Appeal by petitioner from judgment entered 29 December 2000 by
Judge Henry V. Barnette, Jr. in Wake County Superior Court. Heard
in the Court of Appeals 5 December 2001.
Hutchens & Senter, by H. Terry Hutchens and Rudolph G.
Singleton, Jr., for petitioner-appellant.
Attorney General Roy A. Cooper, by Assistant Attorney General
Gaines M. Weaver, for respondent-appellee.
TIMMONS-GOODSON, Judge.
Billy Cain (petitioner) appeals the 29 December 2000 order
of the trial court affirming the revocation of his outdoor
advertising permit issued by the North Carolina Department of
Transportation (NCDOT).
The relevant facts are as follows: Petitioner was the owner of
an outdoor advertising structure located on Interstate 95 in
Cumberland County. Petitioner leased the billboard to Sunshine
Outdoor of Florida, Inc. (Sunshine Outdoor) under the terms of a
written agreement by which Sunshine Outdoor was granted the use of
the billboard for a term of ten years. Sunshine Outdoor subleased
the billboard to Cafe' Risque, a business operated adjacent to
Interstate 95 in Harnett County.
On 7 February 1998, NCDOT Maintenance Manager, Hugh S.Matthews, responded to a report of an apparent destruction of
trees, shrubs, and other vegetation located on the right-of-way of
Interstate 95. The apparent removal of the vegetation was in order
to increase or enhance visibility of the outdoor advertising
structure. On 10 February 1998, the Department District Engineer
revoked petitioner's permit.
Petitioner contended that neither he nor any of his employees
was directly or indirectly engaged in the illegal cutting reported
on 7 February 1998. Petitioner also alleged that neither Sunshine
Outdoor nor Cafe' Risque sought permission to remove vegetation
from the permit site, nor did they inform petitioner of their
intention to remove vegetation. On 28 May 1998, the Secretary of
NCDOT received a letter from Jean Claude Brunnell of Sunshine
Outdoor asserting that Cafe' Risque was responsible for the illegal
cutting and that neither Sunshine Outdoor nor petitioner were aware
of the destruction of the vegetation.
On 9 September 1999, pursuant to an appeal by petitioner, the
Secretary of NCDOT entered a final decision upholding and affirming
the revocation of petitioner's permit. Petitioner petitioned for
judicial review of the final agency decision. The trial court in
affirming the revocation of petitioner's permit made the following
pertinent findings of fact:
7. The billboard at the permit site was
leased to Sunshine Outdoor, Inc. by Billy V.
Cain under the terms of a written agreement,
by the terms of which, Sunshine Outdoor of
Florida, Inc. was granted the rights to the
use of the billboard for a term of ten (10)
years and included options to renew, in
consideration of payments to Billy V. Cain inthe approximate amount over the initial term
of the lease in the approximate amount of One-
Hundred Fifty Thousand Nine Hundred Thirty-
Five Dollars ($150,935.00). Neither Billy V.
Cain, nor any employee of Billy V. Cain was
engaged directly or indirectly in the illegal
cutting at the permit site on February 7,
1998, or at any other time.
8. Neither Billy V. Cain nor any employee of
Billy V. Cain authorized, controlled, directed
or otherwise participated in the illegal
cutting of the vegetation at the permit site
on February 7, 1998.
9. Neither Sunshine Outdoor, Inc. nor Cafe'
Risque nor anyone on behalf of either entity,
sought Billy V. Cain's permission to remove
any vegetation from the permit site nor did
they inform Billy V. Cain of their intention
or plan to remove the vegetation.
10. Billy V. Cain had no knowledge whatsoever
that any person or entity intended to remove
vegetation at the permit site or, in fact, had
removed any vegetation at the permit site.
. . . .
15. Illegal cutting of vegetation at the
permit site was carried out by agents of
either Sunshine Outdoor of Florida, Inc. or
Cafe' Risque.
Based on the above findings of fact, the trial court made the
following conclusions of law:
1. The Final Decision of the Secretary of
Transportation is not in violation of any
constitutional provisions.
2. The Final Decision of the Secretary of
Transportation was made with the Outdoor
Advertising Control Act, N.C. Gen. Stat. 136-
126, et. seq. and rules and regulations
promulgated by the Department of
Transportation.
3. The Final Decision of the Secretary of
Transportation is not effected [sic] by any
other error of law.
