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Kahlo Jeep Chrysler Dodge of Knightstown10/12/2005
any time challenge any unilateral and substantial modification of a franchise agreement under Section 23-2-2.7-1(3) without having to show unreasonableness. In other words, Section 23-2-2.7-1(3), combined with Section 23-2-2.7-7, gives franchisees a two-year window to challenge any franchise agreement provision that on its face allows a franchisor to make a unilateral and substantial change to the agreement. If that two-year window has passed without complaint by the franchisee, then if it is a new motor vehicle dealer it still may challenge an actual unilateral attempt to modify the agreement, without regard to the two-year statute of limitations or whether the franchise agreement purported to allow the franchisor to make any unilateral modification. To succeed on such a claim, however, the modification must be found by a court to be unreasonable.
We also conclude that the Act's statute of limitations is an "occurrence-based" statute, much like the medical malpractice statute of limitations. See Martin v. Richey, 711 N.E.2d 1273, 1278 (Ind. 1999). The medical malpractice statute begins to run when the act of malpractice occurs, not when the patient suffers actual injury as a result of the malpractice. See id. at 1278 n.6. Similarly, the Act provides that the statute of limitations begins to run with any "violation" of the Act, not when a franchisee has actually suffered injury due to a franchisor's actions. See I.C. ยง 23-2-2.7-7. Here, there was a violation of the Act when DaimlerChrysler entered into franchise agreements with the Dealers that contained a provision that the Act labeled an "unlawful provision." The Dealers had two years from the violation date to bring suit against DaimlerChrysler to reform the agreements, but none of them did so. They cannot avoid the statute of limitation's running by asserting that DaimlerChrysler committed a separate wrong by invoking an unambiguous and otherwise legal contract provision in which they had acquiesced for several years without complaint. Our holding today is consistent with the sparse case law that has addressed this issue. See Monroe County Oil Co., Inc. v. Amoco Oil Co., 75 B.R. 158, 162 (S.D. Ind. 1987); see also Anderson v. Indianapolis Indiana AAMCO Dealers Adver. Pool, 678 N.E.2d 832, 836 (Ind. Ct. App. 1997), trans. denied (holding franchisee was barred by the Act's statute of limitations from claiming provision in franchise agreement regarding advertising violated Indiana Code Section 23-2-2.7-1(11) where franchisee did not raise that claim until eight years after executing the franchise agreement).
The General Assembly clearly could have worded the Act very differently, to provide that unilateral and substantial modification of a franchise agreement by a franchisor is an independent "unlawful act or practice" under Section 2 of the Act. It did not, instead only choosing to label it an impermissible franchise agreement provision under Section 1 of the Act. We must give effect to the intent of the legislature as evidenced by the plain language it has chosen to use in the Act. That intent clearly appears to be that causes of action for violations of Section 1 of the Act accrue when a contract containing an unlawful provision is executed and franchisees have two years from that date to challenge the provision, while a cause of action for violations of Section 2 of the Act accrues when the franchisor engages in the prohibited conduct. To accept the Dealers' position here would be to ignore the distinction between Section 1 and Section 2 of the Act that the legislature clearly made.
Conclusion
The Dealers' action against DaimlerChrysler is barred by the Act's statute of limitations. The trial court properly entered
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