Friday, December 19, 2014

SC Administrative Law Court Decisions

CAPTION:
Alonzo M. Jackson, d/b/a Dealer Auctions, Inc. vs. SCDMV

AGENCY:
Alonzo M. Jackson, d/b/a Dealer Auctions, Inc.

PARTIES:
Appellant:
Alonzo M. Jackson, d/b/a Dealer Auctions, Inc.

Respondents:
South Carolina Department of Motor Vehicles
 
DOCKET NUMBER:
07-ALJ-21-0633-AP

APPEARANCES:
n/a
 

ORDERS:

ORDER

STATEMENT OF THE CASE

Appellant Alonzo M. Jackson, d/b/a Dealer Auctions, Inc., appeals an order denying Dealer Auctions’ motion to amend an order of the South Carolina Division of Motor Vehicle Hearings (DMVH) issued following an administrative hearing conducted pursuant to S.C. Code Ann. § 56-15-350 (Supp. 2007). The order affirmed the South Carolina Department of Motor Vehicles’ rejection of Dealer Auctions’ application for a wholesale auction license. Dealer Auctions claims that the hearing officer erroneously ruled that the issues presented in its motion to amend were not properly before the DMVH. The Administrative Law Court (ALC) has jurisdiction pursuant to S.C. Code Ann. § 1-23-660 (Supp. 2007). For the following reasons, the order denying Dealer Auctions’ motion to amend is affirmed in part, reversed in part, and remanded.

BACKGROUND

Dealer Auctions provides auctioning services at various automobile dealerships that, in addition to offering vehicles for sale to the general public, offer vehicles for sale to wholesalers or other dealers. These auctions are closed to the general public. Dealer Auctions is based in North Carolina and provides services in North and South Carolina. One of Dealer Auctions’ South Carolina clients is the Beach Ford dealership in Myrtle Beach. In an effort to enhance its services to Beach Ford, Dealer Auctions sought the Department’s approval to conduct auctions for multiple dealers, including Beach Ford, at the Beach Ford location. The Department advised Dealer Auctions that before it could conduct multiple-seller auctions, it would have to obtain a wholesale auction license.[1]

Dealer Auctions submitted a wholesale license application, but the Department rejected it on the ground that a South Carolina address was not listed in the application. Dealer Auctions submitted an amended application after a representative of Beach Ford agreed to allow Dealer Auctions to use him as the South Carolina contact. The Department rejected the amended application on the ground that the Beach Ford representative was not listed as a manager. Dealer Auctions once again amended the application to indicate that the Beach Ford representative was a manager, but the Department rejected the application on the ground that Dealer Auctions needed a building and sign. In December 2005, Dealer Auctions requested a contested case hearing. Prior to the contested case hearing, the Department agreed that a building and sign were not required. Therefore, the DMVH remanded the case to the Department for a decision on the application.

Beach Ford’s principal owner expressed concern that its dealer license would be subject to revocation if multiple-seller auctions were to be conducted at its location[2] and withdrew its permission to allow the multiple-seller auctions on its property. Because Beach Ford withdrew that permission, the Department rejected Dealer Auctions’ wholesale license application on the ground that the application was without an “established place of business” from which to operate. (ROA Tr. 12, l.21 - 13, l.14; Resp. Ex. 3 & 5). Dealer Auctions again sought a contested case hearing, after which the hearing officer issued a decision affirming the Department’s rejection of the application based on his conclusion that Dealer Auctions did not need a wholesale auction license to perform the services that it had been performing.

Dealer Auctions then filed a motion to amend the hearing officer’s order to specifically address the following issues: (1) whether the Department may revoke or suspend a dealer’s license if the dealer allows a multiple-seller wholesale auction on its property; and (2) whether Dealer Auctions could conduct multiple-seller auctions at the location of one of the sellers without a license. The hearing officer denied the motion to amend based on his conclusion that those issues were not properly before him. Dealer Auctions appealed the denial of its motion.

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. 2007). Therefore, the DMVH is an “agency” under the Administrative Procedures Act. 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. 2007). 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. 2007). 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 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. 2007); see also Lark v. Bi-Lo, Inc., 276 S.C. 130, 276 S.E.2d 304(1981). Pursuant to S.C. Code Ann. § 1-23-380(B) (Supp. 2007), administrative law judges must conduct appellate review in the same manner prescribed in Section 1-23-380(A). Further, section 1-23-380(A)(5) authorizes this court to remand the case to the DMVH for further proceedings. On appeal from a final decision of an administrative agency, the appellant has the burden of convincing this court of error in the agency's decision. See I’On, L.L.C. v. Town of Mt. Pleasant, 338 S.C. 406, 526 S.E.2d 716 (2000) (appellant bears burden of showing error on appeal); Townes Assocs., Ltd. v. City of Greenville, 266 S.C. 81, 221 S.E.2d 773 (1976) (framework for appellate scope of review); see also, e.g. Dunn v. Miller, 247 S.C. 567, 148 S.E.2d 676 (1966) (burden of convincing the appellate court of error in the finding of a circuit judge is upon the appellants); Snyder’s Auto World, Inc. v. George Coleman Motor Co., 315 S.C. 183, 434 S.E.2d 310 (Ct. App. 1993) (in appeal from circuit court, the burden is on appellant to show not only error but also prejudice).

