DANNY G. GOUGH, PARTNER
ENERGY SOLUTIONS, LIMITED
ENERGY SOLUTIONS, LIMITED
LICENSE #07444 PH 1, 2 & 3-I,
No. 03 CVS 75
NORTH CAROLINA STATE BOARD OF
EXAMINERS OF PLUMBING, HEATING
AND FIRE SPRINKLER CONTRACTORS,
Danny G. Gough, petitioner-appellant, pro se.
Young Moore and Henderson, P.A., by John N. Fountain and Reed N. Fountain, for respondent-appellee.
Petitioner, Danny Gough (Gough), presents several issues arising from the trial court's order affirming the North Carolina State Board of Examiners of Plumbing, Heating and Fire Sprinkle Contractors' (Board) decision to discipline him for rules violations. After careful review, we affirm. On 10 April 2002, Winston-Salem Building Inspector Alex Ellis (Ellis) went to a construction site located at 4620 Cherryhill Lane to conduct a final heating inspection for Neal Flanary, the license holder for Brady Flanary HVAC. During the inspection, Ellis noticed a boiler had been installed on the property. Ellis reviewed the building permits and discovered a permit had not been issued for the boiler installation. Later that month, Gough obtained a boiler permit on 24 April 2002.
The Board commenced an investigation and it was determined that William Edwards (Edwards) installed the boiler for Gough in August 2001. Gough provided the boiler for installation and Edwards bought the supplies and did the actual installation. According to a canceled check, on 22 January 2002, Gough paid Edwards $2,500.00 for the installation, labor, and supplies. Edwards was not properly licensed to install the boiler.
On 24 December 2002, the Board sent Gough a notice of hearing which indicated a hearing would be held on 14 January 2003 at the Board's offices in Raleigh, North Carolina. The Board alleged Gough had violated Board regulations by commencing work on the installation of a boiler prior to obtaining a permit and by subcontracting the boiler installation to a plumber that was not properly licensed to install boilers. Gough moved for a continuance, for a change of venue, and for clarification of issues. The Board denied each of these motions. Gough did not appear at the hearing, and in a 20 January 2003 order, the Board determined Gough had violated Board regulations and ordered hislicense be suspended for six months. The Board provided Gough an opportunity to appear before the Board in March 2003 to try and demonstrate that the likelihood of repeated violations was minimal. If Gough had been able to demonstrate his actions would not be repeated in the future, the Board would have considered reducing the suspension length. However, Gough's suspension length was not reduced as Gough did not present any evidence indicating the problems would not be repeated in the future. Gough then sought judicial review in the superior court. The superior court affirmed the Board's order and Gough appeals.
We first explain the procedures governing the appellate review of a final decision of an administrative agency in a contested case. Pursuant to N.C. Gen. Stat. § 150B-43 (2003), [a]ny person who is aggrieved by the final decision in a contested case, and who has exhausted all administrative remedies made available to him by statute or agency rule, is entitled to judicial review of the decision . . . , unless adequate procedure for judicial review is provided by another statute . . . . Id. To obtain judicial review of a final decision . . . , the person seeking review must file a petition in the Superior Court of Wake County or in the superior court of the county where the person resides. N.C. Gen. Stat. § 150B-45 (2003). [A] reviewing superior court 'sits in the posture of an appellate court' and 'does not review the sufficiency of evidence presented to it but reviews that evidence presented to [the agency.]' Mann Media, Inc. v. Randolph Cty. Planning Bd., 356 N.C. 1, 12, 565 S.E.2d 9, 17 (2002) (citation omitted). 'Theproper standard for the superior court's judicial review depends upon the particular issues presented on appeal.' Id. at 13, 565 S.E.2d at 17 (citations omitted). (See footnote 1) [W]here the gravamen of an assigned error is that the agency violated subsections 150B-51(b)(1), (2), (3), or (4) of the APA, a court engages in de novo review. N.C. Dep't of Env't & Natural Res. v. Carroll, 358 N.C. 649, 659, 599 S.E.2d 888, 895 (2004). Under the de novo standard of review, the trial court 'considers the matter anew and freely substitutes its own judgment for the agency's.' Mayo v. N.C. State Univ., ___ N.C. App. ___, ___, 608 S.E.2d 116, 120 (2005) (citations omitted). Where the substance of the alleged error implicates subsection 150B-51(b)(5) or (6), . . . the reviewing court applies the 'whole record test.' Carroll, 358 N.C. at 659, 599 S.E.2d at 895 (citation omitted). When sitting as an appellate body, the trial court 'must set forth sufficient information in its order to reveal the scope of review utilized and the application of that review.' Mann Media, Inc., 356 N.C. at 13, 565 S.E.2d at 17 (citations omitted).
