Toyota dealership relocation to Fishers divides appeals court

August 13, 2015

Whether three competing greater Indianapolis Toyota dealers may block the relocation of another Toyota franchise from Anderson to Fishers divided a panel of the Indiana Court of Appeals Thursday.

Anderson-based Ed Martin Toyota has proposed to relocate to the fast-growing Hamilton County city with the carmaker’s blessing. Andy Mohr Toyota, Butler Toyota and Tom Wood Toyota say not so fast, and after talks with Toyota broke down, the dealers sought relief from the state.

The three Indy-area dealerships were unsuccessful in getting the Auto Dealer Services Division of the Indiana Secretary of State’s Office to find the proposed relocation was without good cause, which would have blocked the move. The division denied their requests, ruling that because the dealerships were outside the 6-mile market area where the dealership would relocate, they lacked standing for a challenge under state law.

The dealerships appealed to a Marion Superior Court that affirmed the division’s ruling, but in a 2-1 ruling Thursday, a majority of the Indiana Court of Appeals reversed and sent the matter back to the division for a do-over.

Judges wrangled with interpreting the Indiana Dealer Services statutes as a matter of first impression on whether the proposed entry into the market constituted a proposed dealership or a relocation, each of which is addressed in Indiana Code.

“In sum, the Division’s interpretation of Sections 9-32-2-20 and 9-32-13-24(e) is unreasonable and incorrect as a matter of law,” Judge Edward Najam wrote for the majority joined by Judge John Baker.

“The Division disregards the statutory scheme and fails to account for the fact that the relocation of an existing dealer into the relevant market is every bit as much a threat, if not a greater threat, to the existing dealers within that area as the establishment of a new dealership,” the majority held. “An agency’s interpretation that is contrary to law is entitled to no deference. Accordingly, we reverse the trial court’s judgment and remand to the Division for further proceedings.”

Dissenting Judge Ezra Friedlander wrote that the statutes in question are “undoubtedly inartful, but I am convinced that the Division’s interpretation is reasonable.” He wrote that the majority’s reliance on imprecise language in the statute leads to “troubling results.”

“In my mind, the clear intent of I.C. § 9-32-13-24 is to provide protest rights to affected … dealers regardless of whether the franchisor intends to relocate an existing dealer in/to/within the relevant market area or establish an entirely new dealer in the relevant market area.  The applicable relevant market area, in turn, determines which dealers have protest rights.

“Under its reasonable interpretation of the relevant statutes, the Division determined that the applicable relevant market area in this case was the six-mile radius. ...  The Dealers do not dispute that they are outside this area.  Accordingly, I would affirm the trial court’s judgment based upon lack of standing.”

The case is Andy Mohr West, Inc. d/b/a Andy Mohr Toyota, Butler Motors, Inc. d/b/a Butler Toyota, and TW Toy, Inc. d/b/a Tom Wood Toyota v. Office of the Ind. Sec. of State, Auto Dealer Services Div. et al, 49A02-1411-PL-812.



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