4. Pursuant to National Advertising Co.
Bradshaw, 60 N.C. App. 745, 299 S.E.2d 817
(1983), the Department must clearly show the
following in order to revoke a permit for the
unlawful destruction of trees or shrubs or
other growth located on the right of way (1)
the identity of the persons, (2) who committed
a violation for which revocation is
permissible and (3) show a sufficient
connection between those persons and the
permit holder.
5. The contract between the Petitioner Billy
V. Cain and Sunshine Outdoor of Florida, Inc.
for the lease of the billboard is a sufficient
connection to satisf[y] the third element
established by the National Advertising Co.
court.
Petitioner appeals.
On appeal, petitioner contends that the trial court erred in
affirming the decision of the Secretary of Transportation in
revoking petitioner's outdoor advertising permit. Specifically,
petitioner argues that an insufficient connection existed between
petitioner and the perpetrator of the illegal cutting and
therefore, petitioner bears no responsibility for the apparent
destruction of the vegetation. Thus, petitioner asserts that the
revocation of his outdoor advertising permit was not justified. We
disagree.
The Outdoor Advertising Control Act (OACA)is codified in
N.C. Gen. Stat. § 136-126 (1999). The purpose of the Act is to
promote the safety, health, welfare and convenience and enjoyment
of travel on and protection of the public investment in highways
within the State, . . . and to promote the reasonable, orderly, andeffective display of such signs, displays and devices. N.C. Gen.
Stat. § 136-127 (1999). N.C. Gen. Stat. § 136-130 provides NCDOT
with the authority to promulgate rules and regulations concerning:
(1) outdoor advertising signs along the right-
of-way of interstate or primary highways in
this State; (2) 'the specific requirements and
procedures for obtaining a permit for outdoor
advertising as required in [N.C. Gen. Stat.] §
136-133'; and (3) 'for the administrative
procedures for appealing a decision at the
agency level to refuse to grant or in revoking
a permit previously issued.'
Advertising Co. v. Bradshaw, Sec. of Transportation, 48 N.C. App.
10, 16-17, 268 S.E.2d 816, 820 (quoting N.C. Gen. Stat. 136-130),
disc. review denied, 301 N.C. 400, 273 S.E.2d 446 (1980).
N.C. Gen. Stat. § 136-133(a) (1999) provides that except as
allowed by statute, no person shall erect or maintain any outdoor
advertising within 660 feet of the nearest edge of the right-of-way
of the interstate or primary highway system without first
obtaining a permit from NCDOT. The statute further provides that
such permit shall be valid until revoked for nonconformance with
this Article or rules adopted by the Department of Transportation.
In accordance with N.C. Gen. Stat. § 136-130, NCDOT has promulgated
N.C. Admin. Code tit. 19, r. 2E.0210(8)(2000) which provides for
revocation of a permit for unlawful destruction of trees or shrubs
or other growth located on the right of way in order to increase or
enhance the visibility of an outdoor advertising structure[.]
When a permit issued for an outdoor advertising structure has
been revoked and all administrative remedies have been exhausted,
the party aggrieved is entitled to judicial review of the decisionof the Secretary of Transportation. N.C. Gen. Stat. § 136-134.1
(1999). Under N.C. Gen. Stat. § 136-134.1, the party may appeal
the order of the Department of Transportation and has a right to a
hearing
de novo in the Superior Court of Wake County. The Superior
Court, after hearing the matter, may affirm, reverse or modify the
decision if the agency decision is (1) in violation of
constitutional provisions; or (2) not made in accordance with this
Article or rules or regulations promulgated by the Department of
Transportation; or (3) affected by other error of law.
Id.
The task of this Court in reviewing a trial court's order of
an agency decision is two-fold: (1) determine whether the trial
court exercised the appropriate standard of review and (2)
determine whether the trial court properly applied this standard.
Whiteco Outdoor Adver. v. Johnston County Bd. of Adjust., 132 N.C.
App. 465, 468, 513 S.E.2d 70, 73 (1999). The standard of review
depends on the nature of the issues presented on appeal.
Walker v.
N.C. Dept. of Human Resources, 100 N.C. App. 498, 502, 397 S.E.2d
350, 354 (1990),
disc. review denied, 328 N.C. 98, 402 S.E.2d 430
(1991). Allegations that a decision is based upon an error of law
dictate
de novo review.
Id. De novo review requires a court to
consider the question anew[,] as if the agency has not addressed
it.
Eury v. N.C. Employment Security,
Comm., 115 N.C. App. 590,
597, 446 S.E.2d 383, 387,
disc. review denied, 338 N.C. 309, 451
S.E.2d 635 (1994). Incorrect statutory interpretation by an agency
constitutes an error of law.
