Auto Body Association of Rhode Island v. State of Rhode Island Department of Business Regulation, C.A. No. PC 07-6484 (R.I. Super 8/13/2008)

• Decision Date: 13 August 2008
• Docket Number: C.A. No. PC 07-6484.
• Parties: AUTO BODY ASSOCIATION OF RHODE ISLAND v. STATE OF RHODE ISLAND DEPARTMENT OF BUSINESS REGULATION and MICHAEL MARQUES in his capacity as DIRECTOR OF THE DEPARTMENT OF BUSINESS REGULATION
• Court: Rhode Island Superior Court

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AUTO BODY ASSOCIATION OF RHODE ISLAND v. STATE OF RHODE ISLAND DEPARTMENT OF BUSINESS REGULATION and MICHAEL MARQUES in his capacity as DIRECTOR OF THE DEPARTMENT OF BUSINESS REGULATION

C.A. No. PC 07-6484.

Superior Court of Rhode Island.

Providence, Sc.

Filed August 13, 2008.

DECISION

VOGEL, J.

The Auto Body Association of Rhode Island ("ABARI") seeks review of a final Decision ("Decision") by the Rhode Island Department of Business Regulation ("DBR" or "agency"). In that Decision, DBR, acting through its director, A. Michael Marques ("Marques"), denied ABARI's declaratory request that the prevailing rate for labor is to be determined solely by the provisions of G.L. 1956 § 27-29-4.4. The Rhode Island Administrative Procedures Act ("RIAPA"), G.L. 1956 § 42-35-15, confers jurisdiction on this Court.

I Facts and Travel

ABARI describes itself as a membership organization comprised of approximately 100 independent auto body repair facilities throughout Rhode Island. (Mem. of Law on Behalf of Appellant, Auto Body Association of Rhode Island [hereinafter ABARI Mem. of Law] at 2.) ABARI argues that § 27-29-4.4 "requires auto insurers to determine and set a prevailing labor rate based upon the results of . . . [the] labor rate survey [mandated by the statute], and to pay such rate established to fully licensed auto body repair facilities in Rhode Island." Id. at 1. On July 23, 2007, ABARI formally requested a declaratory ruling from DBR urging the agency to "declare that the survey results be used to determine a prevailing labor rate as required by the statute, which does not allow any other mechanism to determine and set such rate." (Pet. for Declaratory Ruling at 4.) In a supplemental filing with DBR, ABARI further argued that § 27-29-4.4 "is an unambiguous statute and as such does not require statutory construction." (Supplemental Mem. to Req. for Declaratory Ruling at 1.)

On November 11, 2007, DBR denied ABARI's request. In the Decision issued by Marques, the agency determined that several provisions of § 27-29-4.4 are ambiguous and thus it is proper for the agency to interpret the statute in accordance with the legislature's intent. (Decision at 4, 5.) In particular, DBR determined that the phrase "motor vehicle liability insurance" found in § 27-29-4.4(a) is ambiguous because "in Rhode Island there is no line of insurance called `motor vehicle liability insurance.'" (Decision at 4.) DBR also determined that the word "survey" is ambiguous because "the statute utilize[s] the word `survey' in more than one context"—specifically, to refer to a written document and to the information gathered via that document. Id. at 5. Consequently, DBR interpreted the statute as indicating that the labor rate survey mandated by § 27-29-4.4(a) is not the sole determinant of the prevailing labor rate; rather, it is only one factor which insurers are to consider in determining such a rate. (Decision at 7.)

ABARI timely appealed DBR's Decision to the Superior Court. The Property Casualty Insurers Association of America (PCIAA) was granted leave to intervene. PCIAA requests that the Court affirm DBR's Decision.¹ (Mem. of Law on Behalf of Intervenor, the Property Casualty Insurers Association of America [hereinafter PCIAA Mem. of Law] at 10.)

II Standard of Review

The RIAPA explicitly states the standard that governs this Court's review of a determination by an administrative agency, including DBR. See §§ 42-35-15, 42-35-18. Section 42-35-15(g) provides:

"The court shall not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact. The court may affirm the decision of the agency or remand the case for further proceedings, or it 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) Clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record; or

(6) Arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion."

The appellate review authority granted this Court by § 42-35-15 "is limited to an examination of the certified record to determine if there is any legally competent evidence therein to support the agency's decision." Barrington Sch. Comm. v. Rhode Island State Labor Relations Bd., 608 A.2d 1126, 1138 (R.I. 1992). "This limitation obtains even in situations in which the court might be inclined to view the evidence differently and draw inferences different from those of the agency under review." Rhode Island Pub. Telecomm. Auth. v. Rhode Island State Labor Relations Bd., 650 A.2d 479, 485 (R.I. 1994).

