Wednesday, October 22, 2014

SC Administrative Law Court Decisions

CAPTION:
SCDMV vs. Paul A. Dunbar, IV

AGENCY:
South Carolina Department of Motor Vehicles

PARTIES:
Appellant:
South Carolina Department of Motor Vehicles

Respondents:
Paul A. Dunbar, IV
 
DOCKET NUMBER:
06-ALJ-21-0740-AP

APPEARANCES:
n/a
 

ORDERS:

AMENDED FINAL ORDER

STATEMENT OF THE CASE

This matter is an appeal by the South Carolina Department of Motor Vehicles (Department) from an Order of Dismissal of the South Carolina Division of Motor Vehicle Hearings (DMVH). The DMVH’s Order of Dismissal was issued following a hearing held pursuant to S.C. Code Ann. § 56-10-530 (2006). The Department claims that the DMVH erroneously rescinded the suspension of Respondent’s driving and registration privileges. The Administrative Law Court (ALC or Court) has jurisdiction to hear this matter pursuant to S.C. Code Ann. §§ 1-23-660 & 56-10-530 (Supp. 2006). Upon review, the DMVH’s Final Order and Decision is affirmed.

FACTS

On March 14, 2006, the Department sent Respondent Paul A. Dunbar, IV, written notice that, as a result of a motor vehicle accident that occurred on April 22, 2005, his driving and registration privileges in South Carolina would be suspended pursuant to S.C. Code Ann. § 56-10-530, effective March 29, 2006. The Department’s notice did not describe the vehicle involved in the accident. On May 23, 2005, pursuant to Section 56-10-530, Kenneth C. Anthony, Jr. as attorney for Dunbar filed a letter requesting a hearing to challenge the suspension. A hearing was held on May 1, 2006. Anthony as attorney for Dunbar appeared with his client at the hearing, but no one on behalf of the Department appeared. During the hearing, Anthony moved for “dismissal of that suspension on the basis that there’s no proof that liability insurance did not exist on the date or that an accident even occurred on that date.” At no point prior to, or after, the hearing did the Department file anything with the DMVH.

On August 10, 2006, the DMVH hearing officer issued an Order of Dismissal, pursuant to ALC Rule 23,[1] in which he rescinded Dunbar’s suspension. Specifically, he held that “[t]here was no evidence/testimony corroborating that the Respondent’s vehicle had been involved in an accident/collision.” The Department now appeals the DMVH’s Order of Dismissal.[2]

ISSUES ON APPEAL

1.      Did the DMVH err in holding a hearing with less than the thirty-day notice required by S.C. Code Ann. § 1-23-320(a) (Supp. 2006)?

2.      Did the DMVH violate its statutory duties by failing to gather copies of the Department’s records as evidence to be used against Dunbar at the hearing?

3.      Did the DMVH hearing officer erroneously shift the burden of proof to the Department to demonstrate that Dunbar’s vehicle had been involved in an accident?

STANDARD OF REVIEW

The DMVH is authorized by law to determine contested cases arising from the Department. See S.C. Code Ann. § 1-23-660 (Supp. 2006). Therefore, the DMVH is an “agency” under the Administrative Procedures Act (“APA”). See S.C. Code Ann. § 1-23-310(2) (2005). As such, the APA’s standard of review governs appeals from decisions of the DMVH. See S.C. Code Ann. § 1-23-380 (Supp. 2006); see also Byerly Hosp. v. S.C. State Health & Human Servs. Fin. Comm’n, 319 S.C. 225, 229, 460 S.E.2d 383, 385 (1995). The standard used by appellate bodies, including the ALC, to review agency decisions is provided by S.C. Code Ann. §1-23-380(A)(5) (Supp. 2006).[3] This section provides:

The court may not substitute its judgment for the judgment of the agency as to the weight of the evidence on questions of fact. The court may affirm the decision of the agency or remand the case for further proceedings. The court may reverse or modify the decision [of the agency] if substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions, or decisions are:

(a) in violation of constitutional or statutory provisions;

(b) in excess of the statutory authority of the agency;

(c) made upon unlawful procedure;

(d) affected by other error of law;

(e) clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record; or

(f) arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.

S.C. Code Ann. § 1-23-380(A)(5) (Supp. 2006).

