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.
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. 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
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