Pursuant to N.C. Gen. Stat. § 150B-52 (2003), [a] party to a review proceeding in a superior court may appeal to the appellatedivision from the final judgment of the superior court . . . . Id. When an appellate court reviews
a superior court order regarding an agency decision, 'the appellate court examines the trial court's order for error of law. The process has been described as a twofold task: (1) determining whether the trial court exercised the appropriate scope of review and, if appropriate, (2) deciding whether the court did so properly.'
Mann Media, Inc., 356 N.C. at 14, 565 S.E.2d at 18 (citation omitted). [I]t is well settled that the trial court's erroneous application of the standard of review does not automatically necessitate remand, provided the appellate court can reasonably determine from the record whether the petitioner's asserted grounds for challenging the agency's final decision warrant reversal or modification of that decision under the applicable provisions of N.C.G.S. § 150B-51(b). Carroll, 358 N.C. at 665, 599 S.E.2d at 898.
Gough first contends the trial court erred in its finding that the decision of the State Board was not made upon unlawful procedure or affected by other error of law because the Board should have granted his request for a more definite statement. Specifically, Gough argues the notice of hearing was overly broad, vague, and did not comply with the provisions of N.C. Gen. Stat. § 150B-38.
Although this issue presents an error of law which is reviewed de novo, the trial court purportedly applied the whole record test. Nonetheless, as stated in Carroll, the erroneous application of the standard of review does not automatically necessitate remand,provided the appellate court can reasonably determine from the record whether the petitioner's asserted grounds for challenging the agency's final decision warrant reversal or modification of that decision under the applicable provisions of N.C.G.S. § 150B- 51(b). Carroll, 358 N.C. at 665, 599 S.E.2d at 898. Therefore, we address the merits of Gough's argument. Under the de novo standard of review, [this Court] 'consider[s] the matter anew and freely substitutes its own judgment for the agency's.' Id. at 660, 599 S.E.2d at 895 (citations omitted).
N.C. Gen. Stat. § 150B-38(b) (2003) provides:
Prior to any agency action in a contested case, the agency shall give the parties in the case an opportunity for a hearing without undue delay and notice not less than 15 days before the hearing. Notice to the parties shall include:
(1) A statement of the date, hour, place, and nature of the hearing;
(2) A reference to the particular sections of the statutes and rules involved; and
(3) A short and plain statement of the facts alleged.
The notice of hearing sent to Gough on 20 December 2002 informed him that the hearing was scheduled for 14 January 2003 at 8:30 a.m. at the Board's offices located at 1109 Dresser Court in Raleigh, North Carolina. It also informed Gough that a prehearing conference was scheduled for 6 January 2003 at 10:00 a.m. The notice stated Gough had violated G.S. 87-23(a) which [permits] the Board [to] revoke or suspend any license issued by the Board forgross negligence, incompetence, or misconduct and listed seven possible rule violations, including 21 NCAC 50.0402, 50.0403, 50.0406, and 50.0505. The rules were stated in their entirety in the notice of hearing. The notice also provided these specific factual allegations:
10. During August 2001, Respondent, Danny G. Gough, General Partner of Energy Solutions, Limited Partnership, subcontracted William Howard Edwards, d/b/a Edwards Plumbing Company, to install and Mr. Edwards did install a boiler and piping system at a residence located at Lot 43, 4620 Cherryhill Lane, Winston-Salem, N.C. Energy Solutions paid Edwards in the amount of $2,500.00 for labor and materials. William Howard Edwards had only Plumbing, Class I license and the job was not permitted or inspected. Respondent aided contracting without license. Respondent also subbed the ductwork and gas piping to Brady O'Neal Flanary.
