IN THE COURT OF APPEALS OF IOWA

No. 17-0976

Filed July 18, 2018

EXTREME AUTO PLAZA, INC.,

Plaintiff-Appellant,

vs.

IOWA DEPARTMENT OF TRANSPORTATION, OFFICE OF VEHICLE AND 

MOTOR CARRIER SERVICES,

Defendant-Appellee.

________________________________________________________________

Appeal from the Iowa District Court for Polk County, Paul D. Scott, Judge.

A motor vehicle dealership, which held licenses to sell and recycle 

automobiles, appeals from the district court ruling affirming the agency’s decision 

to revoke both licenses for one year. AFFIRMED IN PART, REVERSED IN PART, 

AND REMANDED.

Robert A. Nading II of Nading Law Firm, Ankeny, for appellant.

Thomas J. Miller, Attorney General, and Michelle E. Rabe, Assistant 

Attorney General, for appellee.

Considered by Vaitheswaran, P.J., and Potterfield and Tabor, JJ.
2

POTTERFIELD, Judge.

Extreme Auto Plaza, Inc. (Extreme)1 appeals from the district court ruling 

affirming the decision of the Iowa Department of Transportation (DOT) revoking its

motor vehicle dealership’s licenses to sell and recycle automobiles for one year. 

I. Background Facts and Proceedings.

In June 2014, the DOT performed an audit of Extreme’s business after

receiving a consumer complaint alleging Extreme failed to disclose to a purchaser 

that the purchased vehicle had a previous salvage title. 

In performing an audit of forty of Extreme’s files regarding sales of vehicles, 

the DOT determined Extreme had overcharged the buyer for registration fees on 

nine of the sales. Based on this finding, the DOT applied for and received a search 

warrant and then seized Extreme’s files for sales made between January 2013 and 

May 2014. After reviewing the files, the DOT found 122 buyers had been 

overcharged for registration fees by Extreme, totaling an amount more than 

$11,000. In some cases, buyers had also been undercharged, with those amounts 

totaling approximately $1450. 

Additionally, in reviewing Extreme’s records, the DOT noted a number of 

vehicles for which Extreme had applied for and received a “clear,” non-salvage title 

by checking the box on the front of the title application form for a “regular title.” 

Additionally, when Extreme later signed those vehicles over to its purchasers, 

Extreme certified “no”—again by checking a box on the form—when presented 

with the following statement: “I have knowledge the motor vehicle is now or was 

 

1 Extreme is owned and operated by Paul Moyer. We ascribe any actions taken by Moyer 

or his employees to Extreme. 
3

previously titled as salvage, rebuilt or flood in this state or any other state.” 

However, on sales contracts for the same vehicles, Extreme included handwritten 

notes stating the new buyer understood the vehicle had been a total loss to 

someone else and having the purchaser sign next to the statement. 

As a result of these discoveries, the DOT sent a letter to Extreme in 

December 2014 notifying it that its motor vehicle dealer and recycler licenses were 

being revoked for one year, starting December 31, 2014. According to the letter, 

the revocations were based upon:

 The motor vehicle dealer has demonstrated a pattern of 

obtaining clear Iowa certificates of title for vehicles known to 

salvage or have damage greater than 50 percent of their value 

by making false statements or knowingly concealing material 

facts on title applications, which constitute violations of Iowa 

Code § 321.97 [(2014)] and are fraudulent practices.

 Vehicles with similar salvage and damage history continue to 

be offered for sale by the motor vehicle dealer with clear Iowa

certificates of title.

 The motor vehicle dealer has overcharged consumers for 

vehicle registration fees as a routine course of business.

Additionally, the DOT demanded Extreme “immediately remove from its sales 

inventory all vehicles that have a salvage history or current or previous damage 

greater than 50 percent of their value, for which the dealer possesses clear Iowa 

certificates of title” and threatened Extreme with an injunction if it did not comply. 

Extreme responded with an affidavit stating it had identified fourteen 

vehicles “that fail to conform with the notice” from the DOT, which Extreme was “in 

process of changing clear title to salvage title.” Additionally, Extreme contested 

the revocation by requesting an evidentiary hearing in front of an administrative 

law judge.

First Hearing: 
4

The administrative hearing took place in July 2015 with testimony and 

exhibits presented by both parties. At the hearing, Extreme stated it was 

challenging both the DOT’s finding of violations and the DOT’s chosen punishment 

of revocation, as the DOT had other, less severe options such as suspension. 

However, Extreme conceded that people had been overcharged registration fees. 

Extreme appeared to focus on contesting whether the violations had been 

intentional or accidental. Additionally, after the execution of the search warrant, 

Extreme refunded the customers the amount they were overcharged and provided 

receipts to the DOT to show that it had done so.

