Friday, June 22, 2018

SC Administrative Law Court Decisions

SLED vs. Kimberly Jennings Durst

South Carolina Department of Motor Vehicles

South Carolina Department of Motor Vehicles

Kimberly Jennings Durst





THIS MATTER is an appeal by the South Carolina Department of Motor Vehicles (the “Department” or “Appellant”) from the Final Order and Decision by the South Carolina Department of Motor Vehicles Hearings (the “DMVH”) issued in an administrative hearing that was held June 25, 2007, pursuant to S.C. Code Ann. § 56-10-530 (2006). Appellant contends that the DMVH erred in rescinding the suspension the license and registration of Kimberly Jennings Durst (“Respondent”) based on her lack of knowledge that the liability carrier on her Honda Pilot had cancelled her liability insurance policy thereon. The Administrative Law Court (“ALC”) has jurisdiction to hear this matter pursuant to S.C. Code Ann. § 1-23-660 (Supp. 2006).

The Department Hearing Officer (“DHO”) issued a Final Order and Decision on June 27, 2007, that held Respondent’s lack of knowledge of the cancellation of her insurance policy was cause for rescission of the license and registration suspension.

Appellant did not appear at the hearing. Respondent was present, without counsel, and with her husband James Peter Durst as her only witness.

The Department argued in its brief on appeal that the suspension should be decided based on whether Respondent was uninsured at the time of the accident, not according to lack of knowledge of the cancellation. While the Department is correct that lack of knowledge is the incorrect basis supporting cause for rescinding Respondent’s suspension, the Court finds that the record supports a finding that the suspension should not be enforced.

Upon consideration of the record, the DMVH’s Order is SUSTAINED but on different grounds.


Respondent’s husband had been insured with State Farm for about twelve (12) years prior to December 10, 2006. On December 10, 2006, he went to the office of State Farm to pay the premium on the policy covering his work vehicle. At this time, he inquired about the balances on their other policies and was told that there were no other payments due.

Seven days later, on December 17, 2006, Respondent, while driving her Honda Pilot, rear-ended another vehicle owned by Cheryl Williams. Respondent presented her insurance information to Officer McEvers at the scene of the accident and was told that the police computer confirmed her status as insured. The day following the accident, when Respondent’s husband presented the accident report to the State Farm agency, he was told that the coverage on the Honda Pilot had been cancelled for non payment of premium in July 2006, whereupon he immediately purchased coverage for the Honda Pilot from State Farm.

At the same time, Respondent’s husband asked the State Farm employee why the Department had not been notified of the cancellation of the insurance on the Honda Pilot. He was told, “Well, you’re lucky we didn’t notify the DMV because your license would have been suspended.”

During the twelve years that preceded the accident, the State Farm agency had always phoned Respondent to warn of an impending lapse of coverage. Neither respondent nor her husband received any such call about the coverage on the Honda Pilot.

Respondent’s husband indicated that an examination of his business records showed that the non-payment was the result of a clerical error by his secretary. Hrg. Trans. 15:3-14. The payment was posted on the books, but there was no evidence that a check was issued. He also acknowledged that the notification of the policy cancellation, if sent, could have been misplaced through commingling with that of another person who shared his mail box at his place of business where he received his insurance bills. Hrg. Trans. 6:11-24.

At the time of the accident, Respondent and her husband were unaware that in July 2006 their insurer, State Farm, had cancelled their motor vehicle liability policy on the Honda Pilot pursuant to S.C Code Ann § 38-77-123(B) for failure to pay the policy premium. For emphasis, both Respondent and her husband testified under oath that neither had received any notification from State Farm regarding the cancellation of their motor vehicle policy on the Honda Pilot. There is no evidence in the record to show that any notice of cancellation, written or otherwise, was provided to Respondent or her husband.

On February 8, 2007, Nationwide Mutual Insurance Company (“Nationwide”) notified Respondent that it was seeking reimbursement for the damage to Cheryl Williams (“Williams”) vehicle that was paid by Williams’ uninsured motorist coverage. On March 15, 2007, Nationwide informed Respondent that the matter had been settled in full. Nationwide subrogation support technician, Jennifer Miner, signed a notarized SCDMV Release of Financial Responsibility on April 2, 2007, to certify that Respondent had satisfied the Department’s criteria for release from her liability responsibility.

On May 14, 2007, the Department mailed Respondent an official notice that her driver’s license and registration were suspended under Section 56-10-530. The notice required that Respondent pay a reinstatement fee of $550 and comply with the terms set forth in the notice regarding financial responsibility. Respondent timely filed a request for hearing pursuant to S.C. Code Ann. § 56-5-2951(B)(2) (2006).