A decision is supported by “substantial evidence” when the record as a whole allows reasonable minds to reach the same conclusion reached by the agency. Bilton v. Best Western Royal Motor Lodge, 282 S.C. 634, 641, 321 S.E.2d 63, 68 (Ct. App. 1984). A decision will not be set aside simply because reasonable minds may differ on the judgment. Lark v. Bi-Lo, Inc., 276 S.C. 130, 136, 276 S.E.2d 304, 307 (1981). The fact that the record, when considered as a whole, presents the possibility of drawing two inconsistent conclusions from the evidence does not prevent the agency’s findings from being supported by substantial evidence. Waters v. S.C. Land Resources Conservation Comm’n, 321 S.C. 219, 226, 467 S.E.2d 913, 917 (1996); Grant v. S.C. Coastal Council, 319 S.C. 348, 353, 461 S.E.2d 388, 391 (1995).

In applying the substantial evidence rule, the factual findings of the administrative agency are presumed to be correct. Rodney v. Michelin Tire Co., 320 S.C. 515, 519, 466 S.E.2d 357, 359 (1996) (citing Kearse v. State Health and Human Servs. Fin. Comm’n, 318 S.C. 198, 200, 456 S.E.2d 892, 893 (1995)). The party challenging an agency action has the burden of proving convincingly that the agency’s decision is unsupported by substantial evidence. Waters, 321 S.C. at 226, 467 S.E.2d at 917.

DISCUSSION

Summary of Applicable Law

The statute at issue here, Section 56-10-530, was enacted by the Legislature to discourage individuals who are involved in motor vehicle accidents from evading their financial responsibilities with respect to such accidents and provides in pertinent part:

When it appears to the director from the records of his office that an uninsured motor vehicle as defined in Section 56-9-20, subject to registration in the State, is involved in a reportable accident in the State resulting in death, injury, or property damage with respect to which motor vehicle the owner thereof has not paid the uninsured motor vehicle fee as prescribed in Section 56-10-510, the director shall . . . suspend such owner’s driver’s license and all of his license plates and registration certificates until such person has complied with those provisions of law and has paid to the director of the Department of Motor Vehicles a reinstatement fee as provided by Section 56-10-510 . . . with respect to the motor vehicle involved in the accident and furnishes proof of future financial responsibility in the manner prescribed in Section 56-9-350, et seq.

S.C. Code Ann. § 56-10-530 (2006). However, Section 56-10-530 also provides that no order of suspension may become effective “until the director has offered the person an opportunity for an administrative hearing to show cause why the order should not be enforced.” Id. The presentation by such person of either: (i) a certificate of insurance, executed by an agent or representative of an insurance company qualified to do business in this State, showing that on the date and at the time of the accident the vehicle was an insured motor vehicle; or (ii) evidence that the additional fee applicable to the registration of an uninsured motor vehicle had been paid to the Department before the date and time of the accident is sufficient to bar the suspensions. Id.

Because of the issues presented in this appeal, it is necessary to note that, prior to January 1, 2006, the Department’s Office of Administrative Hearings (OAH) held the hearings requested under Section 56-10-530. However, in the summer of 2005, S.C. Code Ann. § 1-23-660 was extensively amended by Act No. 128, § 22, 2005 S.C. Acts 1503 (the DMVH Act). Pursuant to the DMVH Act, the DMVH was created as a division of the ALC and, as of January 1, 2006, “the duties, functions, and responsibilities of all hearing officers and associated staff” of the Department were transferred to the DMVH. Act No. 128, § 22, 2005 S.C. Acts 1503 (codified as amended at S.C. Code Ann. § 1-23-660 (Supp. 2006)). The DMVH Act requires DMVH hearing officers to conduct their hearings in accordance with the ALC’s rules of procedure. Id.

Duty to Gather the Department’s Records

The Department claims that, “at the DMVH’s request,” the DMVH was given electronic access to its records “specifically and precisely” so that these materials would be available to DMVH hearing officers, and that because the DMVH Act transferred “the duties, functions, and responsibilities of all hearing officers and associated staff” of the Department to the DMVH, the DMVH had a duty, which it failed to perform, to download the accident report relevant to this case. I disagree.

A. Issue Preservation and Lack of Evidence Supporting the Department’s Factual Claims

As an initial matter, the Department did not raise this issue to the DMVH hearing officer, and the hearing officer did not rule on this issue. Issues that are neither raised to nor ruled upon by the trial court are not preserved for appellate review. Flowers v. S.C. Dep’t of Highways and Pub. Transp., 309 S.C. 76, 79, 419 S.E.2d 832, 834 (Ct. App. 1992). Therefore, this issue has not been properly preserved.

