Court Opinion

ID: 1066252
Source: CourtListenerOpinion
Date Created: 2013-10-09 19:22:57.360704+00
Date Added: 2024-06-11T13:09:01.100212
License: Public Domain

COURT OF APPEALS OF VIRGINIA

Present: Chief Judge Fitzpatrick, Judges Coleman and Lemons
Argued at Salem, Virginia

JOHN M. SURPRENANT
                                                    OPINION BY
v.   Record No. 2522-98-3                     JUDGE DONALD W. LEMONS
                                                    JULY 6, 1999
BOARD FOR CONTRACTORS AND
 WAYNE J. TORRE

             FROM THE CIRCUIT COURT OF ROANOKE COUNTY
                       Roy B. Willett, Judge

          Brian R. Jones (Jones & Glenn, P.L.C., on
          briefs), for appellant.

          Terry N. Grimes (King, Fulghum, Snead,
          Nixon & Grimes, P.C., on brief), for appellee
          Wayne J. Torre.

          John B. Purcell, Jr., Assistant Attorney
          General (Mark L. Earley, Attorney General;
          John C. Wilkinson, Jr., Assistant Attorney
          General, on brief), for appellee Board for
          Contractors.

     John M. Surprenant appeals the decision of the trial court

affirming an award by the Board for Contractors ("Board") under

the Virginia Contractor Transaction Recovery Act (VCTRA).

Finding no reversible error, we affirm the ruling of the trial

court.

                            I.   BACKGROUND

     On October 1, 1987, John Surprenant received a contractor's

license from the Board under the name "U-Nique Builders."

Sometime prior to October 3, 1991, Surprenant incorporated his
trade name as "Unique Builders, Inc." ("Unique").      Surprenant

did not notify the Board that his business had been incorporated

or that it would be contracting with the license he obtained on

October 1, 1987.      Surprenant also holds a state contractor's

license under the trade name, "J.M.S. Builders/Developers,"

which expires on October 21, 1999.

        On October 7, 1991, Wayne J. Torre (Torre) and Unique

entered into a contract for the construction of a home for Torre

in Roanoke County, Virginia.      Construction of the home ended in

1993.       On June 10, 1993, Torre filed in the Circuit Court for

Roanoke County a motion for judgment against Surprenant in his

individual capacity and against Unique alleging breach of

contract.       Unique filed a counterclaim, also alleging breach of

contract.       A bench trial occurred in February, 1995.

        On May 22, 1995, the court in the underlying litigation 1

found in favor of Torre against Unique and awarded damages in

the amount of $25,164.      The judgment was later modified and

increased to $54,184 with interest from February 22, 1995 until

paid.       Although damages were not awarded against Surprenant

individually, in its order dated May 22, 1995, the court in the

underlying litigation stated that it "found that the defendants

        1
       This opinion refers to circuit court rulings in two
different matters. The circuit court that decided the breach of
contract litigation will be referred to as the "court in the
underlying litigation." The circuit court that decided the
appeal from the agency will be referred to as "the trial court."

                                   - 2 -
made certain misrepresentations as further described ore tenus

by the court."    The ore tenus description of the court in the

underlying litigation characterized the misrepresentations as

"material" and "asked counsel to submit briefs concerning the

applicability of the Virginia Consumer Protection Act to the

facts of this case."

     In its final order dated September 25, 1995, the court in

the underlying litigation found that "the facts adduced at trial

fall within the Virginia Consumer Protection Act by Unique

Builders, Inc."   Following the judgment, Unique ceased doing

business.   Surprenant assumed responsibility for all projects

under construction contracted under Unique's name.

     On October 2, 1995, Torre filed a claim for $54,184 with

the Contractor Transaction Recovery Fund (the "Fund").   On

August 28, 1997, the Board sent Torre notice of an informal

fact-finding conference which, pursuant to Code § 9-6.14:11 of

the Virginia Administrative Process Act ("VAPA"), was held

before the Board's Recovery Fund Committee ("Committee") on

September 10, 1997.    The Committee found evidence that the

contractor breached the contract; however, the Committee

recommended that the claim be denied, because it found no

evidence of "improper or dishonest conduct."

