Versatile Management Group v. Finke
| Decision Date | 06 May 2008 |
| Docket Number | No. ED 88144-01.,ED 88144-01. |
| Citation | 252 S.W.3d 227 |
| Parties | VERSATILE MANAGEMENT GROUP and Demitrius Glass, Respondents, v. W. Dale FINKE, Director of Insurance, State of Missouri, Appellant. |
| Court | Missouri Court of Appeals |
Stephen R. Gleason, St. Louis, for appellant.
Versatile Management Group, pro se, Demitrius Glass, pro se, Florissant, for respondents.
This case involves actions taken by the Department of Insurance for the State of Missouri against the licenses of Demitrius Glass and his company, Versatile Management Group, for their violations of the insurance laws of this state. After a prior decision by this Court, transfer of the cause to the Missouri Supreme Court, and retransfer back to this Court, the matter comes to this writer upon reassignment. In this opinion, we confront a procedural issue, which affects many administrative appeals, and a substantive issue, which primarily affects the parties. First, we must decide who has the duty to file the appellant's brief and bears the burden of proof in certain administrative cases. And secondly, we must decide whether there is substantial and competent evidence to support the administrative decision. As to the first matter, we hold first that when an appeal is taken from a circuit-court judgment reversing an administrative decision, the party aggrieved by the agency decision has the duty to file the appellant's brief and the burden of persuasion before this Court. And as to the second issue, we hold that there is substantial and competent evidence here to support the administrative decision. Therefore we reverse the circuit court's judgment and affirm the administrative decision.
After two clients complained that Mr. Glass and his company had mishandled their insurance-premium payments, the Missouri Director of Insurance refused to renew Mr. Glass's insurance producer license, which authorized Mr. Glass to sell accident and health, life and variable contracts. The Director also denied Mr. Glass's application to have property and casualty added as an authorized line of insurance on his license. Mr. Glass appealed the Director's denials to the Administrative Hearing Commission. The Director responded to the appeal, requesting that the Commission affirm the denials. Additionally, the Director filed a complaint against Mr. Glass, requesting, that the Commission find cause to discipline Mr. Glass's license for his violation of the state's insurance laws. The Director alleged that Mr. Glass had received funds intended for insurance-premium payments, but failed to remit the payments to the insurer within thirty days, as required by law — specifically state regulation 20 CSR 700-1.140(2)(D) — leaving two of Mr. Glass's clients without the insurance they paid for. The Director further filed a complaint against Versatile Management Group, requesting that the Commission also find cause to discipline Versatile's business-entity insurance producer license.1 The Director alleged that because Mr. Glass's actions were done under the name of, and on behalf of Versatile, the company had also violated Missouri insurance laws. At all relevant times, Mr. Glass was the sole owner and sole officer of Versatile Management Group.
The Commission conducted a hearing, at which all parties presented evidence. Following the hearing, the Commission issued its decision, denying Mr. Glass's applications. The Commission further found cause to discipline the licenses of Mr. Glass and Versatile Management Group for their failure to timely remit insurance-premium payments.
The Director then held a disciplinary hearing, at which all parties presented evidence. Following the hearing, the Director revoked the licenses of Mr. Glass and Versatile Management Group.
Mr. Glass and Versatile Management Group filed a petition for review with the Circuit Court, requesting that the court review the Director's decisions. Mr. Glass and Versatile Management Group alleged that there was not substantial and competent evidence on the record to support the Director's decisions and that the disciplinary action was arbitrary, capricious, and unlawfully imposed.
After a hearing, the circuit court rendered its judgment, reversing the Director's decision. Without explanation, the circuit court ordered the Director to reinstate Mr. Glass's insurance producer's license for accident and health, life and variable contracts. Furthermore, the court ordered the Director to issue Mr. Glass a property and casualty insurance producer license. And, finally, the court also ordered the Director to reinstate Versatile Management Group's business-entity license. The Director responded by filing a notice of appeal with this Court.
Pursuant to Missouri Supreme Court Rule 84.05(e), which sets forth the procedure when a circuit court reverses the decision of an administrative agency, this Court issued an order directing Mr. Glass and Versatile Management Group, as the parties aggrieved by the agency decision, to file the first brief, which they did jointly. The Director, as the party aggrieved by the circuit-court judgment, then followed with his brief, responding to the allegations and arguments raised in the joint initial brief of Mr. Glass and Versatile Management Group. The case was submitted on these briefs, without oral argument before this Court.
