Opinion
No. 07-696.
Filed April 15, 2008.
Moore County No. 06CVS1603.
Appeal by respondent from judgment entered 29 December 2006 by Judge James M. Webb in Superior Court, Moore County. Heard in the Court of Appeals 12 December 2007.
Van Camp, Meacham Newman, PLLC, by Michael J. Newman, for petitioner-appellee. Attorney General Roy A. Cooper, III, by Assistant Attorney General Christopher W. Brooks, for respondent-appellant.
Petitioner was denied a renewal of his drivers license by respondent, the Division of Motor Vehicles. Petitioner appealed to the superior court which vacated and remanded respondent's decision. Respondent appeals. The dispositive question before this Court is whether respondent acted arbitrarily and capriciously in making its decision not to renew petitioner's drivers license. We find that respondent did act arbitrarily and capriciously, and for the following reasons, we affirm.
I. Background
The superior court judge made the following uncontested findings of fact: Petitioner was originally licensed to drive in New York. Petitioner turned in his New York drivers license, and on 12 July 1989, petitioner was issued a North Carolina drivers license. On 16 September 1993 and 20 November 1997, petitioner renewed his North Carolina drivers license. On 24 November 2005, petitioner's North Carolina drivers license expired. Petitioner applied to renew his North Carolina drivers license. The North Carolina Department of Motor Vehicle's ("DMV") computer records showed that petitioner had an "unsatisfied judgment" from New York, and the DMV refused to renew petitioner's license pursuant to N.C. Gen. Stat. § 20-9(f) because "its computer records reflect[] a suspended driving privilege in . . . New York, based on an unsatisfied judgment in . . . New York." The DMV computer records showed "New York as a [s]tate of [w]ithdrawal for [petitioner's] [r]emote [d]riving [h]istory and reflect a withdrawal date of August 28, 1991." The DMV's "computer records do not reflect when the information about the unsatisfied judgment was received from . . . New York[,] . . . when . . . New York was listed as a [s]tate of [w]ithdrawal under the petitioner's driving record[,] . . . or when information was received concerning the [p]etitioner's driving privilege in . . . New York."
From the record it appears the only information as to the reason for denial which the DMV actually provided to petitioner at the time of his application was a form letter which stated, in part, that "[t]he State of New York has reported that there is a problem with your driving privilege in that state. In order for you to continue the process of obtaining a North Carolina license, you must contact that state and clear the problem."
Petitioner appealed the DMV's decision to superior court claiming the DMV's decision had been "unwarranted and unjustified." Petitioner alleged the following: On or about 24 May 1988, while petitioner was living in New York, petitioner's minor daughter was driving petitioner's vehicle when she was in an accident in New York. Petitioner's vehicle was insured at the time by Liberty Mutual Insurance Company. In September of 1988 petitioner moved to North Carolina. In 1989, petitioner surrendered his New York drivers license and received a North Carolina drivers license. In or about March of 1989, a subrogation action was brought against petitioner regarding his daughter's accident. "At no time was [petitioner] ever made aware of the existence of this lawsuit, nor was he ever properly served with summons and complaint from that New York action." Also in March of 1989, a "process sever attempted to serve . . . [petitioner] by nailing a copy of the summons and complaint to the front door of [petitioner's] former residence — despite the fact that [petitioner] had not lived in that residence or owned that residence for over seven months." A default judgment was entered against petitioner for $3,111.61. "At no time prior to, during, or after this 'judgment' was sought and entered was [petitioner] ever aware of the existence of this lawsuit in New York." "[Petitioner] first became aware of the existence of this 'judgment' when the North Carolina Division of Motor Vehicles told him that the computer system indicated the existence of an unsatisfied judgment in the state of New York."
On 12 December 2006, the DMV filed a motion to dismiss. The superior court treated petitioner's appeal as a petition for certiorari pursuant to Rule 19 of the General Rules of Practice. On 29 December 2006, the superior court denied the DMV's motion to dismiss and vacated and remanded the decision of the DMV which denied petitioner a drivers license. The superior court also ordered that "[t]he [p]etitioner . . . be permitted to apply to the [DMV] for the issuance of a North Carolina drivers license and the [DMV] shall not consider the unsatisfied judgment and/or the [p]etitioner's driving status in the State of New York as a bar in the issuance of a drivers license." The DMV appeals. The DMV argues the superior court (1) utilized an incorrect standard of review, (2) erred in determining the DMV acted arbitrarily and capriciously in denying petitioner a drivers license, and (3) violated the Full Faith and Credit Clause by holding that the court was not bound by a judgment entered in New York.
II. Petitioner's Driving Privilege in the State of New York
The DMV argues "[t]he trial court erred as a matter of law in its final order directing the [DMV] to issue a drivers license to [petitioner] without consideration of [petitioner's] driving privilege in . . . New York in contradiction to the requirements of N.C.G.S. § 20-9(f)." The DMV assigns error to the standard of review utilized by the superior court in making its decision and in finding the DMV's decision was arbitrary and capricious and thus granting petitioner's requested relief.
