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In the Matter of West-Way Car Rental, Inc. v. New Jersey Motor Vehicle Commission

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


July 27, 2012

IN THE MATTER OF WEST-WAY CAR RENTAL, INC. WEST-WAY CAR RENTAL, INC., PLAINTIFF-RESPONDENT,
v.
NEW JERSEY MOTOR VEHICLE COMMISSION, DEFENDANT-APPELLANT, AND SHARON HARRINGTON, DIRECTOR, MICHAEL CALOREL, INDIVIDUAL, A.T.R. ENTERPRISES, INC., D/B/A ALL-HOURS TOWING SERVICE, AND ANTHONY KESSLER, INDIVIDUAL, DEFENDANTS.

On appeal from the New Jersey Motor Vehicle Commission in A-3664-09 and from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-7256-08 in A-5122-09.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted July 17, 2012

Before Judges Sabatino and Kennedy.

In these consolidated appeals, West Way Car Rental, Inc. (West Way) appeals from a March 3, 2010 final agency decision of the New Jersey Motor Vehicle Commission (MVC) ordering that a "forty foot, 2001 Ford Excursion autobus" owned by West Way not be released from impoundment unless West Way registers the vehicle, obtains insurance in the amount of $5 million, and obtains operating authority or a waiver thereof from the Federal Motor Carrier Safety Administration (FMCSA). The MVC appeals from a June 17, 2010 order of the Law Division vacating the court's May 19, 2010 stay of a writ of replevin for the vehicle it had issued on July 22, 2009.

Our review of these matters is hampered by the failure of both parties to provide all the materials required by Rule 2:6-1(a). In addition, both parties cite to orders, briefs and arguments made before an administrative law judge (ALJ), and fail to provide copies of such orders, briefs or a transcript of the hearing conducted by the ALJ. This failure to provide a complete record of materials essential to a proper consideration of the issues, R. 2:6-1(a)(1)(H) and R. 2:6-3, ordinarily would warrant a summary affirmance. See Society Hill Condominium Ass'n v. Society Hill Assocs., 347 N.J. Super. 163, 177-78 (App. Div. 2002). Nonetheless, we chose to examine the parties' arguments on appeal to the extent permitted by what has been provided to us.

I.

We discern the following facts and procedural history from materials supplied by the parties, which, as noted, are not the complete record.

It appears that on August 31, 2008, MVC investigators discovered West Way's vehicle discharging passengers in Belmar and ordered the vehicle impounded. We recite the background facts as set forth in the ALJ's initial decision of January 6, 2010, because it appears that these facts are uncontested:

On August 31, 2008, Daniel Hebert and Ronald English, both motor carrier investigators for the New Jersey Motor Vehicle Commission noticed a forty-foot Ford Excursion discharging passengers in Belmar, New Jersey. As they approached the autobus, they noticed it had no license plates and no inspection sticker. They identified themselves to the driver and instructed him to follow their vehicle to a nearby inspection site. As they returned to the inspection site, the autobus, the vehicle in question herein, made a right-hand turn and drove the wrong way down a one-way street. The autobus came to a stop when another vehicle approached from the opposite direction.

The police were called while Mr. Hebert and Mr. English attempted to get the driver of the autobus to shut off the engine. When the police arrived, the autobus was driven to a mobile inspection unit at which point, the driver was arrested and the vehicle inspected. At the time of the inspection, it was determined that the vehicle was uninsured, unregistered, had fictitious plates and the driver did not have a commercial driver's license. In addition to these violations, there were many safety violations which resulted in the issuance of sixteen motor vehicle violations.

The vehicle was impounded.

On September 19, 2008, West Way Car Rental filed an Order to Show Cause in the Law Division seeking the release of the impounded vehicle. The Court dismissed the request for restraints and injunctive relief citing its lack of jurisdiction to determine the validity of agency actions.

Petitioner then filed an application for emergent relief with the Appellate Division, which denied the petitioner's relief resulting in the petitioner filing this motion with the Motor Vehicle Commission for emergent relief.

After several adjournments and unsuccessful settlement negotiations, a hearing was conducted on August 6, 2009.

