Golden's Concrete Co. v. State
| Decision Date | 13 June 1996 |
| Docket Number | No. 95CA0069,95CA0069 |
| Citation | 937 P.2d 789 |
| Parties | GOLDEN'S CONCRETE COMPANY, Golden Gravel Company, Golden Construction Company, and United Companies of Mesa County, Inc., Plaintiffs-Appellants and Cross-Appellees, v. STATE of Colorado; Gale Norton, in her official capacity as Attorney General; Department of Revenue for the State of Colorado; Renny Fagan, in his official capacity as Executive Director, Department of Revenue of the State of Colorado; Dee Hartman, in his official capacity as Director, Division of Motor Vehicles, Larry D. Huls, in his official capacity as Assistant Director, Division of Motor Vehicle; Jean Gouin, in her official capacity as Program Administrator, Division of Motor Vehicles; and Jaki Berry, in her official capacity as Administrative Officer, Motor Carrier Services, Division of Motor Vehicles, Defendants-Appellees and Cross-Appellants. . IV |
| Court | Colorado Court of Appeals |
King & Isaacson, Scott E. Isaacson, Salt Lake City, Utah; Hutchison, Neider, Ward & King, Richard C. Hutchison, Murray, Utah, for Plaintiffs-Appellants and Cross-Appellees.
Gale A. Norton, Attorney General, Stephen K. ErkenBrack, Chief Deputy Attorney General, Timothy M. Tymkovich, Solicitor General, Mark W. Gerganoff, Assistant Attorney General, Denver, Colorado, for Defendants-Appellees and Cross-Appellants.
In this action challenging the state's implementation of a 1989 statute concerning the collection of truck registration fees from intrastate motor vehicle carriers, plaintiffs, Golden's Concrete Company, Golden Gravel Company, Golden Construction Company, and United Companies of Mesa County, Inc., appeal the trial court's judgment of dismissal against them for failure to exhaust administrative remedies. Defendants, the State of Colorado, its Department of Revenue, and various named individual defendants sued in their official capacities as elected or appointed Colorado officials (collectively the Department), cross-appeal the trial court's order denying their request for attorney fees. We reverse as to plaintiffs' appeal, affirm as to the cross-appeal, and remand for further proceedings.
Plaintiffs, owners of trucks used in intrastate commerce, licensed their vehicles with the State of Colorado in December 1989. Those licenses expired the following year and had to be renewed in December 1990. In early 1992, the Department sent plaintiffs a letter demanding additional fees for the licenses they had obtained in December 1989. The Department's process of attempting to recover higher fees for this period has become known as "backbilling."
The backbilling here occurred as a result of the General Assembly's implementation of Senate Bill 159, which eliminated the gross ton-mile tax on trucks and increased the registration fee from a flat $22.50 per vehicle to a range of fees calculated according to the weight of the vehicle and its annual mileage in Colorado. See Colorado Session Laws 1989, ch. 356, § 42-3-123 at 1583; Riverton Produce Co. v. State, 871 P.2d 1213 (Colo.1994); Buckley Powder Co. v. State, 924 P.2d 1133 (Colo.App. 1996).
However, because the vehicle information for intrastate trucks was not available as of December 1989, the Department was unable to generate a bill for such trucks reflecting the new fees in effect as of January 1, 1990. Accordingly, it determined that, as a temporary measure, the lower 1989 fees would be charged to those intrastate carriers whose licenses expired in December 1989, until such time as the information was available to backbill those carriers for the difference between the 1989 and 1990 rates.
Although this approach created a short-term, one-time disparity in the statute's application between the interstate and intrastate carriers, that disparity was effectively eliminated when the Department backbilled all but two of the intrastate carriers with December expiration dates for the higher 1990 registration fees. See Riverton Produce Co. v. State, supra ().
In January 1993, the Department orally advised at least some plaintiffs that they would not be able to renew their licenses for 1993 until the backbilled amounts had been paid. Thereafter, plaintiffs commenced this action seeking injunctive and declaratory relief, as well as refunds of the amounts collected in the backbilling program.
Plaintiffs brought this case as a class action, on behalf of themselves and approximately 600 intrastate truck owners who also had December 1989 expiration dates.
Shortly after the complaint was filed, the trial court denied plaintiffs' request for a preliminary injunction on the ground that there was an adequate remedy at law insofar as the Department promised to refund any backbilled amounts collected if plaintiffs prevailed in their legal arguments.
