Pretzer v. Motor Vehicle Bd.

• Decision Date: 16 January 2003
• Docket Number: No. 03-02-00403-CV.,03-02-00403-CV.
• Citation: 125 S.W.3d 23
• Parties: Randy PRETZER; Scott Bossier; Bossier Chrysler-Dodge II, Inc. d/b/a Bossier Country, Appellants, v. The MOTOR VEHICLE BOARD and Motor Vehicle Division of the Texas Department of Transportation, Appellees.
• Court: Texas Court of Appeals

125 S.W.3d 23

Randy PRETZER; Scott Bossier; Bossier Chrysler-Dodge II, Inc. d/b/a Bossier Country, Appellants, v. The MOTOR VEHICLE BOARD and Motor Vehicle Division of the Texas Department of Transportation, Appellees.

No. 03-02-00403-CV.

Court of Appeals of Texas, Austin.

January 16, 2003.

Rehearing Overruled February 27, 2003.

J. Bruce Bennett, Cardwell, Hart & Bennett, L.L.P., William R. Crocker, Austin, for Appellants.

Nancy Elizabeth Olinger, Assistant Attorney General, Natural Resource Division, Austin, for Appellees.

Before Justices B.A. SMITH, PATTERSON and PURYEAR.

OPINION

JAN P. PATTERSON, Justice.

In this case, we must decide whether appellees Motor Vehicle Board and Motor Vehicle Division of the Texas Department of Transportation (collectively, "Board") had the statutory authority and adduced substantial evidence to sanction appellants Randy Pretzer, Scott Bossier, and Bossier Chrysler-Dodge II, Inc. d/b/a Bossier Country (collectively, "Bossier") for violations of the Texas Motor Vehicle Code ("Code"). Bossier appeals a district court judgment affirming in part, overruling in part, and reversing and remanding in part a final order of the Board, which imposed $180,000 in civil penalties for violations of sections 4.06(a)(5) and 4.06(a)(6) of the Code. We affirm the judgment of the district court in part, reverse and render in part, and remand the cause to the district court for further proceedings in accordance with this opinion.

FACTUAL AND PROCEDURAL BACKGROUND

Bossier Country ("dealership"), located in the rural community of Fairfield, Texas, is licensed by the Board to sell motor vehicles. Scott Bossier is the president of the dealership and owns a majority of its stock. With a background as an accountant, Scott Bossier handles financial matters of the dealership but is not involved in its day-to-day activities. In 1991, Scott Bossier placed an advertisement in a trade journal to sell the dealership, which had been losing money. Randy Pretzer, who had owned a financially troubled dealership in Washington state, answered the ad. Although Pretzer did not have enough money to buy the dealership, Scott Bossier hired him as general manager in mid-1992. As general manager, Pretzer runs the daily operations of the dealership, which include training and supervising the sales staff. In an effort to increase sales, he also put into place a seven-step sales approach, which sales staff described as "buy or die" and "very high-pressure."

On March 27, 1996, the enforcement section of the Board filed a complaint against Bossier, alleging that beginning in 1991 it had violated the Code by engaging in various fraudulent practices, including (i) submitting false and forged credit applications to potential creditors on behalf of purchasers; (ii) submitting false and forged documents in support of credit applications; (iii) forging buyers' signatures on sales contracts and altering terms of sales contracts after being signed; (iv) defrauding customers by refusing to return trade-ins before sales transactions were final; (v) defrauding customers by requiring them, as a condition of obtaining financing, to pay additional money or agree to a designated "cash price" in excess of the true price at which Bossier sold the vehicles for cash in the ordinary course of business; and (vi) making false representations to the Board about the ownership of the dealership.

The contested case hearing on the complaint was conducted from November 12 through November 25, 1996, with testimony from more than forty witnesses. On March 25, 1998, the administrative law judge ("ALJ") issued an eighty-nine-page proposal for decision ("PFD"), which included extensive findings of fact and conclusions of law. Among the conclusions of law were that Bossier "willfully defrauded retail buyers" in violation of section 4.06(a)(5) of the Code and that by "violation of any law relating to the sale, distribution, financing, or insuring of motor vehicles" it had also violated section 4.06(a)(6). See Tex.Rev.Civ. Stat. Ann. art. 4413(36), § 4.06(a)(5), (6) (West Supp. 2003).

On July 9, 1998, the Board issued its final order, adopting all of the findings of fact and all but three of the conclusions of law (with a modification to another), and imposing civil penalties of $150,000 on the dealership, $25,000 on Pretzer, and $5,000 on Scott Bossier. The order further barred Pretzer for five years from having an ownership interest of ten percent or greater in a franchised or independent dealer, serving as general manager of a dealer, or being in charge of the business activities of a dealer. It also prohibited any dealership in which Pretzer was involved in any of the above capacities from having a franchised or independent dealer's license for five years. Finally, it ordered the dealership, Pretzer, and Scott Bossier to cease and desist from committing any additional violations of the Code.

