Court Opinion

ID: 9587860
Source: CourtListenerOpinion
Date Created: 2023-08-21 23:27:14.067631+00
Date Added: 2024-06-11T17:51:37.613938
License: Public Domain

HAIRE, Presiding Judge,
dissenting:
I would affirm the judgment entered by the trial judge. In my opinion the evidence overwhelmingly supports the estoppel principle upon which the trial court’s judgment was based. The majority apparently does not dispute the sufficiency of the evidence to support estoppel, but rather concludes that the estoppel issue was not properly before the trial court because estoppel was not urged when the matter was presented before the administrative agency’s hearing officer. I would agree with the majority’s conclusion were it not for the fact that in this case, Wallace Imports was entitled to a de novo trial in the superior court and thus could raise any legal issues which it deemed pertinent, even though such issues were not raised before the administrative agency. The scope of review from an administrative decision by the superior court is governed by A.R.S. § 12-910, which at all times pertinent to this appeal provided in part:
“A. ... The hearing and determination shall extend to all questions of law and fact presented by the entire record before the court. No new or additional evidence in support of or in opposition to a finding, order, determination or decision of the administrative agency shall be heard by the court, except in the event of a trial de novo or in cases where in the discretion of the court justice demands the admission of such evidence.
“B. The trial shall be de novo if trial de novo is demanded in the complaint ... and if no hearing was held by the agency or the proceedings before the agency were not steno-graphically reported so that a transcript might be made. ... ” (Emphasis added).
It is undisputed that while the agency hearing in this matter was tape recorded and a transcription made of that recording, it was not stenographically recorded. The legislature recently amended A.R.S. § 12-910(B) to allow both stenographic and mechanical recording of a hearing to suffice for purposes of a record on appeal. The stated purpose of the amendment was for “permitting use of tape recorders or other recording devices by [the] state.... ” See Laws 1980, Ch. 72, § 1. The bill containing this amendment also amended A.R.S. § 38-424 to permit the recording of various public meetings by the use of tape recorders “in lieu of reporters or stenographers.” It appears clear that the legislature distinguished between a “stenographically recorded” and a “mechanically recorded” hearing. We presume that this amendment was intended to change existing law. Trump v. Badet, 84 Ariz. 319, 327 P.2d 1001 (1958); Needel v. Needel, 15 Ariz.App. 471, 489 P.2d 729 (1971). Thus, prior to the 1980 amendment, it is reasonable to conclude *227that a mechanically reported hearing did not equate to a stenographically reported hearing so as to defeat a party’s right to a trial de novo pursuant to A.R.S. § 12-910(B).
A trial de novo having been appropriately requested, the superior court was free to conduct a trial de novo and take all evidence presented by the parties and form its own independent conclusions based on such evidence. See Davis v. Brittain, 89 Ariz. 89, 358 P.2d 322 (1960), modified, 92 Ariz. 20, 373 P.2d 340 (1962). No new evidence was received by the trial court in the instant case. However, the court did, as previously noted, consider the issue of estoppel raised before the trial court by Wallace Imports. In my opinion the trial court did not err in considering this new issue in the de novo proceeding.
Pursuant to A.R.S. § 12-910(A), the superior court hearing and determination “shall extend to all questions of law and fact presented by the entire record before the court.” Further, it is clear that a court can make independent determinations of points of law decided by the administrative agency. See Mountain States Telephone & Telegraph Co. v. Sakrison, 71 Ariz. 219, 225 P.2d 707 (1950). See also 3 Arizona Appellate Handbook, § 32.3.9.2.6. Since under the procedural posture of this case, the court could have taken new evidence and could have made independent factual conclusions, in my opinion it was not precluded from considering a legal issue newly raised in the pleadings based on undisputed facts already in the record.
Although unclear, it appears that the majority holds that Wallace Imports did not properly assert its right to a trial de novo, or alternatively, waived that right by its failure to object to the record and transcript certified to the superior court by the defendant agency as a part of its answer. I see no merit in the majority’s position in that regard. First, it is clear that Wallace Imports demanded a trial de novo in its complaint. This is precisely the procedure required by statute. See A.R.S. § 12-910(B). Additionally, A.R.S. § 12-909(B) specifically authorizes the defendant agency to certify such portions of the record as it deems material. Thus, there is no legal basis for an objection by Wallace Imports to the certified record.
In the trial court proceedings on its motion for judgment on the pleadings, Wallace Imports specifically urged to the court that it was entitled to a trial de novo because the proceedings had not been stenographically recorded. Therefore, the trial court was fully advised concerning the basis of Wallace’s claim of entitlement to a trial de novo. The estoppel issues involved in this proceeding were bought before the trial court by Wallace Imports’ motion for judgment on the pleadings.5 It appears that the majority considers this an inappropriate motion: “Such a motion is a civil pretrial motion which neither comports with the Administrative Review Act, nor with A.R.S. § 12-910 . ... ” Again, I am at a loss to understand the majority’s reasoning in that regard. A.R.S. § 12-914 provides as follows:
“Where applicable, the rules of civil procedure in superior courts ... shall apply to all proceedings [under the Administrative Review Act] except as otherwise provided in this article.”
The motion filed by Wallace Imports, whether considered as a motion for judgment on the pleadings or as a motion for summary judgment, is specifically authorized by the Rules of Civil Procedure. See Rule 12(c) and Rule 56, Rules of Civil Procedure, 16 A.R.S. In its consideration of the Administrative Review Act, the Arizona Appellate Handbook states that the Rules of Civil Procedure are generally applicable in the trial court’s review of agency decisions, see § 32.3.7.1. The Handbook also *228suggests that in such proceedings a decision by the trial court on the issues presented may appropriately be precipitated by the filing of “a motion for judgment, which might properly be denominated a motion for summary judgment, motion for judgment on the record, or motion for judgment under A.R.S. § 12-910.” See § 32.3.7.3.4, at 32-11. In my opinion, the issues were properly presented to the trial court by Wallace Imports’ motion for judgment on the pleadings and appellant’s cross-motion for summary judgment, and the trial court properly found that as a matter of law appellant was estopped from asserting the validity of her title to the vehicle under the evidence presented in this case.