     On October 8, 1997, the Board unanimously accepted the

Committee's report and pursuant to a letter sent by the Board on

October 10, 1997, all parties were notified of the Board's

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decision to deny the claim.   On November 19, 1997, Torre's

counsel sent a letter to the Board stating his intention to

appeal the final order upon its issuance.

     The Committee reconsidered Torre's claim at a second

informal fact-finding conference on December 10, 1997.    Prior to

the hearing, Torre's counsel requested a continuance, which the

Board denied.   The fact-finding conference was held without

Torre or his counsel present.   The Committee again voted to deny

the claim.

     The Committee notified the parties that the Committee would

present its summary of the December 10, 1997 report to the Board

on January 14, 1998, and recommend that the claim be denied.

The Board informed both Surprenant and Torre by certified letter

that they could appear before the Board and respond to the

summary.   The letter sent to Surprenant was returned to the

Board unopened on January 14, 1998.     The hearing was held on

January 14, 1998, and counsel for Torre appeared.    The Board

concluded that Torre had stated a valid claim for recovery and

awarded him $10,000 from the Fund.

     The Board entered its final order on January 28, 1998.       On

February 1, 1998, the Board received Surprenant's notice of

appeal.    On September 3, 1998, a hearing was held in the County

of Roanoke Circuit Court.   On October 1, 1998, the trial court

affirmed the Board’s final order and dismissed Surprenant's

appeal.    Surprenant appeals the dismissal

                                - 4 -
                        II.   STANDARD OF REVIEW

     Pursuant to Code § 54.1-1114, our review of this case is

governed by the VAPA, codified at Code §§ 9-6.14:1 et seq.      Our

scope of review is limited to those facts which appear in the

agency record.     See Code § 9-6.14:17.   In reviewing an agency

decision, the trial court must determine:

          1.     Whether the agency acted in accordance
                 with law;
          2.     Whether the agency made a procedural
                 error which was not harmless error; and
          3.     Whether the agency had sufficient
                 evidential support for its findings of
                 fact.

Johnston-Willis v. Kenley, 6 Va. App. 231, 242, 369 S.E.2d 1, 7

(1988).

     Based upon the standard of review,

          [e]rrors of law fall into two categories:
          first, whether the agency decision-maker
          acted within the scope of his authority, and
          second, whether the decision itself was
          supported by the evidence. Where the agency
          has the statutory authorization to make the
          kind of decision it did and it did so within
          the statutory limits of its discretion and
          with the intent of the statute in mind, it
          has not committed an error of law in the
          first category. The second category of
          error is limited to a determination whether
          there is substantial evidence in the agency
          record to support the decision.

Id. (citation omitted).

     When considering whether substantial evidence in the agency

record supports the decision, "the reviewing court may reject

the agency's findings of fact only if, considering the record as

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a whole, a reasonable mind would necessarily come to a different

conclusion."    Id. (citation omitted).

               III.   "IMPROPER AND DISHONEST CONDUCT"

     The Board's final order states that based "on the finding

of the court that Surprenant violated the Virginia Consumer

Protection Act, the Board concludes that the acts of Surprenant

fall within the statutory definition of improper and dishonest

conduct."   Surprenant argues that this finding is erroneous on

the ground that because the court in the underlying litigation

specifically held that neither Surprenant nor Unique committed

common law fraud, his actions did not meet the statutory

definition of "improper or dishonest conduct."

     Code § 54.1-1118 defines "improper or dishonest" conduct

for purposes of the VCTRA as follows:

            Improper or dishonest conduct includes only
            the wrongful taking or conversion of money,
            property or other things of value which
            involves fraud, material misrepresentation
            or conduct constituting gross negligence,
            continued incompetence or intentional
            violation of the Uniform Statewide Building
            Code. The term improper or dishonest
            conduct does not include mere breach of
            contract.