A. Standard of Review
The DMV argues the superior court improperly applied the "whole record" test when it "considered matters outside the record before the [DMV]." Both parties to the action and the superior court agreed that the appropriate standard of review was the "whole record" test. "When the petitioner questions . . . whether the decision was arbitrary or capricious, then the reviewing court must apply the 'whole record' test." ACT-UP Triangle v. Comm'n for Health Servs., 345 N.C. 699, 706, 483 S.E.2d 388, 392 (1997) (citation and internal quotation marks omitted).
The whole record test requires the reviewing court to examine all competent evidence (the whole record) in order to determine whether the agency decision is supported by substantial evidence. Substantial evidence is evidence that a reasonable mind would deem adequate to support a particular conclusion. In conducting a whole record review, a trial court may not substitute its judgment for the agency's, even if a different conclusion may result under a whole record review.
Teague v. N.C. Dep't. of Transp., 177 N.C. App. 215, 223, 628 S.E.2d 395, 400 (internal citations, internal quotation marks, and brackets omitted) (quoting ACT-UP Triangle v. Comm'n for Health Servs, 345 N.C. 699, 706, 483 S.E.2d 388, 392 (1997)), disc. rev. denied, 360 N.C. 581, 636 S.E.2d 199 (2006).
Significantly, the whole record test requires the court to consider both evidence justifying the agency's decision and contrary evidence that could lead to a different result. However, the test does not allow the reviewing court to replace the agency's judgment when there are two reasonably conflicting views, although the court could have justifiably reached a different result under de novo review.
Cole v. Faulkner, 155 N.C. App. 592, 596-97, 573 S.E.2d 614, 617 (2002) (internal citations omitted). Under the whole record test, "[t]he trial court may not consider evidence outside of the record." Northfield Dev. Co. v. City of Burlington, 165 N.C. App. 885, 888, 599 S.E.2d 921, 924 (citing Batch v. Town of Chapel Hill, 326 N.C. 1, 11, 387 S.E.2d 655, 662 (1990)), disc. rev. denied, 359 N.C. 191, 607 S.E.2d 278 (2004).
However, the "record" which was before the DMV when it made its determination to deny renewal of petitioner's drivers license was, as best we can tell, the petitioner's driving record as it appeared upon the DMV's computer screen when petitioner's renewal application was being considered. Petitioner had no opportunity to see this "record" at the time of the denial of his license renewal, much less any opportunity to refute it. We also note that the printouts of the DMV's documents, including a "RDLSI/Motor Vehicle Record Check," a "Remote Driver History Display," and a "Remote Driver License Match Display," which were before the superior court and which are in our record were printed approximately a year and six months after petitioner was denied the renewal of his license; thus we have no way of knowing if these documents are the same as those the DMV actually considered when refusing to renew petitioner's license. If any court is to review the record before the DMV at the time it made its decision, it should have the documents or information as they existed on the date of the decision. However, the appellee does not raise this issue on appeal, and thus we will consider the DMV's documentary evidence as it was presented to the superior court.
For years, "[w]hen reviewing an appeal from a petition for writ of certiorari in superior court, this Court's scope of review [has been] two-fold: (1) examine whether the superior court applied the appropriate standard of review; and, if so, (2) determine whether the superior court correctly applied the standard." Cole v. Faulkner, 155 N.C. App. 592, 596, 573 S.E.2d 614, 617 (2002); see Shackleford-Moten v. Lenoir Cty. DSS, 155 N.C. App. 568, 572, 573 S.E.2d 767, 770 (2002), disc. rev. denied, 357 N.C. 252, 582 S.E.2d 609 (2003). Recent case law suggests that a failure of the superior court to state or apply the correct standard of review does not require remand if this Court is still able to sufficiently examine the record pursuant to the correct standard of review. See Shackleford-Moten at 572, 573 S.E.2d at 770 (stating "the appellate court need only consider those grounds for reversal or modification raised by the petitioner before the superior court[.]"); Capital Outdoor, Inc. v. Guilford Cty. Bd. of Adjust., 355 N.C. 269, 269, 559 S.E.2d 547, 547 (2002) (reversing per curiam "[f]or the reasons, stated in the dissenting opinion" at 146 N.C. App. 388, 393, 552 S.E.2d 265, 268 (2001) which states, "an appellate court's obligation to review a superior court order for errors of law . . . can be accomplished by addressing the dispositive issue(s) before the agency and the superior court without examining the scope of review utilized by the superior court.").
Respondent here has specifically requested this Court engage in the two-fold examination for appeals of this nature laid out in Cole, and therefore we will address whether the superior court appropriately applied the correct standard of review though we are aware of recent case law which suggests this may not be necessary. See Cole at 596, 573 S.E.2d at 617; Shackleford-Moten at 572, 573 S.E.2d at 770; Capital Outdoor, Inc., 355 N.C. 269, 559 S.E.2d 547. Here the superior court did consider matters outside of the record at the time it made its decision regarding petitioner's license. The superior court considered, inter alia, a copy of the accident report related to the unsatisfied judgment and a copy of the unsatisfied judgment. We therefore agree with the DMV's contention that the superior court incorrectly applied the "whole record" test. However, pursuant to Capital Outdoor, Inc. v. Guilford Cty. Bd. of Adjust., 355 N.C. 269, 559 S.E.2d 547, we chose to disregard the superior court's error in its application of the "whole record" test and review the record correctly applying the test. See Capital Outdoor, Inc. v. Guilford Cty. Bd. of Adjust., 355 N.C. 269, 559 S.E.2d 547 (2002).
