Keystone RV Company v. Texas Department of Motor Vehicles, Motor Vehicle Division

CITATION

THE STATE OF TEXAS

TO: Whitney Brewster, Executive Director

Texas Department of Motor Vehicles

4000 Jackson Avenue

Austin, Texas 78731

Larry Roche

Through his attorney of record, James D. Pierce

1 Sugar Creek Center, Suite 1080

Sugar Land, Texas 77478

You are notified that appellant Keystone RV Company filed on October 8, 2015, in this Court,

under cause no. 03-15-00644-CV, styled Keystone RV Company v. Texas Department ofMotor

Vehicles, Motor Vehicle Division, a petition for judicial review of an order of the Texas

Department of Motor Vehicles, as shown on the petition, copies of which accompany this

citation. See Tex. Occ. Code Ann. § 2301.752; 43 Tex. Admin. Code § 215.207(8) (2015)

(Texas Dep't of Motor Vehicles, Contested Cases: Final Orders). You are commanded to appear

before the Court of Appeals for the Third District of Texas, in Austin, Travis County, Texas, in

the manner prescribed by subchapter P, chapter 2301 of the Texas Occupations Code and the

Texas Rules of Appellate Procedure.

The attorney for Keystone RV Company is:

Christopher J. Lowman

The Lowman Law Firm

One Allen Center

500 Dallas Street, Suite 3030

Houston, Texas 77002-4705

Telephone: (713) 752-0777

Facsimile: (713) 752-0778

E-mail: chris@lowmanlaw.com

NOTICE TO APPELLEES

You have been sued. You may employ an attorney to represent you before this Court. The Court

is required to cause citation to be issued. If you or your attorney do not file a brief in compliance

with the rules of appellate procedure, the Court may proceed to consideration of the cause

without the party's answer or brief.

Date of Issuance: October 16,2015

GIVEN UNDER MY HAND AND THE SEAL OF THIS COURT, on this the 16th day of

October, 2015, at Austin, Travis County, Texas.

Jefpey^.Kyl/

Clerk of the Court of Appeals

Third District of Texas

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RETURN OF CITATION

Received this citation on , at . Executed at

within the County of , State of Texas, on , at , by delivering

to , at , a true copy of this citation together with

an accompanying copy of appellant's petition for judicial review, having first endorsed on the

citation the date of

My fees for service of process are as follows:

For serving citation: $

Other: $

Total Fees $

To certify which witness my hand.

County of

State of Texas

By:

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729

THIRD COURT OF APPE

03-15-00644-CV AUSTIN, TE

10/8/2015 3:41:3"

JEFFREY D. K

CL

CAUSE NO.

KEYSTONE RV COMPANY, § IN THE COURT OF AgfEALS

§ 3rd COURT OF APPEALS

Plaintiff, § AUSTIN, TEXAS

10/8/2015 3:41:34 PM

§

v. § FOR THE THIR^5«^mK!!^

§ OF TEXAS Clerk

TEXAS DEPARTMENT OF §

MOTOR VEHICLES, §

§

Defendant. § AT AUSTIN

PLAINTIFF KEYSTONE RV COMPANY'S

PETITION FOR JUDICIAL REVIEW

TO THE HONORABLE COURT:

Plaintiff Keystone RV Company ("Keystone") respectfully files this

Petition for Judicial Review complaining of the Texas Department of Motor

Vehicles (the "DMV"). By this Petition, Keystone seeks review of a decision of

the DMV pursuant to the Texas Administrative Procedure Act. Keystone will

show the Court as follows:

A.

Parties.

1. Keystone is an Indiana corporation with its principal place of

business in Goshen, Indiana. Keystone is authorized to do business in the State of

Texas.

2. Defendant Texas Department of Motor Vehicles is an agency of the

State of Texas, and is amenable to suit under 43 TEX. ADMIN. CODE §215.207(8)

and Tex. Occ. Code § 2301.751 et seq. (Vernon 2015). The DMV may be served

with process through its Executive Director, Whitney Brewster, at the Texas

Department of Motor Vehicles, 4000 Jackson Avenue, Austin, Texas 78731.

