Opinion
2015 CA 1398
04-27-2016
Tiffany M. Peterson Plaquemine, Louisiana Attorney for Appellants, Bosley's Driving School and O'Neal Bosley Laura C. Hopes Baton Rouge, Louisiana Attorney for Appellee, Department of Public Safety and Corrections. Office of Motor Vehicles
NOT DESIGNATED FOR PUBLICATION On Appeal from the 19th Judicial District Court In and for the Parish of East Baton Rouge State of Louisiana
Trial Court No. C638806, Sec. 22 The Honorable Timothy E. Kelley, Judge Presiding Tiffany M. Peterson
Plaquemine, Louisiana Attorney for Appellants,
Bosley's Driving School and O'Neal
Bosley Laura C. Hopes
Baton Rouge, Louisiana Attorney for Appellee,
Department of Public Safety and
Corrections. Office of Motor Vehicles BEFORE: WHIPPLE, CJ., WELCH, AND DRAKE, JJ. DRAKE, J.
This is an appeal from a trial court's sustaining a peremptory exception raising the objection of no cause of action without a contradictory hearing against plaintiffs, Bosley's Driving School and O'Neal Bosley, who filed suit seeking judicial review of an administrative hearing by the Department of Safety and Corrections, Office of Motor Vehicles (Department). For the following reasons, we reverse the trial court's judgment and remand.
FACTS AND PROCEDURAL HISTORY
O'Neal Bosley is the owner and operator of Bosley's Driving School (Bosley's Driving) in Ascension Parish with locations in Donaldsonville and Gonzales. In Louisiana, there are two types of driver instruction available. Those over eighteen, who have never been licensed, may take a fourteen-hour course, with six hours of classroom instruction and eight hours of behind-the-wheel driving. La. R.S. 32:402.1(A)(2). Those under eighteen, who have never been licensed, must take a thirty-eight hour course, with thirty hours of classroom instruction and eight hours of behind-the-wheel driving. La. R.S. 32:402.1(A)(1)(a). Both Bosley's Driving locations were licensed to instruct the fourteen-hour course, which licenses expired on December 31, 2014. Bosley's Driving also had contracted with the Department to be a third-party tester, but that license also expired on December 31, 2014. Prior to the expiration of the licenses, in October of 2012, Mr. Bosley applied to be licensed to instruct the thirty-eight hour course. The Department denied the application to instruct the thirty-eight hour course in 2012, and again in 2013. However, Bosley's Driving issued certificates of successful completion to nine students in 2013 and 2014, even though it had no license to instruct the thirty-eight hour course. On March 26, 2014, the Department notified plaintiffs to cease and desist operation as a driving school and third-party tester for the State of Louisiana for instructing thirty hour classroom driver's education without an approved license. On March 27, 2014, the Department notified plaintiffs that the instructor, owner and examiner licenses, as well as the third-party tester agreements were being revoked at both the Donaldsonville and Gonzales locations. Plaintiffs appealed these revocations to the Division of Administrative Law in March of 2014.
2011 La. Acts, No. 307, § 2 amended La. R.S. 40:1461 to add paragraph F, which required that every person licensed as a private driving school also become licensed as a third-party tester pursuant to La. R.S. 32:408, on or before June 30, 2012. --------
Additionally, on November 25, 2014, plaintiffs were notified by the Department that the third-party tester agreement with Bosley's Driving and the fourteen-hour (six in the classroom and eight behind-the-wheel) driver education licenses for both locations were not being renewed for the years 2015-2016. As of December 31, 2014, the third-party tester agreement expired, as did the fourteen-hour driver education licenses.
An administrative hearing was held on February 20, 2015, regarding the revocation of the third-party tester agreement and the revocation of the examiner and instructor licenses. The administrative law judge affirmed the Department's revocations on March 20, 2015. On March 23, 2015, the Division of Administrative Law electronically transmitted its decision to all parties.
Plaintiffs filed a petition for judicial review with the trial court on May 1, 2015, and sought a temporary restraining order. The trial court denied the temporary restraining order and set a status conference for June 3, 2015. Prior to the status conference, on May 21, 2015, the Department filed a pleading entitled "Motion and Order to Dismiss for No Cause of Action". Without a contradictory hearing, the trial court signed the order of dismissal on May 26, 2015. It is from this judgment that plaintiffs appeal.
