Original Blue Ribbon Taxi v. Sc Dmv

• Decision Date: 25 November 2008
• Docket Number: No. 4461.,4461.
• Citation: 380 S.C. 600,670 S.E.2d 674
• Court: South Carolina Court of Appeals
• Parties: The ORIGINAL BLUE RIBBON TAXI CORPORATION, Respondent, v. SOUTH CAROLINA DEPARTMENT OF MOTOR VEHICLES, Appellant.

670 S.E.2d 674

380 S.C. 600

The ORIGINAL BLUE RIBBON TAXI CORPORATION, Respondent, v. SOUTH CAROLINA DEPARTMENT OF MOTOR VEHICLES, Appellant.

No. 4461.

Court of Appeals of South Carolina.

Heard November 19, 2008.

Decided November 25, 2008.

Frank L. Valenta, Jr., Phillip S. Porter, and Linda Grice, all of Blythewood, for Appellant.

Gerald M. Finkel and Robert B. Phillips, of Columbia, for Respondent.

ANDERSON, J.:

The South Carolina Department of Motor Vehicles ("DMV") appeals the order of the Administrative Law Court ("ALC") reversing the DMV's denial of an application for a Self-Insurance Certificate. The DMV contends the applicant did not satisfy the requirements established in S.C.Code Ann. § 56-9-60. We affirm.

FACTUAL/PROCEDURAL BACKGROUND

The Original Blue Ribbon Taxi Cab Corporation ("Blue Ribbon") operates a fleet of taxi cabs in South Carolina and has been in operation for over seventy years. Blue Ribbon originally insured its vehicles with policies from various insurance carriers. However, due to soaring policy rates, Blue Ribbon sought and obtained a Self-Insurance Certificate from the DMV. In order to meet the requirements of a self-insurer, Blue Ribbon maintained a segregated claims account to pay judgments entered against it, relying on a letter of credit from the Sumter National Bank ("Bank"). The DMV accepted the letter of credit as complying with the statutory prerequisites.

On November 14, 2005, Blue Ribbon and the Bank renewed and amended the irrevocable letter of credit to limit claims to the minimum automobile insurance policy limits enacted by the General Assembly. In February 2006, the DMV denied Blue Ribbon's renewal application for the Self-Insurance Certificate in response to the new limitations provided for in the letter of credit. Blue Ribbon contested the decision before a DMV Senior Hearing Officer. In his order affirming the denial, the Senior Hearing Officer expounded:

I conclude that the DMV was not satisfied that the Letter of Credit submitted by the Petitioner showed ability to satisfy any judgment against it. I conclude that this decision was in the discretion of DMV as afforded by Section 56-9-60, that the decision was not unreasonable and that it did not contradict state law.

Blue Ribbon further appealed to the Administrative Law Court. The ALC judge issued an order enunciating:

I conclude that the Department's decision to deny Blue Ribbon's application warrants reversal. The Department's decision is premised on the assumption that the legislature intended for self-insurers to provide greater protection to the public than statutory liability policies provide. However, the Department's assumption is at odds with the way in which our Supreme Court has interpreted legislative intent with respect to the self-insurer statute.

...

Furthermore, if the Department were able to deny self-insurer status in any case where it was dissatisfied that the applicant was able to pay any judgment that might be entered against it, then the Department could deny virtually all applications for self-insurer certification. Few, if any, South Carolina companies seeking self-insurer certification can show that they are able to satisfy any potential adverse judgment, no matter how large.

(emphasis in original). The ALC judge concluded Blue Ribbon had complied with the statutory requirements for self-insurer status and reversed the decision of the DMV.

ISSUE

Did the Administrative Law Court err in reversing the South Carolina Department of Motor Vehicles' denial of Blue Ribbon's application for a Self-Insurance Certificate under S.C.Code Ann. § 56-9-60?

STANDARD OF REVIEW

In an appeal from the decision of an administrative agency, the Administrative Procedures Act provides the appropriate standard of review. Olson v. S.C. Dep't of Health & Envtl. Control, 379 S.C. 57, 63, 663 S.E.2d 497, 500-501 (Ct.App.2008); Turner v. S.C. Dep't of Health & Envtl. Control, 377 S.C. 540, 544, 661 S.E.2d 118, 120 (Ct.App. 2008); Clark v. Aiken County Gov't, 366 S.C. 102, 107, 620 S.E.2d 99, 101 (Ct.App.2005). Section 1-23-610(C) of the South Carolina Code is applicable and efficacious in articulating the standard:

The review of the administrative law judge's order must be confined to the record. The reviewing tribunal may affirm the decision or remand the case for further proceedings; or it may reverse or modify the decision if the substantive rights of the petitioner has been prejudiced because of the finding, conclusion, or decision is:

(a) in violation of constitutional or statutory provisions;

(b) in excess of the statutory authority of the agency;

(c) made upon unlawful procedure;

(d) affected by other error of law;

(e) clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record; or

(f) arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.

S.C.Code Ann. § 1-23-610(C) (Supp.2007).

