Ohio dealerships may legally charge document fees of up to $250 that can be added to a vehicle's base price and be subject to sales tax, the state Court of Appeals has ruled.
As a result, the unanimous three-judge panel refused to reinstate a proposed class-action suit against the Ohio Automobile Dealers Association and Halleen Chevrolet in North Olmsted.
The plaintiff, Laura Hutcheson, has asked the court to reconsider its ruling.
According to the decision, Hutcheson bought a new 2009 Cobalt from Halleen. Her sales order included a $250 documentary fee.
She sued, alleging that the fee was unauthorized and that the Ohio dealers association had conspired with its members, including Halleen, to defraud customers by assessing the additional "doc fee." The suit raised claims under Ohio's consumer protection, deceptive trade practices and antitrust laws, and it alleged civil conspiracy, fraudulent misrepresentation and unjust enrichment.
A lower court judge dismissed Hutcheson's complaint three times and denied her request to file a fourth version of the complaint.
The appeals court upheld that ruling in an opinion by Judge Kathleen Ann Keough.
Documentary fees in a fixed amount up to the $250 limit in the statute are permitted to cover a dealership's sales paperwork and don't need to be itemized, the court said.
"Whether this amount is termed a 'documentary service charge' or 'documentary fee' or 'doc fee,' the legislature was clear that such a charge or fee is allowable as long as it is specified in writing and not in excess of the amount allowed," the court said.
Halleen's fee met those requirements, it said, and its "lawful conduct cannot serve as a basis for liability."
The court said the legislature recognized that "motor vehicle dealers may charge, and historically have charged, a documentary service charge in all transactions, including those involving a retail installment sale and those not involving a retail installment sale, including leases, cash transactions and transactions in which consumers obtain their own financing."
The court also denied Hutcheson permission to amend her suit based on a 2010 letter from the Ohio Department of Taxation's Sales and Use Division. The tax letter purportedly stated that her doc charge was improper. The court cited an earlier department holding that "these charges are part of the tax base and subject to the sales tax."
Halleen's lawyer, Christopher Tipping of Akron, said: "Hopefully, this ruling will deter future litigation dealing with the documentary service charge and eliminate any further class actions, which, in my opinion, overly burden our legal system."
The plaintiff has petitioned the court to reconsider the ruling. The petition argues that the decision misinterpreted statutes that make such fees discretionary and allow them to be imposed only by lenders to secure collateral, and not by dealers and not as part of cash sales or leases.
Her attorney, Thomas Misny of Waite Hill, Ohio, said he cannot comment because the case remains in litigation.