SC Administrative Law Court Decisions

This matter comes before me on appeal from a March 9, 1998, Order of the South Carolina Residential Builders Commission (Commission) of the South Carolina Department of Labor, Licensing, and Regulation (Department). The Commission held a contested case hearing concerning certain allegations against the Appellant. Following that hearing, the Commission issued its Final Decision in which it found that the Appellant committed a violation of S.C. Code Ann. § 40-59-90 (Supp. 1997), when he applied for 1997-1998 licensure using an application on which he stated that he was subject to no judgments, liens, or claims, while knowing that he was subject to a binding arbitration claim and judgment of record in the amount of $38,255.00. The Commission revoked Appellant's residential builder's license and stayed the revocation upon certain conditions for reinstatement, including the payment of a fine, satisfaction of the outstanding judgment by payment

or by the posting of a bond, and the posting of another bond as evidence of Appellant's financial responsibility. This appeal followed.

The Appellant sets forth the following issues on appeal in his brief: 1) that the findings, conclusions, and decisions set forth by the Commission exceeded its statutory authority and constituted an abuse of discretion; and 2) that the sanctions imposed by the Commission deprived the Appellant of due process of law. For the following reasons, the Commission's decision is hereby affirmed.

The Appellant, Don M. Alkire, III, is a licensed residential builder. On or about August 20, 1997, he applied for 1997-98 license renewal using the standard form provided by the Commission. On that application form, he did not submit an answer to question number five, which asked if he had ever had a professional or occupational license suspended, revoked, or cancelled. Appellant also answered "no" to question number six, which asked: "Have any judgments, liens, or claims been filed against you or any business officer in the past five years?" However, his application was not accepted at that time because his license was under suspension by a prior order of the Commission. Upon compliance with the terms of that order, and upon being instructed to complete the answer to question number five, the Appellant completed and submitted his license application on November 20, 1997, leaving the answer to question number six as "no."

On August 27, 1997, a matter between the Appellant and a homeowner named Levern Ford was the subject of an arbitration hearing. In September of 1997, the arbitrator issued an order against the Appellant in the amount of $38,255.00. The homeowner then sought to have the arbitration award confirmed by the Richland County Court of Common Pleas and entered as a judgment. On October 17, 1997, the matter was set for hearing. However, the Appellant informed Judge Manning prior to the hearing that he did not object to the relief sought by the homeowner in the petition, and that he would not attend the hearing. These facts are memorialized in the Order of Judge Manning in Ford v. Alkire, Docket No. 97-CP-40-3590, filed November 17, 1997. Also on November 17, 1997, a judgment in favor of Mr. Ford was entered against the Appellant in the amount set in the arbitration order.

Based upon these facts, the Commission issued a complaint against the Appellant on January 16, 1998, alleging that the Appellant had misrepresented facts on his application in violation of S.C. Code Ann. § 40-59-90. After a hearing at which Appellant and his counsel appeared, the Commission issued an order on March 9, 1998, finding that Appellant either knew or should have known that he was subject to the arbitration claim at the time he resubmitted his application on November 20, 1997. The Commission ordered that Appellant's license be revoked, and imposed several conditions in order to stay the revocation. The conditions included the payment of a fine of $250.00, satisfaction of the Ford judgment by payment or bond, and the posting of another bond in the amount of $15,000.00, as evidence of Appellant's financial responsibility. Thereafter, Appellant timely filed an appeal with the Administrative Law Judge Division (Division), and a hearing on the appeal was held on August 5, 1998.

Jurisdiction on appeal is vested in the Administrative Law Judge Division (Division) pursuant to S.C. Code Ann. §§ 1-23-600 and 40-59-90 (Supp. 1997). The provisions of the South Carolina Administrative Procedures Act (APA) govern an appeal from a final order of the Commission. Under the APA, the Division "shall 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. 1997). However, the Administrative Law Judge may reverse or modify the decision of the Board if substantial rights of the appellant have been prejudiced because the administrative findings or decisions are "clearly erroneous in view of the reliable, probative and substantial evidence on the whole record" or "arbitrary or capricious." Id; see also Lark v. Bi-Lo, 276 S.C. 130, 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. See, e.g., Jennings v. Chambers Development Co., Op. No. 2877 (S.C. Ct. App. filed August 10, 1998)(Shealy Adv. Sh. #28 at 23). The possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency's finding from being supported by substantial evidence. Id. Where there is a conflict in the evidence, the agency's findings of fact are conclusive. Id.; see also Harbin v. Owens-Corning Fiberglas, 316 S.C. 423, 450 S.E.2d 112 (Ct. App. 1994). This tribunal cannot substitute its judgment for that of the Commission upon a question as to which there is room for a difference of intelligent opinion. See, e.g., Chemical Leamen Tank Lines v. S.C. Pub. Serv. Comm'n, 258 S.C. 518, 189 S.E.2d 296 (1972).