Agency Decisions and Remand:

In August, the administrative law judge (ALJ) who heard the case issued a 

proposed decision, which affirmed the DOT’s findings of violations and sustained 

the decision to impose a one-year revocation of Extreme’s licenses. In reaching 

its decision, the ruling recited the following conclusions of law:

Iowa Code § 322.9 provides that the Department may revoke 

or suspend the license of a retail motor vehicle dealer if, after notice 

and hearing by the department of inspections and appeals, it finds 

that the licensee has been guilty of an act which would be ground for 

the denial of a license under Iowa Code § 322.6. That section 

authorizes the Department to deny an application for a dealer’s 

license if the applicant has not complied with provisions of chapter 

322 or rules adopted by the Department pursuant to Chapter 322, or 

if the applicant is about to engage in a fraudulent practice or other 

indictable offense in connection with selling or other activity relating 

to motor vehicles. Iowa Code § 322.6(1)(b), (e).

Iowa Code § 321H.6 provides that a recycler license may be 

revoked if the Department finds the licensee has made any material 

misrepresentation to the Department in connection with an 

application for a license, junking certificate, salvage certificate, 

certificate of title, or registration of a vehicle. Iowa Code § 321H.6(2).

Iowa Code § 321.52 governs out of state sales and wrecked 

or salvaged vehicle. When a wrecked or salvage vehicle is repaired, 

an application can be made for regular title. A wrecked or salvage 
5

vehicle is defined as a vehicle for which the cost of repair exceeds 

fifty percent of the fair market value. Disclosure of the vehicle’s 

history must be made and the resulting title and registration will be 

designated as a prior salvage vehicle thereafter. Iowa Code 

§ 321.52(4)(b), (d). 

Iowa Code § 321.105 requires the payment of annual 

registration fees for vehicles operated on the public highways. The 

annual registration fee is to be paid to the county treasurer at the 

time the application for registration is made. If the registration fee 

amount collected by a motor vehicle dealer exceeds the required fee, 

the dealer must return the excess to the purchaser. Iowa Code 

§ 321.105(1), (2), (5).

In its proposed decision, the ALJ went on to find:

There is little dispute that [Extreme] failed to properly disclose 

vehicle prior history on multiple title applications when the damage 

information was readily available. The Department’s exhibits contain 

numerous examples of such vehicles. Moreover, [Extreme] has 

admitted that nearly [it’s] entire inventory is obtained via online 

insurance auctions which move salvaged vehicles almost 

exclusively. To indicate [it] is unaware of any prior damage history 

on a salvage vehicle is clearly a misrepresentation. These

misrepresentations resulted in the issuance of clean titles rather than 

prior salvage titles at the eventual detriment of the purchasers. 

Following the issuance of the Department’s notice of revocation, 

[Extreme] identified 14 salvage vehicles on [it’s] lot that improperly 

held clean titles.

Similarly, there is no dispute that [Extreme] failed to utilize the 

online fee estimator, or to place a phone call to the county treasurer’s 

office to properly determine registration fees, led to a significant 

amount of incorrect charges. [Extreme] had admitted [it] simply 

guessed the fee amount, presumably for years, until audited by the 

Department in June of 2014. The subsequent investigation 

confirmed consumers were overcharged approximately $11,000 and 

undercharged $2000 in just one year of business. There is no way 

to assure that refunds were properly issued by [Extreme] prior to 

June 2014 as no records were maintained and payments were 

purportedly made only in cash.

Extreme appealed the ALJ’s proposed decision. 

In October 2015, the reviewing officer of the DOT affirmed the proposed 

decision. In reaching the decision, the reviewing officer noted that while Extreme 

claimed it had always refunded customers when mistakes in estimating 
6

registration fees occurred, Extreme had provided no documentation to support 

the claim. Additionally, the reviewer noted a “greater concern” in “the evidence 

supplied by the [DOT] regarding clean titles issued by the appellant on salvaged 

titles—a clear violation of section 321H.6.” The reviewer concluded that Extreme 

“never established a reasonable explanation for these actions.” Because the 

“overriding purpose of chapter 322 is to protect consumers of motor vehicles from 

fraud and deception,” and the one-year revocation “is a measured response to 

the voluminous violations committed by” Extreme, the reviewer agreed the oneyear revocation was not too severe.

Extreme then filed a petition for judicial review and a request for an order 

staying the revocations of its licenses pending the outcome of the appeal. The 

district court denied Extreme’s motion to stay. 

Before the court ruled on Extreme’s petition for judicial review, in February 

2016, Extreme filed an application with the district court asking the court to 

remand the matter to the ALJ to hear additional evidence that had not been 

presented during the contested case hearing. In its application, Extreme 

claimed—among other things—the DOT had purposely interfered with Extreme’s 

ability to testify at the administrative hearing by having caused Extreme to be 

served with six criminal complaints at the same time the civil, agency case was 

proceeding. The DOT resisted the application. The district court granted the 

application, ruling:

The facts and circumstances of this case are somewhat unusual with 

the civil administrative matter proceeding at the same time as the 

criminal matter regarding the same underlying factual situation. 

While the court does not necessarily agree with [Extreme’s] 

characterization of the intent and/or motive of the [DOT] in these 
7

matters, the court finds that the application to present additional 

evidence is meritorious. The court finds that the additional evidence 

is material and there were good reasons for failure to present it in the 

contested case proceeding before the agency. . . .

