Tuesday, September 30, 2014

SC Administrative Law Court Decisions

CAPTION:
SCDMV vs. Kevin B. Smalls

AGENCY:
South Carolina Department of Motor Vehicles

PARTIES:
Appellant:
South Carolina Department of Motor Vehicles

Respondents:
Kevin B. Smalls
 
DOCKET NUMBER:
n/a

APPEARANCES:
n/a
 

ORDERS:

STATEMENT OF THE CASE

THIS MATTER is an appeal by the South Carolina Department of Motor Vehicles (“Department”) from a Final Order and Decision of the South Carolina Division of Motor Vehicle Hearings (“DMVH”). The DMVH’s Final Order and Decision was issued following an administrative hearing held pursuant to S.C. Code Ann. § 56-1-1090(c) (Supp. 2006). The Department contends that the DMVH Hearing Officer was in error in denying its Motion to Reconsider despite evidence that the Respondent Kevin B. Smalls (“Respondent”) committed fraud and misrepresentation. 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 consideration of the briefs, the DMVH’s Final Order and Decision is affirmed as set forth below.

background

On September 8, 2004, Respondent was adjudicated a “habitual Offender” for a second time according to S.C. Code Ann. § 56-1-1020(a). Pursuant to section 56-1-1020, and, in accordance with section 56-1-1090(a) (Supp. 2006), his driver’s license was suspended for a five-year period beginning September 8, 2004 and ending September 8, 2009. Despite the habitual offender suspension, Respondent was involved in a motor vehicle accident while driving on October 21, 2006. Two days later, on October 23, 2006, Respondent petitioned for a habitual offender sentence reduction under section 56-1-1090(c), and the hearing was scheduled for November 28, 2006.

In Part I, paragraph five (5) of the petition for a habitual offender suspension reduction, a petitioner must allege “That he/she can show good cause for the Department to rescind his/her habitual offender status as follows.” In this case, Respondent stated “have not had any recent offenses.” In Part II of the petition, Respondent also indicated that he had not been convicted of or charged with any traffic violations since being declared a habitual offender. Respondent was convicted before the DMVH hearing, on November 14, 2006, for Failure to Yield Right of Way and Driving Under Suspension (DUS). Furthermore, the Department learned of the conviction on November 22, 2006, which was six (6) days before the scheduled hearing. The Department did not attempt to enter this evidence into the record, nor did the Department attend the hearing. Due to the timing of petition and conduct of the parties, the offense did not appear on Respondent’s Ten (10) Year Driving Record and the DMVH hearing officer was not aware of the accident.

At the DMVH hearing, the hearing officer specifically questioned Respondent about his habitual offender suspension by asking, “Have you had any moving violations, convictions during this period of time?” Respondent replied, “No.” The hearing officer then asked, “You haven’t driven?” Again, Respondent replied, “No.” Based on the record and Respondent’s testimony, the DMVH hearing officer issued a Final Order and Decision on January 8, 2007, finding good cause for a suspension reduction.

On January 11, 2007, the Department filed a Motion for Reconsideration pursuant to S.C. Code. Ann. § 1-23-660. In the motion, the Department attached copies of Respondent’s accident report and traffic tickets from October 21, 2006. The Department’s motion claimed that Respondent should have apprised the hearing officer of the accident, and Respondent’s failure to do so constitute fraud on the court.

On March 23, 2007, the DHVH hearing officer issued an Order Denying Motion for Reconsideration. The Department now appeals.

ISSUE ON APPEAL

1.      Did the Hearing Officer err in denying the Department’s Motion for Reconsideration based on the intrinsic evidence of Respondent’s conduct?

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(A) (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). See S.C. Code Ann. § 1-23-380(B) (Supp. 2006) (directing Administrative Law Judges to conduct appellate review in the same manner prescribed in Section 1-23-380(A)). 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, 276 S.C. at 136, 276 S.E.2d 304, 307. 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

SCRCP 60(b)(3) – Fraud

Although the Department’s argument that the Respondent perjured himself before the DMVH hearing officer has merit, the Department’s conclusion that there was an error and abuse of discretion in denying the Motion for Reconsideration was misplaced.