The Appellant raises the following issues in his brief:

1. Whether the findings, conclusions, and decisions as set out in the Final Order of the Commission exceeded the Commission's statutory authority and constituted an abuse of its discretion;

2. Whether the Commission's sanctions deprived the Appellant of due process of law.

I. Commission's Findings

The Appellant argues that the Commission's finding that he "knew or should have known" of the arbitration award at the time of his application was not supported by the evidence of record, and that the oral representations of individual Commission members at the hearing were contrary to the findings made in the final order. First, the Appellant states that he answered the question on the application concerning any pending judgments, liens, or claims in the negative in August 1997, well before the judgment was entered against him on November 17, 1997. However, the evidence of record indicates that the arbitration award against the Appellant--which certainly constitutes a "claim," was dated July 24, 1997. Furthermore, Appellant resubmitted the application on November 20, 1997, and did not change his response to the question at that time. By November 20, 1997, Appellant may not have known of the actual entry of the judgment confirming the arbitration award on November 17. However, the Order of Judge Manning establishes that, at least by October 17, 1997, Appellant not only was aware of the homeowner's petition to confirm the arbitration award and enter the judgment, but he also consented to the confirmation of the award and the entry of judgment against him. I conclude, therefore, that the Commission's finding that Appellant either knew or should have known of the claim against him, and thus misrepresented facts on his application, is supported by the substantial evidence of record and must be upheld. Lark v. Bi-Lo, supra.

Second, Appellant contends that the written findings in the Final Order are inconsistent with oral representations made by certain Commission members at the hearing. However, a judicial (or quasi-judicial) pronouncement is not a final ruling on the merits nor is it binding on the parties until it has been reduced to writing, signed by the judge and delivered for recordation. Case v. Case, 243 S.C. 447, 134 S.E.2d 394 (1964); Hilton Head Resort Four Seasons Center Horizontal Property Regime Council of Co-Owners, Inc. v. Resort Inv. Corp., 311 S.C. 394, 429 S.E.2d 459, 462 (Ct. App. 1993); Bayne v. Bass, 302 S.C. 208, 394 S.E.2d 726, 727 (Ct. App. 1990). Therefore, until the order is reduced to writing, the tribunal retains discretion to change its mind and amend any oral rulings accordingly. Case, supra; Doe v. Doe, 324 S.C. 492, 478 S.E.2d 854 (Ct. App. 1996). Since the findings of the Commission are supported by the evidence of record, this court may not disturb them. Lark, supra.

Finally, Appellant contends that the Commission's sanctions, specifically the requirement that Appellant either satisfy or bond off the outstanding judgment and that he obtain an additional bond as evidence of his financial responsibility, were not within its statutory authority and constituted an abuse of discretion. First, S.C. Code Ann. § 40-59-90 (Supp. 1997) provides that "[t]he commission may revoke, suspend, or restrict for a period not to exceed one year the license of a residential builder. . . who, in the opinion of the commission, has committed fraud or deceit in obtaining a license. . . ." In addition, S.C. Code Ann. § 40-1-110 (1)(a) (Supp. 1997), 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:

(1) A board may cancel, fine, suspend, revoke, or restrict the authorization to practice of 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. . . .

Thus, even if, as argued by the Appellant, his conduct did not rise to the level of "fraud or deceit" as provided in Section 40-59-90, it certainly constitutes the use of a "false statement" or the omission of a "material fact" pursuant to Section 40-1-110(1)(a), and therefore constitutes grounds for disciplinary action.