     "A primary rule of statutory construction is that courts

must look first to the language of the statute.    If a statute is

clear and unambiguous, a court will give the statute its plain

meaning."    Va. Employment Comm'n v. Davenport, 29 Va. App. 26,

29-30, 509 S.E.2d 522, 524 (1999) (citations omitted).    By use

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of the disjunctive "or" in the language of the statute, the

legislature evidenced its intention to hold a regulant liable

under the VCTRA for conduct including but not limited to fraud.

Improper or dishonest conduct under the VCTRA may involve either

"fraud" or a "material misrepresentation" or "actions of gross

negligence" or "continued incompetence" or an "intentional

violation of the Uniform Statewide Building Code."

     In addition, although the court in the underlying

litigation did not include a finding of "improper or dishonest

conduct" under the VCTRA, in its judgment, Torre was not

estopped from recovering under the Act.   Code § 54.1-1120(A)(7)

states:

          A claimant shall not be denied recovery from
          the Fund due to the fact the order for the
          judgment filed with the verified claim does
          not contain a specific finding of "improper
          or dishonest conduct." Any language in the
          order which supports the conclusion that the
          court found that the conduct of the regulant
          involved improper or dishonest conduct may
          be used by the Board to determine
          eligibility for recovery from the Fund.

     Here, the court in the underlying litigation found that

Surprenant made a material misrepresentation in his contract

with Torre and violated the Virginia Consumer Protection Act.

Pursuant to Code § 54.1-1120(A)(7), the factual findings of the

court in the underlying litigation provide a basis for the Board

to find improper or dishonest conduct as defined in Code

§ 54.1-1118.

                              - 7 -
           IV.    FACT-FINDING PROCEEDINGS OF THE BOARD

     Surprenant argues that the Board erred in holding more than

one informal fact-finding conference on this matter.      Surprenant

also argues that the trial court erred in affirming the Board's

decision because it was based on evidence presented after the

informal fact-finding conference, in violation of the VAPA and

the Board's own regulations.   In addition, Surprenant argues

that the trial court erred in affirming the Board's decision

which relied upon Torre's affidavit.

             A.    Number of Fact-finding Conferences

     The Board's review of claims brought under the VCTRA is

governed by the VAPA.   See Code § 54.1-1114.    Code § 9-6.14:11

of the VAPA states:

          Agencies shall ascertain the fact basis for
          their decisions of cases through informal
          conference or consultation proceedings
          unless the named party and the agency
          consent to waive such a conference or
          proceeding to go directly to a formal
          hearing.

     The Committee met on September 10, 1997 and recommended

that the Board deny Torre's claim.     The Board heard the case on

October 8, 1997, and adopted the reasons of the Committee and

voted to deny the claim.   On December 10, 1997, upon request of

the Board's legal counsel, the case was reconsidered before the

Committee in a second fact-finding conference.    Nothing in the

VAPA limits the number of fact-finding conferences to one.     We

cannot say the Committee improperly held two fact-finding

                               - 8 -
conferences.   Moreover, Surprenant did not object to the second

fact-finding conference on December 10, 1997; he participated in

it.

                   B.   January 14, 1998 Meeting

      On January 14, 1998, the Board met to consider the

Committee’s recommendation.   Both parties received notice of the

meeting.   Counsel for Torre appeared before the Board and

submitted documents.    Surprenant did not appear.   In its final

order, the Board stated:

           On January 14, 1998, the Board reviewed this
           claim. In attendance was Terry N. Grimes,
           Esquire, counsel for Torre, who made a
           presentation and submitted documents. Based
           on information presented and on the findings
           of the court that Surprenant violated the
           Virginia Consumer Protection Act, the Board
           concludes that the acts of Surprenant fall
           within the statutory definition of improper
           and dishonest conduct.

