Matador Service, Inc. v. Missouri Basin Well Service, Inc.

• Decision Date: 01 May 1985
• Docket Number: No. 10762,10762
• Citation: 367 N.W.2d 749
• Parties: MATADOR SERVICE, INC., Power Fuels, Inc., and Getter Trucking, Inc., Appellants, v. MISSOURI BASIN WELL SERVICE, INC., and Bruce Hagen, Leo M. Reinbold, Dale V. Sandstrom, members of the North Dakota Public Service Commission, Appellees. Civ.
• Court: North Dakota Supreme Court

Page 749

367 N.W.2d 749

MATADOR SERVICE, INC., Power Fuels, Inc., and Getter Trucking, Inc., Appellants, v. MISSOURI BASIN WELL SERVICE, INC., and Bruce Hagen, Leo M Reinbold, Dale V. Sandstrom, members of the North Dakota Public Service Commission Appellees.

Civ. No. 10762.

Supreme Court of North Dakota.

May 1, 1985.

Wheeler, Wolf, Peterson, Schmitz, McDonald & Johnson, Bismarck, for appellants Matador Service, Inc. and Power Fuels, Inc.; argued by R.W. Wheeler, Bismarck.

McIntee & Whisenand, Williston, for appellant Getter Trucking, Inc.; argued by Fred E. Whisenand, Williston.

Hovland & Gambucci, Minneapolis, Minn., for appellee Missouri Basin Well Service, Inc.; argued by James B. Hovland, Minneapolis, Minn.

Daniel S. Kuntz, Asst. Atty. Gen., North Dakota Public Service Com'n, Bismarck, for Public Service Com'n.

ERICKSTAD, Chief Justice.

Matador Service, Inc. [Matador], Power Fuels, Inc. [Power Fuels], and Getter Trucking, Inc. [Getter] appeal from a district court judgment affirming an order of the North Dakota Public Service Commission [PSC] which granted a special certificate of public convenience and necessity to Missouri Basin Well Service, Inc. [Basin]. We affirm.

During January 1980, Basin was incorporated for the purpose of providing completion, maintenance, and other services required in the production of oil, gas, and related minerals. Between the spring of 1981 and October 1982, Basin purchased four trucks and leased them at various times to several oil field shippers and certificated common motor carriers operating in western North Dakota.

Under the terms of the lease agreements, the trucks were driven by Basin employees and the drivers received their direction and pay from Basin rather than from the lessee. As rental for the use of the truck and driver, the lessee paid a fuel surcharge and an hourly rate five percent less than the PSC published rate schedule. Before entering into the leases, Basin consulted with PSC motor carrier division personnel regarding equipment leases with shippers and mailed a copy of the leases to the PSC for its tacit approval.

In October 1982, Basin began leasing its four trucks exclusively to Getter. The truck leases with Getter were filed and approved by the PSC pursuant to Chapter 69-03-06, N.D.A.C. Under the lease arrangement, Basin paid Getter between 15 and 23 percent of all gross revenue. During the first five months of 1983, Basin lost more than $13,000 in its trucking operation while paying Getter more than $97,000. Basin attempted to negotiate for a lower percentage rate of payment to Getter, but Getter refused to reduce the rate.

On April 29, 1983, Basin filed an application with the PSC for a special certificate of public convenience and necessity seeking authority to transport:

"Liquids used in or in connection with the discovery, development and production of natural gas and petroleum and their products and by-products, between points in Golden Valley, Stark, Dunn, Billings, Hettinger, Adams and Bowman Counties, ND."

The application was subsequently amended to include Slope County and to contain a restriction against the transportation of crude oil and refined petroleum products, except under certain circumstances.

Matador, Power Fuels, and Getter appeared at the hearing to protest the application. The PSC issued its findings of fact, conclusions of law and order granting Basin's application on November 1, 1983. The district court affirmed the PSC's decision in a judgment dated May 29, 1984, and Getter, Matador, and Power Fuels have appealed.

I

Getter asserts on appeal that the PSC's findings relating to the need for the proposed service, the public convenience and necessity, and the effect of the proposed service on other existing transportation facilities are not supported by a preponderance of the evidence.