LAW AND DISCUSSION
On appeal, plaintiffs claim that the trial court erred in granting the Department's motion for dismissal without a contradictory hearing or affording them time to file a response.
The purpose of an exception raising the objection of no cause of action is to determine the sufficiency in law of the petition. The exception is triable on the face of the petition. For the purpose of determining the issues raised by the exception, the well-pleaded facts in the petition must be accepted as true. City of New Orleans v. Board of Comm'rs of Orleans Levee Dist., 93-0690 (La. 7/5/94), 640 So. 2d 237, 241; see La. C.C.P. arts. 927 and 931. Furthermore, the facts shown in any documents annexed to the petition must also be accepted as true. See La. C.C.P. art. 853; Cardinale v. Stanga, 2001-1443 (La. App. 1 Cir. 9/27/02), 835 So. 2d 576, 578. The burden of demonstrating that no cause of action has been stated is on the party filing the exception. Home Distribution, Inc. v. Dollar Amusement, Inc., 98-1692 (La. App. 1 Cir. 9/24/99), 754 So. 2d 1057, 1060.
In ruling on an exception of no cause of action, the court must determine whether the law affords any relief to the claimant if he proves the factual allegations in the petition and annexed documents at trial. Home Distribution, 754 So.2d at 1060. No evidence may be introduced to support or controvert the objection that the petition fails to state a cause of action. La. C.C.P. art. 931.
When a petition is read to determine whether a cause of action has been stated, it must be interpreted, if possible, to maintain the cause of action instead of dismissing the petition. Any reasonable doubt concerning the sufficiency of the petition must be resolved in favor of finding that a cause of action has been stated. Brister v. GEICO Ins., 2001-0179 (La. App. 1 Cir. 3/28/02), 813 So. 2d 614, 617. The reviewing court conducts a de novo review of a trial court's ruling sustaining an exception of no cause of action, because the exception raises a question of law, and the lower court's decision is based only on the sufficiency of the petition. B & C Elec., Inc. v. East Baton Rouge Parish Sch. Bd., 2002-1578 (La. App. 1 Cir. 5/9/03), 849 So. 2d 616, 619. When the grounds of the objection pleaded by the peremptory exception may be removed by amendment of the petition, the judgment sustaining the exception shall order such amendment within the delay allowed by the court. If the grounds of the objection cannot be so removed, the action shall be dismissed. La. C.C.P. art. 934. This is true of any objection raised by the peremptory exception, including no cause of action. Brister, 813 So. 2d at 616-17.
On appeal, the Department argues that the trial court properly determined that a contradictory hearing was unnecessary regarding the expired agreement and licenses because Louisiana Code of Civil Procedure article 963 allows a judge to grant an order ex parte and without hearing the adverse party. With regard to this argument, we adopt the reasoning of our brethren on the Third Circuit; Goulas v. Denbury Mgmt. Inc., 2000-935 (La. App. 3 Cir. 12/6/00), 774 So. 2d 346, 349,
This provision, found in Chapter 4, Written Motions, reads as follows: "[i]f the order applied for by written motion is one to which mover is clearly entitled without supporting proof, the court may grant the order ex parte and without hearing the adverse party." La. Code Civ. P. art. 963. The argument that Article 963 should apply to exceptions is an attractive one, although specious. Article 963 does not apply to exceptions. The rules for exceptions are provided in the chapter preceding Article 963, entitled "Exceptions." Conversely, Article 963 is within a chapter entitled "Motions." The chapter concerning motions includes Articles 961-971. The lead article reads as follows: "An application to the court for an order, if not presented in some other pleading, shall be by motion which, unless made during trial or hearing or in open court, shall be in writing." La. Code Civ. P. art. 961. (Our emphasis). This chapter pertains exclusively to applications to the court for orders other than other pleadings for which there are separate provisions. Exceptions are presented to the court in a type of pleading entitled "Exceptions." Codal provisions relevant to exceptions are treated in the chapter titled "Exceptions" and include only Articles 921-934. Article 963 is, therefore, irrelevant and inapplicable in this case. [Emphasis added].
