Appeal by petitioner from judgment entered 11 July 2005 by
Judge Ronald K. Payne in Cabarrus County Superior Court. Heard in
the Court of Appeals 16 May 2006.
Ferguson, Scarbrough, Hayes & Price, P.A., by James E.
Scarbrough, for petitioner-appellant.
Attorney General Roy Cooper, by Special Deputy Attorney
General Francis W. Crawley and Assistant Attorney General Jay
L. Osborne, for respondent-appellee.
Petitioner Ronald Gold Overcash appeals from the Cabarrus
County Superior Court's judgment upholding a final agency decision
of the Environmental Management Commission (the "EMC"), imposing
penalties in the total amount of $125,880.26 as a result of
Overcash's violations of underground storage tank regulations.
Overcash argues primarily that he was incorrectly required to bear
the burden of proving that he did not violate the regulations and
that the findings of fact adopted by the EMC are inadequate.
Because the controlling case law places the burden of proof on the
petitioner in an administrative contested case proceeding to prove
that he is entitled to relief from an agency decision, and this is
the burden that the decisions below imposed on Overcash, we hold
the trial court properly rejected Overcash's argument regarding the
burden of proof. Further, based upon our review of the agencydecision, which adopted in full the recommended decision of the
administrative law judge (the "ALJ"), we hold that the EMC made
sufficient findings of fact to support its conclusions of law and
the imposition of the penalties. Because Overcash's remaining
assignments of error are either without merit or were not properly
preserved for appellate review, we affirm the superior court's
Facts and Procedural History
Overcash owns and operates underground storage tanks ("USTs")
at several locations in North Carolina, including Overcash Gravel
and Grating at 1150 Shelton Road in Concord ("Shelton Road site"),
Coddle Creek Grocery at 11181 Mooresville Road in Davidson ("Coddle
Creek site"), and Bethpage Grocery at 4940 Mooresville Road in
Kannapolis ("Bethpage Grocery site"). Over the course of five
years, the Department of Environmental and Natural Resources
("DENR") investigated these properties pursuant to Subchapter 2N of
Title 15A of the North Carolina Administrative Code, which codifies
the criteria and standards applicable to USTs in our State.
A. Shelton Road Site
In December 1997, DENR conducted an educational compliance
inspection of Overcash's Shelton Road site and found a number of
deficiencies. Overcash was given five months to correct the
violations. On 29 May 1998, a follow-up inspection of the site
revealed many of the same violations, as well as several new ones.
At that point, DENR gave Overcash a Notice of Violation ("NOV"),informing him that he had 30 days to correct the violations or
permanently close the site. Overcash did not respond.
DENR again inspected the site on 28 July 1999 and found that
Overcash had failed to remedy the violations discovered during the
previous investigations and also that there appeared to be yet more
new violations. A revised NOV was sent by certified mail to
Overcash, but he refused receipt. In April 2000, based on this
series of violations and Overcash's lack of response, DENR assessed
civil penalties in the amount of $15,980.64 against Overcash for
his failure to provide (1) corrosion protection, (2) spill
prevention equipment, (3) overfill equipment, (4) records for
inspection, and (5) an automatic line leak detector.
Following the imposition of this penalty, DENR conducted yet
another inspection at the Shelton Road site on 8 May 2001. Again,
the inspection revealed that Overcash had not met the compliance
conditions set forth by the earlier NOV. During the inspection,
DENR inspectors also observed two additional USTs at the site that
had not been registered. DENR assessed a second civil penalty
against Overcash, this time in the amount of $26,942.88, for his
failure to install the protections and equipment required by the
previous investigations, his failure to report and investigate a
suspected petroleum release at the site, and his failure to
maintain a valid operating permit for the additional USTs.
B. Coddle Creek Site
After notifying Overcash of a planned inspection, DENR
inspected Overcash's Coddle Creek site on 26 October 2001 andissued an NOV listing a number of violations. When, on 22 March
2002, it had still received no response to the October NOV, DENR
assessed a series of penalties against Overcash for his failure to
(1) provide corrosion protection for the USTs, (2) conduct a valid
process of leak detection for the USTs and their piping systems,
and (3) conduct an annual line leak test. DENR also fined Overcash
for locating his UST within 100 feet of a well serving a public
water supply. The civil penalties initially totaled $45,978.37,
but were later recalculated and reduced to $38,978.37.