The actions of Respondent constitute a violation of G.S. 87-23 and the rules of the Board.
Among the persons who may testify with reference to the foregoing allegations are the following:
Brady O'Neal Flanary
William Howard Edwards
The Board's order concluded Gough had violated 21 NCAC 50.0402, 21 NCAC 50.0403, 21 NCAC 50.0406, and 21 NCAC 50.0505, four of the seven possible rules violations included in the notice of hearing. Therefore, Gough was provided with notice of the date, time, and location of the hearing, the possible rules violations, and a brief and concise statement of the factual allegations. Nonetheless, Gough contends the notice of hearing was insufficient in light of this Court's opinion in In re Trulove, 54 N.C. App. 218, 282 S.E.2d 544 (1981). In Trulove, this Court held the petitioner was not provided with sufficient notice because the North Carolina State Board of Registration for Professional Engineers and Land Surveyors determined the petitioner had violated a board rule that was not stated in the notice of hearing. Id. at 223-24, 282 S.E.2d at 547-48. Unlike the circumstances in Trulove, the Board provided petitioner with notice of seven possible rule violations, four of which the Board determined were supported by the evidence. (See footnote 2)
Gough also contends the notice was overly broad because it included three rules that the Board later determined were not violated by him. The Board indicates it included in the notice the rules the Board felt were most likely to be at issue and other provisions that may or may not become relevant. These other provisions were included in the notice because unexpected issues or violations may become apparent during the testimony which could not be foreseen prior to the hearing as depositions are not typically held prior to a hearing. The purpose of notice is to apprise the alleged violator with notice of the charges against him so that he may prepare a defense. Id. at 224, 282 S.E.2d at 548. In this case, Gough was provided with sufficient notice of the chargesalleged against him. The fact that the Board included possible rule violations in the notice that did not later become a basis for discipline against Gough is not unlike a criminal case in which the indictment alleges seven possible charges and the defendant is only convicted of four.
Next, Gough argues the superior court erroneously failed to determine the Board's decision was made upon unlawful procedure or was affected by other error of law because the Board abused its discretion in denying his motion for a continuance.
Pursuant to N.C. Gen. Stat. § 150B-38, the Board was required to give at least fifteen days notice of the hearing. Gough received notice of the hearing on 24 December 2002, twenty-two days before the 14 January 2003 hearing. On 4 January 2003, Gough requested a continuance, which was received by the Board on 6 January 2003. The Board denied the motion and informed Gough of the denial on 10 January 2003. Gough contends his continuance request should have been granted because he did not have sufficient time to prepare a response to the allegations which was due on 4 January 2003. Due to the Christmas holidays, Gough contends he was unable to prepare a response or to obtain counsel in the short time period. Gough also contends he would have been able to conduct discovery and interview witnesses if a continuance had been granted.
Pursuant to 21 NCAC 50.1014(a) (June 2004), the rules in Title 26, Chapter 3 of the North Carolina Administrative Code areincorporated by reference into the administrative hearing procedures of the Board. Under 26 NCAC 3.0118 (June 2004):
(a) Requests for a continuance of a hearing shall be granted upon a showing of good cause. Unless time does not permit, a request for a continuance of a hearing shall be made in writing to the [Board] and shall be served upon all parties of record. In determining whether good cause exists, due regard shall be given to the ability of the party requesting a continuance to proceed effectively without a continuance. A request for a continuance filed within five days of a hearing shall be denied unless the reason for the request could not have been ascertained earlier.
