Court Opinion

ID: 9539578
Source: CourtListenerOpinion
Date Created: 2023-08-07 16:06:14.748692+00
Date Added: 2024-06-11T14:58:58.308909
License: Public Domain

The opinion of the court was delivered by
McFarland, J.:
The Kansas Department of Revenue (KDOR) appeals from a judgment of the district court holding K.S.A. 1983 Supp. 40-3104 unconstitutional for failing to provide due process of law under the Fourteenth Amendment to the United States Constitution.
The facts are not in dispute and are summarized as follows. Dorothy M. Barnes possessed a valid driver’s license on July 6, 1983, the date an automobile owned by her was involved in an *821accident. Ms. Barnes had no automobile liability insurance policy in effect at the time of the accident. On September 16, 1983, an administrative hearing was held by a representative of KDOR pursuant to K.S.A. 1983 Supp. 40-3118(d). The KDOR representative entered the following order:
“The respondent has failed to show evidence that an owned vehicle was insured on the date it was involved in an accident.
“The vehicle registration and driving privileges shall be suspended until: (1) proof of current liability insurance, (2) a release of liability, or evidence that an agreement for payment of damages has been entered into, or evidence that the respondent has been finally adjudicated not [to] be liable in respect to such accident, and (3) payment of the appropriate reinstatement fee, have been furnished to the Director, Division of Vehicles.
“The appropriate reinstatement fee is $25.00.”
On November 15, 1983, Ms. Barnes brought this action seeking, inter alia, a stay on the suspension order and reinstatement of her driver’s license and automobile registration. Particularly, she challenged on due process grounds the constitutionality of K.S.A. 1983 Supp. 40-3104. In support of her due process challenge, Ms. Barnes relies on Bell v. Burson, 402 U.S. 535, 29 L. Ed. 2d 90, 91 S. Ct. 1586 (1971). The trial court, in reliance on the Bell case, held K.S.A. 1983 Supp. 40-3104 was unconstitutional as it violated the due process requirements of the Fourteenth Amendment to the United States Constitution and ordered Ms. Barnes’ driving privileges and registration reinstated upon “the demonstration of financial security and the payment of the reinstatement fee.” KDOR appeals from said judgment.
K.S.A. 1983 Supp. 40-3104 is a part of the Kansas Automobile Injury Reparations Act (KAIRA), K.S.A. 40-3101 et seq. The KAIRA was originally enacted in 1973 and has been repeatedly amended since its adoption. Although 1984 and 1985 amendments do not materially affect the issue before us, in this opinion we shall use the version of the Act contained in the 1983 supplement to volume 3A of Kansas Statutes Annotated which was in effect at the time.
The statute held to be unconstitutional is K.S.A. 1983 Supp. 40-3104, which provides:
“(a) Every owner shall provide motor vehicle liability insurance coverage in accordance with the provisions of this act for every motor vehicle owned by such person, unless such motor vehicle is included under an approved self-insurance plan as provided in subsection (d) or is expressly exempted from the provisions of this act.
*822“(b) An owner of an uninsured motor vehicle shall not permit the operation thereof upon a highway or upon property open to use by the public, unless such motor vehicle is expressly exempted from the provisions of this act.
“(c) No person shall knowingly drive an uninsured motor vehicle upon a highway or upon property open to use by the public, unless such motor vehicle is expressly exempted from the provisions of this act.
“(d) Any person in whose name more than 25 motor vehicles are registered may qualify as a self-insurer by obtaining a certificate of self-insurance from the commissioner of insurance. Upon application of any such person, the commissioner of insurance may issue a certificate of self-insurance, if the commissioner is satisfied that such person is possessed and will continue to be possessed of ability to pay any judgment obtained against such person arising out of the ownership, operation, maintenance or use of any motor vehicle registered in such person’s name.
“Upon not less than five days’ notice and a hearing pursuant to such notice, the commissioner of insurance may cancel a certificate of self-insurance upon reasonable grounds. Failure to pay any judgment against a self-insurer, arising out of the ownership, operation, maintenance or use of a motor vehicle registered in such self-insurer’s name, within 30 days after such judgment shall have become final, shall constitute reasonable grounds for cancellation of a certificate of self-insurance.
“(e) Any person violating any provision of this section shall be guilty of a class B misdemeanor, except that any person convicted of violating any provision of this section within three years of any such prior conviction shall be guilty of a class A misdemeanor.
