Toyota of Visalia, Inc. v. Department of Motor Vehicles

• Decision Date: 02 May 1984
• Docket Number: No. 7617,7617
• Citation: 155 Cal.App.3d 315,202 Cal.Rptr. 190
• Parties: TOYOTA OF VISALIA, INC., et al., Plaintiffs and Appellants, v. DEPARTMENT OF MOTOR VEHICLES et al., Defendants and Appellants. Civ.(F001650).
• Court: California Court of Appeals Court of Appeals

Page 190

202 Cal.Rptr. 190

155 Cal.App.3d 315

TOYOTA OF VISALIA, INC., et al., Plaintiffs and Appellants, v. DEPARTMENT OF MOTOR VEHICLES et al., Defendants and Appellants.

Civ. No. 7617 (F001650).

Court of Appeal, Fifth District, California.

May 2, 1984.

Certified for Partial Publication ¹

[155 Cal.App.3d 318] Coder & Tuel and Houston N. Tuel, Jr., Sacramento, for plaintiffs and appellants.

John K. Van de Kamp, Atty. Gen., N. Eugene Hill, Asst. Atty. Gen., and Susan P. Underwood, Deputy Atty. Gen., Sacramento, for defendants and appellants.

OPINION

ZENOVICH, Associate Justice.

This case is before us on an appeal by the Department of Motor Vehicles and the New Motor Vehicle Board from that portion of the judgment which grants a peremptory writ of mandamus commanding them to set aside the revocation of the automobile dealers' licenses of Toyota of Visalia and Pioneer Dodge and to reconsider the penalties previously imposed. That part of the judgment which denies the petition for writ of mandamus is appealed by Toyota of Visalia and Pioneer Dodge.

The Department of Motor Vehicles (Department) filed accusations against Toyota of Visalia (Toyota) and Pioneer Dodge (Pioneer) alleging, respectively, 11 and 8 different categories of violations of the Vehicle Code. ²

Thereafter, a hearing was held before an administrative judge who issued his proposed decisions, finding violations on all but one count and ordering revocation on four counts against Toyota and on two counts against Pioneer, as well as several consecutive suspensions for each dealership.

After these decisions were adopted by the Department, Toyota's and Pioneer's petitions for reconsideration were denied and the dealerships appealed to the New Motor Vehicle Board (Board).

The Board thereafter issued its decisions, in each case modifying the Department's decision and affirming it as modified. These modifications consisted of increasing three penalties (one against Toyota and two against Pioneer), decreasing five penalties (three against Toyota and two against Pioneer), and reversing the Department's finding of a violation on two counts against each dealership.

Thereafter, Toyota and Pioneer filed a petition for a writ of mandamus in the Superior Court of the County of Tulare, alleging that the dealerships were denied a fair hearing, the Board exceeded its jurisdiction by increasing the penalty on appeal, the decision was not supported by the findings, and the findings were not supported by the evidence. ³

After the case was heard, the court issued a decision granting the petition with respect to the penalty imposed, but denying it with respect to the findings and the conduct of the hearing. A judgment and a peremptory writ were issued remanding the proceedings to the Board for reconsideration of the penalty assessed in light of the court's decision.

ISSUES RAISED BY THE BOARD AND THE DEPARTMENT

I

Department and Board first contend that the Board does have authority to increase administrative penalties assessed against dealers by the Department. We agree.

The Board is a nine-member body within the Department. (§ 3000.) This body is required to hear appeals brought by new motor vehicle dealers from decisions of the Department. (§ 3050, subd. (b).) The powers of the Board in deciding such appeals are found in sections 3054 and 3055. Section 3054 provides that "The board shall have the power to reverse or amend the decision of the department if it determines that any of the following exist: ... (f) The determination or penalty, as provided in the decision of the department is not commensurate with the findings." (Emphasis added.) Section 3055 provides that "The board shall have the power to amend, modify, or reverse the penalty imposed by the department." (Emphasis added.) It has been held that section 3055, empowering the Board to amend, modify or reverse a penalty imposed by the Department, is a legislative expansion of the powers of review granted it by section 3054, but that the Board is required to exercise such power with judicial discretion. (Cozens v. New Car Dealers Policy & Appeals Bd. (1975) 52 Cal.App.3d 21, 28, 124 Cal.Rptr. 835.)

The increased penalties were assessed as follows: As to the finding that Toyota placed inaccurate "PAC" stickers on vehicles which gave information about accessories, delivery, and freight charges that differed from the federal window sticker information on these vehicles, the Department imposed a 60-day suspension. The Board determined that the penalty was not commensurate with the finding and increased the penalty to license revocation. As to the finding that Pioneer overcharged on license fees, the Department issued a 10-day suspension. This was increased by the Board to a 15-day suspension. In addition, as to the finding that Pioneer advertised vehicles more than 48 hours after sale, the Department issued a 60-day suspension. The Board increased this to license revocation.

