Carreras v. Iowa Dep’t of Transp., 20-0963

CourtUnited States State Supreme Court of Iowa
Writing for the CourtCHRISTENSEN, CHIEF JUSTICE
PartiesJ. JESUS CARRERAS and LOS PRIMOS AUTO SALES, LLC d/b/a LOS PRIMOS AUTO SALES, Appellants, v. IOWA DEPARTMENT OF TRANSPORTATION, MOTOR VEHICLE DIVISION, Appellee.
Decision Date17 June 2022
Docket Number20-0963

J. JESUS CARRERAS and LOS PRIMOS AUTO SALES, LLC d/b/a LOS PRIMOS AUTO SALES, Appellants,
v.

IOWA DEPARTMENT OF TRANSPORTATION, MOTOR VEHICLE DIVISION, Appellee.

No. 20-0963

Supreme Court of Iowa

June 17, 2022


Submitted February 22, 2022

On review from the Iowa Court of Appeals.

Appeal from the Iowa District Court for Polk County, Jeanie Vaudt, Judge.

Petitioner seeks further review of a court of appeals decision affirming the department of transportation's decision to rescind his license under Iowa Code section 322.3(12). COURT OF APPEALS AFFIRMED IN PART AND VACATED IN PART. DISTRICT COURT AFFIRMED IN PART AND REVERSED IN PART. REMANDED WITH INSTRUCTIONS.

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Todd M. Lantz (argued) and Elisabeth A. Archer of the Weinhardt Law Firm, Des Moines, for appellants.

Thomas J. Miller, Attorney General, Michelle E. Rabe (argued), Assistant Attorney General, for appellee.

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Christensen, C.J., delivered the opinion of the court, in which Waterman and McDonald, JJ., joined, and in which Oxley and Appel, JJ., joined as to parts II and III.C, and in which McDermott, J., joined as to parts II and III.A-B. Oxley, J., filed an opinion concurring in part and dissenting in part, in which Appel, J., joined. McDermott, J., filed an opinion concurring in part and dissenting in part. Mansfield, J., took no part in the consideration or decision of the case.

CHRISTENSEN, CHIEF JUSTICE

This case presents a question of first impression involving the statutory interpretation of Iowa Code section 322.3(12) (2019). Specifically, we must determine whether a motor vehicle dealer licensee's federal structuring conviction for splitting cash deposits into several business accounts to avoid a federal reporting requirement is "in connection with selling or other activity relating to motor vehicles." Id. We also must determine whether there is substantial evidence for the license revocation and how the five-year license revocation period under section 322.3(12) operates.

The administrative law judge reversed the license revocation because the structuring conviction was not referencing or concerning the sale of motor vehicles. On appeal, the reviewing officer, district court, and court of appeals each determined that the structuring offense had a sufficient relation or nexus to the sale or other activity relating to motor vehicles and revocation was consistent with the purpose of chapter 322. However, the district court and court of appeals disagreed on how the five-year revocation operated: the district court determined the five-year period ran from the termination of judicial review proceedings, while the court of appeals held the license revocation could only occur within five years from the date of the conviction.

For the reasons explained below, we hold this structuring conviction- involving the bank deposits of motor vehicle sales proceeds into different business accounts-has a sufficient relation or nexus to be considered an "indictable offense in connection with selling or other activity relating to motor

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vehicles." Id. We determine there is substantial evidence to revoke the motor vehicle dealer license. While Carreras's revocation started on the date of conviction, the revocation was stayed pending Carreras's challenge to the revocation order. The revocation period shall be extended by the length of the stay.

I. Background Facts and Proceedings.

Husband and wife Jesus and Martha Carreras owned and operated Los Primos Auto Sales vehicle dealership in Des Moines.[1] In August 2017, Jesus and Martha Carreras were charged with multiple federal financial crimes related to the operation of their business. On September 6, 2018, Jesus pleaded guilty to one count of structuring transactions to avoid mandatory reporting requirements in violation of 31 U.S.C. § 5324(a), subsections (1) and (3) in exchange for dismissal of all other charges. On January 24, 2019, Jesus was sentenced to a term of probation.

Jesus admitted to the following as a factual basis for the guilty plea. Los Primos Auto Sales had at least three business accounts. Domestic financial institutions have a legal obligation to report transactions in excess of $10, 000. See 26 U.S.C. § 6050I. From January 2014 to April 2017, Jesus and Martha Carreras, on one or more occasions, deliberately broke up cash deposits from Los Primos motor vehicle sale proceeds into amounts less than $10, 000. These deposits were placed into their business accounts. Specifically, the deposits were

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made in a manner to evade reporting obligations or "cause the financial institutions to fail to report transactions in excess of $10, 000." The structured deposits combined for an amount of at least $111, 835.