The Department then filed a motion to dismiss the complaint arguing that plaintiffs had failed to exhaust their administrative remedies and that, therefore, the district court lacked jurisdiction. The trial court agreed and dismissed plaintiffs' amended complaint for lack of jurisdiction.
Subsequently, the trial court denied the Department's request for attorney fees under both § 13-17-101, et seq., C.R.S. (1987 Repl.Vol. 6A), and § 13-17-201, C.R.S. (1987 Repl.Vol. 6A).
On appeal, plaintiffs contend that the trial court erred in determining that exhaustion of their administrative remedies was necessary prior to judicial review. We agree.
Initially, the Department contends that because plaintiffs, as a practical matter, are challenging a denial of the renewal of their 1993 licenses, plaintiffs were required to request an administrative hearing pursuant to § 24-4-104(7), C.R.S. (1988 Repl.Vol. 10A). Plaintiffs, on the other hand, maintain that they were not required to initiate any administrative proceedings under the Administrative Procedure Act (APA), § 24-4-101, et seq., C.R.S. (1988 Repl.Vol. 10A) until such time as they received formal denial of their license renewal requests. We agree with plaintiffs.
Section 24-4-104(7) provides in pertinent part that in any case in which a licensee has timely applied for a license renewal, the existing license shall not expire until such application has been finally acted upon by the agency and, if the application is denied, it shall be treated in all respects as a revocation. Section 24-4-104(3), C.R.S. (1988 Repl.Vol. 10A) provides in turn that no revocation shall be lawful unless, before institution of agency proceedings therefor, the agency has given the licensee notice in writing of facts or conduct that may warrant such action and afforded the licensee opportunity to submit written data, views, and arguments relating to such facts or conduct.
Here, there is no evidence in the record that the Department ever sent written notices to plaintiffs or putative class members that their 1993 licenses would not be renewed until they paid the amounts that were alleged to be due under the backbilling procedure. Significantly, plaintiffs' amended complaint does not state any claim based upon the Department's failure to renew their 1993 licenses. Rather, the gravamen of the amended complaint is a challenge to the backbilling procedures themselves, focusing on the letters sent to plaintiffs in early 1992 advising them of the amounts the Department claimed were due under the backbilling procedure.
Hence, insofar as any administrative agency procedure was applicable, we conclude that none was triggered here under the theory that the Department had denied plaintiffs' request to renew their 1993 licenses.
Insofar as the Department maintains that plaintiffs were required to exhaust some administrative procedure, such as requesting declaratory relief pursuant to § 24-4-105(11), C.R.S. (1988 Repl.Vol. 10A), we consider plaintiffs' arguments that such procedures should be excused here.
Plaintiffs assert that because the complaint raises only questions of law, and no factual issues need be resolved, the exhaustion requirement should be excused. We agree.
The general rule is that where administrative remedies are provided, they must be exhausted before judicial relief may be sought. Downey v. Department of Revenue, 653 P.2d 72 (Colo.App.1982). Although a plaintiff's failure to exhaust administrative remedies can in many cases deprive the courts of jurisdiction to grant relief, Gramiger v. Crowley, 660 P.2d 1279 (Colo.1983), the exhaustion doctrine is not absolute. Patel v. Thomas, 793 P.2d 632 (Colo.App.1990).
The principal policies underlying the exhaustion doctrine are to prevent premature interference with agency processes; to afford the parties and the courts the benefit of its experience and expertise; and to compile a record that is adequate for judicial review. Weinberger v. Salfi, 422 U.S. 749, 95 S.Ct. 2457, 45 L.Ed.2d 522 (1975); Moschetti v. Liquor Licensing Authority, 176 Colo. 281, 490 P.2d 299 (1971).
However, these policies becomes less persuasive when existing administrative remedies are ill-adapted to providing the relief sought, and when the matter in controversy raises questions of law not within the agency's expertise rather than issues committed to administrative discretion and expertise. See McKart v. United States, 395 U.S. 185, 89 S.Ct. 1657, 23 L.Ed.2d 194 (1969) (); Hamilton v. City & County of Denver, 176 Colo. 6, 490 P.2d 1289 (1971) (...
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... ... It also created a state agency called the Committee on Anticompetitive Conduct (CAC), which reviews the final acts of ... 987 P.2d 869 Cf. Golden's Concrete Co. v. State, 937 P.2d 789 (Colo.App.1996), rev'd on other grounds, State v. Golden's Concrete Co., ... ...