Not in dispute was the fact that the subject autobus was properly impounded. The certifications of English and Calorel (supervisor at the scene) were stipulated into evidence.

TESTIMONY

The only witness to testify at the hearing was Bruce Buccolo, the driver of the vehicle at the time it was impounded. He testified that his wife was the president of West Way Car Rental, Inc. but that he was not associated with West Way Car Rental, Inc. According to Mr. Buccolo, West Way Car Rental, Inc. is the owner of the vehicle but that they only lease vehicles to other companies and do not engage in the vehicle's operation. Mr. Buccolo went on to indicate that vehicles owned by West Way Car Rental and vehicles leased by United Leasing, a company that Mr. Buccolo is associated with, are garaged for the most part, in the same location.

Buccolo indicated that on the day in question, after having received the request from a friend to provide limousine service for his son, Buccolo took the vehicle that has now been impounded, apparently with the permission of his wife/president, and used the vehicle to transport passengers knowing, for the most part, of its various violations.

After the vehicle was impounded, West Way, as suggested by the recitation above, undertook two steps: first, it filed in the Law Division a verified complaint and order to show cause in September 2008 against the MVC and certain of its representatives and against a private towing company and an individual. We have not been provided with a copy of the verified complaint or any of its supporting documents, although we have been provided with some of the MVC responding certifications. Nonetheless, the order to show cause suggests West Way was seeking the release of its vehicle from impoundment, as well as damages.

The Law Division denied temporary restraints or a preliminary injunction and West Way sought emergent relief before us. On October 24, 2008, we denied emergent relief and, in a statement of reasons, said West Way "must now proceed through the administrative process to seek release of the impounded vehicle" and its "newly acquired proof of insurance coverage" must be presented to the MVC. We expressed no opinion on whether the failure of West Way to have registered the vehicle anywhere in the United States had any bearing upon impoundment.

Now, it appears that at some point before we denied West Way's emergent application, the Law Division dismissed the complaint as to the MVC and its commissioner and employees on "jurisdictional grounds," although we have not been provided with a copy of that order or any transcript of an opinion from the bench or written statement of reasons of the court for the order. The claims asserted in the verified complaint against the remaining defendants were not dismissed, however.

At some point in or about this time, West Way undertook its second step: it apparently filed a pleading with the MVC seeking the release of the vehicle. Again, we have not been provided with a copy of this pleading, but we assume from the ALJ's decision that West Way sought the release of the vehicle from impoundment.*fn1

As a consequence of these two steps, two actions were unfolding that pertained to the impounded vehicle: first, a Law Division action was proceeding against an individual and a towing company; and, second, an administrative action before the MVC was proceeding with the objective of securing release of the vehicle. The administrative action had been referred to the Office of Administrative Law and a hearing was scheduled before the ALJ for August 6, 2009. West Way pressed both actions which presumably sought the same relief: the release of the vehicle from impoundment.

No answer was apparently filed by the remaining defendants in the Law Division action and defaults appear to have been filed against them. West Way then sought a "proof hearing" against them and on July 22, 2009, the Law Division judge entered judgment against them for $55,200 "individually and severally" which the judge declared would be a "set-off" against any charges due for storage and towing. The judgment further ordered the defendants to "immediately and unconditionally turn over" the vehicle to West Way and further ordered that a "Writ of Replevin issue" in favor of West Way and against defendants. At the same time, the judge signed a "Writ of Replevin" ordering "any Sheriff or Peace Officer of New Jersey" to "deliver[] possession, dominion and control" of the vehicle to West Way.

Thereafter, the matter proceeded before the ALJ who, as noted, issued an initial decision on January 6, 2010. The ALJ found as follows and denied West Way's "application for release of the impounded vehicle":

The critical facts in this matter are not in dispute. The vehicle in question operated by Mr. Buccolo was transporting passengers and was in violation of possibly sixteen motor vehicle statues[].

Of those sixteen violations, many of which were safety violations, most significant were unregistered, uninspected, uninsured and being driven by a driver without a CDL.