On April 2, 2019, the Iowa Department of Transportation (DOT) officially notified Carreras that it was revoking its Motor Vehicle Dealer License for a period of five years effective April 22 under Iowa Code section 322.3(12) because of the structuring conviction. The official notice also provided that the DOT would place the license on an automatic stay order if Carreras requested a revocation hearing. On April 16, Carreras timely appealed the license revocation, and the license revocation was placed on an automatic stay throughout the administrative proceedings. The assigned administrative law judge (ALJ) issued a proposed decision that rescinded the license revocation. The DOT appealed, and the reviewing officer reversed the ALJ's proposed decision.

On October 31, Carreras filed for judicial review of the license revocation in district court. The next day, Carreras filed a request with the DOT to stay the enforcement of the license revocation during the judicial review. The DOT previously informed Carreras that he would "need to file the request for stay in District Court" because the DOT "no longer ha[d] jurisdiction." Carreras responded that Iowa Code chapter 17A did not require "a motion in district court before the agency can grant a stay." The DOT concluded by stating that it would leave the decision of a stay "to the district court and [the DOT] do[es] plan to oppose it." On November 8, Carreras filed an application to stay the license revocation with the district court pursuant to the DOT's request. The district

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court granted a temporary stay of the license revocation, concluding Los Primos would suffer an irreparable injury if the revocation was imposed during the proceedings.

The district court later upheld the DOT's license revocation and determined the DOT had substantial evidence to do so. Carreras filed a notice of appeal on the license revocation. The district court stayed enforcement of the license revocation until the completion of the appeal but tolled the entirety of the five-year revocation period. Carreras filed a separate notice of appeal regarding the tolling period. We consolidated those appeals and transferred the case to the court of appeals, which upheld the DOT's decision to rescind Carreras's license under section 322.3(12) and concluded the DOT had substantial evidence to do so. However, the court of appeals determined the district court lacked the authority to toll the five-year license revocation period under the specific language of section 322.3(12). Carreras sought further review on the license revocation issue. The DOT resisted, and we granted further review.

II. Standard of Review.

"Iowa Code section 17A.19 governs judicial review of this agency action." Good v. Iowa Dep't of Hum. Servs., 924 N.W.2d 853, 860 (Iowa 2019) (quoting Cox v. Iowa Dep't of Hum. Servs., 920 N.W.2d 545, 549 (Iowa 2018)). "We apply the standards set forth in Iowa Code chapter 17A in our judicial review of agency decision-making to determine whether our conclusion is the same as the district court." Id. (quoting Brewer-Strong v. HNI Corp., 913 N.W.2d 235, 242 (Iowa 2018)). "We affirm the district court decision when we reach the same

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conclusion." Id. (quoting Brewer-Strong, 913 N.W.2d at 242). However, we may reverse the agency action if it "prejudiced the substantial rights of the petitioner and if the agency action falls within one of the criteria listed in section 17A.19(10)(a) through (n)." Id. (quoting Brewer-Strong, 913 N.W.2d at 242).

On appeal, Carreras contends the agency action violated sections 17A.19(10)(b) and (10)(c). Iowa Code §§ 17A.19(10)(b) (authorizing relief if the agency action is "in violation of any provision of law"), (c) (authorizing relief if the agency action is "[b]ased upon an erroneous interpretation of a provision of law whose interpretation has not clearly been vested by a provision of law in the discretion of the agency"). Thus, we review the statutory interpretation at issue for errors of law but give deference to the agency's application of the law to the facts. See Neal v. Annett Holdings, Inc., 814 N.W.2d 512, 518 (Iowa 2012); Drake Univ. v. Davis, 769 N.W.2d 176, 183 (Iowa 2009).

Carreras also contends the agency's action violated section 17A.19(10)(f). Iowa Code § 17A.19(10)(f) (authorizing relief if the agency action is "[b]ased upon a determination of fact clearly vested by a provision of law in the discretion of the agency that is not supported by substantial evidence in the record before the court when that record is viewed as a whole"). "When reviewing a finding of fact for substantial evidence, we judge the finding 'in light of all the relevant evidence in the record cited by any party that detracts from that finding as well as all of the relevant evidence in the record cited by any party that supports it.'" Cedar Rapids Cmty. Sch. Dist. v. Pease, 807 N.W.2d 839, 845 (Iowa 2011) (quoting Iowa Code § 17A.19(10)(f)(3)). "Our task, therefore, is not to determine whether the

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evidence supports a different finding; rather, our task is to determine whether substantial evidence, viewing the record as a whole, supports the findings actually made." Id.

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