IT IS ORDERED that this matter be remanded to the agency 

to allow additional evidence be taken before the agency. The 

evidence shall include, but is not limited to, . . . the specific 

information regarding each vehicle the DOT alleges was illegally 

titled to be provided by the DOT, including the NADA[2] value before 

it was damaged, and the cost to repair. 

The Second Hearing:

Additional evidence and argument were presented on remand to the same 

ALJ on May 4, 2016—at which time Extreme’s license had been revoked for 

approximately half of its one-year revocation. Counsel for Extreme opened the 

hearing with an argument that explained about how the words “salvage” or 

“wrecked” have a specific legal meaning within the context of titling vehicles. He 

argued that words or descriptions had been used too freely during the initial 

hearing to describe vehicles that may not have met the legal definitions. Pursuant 

to the DOT’s administrative rule 761-405.6, a wrecked or salvage vehicle is a 

damaged motor vehicle that “(1) had repair costs exceeding 50 percent of its fair 

market value before it had become damaged, and (2) had a fair market value of 

$500 or more before it became damaged.” The “fair market value” is “the average 

retail value found in the National Automobile Dealers Association (NADA) Official 

Used Car Guide.” Counsel for Extreme also asserted a number of errors in the 

initial ruling by the ALJ, including the finding that Extreme “failed to properly 

disclose vehicle prior history on multiple title applications when the damage 

information was readily available.” As the executive officer of the DOT, Tim Allen, 

 

2 NADA refers to the National Automobile Dealers Association Official Used Car Guide. 
8

conceded, there is not a place on the title application to indicate whether the 

vehicle has suffered any prior damage, vehicle history, or values. Rather, the 

person applying for the title simply marks either the “regular title” box or the 

“salvage title” box. It is on the back of the title, once the vehicle is being signed 

over to the new buyer, that the seller—here, Extreme—must mark whether the 

vehicle has ever been titled as a salvage vehicle or has sustained “damage for 

which the cost of repair exceeded 50% of the fair market value before it became 

damaged.” The only option provided by the DOT form is to mark “yes” or “no.”

Similarly, the initial ruling stated Extreme had “admitted that nearly [it’s] 

entire inventory is obtained via online insurance auctions which move salvaged 

vehicles almost exclusively.” In fact, Extreme admitted that it purchased most of 

its inventory through online auctions, which were often stocked with vehicles from 

insurance companies and most of those vehicles had some damage. Extreme did 

not admit it purchased vehicles at the online auctions that had damages greater

than 50% of the NADA value of the vehicle before the damage occurred or that 

had been titled as salvage in another state. 

During its testimony at the second hearing, Extreme claimed it had not 

improperly applied for a regular title on a single salvage vehicle. In that testimony, 

Extreme contradicted its previous affidavit listing fourteen vehicles that it retitled 

as salvage in response to the December 2014 revocation letter warning Extreme 

that if it did “not immediately remove from its sales inventory all vehicles that have 

a salvage history or previous damage greater than 50 percent of their value, for 

which the dealer possesses clear Iowa certificates of title, an injunction [would] be 

filed.” Extreme testified that it knew at the time those vehicles were retitled to 
9

salvage titles that their damage did not meet the 50% threshold but that it retitled 

them anyway because of the “threatening letter.” Extreme reasoned, “So I thought 

if I go down and salvage these, I can continue in business. If I don’t, they’re just 

going to shut me down and worry about the record later.”

At the second hearing, Extreme provided exhibits relating to each of the 

thirty-six vehicles the DOT had identified at the first hearing as improperly titled, 

including a spreadsheet providing certain identifying information about each 

vehicle, its “clean retail” NADA value, the costs Extreme had incurred in repairing 

the vehicle, and the resulting percentage of the NADA value represented by the 

costs of repair. According to Extreme’s calculations, the highest damage 

percentage on any vehicle was 40%. Extreme’s records of the repair costs were 

handwritten on note cards. Extreme testified that the cards were kept as a normal 

part of business and were in the file on each of the cars when the DOT seized its 

records—suggesting the cards were created before there was any reason to be 

anything but accurate. Additionally, Extreme testified that it used the records in 

order to determine its net profits on each vehicle, asserting there would be no 

reason to underestimate or undervalue the costs of repairs because then the 

amount of profit—an amount Extreme had to pay taxes on—would be skewed high. 

Extreme testified that it advised buyers when a vehicle had been a total loss to 

someone else in order to ensure that the buyer was aware that a vehicle history 

may show that an insurance company had deemed that vehicle a “total loss.” 

While the DOT argued it was common sense that the insurance company would 

not declare a vehicle a “total loss” if the damages did not exceed the value of the 

vehicle—thus meeting the 50% threshold for a wrecked vehicle in Iowa—Extreme 
10

testified about instances where an insurance company would deem a stolen 

vehicle a total loss (because the insurance customer would be compensated for 

the vehicle), and then later sell the non-damaged vehicle when it was located. 

Moreover, the term “total loss” is not a term used in the titling of vehicles in Iowa. 