The decision of the Administrative Law Court should not be overturned unless it is unsupported by substantial evidence or controlled by some error of law. Olson, 379 S.C. at 63, 663 S.E.2d at 501 ("[T]his court can reverse the ALC if the findings are affected by error of law, are not supported by substantial evidence, or are characterized by abuse of discretion or clearly unwarranted exercise of discretion."); see S.C.Code Ann. § 1-23-610(C). The ALC judge's order should be affirmed if supported by substantial evidence in the record. See Whitworth v. Window World, Inc., 377 S.C. 637, 640, 661 S.E.2d 333, 335 (2008); Houston v. Deloach & Deloach, 378 S.C. 543, 550, 663 S.E.2d 85, 88 (Ct.App.2008); McGriff v. Worsley Cos., Inc., 376 S.C. 103, 109, 654 S.E.2d 856, 859 (Ct.App.2007). "However, the reviewing court may reverse or modify the decision of the ALC judge if the finding, conclusion, or decision reached is `clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record' or is affected by an error of law." S.C. Coastal Conservation League v. S.C. Dep't of Health & Envtl. Control, 669 S.E.2d 899, 2008 WL 4693075 (S.C.App.2008) (citing Olson, 379 S.C. at 63, 663 S.E.2d at 501; S.C.Code Ann. § 1-23-610(C)(d)-(e)); see also SGM-Moonglo, Inc. v. S.C. Dep't of Revenue, 378 S.C. 293, 295, 662 S.E.2d 487, 488 (Ct.App.2008) ("The court of appeals may reverse or modify the decision only if the appellant's substantive rights have been prejudiced because the decision is clearly erroneous in light of the reliable and substantial evidence on the whole record, arbitrary or otherwise characterized by an abuse of discretion, or affected by other error of law.").

Substantial evidence, when considering the record as a whole, would allow reasonable minds to reach the same conclusion as the Administrative Law Court and is more than a mere scintilla of evidence. S.C. Coastal, 669 S.E.2d 899, 2008 WL 4693075 at *4 (citing Olson, 379 S.C. at 63, 663 S.E.2d at 501); see Whitworth, 377 S.C. at 640, 661 S.E.2d at 335; Sea Pines Ass'n for Prot. of Wildlife, Inc. v. S.C. Dep't of Natural Res., 345 S.C. 594, 605, 550 S.E.2d 287, 294 (2001); Jones v. Harold Arnold's Sentry Buick, Pontiac, 376 S.C. 375, 378, 656 S.E.2d 772, 774 (Ct.App.2008); McGriff, 376 S.C. at 109, 654 S.E.2d at 859; Liberty Mut. Ins. Co. v. S.C. Second Injury Fund, 363 S.C. 612, 619, 611 S.E.2d 297, 300 (Ct.App.2005); Tennis v. S.C. Dep't of Soc. Servs., 355 S.C. 551, 558, 585 S.E.2d 312, 316 (Ct.App.2003); Gattis v. Murrells Inlet VFW No. 10420, 353 S.C. 100, 108, 576 S.E.2d 191, 195 (Ct.App.2003); Corbin v. Kohler Co., 351 S.C. 613, 617, 571 S.E.2d 92, 95 (Ct.App.2002). "The mere possibility of drawing two inconsistent conclusions from the evidence does not prevent a finding from being supported by substantial evidence." Olson, 379 S.C. at 63, 663 S.E.2d at 501 (citing DuRant v. S.C. Dep't of Health & Envtl. Control, 361 S.C. 416, 420, 604 S.E.2d 704, 707 (Ct.App.2004)); accord Palmetto Alliance, Inc. v. S.C. Pub. Serv. Comm'n, 282 S.C. 430, 432, 319 S.E.2d 695, 696 (1984); Tennis, 355 S.C. at 558, 585 S.E.2d at 316; Gattis, 353 S.C. at 108, 576 S.E.2d at 195.

LAW/ANALYSIS

The DMV avers the ALC judge committed error by reversing the Senior Hearing Officer's denial of Blue Ribbon's self-insurance application. The DMV maintains Section 56-9-60 grants the department discretion to deny self-insurer status to applicants with the apparent inability to satisfy any potential adverse judgments. We disagree.

The relevant statute, Section 56-9-60(A), directs:

(A) A person or company who has more than twenty-five motor vehicles registered in his name may qualify as a self-insurer provided that the department is satisfied that the person or company is able to pay any judgments obtained against the person or company. Upon not less than ten days' notice and a hearing pursuant to notice, the department may cancel self-insurer status when the requirements for the status no longer are met. The person or company must submit the following information to the department for it to determine financial responsibility:

(1) a copy of the applicant's latest financial statement prepared by a certified public accountant licensed to do business in South Carolina, indicating that the applicant has a positive net worth;

(2) a current list of all vehicles registered in applicant's name;

(3) the applicant's procedural guidelines for processing claims; and

(4) the applicant must have a net worth of at least twenty million dollars or the department may require the applicant to deposit in a segregated self-insured claims account the sum of three thousand dollars for each vehicle to be covered by the self-insurer's certificate. Eighty percent must be cash or an irrevocable letter of credit issued by a bank chartered in this State or a member bank of the federal reserve system, and the remaining twenty percent may be satisfied by the "quick sale" appraised value...