Ark. Professional Bail Bondsman v. Oudin

• Court: Arkansas Supreme Court
• Writing for the Court: Annabelle Clinton Imber
• Citation: Ark. Professional Bail Bondsman v. Oudin, 69 S.W.3d 855, 348 Ark. 48 (Ark. 2002)
• Decision Date: 21 March 2002
• Docket Number: No. 01-782.,01-782.
• Parties: ARKANSAS PROFESSIONAL BAIL BONDSMAN LICENSING BOARD v. Marc OUDIN, Jr., and Bail Bond Financing, Inc.

69 S.W.3d 855

348 Ark. 48

ARKANSAS PROFESSIONAL BAIL BONDSMAN LICENSING BOARD v. Marc OUDIN, Jr., and Bail Bond Financing, Inc.

No. 01-782.

Supreme Court of Arkansas.

March 21, 2002.

Mark Pryor, Att'y Gen., by: Kim Evans, Ass't Att'y Gen., Little Rock, for appellant.

David A. Hodges, Little Rock, for appellees.

ANNABELLE CLINTON IMBER, Justice.

Appellant Arkansas Professional Bail Bondsman Licensing Board challenges the Pulaski County Circuit Court's reversal of its decision to sanction Appellees Marc Oudin, Jr., and Bail Bond Financing, Inc., for the dual ownership of a bail bond company and a fine-collection company that serve a common court. The Board concluded that Mr. Oudin's dual ownership of the companies violated Section 17 B of Rule and Regulation 1 of the Arkansas Professional Bail Bondsman Licensing Board. We hold that substantial evidence supports the Board's decision. Accordingly, we reverse the circuit court's order and remand with directions to reinstate the Board's decision.

Mr. Oudin is the owner and sole shareholder of a bail bond company, Bail Bond Financing, Inc., and the owner and sole shareholder of Court Services, Inc., a company that assists various courts in collecting outstanding fines and warrant forfeitures in return for fees and service charges. The Board held a disciplinary hearing on April 9, 1999, to determine whether Mr. Oudin's conduct violated the Bail Bondsman Licensing Law at Ark. Code Ann. §§ 17-19-101 to 17-19-212 (Repl.2001) or the rules and regulations governing the bail bond profession. The Board found that Bail Bond Financing provides bond services to the Pine Bluff Municipal Court and that Court Services has contracted to provide its fine-collection services to the Pine Bluff Municipal Court. The Board concluded that Mr. Oudin's dual ownership of the companies was in violation of Section 17 B of Rule and Regulation 1 of the Arkansas Professional Bail Bondsman Licensing Board. That regulation prohibits an owner, partner, officer, or stockholder of a bail bond company from being "regularly or frequently employed by" a court of law. The Board sanctioned Appellees by suspending Marc Oudin, Jr.,'s professional bail bondsman license for six months and by fining Bail Bond Financing, Inc., in the amount of $5,000.

Following the Board's decision, Appellees appealed to the Pulaski County Circuit Court pursuant to the Arkansas Administrative Procedure Act at Ark.Code Ann. § 25-15-201 to 25-15-214 (Repl.1996 and Supp.2001). The circuit court found that the Board was within its authority to take action, that the correct standard of review was substantial evidence, and that substantial evidence existed to support the Board's finding of a contract between Court Services and the Pine Bluff Municipal Court. The court concluded that, due to apparently contradictory Attorney General's opinions on the subject, the petitioners had not met their burden of showing there was no substantial evidence to support the Board's finding that Court Services was "regularly or frequently employed by" Pine Bluff Municipal Court. The circuit court ultimately decided, however, that because Court Services is an independent contractor, rather than an employee, of the Pine Bluff Municipal Court, Appellees were not in violation of Rule and Regulation 1, Section 17 B. As a result, the court reversed the Board's decision imposing sanctions. For its one point on appeal, the Board contends that its decision finding Appellees in violation of Section 17 B of Rule and Regulation 1 was based upon substantial evidence and was not arbitrary and capricious.

I. Standard of Review

This court's review is limited in scope and is directed not to the decision of the circuit court but to the decision of the administrative agency. Arkansas Cont. Lic. Bd. v. Pegasus Renovation Co., 347 Ark. 320, 64 S.W.3d 241 (2001); Tomerlin v. Nickolich, 342 Ark. 325, 27 S.W.3d 746 (2000). "It is not the role of the circuit courts or the appellate courts to conduct a de novo review of the record; rather, review is limited to ascertaining whether there is substantial evidence to support the agency's decision." Tomerlin v. Nickolich, 342 Ark. at 331, 27 S.W.3d at 749; Arkansas Bd. of Exam'rs v. Carlson, 334 Ark. 614, 976 S.W.2d 934 (1998). See also Arkansas Dep't of Human Servs. v. Thompson, 331 Ark. 181, 959 S.W.2d 46 (1998). We review the entire record in making that determination. Arkansas Bd. of Exam'rs v. Carlson, supra; Arkansas Alcoholic Beverage Control v. Muncrief, 308 Ark. 373, 825 S.W.2d 816 (1992).

