Eury v. North Carolina Employment Sec. Com'n

• Citation: 446 S.E.2d 383,115 N.C.App. 590
• Decision Date: 02 August 1994
• Docket Number: No. 9310SC935,9310SC935
• Court: North Carolina Court of Appeals
• Parties: Craig Stan EURY, Jr. and Kenneth White, Petitioners/Appellees, v. NORTH CAROLINA EMPLOYMENT SECURITY COMMISSION, Respondent/Appellant.

Page 383

446 S.E.2d 383

115 N.C.App. 590

Craig Stan EURY, Jr. and Kenneth White, Petitioners/Appellees, v. NORTH CAROLINA EMPLOYMENT SECURITY COMMISSION, Respondent/Appellant.

No. 9310SC935.

Court of Appeals of North Carolina.

Aug. 2, 1994.

[115 N.C.App. 596] Robert J. Willis, Raleigh, for petitioner-appellees.

Chief Counsel Thomas S. Whitaker by Alfreda Williamson and Thelma M. Hill, Raleigh, for respondent-appellant.

EAGLES, Judge.

Respondent-ESC brings forth several assignments of error. After careful review, we reverse the Superior Court's 29 June 1993 order and remand to the Superior Court for remand to the Personnel Commission.

I. Standard of Review

The North Carolina Administrative Procedure Act, G.S. 150B-1 et seq., governs both trial and appellate court review of administrative agency decisions. G.S. 150B-51 governs the scope of the Superior Court's review of final agency decisions. G.S. 150B-51(b) provides:

... [T]he court reviewing a final decision may affirm the decision of the agency or remand the case for further proceedings. It may also reverse or modify the agency's decision if the substantial rights of the petitioners may have been prejudiced because the agency's findings, inferences, conclusions, or decisions are:

(1) In violation of constitutional provisions;

(2) In excess of the statutory authority or jurisdiction of the agency;

(3) Made upon unlawful procedure;

(4) Affected by other error of law;

(5) Unsupported by substantial evidence admissible under G.S. 150B-29(a), 150B-30, or 150B-31 in view of the entire record as submitted; or

(6) Arbitrary or capricious.

Regarding the review of the decisions of administrative agencies, in Amanini v. N.C. Dept. of Human Resources, 114 N.C.App. 668, 674-75, 677, 443 S.E.2d 114, 118-19 (1994), this Court stated:

Although the statute [G.S. 150B-51(b) ] lists the grounds upon which the superior court may reverse or modify a final agency decision, the proper manner of review depends upon the particular issues presented on appeal.

If [petitioner] argues the agency's decision was based on an error of law, then "de novo " review is required. If, however, [petitioner] questions (1) whether the agency's decision was supported by the evidence or (2) whether the decision was arbitrary or capricious, then the reviewing court must apply the "whole record" test.

"De novo " review requires a court to consider a question anew, as if not considered or decided by the agency. The "whole record" test requires the reviewing court to examine all competent evidence (the "whole record") in order to determine whether the agency decision is supported by "substantial evidence."

As to appellate review of a superior court order regarding an agency decision, however, the APA simply specifies "[a] party to a review proceeding in a superior court may appeal to the appellate division from the final judgment of the superior court...." N.C.G.S. § 150B-52.

....

... [O]ur review of a trial court's order under G.S. § 150B-52 "is the same as in any other civil case--consideration of whether the court committed any error of law." Under this approach, the appellate court examines the trial court's order for (1) determining whether the trial court exercised the appropriate scope of review and, if appropriate, (2) deciding whether the court did so properly.

error of law. The process has been described as a twofold task:

....

.... [W]here the initial reviewing court should have conducted de novo review, this Court will directly review the State Personnel Commission's decision under a de novo review standard.

(Citations omitted.) "It is well established that an agency has the ability to reject the recommended decision of an administrative law judge.... Even though the administrative law judge ha[s] already made findings of fact and conclusions of law, the Personnel Commission ha[s] the ability to make its own findings of fact and conclusions of law if it cho[oses] to do so." Davis v. N.C. Dept. of Human Resources, 110 N.C.App. 730, 737, 432 S.E.2d 132, 136 (1993) (citing Webb v. N.C. Dept. of Environmental Health and Natural Resources, 102 N.C.App. 767, 404 S.E.2d 29 (1991); Jarrett v. N.C. Dept. of Cultural Resources, 101 N.C.App. 475, 400 S.E.2d 66 (1991)). See also Oates v. N.C. Dept. of Correction, 114 N.C.App. 597, 442 S.E.2d 542 (1994); Ford v. N.C. Dept. of Environment, Health and Natural Resources, 107 N.C.App. 192, 199, 419 S.E.2d 204, 208 (1992).