Additionally, at the second hearing, the DOT advanced a new interpretation 

of section 321.52(4)(a); the section states, in part:

A vehicle rebuilder or a person engaged in the business of 

buying, selling, or exchanging vehicles of a type required to be 

registered in this state, upon acquisition of a wrecked or salvage 

vehicle, shall surrender the certificate of title or manufacturer’s or 

importer’s statement of origin properly assigned, together with an 

application for a salvage certificate of title, to the county treasurer of 

the county of residence of the purchaser or transferee within thirty 

days after the date of assignment of the certificate of title for the 

wrecked or salvage motor vehicle. This subsection applies only to 

vehicles with a fair market value of five hundred dollars or more, 

based on the value before the vehicle became wrecked or 

salvage. . . . A vehicle on which ownership has transferred to an 

insurer of the vehicle as a result of a settlement with the owner of the 

vehicle arising out of damage to, or unrecovered theft of, the vehicle 

shall be deemed to be a wrecked or salvage vehicle and the insurer 

shall comply with this subsection to obtain a salvage certificate of title 

within thirty days after the date of assignment of the certificate of title 

of the vehicle.

The DOT claimed that the statute provided two situations in which it was 

necessary to title a vehicle with a salvage title. The first was the situation both 

parties acknowledged—where the damage of the vehicle exceeded 50% of the 

NADA value of the vehicle before the damage. The second situation first 

introduced at the second hearing by Allen during his testimony involved vehicles 

bought by a recycler or dealer from outside of Iowa that was titled in an insurance 

company’s name. The DOT conceded that the language of the statute speaks 

specifically to insurers when it states, “A vehicle on which ownership has 
11

transferred to an insurer of the vehicle as a result of a settlement with the owner

of the vehicle arising out of damage to, or unrecovered theft of, the vehicle shall 

be deemed to be a wrecked or salvage vehicle and the insurer shall comply with 

this subsection to obtain a salvage certificate of title . . .” (Emphasis added.) 

However, executive officer Allen testified:

In [section 321.]52 it breaks out insurers to include them in 

requiring them to get a salvage title. It doesn’t say that only insurers 

are required to get that salvage title. 

We take the position that if dealers are allowed to circumvent 

the process, the whole point of 321.52 unravels. If you say to a 

dealer, “You can bring a wrecked car into the state,” just because it 

has a clear title, but it’s clearly a wrecked vehicle, and obtained a 

clear Iowa title, you’re doing an injustice to the consumers. 

The DOT also challenged Extreme’s calculation of the percent of damage 

its vehicles had sustained. While the administrative rule requires the use of the 

“average retail value found in the” NADA, the NADA does not provide any “average 

retail” category. Instead, a “low,” “average,” and “high” value is given under the 

category “auction”; a “rough,” “average,” and “clean” value is given under “tradein”; and then there is a “clean loan” and a “clean retail” value. The “clean retail”

value—the value which Extreme used in all of its calculations—is the category with 

the greatest values. The DOT agreed that the administrative rule did not provide 

any guidance as to which category of the NADA was to be relied upon, but it 

contested whether Extreme’s use of the “clean retail” value for each of the vehicles 

was the appropriate value. Additionally, the DOT contested Extreme’s use of its 

actual repair costs, as the DOT maintained Extreme was getting parts at wholesale 

value and was receiving discounts on the repair work that was completed. 

Extreme testified it “get[s] a little bit of a break on the parts” but maintained it was 
12

paying full price at the repair shops for the work being completed. The DOT’s 

evidence that Extreme was not paying the same repair costs as the average 

consumer was based on a comparison with estimates used by insurance 

companies to determine that vehicle was a total loss. Most, if not all, of these 

estimates from insurance companies were based on repair costs in another market 

and state, such as Dallas, Texas. The administrative rule is silent as to how repair 

costs should be determined. Still, the DOT maintained comparing a “clean retail”

NADA value to Extreme’s minimal “wholesale” repair costs did not provide an 

accurate result when determining if the damage to the vehicle met the 50% 

threshold. Rather, the DOT maintained that the retail estimate of repair costs was 

the appropriate figure to compare to the vehicle’s average retail value.

Second Agency Decisions:

In the second proposed ruling, filed in July 2016, the ALJ noted:

The individual vehicle files contained in DOT’s Exhibit A are 

not well organized. Additionally, they contain a mix of documents 

taken from Extreme’s sales files, and documents gathered from other 

sources during the course of the investigation. Some vehicle files 

have more information than others. A review of every file in Exhibit 

A identified five files that contain specific value and repair estimates 

from an insurance company.

