Opinion ID: 836243
Heading Depth: 2
Heading Rank: 3

Heading: Third Claim for ReliefDeclaratory Judgment and Injunction

Text: We turn finally to plaintiff's third claim for relief. As noted, that claim ultimately was premised upon facts relating to the third billboard and sought (1) a declaration that the OMIA violates both the Oregon and United States Constitutions, and (2) an injunction prohibiting the state from ordering plaintiff to remove any speech from that billboard. The state argues in response that plaintiff failed to exhaust its administrative remedies. Before reaching the merits of the state's argument, we first address whether the state is entitled to maintain that argument in this court. As noted, the state raised failure to exhaust as an affirmative defense in its answer to plaintiff's amended complaint. The state, however, did not file a motion for summary judgment on that basis. Instead, the state argued that claim preclusion barred each of plaintiff's claims for relief, including the third. Indeed, before the trial court, the state expressly noted that its argument [wa]s based on claim preclusion, not exhaustion   . In the Court of Appeals, the state continued to press its claim preclusion theory, but also argued that exhaustion requirements barred plaintiff's third claim for relief. The Court of Appeals, however, refused to entertain the latter argument: Although the [state] raised `exhaustion' as an affirmative defense in its answer, it did not assert it as a ground for summary judgment. Plaintiff was therefore denied the opportunity to develop a complete factual record on that issue for appeal, and we decline to affirm on those grounds. Outdoor Media Dimensions, 150 Or.App. at 125, 945 P.2d 614 . In a footnote, the Court of Appeals added: For example, the trial court's order granting summary judgment included a `stipulation' that plaintiff `made a timely request for an administrative hearing upon receipt of the notice of violation regarding the third structure.' It is doubtful whether that alone established that plaintiff exhausted its administrative remedies: the record does not indicate whether plaintiff followed through on its request or what was the outcome of that hearing. Because the [state] did not assert exhaustion as a ground for summary judgment, plaintiff was not on notice of the need to present additional evidence on that issue. Id. at 125-26 n. 28, 945 P.2d 614. We disagree with the Court of Appeals' application in this case of the principle that an appellate court may affirm a correct decision of a trial court on a basis other than that upon which the trial court relied. At times denominated the right for the wrong reason principle, this court recently described it as follows: When a trial court makes a ruling, we will affirm that ruling on appeal, even if the trial court's legal reasoning for the ruling was erroneous, if another legally correct reason and, to the extent necessary, the record developed in the trial court support the ruling. State v. Rogers, 330 Or. 282, 295, 4 P.3d 1261 (2000). In State Farm Fire v. Sevier, 272 Or. 278, 537 P.2d 88 (1975), the court explained the principle in this way: We are reluctant to reverse a trial court on grounds or theories other than those on which a case is tried and decided unless the parties have been afforded an opportunity to submit further briefs or argument. The considerations are different in cases in which we affirm a trial court. In such cases, when the trial court arrived at a correct result, but on grounds different than those which, in our opinion, are more proper as the basis for such a result, we believe that it is not improper to affirm the trial court; provided, of course, that the pleadings are sufficiently broad and there is sufficient evidence in the record   . Id. at 298, 537 P.2d 88. As developed by this court's decisions, the right for the wrong reason principle permits a reviewing courtas a matter of discretionto affirm the ruling of a lower court on an alternative basis when certain conditions are met. The first condition is that, if the question presented is not purely one of law, then the evidentiary record must be sufficient to support the proffered alternative basis for affirmance. That requires: (1) that the facts of record be sufficient to support the alternative basis for affirmance; (2) that the trial court's ruling be consistent with the view of the evidence under the alternative basis for affirmance; and (3) that the record materially be the same one that would have been developed had the prevailing party raised the alternative basis for affirmance below. In other words, even if the record contains evidence sufficient to support an alternative basis for affirmance, if the losing party might have created a different record below had the prevailing party raised that issue, and that record could affect the disposition of the issue, then we will not consider the alternative basis for affirmance. The second condition is that the decision of the lower court must be correct for a reason other than that upon which the lower court relied. Third, and finally, the reasons for the lower court's decision must be either (a) erroneous or (b) in the reviewing court's estimation, unnecessary in light of the alternative basis for affirmance. The Court of Appeals concluded that the record was insufficient and that plaintiff had not been afforded an opportunity to introduce evidence on the question of