Although the Department titled its pleading "Motion and Order to Dismiss for No Cause of Action," the objection of no cause of action is raised by a peremptory exception. La. C.C.P. art. 927. In certain circumstances, the trial court may sustain a peremptory exception without a hearing. However, the trial court must follow the codal articles pertaining to exceptions. Louisiana Code of Civil Procedure article 934 provides:
When the grounds of the objection pleaded by the peremptory exception may be removed by amendment of the petition, the judgment sustaining the exception shall order such amendment within the delay allowed by the court. If the grounds of the objection raised through the exception cannot be so removed, or if the plaintiff fails to comply with the order to amend, the action, claim, demand, issue, or theory shall be dismissed
Therefore, if the petition on its face fails to make the basic allegations that are required to maintain a claim, the trial court should sustain the objection and provide the plaintiff an opportunity to amend the petition. If the grounds for the objection are curable, La. C.C.P. art. 934 mandates that the trial court permit an amendment to the petition. Alexander and Alexander, Inc. v. State Division of Admin., 486 So. 2d 95, 100 (La. 1986). A dismissal due to a sustaining of a peremptory exception may be made only if either the grounds of the objection cannot be remedied or if the plaintiff fails to remedy them following a court order.
An administrative hearing was held and a decision was rendered upholding the decision of the Department. Plaintiffs filed a petition for judicial review with the trial court. The petition alleges that plaintiffs operated a licensed driving school in Ascension Parish and that on November 25, 2014, the Department notified plaintiffs that their license was revoked and ineligible for renewal. The petition also alleges that plaintiffs were irreparably harmed by the revoking of their license.
The Department claimed in its exception of no cause of action, which was titled a motion, that plaintiffs had no cause of action "to appeal the revocation of his expired 2013-2014 licenses or of the expired third-party tester agreement since Bosley's Driving School is ineligible to operate and conduct driver education training pursuant to La. R.S. 40:1461 regardless of the outcome of the license revocation."
Louisiana Revised Statute 40:1461 provides:
F. Every person licensed or contracted pursuant to this Section to operate a private driving instructor training school or agency, or providing driving courses, shall also be or become licensed or contracted on or before June 30, 2012, as a third-party tester pursuant to R.S. 32:408. Any currently licensed or contracted driving school or instructor who fails to become licensed as a third-party tester on or before June 30, 2012, shall be deemed to be ineligible to engage in the business of operating a private driving school, or instructing in a driving course in any manner until such school or instructor obtains such license or contract.
The Department argues that since all of plaintiffs' licenses were revoked or not renewed, they have no cause of action. However, the Department failed to cite any cases which hold that a party has no cause of action for a petition for judicial review of an administrative decision. At issue is whether the Department improperly revoked or failed to renew the licenses and third-party tester agreement of Bosley's Driving for the years 2013 and 2014. Whether Bosley's Driving licenses were not renewed for 2015 and 2016 was not at issue during the administrative hearing.
Pursuant to La. C.C.P. art. 934, if a petition fails to state a cognizable cause of action and the grounds for the objection can be removed by amendment, the plaintiff should be allowed to amend his demand. See Richardson v. Home Depot USA, 2000-0393 (La. App. 1 Cir. 3/28/01), 808 So. 2d 544, 547. On the other hand, where the grounds for the objection cannot be removed by amendment, the trial court is not required to allow amendment. The decision to allow amendment is within the sound discretion of the trial court. Id.
The trial court erred in using the improper procedure to dismiss the matter rather than follow the codal provisions on exceptions. The trial court should have ordered a hearing on the merits of the Department's exception as provided in La. C.C.P. art. 929(A) which states that exceptions, when pleaded before or in the answer, "shall be tried and decided in advance of the trial of the case." This would have allowed the plaintiffs to argue the merits of the claim that the incorrectly revoked licenses is what led to Bosley's Driving School not qualifying as a third-party tester. The Department relies upon La. R.S. 40:1461 to claim that the plaintiffs could not be a third-party tester because their licenses had been revoked. However, the statute mandates that persons licensed to operate a driving school become licensed to be third-party testers. The initial inquiry has to be if the plaintiffs were licensed to operate a driving school or if those licenses were improperly revoked or not renewed, which is the issue plaintiffs sought judicial review of following the administrative hearing. Because the trial court should have ordered a hearing, but failed to do so, this case was not in a posture for ex parte dismissal. After a de novo review, we find that the trial court was either required to permit the plaintiffs to amend their petition or at least hold a hearing prior to dismissal. As the trial court was faced with an exception of no cause of action, rather than a motion to dismiss, it was required to comply with La. C.C.P. arts. 921-934.
