Mathew Zaheri Corp. v. Mitsubishi Motor Sales of America, Inc.

In this action we consider whether the complaint filed by plaintiffs Mathew Zaherí Corporation, doing business as Hayward Mitsubishi, and Mathew Zaherí was properly dismissed for failure to exhaust their administrative remedy. We conclude it was and affirm the judgment in favor of defendant Mitsubishi Motor Sales of America, Inc.

Procedural History

On July 12, 1991, plaintiffs filed a complaint for damages. The complaint avers that Mathew Zaherí Corporation, doing business as Hayward Mitsubishi, is an authorized franchisee of defendant. Beginning on or about July 1, 1988, Hayward Mitsubishi performed warranty service and repair of Mitsubishi automobiles pursuant to a written agreement with defendant.

In July 1990, defendant conducted an audit of certain of plaintiffs’ warranty service and repair records. As a result of the audit, defendant charged back $137,444.79 of the previously paid warranty claims. Thereafter, defendant caused to be disseminated statements that defendant was “pulling the franchise” because it had found evidence of “massive warranty fraud” which “hit a new record.”

Based on these allegations the complaint sets forth six causes of action, two based…