(1) Good cause includes death or incapacitating illness of a party, representative, or attorney of a party; a court order requiring a continuance; lack of proper notice of the hearing; a substitution of the representative or attorney of a party if the substitution is shown to be required; a change in the parties or pleadings requiring postponement; and agreement for a continuance by all parties if either more time is clearly necessary to complete mandatory preparation for the case, such as authorized discovery, and the parties and the [Board] have agreed to a new hearing date or the parties have agreed to a settlement of the case that has been or is likely to be approved by the final decision maker.
(2) Good cause shall not include: intentional delay; unavailability of counsel or other representative because of engagement in another judicial or administrative proceeding unless all other members of the attorney's or representative's firm familiar with the case are similarly engaged, or if the notice of the other proceeding was received subsequent to the notice of the hearing for which the continuance is sought; unavailability of a witness if the witness testimony can be taken by deposition, and failure of the attorney or representative to properly utilize the statutory notice period to prepare for the hearing.
Id. In this case, Gough received proper notice of the hearing, a witness list, and a copy of all of the Board's exhibits prior to trial. Gough was also afforded an opportunity to participate in a pretrial conference to discuss, and possibly, narrow the issues to be resolved by the Board. However, Gough did not participate in the pretrial conference. Also, the Board gave Gough more than the requisite fifteen days notice. Finally, the issues in this case were not complex. Indeed, the two key issues were whether Gough obtained a permit prior to the boiler installation and whether William Edwards was properly licensed to install a boiler. Accordingly, we conclude the Board properly denied Gough's motion for a continuance as Gough did not demonstrate good cause for a continuance.
Next, Gough alleges the Board erroneously failed to grant his request for a change of venue, and therefore, the superior court erroneously concluded the Board's decision was not made upon unlawful procedure or affected by other error of law.
Gough contends that venue in a contested case before the Board is determined by N.C. Gen. Stat. § 150B-24. However, the Board is an occupational licensing agency. N.C. Gen. Stat. § 150B-2(4b) (2003); see also N.C. Gen. Stat. § 87-16 et seq. Therefore, venue in contested cases before the Board is determined by N.C. Gen. Stat. § 150B-38. See N.C. Gen. Stat. § 150B-38(a)(1). Pursuant to N.C. Gen. Stat. § 150B-38(e):
A hearing conducted by the agency shall be held in the county where the agency maintains its principal office. . . . If a different venue would promote the ends of justice orbetter serve the convenience of witnesses, the agency or [Board] may designate another county. A person whose property or rights are the subject matter of the hearing waives his objection to venue if he proceeds in the hearing.
Id. In this case, the hearing was held at the Board's offices in Raleigh, North Carolina, which is in accordance with the provisions of N.C. Gen. Stat. § 150B-38. Gough has not argued venue in another location would promote the ends of justice or would better serve the convenience of witnesses. Accordingly, we conclude venue was proper in this case.
Next, Gough argues the Board erroneously failed to consider his submission of additional evidence and affidavits in the 11 March 2003 hearing, and therefore, the superior court erroneously concluded the Board's decision was not made upon unlawful procedure or affected by other error of law. In the 20 January 2003 order suspending his license for six months, the Board stated in its order that: 2. The period of suspension may be reduced and license returned to active status if the Respondent personally appears before the Board and makes a satisfactory showing that the types of problems shown in this proceeding will not be repeated.