B. Arbitrary and Capricious
The DMV next contends that the superior court erred in determining that the DMV had been arbitrary and capricious in denying petitioner a drivers license. "An administrative ruling is deemed arbitrary and capricious when it is whimsical, willful, and an unreasonable action without consideration or in disregard of facts or law or without determining principle." Ward v. Inscoe, 166 N.C. App. 586, 595, 603 S.E.2d 393, 399 (2004) (internal quotation marks and brackets omitted).
The DMV denied renewal of petitioner's drivers license pursuant to N.C. Gen. Stat. § 20-9(f). N.C. Gen. Stat. § 20-9(f) reads,
The Division shall not issue a driver's license to any person whose license or driving privilege is in a state of cancellation, suspension or revocation in any jurisdiction, if the acts or things upon which the cancellation, suspension or revocation in such other jurisdiction was based would constitute lawful grounds for cancellation, suspension or revocation in this State had those acts or things been done or committed in this State; provided, however, any such cancellation shall not prohibit issuance for a period in excess of 18 months.
N.C. Gen. Stat. § 20-9(f) (2005). "A license to operate motor vehicles on the public highways of North Carolina is a personal privilege and property right which may not be denied a citizen of this State who is qualified therefore under our statutes." In re Donnelly, 260 N.C. 375, 381, 132 S.E.2d 904, 908 (1963).
As a driver's license in North Carolina for a North Carolina citizen is "a personal privilege and property right" the burden was upon the DMV to present substantial evidence it relied upon in its determination that petitioner's license should not be renewed pursuant to N.C. Gen. Stat. § 20-9(f). See Teague at 223, 628 S.E.2d at 400; In re Donnelly at 381, 132 S.E.2d at 908. The only documentary evidence on the record before us presented by the DMV to the superior court is petitioner's "RDLSI/Motor Vehicle Record Check", petitioner's "Remote Driver History Display," and petitioner's "Remote Driver License Match Display" indicating petitioner has an "unsatisfied judgment." The DMV refused to renew petitioner's license pursuant to N.C. Gen. Stat. § 20-9(f) based upon a suspended driving privilege in New York. However, respondent's documents do not indicate that petitioner's driving privilege has ever been suspended in New York. Furthermore, when petitioner's attorney brought this lack of evidence up at the superior court hearing by noting "— there is nothing that the DMV has shown this Court that shows that [petitioner's] New York driving privileges have ever been suspended, canceled, or revoked — nothing[,]" the DMV's attorney responded, "Then we wouldn't have done it, Your Honor[,]" rather than directing the court's attention to any such evidence.
The documents presented by the DMV are computer printouts of the DMV's records with much of the information encoded. Perhaps some of these codes indicate that petitioner's driving privilege was suspended in New York; however, the DMV presented no evidence of the meaning of any of the codes in its documents. We can interpret some of the abbreviations in the documents, but the record contains no indication of the meanings of, inter alia, D39, A25 or E108286.
As there is not substantial evidence in the record that petitioner's license was suspended in New York, we therefore agree with the superior court that the DMV did act arbitrarily and capriciously in denying petitioner a drivers license pursuant to N.C. Gen. Stat. § 20-9(f). This argument is overruled.
III. Full Faith and Credit Clause
The DMV also contends that "[t]he trial court's order violated the Full Faith and Credit Clause of the United States Constitution in its holding that the court was not bound by a judgment entered in the state of New York." The DMV argues that the record does not demonstrate the New York judgment was not valid, and thus disregarding the judgment violates the Full Faith and Credit Clause.
The Full Faith and Credit Clause of the United States Constitution reads, "Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State. And the Congress may by general Laws prescribe the Manner in which such Acts, Records and Proceedings shall be proved, and the Effect thereof." U.S. Const., art. IV, § 1. "[T]he judgment of a state court should have the same credit, validity, and effect, in every other court of the United States, which it had in the state where it was pronounced." Underwriters Assur. v. North Carolina Life, 455 U.S. 691, 704, 71 L.Ed. 2d 558, 570 (1982) (citation and internal quotation marks omitted).
The record contains no indication that a certified copy of the New York judgment was ever provided to the DMV or that the New York judgment has ever been registered in North Carolina. Furthermore, as noted above, the New York judgment is not part of the record which can be considered by this Court. As the New York judgment is not part of the record and is not before this Court, this argument is without merit.
IV. Conclusion
We conclude that although the superior court incorrectly applied the "whole record" test, it did properly conclude that the DMV acted arbitrarily and capriciously in denying petitioner a drivers license, and therefore we affirm the superior court's decision.
AFFIRMED.
Judges HUNTER and CALABRIA concur.
Report per Rule 30(e).