All Star Rent a Car v. Wi Dept. of Transp.

• Decision Date: 06 July 2006
• Docket Number: No. 2003AP2668.,2003AP2668.
• Citation: 2006 WI 85,716 N.W.2d 506
• Parties: ALL STAR RENT A CAR, INC., Petitioner-Appellant, v. WISCONSIN DEPARTMENT OF TRANSPORTATION and Wisconsin Division of Hearings and Appeals, Respondents-Respondents-Petitioners.
• Court: Wisconsin Supreme Court

716 N.W.2d 506

2006 WI 85

ALL STAR RENT A CAR, INC., Petitioner-Appellant, v. WISCONSIN DEPARTMENT OF TRANSPORTATION and Wisconsin Division of Hearings and Appeals, Respondents-Respondents-Petitioners.

No. 2003AP2668.

Supreme Court of Wisconsin.

Argued September 27, 2005.

Decided July 6, 2006.

COPYRIGHT MATERIAL OMITTED

For the respondents-respondents-petitioners, the cause was argued by F. Thomas Creeron III, assistant attorney general, with whom on the briefs was Peggy A. Lautenschlager, attorney general.

For the petitioner-appellant there was a brief by Richard J. Ward and RJW Legal Services Group, S.C., Madison, and oral argument by Richard J. Ward.

¶ 1 DAVID T. PROSSER, J

This case involves All Star Rent A Car, Inc.'s (All Star) failure to name and serve the Division of Hearings and Appeals (DHA) as respondent when All Star sought review of DHA's decision in circuit court. The circuit court dismissed All Star's petition on grounds that All Star failed to comply with Wis. Stat. § 227.53.¹ The court of appeals reversed in a published decision² because it concluded that the relevant statutes were ambiguous and, as a result, All Star's action in naming and serving the Department of Transportation (DOT), but not the Division of Hearings and Appeals (DHA), was reasonable under the circumstances. We agree with the court of appeals that the relevant statutes are ambiguous. We also recognize that All Star was required to serve DOT as a party under Wis. Stat. § 227.53(1)(c). Nevertheless, we conclude that All Star's failure to follow the instructions in the "Notice" of review rights appended to DHA's written decision—instructions that directed All Star to name DHA as respondent in a notice that clarified the confusing statutes—was not reasonable. Consequently, we reverse.

I. FACTS AND PROCEDURAL HISTORY

¶ 2 The DOT licenses motor vehicle dealers in Wisconsin. Wis. Stat. §§ 218.0101(23) and 218.0114(1). All Star is a licensed motor vehicle dealer that purchases damaged cars and sells them after making repairs. In 2002 All Star's dealer license was scheduled to expire on September 30. Because of consumer complaints and other evidence of statutory violations, the DOT filed a complaint with the DHA to revoke All Star's license. The complaint was dated July 17, 2002.

¶ 3 On August 30, looking ahead to its September 30 license expiration, All Star applied for renewal of its license. By letter dated September 4, 2002, DOT denied the application. On September 25 All Star responded to this denial by filing a request with DHA for a hearing to review the denial.

¶ 4 The DHA combined the revocation proceeding (TR-02-0030) and the nonrenewal proceeding (TR-02-0044) for a contested case hearing on November 8, 2002, before Administrative Law Judge Mark J. Kaiser (ALJ). On March 13, 2003, the ALJ issued a proposed decision. The proposed decision found that DOT had proved two of the three violations it had alleged against All Star, and the proposed order revoked All Star's license and affirmed DOT's nonrenewal of the license.

¶ 5 After receiving comments from the parties, the Administrator of DHA, David Schwarz, issued a Final Decision on May 15, 2003. In the Final Decision, the Administrator made 21 findings of fact and asserted 6 conclusions of law. The Administrator's Order affirmed DOT's denial of All Star's license renewal and revoked All Star's motor vehicle license.³

¶ 6 Attached to DHA's Final Decision was a Notice of All Star's right to judicial review of the decision.⁴ The Notice— headed in bold type—stated:

Set out below is a list of alternative methods available to persons who may wish to obtain review of the attached decision of the Division. This notice is provided to insure compliance with Wis. Stat. § 227.48 and sets out the rights of any party to this proceeding to petition for rehearing and administrative or judicial review of an adverse decision.

....

2. Any person aggrieved by the attached decision which adversely affects the substantial interests of such person by action or inaction, affirmative or negative in form is entitled to judicial review by filing a petition [therefor] in accordance with the provisions of Wis. Stat. §§ 227.52 and 227.53. Said petition must be filed within thirty (30) days after service of the agency decision sought to be reviewed. If a rehearing is requested as noted in paragraph (1) [setting forth the procedure for requesting a rehearing before DHA] above, any party seeking judicial review shall serve and file a petition for review within thirty (30) days after service of the order disposing of the rehearing application or within thirty (30) days after final disposition by operation of law. Any petition for judicial review shall name the Division of Hearings and Appeals as the respondent. Persons desiring to file for judicial review are advised to closely examine all provisions of Wis. Stat. §§ 227.52 and 227.53 to insure strict compliance with all its requirements. (Emphasis added.)