C. Bethpage Grocery Site
On 29 August 2001, DENR sent a written notice to Overcash of
a planned investigation of the Bethpage Grocery site. DENR
inspected the site on 10 September 2001 and issued an NOV listing
a number of violations. Overcash did not respond to the September
NOV. After a follow-up inspection in January 2002, DENR imposed
a penalty in April 2002 of $43,978.37 for Overcash's failure to (1)
conduct a valid method of leak detection for the USTs and their
piping systems, (2) conduct an annual line leak test, and (3) hold
a valid operating permit.
D. Procedural History
In May 2000, April 2002, and May 2002, Overcash commenced
separate contested case proceedings in the Office of Administrative
Hearings . The contested cases were consolidated for hearing, and
the ALJ issued a recommended decision on 4 April 2003 that wasamended on 7 April 2003 to correct clerical errors. The
recommended decision upheld all of the civil penalties that DENR
had assessed for violations at Overcash's three sites.
On 16 October 2003, the EMC issued its Final Agency Decision
adopting the ALJ's decision in full and affirming the imposition of
the penalties, which, all told, amounted to $125,880.26. Overcash
appealed to superior court, and, on 11 July 2005, the Honorable
Ronald K. Payne filed a judgment affirming the EMC's final agency
decision. From this judgment, Overcash timely appealed.
Standard of Review
Review of the EMC's final agency decision is governed by N.C.
Gen. Stat. § 150B-51(b) (2005),
(See footnote 1)
[I]n reviewing a final decision, the court may
affirm the decision of the agency or remand
the case to the agency or to the
administrative law judge for further
proceedings. It may also reverse or modify
the agency's decision, or adopt the
administrative law judge's decision if the
substantial rights of the petitioners may have
been prejudiced because the agency's findings,
inferences, conclusions, or decisions are:
(1) In violation of constitutional
(2) In excess of the statutory authority
or jurisdiction of the agency;
(3) Made upon unlawful procedure;
(4) Affected by other error of law;
(5) Unsupported by substantial evidence
admissible under G.S. 150B-29(a),
150B-30, or 150B-31 in view of the
entire record as submitted; or
(6) Arbitrary, capricious, or an abuse
See also N.C. Dep't of Env't & Natural Res. v. Carroll
, 358 N.C.
649, 658-59, 599 S.E.2d 888, 894 (2004) (stating that an agency's
final decision may be reversed or modified "only if the reviewing
court determines that the petitioner's substantial rights may have
been prejudiced because the agency's findings, inferences,
conclusions, or decisions" fall into one of the six categories
listed in § 150B-51(b)). This Court's scope of review is the same
as that employed by the trial court. Wallace v. Bd. of Trs., Local
Gov't Employees Ret. Sys.
, 145 N.C. App. 264, 274, 550 S.E.2d 552,
558, disc. review denied
, 354 N.C. 580, 559 S.E.2d 553 (2001).
(See footnote 2)
 When the assigned error contends that the agency violated
§§ 150B-51(b)(1), (2), (3), or (4), the court engages in de novo
, 358 N.C. at 659, 599 S.E.2d at 895. "Under the
standard of review, the trial court consider[s] the matter
anew and freely substitutes its own judgment for the agency's."
at 660, 599 S.E.2d at 895 (alteration original) (internal
quotation marks omitted).  With respect to §§ 150B-51(b)(5) or (6), on the other
hand, the reviewing court applies the "'whole record test.'"
, 358 N.C. at 659, 599 S.E.2d at 895 (quoting Meads v. N.C.
Dep't of Agric.
, 349 N.C. 656, 663, 509 S.E.2d 165, 170 (1998)).
Under the whole record test, the trial court "may not substitute
its judgment for the agency's as between two conflicting views,
even though it could reasonably have reached a different result had
it reviewed the matter de novo
. Rather, a court must examine all
the record evidence _ that which detracts from the agency's
findings and conclusions as well as that which tends to support
them _ to determine whether there is substantial evidence to
justify the agency's decision. Substantial evidence is relevant
evidence a reasonable mind might accept as adequate to support a
at 660, 599 S.E.2d at 895 (internal quotation
marks and citations omitted). With these principles in mind, we
turn to an examination of Overcash's contentions on appeal.