This court has previously noted: [A]dministrative agencies are better equipped than courts, by specialization, insight through experience, and more flexible procedures to determine and analyze underlying legal issues affecting their agencies, and this recognition accounts for the limited scope of judicial review of administrative action and the refusal of the court to substitute its judgment and discretion for that of the administrative agency. Because decisions regarding the licensing of bond companies and their employees turn on executive wisdom, it is appropriate to limit the scope of the review on appeal.

Tomerlin v. Nickolich, 342 Ark. at 332-33, 27 S.W.3d at 750 (citations omitted). Thus, our review of administrative decisions is limited in scope. Administrative decisions will be upheld if they are supported by substantial evidence and are not arbitrary, capricious, or characterized by an abuse of discretion. McQuay v. Arkansas State Bd. of Architects, 337 Ark. 339, 989 S.W.2d 499 (1999); In re Sugarloaf Mining Co., 310 Ark. 772, 840 S.W.2d 172 (1992). These standards are consistent with the provisions of the Administrative Procedure Act at Ark.Code Ann. §§ 25-15-201 to 25-15-214:

[R]eview is limited to ascertaining whether there is substantial evidence to support the agency's decision or whether the agency's decision runs afoul of one of the other criteria set out in section 25-15-212(h).

Arkansas Cont. Lic. Bd. v. Pegasus Renovation Co., 347 Ark. at 326, 64 S.W.3d at 244-45; Arkansas State Racing Comm'n v. Ward, Inc., 346 Ark. 371, 57 S.W.3d 198 (2001); Arkansas Bd. of Exam'rs v. Carlson, supra.

Arkansas Code Annotated § 25-15-212(h) provides that this court may reverse or modify the Board's decision

if the substantial rights of the petitioner 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 agency's statutory authority;

(3) Made upon unlawful procedure;

(4) Affected by other error or law;

(5) Not supported by substantial evidence of record; or

(6) Arbitrary, capricious, or characterized by abuse of discretion.

Ark.Code Ann. § 25-15-212(h) (Supp. 2001). In making this determination, we review the entire record and give the evidence its strongest probative force in favor of the agency's ruling. Arkansas Health Servs. Agency v. Desiderata, Inc., 331 Ark. 144, 958 S.W.2d 7 (1998). "[B]etween two fairly conflicting views, even if the reviewing court might have made a different choice, the board's choice must not be displaced." Arkansas Contr. Lic. Bd. v. Pegasus Renovation Co., 347 Ark. at 327, 64 S.W.3d at 245; Jackson v. Arkansas Racing Comm'n, 343 Ark. 307, 34 S.W.3d 740 (2001).

Substantial evidence is defined as "valid, legal, and persuasive evidence that a reasonable mind might accept as adequate to support a conclusion, and force the mind to pass beyond conjecture." Tomerlin v. Nickolich, 342 Ark. at 333, 27 S.W.3d at 751 (quoting Arkansas State Police Comm'n v. Smith, 338 Ark. 354, 362, 994 S.W.2d 456, 461 (1999)). The challenging party has the burden of proving an absence of substantial evidence. Id. To establish an absence of substantial evidence, the challenging party must demonstrate that the proof before the administrative tribunal was so nearly undisputed that fair-minded persons could not reach its conclusion. Id. "The question is not whether the testimony would have supported a contrary finding but whether it supports the finding that was made." Id.

As for our rule regarding the determination of whether an administrative action is arbitrary and capricious, this court said in Arkansas Cont. Lic. Bd. v. Pegasus Renovation Co.:

Administrative action may be regarded as arbitrary and capricious where it is not supportable on any rational basis. To have an administrative action set aside as arbitrary and capricious, the party challenging the action must prove that it was willful and unreasoning action, without consideration and with a disregard of the facts or circumstances of the case. We have stated that the requirement that administrative action not be arbitrary and capricious is less demanding than the requirement that it be supported by substantial evidence.... [O]nce substantial evidence is found, it automatically follows that a decision cannot be classified as unreasonable or arbitrary.

347 Ark. at 332, 64 S.W.3d at 248 (citations omitted).

II. The Board's Authority

The Board maintains that it acted within its authority in conducting a hearing and imposing sanctions against Appellees for a violation of Section 17 B of Rule and Regulation 1 of the Arkansas Professional Bail Bondsman Licensing Board.¹ Rule and Regulation 1, Section 17, states:

A bail bond company license shall not be issued or renewed if any owner, partner, stockholder or officer:

B. Is regularly or frequently employed by:

(1) A court of law; ...

The Board argues that, though the licenses of Appellees were not up for issuance or renewal at the time of the hearing, Ark. Code Ann. § 17-19-210(a)(1) authorizes the Board to take action against a license if it is determined, after notice and a hearing, that the licensee has "[v]iolated any provision of, or any obligation imposed by, [] any lawful rule, regulation, or order of the board...." The Board also relies on language from Bob Cole...