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.
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 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.
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
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