Gough requested the Board reconsider its order and asked to appear at the 11 March 2003 meeting of the Board. The Board allowed Gough to appear at the 11 March 2003 meeting for the limited purpose of determining whether Gough's suspension length should be reduced. Instead of discussing the appropriateness of the sanction, Gough attempted to argue the Board's findings in the 20 January 2003 order were not supported by substantial competent evidence. As previously stated, pursuant to 21 NCAC 50.1014(a), the rules in Title 26, Chapter 3 of the North Carolina Administrative Code are incorporated by reference into the administrative hearing procedures of the Board. Under 26 NCAC 3.0129 (June 2004), [a]fter [a Board] issues a decision in a contested case, the [Board] loses jurisdiction to amend the decision except to correct clerical or mathematical errors. Id. Thus, Gough was not entitled to seek reconsideration of the Board's decision by submitting additional evidence or arguing the accuracy of the Board's findings. Rather, Gough was limited to the purposes of the meeting -- to determine if the length of his suspension should be reduced. (See footnote 3)
Next, Gough argues his constitutional due process rights were violated because he was not permitted to conduct discovery. Discovery in this case was governed by N.C. Gen. Stat. § 150B-39 and 26 NCAC 3.0112 (See footnote 4) , which states in pertinent part:
(a) Discovery methods are means designed to assist parties in preparing to meet their responsibilities and protect their rights during hearings without unduly delaying, burdening or complicating the hearings process and with due regard to the rights and responsibilities of other parties and persons affected. Accordingly, parties are obliged to exhaust all less formal opportunities to obtain discoverable material before utilizing this Rule.
(b) Any means of discovery available pursuant to the North Carolina Rules of Civil Procedure, G.S. 1A-1, is allowed. If the party from whom discovery is sought objects to the discovery, the party seeking the discovery may file a motion with the [Board] to obtain an order compelling discovery. In the disposition of the motion, the party seeking discovery shall have the burden of showing that the discovery is needed for the proper presentation of the party's case, is not for purposes of delay, and that the issues in controversy are significant enough to warrant the discovery. In ruling on a motion for discovery, the [Board] shall recognize all privileges recognized at law.
. . .
(d) The parties in any contested case shall immediately commence to exchange information voluntarily, to seek access as provided by law to public documents and to exhaust other informal means of obtaining discoverable material.
(e) All discovery shall be completed no later than the first day of the contested case hearing. [A Board] may shorten or lengthen the period for discovery and adjust hearing dates accordingly and, when necessary, allow discovery during the pendency of the contested case hearing.
26 NCAC 3.0112 (June 2004).
In Gough's motion for clarification of issues, he did not make a specific discovery request. Rather, Gough moved for a continuance in order to prepare interrogatories, requests for production of documents, and subpoenas. As previously discussed, the Board did not abuse its discretion in denying Gough's continuance motion. Moreover, the issues in controversy in this case were neither complex nor significant. Indeed, the key issue was whether Gough violated Board rules and regulations by (1)installing a boiler without first obtaining the proper permits, and (2) utilizing an improperly licensed subcontractor to install the boiler. Thus, under 26 NCAC 3.0112(b), Gough would not have been able to meet his burden to show additional discovery was necessary. Furthermore, the record indicates the Board voluntarily provided Gough with a witness list in the notice of hearing received by Gough on 24 December 2002. Prior to the hearing, Gough also received a copy of all the exhibits to be presented to the Board. These thirty exhibits included copies of the plumbing and heating permits, invoices, letters, and witness affidavits. Gough was also afforded an opportunity to participate in a pretrial conference during which the parties were to stipulate facts, documents, and testimony not in dispute, narrow the issues to be considered at the hearing, and to determine whether an agreement could be reached resolving the matter without the necessity of a hearing. During this meeting, Gough would have been able to address some of the issues raised by him in his Motion for Clarification of issues. However, Gough did not participate in this meeting.
Briefly stated, prior to the hearing, Gough was provided all of the Board exhibits and a witness list. He was also afforded an opportunity to participate in a pretrial conference to discuss, and possibly, narrow the issues prior to the hearing. Gough also did not make a specific discovery request, and even if he had specifically requested certain types of discovery, the issues presented were not so complex or significant as to warrant furtherdiscovery. Therefore, Gough was not prevented from seeking or obtaining discovery in this case.
Next, Gough argues the board erroneously failed to proceed properly. Specifically, Gough argues the Board should have granted his motions for a continuance, change of venue, clarification of issues, and discovery. We have previously addressed these issues and found the Board did not commit any error or abuse its discretion. Based upon our previous analysis, we conclude the Board proceeded properly.