Here, some of the assignments of error have presented errors of law and accordingly we have conducted a de novo review of those issues. In light of the errors of law and the resultant incomplete condition of the record, we do not consider respondent-ESC's remaining assignments of error, including whether there was substantial evidence to support the Personnel Commission's order of dismissal. We remand the cause to the Superior Court for remand to the Personnel Commission for further hearing.

II. Scope of Admissions and Offer of Proof

Respondent-ESC argues that the Superior Court erred by improperly construing respondent-ESC's admissions and by concluding that respondent-ESC had failed to make a formal offer of proof of testimony excluded by those admissions. We agree.

G.S. 1A-1, Rule 36 provides:

(a) Request for admission.--A party may serve upon any other party a written request for the admission, for purposes of the pending action only, of the truth of any matters within the scope of Rule 26(b) set forth in the request that relate to statements or opinions of fact or of the application of law to fact....

Each matter of which an admission is requested shall be separately set forth. The matter is admitted unless, within 30 days after service of the request, or within such shorter or longer time as the court may allow, the party to whom the request is directed serves upon the party requesting the admission a written answer or objection addressed to the matter, signed by the party or by his attorney....

(b) Effect of admission.Any matter admitted under this rule is conclusively established unless the court on motion permits withdrawal or amendment of the admission. Subject to the provisions of Rule 16 governing amendment of a pretrial order, the court may permit withdrawal or amendment when the presentation of the merits of the action will be subserved thereby and the party who obtained the admission fails to satisfy the court that withdrawal or amendment will prejudice him in maintaining his action or defense on the merits.

G.S. 1A-1, Rule 36. See G.S. 150B-28(a); 26 N.C.A.C. 03 .0012. The Comment to G.S. 1A-1, Rule 36 notes that "[i]n form and substance a Rule 36 admission is comparable to an admission in pleadings or a stipulation drafted by counsel for use at trial, rather than to an evidentiary admission of a party." See also 2 K. Broun, Brandis & Broun on North Carolina Evidence, § 198, at 23 (4th Ed.1993) (failure to respond to a pretrial demand for admissions constitutes a judicial admission). In Contractors, Inc. v. Forbes, 302 N.C. 599, 604-05, 276 S.E.2d 375, 379-80 (1981), our Supreme Court set forth the guidelines for the construction of judicial admissions:

A judicial admission is a formal concession which is made by a party in the course of litigation for the purpose of withdrawing a particular fact from the realm of dispute. See generally 2 Stansbury's North Carolina Evidence § 166 (Brandis rev. 1973). Such an admission is not evidence, but it, instead, serves to remove the admitted fact from the trial by formally conceding its existence. E.g., State v. McWilliams, 277 N.C. 680, 178 S.E.2d 476 (1971). Stipulations are viewed favorably by the courts because their usage tends to simplify, shorten, or settle litigation, as well as save costs to litigants. Rickert v. Rickert, 282 N.C. 373, 193 S.E.2d 79 (1972); Rural Plumbing and Heating, Inc. v. H.C. Jones Construction Co., 268 N.C. 23, 149 S.E.2d 625 (1966); Chisolm [Chisholm ] v. Hall, 255 N.C. 374, 121 S.E.2d 726 (1961). Yet, the effect or operation of a stipulation will not be extended by the courts beyond the limits set by the parties or by the law. Rickert v. Rickert, supra; Lumber Co. v. Lumber Co., 137 N.C. 431, 49 S.E. 946 (1905). In determining the extent of the stipulation, it is appropriate to look to the circumstances under which it was entered, as well as to the intentions of the parties as expressed by the agreement. Rickert v. Rickert, supra. Stipulations will receive a reasonable construction so as to effect the intentions of the parties, but in ascertaining the intentions of the parties, the language employed in the agreement will not be construed in such a manner that a fact which is obviously intended to be controverted is admitted or that a right which is plainly not intended to be waived is relinquished. Id.

Here, petitioners served on respondent-ESC a "Request For Admissions" on 20 June 1990. The section of the Request entitled "Instructions" stated inter alia as follows:

12. Unless otherwise specifically indicated, when used in this discovery request, the phrase "discernible negative impact" shall be defined in the way that that same phrase was used and/or defined in the case of National Cash Register, 70 Labor Arbitration Reports 756, 759.

13. Unless otherwise specifically indicated, when used in this discovery request, the phrase "Event # 1" shall be defined to refer to and include the information contained in the following sentence: "During the afternoon hours on Wednesday, July 12, 1989, the Plaintiffs admitted to Det. Sgt. T.D. Monroe, Det. Sgt. C. Goodnight, and Sgt. Ralph Simmons that the plaintiffs had been growing marijuana on or before July 12, 1989, and that all the marijuana plants and paraphernalia discovered by those same law officers on or before July 12, 1989 at the turn off of NC 705 onto RUPR 1300, opening near end of road, belonged to the plaintiffs."

14. Unless otherwise specifically indicated, when...