“(f) In addition to any other penalities provided by this act for failure to have or maintain financial security in effect, the director, upon receipt of the accident report required by K.S.A. 8-1607, shall, upon notice and hearing as provided by K.S.A. 40-3118, and amendments thereto, suspend:
“(1) The license of each driver in any manner involved in the accident;
“(2) the license of the owner of each motor vehicle involved in such accident, unless the vehicle was stolen at the time of the accident;
“(3) the registrations of all vehicles owned by the owner of each motor vehicle involved in such accident;
“(4) if the driver is a nonresident, the privilege of operating a motor vehicle within this state;
“(5) if such owner is a nonresident, the privilege of such owner to operate or permit the operation within this state of any motor vehicle owned by such owner.
“(g) The suspension requirements in subsection (f) shall not apply:
“(1) To the driver or owner if the owner had in effect at the time of the accident an automobile liability policy as required by K.S.A. 40-3107, and any amendments thereto, with respect to the vehicle involved in the accident;
“(2) to the driver, if not the owner of the vehicle involved in the accident, if there was in effect at the time of the accident an automobile liability policy with respect to such driver’s driving of vehicles not owned by such driver;
“(3) to any person qualified as a self-insurer under subsection (d) of this section;
“(4) to any person who has been released from liability, has entered into an *823agreement for the payment of damages, or has been finally adjudicated not to be liable in respect to such accident. Evidence of any such fact may be filed with the director;
“(5) to the driver or owner of any vehicle involved in the accident which was exempt from the provisions of this act pursuant to K.S.A. 40-3105.
“(h) For the purposes of provisions (1) and (2) of subsection (g) of this section, the director may require verification by an owner’s or driver’s insurance company or agent thereof, that there was in effect at the time of the accident an automobile liability policy as required in this act.
“Any suspension effected hereunder shall remain in effect until satisfactory proof of financial security has been filed with the director and such person has met the requirements under subsection (g) and has paid the reinstatement fee herein prescribed. Such reinstatement fee shall be in the amount of $25 except that if the registration of a motor vehicle of any owner is suspended within one year following a prior suspension of the registration of a motor vehicle of such owner under the provisions of this act such fee shall be in the amount of $75.”
The district court, after holding the entire statute (K.S.A. 1983 Supp. 40-3104) unconstitutional, ordered:
“Plaintiff should have her driving privileges and registration reinstated upon the demonstration of financial security and the payment of the reinstatement fee.”
The result is that the district court applied a portion of the statute it had just invalidated by imposing restrictions on the reinstatement. This points out a threshold problem inherent in the district court’s resolution of the issues. Plaintiff s constitutional challenge to K.S.A. 1983 Supp. 40-3104 was not a broadside attack on the entire statute. Rather, only section (g)(4) of the statute was challenged as failing to meet due process requirements.
K.S.A. 40-3121, applicable to 40-3104, provides:
“If any provisions of this act, or the application thereof to any person or circumstance, is held unconstitutional, the remainder of this act and the application of such provision to other persons or circumstances shall not be affected thereby; and it shall be conclusively presumed that the legislature would have enacted the remainder of this act without such invalid or unconstitutional provision: Provided, That K.S.A. 40-3117 is expressly declared to be nonseverable.”
K.S.A. 1983 Supp. 40-3104(g)(4) is an exception to the mandatory suspension requirements of earlier sections of the statute and is clearly severable under K.S.A. 40-3121. Hence, if section (g)(4) is held to be unconstitutional, the result is KDOR still is mandated by the statute to suspend plaintiffs license and registration. As a practical matter, it is rather self-defeating to seek destruction of the exemption one is trying to come within, but *824the issue of the validity of K.S.A. 1983 Supp. 40-3104(g)(4) is before us and we shall proceed to determine it.
Before turning to the issue, however, certain basic principles should be stated. In State v. Huffman, 228 Kan. 186, Syl. ¶ 1, 612 P.2d 630 (1980), we held:
“This court adheres to the proposition that the constitutionality of a statute is presumed, that all doubts must be resolved in favor of its validity, and before the statute may be stricken down, it must clearly appear the statute violates the constitution. Moreover, it is the court’s duty to uphold the statute under attack, if possible, rather than defeat it, and if there is any reasonable way to construe the statute as constitutionally valid, that should be done.”