Brooks, Comm'r. of Labor v. Rebarco,
Inc., 91 N.C. App. 459, 464, 372 S.E.2d 342, 345 (1988). In the instant case, petitioner contends that the court's
order affirming the final decision of the Secretary of
Transportation revoking petitioner's outdoor advertising permit was
contrary to law. Accordingly, we review the Secretary's decision
de novo.
In determining whether there has been a violation of an
outdoor advertising regulation sufficient to support a permit
revocation, our Court has held NCDOT must (1) clearly identify
persons, (2) who committed a violation for which revocation is
permissible, and (3) show a sufficient connection between those
persons and the permit holder.
Whiteco Industries, Inc. v.
Harrelson, 111 N.C. App. 815, 434 S.E.2d 229 (1993),
disc. review
denied, 335 N.C. 566, 441 S.E.2d 135 (1994).
Since
National, it has been established that direct
involvement by the permit holder in the alleged violation is not
necessary to uphold a revocation. In
Whiteco Metrocom, Inc. v.
Roberson, 84 N.C. App. 305, 306, 352 S.E.2d 277, 277 (1987),
petitioner, owner of an outdoor advertising structure, hired an
independent contractor to maintain its signs. Petitioner's permit
was revoked because of the violations committed by independent sign
maintenance subcontractors.
Id. at 306, 352 S.E.2d at 277.
Petitioner contended his permit could not be revoked since the
delinquencies were those of an independent contractor.
Id. at
307, 352 S.E.2d at 278. This Court held that by obtaining the
statutorily authorized permit, petitioner accepted the duty to
follow the law in its exercise; and petitioner did not rid itselfof this duty by hiring an independent substitute to act for it; for
a duty imposed by statute cannot be delegated.
Id. at 307, 352
S.E.2d at 278.
Similarly, in
Whiteco Industries, 111 N.C. App. 815,
434
S.E.2d 229, Whiteco leased a billboard to Comfort Inn.
Subsequently, three men were observed cutting trees on the right-
of-way.
Id. at 816, 434 S.E.2d at 231. The men admitted that
they were hired by the owner of Comfort Inn. The permit holder,
Whiteco, argued that because the lessee of the billboard had hired
the violators, there was not a sufficient connection to warrant
permit revocation.
Id. at 820, 434 S.E.2d at 233. This Court held
that this argument would be tantamount to inviting circumvention
of the law, and we reject it. Petitioner's responsibility to abide
by DOT's requirements to obtain and retain outdoor advertising
permits
did not end when it leased billboard space to a third
party, and is not excused when an agent of the third party violates
those requirements.
Id. at 821, 434 S.E.2d at 233 (emphasis
added).
Our
de novo review in the instant case leads us to conclude
that the trial court's decision was not affected by errors of law.
The fact that petitioner did not know of the alleged violation nor
hired the violators, did not relieve him of liability. The fact
remains that there existed a contractual relationship between
petitioner and Sunshine Outdoor. As in
Whiteco, petitioner had a
responsibility to abide by NCDOT requirements and his
responsibility did not end when petitioner leased billboard spaceto a
third party, nor did it end when a
sublessee violated those
requirements. Based on prior rulings of this Court, we hold that
the trial court properly affirmed the revocation of petitioner's
outdoor advertising permit.
Petitioner presents two new arguments on appeal: (1) recent
changes to the administrative code provisions related to outdoor
advertising show that the permit at issue was unfairly revoked; and
(2) NCDOT has ample means to protect against illegal cutting on the
right-of-way through enforcement of N.C. Gen. Stat. § 14-128.
However, these arguments were not presented at trial, nor does the
record reflect that petitioner has assigned them as error.
Arguments not made before the trial court are not properly before
this Court.
See N.C.R. App. P. 10 (b)(1) (2000). Accordingly, we
do not address petitioner's remaining assignments of error.
Based on the foregoing, we affirm the trial court's order
upholding the revocation of petitioner's outdoor advertising
permit.
Affirmed.
Judge Hudson concurs.
Judge Tyson concurs in the result with a separate opinion.
================================
TYSON, Judge concurring in the result.
I concur in the result of the majority. There was substantial
evidence of a sufficient connection between the permit holder and
his lessee, the person who cut the vegetation, to uphold the
revocation of the permit. I disagree with the majority that it isirrelevant whether Sunshine Outdoor or Cafe' Risque hired the
violators.