3. Larry Roche was a party of record in the proceedings below but does

not have an interest in the issues presented in this appeal. Roche may be served

through his attorney of record, James D. Pierce, 1 Sugar Creek Center, Suite 1080,

Sugar Land, Texas 77478.

B.

Jurisdiction.

4. Keystone has exhausted all administrative remedies available within

the DMV and brings this action in the Court of Appeals for the Third District of

Texas pursuant to 43 Tex. Admin. Code §215.207(8) and Tex. Occ. Code

§2301.751 (a) (2) (Vernon 2015).

C.

Venue.

5. Venue is proper in the Court of Appeals for the Third District of

Texas pursuant to 43 Tex. Admin. Code §215.207(8) and Tex. Occ. Code §

2301.751 etseq. (Vernon 2015).

D.

Legal Basis for Review.

6. Keystone's substantial rights have been prejudiced because the

administrative findings, inferences, conclusions, and decisions by the DMV in this

case are:

A. in violation of a constitutional or statutory provision;

B. in excess of the agency's statutory authority;

C. made through unlawful procedure;

D. affected by other error of law;

E. not reasonably supported by substantial evidence considering the

reliable and probative evidence in the record as a whole; or

F. arbitrary or capricious or characterized by abuse of discretion or

clearly unwarranted exercise of discretion.

Texas Administrative Procedure Act, TEX. Gov't. CODE §2001.174(2)

(Vernon 2015).

E.

Statement of Facts.

7. This is a proceeding under TEX. OCC. CODE § 2301.601 et seq.,

commonly referred to as the "lemon law". This case involves a travel trailer

manufactured and warranted by Keystone and purchased by Larry Roche,

Complainant in the proceedings below. Roche filed a lemon law complaint with

the DMV on November 19, 2014, alleging five issues with his travel trailer.

8. On August 1, 2015—before a lemon law hearing was held—the

parties reached a settlement under which Keystone agreed to replace Roche's

original travel trailer with a newer model. The DMV was notified of the

settlement and Roche filed a Motion to Dismiss on August 12, 2015.

9. Because of the settlement and voluntary dismissal, no hearing was

ever held and the DMV never issued an order requiring Keystone to repurchase or

replace the subject travel trailer.

10. On August 13, 2015, the DMV issued an order dismissing the case.

See Dismissal Order, attached as Exhibit A. However, instead of a straightforward

dismissal order, the DMV imposed six (6) additional obligations on Keystone

which were not part of the settlement agreement and which exceed the DMV's

statutory authority. See Dismissal Order, conditions 1-6.

11. Keystone filed a Motion for Rehearing on September 2, 2015,

objecting to the six obligations imposed by the DMV in its Dismissal Order. The

DMV denied Keystone's Motion for Rehearing by order dated September 8, 2015.

F.

Summary of the Argument.

12. Because this case was settled prior to hearing and because there was

no repurchase or replacement order issued by the DMV, the six (6) obligations

imposed on Keystone in the Dismissal Order have no statutory basis. Specifically,

Tex. Occ. Code § 2301.610 only requires a disclosure statement when a

manufacturer has been ordered to repurchase or replace a vehicle. Because there

was no such order in this case, a disclosure statement is not required and the

conditions imposed on Keystone in the Dismissal Order lack any statutory

foundation.

G.

The Obligations Imposed on Keystone in the Dismissal Order

Exceed the DMV's statutory authority.

13. The Texas Legislature only requires a disclosure statement in one

circumstance: where the DMV orders a manufacturer to repurchase or replace a

vehicle. The disclosure requirement is found at TEX. OCC CODE § 2301.610:

"DISCLOSURE STATEMENT, (a) A manufacturer, distributor, or

converter that has been ordered to repurchase or replace a vehicle

shall, through its franchised dealer, issue a disclosure statement

stating that the vehicle was repurchased or replaced by the

manufacturer, distributor, or converter under this subchapter. The

statement must accompany the vehicle through the first retail

purchase following the issuance of the statement and must include

the toll-free telephone number described by Subsection (d) that will

enable the purchaser to obtain information about the condition or

defect that was the basis of the order for repurchase or replacement.

