ORDERS:
ORDER
________________________
AFFIRMED
________________________
STATEMENT OF THE CASE
This matter is before the undersigned pursuant to the appeal of Wayne Russell, d/b/a
Russell’s Construction (“Appellant”) from the Final Order of the South Carolina Department of
Labor, Licensing, and Regulation, South Carolina Residential Builders Commission (“Respondent”
or “Commission”), dated December 12, 2003. In its Final Order, the Commission found that the
Appellant violated S.C. Code Ann. §§ 40-59-110 (Supp. 2002) and 40-1-110(a) (2001). The
Commission ordered that Appellant pay a fine in the amount of $500.00 for the above violations and
suspended his license until a matter involving an arbitration award against Appellant was finalized
to the satisfaction of the Commission. Oral arguments were heard before me at the Administrative
Law Court
(“ALC” or “Court”) in Columbia, South Carolina, on June 16, 2004.
FACTUAL BACKGROUND
Appellant Wayne Russell, d/b/a Russell’s Construction, was duly licensed by the South
Carolina Residential Builders Commission as a residential home builder. On April 9, 2003,
Appellant appeared at a hearing before the Commission pursuant to service of a Notice of Charges
and Notice of Hearing charging Appellant with violating S.C. Code Ann. §§ 40-59-90 and 40-1-110.
The charges arose pursuant to a complaint filed by a member of the public (“complainant”) who had
contracted with Appellant to perform construction work on the complainant’s house, which work
was never completed. After the hearing on this matter, the Commission issued an Order, dated April
14, 2003. In its Order, the Commission dismissed the case, finding that Appellant’s failure to
complete the construction work resulted from a contract dispute between Appellant and the
complainant, which was subject to arbitration.
Subsequently, the matter was submitted to arbitration. The entire arbitration process was
documentary and no hearing was ever held. Appellant did not respond to correspondence sent to him
from the arbitrator, and on May 12, 2003, the arbitrator awarded the complainant $10,000.00 plus
costs.
On June 20, 2003, Appellant submitted to the Commission his 2003-2004 license renewal
application, which was dated June 4, 2003. Question “2C” on the application asked the following:
“Since your last renewal has there been any judgements, liens or claims filed against you or any
business with which you have been associated?” Appellant answered “No” to this question.
Thereafter, Appellant was served with a Notice and Complaint charging him with committing fraud
or deceit in obtaining a license in violation of S.C. Code Ann. §§ 40-59-110 (Supp. 2002) and 40-1-110(a) (2001) due to his failure to disclose the arbitration award against him.
A hearing was held before the Commission on December 10, 2003, and the Commission
issued an Order on December 12, 2003. In its Order, the Commission found that Appellant did
violate S.C. Code Ann. §§ 40-59-110 (Supp. 2002) and 40-1-110(a) (2001) and sanctioned Appellant
by ordering that he pay a fine in the amount of $500 and that his license to practice residential home
building be suspended until such time as the arbitration award is finalized to the satisfaction of the
Commission. Appellant was also allowed to complete projects already in progress during the time
of this suspension. Appellant then filed this appeal with the ALC on February 2, 2004.
JURISDICTION AND STANDARD OF REVIEW
Jurisdiction on appeal is vested in the Administrative Law Court pursuant to S.C. Code Ann.
§ 1-23-600 (Supp. 2003) and § 40-1-160 (2001). The provisions of the South Carolina
Administrative Procedures Act (“APA”) govern an appeal from a Final Order of the Commission.
A final decision of the Commission may be reversed or modified if substantial rights of the
appellant have been prejudiced because the administrative findings or decision are clearly erroneous
in view of the reliable, probative and substantial evidence on the whole record, are arbitrary or
capricious, are in violation of constitutional or statutory provisions, are made upon unlawful
procedure, or are affected by other error of law. S.C. Code Ann. § 1-23-380(A)(6)(a), (c), and (d)
(Supp. 2003). Further, a finding of fact by the Commission will not be overturned by this court
“unless there is no reasonable probability that the facts could be as related by a witness upon whose
testimony the finding was based.” Lark v. Bi-Lo, 276 S.C. 130, 137, 276 S.E.2d 304 (1981).
“Substantial evidence” is that evidence which, in considering the record as a whole, would
allow reasonable minds to reach the conclusion that the administrative agency reached. Jennings v.
Chambers Development Co., 335 S.C. 249, 516 S.E.2d 453 (1999). It is “such relevant evidence as
a reasonable mind might accept as adequate to support a conclusion.” Midlands Utility, Inc. v. S.C.
