Court Opinion

ID: 2763021
Source: CourtListenerOpinion
Date Created: 2014-12-19 17:06:59.527104+00
Date Added: 2024-06-11T12:45:45.372225
License: Public Domain

IN THE SUPREME COURT OF NORTH CAROLINA
                                   No. 552PA13
                             Filed 19 December 2014

                 IN RE TWIN COUNTY MOTORSPORTS, INC.

      On discretionary review pursuant to N.C.G.S. § 7A-31 of a unanimous

decision of the Court of Appeals, ___ N.C. App. ___, 749 S.E.2d 474 (2013), affirming

an order entered on 17 October 2012 by Judge Frank Brown in Superior Court,

Nash County, and remanding the matter for a new hearing. Heard in the Supreme

Court on 7 October 2014.

      Roy Cooper, Attorney General, by Christopher W. Brooks, Assistant Attorney
      General, for respondant-appellant Michael D. Robertson, Commissioner,
      North Carolina Division of Motor Vehicles.

      Jessica C. Williams, PLLC, by Ralph E. Stevenson, III, for petitioner-appellee
      Twin County Motorsports, Inc.

      BEASLEY, Justice.

      In this appeal we consider whether a corporation may appear or proceed at

hearings before the Division of Motor Vehicles (“DMV”) without being represented

by an attorney.      Because we have determined that a hearing before an

administrative agency is not an “action or proceeding,” we hold that a nonattorney

may appear or proceed on behalf of a corporation before an administrative hearing

officer without engaging in the unauthorized practice of law under N.C.G.S. § 84-4.
                      IN RE: TWIN COUNTY MOTORSPORTS, INC.

                                 Opinion of the Court

      Twin County Motorsports, Inc. (“Twin County”) is licensed by the DMV to

perform vehicle emissions and equipment inspections. On 7 October 2010, the DMV

charged Twin County with six violations of N.C.G.S. § 20-183.7B(a)(3) for allowing a

person not licensed as a safety inspection mechanic to perform safety inspections.

Lance Cherry, an officer and shareholder of Twin County, requested a hearing

before the DMV. On 19 May 2011, Cherry appeared on behalf of Twin County at

the DMV hearing. He informed the hearing officer that he did not wish to have an

attorney present. In his testimony, he stated that the allegations levied by the

DMV were “accurate,” but that the violations were “unintentional.” The hearing

officer concluded that sufficient evidence was presented to sustain that Twin

County violated N.C.G.S. § 20–183.7B(a)(3).        The hearing officer levied a civil

penalty of fifteen hundred dollars and suspended Twin County’s inspection license

for 1080 days.

      Twin County retained legal counsel and sought review of the hearing officer’s

decision by the Commissioner of the DMV. The Commissioner upheld the hearing

officer’s order on 5 August 2011.     Twin County appealed the Commissioner’s

decision to the Superior Court of Nash County. In its appeal to the trial court, Twin

County asserted that Twin County, as a corporation, should not have been

represented by Cherry, a nonattorney, at the DMV hearing. The trial court agreed,

concluded that Cherry’s pro se representation of Twin County as an agent of Twin

County constituted the unauthorized practice of law in violation of N.C.G.S. §§ 84-4

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                      IN RE: TWIN COUNTY MOTORSPORTS, INC.

                                  Opinion of the Court

and 84-5, and remanded the matter to the DMV hearing officer for a new hearing.

The State appealed to the Court of Appeals.

      The Court of Appeals affirmed the trial court. In re Twin Cnty. Motorsports,

Inc., ___ N.C. App. ___, 749 S.E.2d 474 (2013). The court reasoned that its earlier

holding in Lexis-Nexis, Division of Reed Elsevier, Inc. v. Travishan Corp. that “ ‘a

corporation must be represented by a duly admitted and licensed attorney-at-law

and cannot proceed pro se’ ” controlled here. Id. at ___, 749 S.E.2d at 476 (quoting

Lexis-Nexis, 155 N.C. App. 205, 209, 573 S.E.2d 547, 549 (2002)). The Court of

Appeals explained that even though it had determined that a corporation may

represent itself pro se in “contested case” proceedings under N.C.G.S. § 150B-23

before the Office of Administrative Hearings (“OAH”), Allied Envtl. Servs., PLLC v.