Buccolo's testimony was surely not compelling and clearly not convincing. His testimony was pretextual in nature in that he would have the undersigned believe that there is a significant distinction between West Way Car Rental and United Care Rental, the entity with which he is affiliated. He contends that despite the husband and wife relationship, it was he who was responsible for taking the vehicle in question on what amounts to a joy ride with passengers without any responsibility falling on West Way Car Rental.

Buccolo, who under cross-examination admitted to a felony conviction for falsifying insurance information, offered up the proposition, through his attorney, that West Way would not be operating the vehicle and that it would be transported (flatbedded) out of state to the jurisdiction of the manufacturer. Thus, since West Way "promises" not to operate the vehicle and to transport it out of state, it should be released from impoundment.

Carving the adipose tissue from the skeleton of the facts herein, what remains is an uninsured autobus that does not appear to be registered anywhere in the United States. Although I concur with West Way's argument that they are in essence caught in a "catch 22" in that they cannot affect the repairs to the vehicle until it is registered and insured which cannot be done until the repairs are completed, the shortcoming of this argument is that MVC is in agreement that the safety repairs required could not be effectuated without the vehicle being flat-bedded to the manufacturer or other repairer.

I FIND in addition to the undisputed facts involved herein that Buccolo at the scene made an admission that the vehicle had been used interstate. Despite this admission, it is clear that the vehicle in question can seat more than sixteen passengers which would put it under the auspices of Federal 49 C.F.R. § 387.33.

The argument of West Way in essence boils down to it was not West Way's responsibility for what occurred on the date in question leading to the impoundment and MVC should simply return the impounded vehicle to the owner because the owner asked for it.

CONCLUSION

I CONCLUDE that both legally and factually MVC has established that insurance for the vehicle in question in the minimum amount of $5,000,000 is to be produced prior to release from impoundment. Although the vehicle need not be registered in New Jersey prior to release from impoundment, it must be established by West Way to a reasonable degree of certainty that the vehicle once released, if unregistered, will not be operated in New Jersey but transported to another jurisdiction by flatbed. However, the only CONCLUSION being reached in this matter by the undersigned at this time is that prior to the release of the vehicle in question from impoundment, proof of valid insurance coverage in an amount of at least $5,000,000 must be produced.

The ALJ determined that the insurance requirement in the amount of $5.0 million was required by 49 C.F.R. § 387.33, which applied to the West Way vehicle.

On March 3, 2010, the MVC issued its final agency decision which affirmed, in part, and modified, in part, the ALJ's initial decision. The MVC found that the ALJ correctly determined that West Way was required to obtain $5.0 million in insurance on the vehicle. The MVC further found that the vehicle cannot be released until it is registered and that because it qualified as a "bus" engaged in charter transportation, it required "operating authority [pursuant to 49 C.F.R. § 392.9a] from the [FMCSA] to operate in the manner that it operated on the day it was impounded." The MVC concluded:

It is, therefore, on this 3rd day of March 2010, ORDERED that the autobus owned by West Way Car Rental, Inc. that was impounded on or about August 31, 2008, not be released until West Way Car Rental, Inc. obtains insurance for the vehicle in the minimum amount of $5,000,000 registers the vehicle, and obtains either operating authority, or a waiver or letter indicating that they do not need operating authority, from the FMCSA. Until those conditions are met, the vehicle shall remain impounded.

West Way filed its appeal from the MVC final decision on April 13, 2011.

Notwithstanding the MVC final decision, West Way appeared thereafter to try to gain possession of its vehicle pursuant to the 2009 "Writ of Replevin." The MVC, represented by the Attorney General, apparently sent a letter to the Law Division judge who initially issued the writ, and thereby obtained an order on May 19, 2010, staying the writ pending "oral argument."