Dep’t of Health and Environmental Control, 298 S.C. 66, 69, 378 S.E.2d 256, 258 (1989). The
possibility of drawing two inconsistent conclusions from the evidence will not mean the agency’s
conclusion was unsupported by substantial evidence. Palmetto Alliance, Inc. v. S. C. Public Service
Comm’n, 282 S.C. 430, 432, 319 S.E.2d 695, 696 (1984).
Where there is a conflict in the evidence, the agency’s findings of fact are conclusive. Id.;
see Harbin v. Owens-Corning Fiberglas, 316 S.C. 423, 450 S.E.2d 112 (Ct. App. 1994). This court
cannot substitute its judgment for that of the Commission upon a question as to which there is room
for a difference of intelligent opinion. Chemical Leamen Tank Lines v. S.C. Pub. Serv. Comm’n,
258 S.C. 518, 189 S.E.2d 296 (1972). It has the benefit of seeing and hearing the testimony of the
witnesses and judging their credibility and demeanor. The factual findings of an administrative
agency [the Commission] are presumed to be correct and will be set aside only if unsupported by
substantial evidence. Kearse v. State Health and Human Finance Commission, 318 S.C. 198, 456
S.E.2d 892 (1995). Applying the “substantial evidence rule,” an appellate court may not substitute
its judgment for that of the agency as to the weight of the evidence on questions of fact. S.C. Code
Ann. § 1-23-380 (A)(6) (Supp. 2003); Toussaint v. State Board of Medical Examiners, 303 S.C. 316,
400 S.E.2d 488 (1991).
Finally, Appellant has the burden of convincingly proving that the agency’s final
administrative decision is unsupported by substantial evidence. Waters v. South Carolina Land
Resources Conservation Commission, 321 S.C. 219 , 467 S.E.2d 913 (1996). He failed to meet that
burden in this case.
DISCUSSION
Appellant argues that he did not fully understand the arbitration process and did not consider
the arbitration award against him to be a judgment, lien or claim. While the arbitration award
against Appellant does not constitute a judgment or lien, as it had not been perfected at the time
Appellant submitted his renewal application, the award certainly constitutes a “claim.” Black’s Law
Dictionary defines a claim as “a demand for money or property to which one asserts a right..., e.g.
insurance claim,” or “an interest or remedy recognized at law; the means by which a person can
obtain a privilege, possession, or enjoyment of a right or thing.” Black’s Law Dictionary, 7th Ed.,
1999, p. 240. In bankruptcy law, a claim is any “right to payment or to an equitable remedy for
breach of performance if the breach gives rise to payment.” Id. at 241. It is further explained that
it does not matter whether the right (or claim) has been reduced to a judgment. Id.
Although Appellant argues that he did not understand the import of the arbitration process,
the record is clear that he was aware that an arbitration award had been made against him in the
amount of $10,000.00 at the time that he submitted his renewal application to the Commission in
June of 2003. Accordingly, he had a duty to notify the Commission of the award. Appellant also
admitted at the hearing before the Commission on December 10, 2003 that he had received the award
against him. Furthermore, just two months before Appellant submitted his renewal application, he
had been before the Commission on April 14, 2003 on a hearing on charges regarding the matter
submitted to arbitration, that case being dismissed with the express purpose of resolving the matter
in arbitration. Assuredly, Appellant had knowledge of the ongoing arbitration proceeding; however,
Appellant did not disclose the award on the application. I therefore conclude that the Commission’s
finding that Appellant committed fraud or deceit in obtaining a license by not disclosing the
arbitration award, of which he was aware, is supported by the substantial evidence of the record and
must be upheld. Lark v. Bi-Lo, supra.
As to the sanctions imposed by the Commission in this case, such are authorized by law and
within the Commission’s discretion. S.C. Code Ann. § 40-59-110 (Supp. 2002) authorizes the
Commission to “revoke, suspend, or restrict the license...of a licensee...who the commission finds
has committed fraud or deceit in obtaining a license....” In addition, S.C. Code Ann. § 40-1-110(1)(a)(2001), which applies to all boards and commissions within the Department, provides:
In addition to other grounds contained in this article and the respective board’s
chapter:
A board may cancel, fine, suspend, revoke, or restrict the authorization to
practice to an individual who:
(a) used a false, fraudulent, or forged statement or document or
committed a fraudulent, deceitful, or dishonest act or omitted a
material fact in obtaining licensure under this article...
(Emphasis added.)
Thus, the sanctions imposed by the Commission are clearly within those established by law
and are within its discretion. They are not arbitrary nor without rational basis. They are consistent
with the purpose of the laws and regulations governing the residential building industry in this state.
ORDER
For all the foregoing reasons, it is hereby:
ORDERED that the Commission’s Order dated December 12, 2003 is affirmed.
AND IT IS SO ORDERED.
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MARVIN F. KITTRELL
Chief Administrative Law Judge
June 23, 2004
Columbia, South Carolina |