In an appeal from a decision of an administrative agency, we review the agency's decision rather than the district court's decision, and look to the record compiled by the agency. Application of Skjonsby Truck Line, Inc., 357 N.W.2d 227 (N.D.1984); Garner Public School v. Golden Valley County Committee, 334 N.W.2d 665 (N.D.1983). We determine whether or not the administrative agency's findings of fact are supported by a preponderance of the evidence, its conclusions of law are sustained by the findings of fact, and its decision is supported by the conclusions of law. Application of Skjonsby Truck Line, Inc., supra; Appeal of Dickinson Nursing Center, 353 N.W.2d 754 (N.D.1984). We do not make independent factual findings or substitute our judgment for that of the agency, but determine only whether a reasoning mind reasonably could have determined that the factual conclusions reached were proved by the weight of the evidence from the entire record. Application of Skjonsby Truck Line, Inc., supra; Power Fuels, Inc. v. Elkin, 283 N.W.2d 214 (N.D.1979).

The thrust of Getter's argument in regard to each of the issues it has raised is that the PSC's findings and conclusions are in error because they fail to recognize the legal effect of the lease agreements between Getter and Basin. The PSC's findings and conclusions are based on the testimony of several shipper witnesses who appeared in support of the application and testified, in essence, that they rely on Basin to satisfy their transportation requirements and that they wish to continue using Basin's services for future needs. Getter asserts that the services referred to by the shippers were not those of Basin, but were those of Getter under its lease agreements with Basin.

The PSC found that under the lease arrangement "Getter does not provide Missouri Basin with any direction as to the conduct of its operation." The PSC further found that when Basin entered into the lease agreements with Getter "it had some customers and it has been continuing to serve those customers," and that Getter has contacted Basin with offers of freight "less than 10 times." With regard to the lease arrangement, the PSC found:

"Missouri Basin furnishes the trucks, drivers, carries its own insurance, pays all of its equipment and operational expenses, solicits its own business, answers the phone at its terminal facility and dispatches equipment under the name Missouri Basin on a 24-hour per day basis. All billings are prepared by Applicant and processed for payment by Getter. Getter handles proration and licensing on Missouri Basin's equipment, pays Missouri Basin based on billings and allows Missouri Basin to operate under their authority."

The evidence reflects that most of the shippers served by Basin were solicited by Basin rather than Getter and considered Basin to be the carrier. The PSC's findings that shippers wanted to continue to use Basin as a carrier recognized the distinction between the service rendered by Basin as Getter's lessee and the services rendered by Getter with its own equipment and personnel. We conclude that the PSC did not err in characterizing Basin, throughout its findings and conclusions in this case, as the provider of services even though the services were provided by lease under Getter's authority.

Getter asserts that Basin failed to establish a need for the proposed service. Getter argues that the PSC erred in not finding that the shipper witnesses had no complaints or problems in securing adequate services and that the existing certificated carriers had the necessary equipment and resources to provide the transportation services Basin sought to provide. Getter's argument implies that the PSC was required to make a finding regarding the adequacy of existing service. This court, rejecting a similar argument in Power Fuels, Inc. v. Elkin, 283 N.W.2d 214, 225-226 (N.D.1979), held that the evidence need not show that the services furnished by holders of existing certificates are not reasonably adequate before an additional certificate may be granted to an applicant. We quoted with approval from In re Hanson, 74 N.D. 224, 239, 21 N.W.2d 341, 349 (1945):

" '[T]he commission is not confined to the immediate present. It must have a broad view and a far look and though public necessity and convenience may seem to be somewhat trivial at first, to the commission charged with the duty of oversight it may appear conditions were so shaping themselves there is a growing demand now and for the immediate future and thus the commission be required to make provision therefor. It is not merely the necessity for the next day; but for the morrow which governs the commission.' " Power Fuels, supra, 283 N.W.2d at 225-226. [Footnote omitted.]

In 1981, the Legislature amended Sec. 49-18-14, N.D.C.C., ¹ by specifically deleting adequacy of existing transportation facilities as a factor to be considered by the PSC in granting a certificate. 1981 N.D.Sess.Laws Ch. 479, Sec. 8. Getter's assertion is therefore without merit.

Many of the shipper witnesses testified that they are currently relying on Basin to satisfy their transportation needs, that they expect expansion of their North Dakota operations in the future, and that they wish to use Basin's services for those future needs. We conclude that the PSC's findings relating to the public need for Basin's services are supported by a preponderance of the evidence.

Getter also asserts that, before a certificate may be granted, the PSC must find that public convenience and necessity require the proposed service rather than that the proposed service would be consistent with public convenience and necessity. Getter relies on Sec. 49-18-15, N.D.C.C., which provides in pertinent part:

"49-18-15. Testimony--Issuance of certificate--Conditions.... If the commission finds from the evidence that the public convenience and necessity require the proposed service or any part thereof, it may issue the certificate as prayed for, or may issue it for the partial exercise only of the privilege sought, and may attach to the exercise of the right granted by...