After oral argument on June 16, 2010, the judge stated: "I don't find that I have any jurisdiction to make a determination that I could stay my order because there happens to be an administrative decision that's contrary" and, accordingly, lifted the stay by an order entered the following day, June 17, 2010. On June 18, 2010, the MVC filed an appeal from the order of June 17, 2010, and obtained from us a temporary stay of the writ. West Way later moved to vacate the stay and on August 10, 2010, we vacated the temporary stay on condition that West Way shall maintain and provide proof of valid insurance on the subject vehicle as ordered by the Law Division and the Office of Administrative Law [sic], and on the further condition that West Way shall not operate the vehicle and shall not permit others to operate the vehicle until the conditions and deficiencies that led to impoundment are corrected, repaired and brought into compliance with NJMVC requirements.

II.

A.

On appeal, West Way asserts that the final decision of the MVC requiring it to secure $5.0 million in insurance pursuant to federal regulation and obtain operating authority or a waiver thereof from the FMCSA are without basis in the law because those requirements only pertain to those who "operate" such vehicles. West Way claims it is simply a "leasing company . . . [and]. . . is in no way involved in the 'services related to [the] movement' of passengers", required for federal regulatory authority under 49 U.S.C. § 13102(23). West Way also asserts that requiring it to register the vehicle is arbitrary but it "merely wants to tow the vehicle" so it can be repaired.

We begin by stating some firmly established principles that guide our analysis. Appellate review of an administrative agency decision is limited. In re Herrmann, 192 N.J. 19, 27 (2007); In re Carter, 191 N.J. 474, 482 (2007). "Where . . . the determination is founded upon sufficient credible evidence seen from the totality of the record and on that record findings have been made and conclusions reached involving agency expertise, the agency decision should be sustained." Gerba v. Bd. of Trs. of the Pub. Emps. Ret. Sys., 83 N.J. 174, 189 (1980). An administrative agency's determination is presumptively correct, and we will not substitute our own judgment of the facts for that of the agency if the agency's findings are supported by sufficient credible evidence and are not arbitrary, capricious or unreasonable. See Carter, supra, 191 N.J. at 482; Bd. of Educ. of Englewood Cliffs v. Bd. of Educ. of Englewood, 333 N.J. Super. 370, 380 (App. Div.), certif. granted, 166 N.J. 604 (2000); Gerba, supra, 83 N.J. at 189. The burden is on the party opposing the action to demonstrate grounds for reversal. McGowan v. N.J. State Parole Bd., 347 N.J. Super. 544, 563 (App. Div. 2002); Bowden v. Bayside State Prison, 268 N.J. Super. 301, 304 (App. Div. 1993), certif. denied, 135 N.J. 469 (1994).

Under the arbitrary and capricious standard, our scope of review is guided by three major inquiries: (l) whether the agency's decision conforms with relevant law; (2) whether the decision is supported by substantial credible evidence in the record; and (3) whether in applying the law to the facts, the agency clearly erred in reaching a result that was either arbitrary, capricious or unreasonable. In re Stallworth, 208 N.J. 182, 194 (2011); Carter, supra, 191 N.J. at 482-83. When an agency decision meets the above criteria, we accord substantial deference to the agency's fact-finding and legal conclusions, being mindful of the agency's "'expertise and superior knowledge of a particular field.'" Circus Liquors, Inc., v. Middletown Twp., 199 N.J. 1, 10 (2009) (quoting Greenwood v. State Police Training Ctr., 127 N.J. 500, 513 (1992)). See also Herrmann, supra, 192 N.J. at 28. Consequently, we will not substitute our own judgment for the agency's even though we might have reached a different result. Stallworth, supra, 208 N.J. at 194; Herrmann, supra, 192 N.J. at 27-28.

With these principles in mind, we note that the arguments advanced by West Way on appeal were considered and rejected by the MVC in its final decision. The MVC determined that West Way "implicitly allowed its vehicle to be used as a motor carrier" and "should, therefore, have made sure that the vehicle was registered and properly insured before it was taken out on the road." Given the facts of this case, we cannot conclude that the MVC's findings and conclusions are arbitrary, capricious or unreasonable.

Further, West Way's claim that it is simply a "leasing company" is belied by the facts of this case and, further, is a factual claim rejected by the MVC. We defer to the MVC's fact-findings and consequently affirm the final decision of the MVC. Simply put, the facts show that West Way permitted its "bus" to operate as a charter service in interstate commerce. Consequently, requiring it to register the vehicle and comply with applicable federal requirements for such operations is neither unreasonable nor unwarranted.

