Hudson v. Director of Revenue, State

• Decision Date: 06 March 2007
• Docket Number: No. WD 65912.,WD 65912.
• Citation: 216 S.W.3d 216
• Parties: Lugene HUDSON, Respondent, v. DIRECTOR OF REVENUE, STATE OF MISSOURI, Appellant.
• Court: Missouri Court of Appeals

216 S.W.3d 216

Lugene HUDSON, Respondent, v. DIRECTOR OF REVENUE, STATE OF MISSOURI, Appellant.

No. WD 65912.

Missouri Court of Appeals, Western District.

March 6, 2007.

Cheryl Caponegro Nield, Associate Solicitor, Jefferson City, for Appellant.

Philip F. Cardarella, Kansas City, for Respondent.

Before HOWARD, P.J., BRECKENRIDGE and HARDWICK, JJ.

PATRICIA BRECKENRIDGE, Judge.

The Director of Revenue appeals the judgment of the trial court reversing the director's suspension of Lugene Hudson's vehicle registration for submitting false proof of insurance pursuant to section 303.042.4, RSMo Cum.Supp.2006.¹ In her sole point on appeal, the director claims that the trial court erred in reinstating Mr. Hudson's vehicle registration because its decision is against the weight of the evidence, is unsupported by substantial evidence, and misapplies the law in that the director properly suspended Mr. Hudson's vehicle registration because he presented a false insurance card to the Department of Revenue. Specifically, the director contends that, although Mr. Hudson believed that his insurance card was valid, his belief is irrelevant because, under the Motor Vehicle Financial Responsibility Law, liability is strict. Because this court finds that section 303.042.4 is a strict liability statute, the trial court erred in reinstating Mr. Hudson's vehicle registration. The judgment of the trial court is reversed and remanded for entry of judgment reinstating the suspension of Mr. Hudson's vehicle registration.

Factual and Procedural Background

On October 26, 2004, Mr. Hudson attempted to renew his vehicle registration at the Department of Revenue's Raytown branch office. At the branch office, Mr. Hudson gave a Department of Revenue employee his paperwork, which included an insurance identification card, as required by section 303.026. After viewing the card, the employee informed Mr. Hudson that his insurance identification card was invalid. The employee believed Mr. Hudson's insurance card was false because the paper and the colors were not the same as other Farmers Insurance Company cards, the print was not properly aligned, and the back of the card had several spacing, capitalization, and grammatical errors. The employee retained the insurance card and returned the rest of Mr. Hudson's paperwork to him. Sometime that same day, the employee contacted a representative at Farmers Insurance Company and the representative was unable to find a valid insurance policy by name or policy number.²

After learning that his insurance card was invalid, Mr. Hudson attempted to locate the individual who sold him the policy. Mr. Hudson had purchased the policy at a mall from a man dressed in a suit who was sitting at a table with a sign that said automobile insurance. The man represented to Mr. Hudson that he was from Farmers Insurance Company. Mr. Hudson told the man how much he paid for his insurance and the man told Mr. Hudson "I can get it cheaper" because he contacted the insurer directly, rather than having the expense of an office. Mr. Hudson then filled out some paperwork, paid for the policy, and was given an insurance identification card. After the Department of Revenue employee told Mr. Hudson that the card was not valid, he returned to the mall where he had purchased the policy, but the man was no longer there.

Upon further investigation by the Department of Revenue, a Farmers Insurance representative confirmed that the company was not able to locate any policy with Mr. Hudson's name or policy number in the company's database. On December 2, 2004, the Department of Revenue sent notice to Mr. Hudson that it was suspending his vehicle plates on January 9, 2005, for a period of one year because there was reason to believe that the proof of insurance Mr. Hudson submitted to the Department of Revenue was false. The notice referenced section 303.042.4. In response to the Department's notice, Mr. Hudson requested an administrative hearing, and an appeals referee of the Administrative Hearing Section of the Department of Revenue heard the matter on January 26, 2006.

In lieu of appearing at the hearing, Mr. Hudson elected to submit his testimony by affidavit. In the affidavit, Mr. Hudson provided a brief description of how he procured the insurance card. Mr. Hudson also stated that when he attempted to register his vehicle that was the first time he knew that his insurance was invalid. Mr. Hudson further stated that, immediately upon learning that his insurance was invalid, he went to a valid insurance broker and obtained vehicle insurance. Mr. Hudson then resubmitted his vehicle registration application at the Department of Revenue, and his vehicle registration was renewed.