In essence, the dispute over the subject vehicle is between two innocent parties. The question before the trial court was who should bear the loss — appellant in losing the Toyota because of the duplicity of her husband or Wallace Imports in having to return the Toyota and lose $5,500.00 paid to the errant husband in reliance upon his title to the vehicle.
The principle of equitable estoppel under such circumstances is that when one of two innocent persons must suffer, the person who made possible the loss must bear the burden as against the person who acted in good faith without knowledge of the facts and changed his position to his detriment. See In re Estate of Milliman, 101 Ariz. 54, 415 P.2d 877 (1966); General Motors Acceptance Corp. v. Hill, 95 Ariz. 347, 390 P.2d 843 (1964).
It is my opinion that the undisputed facts support the conclusion that appellant made possible the loss by initially obtaining title to the vehicle in a manner which gave her errant husband the right to transfer the vehicle and by providing him with keys that enabled him to acquire physical possession of the vehicle. The record fully supports the trial court’s conclusion that Wallace Imports acted in good faith without knowledge of the facts of the relationship between appellant and her errant husband, or knowledge of the existence of a duplicate title and the new title issued solely in appellant’s name.
Appellant argues that Wallace Imports had constructive notice of the facts by virtue of the motor vehicle records and had an obligation to check the motor vehicle records whereupon it would have discovered that appellant had obtained a subsequent title to the vehicle in her own name.6 However, under Arizona’s statutory scheme concerning title to motor vehicles, it is the title certificate itself, not the Motor Vehicle Division records, which provide constructive notice of ownership. See A.R.S. § 28-325(E).7 Further, there was testimony in the record to support the conclusion that the practice of the Motor Vehicle Division is not to accept phone inquiries regarding the status of title to an automobile except in very limited circumstances. The division requires that requests for such information be in writing. Therefore, it is the custom and practice of automobile dealers in Arizona to rely on the certificate and not to make calls to the Motor Vehicle Division when they purchase cars or take cars in trade. Consequently, I would find that Wallace Imports had no duty to search the motor vehicle records.
The principle of estoppel in a title situation such as this arises when a party either willingly or negligently clothes another party with either actual title or indicia of title sufficient to allow the latter party to vest title to that property in an innocent pur*229chaser without notice. See Kearby v. Western States Securities Co., 31 Ariz. 104, 250 P. 766 (1926). In that case, an automobile dealer sold a car to a salesman on a note and conditional sales contract. Title to the car remained with the finance company which held the note and contract until the price was paid. The finance company permitted the dealer to retain the automobile. The salesman then sold the car to Kearby who made payments to the dealership, not the finance company. When the finance company did not receive car payments from the dealer it sought to replevy the car from Kearby. On appeal, the supreme court held that while the finance company held actual title to the car and had not given the salesman actual power to sell it,
“[I]t clothed them [the dealer and salesman] with the apparent power to do so, and ... anyone dealing with either or both of them regarding the car would be justified in assuming that the Motor Company owned it and had a right to sell it.” 31 Ariz. at 113, 250 P. at 768.
The court thus concluded that the finance company was estopped to assert its title. The court went on to note that even though the finance company had recorded the conditional sales contract, it did not constitute notice to the purchaser such as to defeat an estoppel.
In Kearby, the court also held that the well-settled principle that one can transfer no better or superior title than he himself has did not apply. Rather, the court found an exception, stating:
“Where the true owner holds out another or allows him to appear as the owner of or as having full power of disposition over the property, and innocent third persons are thus led into dealing with such apparent owner, they will be protected. Their rights, in such cases, do not depend upon the actual title or authority of the person with whom they deal directly, but are derived from the act of the real owner, which precludes him from disputing, as against them, the existence of the title or power which, through negligence or mistaken confidence, he caused or allowed to appear to be vested in the person making the transfer.” 31 Ariz. at 114, 250 P. at 769.
See also Price v. Universal C.I.T. Credit Corp., 102 Ariz. 227, 427 P.2d 919 (1967);8 General Motors Acceptance Corp. v. Hill, supra; Dissing v. Jones, 85 Ariz. 139, 333 P.2d 725 (1958); Kelsoe v. Grouskay, 70 Ariz. 152, 217 P.2d 915 (1950); Theriac v. McKeever, 405 So.2d 354 (La.App.1981); Skates v. Lippert, 595 S.W.2d 22 (Mo.App.1979); cf. Mabe v. Dillon, 46 N.C.App. 340, 264 S.E.2d 796 (1980).
Turning now to the majority opinion, 1 see little relevance in the extended statutory discussion set forth therein. Simply stated, there are no statutory provisions which directly bear on or furnish a clear resolution of the issues presented in this appeal. However, even if we were to assume direct statutory support for a holding that a duplicate title obtained through statutory procedures generally supersedes the original certificate of title, I would hold that appellant’s actions in clothing her errant husband with the original certificate of title as reflected in this record would estop her from asserting title against Wallace Imports, an innocent good faith purchaser for value without prior notice of appellant’s claims.9
In conclusion, for the reasons stated, I would affirm the judgment entered by the trial court.

