In re Villeneuve
Annotate this Case
In re Villeneuve (96-640); 167 Vt. 450; 709 A.2d 1067
[Filed 6-Feb-1998]
NOTICE: This opinion is subject to motions for reargument under
V.R.A.P. 40 as well as formal revision before publication in the Vermont
Reports. Readers are requested to notify the Reporter of Decisions,
Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
any errors in order that corrections may be made before this opinion goes
to press.
No. 96-640
In re David Villeneuve Supreme Court
On Appeal from
Chittenden Superior Court
December Term, 1997
Alden T. Bryan, J.
Michael Rose, St. Albans, for Plaintiff-Appellee.
F. Brian Joslin of Theriault & Joslin, Montpelier, and Michael A.
Fitzhugh and Edward P. O'Leary of Fitzhugh & Associates, Boston,
Massachusetts, for Defendant-Appellant.
PRESENT: Amestoy, C.J., Dooley, Morse, Johnson and Skoglund, JJ.
DOOLEY, J. Defendant Ford Motor Co., appeals from a ruling of the
Chittenden Superior Court which overturned a decision of the New Motor
Vehicle Arbitration Board because of the participation in it of board
members who did not attend the evidentiary hearing. The arbitration board
decision found that a Ford truck which plaintiff, David Villeneuve,
purchased new from a local Ford dealer was not a lemon and plaintiff was
not entitled to a refund. Defendant argues that the court decision was
erroneous under the very narrow standard of review applicable to these
proceedings. Plaintiff argues, by way of cross-appeal, that the court
erred in remanding for a new hearing because he is entitled to relief as a
matter of law. We affirm.
This proceeding was brought under the New Motor Vehicle Arbitration
Act, 9 V.S.A. §§ 4170-81, commonly known as the lemon law, which was
passed in order to facilitate an expeditious and inexpensive resolution of
automobile warranty problems. Pecor v. General Motors Corp., 150 Vt. 23,
24, 547 A.2d 1364, 1365 (1988). On September 27, 1995, plaintiff
filed a complaint with the New Motor Vehicle Arbitration Board that the
1995 Ford truck, purchased in January 1995, had been out of service for
repair of warranted defects for 30 days or more and still had the following
defects:
Bolt missing in RR wheel well, windshield wipers, mud flaps,
right front door, air bag overload system, oil leak in motor,
windshield broken, red paint bad, black paint bad, tailgate screws,
wood trim, running board lights, rear cowl falling off, masking
tape left on roof and cowl, cowl under front bumper, center
wooden console poorly finished, brakes, running boards
misaligned, screws on rubber strip that holds down rug, missing
rubber in window and rusty screws that hold stainless steel tailgate
protector on.
Plaintiff sought a refund of the purchase price.
At the time of the complaint, the vehicle was with a South Burlington
Ford dealer for repair. It went in for repair on July 10, 1995, and was
returned to plaintiff on October 10, 1995. Apparently, the repairs
performed narrowed the claimed list of defects. For example, at the
hearing plaintiff testified that the windshield wiper defects and engine
oil leak had been resolved. Plaintiff remained concerned about leaks
around the windshield and defects in the brakes and added a new concern
that the horn did not function.
Although plaintiff had purchased the vehicle from the Ford dealer, it
had been customized by a vehicle modification company, Centurion, Inc.
Ford s position was that any remaining defects were the responsibility of
Centurion, and not Ford. In fact, in August of 1995 the Ford dealer had
shipped the vehicle to Centurion in Michigan. It spent about half of the
three-month repair attempt at Centurion.
The New Motor Vehicle Arbitration Board is established by statute with
five members and two alternates. See 9 V.S.A. § 4174(a). Four members
were present for the hearing in this case. They took evidence for about an
hour and a half on October 26, 1995 and thereafter had a view and test
drive of the truck. During the hearing, one member of the board announced
that he would recuse himself because he was a Ford dealer.