Next, Gough presents several issues arising from the Board's 20 January 2003 order. Specifically, Gough contends hearsay testimony was erroneously presented to and considered by the Board. He also argues the findings of fact and conclusions of law were not supported by the evidence. The admissibility of evidence is reviewed de novo and whether the findings of fact are supported by the evidence is determined by the whole record test. See Carroll, 358 N.C. at 659-60, 599 S.E.2d at 895. Under the whole record test,
the reviewing court [examines] all competent evidence to determine whether the agency decision is supported by substantial evidence. The administrative findings of fact, if supported by substantial evidence in view of the entire record, are conclusive upon a reviewing court. Notably, [t]he 'whole record' test does not allow the reviewing court to replace the Board's judgment as between two reasonably conflicting views, even though the court could justifiably have reached a different result.
Farber v. N.C. Psychology Bd., 153 N.C. App. 1, 14, 569 S.E.2d 287, 297 (2002) (citations omitted). 'Substantial evidence' is definedas 'relevant evidence a reasonable mind might accept as adequate to support a conclusion.' Watkins v. N.C. State Bd. of Dental Exam'rs, 358 N.C. 190, 199, 593 S.E.2d 764, 769 (2004) (quoting N.C. Gen. Stat. § 150B-2(8b) (2003)).
The findings of fact relevant to Gough's discipline state:
4. Respondent subcontracted William Howard Edwards, d/b/a Edwards Plumbing Company, to install and Mr. Edwards did install the heating system including the boiler and piping and interconnection of the boiler and coils to the system at Lot 43, 4620 Cherryhill Lane, Winston-Salem, N.C. Energy Solutions furnished the boiler and paid Edwards $2,500.00 for all labor and materials. William Howard Edwards had only Plumbing, Class I license. This contract required the subcontractor to hold H-1 license.
5. Respondent failed to obtain permit and inspection of the boiler prior to placing it in operation. (See footnote 5)
Gough contends these findings of fact were based upon the hearsay testimony of Ellis, a Winston-Salem Building Inspector. Our review of the whole record indicates these findings of fact were not based upon Ellis' testimony. In this case, William H. Edwards, a plumbing contractor, testified that he installed the boiler for Gough in August 2001. He testified Gough provided the boiler and Edwards supplied the piping. Specifically, Edwards testified I also hooked up the water supply to the boiler, but I didn't . . . turn the system on[.] Edwards also indicated that he assumedGough had the permit for the boiler prior to connecting the piping to the boiler. Edwards sent Gough an invoice dated 23 December 2001 for the installation of the copper piping, labor, and supplies. Gough paid Edwards $2,500.00 on 22 January 2002 and the memo section of the check indicated it was for the boiler. During his testimony, Edwards admitted his plumbing license classification did not permit him to install a boiler. Although the boiler installation was completed in August 2001, the boiler permit was not issued until a later date. The boiler permit indicates it was not issued until 24 April 2002. Thus, findings of fact 4 and 5 were not based upon Ellis' testimony; rather, these findings were based upon Edwards' testimony and several documents, including the boiler permit. Therefore, even assuming Ellis' testimony was hearsay, no prejudicial error occurred in admitting the testimony because the findings of fact were not based upon the alleged hearsay testimony.
Finally, we have examined Gough's remaining issues regarding the Board's findings of fact and conclusions of law, alleged due process violations, the standard of review, presentation of new evidence, and a motion for a new trial and have determined that these issues have already been addressed in this opinion. In sum, the whole record supports the Board's determination that Gough commenced work on the installation of a boiler without the proper permit and utilized a plumbing subcontractor that was not properly licensed to install a boiler. These actions violated 21 NCAC50.0402, .0403, .0406, and .0505. We also hold that Gough's due process rights were not violated by the Board.
Judges CALABRIA and JACKSON concur.
Report per Rule 30(e).
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