¶ 7 On May 26, 2003, All Star petitioned the Dane County Circuit Court for judicial review of DHA's decision pursuant to Wis. Stat. § 227.52. In its petition, All Star named DOT as the respondent and served the petition upon DOT and the Attorney General. All Star did not name or serve DHA. On May 29, 2003, the circuit court held a hearing on All Star's motion to stay the effect of DHA's order. On June 13, 2003, the circuit court held a second hearing on All Star's stay request. Present at both hearings were attorneys for DOT and the Attorney General. Ultimately, the circuit court granted All Star's request for a stay.

¶ 8 On June 16, 2003, more than 30 days after All Star received the May 15 decision, and 20 days after All Star served DOT with its petition for judicial review, DOT filed a notice of appearance and a motion to dismiss.⁵ DOT claimed the circuit court lacked personal jurisdiction over DHA and subject matter jurisdiction.⁶ The circuit court agreed and dismissed All Star's petition because All Star failed to name and serve DHA as the respondent, which the court concluded was required by Wis. Stat. § 227.53(1)(b). The circuit court held: (1) Wis. Stat. §§ 227.52 and 227.53 clearly required service upon DHA; and (2) All Star's decision "to serve a party entirely unrelated to the deciding `agency[,]'" was neither reasonable nor logical.

¶ 9 All Star appealed, and the court of appeals reversed. The court of appeals concluded that Wis. Stat. § 227.53 is ambiguous in prescribing "which administrative entity All Star was required to serve . . . ." All Star Rent A Car v. Wis. Dep't of Transp., 2004 WI App 198, ¶ 1, 276 Wis.2d 793, 688 N.W.2d 681.

¶ 10 The court of appeals found two sources of ambiguity. First, Wis. Stat. § 227.53(1)(b) requires the petition to be entitled in "the name of the agency whose decision is sought to be reviewed as respondent. . . ." (Emphasis added.) Wisconsin Stat. § 227.01(1) defines an "agency" as "the Wisconsin land council or a board, commission, committee, department or officer in the state government, except the governor, a district attorney or a military or judicial officer." DHA is a "division" of the Department of Administration (DOA). Wis. Stat. § 218.0101(9). A "division" does not fit within the definition of agency in § 227.01(1). Therefore, the court of appeals concluded, § 227.53 does not clearly require DHA to be named and served as the respondent. All Star Rent A Car, 276 Wis.2d 793, ¶ 11, 688 N.W.2d 681.

¶ 11 Second, Wis. Stat. § 227.46(2m) states: "The decision of the administrator of the division of hearings and appeals is a final decision of the agency subject to judicial review under s. 227.52." The court of appeals concluded that a reasonable reading of this statute is that "the DHA administrator's decision becomes the final decision of the DOT." All Star Rent A Car, 276 Wis.2d 793, ¶ 12, 688 N.W.2d 681. Thus, the court of appeals concluded the interaction between Wis. Stat. §§ 227.53 and 227.46(2m) rendered the former unclear as to whom must be named and served as the respondent. Id.

¶ 12 We granted the DOT and DHA's petition for review.

II. STANDARD OF REVIEW

¶ 13 Whether Wis. Stat. § 227.53(1) clearly prescribes which agency must be named and served as the respondent requires statutory interpretation. Statutory interpretation is a question of law we review de novo. State v. Tucker, 2005 WI 46, ¶ 11, 279 Wis.2d 697, 703, 694 N.W.2d 926.

¶ 14 Likewise, whether All Star's failure to name and serve DHA was reasonable under the circumstances is a question of law, since the underlying facts are not in dispute. See State ex rel. Coleman v. McCaughtry, 2006 WI 49, ¶ 17, ___ Wis.2d ___, 714 N.W.2d 900.

¶ 15 Finally, determinations of waiver generally present mixed questions of fact and law. See Reckner v. Reckner, 105 Wis.2d 425, 435, 314 N.W.2d 159 (Ct. App.1981). Where the facts are undisputed, however, the question of whether DOT waived its objection to the competence of the circuit court is a question of law we review de novo. Johnson v. Rogers Mem'l Hosp., 2005 WI 114, ¶ 31, 283 Wis.2d 384, 700 N.W.2d 27.

III. DISCUSSION

¶ 16 This case requires the court to consider three questions:

1. Does Wis. Stat. § 227.53 clearly set forth which agency must be named and served as respondent on the facts of this case?

2. If § 227.53 does not clearly set forth which agency must be named and served, was All Star's action in naming and serving only DOT reasonable?

3. Did DOT waive its objection to the "competency" of the circuit court by participating in two court hearings?

¶ 17 Before we turn to the merits of the parties' dispute, we will briefly describe DOT's licensing procedure, judicial review of DOT licensing decisions, and the relationship of DHA to DOT.

¶ 18 DOT is charged with issuing and supervising motor vehicle dealer licenses. Wis. Stat. § 218.0111. DOT has the authority to deny an application for a license, including a...