing Burr v. Bd. of Cty. Commrs. of Stark Cty., 23
Ohio St. 3d 69, 491 N.E.2d 1101 (1986), paragraph two of the syllabus.
{¶22} The crux of Hathorn and Blount’s fraud claim was that Dana Motor had
represented to Hathorn and Blount that they were providing more motor oil to them
than they were. There was deposition testimony from Hathorn, Blount, and Larry
Molloy that Dana Motor’s itemized bills showed that Hathorn and Blount were
charged for motor oil that they never received. But there was no testimony or other
evidence that Hathorn or Blount purchased individual quarts of motor oil, as opposed
to a motor oil change. And it was uncontested that a motor oil change was menu-
priced. Based on Fairbanks’s affidavit, the actual amount of fluids used was irrelevant
to what a customer paid because under the menu pricing scheme the quoted price did
not change from start to finish. Instead, customers received bundled services and
goods for a fixed price. We find nothing fraudulent about this practice.
{¶23} For similar reasons, Hathorn and Blount’s breach of contract claim fails.
A breach of contract exists where, without legal justification, a party fails to perform
any promise that forms a whole or part of a contract. Natl. City Bank of Cleveland v.
Erskine & Sons, 158 Ohio St. 450, 110 N.E.2d 598 (1953), paragraph one of the
syllabus. Hathorn and Blount claim that Dana Motor breached their contract with
them by failing to provide the motor oil that Hathorn and Blount had paid for.
{¶24} Hathorn and Blount paid for bundled services and goods. They do not
allege, and there is no evidence to show, that Dana Motor failed to provide the agreed
upon bundle of services and goods at the agreed upon price.
{¶25} Hathorn and Blount also argue that the trial court improperly relied on
the “Voluntary Payment Doctrine” when ruling on their breach of contract claim.
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OHIO FIRST DISTRICT COURT OF APPEALS
Because we have already determined that there was no breach of contract, this
argument is moot and we decline to address it. See App.R. 12(A)(1)(c).
{¶26} This argument therefore has no merit.
Conclusion
{¶27} The bottom line in this case is that Hathorn and Blount each received
what they paid for—agreed upon automobile services at agreed upon prices. Summary
judgment in favor of Dana Motor was appropriate, and Hathorn and Blount’s sole
assignment of error is overruled.
{¶28} The trial court’s judgment is affirmed.
Judgment affirmed.
DEWINE, P.J., and MOCK, J., concur.
Please note:
The court has recorded its own entry this date.
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