In re Juran and Moody, Inc.

Decision Date03 July 2000
Docket NumberNo. 990355.,990355.
Citation2000 ND 136,613 N.W.2d 503
PartiesIn the Matter of JURAN AND MOODY, INC., a/k/a JM Dissolution, JM Capital Corporation, Juran and Moody Financial Group, Inc., Municipal Capital Markets Corporation, George Frank, and their Officers, Directors, Employees, Salesmen, Affiliated Companies, and escrow Agents or Trustees who acted as Agents for any of the Respondents. North Dakota Securities Commissioner, Appellant, v. Juran and Moody, Inc., a/k/a JM Dissolution, JM Capital Corporation, Juran and Moody Financial Group, Inc., Municipal Capital Markets Corporation, George Frank, and their Officers, Directors, Employees, Salesmen, Affiliated Companies, and escrow Agents or Trustees who acted as Agents for any of the Respondents, Respondents and Appellees.
CourtNorth Dakota Supreme Court

James L. Norris, Special Assistant Attorney General, James L. Norris, P.C., Bismarck, for appellant.

Todd Ervin Zimmerman, Dorsey & Whitney, Fargo, for respondents and appellees.

KAPSNER, Justice.

[¶ 1] The North Dakota Securities Commissioner ("Commissioner") appeals from the district court's dismissal of his appeal from the final decision of the administrative law judge ("ALJ") which dismissed the Commissioner's order against Juran and Moody, Inc., et al. ("Juran and Moody"). We hold the Commissioner is allowed to appeal under N.D.C.C. § 28-32-15 and has standing to appeal. We therefore reverse and remand to the district court.

I

[¶ 2] On July 24, 1997, the Commissioner issued an order against Juran and Moody. The Commissioner ordered Juran and Moody to stop offering unregistered, nonexempt securities and to pay $175,000 for violations of securities laws. Juran and Moody timely requested a hearing. Juran and Moody filed objections to the Commissioner's order, asserting, in part, the Commissioner had improperly destroyed documents regarding the treatment of securities transactions of other companies1 and Juran and Moody had relied on those documents in its own securities transactions. The Commissioner submitted a request for an ALJ to the Office of Administrative Hearings ("OAH"). The request listed the Commissioner and Juran and Moody as the parties, described the matter as an "[a]ppeal of Commissioner's order based on unregistered securities offerings, misrepresentation and failure to provide information to the Commissioner," and indicated the Commissioner sought an ALJ "[t]o conduct the hearing, issue findings of fact, conclusions of law, and a final order." (emphasis in original). Explaining his decision to request a final order, the Commissioner indicated he "felt that it was very important to allow the hearing officer to make the final decision since Juran & Moody were already accusing the Commissioner of being biased."

[¶ 3] The OAH designated an ALJ to hear the matter. Prior to a hearing, several motions were made. Juran and Moody moved the ALJ for permission to serve interrogatories upon the Commissioner. The Commissioner initially contested the motion but later provided Juran and Moody with the requested information. Juran and Moody successfully moved the ALJ to exclude an affidavit submitted by the Commissioner. Both Juran and Moody and the Commissioner moved the ALJ for summary judgment.

[¶ 4] A hearing was held before the ALJ in November 1998. Juran and Moody and the Commissioner attended and presented arguments to the ALJ. On January 22, 1999, the ALJ issued "Findings of Fact, Conclusions of Law, and Order on Cross-Motions for Summary Judgment." The ALJ found Juran and Moody did not violate securities registration laws and dismissed the Commissioner's imposition of civil penalties. The ALJ, however, did not resolve all the issues. The Commissioner withdrew the allegations regarding the remaining issues. The ALJ issued a final order of dismissal on April 20, 1999.

[¶ 5] The Commissioner appealed to district court. Asserting the Commissioner lacked standing to appeal, Juran and Moody filed a motion to dismiss. The court concluded "the agency has not established that it has `standing' for purposes of appealing its own final order" and granted Juran and Moody's motion to dismiss. The Commissioner appealed.

II

[¶ 6] The Commissioner argues N.D.C.C. § 28-32-15 should be interpreted to allow his appeal from the ALJ's decision. The interpretation of a statute is a question of law fully reviewable by this Court. Medcenter One, Inc. v. North Dakota State Bd. of Pharmacy, 1997 ND 54, ¶ 13, 561 N.W.2d 634. Our primary goal is to ascertain legislative intent. Id. We look first to the language of the statute. Id. We read statutes as a whole to give meaning to each word and phrase, whenever fairly possible. Id. If the language is clear and unambiguous, the legislative intent is presumed clear from the face of the statute. Id. "If the language of a statute is ambiguous, the court may resort to extrinsic aids to interpret the statute." Blackburn, Nickels & Smith, Inc. v. National Farmers Union Property & Cas. Co., 452 N.W.2d 319, 322 (N.D.1990). A statute is ambiguous if it is susceptible to differing rational meanings. Northern X-Ray Co., Inc. v. State ex rel. Hanson, 542 N.W.2d 733, 735 (N.D.1996). Ambiguity may result where the Legislature has amended portions of a statute. Roggenbuck v. North Dakota Workers Comp. Bur., 481 N.W.2d 599, 602 (N.D.1992) (noting "the ambiguity resulting from the amendments to section 65-05-15, N.D.C.C.").