Burden of Proof
 Overcash first argues that he was incorrectly made to bear
the burden of proof during the hearing before the ALJ. The proper
allocation of the burden of proof is purely a question of law.
Lindsay v. Brawley
, 226 N.C. 468, 471, 38 S.E.2d 528, 530 (1946).
We review the trial court's ruling rejecting this argument de novo.
, 358 N.C. at 659, 599 S.E.2d at 895.
N.C. Gen. Stat. § 150B-23(a) (2005) provides:
A contested case shall be commenced by filing
a petition with the Office of Administrative
Hearings . . . . [I]f filed by a party other
than an agency
, [the petition] shall statefacts tending to establish that the agency
named as the respondent
. . . has ordered the
petitioner to pay a fine or civil penalty
. and that the agency
(1) Exceeded its authority or
(2) Acted erroneously;
(3) Failed to use proper procedure;
(4) Acted arbitrarily or capriciously;
(5) Failed to act as required by law or
(Emphasis added.) See also
N.C. Gen. Stat. § 150B-29(a) (2005)
("The party with the burden of proof in a contested case must
establish the facts required by G.S. 150B-23(a) by a preponderance
of the evidence.").
While neither of these statutes specifically allocates the
burden of proof, this Court held
in Britthaven, Inc. v. N.C. Dep't
of Human Res
., 118 N.C. App. 379, 382, 455 S.E.2d 455, 459
(emphasis omitted), disc. review denied
, 341 N.C. 418, 461 S.E.2d
754 (1995), that "the ALJ is to determine whether the petitioner
has met its burden in showing that the agency" acted or failed to
act as provided in § 150B-23(a)(1)-(5). Likewise, in Holly Ridge
Assocs., LLC v. N.C. Dep't of Env't & Natural Res.
, 176 N.C. App.
594, 608, 627 S.E.2d 326, 337 (2006), this Court observed that
"caselaw holds that unless a statute provides otherwise, petitioner
has the burden of proof in OAH contested cases." Applying this
principle, the Court concluded that the petitioner _ and not DENR
_ bore the burden of proving the violations specified in N.C. Gen.Stat. § 150B-23(a). Holly Ridge
, 176 N.C. App. at 608-09, 627
S.E.2d at 337. In short, this Court has already held that the
burden of proof rests on the petitioner challenging an agency
while discussing the proper allocation of the burden
of proof in a contested case involving a state employee, our
Supreme Court explained:
Two general rules guide the allocation of the
burden of proof outside the criminal context:
(1) the burden rests on the party who asserts
the affirmative, in substance rather than
form; and (2) the burden rests on the party
with peculiar knowledge of the facts and
circumstances. . . . The North Carolina courts
have generally allocated the burden of proof
in any dispute on the party attempting to show
the existence of a claim or cause of action,
and if proof of his claim includes proof of
negative allegations, it is incumbent on him
to do so.
Peace v. Employment Sec. Comm'n
, 349 N.C. 315, 328, 507 S.E.2d 272,
281 (1998). In appeals under § 150B-23(a), the statute requires a
petitioner, other than an agency, to allege facts establishing that
the agency acted improperly in order to state a proper basis for
obtaining relief from the agency decision. Under Peace
the petitioner is seeking to show a basis for reversing the agency
decision, the burden of proof is properly allocated to the
petitioner _ even if that burden requires proving a negative.
Overcash nonetheless contends that Town of Wallace v. N.C.
Dep't of Env't & Natural Res.
, 160 N.C. App. 49, 584 S.E.2d 809
(2003), places the burden of proof on the agency in a contested
case petition. In Town of Wallace
, however, this Court neverspecifically resolved the issue of the burden of proof. After
pointing to the pleading burden imposed by N.C. Gen. Stat. § 150B-
23(a) and the reference in N.C. Gen. Stat. § 150B-29(a) to the
burden of proving the required facts by a preponderance of the
evidence, the Court observed that "Chapter 150B, Article 3 is
otherwise silent as to the burden of proof in demonstrating error
by the agency." Town of Wallace
, 160 N.C. App. at 56, 584 S.E.2d
at 815. The Court did not further address the issue other than
noting that the trial court did not relieve the Town of Wallace,
the petitioner, of its burden of pleading sufficient facts under
N.C. Gen. Stat. § 150B-23(a) and that the Court had reversed the
trial court's conclusion that DENR had failed to present
substantial evidence that the petitioner had caused an improper
discharge, rendering the burden of proof issue immaterial. Town of
, 160 N.C. App. at 56, 584 S.E.2d at 815.