At the hearing below, the Secretary of Transportation found
that Richard Marshburn (Marshburn), agent for Sunshine Outdoor,
authorized and hired Danny Moore (Moore), the party who cut the
vegetation without a permit. This finding of fact is supported by:
(1) a memo from R.R. Stone, the District Engineer, which states
that Marshburn informed him that Sunshine Outdoor was responsible
for the cutting; and (2) a letter from Hugh Matthews, the County
Maintenance Engineer, which states that upon reporting to the site
of the cutting, Moore informed him that Marshburn had hired him and
that Moore went to the motel and brought Marshburn back to the site
with him. These facts establish a sufficient connection between
the person who violated 19A N.C. Admin. Code r. 2E.0210(8) and the
permit holder.
See Whiteco Indus., Inc. v. Harrelson, 111 N.C.
App. 815, 819, 434 S.E.2d 229, 232-33 (1993) (violators hired by
lessee of the permit holder was a sufficient connection to warrant
revocation of the holder's permit) (
Whiteco I).
However, the majority implies that petitioner's responsibility
to abide by NCDOT requirements does not end when the violators are
the sublessee or are hired by the sublessee. A sufficient
connection between the permit holder and the violator, as required
in
National Adver. Co. v. Bradshaw, 60 N.C. App. 745, 749, 299
S.E.2d 817, 819 (1983), does not extend to third party strangers to
the permit holder, such as a sublessee. To hold otherwise
would
leave the permit holder without recourse against an unknown thirdparty whose actions caused the permit holder to lose not only his
permit, but his structural improvements on the property as well.
See 19A N.C. Admin. Code r. 2E.0212(b) (2000) (when the outdoor
advertising structure is unlawful and a nuisance, it must be made
to conform, if permitted by the rules, or removed); 19A N.C. Admin.
Code r. 2E.0212(c) (2000) (an outdoor advertising structure cannot
be made to conform when the permit is revoked under 19A NCAC
2E.0210(2),(3),(11), or (12)).
There exists no privity of contract between the original
landlord-permit holder and the sublessee or other third party
stranger to the agreement between the permit holder and the lessee.
The original landlord has no right of direct action against the
sublessee with respect to violations of covenants in the original
lease.
Neal v. Craig Brown, Inc., 86 N.C. App. 157, 162, 356
S.E.2d 912, 915 (1987) (citing Patrick K. Hetrick & James B.
McLaughlin, Jr.,
Webster's Real Estate Law in North Carolina, § 241
at 251 (Rev. ed. 1981)). A contractual relationship exists between
the original lessor-permit holder and sublessee only if a sublease
constitutes an actual assignment.
Northside Station Assocs.
Partnership v. Maddry, 105 N.C. App. 384, 388, 413 S.E.2d 319, 321
(1992) (citation omitted). [A] conveyance is an assignment if the
tenant conveys his 'entire interest in the premises, without
retaining any reversionary interest in the [lease] term itself.'
Id. If the conveyance is an assignment, privity of estate is
created between the original lessor and the sublessee with regard
to lease covenants that run with the land, and the original lessorwill have a right of action directly against the sublessee.
Id.
Absent an assignment, privity of estate is not established and
the original landlord-permit holder has no direct action and thus
no recourse against the sublessee. There is no evidence in the
record that shows petitioner's lease with Sunshine Outdoor was
assigned to Cafe' Risque.
This interpretation has been adopted and incorporated in
recent amendments to 19A N.C. Admin. Code r. 2E.0210 which provides
for revocation of the permit for:
(11) destruction or cutting of trees, shrubs,
or other vegetation located on the state-owned
or maintained right of way where an
investigation by the Department of
Transportation reveals that the destruction or
cutting:
(c) was conducted by one or more of the
following: the sign owner, the permit holder,
the lessee or advertiser employing the sign,
the owner of the property upon which the sign
is located, or any of their employees, agents
or assigns, including, but not limited to,
independent contractors hired by the permit
holder/sign owner, the lessee/agents or
advertiser employing the sign, or the owner of
the property upon which the sign is located.
19A N.C. Admin. Code r. 2E.0210(11)(c) (2000) (emphasis supplied).
National,
Whiteco I, and the amendment to the rules adopted by
the Department of Transportation do not extend sufficient
connection to those third parties with which the permit holder
does not have such a legal relationship to allow him recourse for
the revocation of his permit and the loss of his improvements.
Given the finding of fact by the Secretary of Transportation, that
Sunshine Outdoor, petitioner's lessee, was present and ordered theillegal cutting of the vegetation, I concur that a sufficient
connection between the permit holder and his lessee was
established to uphold the revocation of petitioner's permit.
See
Whiteco I, 111 N.C. App. at 819, 434 S.E.2d at 232-33.
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