DISCUSSION

In response to Appellant’s motion to amend, the hearing officer specifically indicated that he was not going to rule on the issues in question because they were not properly within the scope of the contested case before him. Appellant maintains that these issues are properly within the scope of the contested case. I conclude that the hearing officer properly declined to rule on the issue of whether the Department may revoke or suspend a dealer’s license if the dealer provides its location for a multiple-seller auction. However, the hearing officer erred in declining to rule on the issue of whether Dealer Auctions may provide auction services for multiple sellers without a license when the auctions occur at the location of one of those sellers.

This contested case was triggered by the Department’s denial of Dealer Auctions’ application for a license to conduct multiple-seller auctions on the basis that Dealer Auctions no longer had an “established place of business” from which to conduct multiple-seller auctions after Beach Ford withdrew permission to use its location. Beach Ford withdrew its permission because its principal owner was concerned that the Department would revoke or suspend its dealer license if it allowed other dealers’ vehicles to be auctioned on its property. However, because there has not yet been a revocation or suspension of Beach Ford’s dealer license, there is no agency decision on that issue that could be the subject of a contested case.[3] Therefore, the possibility that the Department may revoke or suspend Beach Ford’s license if it allows other dealers’ vehicles to be auctioned on its property is not within the scope of Dealer Auctions’ contested case. Unless the Department actually revokes or suspends an automobile dealer’s license for allowing multiple-seller auctions on its property, Dealer Auctions’ request for a ruling on that issue must be brought in an action under the Declaratory Judgment Act. S.C. Code Ann. §§ 15-53-10 to -140 (2005).[4]

Dealer Auctions’ sole reason for filing the application for a wholesale auction license was to obtain approval from the Department to provide auction services for multiple dealers at the location of one of those dealers, a service that Dealer Auctions had not yet provided in South Carolina. There seemed to be no question that the service that Dealer Auctions had already been providing in South Carolina, providing auction services for a single dealer at the dealer’s location, did not require a wholesale auction license. (ROA Tr. 24, l.8-16). Therefore, the legal issues that properly arose from Dealer Auctions’ request for a contested case include, but are not necessarily limited to: (1) whether it needed a wholesale license to provide auction services for multiple sellers at the location of one of those sellers; and (2) if Dealer Auctions did need such a license, whether the Department properly rejected its license application on the ground asserted, viz., that the applicant was without an “established place of business” from which to operate. (ROA Resp. Ex. 3). The hearing officer did not rule on these issues. Because these issues were properly within the scope of the hearing, the hearing officer should not have declined to rule on them after receiving Appellant’s specific request to do so. Therefore, these issues must be remanded for decision by the DMVH.

ORDER

IT IS THEREFORE ORDERED that the decision of the DMVH denying Dealer Auctions’ motion to amend is AFFIMED IN PART, REVERSED IN PART, AND REMANDED to decide: (1) whether Dealer Auctions needs a wholesale license to provide auction services for multiple sellers at the location of one of those sellers; and (2) if Dealer Auctions does need such a license, whether the Department properly rejected its license application on the ground that the applicant was without an “established place of business” from which to operate.

AND IT IS SO ORDERED.

__________________________________

June 11, 2008 JOHN D. GEATHERS

Columbia, South Carolina Administrative Law Judge

1205 Pendleton Street, Suite 224

Columbia, South Carolina 29201-3731



[1] S.C. Code Ann. § 56-15-510 (2006) provides that a “wholesale motor vehicle auction” is an entity in the business of providing auction services in wholesale transactions at its established place of business, and which does not buy, sell, or own the motor vehicles it auctions in the ordinary course of its business.

[2] S.C. Code Ann. § 56-15-330 (2006) requires an automobile dealership to make the business of selling or exchanging motor vehicles to the public the principal business conducted from the dealership’s established place of business. The Department considers auctioning a “principal business” and therefore does not approve of the Beach Ford location being used for both a retail dealership and a wholesale auction business. The Department’s position is that, for Beach Ford to keep its dealership license, the retail dealership has to be the principal business conducted at its established place of business and that location may not have two principal businesses. (ROA, p. 24, l. 8 - p. 26, l. 15; p. 33, l. 10 - 16).

[3] See S.C. Code Ann. § 1-23-310(3) (defining a “contested case” as proceeding in which legal rights, duties, or privileges of party are required by law to be determined by administrative agency after opportunity for hearing); Rogers v. S.C. Dep’t of Health & Envtl. Control, 01-ALJ-07-0402-CC, 2001 WL 1397451 (Admin. Law Ct., Oct. 23, 2001) (contested case to challenge DHEC decision on conceptual dock master plan was not required by the South Carolina Constitution because decision was merely advisory to permitting staff and thus no one was finally bound by decision; when dock permit itself is either granted or denied based upon conceptual dock master plan, then that plan can be challenged in contested case on permit decision).

[4] See S.C. Code Ann. § 15-53-20 (2005) (courts of record within their respective jurisdictions shall have power to declare rights, status, and other legal relations whether or not further relief is or could be claimed); S.C. Code Ann. §§ 15-53-30 (2005) (any person whose rights, status, or other legal relations are affected by statute may have determined any question of construction or validity arising under statute and obtain declaration of rights, status or other legal relations under statute); S.C. Code Ann. §§ 15-53-130 (2005) (Title 15 Chapter 53 is remedial, its purpose is to settle and to afford relief from uncertainty and insecurity with respect to rights, status and other legal relations, and it is to be liberally construed and administered); see also Sloan v. S.C. Bd. of Physical Therapy Exam’rs, 370 S.C. 452, 636 S.E.2d 598 (2006) (affirming circuit court’s ruling in declaratory judgment action brought to determine whether physical therapist was statutorily prohibited from working as employee of physician referring patients to physical therapist for services).


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