When the ALJ compared Extreme’s reported repair costs with those insurance 

company’s estimated repair costs, it found the difference “striking” and “so vast 

that their reliability is necessarily in question.” The ALJ continued:

Extreme now contends that a clean retail NADA value, and 

[Extreme’s] reported actual repair costs, are the only appropriate 

figures to use when determining if these vehicles were salvage. This 

argument is not persuasive. In fact, Mr. Moyer did not use either of 

those figures when he made the determination. The statute requires 

an application for certificate of title be filed within thirty days of the 

date of assignment. Iowa Code §321.52(4)(a). It is clear from the 
13

vehicle files in Exhibit A[3]that Extreme routinely applied for and 

secured an Iowa certificate of title in far less than 30 days. Mr. Moyer 

acknowledged at hearing that the cars were often not repaired prior 

to obtaining an Iowa title, and he relied on his own estimate for the 

repair costs. This is consistent with the statute which allows the 

owner to apply for a regular certificate of title after the vehicle has 

been repaired and passes a salvage theft examination. See Iowa 

Code § 321.52(4)(b). Mr. Moyer also relied on his own estimate for 

fair market value. He testified he does not need to look up the NADA 

value, or use any other source regarding repair costs for making the 

determination to apply for a regular or salvage title. His own 

estimates for these figures are based on his personal guess from 

looking at the cars.

This calculation is important. If the repair costs exceed 50% 

of the fair market value of the vehicle prior to damage, Extreme must 

apply for a salvage title pursuant to Iowa Code section 321.52(4)(a), 

(d). The figures that Extreme now argues must be used lead to a 

less than 50% damage result for all thirty-six vehicles in Exhibit A. 

This includes at least two vehicles that entered Iowa with a salvage 

title from another state. Mr. Moyer testified at hearing that all of the 

vehicles in Exhibit A came to Iowa with a regular title. This is not 

accurate according to the documentation in evidence. Exhibit A, p. 

829 contains a copy of a salvage title from the state of Missouri for a 

2013 Volkswagen Jetta, and the final settlement statement showing 

Extreme purchased the vehicle via Copart Auto Auction on April 11, 

2014. Extreme contends that this vehicle was not salvage, and its 

repair costs were only 19% of its prior damage value. These results 

do not make sense. Mr. Moyer’s testimony is not consistent with 

other evidence in the record. He has not submitted any 

documentation verifying the accuracy of his reported repair costs. As 

the owner of Extreme, he clearly has an interest in maintaining 

licensure. His repair costs are dramatically less than other available 

estimates, and lead to a “non-salvage” result in every instance. As 

a result, Mr. Moyer’s testimony, and his reported repair costs at 

Exhibit 40, lack credibility.

The DOT’s position that Mr. Moyer’s reported repair costs 

grossly understate what a retail cost of repairs would be is clearly 

bolstered by the comparison of Moyer’s costs to the insurance 

company repair estimates. This type of retail repair cost estimate is 

relied upon in section 321.52(4)(b) for the determination of damages 

following theft. It is not unreasonable to give them weight in this 

context as well. The applicable statute and rule require the use of 

an average retail value when determining fair market value, it follows 

 

3 Exhibit A is the DOT’s 941-page exhibit from the first hearing, which includes identifying 

and supportive information that Extreme improperly titled thirty-six vehicles with a regular 

title instead of a salvage one.
14

that a retail repair cost should also be used. Mr. Moyer’s reported 

repair costs appear to be of a wholesale nature, rather than retail.

He acknowledged at hearing that he is given a break on the cost of 

parts from auto shops. It is unclear from the index card notations if 

labor costs have been included. Additionally, it is unclear whether 

Moyer’s repairs actually returned the vehicles to their condition prior 

to damage. Moyer testified at hearing, for example, that he has 

declined to repair hail damage if he considers it to be light.

An Iowa title application requires an applicant to indicate if 

they are seeking a regular or salvage certificate of title. By failing to 

apply for a salvage certificate of title when repair costs exceed 50% 

of the fair market value of the vehicle prior to damage, Extreme 

obtained a regular Iowa certificate of title that did not properly 

disclose prior damage. The back side of the certificate of title asks if 

the vehicle was previously titled as salvage. If the answer is no, it 

then asks if the owner has knowledge of the vehicle sustaining 

damage for which the cost of repair exceeded 50% of the fair market 

value before it became damaged. The same questions are asked 

again on the Iowa damage disclosure statement which is filled out 

when the vehicle is sold. Extreme applied for a regular certificate of 

title for all of the vehicles in Exhibit A, and did not disclose prior 

damage for which the cost of repair exceeded 50% of the fair market 

value before it became damaged on any of the certificates or damage 

disclosure statements.

In December 2014, Extreme identified fourteen vehicles on its 

sales lot with titles that failed to comply with Iowa law. Mr. Moyer 

submitted an affidavit attesting to this and reporting he would have 

all of the vehicles properly titled as salvaged vehicles. The affidavit 

and list of vehicles were submitted at the July 2015 hearing, as 

evidence of Mr. Moyer’s willingness to cooperate with the DOT and 

fix violations. Mr. Moyer subsequently testified at the May 4, 2016 

hearing that his sworn affidavit was actually false, and all fourteen of 

the listed vehicles were not salvage. He contends he changed the 

titles on these vehicles and submitted the affidavit solely to avoid the 

DOT seeking an injunction. Mr. Moyer’s explanation makes little 

sense. He was represented by counsel at the time the affidavit was 

submitted and was in the process of appealing the DOT license 

revocation. The notion that he falsely identified fourteen examples 

of his failure to comply with Iowa law to avoid further legal challenges 

from the DOT is not believable and I give it no weight.