Moreover, there is no evidence in the Record that supports the Department’s factual claims that either the DMVH requested access to the Department’s records or that the DMVH was given access to the Department’s records. ALC Rule 36(G) provides that an “Administrative Law Judge will not consider any fact which does not appear in the Record.” As the appellant in this case, the onus was on the Department to provide this Court with sufficient means to analyze the merits of its claims. See Medlock v. One 1985 Jeep Cherokee VIN 1JCWB7828FT129001, 322 S.C. 127, 132, 470 S.E.2d 373, 376 (1996).

It is for these reasons that the South Carolina Supreme Court has held on numerous occasions that the issuance of a default judgment based on a party’s failure to appear at a proceeding or to make requisite legal filings is not directly appealable. See, e.g., Edith v. State, 369 S.C. 408, 409, 632 S.E.2d 844, 844 (2006) (default judgment based on failure to respond to a conditional order of dismissal); Belue v. Belue, 276 S.C. 120, 276 S.E.2d 295 (1981) (default judgment based on failure to appear); Odom v. Burch, 52 S.C. 305, 29 S.E. 726 (1898) (default judgment based on failure to file answer). Instead, the court has held that the proper procedure for challenging a default judgment is to move the trial court to set aside the judgment pursuant to SCRCP Rule 60(b). See Winesett v. Winesett, 287 S.C. 332, 334, 338 S.E.2d 340, 341 (1985). In Winesett, the Supreme Court explained the reasoning behind this rule:

An early justification for this rule was that a defendant who does not appear and answer “has no status in court which will enable him to appeal from the judgment rendered.” An additional justification is that a party appealing a default judgment will ordinarily be precluded from raising any issues on appeal because they were not first presented below. Finally, the appellant will often not be able to meet his burden of providing this Court with a record sufficient to permit an adequate review.

Winesett, 287 S.C. at 333-34, 338 S.E.2d at 341.

Here, the DMVH hearing officer dismissed this case pursuant to the default provisions set forth in ALC Rule 23 after the Department failed to submit any evidence or otherwise participate in the proceeding. Therefore, the DMVH’s Order of Dismissal is not appealable. The Department should have challenged the default judgment by filing a Rule 29(D)[4] motion to reconsider with the DMVH.[5] The DMVH’s ruling on such a motion would have been appealable to this Court.

Furthermore, as discussed below, even if the DMVH’s Order of Dismissal were appealable, reversal of the DMVH’s Order of Dismissal would still not be warranted.

B. Duties Transferred to the DMVH Did Not Include Evidence-Gathering Duties

The cardinal rule of statutory construction is to ascertain and effectuate the intent of the Legislature. Hodges v. Rainey, 341 S.C. 79, 85, 533 S.E.2d 578, 581 (2000). In ascertaining the intent of the Legislature, a court should not focus on any single section or provision but should consider the language of the statute as a whole. Mid-State Auto Auction of Lexington, Inc. v. Altman, 324 S.C. 65, 69, 476 S.E.2d 690, 692 (1996). Although there is no single, invariable rule for determining legislative intent, the language must be read in a sense which harmonizes with its subject matter and accords with its general purpose. Scholtec v. Estate of Reeves, 327 S.C. 551, 558, 490 S.E.2d 603, 607 (Ct. App. 1997).

Here, the statutory framework of the DMVH Act demonstrates that, by devolving the duties, functions, and responsibilities of the hearing officers and associated staff of the Department to the DMVH, the Legislature did not intend to transfer the Department’s evidence-gathering duties to the DMVH. First, the DMVH Act requires DMVH hearing officers to abide by the Code of Judicial Conduct, as contained in Rule 501 of the South Carolina Appellate Court Rules. Act No. 128, § 22, 2005 S.C. Acts 1503 (codified as amended at S.C. Code Ann. § 1-23-660 (Supp. 2006)). Canon 3 of the Code of Judicial Conduct states: “A judge shall perform the duties of judicial office impartially and diligently.” Rule 501 SCACR, Canon 3 (emphasis added). As a fundamental matter, the impartiality requirement prohibits a judge from investigating the very violations that he or she is required to adjudicate. See Commentary to Rule 501 SCACR, Canon 3(B)(7) (“A judge must not independently investigate facts in a case and must consider only the evidence presented”); see also State v. Adams, 291 S.C. 132, 134, 352 S.E.2d 483, 485 (1987) (“A magistrate who participates in a general search for evidence is not neutral and detached.”); In re Marriage of Smith, 448 N.E.2d 545, 550 (Ill. App. Ct. 1983) (holding, in a marriage dissolution proceeding, that it was the responsibility of the parties, not the trial court, to obtain and present adequate information regarding husband’s pension rights). This impartiality requirement also applies to court personnel. See Rule 501 SCACR, Canon 3(C)(2) (“A judge shall require staff, court officials and others subject to the judge’s direction and control to observe the standards of fidelity and diligence that apply to the judge and to refrain from manifesting bias or prejudice in the performance of their official duties.”)