(b) The manufacturer, distributor, or converter must restore the

cause of the repurchase or replacement to factory specifications and

issue a new 12-month, 12,000-mile warranty on the vehicle.

(c) The board shall adopt rules for the enforcement of this section."

14. Here, it is undisputed that no repurchase or replacement order was

ever issued by the DMV. Accordingly, the Dismissal Order—which imposes on

Keystone a disclosure requirement and the issuance of a new 12-month, 12,000

mile warranty, as well as related notifications to the DMV—impermissibly

exceeds the scope of the statute.

15. The DMV's reliance on their own administrative rules to impose a

disclosure requirement on Keystone is equally unavailing. 43 Tex. Admin. Code

§215.210 states:

"(4) If a manufacturer, converter, or distributor replaces or

repurchases a vehicle pursuant to an order issued by the final order

authority, reacquires a vehicle to settle a complaint filed under

Occupations Code, Chapter 2301, Subchapter M or Occupations

Code, §2301.204, or brings a vehicle into the state of Texas which

has been reacquired to resolve a warranty claim in another

jurisdiction, the manufacturer, converter, or distributor shall, prior to

resale of such vehicle, re-title the vehicle in Texas and issue a

disclosure statement on a form provided by or approved by the

department. In addition, the manufacturer, converter, or distributor

reacquiring the vehicle shall affix a disclosure label provided by or

approved by the department on an approved location in or on the

vehicle. Both the disclosure statement and the disclosure label shall

accompany the vehicle through the first retail purchase. No person or

entity holding a license or general distinguishing number issued by

the department under Occupations Code, Chapter 2301 or

Transportation Code, Chapter 503 shall remove or cause the removal

of the disclosure label until delivery of the vehicle to the first retail

purchaser. A manufacturer, converter, or distributor shall provide the

department in writing, the name, address, and telephone number of

any transferee, regardless of residence, to whom the manufacturer,

distributor, or converter, as the case may be, transfers the vehicle

within 60 days of each transfer. The selling dealer shall return the

completed disclosure statement to the department within 60 days of

the retail sale of a reacquired vehicle. Any manufacturer, converter,

or distributor or holder of a general distinguishing number who

violates this section is liable for a civil penalty or other sanctions

prescribed by the Occupations Code. In addition, the manufacturer,

converter, or distributor must repair the defect or condition in the

vehicle that resulted in the vehicle being reacquired and issue, at a

minimum, a basic warranty (12 months/12,000 mile, whichever

comes first), except for non-original equipment manufacturer items

or accessories, which warranty shall be provided to the first retail

purchaser of the vehicle."

(emphasis added).

16. The DMV's administrative rule impermissibly expands the scope of

disclosure requirement set forth by the Legislature in § 2301.610 of the TEX. OCC.

Code. It not only requires disclosure where an order of repurchase or replacement

is issued (mirroring the statute), but adds two new circumstances: (1) where a

manufacturer reacquires a vehicle to settle a complaint (the case here), and (2)

where a manufacturer brings a vehicle into Texas which has been reacquired to

resolve a warranty claim in another jurisdiction.

17. Under well-established Texas law, an administrative agency like the

DMV is a creation of the Legislature, and as such has only the powers which are

delegated to it, expressly or impliedly, by the Legislature. State v. Jackson, 376

S.W.2d 341, 344 (Tex. 1964) (agency has no inherent authority).

18. An agency may not exercise what is effectively a new power, or a

power contradictory to the statute, on the theory that the exercise of such a power

is expedient for administrative purposes. Public Utility Comm 'n of Texas v. City

Pub. Serv. Bd. of San Antonio, 53 S.W.3d 310, 316 (Tex. 2001); CenterPoint

Energy Entex v. Railroad Comm'n , 208 S.W.3d 608, 615-16 (Tex. App.—Austin

2006, pet. dism'd w.o.j.).

