DAISY OUTDOOR ADVERTISING v. SCDOT, 3564.

• Decision Date: 12 November 2002
• Docket Number: No. 3564.,3564.
• Citation: 572 S.E.2d 462,352 S.C. 113
• Court: South Carolina Court of Appeals
• Parties: DAISY OUTDOOR ADVERTISING COMPANY, INC., Appellant, v. SOUTH CAROLINA DEPARTMENT OF TRANSPORTATION, Respondent.

352 S.C. 113

572 S.E.2d 462

DAISY OUTDOOR ADVERTISING COMPANY, INC., Appellant, v. SOUTH CAROLINA DEPARTMENT OF TRANSPORTATION, Respondent.

No. 3564.

Court of Appeals of South Carolina.

Submitted July 10, 2002.

Decided November 12, 2002.

Robert D. Moseley, Jr., of Greenville; for Appellant.

Assistant Chief Counsel Barbara M. Wessinger, of Columbia; for Respondent.

HUFF, J.:

Daisy Outdoor Advertising Company, Inc. (Daisy) appeals from the circuit court's affirmance of the Administrative Law Judge's (ALJ's) order upholding the South Carolina Department of Transportation's (SCDOT's) revocation of two permits for outdoor advertising signs. We affirm.¹

FACT AND PROCEDURAL HISTORY

Daisy applied for permits for two outdoor advertising signs to be located along 1-26 in Spartanburg County in November of 1998. As the signs were to be located in an area without zoning, Daisy was required to identify a qualifying business within 600 feet of the sign sites. The applications listed Quick Response Fire Systems as the qualifying business. On March 31, 1999, SCDOT informed Daisy that the applications had been approved.

In May of 1999, Quick Response ceased its operations at this location. By August of 1999, it had vacated the location, the power had been disconnected, and a "For Lease" sign had been placed in front of the building. In November of 1999, SCDOT informed Daisy that it was canceling the permits for the signs.

Daisy appealed to the ALJ. The ALJ found SCDOT had established by prima facie evidence that Quick Response's activities at the location were a sham as defined in 25A S.C.Code Ann. Regs. 63-342(U) (Supp.2001). He then found Daisy failed to overcome SCDOT's prima facie case that Quick Response was primarily situated at this location to qualify the sign site and failed to establish that there was any meaningful business conducted at Quick Response for the requisite one-year period after the approval of the applications. Daisy appealed to the circuit court, which affirmed the ALJ. This appeal followed.

STANDARD OF REVIEW

The standard of review for a court reviewing the decision of an ALJ is set forth in S.C.Code Ann. § 1-23-610(D) (Supp.2001) of the Administrative Procedures Act (APA). The court may not substitute its judgment for that of the ALJ on questions of fact when those facts are supported by substantial evidence. Al-Shabazz v. State, 338 S.C. 354, 527 S.E.2d 742 (2000). Substantial evidence is relevant evidence that, considering the record as a whole, a reasonable mind would accept to support the ALJ's decision. Id. It exists when, if the case were presented to a jury, the court would refuse to direct a verdict because the evidence raises questions of fact for the jury. Id. Substantial evidence is more than a mere scintilla of evidence, but is something less than the weight of the evidence. Id. Furthermore, the possibility of drawing two inconsistent conclusions from the evidence does not prevent a court from concluding that substantial evidence supports the ALJ's finding. Id.

DISCUSSION

Daisy argues the circuit court's order should be reversed because the ALJ erred in upholding SCDOT's revocation of the sign permits. We disagree.

In the Highway Advertising Control Act, the General Assembly acknowledged that outdoor advertising is "a business which must be allowed to exist and operate where other business and commercial activities are conducted and that a reasonable use of property for outdoor advertising to the traveling public is desirable." S.C.Code Ann. § 57-25-130 (Supp.2001). However, the General Assembly also recognized that the erection and maintenance of outdoor advertising signs adjacent to the interstate and federal-aid primary systems must be regulated. Id. Thus, it granted SCDOT the authority to issue permits for the erection and maintenance of the signs and to promulgate regulations governing the issuance of the permits. S.C.Code Ann. § 57-25-150(A) (Supp.2001).

Generally, the Highway Advertising Control Act limits the placement of commercial outdoor advertising signs to zoned industrial areas, zoned commercial areas, unzoned commercial areas, or unzoned industrial areas. S.C.Code Ann. § 57-25-140(7) & (8) (Supp.2001). An unzoned commercial or industrial area is defined as "the land occupied by the regularly used building, parking lot, and storage and processing area of a commercial, business, or industrial activity and land within six hundred feet of it on both sides of the highway." S.C.Code Ann. § 57-25-120(4) (Supp.2001). Such an area does not include an area occupied by "sham activities." 25A S.C.Code Ann. Regs. 63-342(FF)(4) (Supp.2001). A sham activity is defined as:

any activity that is seemingly a commercial or industrial activity but which was created primarily or exclusively to qualify an area as an unzoned commercial or industrial area and which does not conduct any meaningful business at the activity site. Failure of an activity to maintain the standards set forth under the definition of transient and temporary² within one year after a sign permit was issued based on the activity qualifying the sign site as an unzoned commercial or industrial area shall be prima facie evidence that the activity was a sham.

25A S.C.Code Ann. Regs. 63-342(U) (Supp.2001). If an activity is subsequently determined to be a sham activity, the sign permitted under this activity shall be illegal and must be removed at the sign owner's or landowner's expense. 25A S.C.Code Ann. Regs. 63-344(G) (Supp.2001).

Daisy acknowledges in its brief that Quick Response ceased its operations less than one year after the permit approval, and thus, SCDOT established a prima facie case that Quick Response was a sham activity. Once a party establishes a prima facie case, the burden of proof shifts to the opposing party. Hadfield v. Gilchrist, 343 S.C. 88, 538 S.E.2d 268 (Ct.App.2000). The ALJ found Daisy had failed to overcome SCDOT's prima facie case that Quick Response was a sham activity. We reject Daisy's contention that the ALJ improperly shifted the burden of proof to Daisy. Furthermore, we find substantial evidence in the record supports the ALJ's finding that Daisy failed to overcome SCDOT's prima facie case that Quick Response was primarily situated at this location to qualify the sign sites as an unzoned commercial area.

Pursuant to Regulation 63-342(U), Daisy had the burden of coming forward with evidence to show (1) Quick Response was not created primarily or exclusively to qualify the location for an outdoor advertising sign, and (2) it conducted meaningful activity at the site. Daisy asserts it met this burden by presenting evidence that Quick Response was a viable business conducting meaningful business for more than a year before the approval of the sign permits. The issue is not whether Quick Response was a legitimate business, but rather whether its activities at the site were created primarily or exclusively to qualify the site for placement of the signs.

Daisy, whose primary business is outdoor advertising, owns the buildings Quick Response occupied on the site. Daisy and Quick Response entered into the lease on April 23, 1998. The terms of the lease were very favorable towards Quick Response. The rent was only $400.00 a month compared to $1,600.00 a month Quick Response paid at its former location. Daisy continued to pay the electric bills for the site until October 19, 1998, when the electricity was connected in Quick Response's name. Quick Response...