Luisi Truck Lines, Inc. v. Washington Utilities and Transp. Commission

• Decision Date: 28 December 1967
• Docket Number: No. 38932,38932
• Citation: 72 Wn.2d 887,435 P.2d 654
• Parties: LUISI TRUCK LINES, INC., Respondent, v. WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION, Appellant.
• Court: Washington Supreme Court

Page 887

72 Wn.2d 887

435 P.2d 654

LUISI TRUCK LINES, INC., Respondent, v. WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION, Appellant.

No. 38932.

Supreme Court of Washington, Department 2.

Dec. 28, 1967.

John J. O'Connell Atty. Gen., Robert E. Simpson, Asst. Atty. Gen., Olympia, for appellant.

Glenn W. Toomey, Seattle, for respondent.

WARD, Judge. ^*

In this action the Washington Utilities and Transportation Commission seeks the review of an order of remand entered by the Thurston County Superior Court which directed the commission to make findings of fact with respect to the property rights which the plaintiff, Luisi Truck Lines, Inc., acquired under a permit extension issued in 1939. On November 14, 1939, the Department of Public Service of the State of Washington granted to Eugene Luisi an extension of a common carrier permit No. 4514, originally issued to him on September 16, 1937, to include the hauling of 'fruit and vegetables between points in King and Pierce counties and points in Chelan, Yakima, Benton and Kittitas counties.' On September 21, 1962, the Washington Utilities and Transportation Commission permitted Eugene Luisi to transfer permit No. 4514 to Luisi Truck Lines, Inc. ¹

The permit issued to Luisi, as amended and extended from time to time, granted him the right to haul within the state of Washington a number of different agricultural commodities, materials and supplies. This appeal, however, concerns only the property rights included within the general terms 'fruit and vegetables' granted him in the amendatory order in 1939. Luisi unilaterally construed the permit as authorization to haul fruit and vegetables both in the natural state and as semi-processed and fully-processed agricultural commodities. The commission apparently acquiesced in Luisi's construction of the permit until 1948. Between 1939 and 1948 he was permitted to haul fresh fruit and vegetables, fruit, semi-processed in brine, and frozen and canned commodities without objection by the commission. This included peas in lug boxes, pre-cooled with water, and in frozen packages.

In 1948, Mr. Luisi was notified by some undisclosed representative of the state agency that his permit did not grant him the right to haul semi-processed or fully-processed agricultural commodities, and pursuant to such informal directive, Luisi hauled fruit and vegetables in their natural state only until 1954, when he again commenced hauling processed and canned goods and continued until 1961, at which time the commission, in a show cause proceeding, charged him in five counts with having violated and exceeded his permit authority by hauling canned fruit and vegetables. Mr. Luisi appeared in person any by counsel at the show cause proceedings which resulted in the entry of order No. M.V. 76854 on June 7, 1962. Findings of fact Nos. 3 and 4, and the decretal portion of the order are as follows:

3. Respondent is guilty of five violations of Rule 18 (now Rule 21) in that he hauled canned fruits and vegetables on five separate occasions.

4. The following authority permits the applicant to haul unmanufactured and unprocessed fruits and vegetables only:

Fruit and vegetables between points in King and Pierce Counties and points in Chelan, Yakima, Benton and Kittitas Counties.

ORDER

WHEREFORE, IT IS ORDERED That the respondent be assessed monetary penalties and be served with a statutory notice as provided by RCW 81.80.350.

DATED at Olympia, Washington, and effective June 7, 1962.

WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION.

On June 10, 1964, Luisi Truck Lines, Inc., filed a petition with the commission requesting a hearing to determine the specific authority granted to it in permit No. 4514 and specifically requested an interpretation which would permit it to haul fruit and vegetables both unmanufactured and also semi-processed, processed and canned. At the hearing held upon this petition, the petitioner presented the history of operations under the permit since 1937 as briefly summarized above. The commission presented no evidence except order No. M.V. 76854. The commission on this record made a finding that the term 'fruit and vegetables' as used in Luisi's permit, included the transportation of fresh fruit and vegetables only, that semi-processed or processed fruits and vegetables were excluded from the terms of the permit, and upon this finding denied the petition of Luisi for clarification of the rights which were acquired in 1939 under permit No. 4514.