      Surprenant argues that the Board violated the VAPA by

considering evidence presented by Torre's counsel at that

meeting, stating, "evidence is to be submitted only during the

Informal Fact Finding Conference."      The VAPA mandates as

follows:   "[a]gencies shall ascertain the fact basis for their

decisions of cases through informal conference or consultations

proceedings unless the named party and the agency consent to

waive such a conference or proceeding to go directly to a formal

hearing. . . ."   Code § 9-6.14:11.     Following the informal

fact-finding conferences, the board or commission meets to

                                - 9 -
render a decision, where "persons who participated in the prior

proceeding shall be provided an opportunity to respond at the

board or commission meeting to any summaries prepared by or for

the board or commission."    Code § 9-6.14:11(C).

     Surprenant never objected to the presentation by Torre's

counsel nor the introduction of documents at the meeting on

January 14, 1998.   Pursuant to the certified letter sent to his

home, Surprenant had notice of his opportunity to appear before

the Board.    Surprenant neither filed any objections to Torre's

presentation of evidence before the Board nor requested a

rehearing on this basis.     Surprenant may not raise matters on

appeal that he did not bring before the agency.     See Pence

Holdings, Inc. v. Auto Center, Inc., 19 Va. App. 703, 454 S.E.2d
732 (1995).

                        C.   Torre's Affidavit

     Surprenant argues that the trial court erred in affirming

the Board’s decision that relied in whole or in part on Torre's

affidavit.    Surprenant contends that "every allegation of

wrongful or dishonest conduct set forth in Torre's affidavit had

been litigated and resolved against [Torre]" and could not

constitute a basis upon which the Board found a claim in Torre's

favor.   Surprenant maintains that the findings of the court in

the underlying litigation that no cause of action for

misrepresentation existed against Surprenant or Unique precludes

the Board's relitigation of the same issue in a different forum.

                                - 10 -
     Pursuant to the requirements of the VCTRA, Torre, the

claimant, was required to file an affidavit setting forth the

elements of his statutory claim.    See Code § 54.1-1120(A)(1).

The Board did not base its decision on Torre's affidavit.    The

Board relied upon "information presented [at the January 14,

1998 hearing] and on the findings of the court that Surprenant

violated the Virginia Consumer Protection Act."

     Pursuant to Code § 54.1-1120(A)(7), the Board can find

grounds of improper or dishonest conduct by a regulant in the

language of any order that supports its finding.     Here, the

basis of the Board's decision was not Torre's affidavit but the

orders of May 22 and September 25, 1995 from the court in the

underlying litigation.   The language contained in the orders was

sufficient to support the Board's decision, and the trial court

did not err in affirming the Board's decision.

                  V.   JUDGMENT AGAINST "REGULANT"

     The VCTRA provides a limited means of recovery for a claim

against a regulant that remains unsatisfied.   A regulant is

defined as "any individual, person, firm, corporation,

association, partnership, joint venture or any other legal

entity licensed by the Board for Contractors."    Code

§ 54.1-1118.   The money judgment in the underlying litigation

was against Unique.    Surprenant argues that Unique never held a

license from the Board and therefore could not be considered a

                               - 11 -
regulant.   Surprenant contends that he was the only regulant

recognized by the Board.

     A review of the record reveals that Surprenant did not

raise this issue before the Board.        Surprenant's argument before

the Board was confined to whether he had committed acts of

"improper or dishonest" conduct for purposes of the VCTRA.

Surprenant never maintained before the Board that he could not

be held responsible as a regulant under the Act based upon a

judgment against Unique.   In Pence Holdings, 19 Va. App. at 707,

454 S.E.2d at 734, we stated, "an appellant, under the

provisions of the APA, may not raise issues on appeal from an

administrative agency to the circuit court that it did not

submit to the agency for the agency's consideration."       Having

failed to raise the issue before the administrative agency, he

was precluded from raising the issue before the trial court.         We

also decline to consider it on appeal.

                           VI.   CONCLUSION

     The order of the trial court affirming the award of the

Board is affirmed.

                                                              Affirmed.

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