Court Opinion

ID: 9659942
Source: CourtListenerOpinion
Date Created: 2023-08-23 21:59:08.984188+00
Date Added: 2024-06-11T18:14:13.294924
License: Public Domain

Ray Thornton, Justice, dissenting. I would affirm the findings of the trial court on the grounds that appellants must exhaust their administrative remedies before the Arkansas Manufactured Home Commission before pursuing judicial relief in this matter. I respectfully dissent from the majority opinion that by choosing not to claim damages but rather to seek the rescission of a contract to purchase more than a year after the purchase contract was entered into, appellants should be allowed to deprive the administrative agency of its authority and responsibility to determine whether standards had been violated, and, if so, to award appropriate damages. See Ark. Code Ann. § 20-29-105 (Repl. 1991). In my view, the Legislature created the Commission to provide protection to consumers who purchased defective manufactured homes. Recognizing the special problems associated with recovering damages from dealers and manufacturers who had inadequate financial resources or were otherwise judgment-proof, the Legislature provided a Recovery Fund to underwrite damages up to $10,000.00 per unit. However, no limitation was imposed upon the maximum remedy to be recovered from the manufacturer or dealer which violated the standards. The rationale for the establishment of a recovery fund to protect the consumer is similar to the principle that an award from the Worker’s Compensation Commission generally does not require a proof of fault for recovery for work-related injuries. As we stated in Brown v. Finney, 326 Ark. 691, 694, 932 S.W.2d 769, 771 (1996), the purpose behind the Worker’s Compensation Act . . . was to change the common law by shifting the burden off all work-related injuries from individual employers and employees to the consuming public with the concept of fault being virtually immaterial. See Simmons First Nat’l Bank v. Thompson, 285 Ark. 274, 686 S.W.2d 415 (1985). With the passage of such statutes, employers gave up the common law defenses of contributory negligence, fellow servant, and assumption of the risk and, likewise, employees gave up the chance of recovering unlimited damages in return for certain recovery in all work-related cases. Id. Brown, 326 Ark. at 694, 932 S.W.2d at 771. Here, the Legislature clearly intended that all actions concerning defects in manufactured housing should be addressed by the Commission, but did not statutorily provide that the remedy be exclusive. The majority has properly cited the applicable provisions of Ark. Code Ann. § 20-29-105, but I wish to emphasize the first sentence of that statutory provision: “All consumer, licensee, installer, dealer, or manufacturer complaints shall be filed with the Commission.” Ark. Code Ann. § 20-29-105(a) (Repl. 1991). While I agree with the majority that this delegation is not statutorily exclusive as provided in the workers’ compensation law, hopefully all members of the court would agree that in the absence of a statutory delegation of exclusive jurisdiction, the jurisprudential doctrine of exhaustion controls. The jurisprudential-exhaustion doctrine is a “long settled rule of judicial administration [which mandates] that no one is entitled to judicial relief for a supposed or threatened injury until the prescribed administrative remedy has been exhausted.” Taylor v. U.S. Treasury Dept., 127 F.3d 470, 476 (5th Cir. 1997), citing Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41, 50-51. Arkansas courts have previously held that exhaustion of administrative remedies is not required where irreparable injury will result if the complaining party is compelled to pursue administrative remedies, or where an administrative appeal would be futile. Delta School of Commerce, Inc. v. Harris, 310 Ark. 611, 618, 839 S.W.2d 203, 207 (1992); Barr v. Arkansas Blue Cross and Blue Shield, Inc., 297 Ark. 262, 267, 761 S.W.2d 174, 177 (1988). Here, the majority has determined that the case, as pleaded, requests relief not available to appellants under the administrative remedy available before the Manufactured Home Commission, and that therefore the remedy is inadequate and need not be exhausted. This conclusion is flawed, in my view, simply because the remedy of damages for the entire purchase price, which is available through administrative action, is adequate. As the majority quite correctly notes, the General Assembly provided for the establishment of the Arkansas Manufactured Home Commission to adopt uniform standards for the building, selling, and installation of manufactured homes, and to enforce those standards and deter violations through penalties. Act 346 of 1987, codified at Ark. Code Ann. §§ 20-29-101 through 20-29-111 (Repl. 1991), outlines procedures for filing consumer complaints before the Commission, which is empowered to award damages