20. Here, the Legislature has provided only one circumstance in which a

disclosure statement is required: when the DMV orders a repurchase or

replacement. The DMV lacks authority to expand the statute to add additional

circumstances. The canon of statutory construction known as expressio unius est

exclusio alterius—literally "the specific mention of one is the exclusion of the

other"—means that the Legislature's explicit mention or inclusion of one thing

signals its intention to exclude the other or alternative thing. Tex. Bd. of

Chiropractic Examiners v. Tex. Medical Ass'n, 375 S.W.3d 464, 477-78 (Tex.

App.—Austin 2012, pet. denied). This well-established rule of statutory

construction prevents the DMV from adding additional circumstances under which

a disclosure statement is required.

21. Tex. Bd. of Chiropractic Examiners, 375 S.W.3d at 481-82, is

dispositive here, and makes clear that a state agency cannot engage in

administrative rule-making which expands the scope of its statutory authority. In

that case, this Court invalidated administrative rules of the Texas Board of

Chiropractic Examiners which exceeded the statutory limits of the Texas

Occupations Code. Following the same analysis, the DMV cannot expand the

disclosure requirement beyond that which is authorized by the Legislature.

WHEREFORE, PREMISES CONSIDERED, Plaintiff Keystone RV

Company respectfully requests that Defendant Texas Department of Motor

Vehicles be cited to appear and answer, and that on final trial, Plaintiff have

judgment of this Court:

a. Reversing the decision of the agency, or remanding the case to

agency for further proceedings; and

b. Awarding Plaintiff costs incurred, together with all other relief to

which Plaintiff may be justly entitled.

Respectfully submitted,

The Lowman Law Firm

By: U^AA^-—

Christopher J. Lowman

State Bar Number 12636480

One Allen Center

500 Dallas Street, Suite 3030

Houston, Texas 77002-4705

Telephone: (713) 752-0777

Facsimile: (713)752-0778

E-mail: chris@lowmanlaw.com

Attorneys for Plaintiff

Keystone RV Company

^$&* Texas Department qfMotorVehicles

HELPING T6XAN9 QO. HaPING TEXAS GROW.

OFFICE OF ADMINISTRATIVE HEARINGS

4000 JACKSON AVENUE • AUSTIN, TEXAS 78731

PHONE: (512)465-5000 • FAX:(512)465-5656

DATE: AUGUST 13. 201S

NUMBER OF PAGES INCLUDING THIS COVER SHEET: 4

REGARDING ORDER NO. 6: DISMISSING CASE

CASE NUMBER: 15-0100 CAF / WIPfl 817311

HEARINGS EXAMINER: EDWARD SANDOVAL

RECD7EENTS: FAX NUMBER

JAMES D. PIERCE, ATTY. CERTIFIED MAE., RRR

FIRST CLASS MAR,

AND COURTESY COPY VIA EMAIL

CHRISTOPHER J. LOWMAN, ATTY. CERTIFIED MAIL, RRR

FIRST CLASS MAIL

AND COURTESY COPY VIA EMAIL

TxDMV. ENFORCEMENT SECTION VIA EMAIL

NOTE: IF ALL PAGES ARE NOT RECEIVED, PLEASE CONTACT OFFICE OF

ADMINISTRATTVE HEARINGS (512) 46S-S000.

^fSr* Texas Department o/MotorVehicles

HELPING TEXANS GO. HELPINQ TEXAS OflOW.