B.

The MVC appeals from the Law Division's June 17, 2010 order that vacated the stay of the writ of replevin, originally issued in favor of plaintiff on July 22, 2009. We perceive no need to address the June 17, 2010 order but we do vacate that portion of the July 22, 2009 judgment issuing the writ of replevin and ordering the vehicle to be released "immediately and unconditionally." We determine that that portion of the judgment in favor of West Way is void for lack of subject matter jurisdiction.

Rule 2:3-2(a)(2) provides that appeals may be taken to the Appellate Division as of right "to review final decisions or actions of any state administrative agency or officer . . . ." The rule then goes on to provide that such review "shall not be maintainable so long as there is available a right of review before any administrative agency or officer, unless the interest of justice requires[.]"

The principle that a party must exhaust available administrative remedies before resorting to the courts is firmly embedded in our jurisprudence. See Central R.R. Co. v. Neeld, 26 N.J. 172, 178, cert. denied, 357 U.S. 928, 78 S. Ct. 1373, 2 L. Ed. 2d 1371 (1958). "If the complaining party prevails before the administrative agency . . . judicial proceedings would have been unnecessary and the court would have intervened needlessly. See L. Jaffe, Judicial Control of Administrative Action, 424-426 (1965). Our policy has been to discourage piecemeal litigation." Garrow v. Elizabeth General Hospital, 79 N.J. 549, 559 (1979). The policy discourages parties' premature resort to judicial intervention in claims that are more appropriately resolved through administrative proceedings. Hernandez v. Overlook Hosp., 149 N.J. 68, 73-74 (1997).

West Way cannot elect to pursue judicial relief from an interlocutory order of an administrative agency and, at the same time, challenge that order through the administrative process. Such action runs squarely afoul of the principle of exhaustion of remedies. It can also lead to inconsistent outcomes in multiple forums, as happened here.

Beyond this, West Way's detour to the Law Division violates the principle that the Appellate Division maintains exclusive jurisdiction to review state agency actions. Pascucci v. Vagott, 71 N.J. 40, 52 (1976); Sod Farm Assocs. v. Twp. of Springfield, 366 N.J. Super. 116, 131-32 (App. Div. 2004). Under our Constitution, N.J. Const. art. VI, § 5, ¶ 4, and the implementing rules adopted by our Supreme Court, "every proceeding to review the action or inaction of a state administrative agency would be by appeal to the Appellate Division." Central R.R. Co. v. Neeld, supra, 26 N.J. at 184; Johnson v. New Jersey State Parole Board, 131 N.J. Super. 513, 514 (App. Div. 1974), certif. denied, 67 N.J. 94 (1975).

By resorting to a collateral action in the Law Division, West Way chose to ignore the fact that jurisdiction to review state agency or officer actions inheres only in the Appellate Division. Moreover, as we have indicated, West Way failed to exhaust its administrative remedies.

Accordingly, West Way's challenge to the impounding of its vehicle should not have been adjudicated by the Law Division because the vehicle was impounded by action of the MVC, a state agency. Since the Law Division lacked jurisdiction to order the vehicle "released" from the impound order of the MVC, it consequently lacked jurisdiction to enter judgment issuing the writ of replevin and ordering the unconditional release of the vehicle from impoundment. Therefore, the July 22, 2009 judgment in favor of West Way is void, and must be vacated. See, e.g., Maguire v. Van Meter, 121 N.J.L. 150, 152 (E. & A. 1938) (stating that "lack of jurisdiction will subject the judgment of any court to collateral attack for such judgment is wholly nugatory and may be disregarded. . . . In legal contemplation it is wholly inoperative because it was not within the power of the [adjudicative body] to enter such judgment.").

We affirm the MVC final agency decision. We vacate the Law Division judgment of July 22, 2009, insofar as it improvidently ordered the release of the West Way vehicle from impoundment and authorized issuance of a writ of replevin. We do not retain jurisdiction.


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