In a divided decision, this Court dismissed the Director's appeal. This Court held first that, even though the Director was formally designated as "respondent" on appeal pursuant to Rule 84.05(e), the Director still had the burden of persuading this Court why the circuit court erred in reversing the prior administrative decision. This Court reasoned that because being aggrieved by the circuit court's judgment is the dispositive factor in determining standing before the Court of Appeals, it also determines which party has the burden of persuasion before this Court. Thus, this Court concluded that because the Director was aggrieved by the circuit court's decision, it was the party that must convince this Court either (a) why the circuit court erred; or (b) why the administrative decision was correct. This Court then found that the Director failed to carry his burden because the Director's brief failed to comply with numerous requirements of Rule 84.04, which sets forth the requirements for an appellant's brief. Due to these deficiencies, this Court held that nothing had been preserved for our review. Consequently, this Court dismissed the Director's appeal for failure to comply with the briefing requirements of Rule 84.04.
Following this Court's decision, the Director filed an application to transfer the cause to the Supreme Court of Missouri. The Director argued that this Court's decision regarding the burden of briefing and persuasion on appeal from a circuit-court judgment reviewing the decision of an administrative agency in a contested case was contrary to practice and established precedent, and could not be applied under Rules 84.04 and 84.05.2
The Supreme Court, upon the Director's application, ordered the cause transferred to the Supreme Court. By its order of August 21, 2007, the Supreme Court retransferred the cause to this Court for reconsideration in light of State ex rel. Riverside Pipeline Co. v. Public Service Commission, 165 S.W.3d 152, 155 (Mo. banc 2005).
Upon our further consideration, we now conclude that our prior opinion was in error and issue this opinion.
We first address the burdens of briefing and persuasion in this appeal.
Rule 84.05(e), which sets forth procedures for filing briefs in the appellate court where the circuit court reverses the decision of an administrative agency, provides:
If the circuit court reverses a decision of an administrative agency and the appellate court reviews the decision of the agency rather than of the circuit court, the party aggrieved by the agency decision shall file the appellant's brief and reply brief, if any, and serve them within the time otherwise required for the appellant to serve briefs. The party aggrieved by the circuit court's decision shall prepare the respondent's brief and serve it in a time otherwise required for the respondent to serve briefs. In such a procedural posture, all districts of this Court have noted that the party who was aggrieved by the administrative decision is designated as appellant and is to file the appellant's brief on appeal. Moto, Inc. v. Board of Adjustment of City of St. Louis, 88 S.W.3d 96, 99 n. 2 (Mo. App. E.D.2002); Psychiatric Healthcare Corp. of Missouri v. Department of Social Services, 100 S.W.3d 891, 898 n. 8 (Mo. App. W.D.2003); Garrett v. Missouri Dept. of Social Services, 57 S.W.3d 916, 917 (Mo. App. S.D.2001).
Granted, at first blush it may seem peculiar to have the last-in-time prevailing party file the first brief and have the burden of persuasion in the appellate court. But the language of the Rule is clear and, when considered in light of this Court's standard of review, logical. On appeal from a judgment of the circuit court reviewing the decision of an administrative agency, this Court reviews the decision of the agency, not the decision of the circuit court. Missouri Coalition for the Environment v. Herrmann, 142 S.W.3d 700, 701 (Mo. banc 2004); Moto, 88 S.W.3d at 99. We presume that the agency's decision is correct. Reed v. Missouri Dept. of Social Services, Family Support Div., 193 S.W.3d 839, 841 (Mo.App. E.D.2006). And, as is the general rule when a judgment is presumed correct, the burden to show otherwise falls on the party challenging the decision. See, e.g., Hernandez v. State Bd. of Registration for Healing Arts, 936 S.W.2d 894, 900 (Mo.App. W.D.1997)(citing State ex rel. Dyer v. Public Service Comm'n, 341 S.W.2d 795, 800 (Mo.1960)). If a party, such as the Director here, prevails in his position at the agency level, but then is...
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