Second, the DMVH Act makes the DMVH a part of the ALC, not the Department. Act No. 128, § 22, 2005 S.C. Acts 1503 (codified as amended at S.C. Code Ann. § 1-23-660 (Supp. 2006)). By separating the DMVH from the Department, the Legislature created an independent tribunal for adjudicating license and registration suspension matters. Therefore, it is highly unlikely that the Legislature intended for the DMVH to perform the same prosecutorial-type duties that the Department’s OAH once performed. For these reasons, I hold that it was not the duty of the DMVH to gather copies of the Department’s records.

Burden of Proof

The Department also argues that the DMVH hearing officer erroneously shifted the burden of proof to the Department to demonstrate that Dunbar’s vehicle had been involved in an accident. Before resolving this issue, a careful analysis of the term “burden of proof” is required. “The term ‘burden of proof’ has been used to describe two related but distinct concepts: the burden of production and the burden of persuasion.” 29 Am. Jur. Evidence § 155 (1994); see also Dir., Office of Workers’ Comp. Programs, Dep’t of Labor v. Greenwich Collieries, 512 U.S. 267, 272 (1994). The burden of persuasion refers to the duty to prove the truth of an issue by the quantum of evidence the law demands in the case in which the issue arises.[6] Alex Sanders & John S. Nichols, Trial Handbook for South Carolina Lawyers § 9.1 at 369 (3d ed. 2005). The burden of production, or burden of going forward with the evidence, refers to the obligation of a party to proceed with evidence, at any stage of the trial, to make or meet a prima facie case.[7] Id. § 9.1 at 369. As a trial progresses, the burden of production may shift from one side to the other as the respective parties present evidence. Id. § 9.1 at 370. The burden of persuasion, however, does not generally shift. Id. § 9.1 at 369. The current standard practice is to use the term “burden of proof” to refer to the burden of persuasion. Greenwich Collieries, 512 U.S. at 276. This is the meaning intended by this Court when using the phrase “burden of proof” herein.

Here, Section 1-23-660 specifically requires DMVH hearing officers to conduct their hearings in accordance with the ALC’s rules of procedure. One of those rules, ALC Rule 29(B), expressly states: “In matters involving the assessment of civil penalties, the imposition of sanctions, or the enforcement of administrative orders, the agency shall have the burden of proof.” In Section 56-10-530 proceedings, the Department is seeking to suspend a person’s registration privileges and/or driver’s license. Therefore, in such proceedings, the Department bears the burden of proof with respect to establishing that a vehicle owned by the motorist was involved in an accident in South Carolina resulting in bodily injury, death or property damage. See S.C. Code Ann. § 56-10-530 (2006); see also Stephen P. Bates, The Contested Case Before the ALJD, South Carolina Administrative Practice & Procedure 161, 200-01 (Randolph R. Lowell & Stephen P. Bates eds., 2004) (discussing generally the burden of proof in administrative enforcement cases).

The statute does not shift the Department’s burden of proof to the motorist. Section 56-10-530 is analogous to those statutes and court rules that require nonmoving parties to “show cause” why a certain action should not be taken against them. Such statutes and court rules do not shift the moving party’s burden of proof to the nonmoving party. See, e.g., Brasington v. Shannon, 288 S.C. 183, 184, 341 S.E.2d 130, 131 (S.C. 1986) (holding that the use of a rule to show cause to initiate a contempt proceeding did not shift the burden of proof to the nonmoving party); State v. Saulter, 224 S.E.2d 247, 249 (N.C. Ct. App. 1976) (“Though [the habitual offender statute] provides that the court enter an order directing the person named to show cause why he should not be barred from operating a motor vehicle on the highways of this State, the burden of proof is not on the defendant.”); Davis v. Commonwealth, 252 S.E.2d 299, 301 (Va. 1979) (holding, in a case involving Virginia’s habitual traffic offender statute, that the trial court’s order requiring motorist to show cause why he should not be barred from operating motor vehicles on Virginia’s highways did not shift the burden of proof to the motorist); Brennan v. Johnson, 391 A.2d 337, 339 n.1 (Me. 1978) (where, in a case involving Maine’s habitual traffic offender law, the Maine Supreme Court stated that “we observe that resort to a show cause order (as provided by the Legislature here) does not relieve a plaintiff of his initial burden of going forward with evidence nor of his ultimate burden of proof”). Similarly, Section 56-10-530 does not shift the Department’s burden of proof to the motorist. However, once the Department presents prima facie evidence to show that a vehicle owned by the motorist was involved in an accident in South Carolina resulting in bodily injury, death or property damage, the burden shifts to the motorist. If, after the Department establishes its prima facie case, the motorist does not present any evidence, then the motorist’s suspension must be sustained.