[¶ 7] Section 28-32-15, N.D.C.C., is susceptible to differing rational meanings and is thus ambiguous. On several occasions, the Legislature has amended different portions of the statute. Subsection one suggests the Commissioner, as a party to the administrative proceedings, may appeal from the ALJ's decision. N.D.C.C. § 28-32-15(1). It indicates "[a]ny party to any proceeding heard by an administrative agency, except in cases where the order of the administrative agency is declared final by any other statute, may appeal from the order." Id. `Party' means each person named or admitted as a party or properly seeking and entitled as of right to be admitted as a party. An administrative agency may be a party." N.D.C.C. § 28-32-01(8). Other subsections, however, suggest the Commissioner, as the agency, may not appeal. Subsection four provides "[a]n appeal shall be taken by serving a notice of appeal ... upon the administrative agency concerned." N.D.C.C. § 28-32-15(4). Subsection five provides "[t]he agency and all other parties of record who are not designated as appellants must be named as appellees." N.D.C.C. § 28-32-15(5). Subsection six provides "[t]he bond or other undertaking [filed by the appellant]... may be enforced by the agency concerned." N.D.C.C. § 28-32-15(6).

[¶ 8] Because the statute is ambiguous, we may consider extrinsic evidence to interpret it. State v. Brossart, 1997 ND 119, ¶ 14, 565 N.W.2d 752. Under N.D.C.C. § 1-02-39:

If a statute is ambiguous, the court, in determining the intention of the legislation, may consider among other matters:
1. The object sought to be attained.
2. The circumstances under which the statute was enacted.
3. The legislative history.
4. The common law or former statutory provisions, including laws upon the same or similar subjects.
5. The consequences of a particular construction.
6. The administrative construction of the statute.
7. The preamble.

[¶ 9] Interpreting N.D.C.C. § 28-32-15 to preclude the Commissioner from appealing from the ALJ's final decision would frustrate the apparent, although not explicit, legislative intent. "[O]ur interpretation must be consistent with legislative intent and done in a manner which will accomplish the policy goals and objectives of the statutes." In the Interest of K.G., 551 N.W.2d 554, 556-57 (N.D.1996) (citations omitted). The consequences of construing N.D.C.C. § 28-32-15 to preclude the Commissioner's appeal, a proper consideration under N.D.C.C. § 1-02-39(5), compel us to hold that in the limited context where an agency requests the OAH designate an ALJ to issue a final decision and appeal is not expressly prohibited,2 the requesting agency is allowed to appeal under N.D.C.C. § 28-32-15.

[¶ 10] Finality is a concept central to the administrative process as it establishes the time to petition for reconsideration under N.D.C.C. § 28-32-14, the effectiveness of the order under N.D.C.C. § 28-32-14.1, and the time for appeal under N.D.C.C. § 28-32-15. Understood within the statutory construct of administrative agency actions, the finality of an order is a precondition to taking further action, not a prohibition against further appeal. See II Kenneth Culp Davis & Richard J. Pierce, Jr., Administrative Law Treatise § 15.11, at 355 (3d ed.1994) (emphasizing "[c]ourts have long held that only `final agency action' is reviewable" and noting final actions are "immediately reviewable" under section 704 of the Administrative Procedure Act). We believe the district court misinterpreted the word "final" in the Commissioner's request to the OAH as precluding appeal by the Commissioner from the ALJ's decision.

[¶ 11] The Legislature has developed a scheme allowing an agency the option to request the OAH designate an ALJ to issue a final decision rather than a recommendation. See Blanchard v. North Dakota Workers Comp. Bur., 1997 ND 118, ¶ 14, 565 N.W.2d 485 (providing "[w]hen read as a whole, the statutory scheme for decisions by an ALJ manifests a legislative intent that an ALJ's decision is a final order when the Legislature has authorized the ALJ to issue a final order, or when the requesting agency has authorized the ALJ to issue a final order"). Section 28-32-13(2), N.D.C.C., indicates if a "person authorized by the agency head or by law to issue a final order, is presiding, the order issued is the final order." Under N.D.C.C. § 28-32-08.5(6), a hearing officer has a duty to "[m]ake findings of fact and conclusions of law and issue a final order, if required by statute or requested by an...

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