(Citations to the record omitted.)

The ALJ determined Extreme had improperly applied for regular titles when 

it should have applied for salvage titles. In making this determination, the ALJ 
15

relied upon the retail costs of repairs and either the “clean retail” or “clean tradein” value—either value resulted in damage exceeding 50%. 

Next, the ALJ acknowledged section 321.52(4)(a) on its face only places an 

obligation on Iowa insurance companies, it found persuasive the DOT’s contention 

that the statute also placed an obligation on licensed dealers and recyclers to 

obtain a salvage certificate of title when they purchase a vehicle with a foreign title 

held by an out-of-state insurance company. In reaching this conclusion, the ALJ 

relied on a decision by our supreme court, Mulder v. Iowa Department of 

Transportation, 565 N.W.2d 348, 350 (Iowa 1997), in which the court discussed 

that the legislative intent of section 321.52 was to “ensure that consumers were 

informed about any significant damage and/or prior salvage designations which a 

vehicle might have had.” 

Finally, the ALJ noted that Extreme had admitted it overcharged customers 

registration fees. While Extreme claimed it had paid customers back the overage 

in the instances the customers noticed and requested it even before the execution 

of the search warrant, Extreme had no receipts to support this assertion. It was 

undisputed that after the search warrant was executed, Extreme paid each of the 

122 customers back with a check and provided the receipts to the DOT. Based on 

all of the foregoing, the ALJ concluded:

Extreme has a duty as a licensee to comply with the law. 

[Extreme] has been in the car business for decades, and should be 

well aware of the requirements. [It] has been directed by the 

Department in the past to fix problems and has apparently done so. 

Yet, problems persist. These violations support a significant 

sanction. After full consideration of the additional evidence 

submitted at hearing on remand, the sanction previously imposed by 

DOT is sustained.
16

Extreme appealed the ALJ’s proposed ruling, and the DOT’s reviewing 

officer affirmed, finding Extreme had failed to meet its burden to prove that no 

customers were overcharged registration fees. Additionally, the review ruling 

stated:

On [Extreme’s] second request for director review, [Extreme]

highlights documentation [it] did supply regarding clean titles on 

salvaged vehicles. A wrecked or salvage vehicle is a damaged 

motor vehicle that has repair costs exceeding 50 percent of its fair 

market value before it became damaged. 761 Iowa Administrative 

Code 405.6(1)(a). [Extreme] cites to thirty-seven vehicles bought at 

salvage auctions primarily in 2013-14 that were identified by [the 

DOT]. According to [Extreme]’s Exhibit 40, every one of the vehicles 

show a repair cost between 0 and 40 percent of the fair market value.

The administrative law judge found that this evidence 

stretched credulity. The manner in which these repair costs were 

recorded by the appellant is also dubious. There is no substitute for 

accurate record keeping; amounts for replacement parts scrawled on 

index cards without supporting receipts and with indiscernible labor 

costs does not constitute accurate record keeping. Of greatest 

concern was [Extreme’s] questionable practice of applying for clean 

title well before the vehicle had been repaired. Knowledge of the 

total repair costs and proof they would be less than half the fair 

market value could not have existed at that time.

The overriding purpose of Chapter 322 is to protect 

consumers of motor vehicles from fraud and deception. State v. 

Miner, 331 N.W.2d 683 (Iowa 1983). I believe the conclusions of the 

administrative law judge are correct and supported by the extensive 

record that was made. The proposed sanction of a one-year 

revocation is a reasonable response to the appellant’s violations.

Exteme then filed a petition for judicial review. 

Judicial Review Ruling:

The district court affirmed the agency ruling, finding substantial evidence 

supported the DOT’s findings; that the agency’s determinations that the “clean 

retail” category of the NADA was not the proper category to use pursuant to the 

“average retail value” language from rule 761-405.6 and that it was more 

appropriate to utilize the insurance company’s estimated repair cost rather than 
17

Extreme’s claimed costs. The district court ruled these findings were neither 

beyond the DOT’s authority, an erroneous interpretation, nor reached in an 

arbitrary and capricious manner; and that the agency acted within its discretion 

when it decided to impose a one-year revocation instead of a lesser sanction. 

However, although the issue was raised, the district court did not rule on whether 

the agency’s interpretation of section 321.52(4)(a)—that it applies to dealers and 

recyclers and requires them to title any vehicle obtained from an out-of-state 

insurance company as salvage—was in error.

Extreme appeals.

II. Discussion.

On appeal, Extreme asks us to conclude that that it did not make any 

fraudulent title applications. In doing so, Extreme challenges both the DOT’s 

interpretation of section 321.52(4)(a) as requiring recyclers and dealers to obtain 

salvage titles for any vehicles bought from out-of-state insurance companies and 

the DOT’s determination that at least some of the vehicles originally identified by 

the DOT had more than 50% damage. If Extreme is meritorious in these claims, it 

asks that we remand back to the DOT to impose a less-severe penalty on the 

remaining violations (the overcharging of registration fees).