The board rendered a decision on December 22, 1995. The brief
findings recite that
plaintiff sought a refund and quote plaintiff s list of defects. They also
find that the vehicle was out of service for thirty or more days to repair
warranted defects. Thereafter, the following decision is written:
D
The service history of the vehicle during the warranty period
would not cause a reasonably prudent buyer to believe that the
vehicle was a defective vehicle commonly known as a lemon; and,
therefore, the defects and nonconformities under the
manufacturer s warranty do not substantially impair the use,
market value or safety of the vehicle.
The decision is signed by the chair. Thereafter, it states that five
members participated in the decision and one abstained. The five members
participating include the three persons who were at the hearing and two
other members who were not present at the hearing. Those two members each
filed a certification stating that I listened to the October 26, 1995
hearing tape in the above referenced matter and participated in a Board
deliberation prior to rendering my decision. The final vote was three to
two; both of the dissenting votes were cast by members who were at the
evidentiary hearing. Thus, a majority of the prevailing votes were cast by
board members who were not at the evidentiary hearing.
Plaintiff moved to vacate the board decision on December 20, 1995,
arguing that the participation in the decision of members who did not
attend the evidentiary hearing was improper and that the board improperly
used an objective standard to determine whether the vehicle was a lemon.
The superior court agreed that the participation of the absent board
members was improper. It accepted that it might be possible for members to
participate in a decision, without attending the hearing, but decided that
participation was not proper in this case because: (1) the decision was
based in part on a view and test drive of the vehicle, attended by the
members at the hearing, and not otherwise reflected in the record or
findings; and (2) the tape and transcript of the hearing was of poor
quality and the evidence was impossible to follow. The superior court also
decided that the board used the correct standard to determine whether
the vehicle was a lemon and that the appropriate remedy was a remand for
further proceedings.
We start with Ford s argument that the superior court exceeded its
jurisdiction in reversing the board decision. As Ford emphasizes, the
lemon law provides only a very limited role for the superior court in
reviewing a decision of the board. The court may vacate or modify a board
decision only if the appealing party proves by clear and convincing
evidence that one of the four statutory grounds exist. 9 V.S.A. §
4176(a). The statutory grounds are taken from the Vermont Arbitration Act
and are virtually identical to the grounds for vacating an arbitration
award. See 12 V.S.A. § 5677; Muzzy v. Chevrolet Div. Gen. Motors Corp.,
153 Vt. 179, 184, 571 A.2d 609, 612 (1989). As we emphasized in Muzzy, we
do not sit as an appellate court on errors of fact or law made by the
Board and intervene to correct an error of law only under extreme
circumstances. 153 Vt. at 184-85, 571 A.2d at 612-13.
The superior court found that two of the statutory grounds to vacate
were present here: (a) the board exceeded its powers; and (b) the board
refused to hear evidence material to the controversy or otherwise conducted
the hearing contrary to the rules promulgated by the board so as to
prejudice substantially the rights of a party. 9 V.S.A. § 4176(a)(3),
(4). The court decided that the board violated its Rule 23 requiring
consideration of all the facts and arguments in a case because the two
members absent from the hearing could not gain the facts from the tape
alone, particularly because of the importance of the vehicle inspection;
and also violated Rule 21 which makes the evidence and argument presented
at the hearing plus any knowledge gained from the inspection of the motor
vehicle the exclusive record for decision.
Even though we must first determine whether the superior court acted
within its limited review power, it is helpful to first look at the
substance of its decision. In Lewandoski v. Vermont State Colleges, 142
Vt. 446, 457 A.2d 1384 (1983), we considered a claim that the Vermont Labor
Relations Board lacked jurisdiction to render a grievance decision adverse
to the employee because no member of the board had attended all of the
evidentiary hearing. The
employee also argued that the failure of all the board members to attend
all of the hearing denied him due process of law. We followed the majority
rule that in order to comply with due process it is only required that
members not present when testimony is taken review the testimony before
participating in the decision. Id. at 452-53, 457 A.2d at 1387. We
upheld the board decision with the following holding:
We therefore follow the majority rule, and hold that on the facts
presented here, where a quorum of administrative officers has been
present throughout, and where the whole tribunal has carefully
reviewed the record prior to rendering a decision, grievant was not
denied due process of law.