Moreover, the sanctions imposed by the Board were within its statutory authority. First, the Commission revoked Appellant's license. Revocation of a license is specifically permitted by S.C. Code Ann. § 40-59-90, § 40-1-110, and § 40-1-120. Then the Commission imposed several conditions which had to be met by Appellant in order for the revocation to be stayed: the payment of a fine in the amount of $250.00, satisfaction of the outstanding judgment by either payment or a bond, submission of an additional bond as evidence of Appellant's financial responsibility, and periodic appearances before and reports to the Commission as requested. S.C. Code Ann. § 40-1-120 (Supp. 1997) provides that, in addition to those sanctions provided pursuant to its own licensing act, and upon a determination that grounds for discipline exist, the Commission may:

(1) issue a public reprimand;

(2) impose a fine not to exceed five hundred dollars unless otherwise specified by statute or regulation of the board;

(3) place a licensee on probation or restrict or suspend the individual's license for a definite or indefinite time and prescribe conditions to be met during probation, restriction, or suspension including, but not limited to, satisfactory completion of additional education, of a supervisory period, or of continuing education programs;

(4) permanently revoke the license.

(Emphasis added). Furthermore, S.C. Code Ann. § 40-59-80 (Supp. 1997) requires that any applicant for a residential builders' license must submit a bond or furnish "proof of financial responsibility acceptable to the Commission."

Applying these statutory provisions to the conditions imposed by the Commission, I conclude that the conditions are within its statutory authority. First, the fine is clearly authorized by Section 40-1-120(2). Second, the Commission is authorized to prescribe conditions to be met during a "definite or indefinite" probationary period. The language of Section 40-1-120(3) does not place limitations on the types of conditions which may be imposed. Moreover, pursuant to S.C. Code §§ 40-59-80 and 40-59-85 (Supp. 1997), the Commission must investigate the financial condition of an applicant, including his financial responsibility, credit report, reputation for prompt payment of bills, and outstanding judgments, and the applicant must furnish a bond or "proof of financial responsibility acceptable to the Commission" prior to the issuance of a license. Thus, the Commission is charged with the responsibility of ensuring that its licensees are financially responsible, and is given the discretion in each case to determine what proof of financial responsibility is necessary. I therefore conclude that, under the circumstances of this case, the Commission acted within its discretion and its statutory authority in imposing the requirements that the Appellant both satisfy the outstanding judgment against him and furnish a bond. See Deese v. S.C. State Bd. of Dentistry, 286 S.C. 182, 332 S.E.2d 539 (Ct. App. 1985).

II. Due Process

Appellant also contends that the "stacking of sanctions" against him constituted a violation of his due process rights, in that he is financially unable to both satisfy the judgment and furnish the bond required by the Commission. This contention is largely based upon the inconsistency between the oral representations made by some Commission members at the hearing and the findings in the Final Order. However, as discussed above, any oral findings made at the hearing were subject to change, pending the issuance of a written order. Accordingly, the inconsistencies of which the Appellant complains cannot constitute a basis for reversing the Commission's decision.

In addition, an examination of the record in this case indicates that the Appellant was afforded procedural due process.

The fundamental requirement of due process is the opportunity to be heard at a meaningful time and in a meaningful manner. Due process does not mandate any particular form of procedure. Instead, due process is a flexible concept, and the requirements of due process in a particular case are dependent upon the importance of the interest involved and the circumstances under which the deprivation may occur.

S.C. Dep't of Social Services v. Holden, 319 S.C. 72, 459 S.E.2d 846 (1995), quoting S.C.N.B. v. Central Carolina Livestock Market, 289 S.C. 309, 345 S.E.2d 485 (1986). The formal complaint gave Appellant notice that the truthfulness of his 1997-98 application was at issue. At the hearing, Appellant appeared with counsel and was given the opportunity to testify at some length, explaining his position. While the manner in which the Commission conducted the hearing--asking Appellant direct questions rather than having counsel examine him--may not have been optimal, I cannot find that Appellant's due process rights were violated as a result. Cf. William M. Johnson and Columbiana Builders, Inc. v. S.C. Dep't of Labor, Licensing and Regulation, Contractors' Licensing Board, Docket No. 96-ALJ-11-0189-AP (where the licensee was not allowed the opportunity to testify or offer other evidence in his defense, the case was remanded to the Board to conduct a new

hearing and offer the licensee a full opportunity to present testimony, offer evidence, and call witnesses).

For all the foregoing reasons, the Final Order of the Commission is hereby AFFIRMED.

AND IT IS SO ORDERED.

_________________________________

Marvin F. Kittrell

Chief Judge

Columbia, South Carolina

January 11, 1999