N.C. Dep’t of Envtl. & Natural Res., 187 N.C. App. 227, 653 S.E.2d 11 (2007), disc.

rev. denied, 362 N.C. 354, 661 S.E.2d 238 (2008), this exception to Lexis-Nexis’s

general prohibition against pro se representation by corporations did not apply here

because DMV proceedings are exempt from the “contested case” provisions of

N.C.G.S. Chapter 150B and are thus not governed by section 150B-23. Twin Cnty.

Motorsports, ___   N.C. App. at ___, 749 S.E.2d at 477.     Because the reasoning

employed by the Court of Appeals in announcing the Allied “exception” did not

apply to administrative appeals not governed by N.C.G.S. § 150B-23, the court held

that “in hearings before the DMV, corporations must be represented by legal

counsel.” Id. at ___, 749 S.E.2d at 477.

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                      IN RE: TWIN COUNTY MOTORSPORTS, INC.

                                  Opinion of the Court

       The State sought our discretionary review of the court’s decision, which we

allowed on 6 March 2014. ___ N.C. ___, 755 S.E.2d 627 (2014). In its appeal to this

Court, the State asks that we conclude that N.C.G.S. § 84-4, governing the

unauthorized practice of law, does not prohibit an owner of a business licensed by

the DMV from appearing on behalf of his entity at a license hearing. The State

asserts that “administrative license hearings before [the] DMV are not by law an

‘action or proceeding’ ” under N.C.G.S. § 84-4 and that, under State v. Pledger, 257
N.C. 634, 127 S.E.2d 337 (1962), a nonlawyer agent is allowed to perform a legal act

on behalf of a corporation without violating section 84-4 if the act is in “the primary

interest of the corporation.” See Gardner v. N.C. State Bar, 316 N.C. 285, 289-90,

341 S.E.2d 517, 520 (1986) (“When a corporation’s employees perform legal services

for the corporation in the course of their employment, their acts have been held to

be the acts of the corporation so that in law, the corporation itself is performing the

acts.”).

       In pertinent part, N.C.G.S. § 84-4 provides that

             it shall be unlawful for any person or association of
             persons, except active members of the Bar of the State of
             North Carolina admitted and licensed to practice as
             attorneys-at-law, to appear as attorney or counselor at
             law in any action or proceeding before any judicial body,
             including the North Carolina Industrial Commission, or
             the Utilities Commission . . . .

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                          IN RE: TWIN COUNTY MOTORSPORTS, INC.

                                    Opinion of the Court

N.C.G.S. § 84-4 (2013). A prerequisite for the unauthorized practice of law under

N.C.G.S. § 84-4, therefore, is indeed an appearance in an “action or proceeding”

before a judicial body.

      In Ocean Hill Joint Venture v. North Carolina Department of Environment,

Health & Natural Resources, 333 N.C. 318, 426 S.E.2d 274 (1993), this Court

addressed the definition of “action or proceeding.” We addressed whether a one-

year statute of limitations, N.C.G.S. § 1-54(2), applied to an administrative agency’s

assessment of a civil penalty. Id. at 320-21, 426 S.E.2d at 276. The provision in

question prescribed a one-year statute of limitations of one year for “an action or

proceeding . . . [u]pon a statute . . . where the action is given to the State alone.”

N.C.G.S. § 1-54, -54(2) (1983). We determined that “a prerequisite for application of

N.C.G.S. § 1-54 is that there must be an ‘action or proceeding.’ ” Ocean Hill, 333
N.C. at 321, 426 S.E.2d at 276. We turned to the question of what, then, constitutes

an “action or proceeding”:

                    An “action” as defined in N.C.G.S. § 1-2 “is an
             ordinary proceeding in a court of justice . . . .” Although
             “proceeding” itself is not defined in Chapter 1, the terms
             “ordinary proceeding” and “special proceeding” are both
             used. The definition of “action” encompasses “ordinary”
             proceedings while a “special proceeding” includes every
             other remedy in a court of justice.              From these
             definitions we conclude that, as the term is used in
             Chapter 1 of the General Statutes, a “proceeding,” like an
             “action,” must take place in a court of justice.