Furthermore, this court notes that the record before us contains the decision of the administrative law judge, but no record of the proceedings at that level. There was no administrative record or exhibits before the trial court. A person who is aggrieved by a final decision in an adjudication proceeding is entitled to judicial review under the provisions of the Administrative Procedure Act. La. R.S. 49:964(A). Proceedings for review may be instituted by filing a petition in the district court of the parish in which the agency is located within the time limits set forth in the statute. La. R.S. 49:964(B). The agency shall transmit to the reviewing court the original or a certified copy of the entire record of the proceeding under review unless stipulated to the contrary by the parties. The court may require or permit subsequent corrections or additions to the record. La. R.S. 49:964(D). If, before the date set for hearing, application is made to the court for leave to present additional evidence, and it is shown to the satisfaction of the court that the additional evidence is material and that there were good reasons for failure to present it in the proceeding before the agency, the court may order that the additional evidence be taken before the agency upon conditions determined by the court. The agency may modify its findings and decision by reason of the additional evidence and shall file that evidence and any modifications, new findings, or decisions with the reviewing court. La. R.S. 49:964(E). The review shall be conducted by the court without a jury and "shall be confined to the record." However, in cases of alleged irregularities in procedure before the agency, not shown in the record, proof thereon may be taken in the court. The court, upon request, shall hear oral argument and receive written briefs. La. R.S. 49:964(F). Louisiana Revised Statute 49:964(G) specifically defines the scope of judicial review of agency decisions as follows:
The court may affirm the decision of the agency or remand the case for further proceedings. The court may reverse or modify the decision if substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions, or decisions are:
(1) In violation of constitutional or statutory provisions;
(2) In excess of the statutory authority of the agency;
(3) Made upon unlawful procedure;
(4) Affected by other error of law;
(5) Arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion; or
(6) Not supported and sustainable by a preponderance of evidence as determined by the reviewing court. In the application of this rule, the court shall make its own determination and conclusions of fact by a preponderance of evidence based upon its own evaluation of the record reviewed in its entirety upon judicial review. In the application of the rule, where the agency has the opportunity to judge the credibility of witnesses by first-hand observation of demeanor on the witness stand and the reviewing court does not, due regard shall be given to the agency's determination of credibility issues.In Buras v. Bd. of Trustees of Police Pension Fund of City of New Orleans, 367 So. 2d 849, 852-53 (La. 1979), the Louisiana Supreme Court noted that a trial court was not permitted to conduct a trial de novo as a reviewing court when the administrative record was not transmitted to the trial court. Although the present case does not involve a trial de novo, the trial court had no administrative record before it. In order to determine if the petition could be amended to state a cause of action, the trial court must have the administrative record. Therefore, the following language of the Louisiana Supreme Court is persuasive:
In addition, it is apparent that the board itself failed to comply with the procedural requirements established by the Administrative Procedure Act. La. R.S. 49:955-958, 964 D. Pursuant to La. R.S. 49:964 G, the trial court was authorized to remand this matter for further proceedings to allow the board to comply with the requirements of the Administrative Procedure Act. In view of the board's non-compliance with the procedures established by the act and the trial court's failure to remand the case to the board, we find that the court of appeal erred in deciding this matter on the evidence before it. The clear effect of the Administrative Procedure Act is that evidence be heard and evaluated by the agency and a proper administrative record be transmitted to the court on which it can base its review of the agency's decision in accordance with the standard of review set forth in La .R.S. 49:964 G. Accordingly, a proper disposition of this matter requires reversal of the judgment of the court of appeal and remand of the case to the board with instructions to comply with the Administrative Procedure Act.Buras, 367 So. 2d at 853.
In accordance with the mandate expressed by the foregoing language, we are required to remand the case to the trial court with instructions that the administrative record be transmitted to and incorporated into the trial court's record.
CONCLUSION
For the above and foregoing reasons, the trial court's judgment maintaining the Department's exception of no cause of action and dismissing the petition for judicial review of O'Neal Bosley and Bosley's Driving School is hereby reversed and set aside, and the case is remanded to the Nineteenth Judicial District Court with instructions that the administrative record be transmitted to and incorporated in the trial court's record in compliance with the provisions of the Administrative Procedure Act, La. R.S. 49:951, et seq.; and reviewed in accordance with the standards set forth in La. R.S. 49:964(G). Costs of this appeal are assessed against defendant, Department of Public Safety and Corrections, Office of Motor Vehicles in the amount of $459.50.
REVERSED AND REMANDED WITH INSTRUCTIONS.