However, the Court is not bound by decisions of law reached by an administrative agency, such as DBR. See Chenot v. Bordeleau, 561 A.2d 891, 893 (R.I. 1989) (citing Carmody v. Rhode Island Conflict of Interest Comm'n, 509 A.2d 453, 458 (R.I. 1986)). The Court may reverse, modify, or remand an agency's decision if the decision substantially prejudices the appellant by satisfying any of the six criteria explicitly stated in § 42-35-15(g). See Barrington Sch. Comm., 608 A.2d at 1138. The Court, in its limited review, explores the record to identify and correct any potential violations of the applicant's constitutional or statutory rights. See id. It is the Court's duty "to determine what the law is and its applicability to the facts." Chenot, 561 A.2d at 893. Without question, the construction of a particular statute is a question of law. City of East Providence v. Pub. Utilities Comm'n, 566 A.2d 1305, 1307 (R.I. 1989); see also R.R. Ret. Bd. v. Bates, 126 F.2d 642, 643 (D.C. Cir. 1942) (explaining that whether the appellee came within the scope of the relevant statute "is a question of law, one of statutory interpretation, and that is a field in which courts are regarded as having some expertness"). Therefore, this matter is properly before this Court for de novo review. Marques v. Pawtucket Mut. Ins. Co., 915 A.2d 745, 747 (R.I. 2007) (citing Silva v. Fitzpatrick, 913 A.2d 1060, 1063 (R.I. 2007)).

III

Law and Analysis

A Statutory Interpretation

Section 27-29-4.4, titled "Auto body repair rate surveys," was enacted by the Legislature in 2006. P.L. 2006 ch. 173, § 1. The statute provides in part as follows: "Every insurance carrier authorized to sell motor vehicle liability insurance in the state shall conduct an auto body repair labor rate survey . . . ." Section 27-29-4.4(a). The statute defines "auto body repair labor rate survey" as "an analysis of information gathered from auto body repair shops regarding the rates of labor that repair shops charge in a certain geographic area." Section 27-29-4.4(a)(1). The statute also requires that "[e]ach insurer must conduct an auto body labor rate survey, in writing, annually to determine a prevailing auto body labor rate for fully licensed auto body repair facilities." Section 27-29-4.4(a)(2). The statute indicates four items that must be included in each auto body labor rate survey—the name and address of the shops surveyed; the total number of shops surveyed; the prevailing rate established by the insurer; and a description of the formula or method used to calculate the prevailing rate. Section 27-29-4.4(a)(4).

ABARI asserts that § 27-29-4.4 "is not ambiguous and that deference to the Department's determination should not be accorded as its interpretation of the statute runs contrary to the express language used by the Legislature." (ABARI Mem. of Law 5.) For their part, DBR and PCIAA maintain that the statute is ambiguous and that DBR's interpretation effectuates the Legislature's intent. (Decision at 4, 7; PCIAA Mem. of Law 6-9.) Moreover, DBR and PCIAA urge that DBR, as the administrative agency charged with effectuating § 27-29-4.4, is owed great deference in interpreting the statute. (Br. of the Department of Business Regulation 3; PCIAA Mem. of Law 5.)

This Court recognizes that, under certain circumstances, an administrative agency is owed "great deference in interpreting a statute whose administration and enforcement have been entrusted to the agency." In Re Lallo, 768 A.2d 921, 926 (R.I. 2001). As the Rhode Island Supreme Court has repeatedly explained, an administrative agency is owed great deference in interpreting a statute "where the provisions of a statute are unclear or subject to more than one reasonable interpretation . . . as long as that construction is not clearly erroneous or unauthorized." Gallison v. Bristol Sch. Comm., 493 A.2d 164, 166 (R.I. 1985) (citing Flather v. Norberg, 119 R.I. 276, 377 A.2d 225, 229 n.3 (R.I. 1977)); see Labor Ready Northeast, Inc. v. McConaghy, 849 A.2d 340, 344-45 (R.I. 2004) (explaining that when an administrative agency interprets a statute whose text is unclear or subject to more than one interpretation and that agency is empowered by the Legislature to enforce that statute, a reviewing court must afford the agency's interpretation "weight and deference as long as that construction is not clearly erroneous or unauthorized").

However, when the text of a particular statute is not ambiguous the Court must interpret the statute literally. Labor Ready Northeast, Inc., 849 A.2d at 345 (citing Stebbins v. Wells, 818 A.2d 711, 715 (R.I. 2003)). The Court is mindful that "a primary rule of statutory construction is that words used in a statute should be given their ordinary literal meaning. . . ." Cocchini v. City of Providence, 479 A.2d 108, 111 (R.I. 1984). "It is a well-settled principle of statutory construction in this jurisdiction that when a statute has a plain, clear, unambiguous meaning, no interpretation of the statute is required and the court is bound to construe the...