On February 8, 2005, the appeals referee issued a Statement of the Case, Findings of Fact, Conclusions of Law and Decision finding that the proof of insurance Mr. Hudson submitted to the Department of Revenue was false. The document also included the director's decision to suspend Mr. Hudson's vehicle registration for one year, effective March 13, 2005. Pursuant to section 303.290.2, Mr. Hudson filed a petition for review of the director's decision in the Circuit Court of Jackson County, claiming that he did not knowingly submit a false proof of insurance to the Department of Revenue. On May 19, 2005, the circuit court held a de novo hearing, at which Mr. Hudson testified that he had no way of knowing that the insurance card was invalid and that he thought it was real. On June 20, 2005, the trial court found "the issues in favor of" Mr. Hudson, granted his petition for review, and reversed the decision of the director. The director filed this appeal.

Standard of Review

In reviewing the trial court's judgment regarding the director's decision to suspend an owner's vehicle registration for submitting false proof of insurance under section 303.042.4, this court reviews the trial court's judgment and not the decision of the director. Dilts v. Dir. of Revenue, 208 S.W.3d 299, 301 (Mo.App. W.D. 2006). This court will affirm the judgment of the trial court unless it is against the weight of the evidence, unsupported by substantial evidence, or erroneously declares or applies the law. Id. This court defers to the trial court's determinations of credibility. Whitworth v. Dir. of Revenue, 207 S.W.3d 623, 624 (Mo.App. E.D. 2006). All evidence and inferences therefrom are viewed in the light most favorable to the prevailing party. Id. However, where "`the evidence is uncontroverted or admitted so that the real issue is a legal one as to the legal effect of the evidence,'" then this court need not defer to the judgment of the trial court. Id. (citation omitted).

Liability Under Section 303.042.4 is Strict Liability

In her sole point on appeal, the director claims that the trial court erred in reinstating Mr. Hudson's vehicle registration because its decision is against the weight of the evidence, unsupported by substantial evidence, and misapplies the law, in that the director properly suspended Mr. Hudson's vehicle registration because he presented a false insurance card to the Department of Revenue. Specifically, the director contends that, although Mr. Hudson believed that his insurance card was valid, his belief is irrelevant because, under section 303.042.4 of the Motor Vehicle Financial Responsibility Law, liability is strict.

On the other hand, Mr. Hudson claims that the term "false" in section 303.042.4 evidences the legislature's intention that the owner must knowingly submit a false insurance card. Because he did not know the insurance card he submitted was false, Mr. Hudson argues that the trial court did not err in reversing the director's suspension of his vehicle registration. Mr. Hudson alternatively claims that, even if there is no knowledge requirement and liability is strict, the trial court did not err because the director failed to prove that the "insurance card submitted was in fact false." He further claims that there is also an "issue" as to whether "the alleged false insurance card was ever actually `submitted.'"

Under Missouri's Motor Vehicle Financial Responsibility Law, every motor vehicle owner, at the time of vehicle registration, is required to show an insurance identification card or other proof of financial responsibility. Section 303.026.2. If the proof of insurance submitted by a vehicle owner is false, the director is required to suspend the owner's vehicle registration and driving privilege for one year. Section 303.042.4. As stated above, the director claims that liability under section 303.042.4 is strict liability, while Mr. Hudson asserts that lack of knowledge of the falsity of the insurance card is a proper defense. Resolution of this case requires an interpretation of section 303.042.4.

The primary object of statutory interpretation is to ascertain the intent of the legislature from the language used. United Pharmacal Co. of Mo., Inc. v. Mo. Bd. of Pharmacy, 208 S.W.3d 907, 909 (Mo. banc 2006). In doing so, this court considers the words used in the statute in their plain and ordinary meaning. Id. at 910. "When the legislative intent cannot be determined from the plain meaning of the statutory language, rules of statutory construction may be applied to resolve any ambiguity." Id.

Section 303.042.4 provides:

If the director determines that the proof of insurance submitted by a motor vehicle owner or operator pursuant to this chapter is false, the director shall suspend the owner's vehicle registration and operator's driving privilege. The director shall terminate the suspension one year after the effective date upon payment by the owner or operator of a reinstatement fee of one hundred fifty dollars and submission of proof of insurance as prescribed in section 303.026 or some other form of proof of insurance as prescribed by the director.

(Emphasis added.) Because "false" is not defined in Chapter 303, "its meaning...