for the cost of repairs. Under these sections, the Arkansas Manufactured Home Commission is authorized to collect annual assessments of manufacturers, dealers, and installers of manufactured homes to contribute to a recovery fund whose purpose is to pay awards for claims and complaints filed with the Commission. Section 20-29-105 provides: All consumer, licensee, installer, dealer, or manufacturer complaints shall be filed with the Commission. The Commission shall determine by a hearing or whatever procedure it establishes first, if any, standard adopted by the Commission has been violated, and, if so, the actual cost of repairs to the manufactured home, if any, suffered by the aggrieved party or parties. Ark. Code Ann. § 20-29-105(a) (Repl. 1991). It seems clear to me that if a structure as substantial as a manufactured home is truly beyond repair, the limit of recovery which could be awarded by the Commission would be the cost of a new home. Upon finding that a standard has been violated, the Commission shall direct the respondent to pay the awarded amount. If the amount is not paid, and the award is not appealed to circuit court, the Commission may pay the award to the complainant from the Recovery Fund, so long as the amount is not in excess of $10,000.00, and the complainant agrees to subrogate his claim to the Commission. Ark. Code Ann. § 20-29-106(a)-(b) (Repl. 1991). The language of the statute providing that “All consumer, licensee, installer, dealer, or manufacturer complaints shall be filed with the Commission” clearly indicates the Legislature’s intention that disputes such as these be brought before the Commission. This effectuates the legislative goal that the Commission enforce the state’s standards and penalize violators. The majority’s opinion defeats these goals; agency enforcement of state standards is impossible where the Commission is not made aware of violations. A basic rule of administrative procedure requires that an agency be given the opportunity to address a question before a complainant resorts to the courts. Hankins v. McElroy, 313 Ark. 394, 855 S.W.2d 310 (1993). Furthermore, the Legislature has revealed its intention that this is a remedy which must be exhausted in the following provisions concerning appeals to circuit court: Appeals from a decision of the Commission shall be to the Circuit Court in accordance with the Arkansas Administrative Procedure Act. Such appeal shall stay that portion of the Commission order which directs payment of the damage. Neither the respondent nor the Commission shall be required to pay damages to the complainant until such time as a final order of the Circuit Court, Court of Appeals, or Supreme Court is issued. On appeal, the Circuit Court jurisdiction in awarding damages to be paid from the fund shall be limited in amount to (a) the amount determined by the Commission, or (b) the limits set forth herein. The Court shall not award attorneys’ fees or court costs to be paid by the fund. Ark. Code Ann. § 20-29-107 (Repl. 1991). The amount of damages awarded by the Commission shall be limited to the actual cost of repairs to the manufactured home and shall not include attorneys’ fees. On appeal to the Circuit Court from an award of the Commission, the jurisdiction of the Circuit Court shall be limited to the actual cost of repairs to the manufactured home. The Circuit Court shall not have jurisdiction to award punitive or exemplary damages for claims covered by the provision of this chapter, attorneys’ fees, or costs. Ark. Code Arm. § 20-29-105(b) (Repl. 1991). While appellants argue that they seek a remedy which is beyond the power and authority of the Commission to grant, a plain reading of the above-quoted statutory language reveals no limits on the compensatory damages that may be granted to a complainant by the Commission; indeed, damages for the full amount of the manufactured home may be appropriate, thus effecting a rescission of the sales contract. The only remedies which are unavailable from the Commission are those for attorney’s fees and exemplary damages. This limitation on recovery, like the limitation on an action in tort in workers’ compensation cases, is offset by the availability of up to $10,000.00 from the Commission’s Recovery Fund, just as the worker’s tort claim is offset by the assured recovery for work-related injuries. The majority opinion relies strongly upon the language of the Code regarding consumer’s rights in addition to the warranty on the manufactured home which is required by the statutes. It seems clear to me that this provision relating to warranties, coupled with the Commission’s authority to award damages, negates any conclusion that proceeding before the Commission would be futile. I agree with the trial court’s conclusion that administrative remedies should be exhausted before the courts accept jurisdiction, and respectfully dissent from the majority’s opinion.