Id. (emphasis added by court) (citations omitted). We then contemplated whether

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                       IN RE: TWIN COUNTY MOTORSPORTS, INC.

                                    Opinion of the Court

an agency, when empowered by the General Assembly with judicial authority, may

constitute such a “court of justice”:

                    We have recognized that “[a]rticle IV, section 3 of
             the Constitution contemplates that discretionary judicial
             authority may be granted to an agency when reasonably
             necessary to accomplish the agency’s purposes.” In the
             Matter of Appeal from the Civil Penalty Assessed for
             Violations of the SPCA, 324 N.C. 373, 379, 379 S.E.2d 30,
             34 (1989). However, an agency so empowered is not a
             part of the “general court of justice.” N.C. Const. art. IV,
             § 2. In fact, “[a]ppeals from administrative agencies shall
             be to the general court of justice.” N.C. Const. art. IV, § 3
             (emphasis added). Thus, the grant of limited judicial
             authority to an administrative agency does not transform
             the agency into a court for purposes of the statute of
             limitations.

Id. (brackets in original). We concluded that the agency’s “issuance . . . of a notice of

civil penalty” was “not the institution of an action or proceeding in a court [of

justice]” and therefore, was not “within the meaning of N.C.G.S. § 1-54.” Id.

      Our holding in Ocean Hill governs the question before us today. As in Ocean

Hill, a prerequisite for the statute at issue is that there be an “action or

proceeding.” N.C.G.S. § 84-4. We have determined that an “action or proceeding”

requires a “court of justice,” and that an administrative agency, though empowered

with limited judicial authority, is not a “court of justice.” Ocean Hill, 333 N.C. at

321, 426 S.E.2d at 276.         We must therefore conclude that a nonattorney’s

appearance on behalf of a corporate entity before an administrative hearing officer

does not constitute the unauthorized practice of law under N.C.G.S. § 84-4 because

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                      IN RE: TWIN COUNTY MOTORSPORTS, INC.

                                 Opinion of the Court

the appearance is not an “appear[ance] as attorney or counselor at law in any action

or proceeding before any judicial body.” N.C.G.S. § 84-4 (emphasis added). Because

an appearance by a nonattorney before an administrative hearing officer does not

constitute the unauthorized practice of law under N.C.G.S. § 84-4, we need not

address the State’s arguments concerning Pledger.

      We further note that our conclusion that a nonattorney may appear before an

administrative hearing officer without violating N.C.G.S. § 84-4 is in line with

recent legislative action.   The North Carolina General Assembly has recently

provided that, in contested cases before the Office of Administrative Hearings

(OAH) and in appeals to the Property Tax Commission, “[a] business entity may

represent itself using a nonattorney representative.” Act of Aug. 15, 2014, ch. 120,

secs. 7(a), 7(b), 2014 5 N.C. Adv. Legis. Serv. 26, 31-32 (LexisNexis) (amending

N.C.G.S. §§ 150B-23(a) and 105-290). While not directly governing the matter sub

judice because the legislation applies to contested cases before the OAH and appeals

to the Property Tax Commission commencing on or after 18 September 2014, the

passage of this legislation is consistent with our conclusion that a nonattorney’s

appearance before an administrative hearing officer does not constitute the

unauthorized practice of law under N.C.G.S. § 84-4.

      The trial court erred in reversing the DMV’s final agency decision in this

case. For the reasons stated above, we reverse the decision of the Court of Appeals

                                         -7-
                      IN RE: TWIN COUNTY MOTORSPORTS, INC.

                                 Opinion of the Court

affirming the trial court’s order and remanding this matter for a new hearing before

the DMV.

      REVERSED.

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