The evidence presented at the 1964 hearing indicated that there have been technological changes between 1939 and 1964 in the handling of fruit and vegetables from the time they leave the field until they reach the form in which they are put on the market. Some of these developments include what is termed semi-processing and include methods by which the fruit and vegetables, through the use of brine or cooling processes, are kept substantially in their raw and natural state while being transported from Eastern Washington where produced, to processing plants situated in Western Washington. ² The record brought before this court does not indicate that the commission gave any consideration to this evidence or made any finding thereon. The record shows that the order entered following the 1964 hearing was predicated entirely upon the proceedings brought in 1961 to determine whether Luisi was guilty of violating the state law and the commission's regulations in hauling canned goods. The record indicates that in 1961 the commission produced only the testimony of one of its employees who expressed the opinion that Luisi did not have authority to haul fruit and vegetables in a canned processed or semi-processed condition. The record does not indicate that any testimony whatsoever was presented with respect to the nature of the property rights which Luisi acquired in 1939 under the general terms 'fruit and vegetables' as those trade usages were understood at that time, and counsel in oral argument affirms that that question was not considered by the commission as a basis for its order.

The Superior Court of Thurston County on its review of the record noted that there had never been a determination by the commission with respect to the property rights which Luisi acquired in 1939 and remanded the proceeding to the commission to make a determination and enter findings of fact with respect to the property rights which Luisi acquired in 1939 (incorrectly referred to in the order as 1938). It is from that order that this appeal is taken.

The issue in this case is a narrow one; it deals entirely with the related principles of collateral attack, collateral estoppel and res judicata. It is the commission's position that finding No. 4 in its 1962 order, to the effect that Luisi's permit allowed him to haul only unmanufactured and unprocessed fruit and vegetables, was res judicata and determinative of the issues presented in the 1964 proceedings. It is the plaintiff's position that this finding of fact went beyond the issues of the 1961 proceedings and that res judicata principles do not bar the subsequent determination of those issues which were not necessarily and actually determined and litigated in the prior proceedings. We agree that the plaintiff's construction is correct.

It should be noted initially that the common carrier permit which Luisi acquired in 1939 permitting him to haul fruit and vegetables within certain designated areas constituted a property right and that under the laws of this state, RCW 81.80.280, such property right can be canceled, suspended, altered or amended only on account of repeated violations of the laws governing common carriers, the rules and regulations of the commission, or the motor laws of the state of Washington or the United States. The cited statute recognizes the property owner's right to due process of law before he may be deprived of this property right and requires a notice and hearing. The notice obviously would be insufficient to constitute due process of law unless it directed the permit holder's attention to the fact that an issue to be determined at the hearing would be the cancellation, alteration or amendment of the property right which he had under the terms of his permit. In Lee & Eastes, Inc. v. The Public Service Commission, 52 Wash.2d 701, 704, 328 P.2d 700 (1958), we said:

RCW 81.80.280 requires notice and a hearing before the commission can cancel, suspend, alter or amend any permit; it then authorizes such changes only on the basis of certain violations. Clearly the permits are not subject to the arbitrary whim or caprice of the commission, once they have been issued. In this respect, a permit, once acquired and exercised, becomes a vested right, subject to being divested for cause. See Taylor-Edwards Warehouse & Transfer Co. v. Department of Public Service, 1945, 22 Wash.2d 565, 157 P.2d 309. (Footnote omitted.)

The 1961 hearing was held pursuant to a complaint filed by the commission charging that Luisi had violated the law, and the rules and regulations of the commission in that he had hauled canned goods in violation of his permit. RCW 81.04.110 requires that '(a)ll grievances to be inquired into shall be plainly set forth in the complaint.' The Administrative Procedure Act, in RCW 34.04.090, prior to the 1967 amendment, stated that '(t)he notice shall state the time, place and issues involved, but if, by reason or the nature of the proceeding, the issues cannot be fully stated in advance of the hearing, * * * they shall be fully stated as soon as practicable, and opportunity shall be afforded all parties to present evidence and argument with respect thereto.' The record does not indicate and the commission does not contend that Luisi has ever been given notice of a hearing pursuant to RCW 81.80.280, notifying him that the commission sought to cancel, suspend or alter the property rights which he acquired in 1939 under the ...