On June 27, 2007, the DHO issued a Final Order and Decision rescinding the suspension of Respondent’s driver’s license and registration. In support of the rescission, the DHO found that Respondent’s lack of knowledge regarding the cancellation of her insurance policy was good cause to support the rescission of the suspension.


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.


Did the DMVH Hearing Officer err in finding that Respondent’s lack of knowledge of the cancellation of her motor vehicle liability policy was cause to rescind the suspension of her driver’s license and registration?

South Carolina law governing motor vehicle liability insurance provides an insurer with the authority to unilaterally cancel a policy under two specific instances: (1) where a license to drive has been suspended or revoked, or (2) where the named insured fails to pay the policy premium or any installment of the premium. S.C. Code Ann. § 38-77-123(B) (2006); see also South Carolina Farm Bureau Mutual Insurance Co. v. Courtney, 349 SC 366, 563 S.E.2d 648 (2002) (finding that Section 38-77-123 limits unilateral cancellation by the insurer). The circumstances surrounding the cancellation of Respondent’s policy fall directly within the provisions of Section 38-77-123(B), and allowed State Farm to unilaterally cancel coverage on the Honda Pilot because it is undisputed that the premium payment that was due in May 2006 was not made.

However, despite State Farm’s authority to cancel the policy under Section 38-77-123(B)(2), that cancellation requires written notice to the insured under S.C. Code Ann. § 38-77-120(a) (2006), as follows:

(a)    “No cancellation or refusal to renew by an insurer of a policy of automobile insurance is effective unless the insurer delivers or mails to the named insured at the address shown in the policy a written notice of the cancellation or refusal to renew.”

S.C. Code Ann. § 38-77-120(a) (2006) (emphasis added).

There are two exceptions to the requirement of written notice set forth in §38-77-123(B), neither of which are applicable here.

In addition, S.C. Code Ann. § 56-10-40 (2006), requires insurers to notify the Department of policy cancellation. Section 56-10-40 provides, in pertinent part:

“Every insurer writing automobile liability insurance in this State and every provider of other security approved and accepted by the director¼shall notify the Department of Motor Vehicles in a manner prescribed by regulation of the lapse or termination of any such insurance¼.”

Upon receipt of any such notice of lapse or termination the department shall make a reasonable effort to notify the person that his certificate or registration and driving privileges have been suspended¼

S.C. Code Ann. § 56-10-40 (2006) (emphasis added).

The foregoing provision is supplemented by § 56-10-240 which provides:

“… Upon receiving information to the effect that a policy is canceled or otherwise terminated on a motor vehicle registered in South Carolina, the Department shall suspend the owner’s driving privileges, license plate and registration certificate …”[1]

S.C. Code Ann. § 56-10-240 (2006).

“Upon” as used in the preceding paragraph means “immediately” or “very soon after” or “on the occasion of”. Unabridged (v1.1) Based on random House Unabridged Dictionary, Random House, Inc., 2006.

“In the absence of evidence to the contrary, the law assumes that public officials have performed their duties properly, unless the official act in question appears irregular on its face.”[2] 29 Am. Jur. 2d Evidence § 203 (1994).

The Court assumes that if the insurance company ever notified the Department, such notice immediately preceded the suspension letter of May 14, 2007 as a result of which the Department issued the letter of May 14 (i.e., if the Department had received notice sooner, it would be presumed that it would have done its duty properly and “immediately or very soon after” or “on the occasion of” suspended Respondent’s privilege to drive and registration). Indeed, the notice of cancellation may never have been given to the Department because the suspension letter of May 14, 2007, appears to have been issued under § 56-10-530 as the result of the report of an accident by an uninsured vehicle.

There is no evidence in the record that a notice of cancellation was ever delivered or mailed by State Farm to the insured as required by law. Nor was there evidence to suggest otherwise than that the insurer failed to notify the Department of the cancellation until approximately eleven (11) months after the cancellation (cancellation July, 2006, accident December 17, 2006 and notice of cancellation May 14, 2007). A preponderance of the evidence in the record suggests that State Farm failed to carry out its duty to provide written notice of the cancellation to the insured.

The following contribute to that preponderance:

1.)    The forthright statement of respondent’s husband that there was a possibility that the written notice, if mailed, could have been lost when commingled with the mail of another person who used the same mail box. This indicates honest objectivity on the part of the witness and bolsters the truthfulness of his other testimony.

2.)    The fact that the police computer confirmed coverage in effect on the Honda Pilot at the scene of the accident, thus evidencing the fact that the Department had not been notified of the cancellation which had taken place about five (5) months previously.