Standard of Review:

We begin by considering our role in reviewing this agency action. “The 

district court functions in an appellate capacity to correct errors of law on the part 

of the agency.” Willett v. Iowa Dep’t of Tranps., 572 N.W.2d 172, 173–74 (Iowa 

Ct. App. 1997). “We review such action by the district court applying the same 

standard of section [17A.19(10)] to the agency action to determine whether our 
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conclusions are the same as the district court.” Id. at 174. Insofar as the DOT’s 

findings of facts are at issue, we are bound by the findings if they are supported 

by substantial evidence in the record, when the record is viewed as a whole. Cobb 

v. Emp’t Appeal Bd., 506 N.W.2d 445, 447 (Iowa 1993). “The possibility of drawing 

two inconsistent conclusions from the evidence does not prevent an agency’s 

finding from being supported by substantial evidence.” Gordon v. Iowa Dep’t of 

Transp., 389 N.W.2d 390, 392 (Iowa 1986). Additionally, it is Extreme that bore 

the burden to show compliance with all lawful requirements for the retention of its 

licenses. See Mary v. Iowa Dep’t of Transp., 382 N.W.2d 128, 132 (Iowa 1986); 

see also Iowa Code § 17A.18(3) (preventing the “revocation, suspension, 

annulment, or withdrawal” “of any license” until after “the licensee was given an 

opportunity to show, in an evidentiary hearing conducted according to the 

provisions of this chapter for contested cases, compliance with all lawful 

requirements for the retention of the license”).

Iowa Code section 321.52(4)(a):

We begin our analysis by considering the agency’s determination that 

section 321.52(4)(a) requires licensed dealers and recyclers to obtain a salvage 

certificate of title when they purchase a vehicle with a foreign title held by an outof-state insurance company.4

 In considering the DOT’s interpretation of the 

 

4 While Extreme raised this issue before the district court, the district court did not rule on 

it. Additionally, although it was included in—and in fact, constituted the main portion of—

Extreme’s appellate brief, the DOT has not responded to Extreme’s argument on appeal. 

However, we decide the issue as it was properly raised before and decided upon by the 

agency. See Staff Mgmt. v. Jimenez, 839 N.W.2d 640, 647 (Iowa 2013) (stating errorpreservation rules are different for administrative law cases; the court has “held a party 

preserves error on an issue before an agency if a party raises the issue in the agency 

proceeding before the agency issues a final decision and both sides have had an 

opportunity to address the issue”); Chauffeurs, Teamsters, & Helpers, Local Union No. 
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statute, we do not give the agency deference, as normally “the interpretation of a 

statute is a pure question of law over which agencies are not delegated any special 

powers by the General Assembly, so, a court is free to, and usually does, substitute 

its judgment de novo for that of the agency.” Renda v. Iowa Civil Rights Comm’n, 

784 N.W.2d 8, 11 (Iowa 2010) (citation omitted). Here, the enabling statute does 

not expressly vest in the agency the right to interpret laws. See Iowa Code 

§ 307.12 (listing the duties of the director of the department of transportation); cf. 

Renda, 784 N.W.2d at 11 (noting that the enabling statute for the Iowa Department 

of Education does explicitly grant the department the power to interpret school laws 

and rules relating to school laws). Additionally, while the DOT has been given

rulemaking authority, see Iowa Code § 307.12(1)(n), “we have not concluded that 

a grant of mere rulemaking authority gives an agency the authority to interpret all 

statutory language.” Renda, 784 N.W.2d at 13. Moreover, the issue here—

whether the term “insurer,” as used in section 321.52(4)(a) is also meant to 

encompass all recyclers and dealers—involves language that has “specialized 

legal meaning and [is] widely used in areas of law other than the” department of 

transportation arena. Id. at 14. Thus, we are not convinced the legislature 

intended to vest the DOT with the authority to interpret the term insurer, and we 

review for correction of errors at law. See Iowa Code § 17A.19(10)(c). 

When interpreting statutory provisions, we utilize the well-established rules 

of statutory construction. Id. at 15. “It is of course true that where the language 

 

238 v. Iowa Civ. Rts. Comm’n, 394 N.W.2d 375, 382 (Iowa 1986) (finding error must be 

preserved at the agency level, not on judicial review in the district court); Brewbaker v. 

State Bd. of Regents, 843 N.W.2d 466, 471 (Iowa Ct. App. 2013) (“To preserve an issue 

on appeal, the party must first argue the issue before the agency.”). 
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chosen by the legislature is unambiguous, we enforce a statute as written.” 

Rhoades v. State, 880 N.W.2d 431, 446 (Iowa 2016). “A statute is ambiguous if 

reasonable minds differ or are uncertain as to the meaning of the statute.” Id. 

