State ex rel. Dept. of Natural Resources v. Lehman

• Decision Date: 17 July 1978
• Docket Number: No. 1-278A27,1-278A27
• Citation: 177 Ind.App. 112,378 N.E.2d 31
• Parties: STATE of Indiana ex rel. DEPARTMENT OF NATURAL RESOURCES et al., Appellant (Defendant below), v. Billy R. LEHMAN, Appellee (Plaintiff below).
• Court: Indiana Appellate Court

Page 31

378 N.E.2d 31

177 Ind.App. 112

STATE of Indiana ex rel. DEPARTMENT OF NATURAL RESOURCES et al., Appellant (Defendant below), v. Billy R. LEHMAN, Appellee (Plaintiff below).

No. 1-278A27.

Court of Appeals of Indiana,First District.

July 17, 1978.

Theodore L. Sendak, Atty. Gen., David Michael Wallman, Deputy Atty. Gen., Indianapolis, for appellant.

Joseph A. Sullivan, Bloomfield, for appellee.

ROBERTSON, Judge.

Defendant-appellant the State of Indiana, ex rel. Department of Natural Resources appeals a judgment of Greene Circuit Court reversing the Natural Resources Commission's affirming disciplinary action taken against plaintiff-appellee Captain Billy R. Lehman of the Department's Law Enforcement Division (Division). We affirm.

In 1975, Lehman was arraigned before the superintendent of the Division on charges arising from a Commission investigation into allegations made against certain members of the Division. The charges against Lehman included: using a state-owned vehicle for personal use; taking a state-owned boat and motor to Florida after being ordered not to do so; using officers of the Division to deliver personal items to the superintendent's home; and, not providing effective leadership and failing to exercise good judgment in making decisions. Following the arraignment, the superintendent issued an order demoting Lehman and directing that in the event of an appeal of the demotion order Lehman would be suspended without pay pending results of the appeal. Lehman's subsequent appeal before the Natural Resources Commission resulted in the Commission's affirming the superintendent's action. A petition for judicial review followed, and upon consideration of the matter, the trial court set aside the Commission's decision and remanded for further proceedings.

The State's appeal from the trial court's overruling of State's motion to correct errors raises these issues:

1. Whether the trial court erred in finding that no evidence was presented at the arraignment to support the charges filed.

2. Whether the trial court erred in its specific finding that Lehman's demotion was made without a finding of any cause as required by IC 1971, 14-3-4-7 (Burns Code Ed.).

3. Whether the trial court erred in finding the demotion, reassignment, and suspension contained in the superintendent's special order were arbitrary, capricious, an abuse of discretion and unsupported by substantial evidence.

4. Whether the trial court erred in finding that the actions of the Commission in its conduct of the investigation and determination were in violation of IC 4-22-1-20.

5. Whether the trial court erred in finding the record of the appeal before the Commission did not contain substantial evidence of guilt as to the charges.

1.

As to the first issue, the State argues that the departmental regulations pertaining to arraignments only provide for an opportunity for the charged person to answer the charges with his own evidence and that "(t)he decision is then left up to the Superintendent, after hearing all pertinent information, as to what action will be taken." The State's tenuous assertion that certain Lehman testimony constituted "admission" of the charges levied apparently leads the State to conclude that the trial court erred in its finding that there was no evidence at the arraignment to support the charges.

Lehman, contrarily, directs us to the superintendent's Special Order 713 which reads, in part Captain Lehman was arraigned on the above charges on October 24, 1975 in accordance with Division regulations. A plea of Not Guilty was entered by Captain Lehman and witnesses were presented who testified as to Captain Lehman's ability and efficiency as a Regional Commander.

The testimony on which the Commission based their findings and recommendations was not made available to Superintendent Charles A. Murphy at this arraignment. No testimony was heard which could be used to find Captain Lehman guilty except the charges based on the Commission's findings. In order to be granted an appeal to the Commission, Captain Lehman must be notified he is ordered demoted.

This unambiguous statement, which remained uncontroverted, and the superintendent's consistent testimony at the departmental hearing clearly show that the trial court correctly found that no evidence had been proffered. This issue reveals no error.

2.