Id. at 453, 457 A.2d at 1387-88.
As Lewandoski noted, the holding is similar to that of most courts
that have considered the question, at least where the credibility of one or
more witnesses is not central to the decision. See id. at 452-53. But due
process does require the decision maker s personal presence at evidentiary
hearings where the agency involved elects to make factual determinations
as a hearing panel and the record does not provide a reasonable basis for
evaluating the kind of testimony in question. In re Grimm, 635 A.2d 456,
459 (N.H. 1993). Although the superior court couched its decision in terms
of the board rules, it ruled, in essence, that the record reviewed by the
members absent from the hearing did not provide a reasonable basis for
evaluating" the evidence.
We will uphold the trial court s review of the relevance of evidence
in an arbitration proceeding absent an abuse of discretion. See Matzen
Constr. Co. v. Leander Anderson Corp., 152 Vt. 174, 178, 565 A.2d 1320,
1323 (1989). Within that standard of review, we find the superior court s
evaluation of the evidence fully supported by the record.
The hearing was conducted primarily through questions of the chairman
of the board, supplemented by questions from other members. It is an
understatement to say that this method of evidence presentation did not
clearly identify the issues and positions of the parties or allow each side
to present fully the testimony it found relevant. Indeed, the parties
often vied to
answer the board s questions as quickly and aggressively as possible,
causing them to talk over each other. At one point, the chairman
commented: We re going to do one at a time or we re going to get into a
fistfight. The situation was aggravated by the failure of either party to
comply with discovery obligations to state their positions prior to the
hearing.
To the extent we can discern it, the position of Ford appeared to be
that it had not received a last opportunity to repair, as is its statutory
right, 9 V.S.A. § 4173(d), and the continuing defects were the obligation
of the company which modified the truck, and not Ford. Although Ford
prevailed in the board s written decision, it did so on a ground it had
never raised or argued.
The court found that the audio tape of the hearing, and the transcript
typed from that tape, was an inadequate record for decision for two
reasons. First, the members present viewed the vehicle and test drove it.
The court concluded that the view and test drive must have been important
to the board majority s evaluation that the defects and warranty
nonconformities did not substantially impair the use, market value or
safety of the vehicle. The observations administrative board members make
at a view are evidence and are properly considered in arriving at a
decision. See In re Quechee Lakes Corp., 154 Vt. 543, 552, 580 A.2d 957,
962 (1990). Ordinarily, the board members must include the result of their
observations in their findings, see id., but the very limited standard of
review prevents us from enforcing this requirement here. Nevertheless, the
absence of any findings based on the view makes it difficult for a
reviewing court to discount this evidence and hold that it was harmless
that board members who participated in the decision did not view the
vehicle. We agree with the superior court that the absence of board
members from the view and test drive prevented them from participating in
the decision in this case.
We do not have to decide whether the poor testimonial record alone
would have prevented participation by members not present at the hearing.
Certainly, the chaotic testimony presentation impaired the ability of all
board members, whether or not present at the hearing,
to render a thorough and thoughtful decision. The tendency of parties to
try to speak over each other made it difficult for the transcriber to
identify the speaker. In a number of instances, the testimony was
inaudible and could not be transcribed. Nevertheless, the identity of the
speaker could usually be inferred from the substance of the statement and
the instances of lost testimony were not critical to capturing the gist of
the position of the parties.
To provide guidance to the board, however, we emphasize that the
defects in the evidentiary record have much greater significance where, as
here, the findings are sparse and inadequate. To the extent the board
desires that members participate in future decisions without attending the
evidentiary hearing, we are much more likely to uphold the ultimate
decision if the absent members view the vehicle and the majority of the
board issues sufficiently detailed findings so we can determine how it
evaluated the evidence that was before it.