Neither here nor before the ALJ did the DOT claim that the term “insurer” as used 

in section 321.52(4)(a) could reasonably be understood to mean insurers, 

recyclers, and dealers. Rather, the DOT focused on the legislative intent of the 

statute, arguing that because the legislature meant for the statute to ensure that 

customers were informed about any prior damage, the statute must be applied 

more broadly than written. See Mulder, 565 N.W.2d at 350. But we do not 

consider the purpose of a statute when the language is unambiguous. See McGill 

v. Fish, 790 N.W.2d 113, 118 (Iowa 2010) (“We do not search for legislative intent 

beyond the express language of a statute when that language is plain and the 

meaning is clear. . . . We only apply the rules of statutory construction when the 

statutory terms are ambiguous.”).

The agency was in error when it interpreted section 321.52(4)(a) to require 

Extreme, as a dealer and a recycler, to title any vehicle obtained from an out-ofstate insurance company as salvage. Thus, we limit the scope of our review to the 

question whether Extreme improperly applied for regular titles when the vehicle 

had sustained damage for which the cost of the repair exceeds 50% of the fair 

market value, pursuant to the NADA. 

After the second hearing, when the ALJ was provided the NADA information 

for each of the vehicles the DOT claimed were improperly titled, the ALJ identified 

five vehicles on which Extreme had improperly applied for a regular title. Extreme 

maintains this determination was in error, as the ALJ relied on the insurance 
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company’s estimate of repair costs, which was higher than Extreme’s actual costs. 

But the ALJ found that Extreme’s claimed repair costs lacked credibility. In doing 

so, the ALJ noted that Extreme failed to bring a single receipt to establish that the 

costs listed on the handwritten note cards were correct. Additionally, because 

Extreme’s numbers were so much lower than those estimated by the insurance 

companies, the ALJ doubted their veracity. The insurance companies had found 

the vehicles to be a total loss, while Extreme claimed that four of the vehicles 

sustained damage 15% or less of the NADA value, with the outlier fifth vehicle 

having sustained 22% damage. Extreme contends the ALJ could not rely on the 

estimates of a third party to determine whether the vehicle needed to be titled with 

a salvage title. First, we note that both the appropriate code section and the 

administrative rule are silent as to how the “repair cost” is to be determined. 

Second, we understand the ALJ’s use of the estimates as a comparison in 

determining whether Extreme’s estimates were reliable, which we believe is 

appropriate as Extreme had a motive for being dishonest about its repair costs. 

Moreover, as the ALJ noted, because Extreme titled the vehicles under a regular 

title immediately, the vehicles were never inspected to determine that the repairs 

Extreme made to the vehicles actually fixed the damage the vehicle had sustained. 

While the DOT did not have a witness who could testify as to what the actual costs 

of repair would have been for the vehicles in question, Extreme bore the burden of 

establishing that the vehicles had been properly registered, see Mary, 382 N.W.2d 

at 132, and the ALJ determined Extreme’s evidence of such lacked credibility. The 

DOT’s reviewing officer affirmed the ALJ’s ruling, adding its own statements about 

Extreme’s credibility. We are not at liberty to reweigh the credibility of the 
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witnesses and the evidence. See Christiansen v. Iowa Bd. of Educ. Exam’r, 831 

N.W.2d 179, 192 (Iowa 2013) (“The law is well-settled. It is in the agency’s duty 

‘as the trier of fact to determine the credibility of the witnesses, weigh the evidence, 

and decide the facts in issue.’” (citation omitted)). Because substantial evidence 

supports the DOT’s determination that Extreme improperly titled five vehicles with 

regular titles, we affirm the finding of violations in respect to those vehicles. 

We recognize the DOT’s discretion in determining the appropriate 

punishment5 and believe the DOT should be given the opportunity to review 

whether the imposed punishment is appropriate in light of our conclusion that 

section 321.52(4)(a) does not require recyclers and dealers to title all vehicles 

bought from out-of-state insurance companies as salvage, thereby reducing the 

number of violations the DOT believed Extreme committed.6 Thus, we remand to 

the agency for a re-determination of the sanction imposed. 

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.

 

5

Iowa Code section 322.9 concerns motor vehicle dealers and allows the department to 

“revoke or suspend the license of a retail motor dealer if, after notice and hearing by the 

department of inspections and appeals, it finds the licensee has been guilty of an act which 

would be a ground for the denial of a license under section 322.6.” Similarly, Iowa 

Administrative Code 761-425.62(1) concerns motor vehicle dealers and provides, “The 

department may deny an application or suspend or revoke a certificate or license if the 

applicant, certificate holder, or licensee fails to comply with the applicable provisions of 

this chapter.” 

Iowa Code section 321H.6 allows the DOT to deny, revoke, or suspend the license 

of a vehicle recycler to deny the application for the recycler license if the department finds 

the “licensee has violated any provision of the chapter” or “made any material 

misrepresentations to the department in connect with an application for a license, junking 

certificate, salvage certificate, certificate of title, or registration of a vehicle”—among other 

things. 

6 We note that Extreme has already served its one-year revocation. Still, Extreme has 

asked us to remand for review by the DOT, as the DOT may use its determination that 

Extreme failed to comply with the statutory provisions as grounds to deny Extreme’s future 

applications to re-obtain its dealer and recycler licenses.