. Since the motion for judgment on the pleadings brought to the trial court’s attention factual matters contained in both the agency’s answer and the certified record, it appears that, pursuant to Rule 12(c), Rules of Civil Procedure, the trial court treated the motion as one for summary judgment. In response, appellant filed her own “Cross-Motion for Summary Judgment.”

. I do not find it necessary to determine whether the original certificate of title which was arguably not “lost” took precedence over both the duplicate title and the title issued in appellant’s individual name because I find the issue of estoppel determinative in this case. Therefore, I express no opinion with respect to that matter.

. This section makes filing and issuance of the certificate constructive notice and makes notice effective when the previously issued certifícate or application for certificate and accompanying documents evidencing any lien or encumbrance are executed if filed with MVD within 10 days of execution irrespective of what MVD records show within that 10 day period. Thus, constructive notice is dependent upon the certificate of title not the MVD files.

. Appellant has cited this case for the proposition that as between the isolated purchaser and an automobile financier, the financier who had the expertise to protect himself should absorb the loss. However, in Price the financier of certain individual purchasers who financed their purchases without obtaining certificate of title were held to prevail against Price, the financier of the dealer, because Price had clothed the dealer with the indicia of authority to vest title in others. Although Price held the certificates of title, the court held he was es-topped from asserting title against the individual purchasers and their financier.

. I recognize that a different holding might well be required if, prior to the purchase by Wallace Imports, appellant had utilized the duplicate title to transfer the vehicle to another innocent good faith purchaser for value.