VOLVO TRUCKS v. STATE, DEPT. OF TRANSP.

Decision Date11 March 2010
Docket NumberNo. 2008AP1385.,2008AP1385.
Citation2010 WI 15,779 NW 2d 423
PartiesVOLVO TRUCKS NORTH AMERICA, Petitioner-Appellant-Petitioner, v. STATE of Wisconsin DEPARTMENT OF TRANSPORTATION and Wisconsin Division of Hearings and Appeals, Respondents, Wausau Truck Center, Inc., Interested Party-Respondent.
CourtWisconsin Supreme Court

For the petitioner-appellant-petitioner there were briefs by Anthony Tomaselli, Andrew M. Norman, and Quarles & Brady LLP, Madison, and Billy M. Donley and Baker & Hostetler, LLP, Houston, Tex., and oral argument by Billy M. Donley.

For the interested party-respondent there was a brief by Paul R. Norman, Andrew N. DeClercq, and Boardman, Suhr, Curry & Field LLP, Madison, and oral argument by Paul R. Norman.

¶ 1 SHIRLEY S. ABRAHAMSON, Chief Justice

This is a review of an unpublished order of the court of appeals summarily affirming the order of the Circuit Court for Marathon County, Greg Grau, Judge, affirming an order of the Division of Hearings and Appeals.1

¶ 2 The dispute arises under chapter 218, §§ 218.0101-.0172 of the statutes, governing motor vehicle dealers. Volvo Trucks North America issued a termination notice to Wausau Truck Center, canceling Wausau Truck's Volvo franchise. Wausau Truck filed a complaint of unfair cancellation pursuant to Wis. Stat. § 218.0114(7)(d) (2007-08).2 The Division of Hearings and Appeals, which is charged by the legislature with hearing such disputes under Wis. Stat. §§ 218.0114(7)(d) and 227.43(1)(bg), issued an order requiring Volvo to rescind its termination notice. Volvo sought judicial review of the Division's order under chapter 227 of the statutes. See Wis. Stat. §§ 227.46(2m), 227.52.

¶ 3 Volvo argues that the Division's order to rescind Volvo's termination notice is based on the erroneous conclusion that although Wausau Truck materially breached its dealer agreement with Volvo, the breach was subsequently cured within a reasonable time, as required under Wis. Stat. § 218.0116(1)(i)1.b. The Division determined that the relevant cure period ended on December 31, 2003, and that Wausau Truck had cured the material breach within that time.

¶ 4 The issue presented for judicial review here, as before the circuit court and the court of appeals, is whether Wausau Truck cured its breach within the "cure period." If Wausau Truck's breach of the dealer agreement was not cured, then Volvo had "just provocation" allowing it to cancel the dealer agreement under Wis. Stat. § 218.0116(1)(i)2.3

¶ 5 This issue in turn presents two questions: (1) What is the meaning of the word "cure" in Wis. Stat. § 218.0116(1)(i)1.b.? (2) After being given notice by Volvo, did Wausau Truck cure its breach of the dealer agreement? If Wausau Truck cured the breach, then Volvo's franchise termination was not lawful and the Division's order to rescind the termination notice will be affirmed.

¶ 6 For the reasons set forth, we conclude that Volvo did not show that its proposed interpretation of the statutory word "cured" (or any other proposed interpretation of "cured") was more reasonable than the Division's interpretation. Accordingly, given our posture in review of administrative decisions, the Division's interpretation of the word "cured" is accepted as the correct interpretation of the statute.

¶ 7 We need not resolve whether in the instant case the Division's determination that Wausau Truck had cured its breach of the dealership agreement is a finding of fact or a conclusion of law. That determination does not alter the result that the Division's order is affirmed. If the Division's determination that Wausau Truck cured the breach is a finding of fact, there is substantial evidence to support the finding. If the Division's application of its interpretation of "cured" to the undisputed facts is a conclusion of law, the Division's rationale was reasonable and no more reasonable application of the definition of "cure" to the facts has been established. Accordingly, we affirm the decision of the court of appeals that affirmed the order of the Division requiring Volvo to rescind the termination notice it issued to Wausau Truck.