Bossier sought judicial review of the Board's order in a Travis County district court. The district court found substantial evidence to support the finding that Bossier "willfully defrauded retail buyers" in violation of section 4.06(a)(5) of the Code but determined that the Board did not have jurisdiction to enforce section 4.06(a)(6) of the Code as to retail sales of used motor vehicles occurring before June 8, 1995. It therefore reversed the Board's conclusion that Bossier had violated section 4.06(a)(6). Further, because the Board's order based the civil penalties on several statutory violations, the district court reversed and remanded the cause to the Board for determination of civil penalties based solely on violation of section 4.06(a)(5) of the Code.

On appeal, Bossier contends in six of its eight issues that the district court erred in holding that (i) the Board had the statutory authority to impose penalties against Pretzer and Scott Bossier individually; (ii) Bossier received sufficient notice of the legal and factual bases of the complaint filed against it; (iii) there is substantial evidence to support the Board's findings that Bossier willfully defrauded retail buyers of automobiles under section 4.06(a)(5) of the Code; (iv) the Board made sufficient findings of fact to support its conclusion that Bossier violated section 4.06(a)(5); (v) the Board was not required to give Bossier notice before filing its complaint; and (vi) the Code does not violate the equal protection provisions of the United States and Texas Constitutions or the separation of powers provision of the Texas Constitution. In its two remaining issues, Bossier contends that the Board erroneously applied a "preponderance of the evidence" standard of proof, instead of the higher "clear and convincing evidence" standard, and that the ALJ erred in denying Bossier's motion to reopen the contested case hearing.

ANALYSIS

I.

In its first issue, Bossier argues that the district court erred in holding that the Board has the statutory authority to impose monetary penalties and sanctions against Scott Bossier and Pretzer, individually, for violations of section 4.06(a)(5) of the Code. Because Scott Bossier and Pretzer are not "licensees,"¹ it contends that the Board has no statutory authority to sanction them for violations of the Code.

Statutory construction is a question of law, which we review de novo. Lopez v. Texas Workers' Comp. Ins. Fund, 11 S.W.3d 490, 494 (Tex.App.-Austin 2000, pet. denied) (citing Johnson v. City of Fort Worth, 774 S.W.2d 653, 656 (Tex.1989); Republic Western Ins. Co. v. State, 985 S.W.2d 698, 701 (Tex.App.-Austin 1999, pet. dism'd w.o.j.)). In construing these statutes, we are mindful of the rules of statutory construction. One of the cardinal rules is that we must ascertain and give effect to the legislature's intent for the provision we are construing. See Fleming Foods v. Rylander, 6 S.W.3d 278, 284 (Tex.1999); Union Bankers Ins. Co. v. Shelton, 889 S.W.2d 278, 280 (Tex.1994); Calvert v. Texas Pipe Line Co., 517 S.W.2d 777, 780 (Tex.1974). The legislature's intent should be determined by reading the language used in the particular statute and construing the statute in its entirety. See In re Bay Area Citizens Against Lawsuit Abuse, 982 S.W.2d 371, 380 (Tex.1998); Taylor v. Firemen's & Policemen's Civil Serv. Comm'n, 616 S.W.2d 187, 190 (Tex. 1981). Further, we should read every word, phrase, and expression in a statute as if it were deliberately chosen, and presume the words excluded from the statute are done so purposefully. See Gables Realty Ltd. P'ship v. Travis Cent. Appraisal Dist., 81 S.W.3d 869, 873 (Tex.App.-Austin 2002, pet. denied); City of Austin v. Quick, 930 S.W.2d 678, 687 (Tex.App.-Austin 1996), aff'd, 7 S.W.3d 109 (Tex.1998) (citing Cameron v. Terrell & Garrett, Inc., 618 S.W.2d 535, 540 (Tex.1981)); see also 2A Norman J. Singer, Sutherland Statutory Construction § 47.25 (6th ed.2000) (stating that there is generally an inference that omissions from a statute are intentional). Furthermore, construction of a statute by an administrative agency charged with its enforcement is entitled to serious consideration, as long as the construction is reasonable and does not contradict the plain language of the statute. Tarrant Appraisal Dist. v. Moore, 845 S.W.2d 820, 823 (Tex.1993); see Ford Motor Co. v. Motor Vehicle Bd., 21 S.W.3d 744, 762 (Tex.App.-Austin 2000, pet. denied).

We will first address the purposes of the Code and the Board's overall powers. The Board "has broad power to regulate all aspects of the distribution and sale of motor vehicles." American Honda Motor Co., Inc. v. Texas Dep't of Transp., 47 S.W.3d 614, 624 (Tex.App.-Austin 2001, pet. denied); see Tex.Rev.Civ. Stat. Ann. art. 4413(36), § 3.01(b) (West Supp.2003). The purpose of the Code is "to exercise the state's police power to insure a sound system of distributing and selling motor vehicles through licensing and regulating manufacturers, distributors, converters, and...