In addition, it should also be noted that deprivation of a driver’s license by the State constitutes a deprivation of property sufficient to necessitate application of the due process clause. Mackey v. Montrym, 443 U.S. 1, 61 L. Ed. 2d 321, 99 S. Ct. 2612 (1979); Dixon v. Love, 431 U.S. 105, 52 L. Ed. 2d 172, 97 S. Ct. 1723 (1977); Carson v. Division of Vehicles, 237 Kan. 166, 699 P.2d 447 (1985). The constitutional guarantee of procedural due process has always been understood to embody a presumptive requirement of notice and a meaningful opportunity to be heard, except in emergency situations, before the State acts finally to deprive a person of his property. Mackey v. Montrym, 443 U.S. 1; Mullane v. Central Hanover Tr. Co., 339 U.S. 306, 94 L. Ed. 865, 70 S. Ct. 652 (1950); State v. Durst, 235 Kan. 62, 678 P.2d 1126 (1984).
The trial court in its determination relied upon Bell v. Burson, 402 U.S. 535, in finding the statute defective for failure to provide any hearing to determine if there was “a reasonable possibility of a judgment being rendered against [Dorothy M. Barnes] as a result of the accident.” KDOR argues Bell involved a financial responsibility act as opposed to a compulsory insurance act and, hence, Bell is not controlling. We must examine Bell in some detail.
The Georgia Motor Vehicle Safety Responsibility Act involved in Bell required any person involved in a motor vehicle accident to submit a report to the Director of Public Safety. Within 30 days after receipt of such a report, the Director was required to suspend licenses and registration certificates of all operators and owners of vehicles involved unless such owner or driver filed proof of financial responsibility — namely evidence of liability insurance in force at the time of the accident or the posting of *825security to cover the amount of damages claimed by aggrieved parties in reports of the accident. The administrative hearing conducted prior to suspension excluded consideration of the owner’s or driver’s fault or liability for the accident.
Bell was a clergyman whose ministry required him to travel by car to rural Georgia communities. One day a five-year-old girl rode her bicycle into the side of the clergyman’s car. The child’s parents filed an accident report indicating $5,000 in damages. The Director informed Bell that unless he was covered by liability insurance in effect at the time of the accident, he must file a bond or cash security deposit of $5,000 or present a notarized release from liability, plus proof of future financial responsibility, or suffer the suspension of his driver’s license and vehicle registration. Bell requested an administrative hearing before the Director asserting that he was not liable as the accident was unavoidable, and stating also that he would be severely handicapped in the performance of his ministerial duties by a suspension of his licenses. A hearing was scheduled but the Director informed petitioner that “ ‘[t]he only evidence that the Department can accept and consider is: (a) was the petitioner or his vehicle involved in the accident; (b) has petitioner complied with the provisions of the Law as provided; or (c) does petitioner come within any of the exceptions of the Law.’ ” 402 U.S. at 537-38 At the administrative hearing the Director rejected petitioner’s proffer of evidence on liability, ascertained that petitioner was not within any of the statutory exceptions, and gave petitioner 30 days to comply with the security requirements or suffer suspension.
In holding the Georgia Financial Responsibility Act violative of due process requirements, the United States Supreme Court reasoned:
“If the statute barred the issuance of licenses to all motorists who did not carry liability insurance or who did not post security, the statute would not, under our cases, violate the Fourteenth Amendment. [Citations omitted.] It does not follow, however, that the amendment also permits the Georgia statutory scheme where not all motorists, but rather only motorists involved in accidents, are required to post security under penalty of loss of the licenses. [Citations omitted.] Once licenses are issued, as in petitioner’s case, . . . the licenses are not to be taken away without that procedural due process required by the Fourteenth Amendment. [Citations omitted.] This is but an application of the general proposition that relevant constitutional restraints limit state power to terminate an entitle*826ment whether the entitlement is denominated a ‘right’ or a ‘privilege’. [Citations omitted.]
. . Since the only purpose of the provisions before us is to obtain security from which to pay any judgments against the licensee resulting from the accident, we hold that procedural due process will be satisfied by an inquiry limited to the determination whether there is a reasonable possibility of judgments in the amounts claimed being rendered against the licensee.
“The State argues that the licensee’s interest in avoiding the suspension of his licenses is outweighed by countervailing governmental interests and therefore that this procedural due process need not be afforded him. We disagree. In cases where there is no reasonable possibility of a judgment being rendered against a licensee, Georgia’s interest in protecting a claimant from the possibility of an unrecoverable judgment is not, within the context of the State’s fault-oriented scheme, a justification for denying the process due its citizens. . . .
