Court Opinion

ID: 6553538
Source: CourtListenerOpinion
Date Created: 2022-07-19 22:32:02.427906+00
Date Added: 2024-06-11T15:56:02.120104
License: Public Domain

Wendell L. GRIFFEN, Judge, dissenting. I disagree with the majority and would hold 1) that the clear and all-inclusive language used in Arkansas Code Annotated section 23-112-302 (Supp. 2001), which provides indemnity for any loss sustained by any person, covers losses sustained by individuals who are in privity of a partnership, 2) that the agency’s finding that there was a lack of evidence as to the acts of the bonded principal sufficient to revoke the dealer’s license is not supported by substantial evidence and that it is arbitrary and capricious, and 3) that appellant failed to properly preserve the issue of partnership for appellate review. In view of my position, I would reverse and remand appellee’s cross appeal for further proceedings to occur on appellee’s claim for attorney’s fees and penalties pursuant to Arkansas Code Annotated section 23-79-208(a)(1) (Supp. 2001). Statutory Construction In Western Carroll Cty. Ambulance Dist. v. Johnson, 345 Ark. 95, 44 S.W.3d 284 (2001), our supreme court outlined the procedure for statutory construction as follows: We review issues of statutory construction de novo, as it is for this court to decide what a statute means. The first rule in considering the meaning and effect of a statute is to construe it just as it reads, giving the words their ordinary and usually accepted meaning in common language. When the language of a statute is plain and unambiguous, there is no need to resort to rules of statutory construction. The basic rule of statutory construction is to give effect to the intent of the General Assembly. Where the language of the statute is plain and unambiguous, we determine legislative intent from the ordinary meaning of the language used. In considering the meaning of a statute, we construe it just as it reads, giving the words their ordinary and usually accepted meaning in common language. We construe the statute so that no word is left void, superfluous, or insignificant; and meaning and effect are given to every word in the statute if possible. However, we will not give statutes a literal interpretation if it leads to absurd consequences that are contrary to legislative intent. Id. at 99-100, 44 S.W.3d at 286-87. (Citations omitted.) The Arkansas Motor Vehicle Commission Act, as codified by Arkansas Code Annotated sections 23-112-103 to 509, creates certain rules and regulations in regard to motor-vehicle dealers. Section 23-112-302 requires that an individual serving in the capacity of a used motor vehicle dealer complete a license and secure a surety bond. Section 23-112-302(c)(3) (Supp. 2001) provides that the surety bond “shall be an indemnity for any loss sustained by any person by reason of the acts of the person bonded when those acts constitute grounds for the suspension or revocation of his license. ” (Emphasis added.) Section 23-112-308 lists enumerated reasons for which the Commission may deny an application or revoke or suspend a license, including: fraud practiced or a material misstatement made by an applicant in any application for license under the provisions of the chapter; failure to comply with any provision of the chapter or to comply with any rule or regulation promulgated by the commission; any violation of any law relating to the sale, distribution, or financing of motor vehicles; defrauding a retail buyer to the buyer’s damage; selling or attempting to sell vehicles from a location other than the location specified on the license; failure to notify the commission of a change in location. See Ark. Code Ann. § 23-112-308. Significantly, section 23-112-302 refers to section 23-112-308 indirectly by its use of the language “when those acts constitute grounds for the suspension or revocation of his license.” Section 23-112-308 lists grounds for'suspension or revocation. In applying our rules of statutory construction to an interpretation of section 23-112-308 in fight of section 23-112-302, the phrase “any loss sustained by any person” is all inclusive. It would appear that the legislature did not intend to restrict the language to provide coverage for the losses sustained by the act of a bonded principal to individuals who are not involved in a partnership arrangement, but to exclude coverage to individuals who are engaged in a partnership. Indeed, sections 23-112-302 and 23-112-308 must be read together, giving the words their ordinary meaning, to ensure that neither section is left void. The legislature recently updated the Arkansas Motor Vehicle Commission Act by its enactment of Act 1053 of 2001. It retained the inclusive language “any loss sustained by any person.” Thus, I would conclude that the legislature did not intend to restrict the application of section 23-112-302. Whether the Circuit Court Exceeded its Scope of Review by Deciding that the Agency’s Finding was not Supported by Substantial Evidence and that the Agency’s Finding was Arbitrary, Capricious, and an Abuse of Discretion The rules governing a judicial review of administrative findings are the same for circuit and appellate courts. See Hector v. Arkansas Soil & Water Conservation Comm’n, 47 Ark. App. 177, 888 S.W.2d 312 (1994). When reviewing an agency decision, a de novo review of the record by the circuit court or appellate court is not warranted. See Arkansas State Police Comm’n v. Smith, supra. Rather, the examination of the record is limited to determining whether substantial evidence exists to support the agency’s finding and whether the agency’s decision is arbitrary, capricious, or represents an abuse of discretion. See Arkansas State Police Comm’n v. Smith, supra. The circuit court must query whether