Pursuant to S.C. Code Ann. § 1-23-660 (Supp. 2006), ALC Rule 29(D) is applicable to DMVH hearings and states, “Any party may move for reconsideration of a final decision of an administrative law judge in a contested case, subject to the grounds for relief set forth in SCRCP Rule 60(b).” Motions for reconsideration made under Rule 60(b)(1-3) must be made within a reasonable period of time, but not more than one year after the order has been entered. See SCRCP Rule 60 (Notes) (Time). The judge has the discretion to grant or deny such a motion, and on appeal the standard of review shall be whether or not there was an abuse of discretion by the Court. See Raby Construction, L.L.P. v. Orr, 358 S.C. 10, 18, 594 S.E.2d 478, 482 (2004).

In this case, there are two factual elements of the alleged fraud to consider, which are (1) the type of fraud, and (2) the time the moving party became aware of the fraud. First, when a party attacks a judgment by a Motion for Reconsideration under Rule 60(b)(3), South Carolina law makes the distinction of whether the fraud is extrinsic or intrinsic to the issue raised. Orr, 594 S.E.2d at 483. Extrinsic fraud is collateral to the issue raised, and arises in such circumstances where fraud “induces a person not to present a case or deprives a person of the opportunity to be heard.” Orr. Intrinsic fraud, however, “misleads a court in determining issues and induces the court to find for the party perpetrating the fraud.” Id. The usual types of intrinsic fraud are perjured testimony or presenting forged documents at trial. Id. The basis for the distinction is that perjured statements should surface during the hearing, and permitting relief based on intrinsic fraud would undermine the stability of judgments. Id.

Here, the Department’s Motion for Reconsideration was focused centrally on Respondent’s petition and his perjured statements made in the DMVH hearing. Respondent specifically indicated in his petition that he had not been involved in any recent offenses and indicated at the hearing that he had not driven during the suspension period. While the Respondent could face charges for perjury, these fraudulent misleading statements were intrinsic to the allegations raised by the motion.[1] Hence, the DMVH hearing officer’s denial of the Department’s motion did not constitute an abuse of discretion.

Second, the Department should not prevail on a Motion for Reconsideration when it had knowledge of Respondent’s conviction prior to the hearing and failed to bring forth the evidence that was relevant to the finding of good cause. In Orr, the Supreme Court of South Carolina found that “a party may not prevail on a Rule 60(b)(3) motion on the basis of fraud where he or she has access to disputed information or has knowledge of inaccuracies in an opponent’s representations at the time of the alleged misconduct.” Id. at 484. The Administrative Law Court has suggested that the Department could attend these hearings to offer the Uniform Traffic Ticket into evidence.[2] The Department argues it was only afforded two days to process and post the conviction to Respondent’s record due to the Thanksgiving holiday. If that is true, then the Department could have availed itself the benefit of filing for a Motion for Continuance under ALC Rule 19(B) to present the evidence to the DMVH hearing officer. Instead, the Department waited until the Final Order and Decision was issued until it raised the issue. Although perjury is a criminal offense, there was no error, as a matter of law, for denying the motion.

ORDER

IT IS THEREFORE ORDERED that the DMVH’s Final Order and Decision is AFFIRMED.

AND IT IS SO ORDERED.

________________________

John D. McLeod

Administrative Law Judge

December 6, 2007

Columbia, South Carolina



[1] Under S.C. Code § 16-9-10(A)(1) “It is unlawful for a person to willfully give false, misleading, or incomplete testimony under oath in any court of record, judicial, administrative, or regulatory proceeding in this State.” Perjury is a class F felony. S.C. Code Ann. § 16-1-90(F). The act of perjury is punishable by fine or imprisonment up to 5 years. S.C. Code Ann. § 16-9-10(B)(1). Furthermore, the circuit courts have original jurisdiction in criminal matters. See S.C. CONST Art. V, § 11; see also State v. Dudley, 364 S.C. 578, 614 S.E.2d 623 (2005).

[2] See South Carolina Department of Motor Vehicles v. Brian Livingston, 2006 WL 3921910 (S.C. Admin. Law Judge Div.).


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