Thursday, April 24, 2014

SC Administrative Law Court Decisions

CAPTION:
SCDMV vs. Kyle S. Ledford

AGENCY:
South Carolina Department of Motor Vehicles

PARTIES:
Appellant:
South Carolina Department of Motor Vehicles

Respondent:
Kyle S. Ledford
 
DOCKET NUMBER:
06-ALJ-21-0777-AP

APPEARANCES:
n/a
 

ORDERS:

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. § 56-1-1030 (Supp. 2006). The Department claims that the DMVH erroneously rescinded the driver’s license suspension of Respondent Kyle S. Ledford (Respondent). The Administrative Law Court (ALC or Court) has jurisdiction to hear this matter pursuant to S.C. Code Ann. § 1-23-660 (Supp. 2006). Upon review of this matter, the DMVH’s Order of Dismissal is affirmed.

BACKGROUND

On June 30, 2006, the Department sent Respondent a Notice of Suspension informing him that, as of July 30, 2006, his driver’s license would be suspended pursuant to the habitual offender statute, S.C. Code Ann. § 56-1-1090 (Supp. 2006). The Notice of Suspension stated that Respondent had accumulated two Reckless Driving convictions and one Driving Under Suspension conviction in a three-year period.

On July 26, 2006, Respondent requested a hearing with the DMVH to challenge the suspension. A hearing was held on August 28, 2006. Respondent appeared at the hearing, but no one from the Department appeared. At no point prior to, or after, the hearing did the Department file anything with the DMVH.

On September 8, 2006, the DMVH hearing officer issued an Order of Dismissal, pursuant to ALC Rule 23,[1] in which he rescinded Respondent’s suspension. Specifically, he held that the Department had failed to provide the DMVH with “any testimony or evidence (i.e., traffic tickets) to corroborate that the Respondent had received or was found guilty of any of the alleged violations that are listed on the Notice of Suspension.”

The Department now appeals the DMVH’s Order of Dismissal.

ISSUES ON APPEAL

1.      Did the DMVH hearing officer err by rescinding Respondent’s suspension when the DMVH failed to gather copies of the Department’s records as evidence to be used at the hearing?

2.      Did the DMVH hearing officer err by placing the burden of proof on the Department to demonstrate that Respondent was convicted of the violations listed on the Notice of Suspension?

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).[2] That 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).

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). 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

S.C. Code Ann. § 56-1-1030 (Supp. 2006) provides in pertinent part:

If the [Department of Motor Vehicles] determines after review of its records that [a] person is an habitual offender as defined in Section 56-1-1020, the department must revoke or suspend the person’s driver’s license. . . . A resident of South Carolina found to be an habitual offender may appeal the decision to the Division of Motor Vehicle Hearings in accordance with its rules of procedure.

S.C. Code Ann. § 56-1-1020 (2006) defines a habitual offender to include a person who, in a three-year period, accumulates three of more convictions for, among other things, “[d]riving or operating a motor vehicle in a reckless manner” and “[d]riving a motor vehicle while his license, permit, or privilege to drive a motor vehicle has been suspended or revoked.” Pursuant to S.C. Code Ann. § 56-1-1090 (Supp. 2006), the length of a habitual offender suspension is five years, unless the suspension period is reduced to two years as permitted by subsection (c) of Section 56-1-1090.

Because of the issues presented in this appeal, it is important to note that, prior to January 1, 2006, the Department’s Office of Administrative Hearings (OAH) held the hearings requested under Section 56-1-1030. However, in the summer of 2005, the Legislature enacted 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 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 statutory duty, which it failed to perform, to download the Department’s records that were 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 claim 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, 632 S.E.2d 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, to appeal this issue, the Department should have first challenged the default judgment by filing a Rule 29(D)[3] motion to reconsider with the DMVH.[4] The DMVH’s ruling on such a motion would have created a record to appeal 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 erred by placing the burden of proof on the Department to demonstrate that Respondent had been convicted of the violations listed on the Notice of Suspension. Specifically, the Department claims that the DMVH proceeding constituted an “appeal” of the Department’s decision to suspend Respondent’s license, and that the burden was therefore on Respondent “to allege an error of law, abuse of discretion, or lack of substantial evidence.” For the following reasons, I disagree.

First, the Department’s argument that a DMVH hearing held pursuant to Section 56-1-1030 constitutes an “appeal” is unconvincing. Nothing in Section 1-23-660 suggests that DMVH hearing officers will perform appellate duties; rather, Section 1-23-660 indicates that DMVH hearing officers will preside over only contested case hearings.[5] Therefore, although a case involving a habitual offender declaration reaches the DMVH in the posture of an appeal, the DMVH hearing officer is not sitting in an appellate capacity. See Reliance Ins. Co. v. Smith, 327 S.C. 528, 534, 489 S.E.2d 674, 677 (Ct. App. 1997) (holding that statute allowing taxpayers and county assessors to “appeal” a county assessment board’s property tax assessment by requesting a contested case hearing before the ALC did not place the ALC in an appellate capacity).

Second, in enacting the DMVH Act, the Legislature specifically required DMVH hearing officers to conduct their hearings in accordance with the ALC’s rules of procedure. Act No. 128, § 22, 2005 S.C. Acts 1503 (codified as amended at S.C. Code Ann. § 1-23-660 (Supp. 2006)). 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.” Therefore, because an administrative suspension of a motorist’s driver’s license is a “sanction,”[6] the DMVH hearing officer did not err by dismissing this case based on the Department’s failure to submit any evidence or otherwise participate in the proceeding. See 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).

For these reasons, the DMVH’s Order of Dismissal is affirmed.

ORDER

IT IS HEREBY ORDERED that the DMVH’s Order of Dismissal is AFFIRMED.

AND IT IS SO ORDERED.

______________________________

Ralph K. Anderson, III

Administrative Law Judge

October 25, 2007

Columbia, South Carolina



[1] At the time the Order of Dismissal was issued, ALC Rule 23 provided in full:

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] 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).

[3] 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 (2d. ed. 2002).

[4] 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.

[5] For instance, Section 1-23-660 states that DMVH hearing officers “shall conduct hearings,” and it specifically discusses evidence being introduced at such hearings.

[6] See State v. Price, 333 S.C. 267, 272, 510 S.E.2d 215, 218 (1998).


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