We reviewed the merits of the superior court decision first because
its rationale necessarily determines whether the court had the power to
intervene to provide a remedy for the board error. Although subject to some
of the procedures of an arbitration body, the board is a public
administrative agency which must provide due process of law to consumers
and manufacturers who appear before it. Thus, irrespective of the narrow
standard of review, the court must vacate a board decision that is, like
this one, based on a violation of due process.
We have no difficulty in reaching the same result under the statutory
grounds for vacating an arbitration award. As we stated with respect to
private arbitrations, the scope of court review is limited to ensuring that
the arbitration proceedings fall within the boundaries of due process.
Matzen, 152 Vt. at 177, 565 A.2d at 1322. The rules of the board are
designed to provide a simple, fair and orderly procedure. Vermont New
Motor Vehicle Arbitration Board Rules, Rule 1, 9 Code of Vt. Rules, Rule
80180001 at 1 (1992). The board must conduct a hearing on all issues for
decision. Id. Rule 16. The board must render a decision after
considering all the facts and arguments in a case. Id. Rule 23. We
agree that the board violated its own rules and that violation provided
jurisdiction to vacate the award under 9 V.S.A.
§ 4176(a)(4).
The superior court properly vacated the decision of the board which
denied plaintiff a remedy. By cross-appeal, plaintiff argues that the
board and superior court erred in using an objective standard to determine
whether he was satisfied with Ford s repair attempts. He argues that he
should prevail because he remains unsatisfied with the repairs despite the
fact that the vehicle was out of service for repairs for thirty days or
longer. In making these arguments, he relies upon Muzzy, 153 Vt. at
186-90, 571 A.2d at 614-16, where we held that although the manufacturer
has one last opportunity to repair the vehicle after the consumer files a
complaint with the board, this repair would not prevent relief if the
consumer was dissatisfied with it. We held that we must apply a subjective
standard to determine satisfaction.
The Muzzy holding is based on a construction of 9 V.S.A. § 4173(d),
which specifically requires that the consumer be satisfied with a last
repair attempt. Here, the board s decision rests on a different statutory
section which requires the board to find that a defect or condition which
substantially impairs the use, market value, or safety of the motor vehicle
to the consumer. 9 V.S.A. § 4172(e). The statute goes on to provide that
it is an affirmative defense to any claim under this chapter that an
alleged nonconformity does not substantially impair the use, market value
or safety. Id. § 4172(f). We must construe a statute according to the
ordinary meaning of the words the legislature has chosen. In this case,
those words clearly set forth an objective standard. Neither the board nor
court erred in using an objective standard to determine whether defendant
proved the affirmative defense.
Finally, plaintiff argues that the court should not have remanded to
the board because only three board members could rule on the case and they
found in his favor by a two-to-one vote. The superior court apparently
agreed that plaintiff could prevail on a two-to-one vote but remanded for
further proceedings to enable the two dissenting members to determine
whether plaintiff was entitled to relief according to the statutory
standards. Defendant contests that a consumer can obtain relief on an
affirmative vote of only two members of the board. We agree
with defendant on this issue. 1 V.S.A. § 172 provides:
§ 172 Joint Authority
When joint authority is given to three or more, the concurrence
of a majority of such number shall be sufficient and shall be
required in its exercise.
There is nothing in the statutory procedures governing the New Motor
Vehicle Arbitration Board to suggest that § 172 does not apply to it. The
statute clearly requires that a majority of the members of an
administrative board must vote for a result for the vote to be effective.
Here, a majority of the board has not voted for a result. The only
feasible remedy is to require a rehearing of the evidence in compliance
with the procedures set out in this opinion to reach a result in compliance
with § 172. Although we agree with the superior court that a remand is
required, we differ on the scope of the remand and the nature of the action
that the board must take.
The decision of the Chittenden Superior Court is affirmed. The matter
is remanded to the Vermont New Motor Vehicle Arbitration Board for
proceedings consistent with this opinion.
FOR THE COURT:
_______________________________________
Associate Justice
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