With respect to the second issue, the State in its brief makes no attempt to apply those facts upon which it would rely to the pertinent law, aside from this cursory statement: "After hearing all of the evidence presented at the arraignment, even based on the defendant's own testimony, Superintendent Murphy had evidence greater than the mere fact of the charges upon which to base the demotion and reassignment of Plaintiff (Lehman)." The State has failed to present such cogent argument as is contemplated by our appellate rules, Ind. Rules of Procedure, Appellate Rule 8.3(A)(7), and, therefore, the State has demonstrated no error.

3.

Next, the State contends that the superintendent's actions were not arbitrary or capricious. We disagree.

In Hatcher v. Smith (1972), 152 Ind.App. 299, 283 N.E.2d 582, a case cited by both parties to this appeal, the Court of Appeals quoted from State Board of Tax Commissioners v. Chicago, Milwaukee, St. Paul & Pacific R. R. Co. (1951), 121 Ind.App. 302, 308-309, 96 N.E.2d 279, 282.

"Arbitrary or capricious action on the part of an administrative board means willful and unreasonable action, without consideration and in disregard of the facts or circumstances of the case; action taken without some basis which would lead a reasonable and honest man to such action."

152 Ind.App. at 310, 283 N.E.2d at 589.

We think that for the superintendent to take disciplinary measures after he had specifically found that no evidence was presented to support the charges levied constituted arbitrary and capricious action and an abuse of discretion. We do recognize the importance of granting discretion to administrative bodies for the effective dispatch of their duties. However, notions of fairness and reasonableness dictate the result reached in this case by the trial court.

4.

The next issue relates to IC 4-22-1-20, which, in part, states:

Whenever a hearing is conducted by an agent or representative of an agency such agent or representative who presides at such hearing shall not consult any person or party on any fact in issue unless upon notice and opportunity for all parties to participate. No agent or representative conducting a hearing shall perform any of the investigative or prosecuting functions of said agency in the case heard or to be heard by him or in a factually related case.

The State urges error in the reviewing court's finding that the Commission's actions in conducting the investigation and subsequently adjudicating the charges were violative of 4-22-1-20. We agree that the finding was in error. However, it does not present reversible error.

The State correctly points to the relevant portion of the record which indicates that those members of the Commission who participated in the investigation and who signed the investigation report disqualified themselves from the appeal proceedings. The record, moreover, shows that Lehman and his counsel agreed to let the hearing proceed and to accept the hearing verdict despite the absence of a quorum (resulting from Commission members' disqualification).

Lehman contends, though, that he did not waive any right, as the State maintains, regarding the manner in which the hearing was conducted but that the record solely indicates waiver to objection to an absence of quorum. Even if the record was susceptible of such an interpretation, Lehman failed to enter a contemporaneous objection stating the claimed grounds therefor and, thus, waived any error. Finally, our review of the hearing proceedings reveals no indication that Lehman did not have a procedurally fair hearing or that the requirements of due process were violated. Notwithstanding Lehman's reception of a fair appeal hearing and the trial court's ruling to the contrary, we will not reverse on this issue, for we agree with the trial court on the merits that the Commission's final decision was not supported by substantial evidence. We next address that precise issue.

5.

With respect to the last alleged error, the State maintains that the trial court erred in its review of the Commission's determination by reweighing the evidence and that substantial evidence was presented on each of the charges made against Lehman.

As the State has properly framed the issue, we are presented the opportunity to summarize ¹ the proper standard of trial court review of administrative determinations. In cases where appeal from an administrative determination is made pursuant to the Indiana Administrative Adjudication Act, IC 1971, 4-22-1-1 to 30 (Burns Code Ed.), such as in the present case, section 4-22-1-18 provides:

4-22-1-18 (63-3018). Judicial review Procedure. On such judicial review such court shall not try or determine said cause de novo, but the facts shall be considered and determined exclusively upon the record filed with said court pursuant to this act (4-22-1-1 4-22-1-30).

On such judicial review, if the agency has complied with the procedural requirements of this act, and its finding, decision or determination is supported by substantial, reliable and probative evidence, such agency's finding, decision or determination shall not be set aside or disturbed.

If such court finds such finding, decision or determination of such agency is:

(1) Arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law; or

(2) Contrary to constitutional right, power, privilege or immunity; or

(3) In excess of statutory jurisdiction, authority or limitations, or short of statutory right; or

(4) Without observance of procedure required by law; or

(5) Unsupported by substantial...