ORDERS:
ORDER
STATEMENT
OF CASE
THIS
MATTER is an appeal by the South Carolina Department of Motor Vehicles (the
“Department”) from the Final Order and Decision by the South Carolina
Department of Motor Vehicles Hearings (the “DMVH”). The DMVH’s Order was
issued in connection with an administrative hearing that was held pursuant to
S.C. Code Ann. § 56-10-530 (2006). The Department contends that the DMVH
hearing officer was in error for rescinding the suspension of Aimee Jo Bosco
(“Respondent”) because the duty to maintain motor vehicle liability coverage
belongs to the owner and is not delegable to a third party. The Administrative Law Court (“ALC”) has jurisdiction to hear this matter pursuant to S.C. Code
Ann. § 1-23-660 (Supp. 2006). Upon consideration of the record, the DMVH’s
Order is REVERSED.
BRIEF
HISTORY
On
February 16, 2007, Respondent was involved in a motor vehicle accident and was
never notified that her ex-husband, Roy C. Price (“Price”), had cancelled her
motor vehicle liability policy on June 9, 2006. On May 17, 2007, the
Department notified Respondent that, pursuant to S.C. Code Ann § 56-10-530, her
license and registration were subject to suspension as of June 1, 2007.
Respondent requested an administrative hearing under Section 56-10-530.
The
DMVH scheduled a hearing for July 3, 2007, and the Department Hearing Officer
(“DHO”) issued a Final Order and Decision on July 24, 2007. In the order, the
DHO held that the mutual verbal agreement that Respondent’s ex-husband agreed
to maintain the liability coverage and Respondent’s lack of notice of the policy
cancellation were cause for rescission of the suspension.
FACTS
On
February 16, 2007, Respondent was in a motor vehicle accident on Sunset
Boulevard in Lexington County, South Carolina. After verifying Respondent’s
insurance at the scene of the accident, the police officer discovered, to
Respondent’s surprise, that Respondent was uninsured. Respondent’s liability
coverage was being paid by Price, her ex-husband, until he canceled the
coverage mid-term. Within three (3) days of the accident, Respondent had
contacted South Carolina Farm Bureau Insurance Company and obtained an
individual motor vehicle insurance policy.
On
May 17, 2007, Respondent received an Official Notice from the Department that
her driver’s license and registration were subject to suspension pursuant to
Section 56-10-530 as of June 1, 2007. The notice informed Respondent of the
requirements for compliance with the rules of establishing Financial
Responsibility and stated that Respondent would have to pay a fee of $550 to
have her driver’s license reinstated. The notice also informed Respondent of
her right to request a hearing to show why the suspension should not be
enforced. Respondent requested a hearing.
The
DMVH hearing was held on July 3, 2007 with the DHO and Respondent in
attendance. Respondent stated for the record that she was unaware that her
insurance had been cancelled prior to her accident. Notification was never
provided to Respondent from the Department, Ford Credit, South Carolina Farm
Bureau Insurance Company, or from her husband. Respondent stated, however,
that she immediately called an insurance agent the day following the accident
and signed a policy two days later.
After
entering into the record a letter from South Carolina Farm Bureau agent Chrystal
A. Veld, Respondent explained the circumstances that gave rise to this matter.
Respondent stated that she and Price divorced in October 2006 after being
separated for five (5) or six (6) years. She stated that Price paid the
insurance during the entire period of their separation, leading up to the date
he cancelled her coverage. However, she stated that she never received any
notification when Price cancelled her liability coverage on June 9, 2006. Hrg.
Trans. 8:22-24. In response to further questioning by the DHO, Respondent
stated that she had a verbal agreement with Price, that she would purchase a
car and that Price would pay her car insurance. Although Respondent stated
that Price carried both cars under the same policy, she did not offer any real
evidence to show that the policy was issued in Respondent’s name. The letter
from South Carolina Farm Bureau, however, explains that Price was allowed to
remove Respondent from the policy and cancel her coverage because Price was the
policyholder.
On July
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 there was no evidence that Respondent was
notified that her policy was cancelled. Although Respondent paid the note on
the car, the DHO found that Price assumed responsibility to pay the insurance
and never notified Respondent that her coverage was being cancelled. The DHO
found these facts were cause for rescission of Respondent’s suspension.
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.
ISSUE ON APPEAL
Did the DHO err in rescinding
Respondent’s suspension based upon a finding that Respondent lacked notice that
her ex-husband cancelled her motor vehicle liability policy?
Pursuant
to S.C. Code Ann. § 56-9-20(5) (2006), a motor vehicle liability policy is
defined as “an owner’s or operator’s policy of liability insurance….” Before
the Department will issue a registration certificate, every owner of a motor vehicle
must show that a liability policy (a/k/a security) has been obtained. S.C. Code
Ann. § 56-10-10 (2006). More importantly, however, the rules surrounding Motor
Vehicle and Financial Security require every motor vehicle owner to maintain
security for the duration of the registration period. Id. These rules
afford the public protection by ensuring that registered and licensed motor
vehicles have at least the minimum amount of liability coverage. Shores v.
Weaver, 315 S.C. 347, 433 S.E. 2d 913 (Ct. App. 1993).
Based
upon the motor vehicle laws of the State and the facts contained in the record,
the order from the DMVH hearing cannot be sustained. Pursuant to S.C. Code
Ann. § 56-10-530 (2006), when an uninsured driver is involved in a reportable
accident that results in property damage, the driver’s license and registration
shall be suspended. Section 56-10-530 affords the uninsured driver an
opportunity to request an administrative before the suspension becomes
effective to show cause why the suspension should not be enforced. A DMVH
hearing was held for Respondent, but she failed to proffer any evidence to
support a showing of cause for rescission of her suspension.
At
the hearing, Respondent stated that she owned and operated the vehicle that was
involved in the accident. Respondent indicated to the DHO that a mutual
agreement existed with Price, that he would pay the insurance on her new motor
vehicle. Respondent stated that Price carried the insurance of both vehicles
under the same policy. Hrg. Trans 7:9-11. Respondent testified that she never
received notice of the cancellation from her husband, the insurance carrier, or
from Ford Credit. Respondent proffered a letter from South Carolina Farm
Bureau Insurance Company that stated notification was mailed to Price’s address,
the named policy holder, after he requested Respondent’s removal from coverage.
While
the Court is sympathetic to Respondent and the circumstances surrounding the
separation from her husband, Section 56-10-10 of the Motor Vehicle Financial
Responsibility Act requires that Respondent, as the owner, assume the duty for
maintaining liability coverage on her motor vehicle. Respondent entered into
evidence a letter from the insurance company that indicated Price was the
policyholder and that he received notice of the cancellation after he voluntarily
cancelled her coverage. After reviewing the record, the Court finds that the
DHO erred in rescinding Respondent’s suspension and finds that the Final Order
and Decision from July 24, 2007 should be reversed.
IT IS THEREFORE ORDERED, that the Order of the DHO is REVERSED and the suspension
of Respondent’s driving license and registration is reinstated.
________________________________
John D. McLeod, Judge
S.C. Administrative Law Court
April 14, 2008
Columbia, SC
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