I

¶ 8 We turn first to the applicable standard of review. This court reviews the order of the Division rather than the order of the circuit court or the decision of the court of appeals, although we benefit from the analyses of those courts.4

¶ 9 The role of the Division of Hearings and Appeals in the instant case is the same as in Racine Harley-Davidson, Inc. v. Division of Hearings and Appeals, 2006 WI 86, ¶ 8 n. 4, ¶¶ 21-25, 292 Wis.2d 549, 717 N.W.2d 184. See Wis. Stat. § 227.43(1)(bg). Accordingly, we look to Racine Harley-Davidson for the standard of review.

¶ 10 Unless a court finds a ground for setting aside, modifying, remanding, or ordering agency action or ancillary relief, the court shall affirm the agency's action. Wis. Stat. § 227.57(2).

¶ 11 Volvo argues that a question of law is presented, namely the meaning of "cure" in Wis. Stat. § 218.0116(1)(i)1.b. An agency's "interpretation and application of a statute is a question of law to be determined by a court,"5 as we have discussed numerous times. Erroneous interpretation of law provides a ground to set aside or modify an agency decision. Wis. Stat. § 227.57(5). A reviewing court may, however, give deference to an agency's interpretation and application of a statute.6

¶ 12 Deference to an agency's determination of law recognizes the comparative institutional qualifications and capabilities of the courts and the agency.7 Granting deference to an agency's statutory interpretation does not abdicate the court's own authority and responsibility to interpret statutes. Even when granting deference to an agency's statutory interpretation, the court does not accept the agency's interpretation without a critical eye. The court itself must always interpret the statute to determine the reasonableness of the agency interpretation; only reasonable agency interpretations are given any deference.8

¶ 13 Our case law has established three levels of deference to be accorded to an agency interpretation and application of the law, depending on the circumstances: "great weight deference," "due weight deference," or "no deference."9

¶ 14 "Great weight" deference is warranted when (1) the agency is charged by the legislature with administering the statute in question; (2) the agency interpretation is of long standing; (3) the agency employed its specialized knowledge or expertise in interpreting the statute; and (4) the agency's interpretation will provide uniformity and consistency in the application of the statute. When courts apply "great weight" deference, an agency's reasonable statutory interpretation will be sustained even if the court concludes that another interpretation is equally reasonable or even more reasonable.10

¶ 15 Courts give lesser, "due weight" deference when the agency is charged by the legislature with enforcement of the statute and has experience in the area, but has not developed expertise that necessarily places the agency in a better position than the court to interpret the statute. Courts applying "due weight" deference will sustain an agency's statutory interpretation if it is not contrary to the clear meaning of the statute and no more reasonable interpretation exists.11 Applying "due weight" deference, a reviewing court will not set aside the agency's interpretation in favor of another equally reasonable interpretation, but will replace it with a more reasonable interpretation if one exists.12

¶ 16 Reviewing courts give no deference to an agency's statutory interpretation when any of the following conditions are met: (1) the issue presents a matter of first impression; (2) the agency has no experience or expertise relevant to the legal issue presented; or (3) the agency's position on the issue has been so inconsistent as to provide no real guidance.13 A court giving no deference to an agency's interpretation of a statute benefits from the agency's analysis but interprets the statute independent of the agency's interpretation and in effect adopts an interpretation the court determines is the most reasonable interpretation.14

¶ 17 Here, we give "due weight" deference to the Division's interpretation of the statute, as did the court of appeals and the circuit court. Due weight deference is accorded in the instant case because the Division is charged with hearing and deciding complaints of unfair cancellation of a motor vehicle dealer franchise. Wis. Stat. § 218.0114(7)(d). The Division has experience in applying the franchise termination provision of the Wisconsin Motor Vehicle Dealer Law, even though no cases on the particular issue in the instant case, namely "cure" of a breach, have been presented. Under these circumstances, the Division's interpretation and application of the statute warrants due weight deference.15 "A reviewing court accords an agency's statutory interpretation due weight deference when the agency has some experience in an area but has not developed the expertise that necessarily places it in a better position than a court to make judgments regarding the interpretation of the statute."16

¶ 18 Thus the Division's interpretation and application of the statute in the instant case will be upheld if it is "not contrary to the clear meaning of the statute" and no more reasonable interpretation exists.17

¶ 19 With regard to the Division's findings of fact, we review those findings by applying a "substantial evidence" standard, affording significant deference to the agency's findings.18 Substantial evidence does not mean a preponderance of evidence. It means whether after considering all the evidence of record, reasonable minds could arrive at the conclusion reached by the trier of fact.19 "The weight and credibility of the evidence are for the agency, not the reviewing court, to determine."20 An agency's findings of fact...

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