exhaustion of administrative remedies. Outdoor Media Dimensions, 150 Or.App. at 125-26, 945 P.2d 614. We disagree. The present record is sufficient to support the state's alternative basis for affirmance and, although the state did not place emphasis on that basis until appeal, plaintiff suffered no disadvantage thereby. In addressing the issue, we look to the evidence and allegations surrounding the third billboard that, at the time that the trial court granted final summary judgment, provided the predicate for plaintiff's claim for declaratory and injunctive relief. [13] Respecting the adequacy of the factual record, as noted, the parties stipulated in the trial court that plaintiff timely had requested an administrative hearing after receiving the state's notice that the billboard violated the OMIA. The Court of Appeals noted that plaintiff's stipulation did not establish whether plaintiff followed through on its request for the administrative hearing or, if it did, what the outcome of that hearing was. For those reasons, the Court of Appeals deemed it doubtful whether the stipulation established that plaintiff had failed to exhaust its administrative remedies. Outdoor Media Dimensions, 150 Or.App. at 125-26 n. 28, 945 P.2d 614. We have no disagreement with the Court of Appeals' observations about the questions that the trial court record leaves open. The ultimate issue that this court must address, however, is whether, in light of those omissions, the evidentiary record permits us to conclude that plaintiff failed to exhaust its administrative remedies. We believe that it does. This court has recognized the general rule of administrative law that as to matters within the jurisdiction of an administrative agency, `[j]udicial review is only available after the procedure for relief within the administrative body itself has been followed without success.' Mullenaux v. Dept. of Revenue, 293 Or. 536, 539, 651 P.2d 724 (1982) (bracket in original); see also Jackson v. Dept. of Rev., 298 Or. 633, 637, 695 P.2d 923 (1985) ([a]dministrative remedies are not exhausted unless applicable procedures, prescribed by statute or by rule, have been satisfied). The doctrine of exhaustion applies when a party, without conforming to the applicable statutes or rules, seeks judicial determination of a matter that was or should have been submitted to the administrative agency for decision. See State ex rel. MVD v. Norblad, 320 Or. 307, 313, 882 P.2d 598 (1994) (party may not evade administrative review by seeking interlocutory relief in circuit court to overturn hearings officer's order quashing subpoena). As the court stated in Norblad: [I]f the hearings officer's order quashing the subpoena is an error, judicial review of that error is available [as provided by statute], after a final order issues.    That is the statutorily prescribed form of judicial review. Id. at 314, 882 P.2d 598. Neither does the fact that the issues presented here are purely legal ones excuse the requirement that plaintiff exhaust its administrative remedies. See Dennehy v. Dept. of Rev., 295 Or. 574, 579, 668 P.2d 1210 (1983) (Statutorily required administrative review may not be ignored simply because the issue is a question of law.). Indeed, [a]lthough it is an authority to be exercised infrequently, and always with care, Oregon administrative agencies have the power to declare statutes and rules unconstitutional. Nutbrown v. Munn, 311 Or. 328, 346, 811 P.2d 131 (1991). In short, the agency here had the authority to adjudicate the claims at issue. The question, then, is whether, having acknowledged the availability of administrative review, plaintiff has satisfied the applicable procedures before initiating this litigation. As noted above, the OMIA provides three options to the owner of a sign for which a notice of violation has been issued. The owner may (1) make the sign comply, (2) remove the sign, or (3) request a hearing before the engineer within the time specified in the notice. ORS 377.775(3)(a). The record below demonstrates without contradiction that, as to the third billboard, plaintiff sought to avail itself of one of those options, namely, the administrative remedy that ORS 377.775(3)(a) provides. Plaintiff did so by timely requesting an administrative hearing before the engineer. Having begun the administrative process with a timely request for an administrative hearing, and regardless of the outcome of that hearing, review of the agency's ruling would have been by petition for judicial review in the Court of Appeals under the Administrative Procedures Act. ORS 183.482 (providing for judicial review in Court of Appeals of contested cases). That, of course, did not happen, which is why the case came to us in this posture. For whatever reason, plaintiff chose to bring its dispute in a new forum. That decision is inconsistent with the principles of exhaustion discussed above. In our view, those facts aloneregardless of whatever else may have happened laterdemonstrate that plaintiff did not exhaust its administrative remedies. No further record is needed to rule upon the state's defense; neither could plaintiff have created a different record below that might have altered the outcome of the state's defense. It follows that the trial court did not err in granting summary judgment to the state with respect to plaintiff's third claim for relief. The decision of the Court of Appeals and the judgment of the circuit court are affirmed.