The trial court below agreed with the dealers' contention that it was the Legislature's intent to benefit aggrieved dealers by establishing the appellate process described above. The court noted that the language of the statutes outlining the powers and duties of the Board (i.e., "amend" and "modify") is unclear as to the Board's power to enhance penalties. The trial court stated, "A reading of the whole chapter relating to the creation of the New Motor Vehicle Board supports Petitioners' position that the purpose of the Board was to provide an administrative appeal to aggrieved dealers. Thus, absent express statutory language that the Board could subject an appellant to more severe sanctions than those from which he appealed, the statutes in question should be construed as not empowering the Board to enhance penalties."

Board contends the words "amend" and "modify" in the statutes in question confer the ability to enhance as well as diminish Department's penalty. Board cites the Black's Law Dictionary definition of "amend" as meaning "To improve. To change for the better by removing defects or faults.... To change, correct, revise." (Rev. 4th ed. 1968.) In addition, Board cites the Black's Law Dictionary definition of "modify" as meaning "To alter; to change in incidental or subordinate features; enlarge, extend; limit, reduce." Thus, Board contends, "to modify the penalty could mean either to enlarge or reduce it." Board cites American Telephone and Telegraph Company v. F.C.C. (2 Cir.1974) 503 F.2d 612, which commented on a similar dispute over the meaning of the term "modify":

"As we noted initially, Section 203(b) clearly provides that the FCC has the power to 'modify' the notice requirement. AT & T concedes this but argues that the word 'modify' can only mean reduce and cannot be interpreted to mean enlarge. The FCC and the intervenors urge that to modify means to change or to alter whether or not this results in an increase or a decrease in the notice period. Each party and the intervenors have supplied etymological support for their positions. AT & T even resorts to the philological ultimate, the Latin root, modificare, in which it finds particular comfort. Before succumbing to semantic aphasia, we are persuaded that to 'modify' means to alter or change whether this involves enlargement or reduction. Black's Law Dictionary 1155 (4th ed. 1951) so defines the word and this is the normal meaning which lawyers and judges attribute the term. Certainly, to modify an opinion or an order, it is not necessarily to reduce it but simply to change it, irrespective of any quantitative result." (Id., at p. 615, fns. omitted, emphasis added.)

Board cites the statutory rule of construction that when clearly intended or indicated, words in a statute should be given their ordinary meaning. (County of Los Angeles v. Frisbie (1942) 19 Cal.2d 634, 641-642, 122 P.2d 526.) Board contends that the Legislature knows how to place limitations on a reviewing board when it wants to do so. Board asserts that it did not do so in sections 3054 and 3055.

Toyota and Pioneer contend that the Legislature intended for the Board to use its penalty amending and modifying powers only for the dealers' benefit because the Board's powers are only unleashed at the dealers' request.

Toyota and Pioneer also contend that if the Legislature had intended to give the Board extraordinary power to increase penalties without a request for increase, it would have included the appropriate enabling language. Pioneer and Toyota contend that "amend" and "modify" in the statutes in question are simply intended to let Board know that it may grant relief to appealing dealers short of complete reversal when the facts of the case do not warrant complete reversal.

Pioneer and Toyota contend that Board is ignoring the cardinal rule of statutory construction, which holds that the court should interpret statutes consistent with the intent of the Legislature so as to effectuate the purpose of the law. (See Mercer v. Perez (1968) 68 Cal.2d 104, 112, 65 Cal.Rptr. 315, 436 P.2d 315; Hogya v. Superior Court (1977) 75 Cal.App.3d 122, 132, 142 Cal.Rptr. 325; Code Civ.Proc., § 1859.) Pioneer and Toyota stress the primary rule of statutory construction to which every other rule must yield--that is, the intention of the Legislature should be given effect, and the language of any statute and provision therein may not be construed so as to nullify the will of the Legislature or to cause the law to conflict with the apparent purpose the lawmakers had in view. (California Sch. Employees Ass'n v. Jefferson Elementary Sch. Dist. (1975) 45 Cal.App.3d 683, 691-692, 119 Cal.Rptr. 668; Struckman v. Board of Trustees (1940) 38 Cal.App.2d 373, 376, 101 P.2d 151.)

We first examine the general statutory purpose behind the creation of the Board. The issue before us is one of first impression and we note there is very little history of legislative intent to guide us.

The statute creating the New...