3.)    The fact that the State Farm employee acknowledged to Respondent’s husband on the day after the accident that the Department had not been notified of the cancellation as required thus increasing the likelihood that State farm had also failed to give written notice of the cancellation to the insured.

4.)    The uncontroverted testimony of Respondent and her husband is that neither received any written notice of the cancellation.

5.)    The fact that Respondent and her husband had been maintained insurance coverage with State Farm for twelve (12) years prior to the accident.

6.)    The fact that the Department did not give notice of suspension to Respondent until almost five months after the accident (and ten months after the cancellation) thus indicating that it did not receive notice of the cancellation at the time it was asserted to have taken place.

It should be noted that Regulation 63-449, which required notice of cancellation by the insurer to the Department within ten (10) days of the cancellation, was repealed in 1998. Evidently, it was not replaced. Suffice it to say that a delay of approximately eleven (11) months, or more, in reporting the cancellation is unreasonable.

Although the DHO rescinded Respondent’s suspension based on a lack of knowledge rather than lack of notice by the insurer, the Court is not precluded from affirming the disposition. See State v. Goodstein, 278 S.C. 125, 292 S.E.2d 791, 793 (1982) (finding that “an appellate not, as a general rule, bound by the reasoning adopted below if the record discloses a correct result.”). Because the evidence in the record discloses a correct result, the Court may sustain the DHO’s decision despite the fact that it was based upon the wrong ground. Goodstein, 292 S.E.2d at 793.

This approach is in keeping with the view, as expressed in Rule 220(c), SCACR, that an appellate court may affirm the lower court's judgment for any reason appearing in the record on appeal. An affirmance promotes judicial economy and finality in private and public affairs, which are important public policies.

I'On, L.L.C. v. Town of Mt. Pleasant, 338 S.C. 406, 420-21, 526 S.E.2d 716, 723 (2000) (emphasis in original); see also Kreutner v. David, 320 S.C. 283, 465 S.E.2d 88 (1995) (appellate court may affirm for any reason appearing in the record); State v. Johnson, 278 S.C. 668, 301 S.E.2d 138 (1983).


In summary, the failure of the Department to receive notice which it should have received much sooner coupled with the testimony of Respondent and her husband that they did not receive any written notice of cancellation, lead to the conclusion that no such notice was mailed or otherwise delivered to them and that the cancellation was thus ineffective under the unambiguous terms of § 38-77-120 (a).

IT IS THEREFORE ORDERED, that the Order of the DHO is SUSTAINED and the suspension of Respondent’s driving license and registration is rescinded.[3]


John D. McLeod, Judge

S.C. Administrative Law Court

April 10, 2008

Columbia, SC

[1] The title to § 56-10-240 which precedes that subsection in bold print in the S.C. Code of Laws contains the words “written notice by insurer” but there is nothing in the text of that statute that refers to any such notice.

[2] This presumption has been recognized in South Carolina. See 30 S.C. Jur. Evidence § 29 (2006) (“In the absence of any proof to the contrary, public officers are presumed to have properly discharged the duties of their offices and to have faithfully performed the duties with which they are charged.”); S.C. Nat’l Bank v. Florence Sporting Goods, Inc., 241 S.C. 110, 115-16, 127 S.E.2d 199, 202 (1962) (same); Felder v. Johnson, 127 S.C. 215, 217, 121 S.E. 54, 54 (1924) (“In the absence of evidence to the contrary, courts are bound to presume that public officers have properly discharged their duties and that their acts are in all respects regular.”); Steele v. Atkinson, 14 S.C. 154, 161 (1880) (“The rule of law undoubtedly is that, in the absence of any evidence to the contrary, the presumption is that a public officer has done his duty — not that he has violated it.”). Moreover, this presumption has been applied to law enforcement officers. See, e.g., Steele, supra (applying presumption to a sheriff); Fisk v. Dep’t of Motor Vehicles, 179 Cal. Rptr. 379 (Cal. Ct. App. 1981) (applying presumption to a highway patrol officer and stating that presumption “may help lay the foundation for admissibility of evidence”); State v. Hensley, 600 N.E.2d 849 (Ohio Ct. App. 1992) (applying presumption to law enforcement officials); Barnes v. State, 763 So.2d 216 (Miss. Ct. App. 2000) (same). Furthermore, the South Carolina Supreme Court has held that state highway patrol officers and troopers fall within the common law definition of “public officer.” See State v. Bridgers, 329 S.C. 11, 495 S.E.2d 196 (1997).

[3]The decision in this appeal is based on the totality of the facts and should not be viewed by any reader as precedent in future cases. The Court is keenly aware of the mischief that might be worked by a ruling that accepts an unsupported statement that “I did not get notice of the cancellation” as sufficient ground for rescinding a suspension.