substantial evidence supports the findings made by the agency, not whether the evidence would have supported a different conclusion. See Arkansas State Police Comm’n v. Smith, supra. In order to successfully challenge a finding of substantial evidence, a party must show that the proof before the agency was so nearly undisputed that fair minded individuals could not have reached the conclusion reached by the agency. See Arkansas State Police Comm’n v. Smith, supra. Evidence is given its strongest probative force in favor of the agency’s decision. See Arkansas State Police Comm’n v. Smith, supra. Arkansas Code Annotated section 23-112-301 (d)(1) (Supp. 2001) mandates that no person shall engage in the business of selling, buying or exchanging motor vehicles, unless the person holds a valid license issued by the Arkansas Motor Vehicle Commission for the makes of motor vehicles being bought, sold, or exchanged. License applications must be verified by oath or affirmation of the appficants. See Ark. Code Ann. § 23-112-302(a)(i) (Supp. 2001). In addition, the application must be accompanied by the filing with the Commission of a surety bond, which shall be in effect upon the applicant’s being licensed and shall be conditioned upon the applicant abiding by the provisions of section 23-112-302. See Ark. Code Ann. § 23-112-302(c)(2) (Supp. 2001). In the present case, the agency specifically found that an application was submitted to the Commission stating that Star Body and Auto Sales was owned by an individual, Denver Haus. It then stated that it was presumed that the bond was issued as stated to Denver Haus as Star Body Shop. Given the agency’s conclusion that Haus was acting as Star Body Shop, any unlawful actions of Haus that constituted grounds for suspension or revocation of the dealer’s license would fall within the ambits of section 23-112-302. Second, the language in section 23-112-302 provides indemnity for any loss sustained by any person, payable upon receipt by the Commission of a final judgment from an Arkansas court of competent jurisdiction. The agency decision acknowledged that appellee’s complaint alleged that Haus “stole” certain certificates of title. This clearly falls within section 23-112-308(6), willful violation of any law relating to the sale, distribution, or financing of motor vehicles. However, the agency concluded that appellee was not a member of the general public such as to trigger the protection of the Arkansas Motor Vehicle Commission Act, based on its finding that appellee’s claim that Haus “stole” certain certificates from him was a mere allegation that could not be reached due to a lack of evidence. Substantial evidence existed that Haus’s conduct fell within the guidelines to revoke his license because a court of competent jurisdiction had previously determined that appellee had presented prima facie, undisputed evidence that Haus was liable for the allegations cited by appellee in the original complaint. These allegations included appellee’s claim that Haus made material misstatements in the license application and defrauded appellee on the sale and financing of motor vehicles by stealing certificates of title while acting in the capacity of Star Body Shop and Auto Sales, as evidenced by a default judgment that found Haus liable to appellee for fraudulent conduct and awarded appellee $21,098. Haus’s action of defrauding appellee by stealing certificates of title while acting in his capacity as Star Body Shop and Auto Sales constituted a willful violation of the law relating to the sale and financing of motor vehicles and constituted grounds for the suspension or revocation of the license issued to Haus as Star Body Shop. Additionally, Haus’s action of moving the location of the dealership to another location without notifying the Commission and making material misstatements in the license application constituted grounds for the suspension or revocation of his dealer’s license. Thus, the agency’s decision to ignore the default judgment and deny appellee’s claim against the bond because of a lack of evidence represented an abuse of discretion. Partnership Between Haus and Flowers For its second point on appeal, appellant argues that the administrative agency erroneously precluded it from arguing that appellee is Hable as a partner in the bonded principal. Appellee correctly responds that appellant is precluded from addressing this issue on appeal due to appellants failure to file a cross-appeal on the agency’s adverse rufing. Failure of Trial Court to Grant Attorney’s Fees and Penalties Arkansas Code Annotated section 23-79-208(a)(l) (Supp. 2001) reads as follows: In all cases where loss occurs and the . . . surety . . . shall fail to pay the losses within the time specified in the policy after demand made therefore, the person, firm, corporation or association shall be liable to pay the holder of the policy or his assigns, in addition to the amount of the loss, twelve percent (12%) damages upon the amount of the loss, together with all reasonable attorney fees for the prosecution and collection of the loss. Our supreme court addressed section 23-79-208 in Newcourt Fin., Inc. v. Canal Ins., 341 Ark. 181, 17 S.W.3d 83 (2000), and held that a loss payee is an insured because it could sue to enforce the policy under which it would be paid. Appellee received a default judgment against Denver Haus, acting as Star Body Shop, in July 1988 and exhausted his administrative remedies in 1993. Appellant refused to pay the claim. Appel-lee proceeded before the administrative agency, and the agency entered a decision that was reversed by the circuit court. Given my recommendation to reverse the agency decision as arbitrary and capricious, I would remand appellee’s claim for attorney’s fees pursuant to section 23-79-208.