OFFICE OF ADMINISTRATIVE HEARINGS

4000 JACKSON AVENUE • AUSTIN, TEXAS 78731

PHONE: (512) 465-5000 • FAX: (512) 465-5656

SERVICE LIST

STYLE/CASE: LARRY ROCHE, Complainant v. KEYSTONE RV COMPANY,

Respondent

CASE NUMBER: 15-0100 CAF / WED U 817311

OAHHEARINGS EXAMINER; EDWARD SANDOVAL

REPRESENTATIVE / ADDRESS PARTIES

James D. Pierce

Attorney at Law

1 SugarCreek Center, Suite 1080

Sugar Land, Texas 77478

(713) 650-0150 (PH)

(713) 650-0146 (FAX)

ATTORNEY FOR COMPLAINANT

Christopher J. Lowman

The Lowman Law Firm

One Allen Center

500 Dallas Street, Suite 3030

Houston, Texas 77002-4705

(713)752-0777 (PH)

(713) 752-0778 (FAX)

chris(2).lowman law.com ATTORNEY FOR KEYSTONE RV

Texas Department of Motor Vehicles

Enforcement Division

4000 Jackson Avenue

Austin, Texas 78731

(512) 302-2328 (FAX) TxDMV, ENFORCEMENT DIVISION

TEXAS DEPARTMENT OF MOTOR VEHICLES

CASE NO. 15-0100 CAF

LARRY ROCHE, § BEFORE THE OFFICE

Complainant §

§

v.

§ OF

§

KEYSTONE RV COMPANY, §

Respondent §

§ ADMINISTRATIVE HEARINGS

ORDER NO. 6 - DISMISSING CASE

On November 18, 2014, Complainant Larry Roche filed a petition seeking relief pursuant to Texas

Occupations Code §§2301.604(LemonLaw) for alleged warrantable defects inamotorvehicle(subject

vehicle) manufactured by Respondent Keystone RC Company. On August 12,2015, Complainant

notifiedthe Texas Department ofMotor Vehicles(Department) that Respondenthas agreed to replace

the subject vehicle, and that Complainant no longer desires to pursue the petition filed with the

Department. Goodcauseexists to dismiss the complaint. Inaccordance with therequirements ofTexas

Occupations Code § 2301.610 and 43 Texas Administrative Code § 215.210,

IT IS ORDERED that:

1. Respondent's communications with Complainant finalizing replacement of

the subject vehicle shall be reduced to writing, and a copy thereof shall be

provided to the Department within twenty (20) days of completion of the

replacement;

2. Should replacement of the subject vehicle include a monetary refund,

Respondent shall remit the refund to Complainant and the licnholder as their

respectiveownership interests require. Ifcleartitle to the reacquired vehicle

is delivered to Respondent, the full refund shall be paid to Complainant;

3. Respondent shallobtainaTexas title forthe reacquired vehicle prior to resale

and issue a disclosure statement on a form provided or approved by the

Department;1

1Correspondence and telephone inquiries regarding disclosure labols should be addressed to: Texas Department of Motor

Vehicles, Enforcement Division-Lemon Law Section, 4000 Jackson Avenue Building 1, Austin, Texas 78731, Phone

(512)465-4076.

CASE NO. 15-0100 CAP ORDER NO. 6 - DISMISSING CASE PAGE 2

4. Respondent shall affix the disclosure label to the reacquired vehicle in a

conspicuous location (e.g., hanging from the rear view mirror). Upon

Respondent's first retail sale of the reacquired vehicle, the disclosure

statement shall be completed and returned to the Department;

5. Within sixty (60) days oftransfer ofthe reacquired vehicle, Respondent shall

provide to the Departmentwritten noticeofthe name, address and telephone

number ofany transferee(wholesaleror equivalent),regardlessofresidence;

and

6. Respondent shall repair the defect or condition that was the basis of the

subject vehicle's reacqutsition and issue a new 12-month/12,000-milc

warranty on the reacquiredvehicle.

Subjectto the conditionsset forth above,thiscase is herebyDISMISSED fromthe docketoftheTexas

Department of Motor Vehicles.

Signed August 13,2015.

CHIEF HEARINGS EXAMINER

OFFICE OF ADMINISTRATIVE HEARINGS

TEXAS DEPARTMENT OF MOTOR VEHICLES

WID# 817311