“The main thrust of Georgia’s argument is that it need not provide a hearing on liability because fault and liability are irrelevant to the statutory scheme. We may assume that were this so, the prior administrative hearing presently provided by the State would be ‘appropriate to the nature of the case.’ Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 313 [, 94 L. Ed. 865, 872, 70 S. Ct. 652] (1950). But ‘[i]n reviewing state action in this area . . . we look to substance, not to bare form, to determine whether constitutional mínimums have been honored.’ [Citation omitted.] And looking to the operation of the State’s statutory scheme, it is clear that liability, in the sense of an ultimate judicial determination of responsibility, plays a crucial role in the Safety Responsibility Act. If prior to suspension there is a release from liability executed by the injured party, no suspension is worked by the Act. Ga. Code Ann. § 92A-606 (1958). The same is true if prior to suspension there is an adjudication of nonliability. Ibid. Even after suspension has been declared, a release from liability or an adjudication of nonliability will lift the suspension. Ga. Code Ann. § 92A-607 (Supp. 1970). Moreover, other of the Act’s exceptions are developed around liability-related concepts. Thus, we are not dealing here with a no-fault scheme. Since the statutory scheme makes liability an important factor in the State’s determination to deprive an individual of his licenses, the State may not, consistently with due process, eliminate consideration of that factor in its prior hearing.
“We hold, then, that under Georgia’s present statutory scheme, before the State may deprive petitioner of his driver’s license and vehicle registration it must provide a forum for the determination of the question whether there is a reasonable possibility of a judgment being rendered against him as a result of the accident. We deem it inappropriate in this case to do more than lay down this requirement. The alternative methods of compliance are several. Georgia may decide merely to include consideration of the question at the administrative hearing now provided, or it may elect to postpone such a consideration to the de novo judicial proceedings in the Superior Court. Georgia may decide to withhold suspension until adjudication of an action for damages brought by the injured party. Indeed, Georgia may elect to abandon its present scheme completely and pursue one of the various alternatives in force in other States. Finally, Georgia may reject all of the above and devise an entirely new regulatory scheme. The area of choice is wide: we hold only that the failure of the present Georgia *827scheme to afford the petitioner a prior hearing on liability of the nature we have defined denied him procedural due process in violation of the Fourteenth Amendment.” 402 U.S. at 539-43. (Emphasis supplied.)
In a footnote relative to various acceptable alternatives, the Supreme Court stated:
“The various alternatives include compulsory insurance plans, public or joint public-private unsatisfied judgment funds, and assigned claims plans.” 402 U.S. at 543 n. 6. (Emphasis supplied.)
K.S.A. 1983 Supp. 40-3104(g)(4) is a part of the Kansas Automobile Injury Reparations Act. The purpose of the act is set forth in K.S.A. 40-3102 as follows:
“The purpose of this act is to provide a means of compensating persons promptly for accidental bodily injury arising out of the ownership, operation, maintenance or use of motor vehicles in lieu of liability for damages to the extent provided herein.”
The KAIRA is a compulsory insurance act applicable to all motorists and mandates certain minimum insurance coverage of all vehicles operated in the state, including personal injury protection (PIP) benefits.
The Georgia Act before the United States Supreme Court in Bell was a financial security act requiring evidence of financial security (applicable insurance or the posting of security) only in the event of an accident. The Kansas Act is a compulsory insurance law. It is a crime under the Act to operate or permit an uninsured vehicle to be operated on the highways of Kansas regardless of whether or not an accident occurs. An owner’s license may be revoked and registration may be suspended under 40-3118 (the section of the Act dealing with registration of motor vehicles) upon a showing of failure to maintain continuing insurance without any accident having occurred.
The United States Supreme Court in the Bell opinion recognized Georgia had choices in correcting the due process deficiency in its financial responsibility act — it could provide for a fáult determination at its suspension hearing or go to an entirely different type of law such as a “compulsory insurance plan.” To iterate, the Kansas Act is not a financial responsibility act — it is a compulsory insurance act.
We do not believe Bell v. Burson, 402 U.S. 535, is controlling on the issue before us. Kansas, unlike Georgia, required the motorist to have automobile insurance on his or her vehicle *828before operating or permitting the vehicle to be operated on the highways of Kansas. Violation of the compulsory insurance law subjects the vehicle’s owner to suspension of his or her driver’s license, revocation of registration and criminal sanctions whether or not an accident has occurred.
We conclude K.S.A. 1983 Supp. 40-3104(g)(4) is not violative of the due process requirements of the Fourteenth Amendment to the United States Constitution.
The judgment of the district court is reversed.