Here, the Department did not present any evidence to show that a vehicle belonging to Dunbar was involved in an accident in South Carolina resulting in bodily injury, death or property damage. The Department’s contention that the Notice of Suspension issued to Dunbar sufficiently established the Department’s prima facie case is without merit. As a basic matter, the Notice of Suspension does not indicate whether any bodily injury, death or property damage occurred as a result of the referenced accident. Therefore, it was not error for the DMVH hearing officer to dismiss this case based on the Department’s failure to submit any evidence.

Accordingly, because it was not the duty of the DMVH to gather the Department’s records, and because the Department failed to meet its burden of proof, the DMVH’s Final Order and Decision must be affirmed.[8]

ORDER

Pursuant to the Department’s motion for reconsideration, the Final Order previously filed in this matter is VACATED and this Amended Final Order is substituted. IT IS HEREBY ORDERED that the DMVH’s Final Order and Decision is AFFIRMED.

AND IT IS SO ORDERED.

________________________________________

October 17, 2007 JOHN D. GEATHERS

Columbia, South Carolina Administrative Law Judge

1205 Pendleton Street, Suite 224

Columbia, South Carolina 29201-3731



[1] ALC Rule 23 provides:

The administrative law judge may dismiss a contested case or dispose of a contested case adverse to the defaulting party. A default occurs when a party fails to plead or otherwise prosecute or defend, fails to appear at a hearing without the proper consent of the judge or fails to comply with any interlocutory order of the administrative law judge. Any non-defaulting party may move for an order dismissing the case or terminating it adversely to the defaulting party.

[2] The Department’s brief indicates it is appealing an amended order dated August 15, 2006, but the record contains only the order dated August 10, 2006. However, the Notice of Appeal indicates it is appealing the August 10, 2006, order.

[3] Pursuant to S.C. Code Ann. § 1-23-380(B) (Supp. 2006), administrative law judges must conduct appellate review in the same manner prescribed in Section 1-23-380(A).

[4] Under ALC Rule 29(D), any party may move for reconsideration of an administrative law judge’s decision in a contested case provided that a petition for judicial review has not been filed. Rule 29(D) provides that the reconsideration is subject to the grounds for relief set forth in Rule 60(B) (1 through 5), SCRCP. Nevertheless, recognizing the practical need for a general motion for reconsideration in administrative proceedings, Justice Toal set forth that “in practice, motions for reconsideration under Rule 59(e)” of the Rules of Civil Procedure may also be made. Jean H. Toal et al., Appellate Practice in South Carolina 40 (1999).

[5] Although the Note to ALC Rule 29(D) states that “[t]he filing of a motion for reconsideration is not a prerequisite to filing a notice of appeal from the final decision of an administrative law judge,” it is not this Court’s view that this provision should be interpreted, contrary to the above reasoning, to allow a default judgment-type administrative decision to be directly appealed. In other words, if an issue is not raised or a record established to support a party’s grounds for appeal, the appeal will be ineffectual.

[6] In an administrative hearing, the burden of proof is generally a preponderance of the evidence. Anonymous (M-156-90) v. State Bd. of Med. Exam’rs, 329 S.C. 371, 375, 496 S.E.2d 17, 19 (1998).

[7] A prima facie case is made by presenting evidence sufficient in law to raise a presumption of fact or establish the fact in question unless rebutted. LaCount v. Gen. Asbestos & Rubber Co., 184 S.C. 232, 240, 192 S.E. 262, 266 (1937). “The words [“prima facie evidence”] import that the evidence produces for the time being a certain result; but that result may be repelled.” Mack v. Branch No. 12, Post Exch., Fort Jackson, 207 S.C. 258, 272, 35 S.E.2d 838, 844 (1945).

[8] Moreover, Anthony indicates in his brief that he was ready to go forward with evidence in support of his case at the hearing before the hearing officer summarily dismissed the case and attached that evidence—a copy of a notarized release of financial responsibility from the other driver to his brief. While this court in an appellate capacity will not consider materials not presented to the trial court and not contained in the record, it appears the correct result was reached by the dismissal and the suspension should not have gone into effect at all.


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