Town of Wallace
never addresses Britthaven
and never conducts
the analysis mandated by Peace
. We do not believe that Town of
expresses any view as to which party bears the burden of
proof in a contested case that alleges an agency erred in one of
the ways set out in N.C. Gen. Stat. § 150B-23(a). We are bound by
and Holly Ridge
, as well as by the analysis in Peace
and accordingly hold that the trial court did not err in concluding
that the EMC properly allocated the burden of proof to Overcash.
Sufficiency of the Findings of Fact and Conclusions of Law
 A significant number of Overcash's remaining arguments on
appeal relate to the specific violations found by DENR, such as thefailure to install required equipment on the various USTs and to
conduct required testing. With respect to each violation, Overcash
alleges that the pertinent conclusions of law made by the ALJ, and
ultimately adopted by the EMC, are "not based on adequate findings
supported by substantial evidence." This repeated assertion
appears to be two arguments rolled into one: (1) that there was
insufficient evidence to support the findings of fact and (2) that
adequate findings of fact do not support the conclusions of law.
We are precluded from considering Overcash's arguments
regarding the sufficiency of the evidence to support the findings
of fact because none of Overcash's 21 assignments of error
whether any specific finding of fact is supported by
competent evidence. "Where no error is assigned to the findings of
fact, such findings are presumed to be supported by competent
evidence and are binding on appeal." McConnell v. McConnell
N.C. App. 622, 626, 566 S.E.2d 801, 804 (2002). While Overcash
does contend generally in one assignment of error "that the
findings are inadequate and not supported by the evidence," it is
well-established that "[a] single assignment generally challenging
the sufficiency of the evidence to support numerous findings of
fact . . . is broadside and ineffective." Wade v. Wade
, 72 N.C.
App. 372, 375-76, 325 S.E.2d 260, 266, disc. review denied
N.C. 612, 330 S.E.2d 616 (1985). Because of Overcash's failure to
assign error with respect to the sufficiency of the evidence to
support any specified factual findings, those findings are bindingon appeal, and we do not address those portions of his brief
arguing that the EMC decision is unsupported by the evidence.
 Overcash does specifically assign error to the agency's
reliance on his lack of records as evidence that he had not
installed required equipment or conducted required tests. Overcash
argues that he is only required by the Administrative Code to keep
records for one year. See
15A N.C. Admin. Code 2N.0506 (2006)
(adopting in full the provisions of 40 C.F.R. § 280.45(b) (2006)).
He contends, based on this regulation, that DENR could not rely
upon an absence of documentation of equipment and tests for periods
of time not falling within the prior one-year period.
In making this argument, Overcash fails to distinguish between
two different violations for which he was penalized: (1) a failure
to maintain required records and (2) a failure to perform the
inspections that would produce records. Overcash received one fine
for his failure to keep records for the prescribed period of time:
a penalty issued on 3 April 2000 based on a lack of records at the
Shelton Road site during the period from 28 July 1999 to 3 February
(See footnote 3)
Thus, to the extent that Overcash was fined specifically
for a lack of recordkeeping, the fine was due to the absence of
records dating less than one year before the violation date.
Most of Overcash's fines were not, however, imposed because of
his failure to keep required records, but rather arose out of
Overcash's failure to provide required equipment for his USTs andfailure to perform required tests on his USTs. The lack of any
written documentation that Overcash had installed the equipment or
performed the tests was one piece of evidence relied upon by DENR
in finding Overcash's lack of compliance with the regulations. As
DENR points out, installation of the equipment and performance of
the testing would likely produce some document evidencing
compliance, such as a receipt. DENR argues further:
The record retention requirement was unchanged
over the period under review and the
reasonable inference arising from the current
nonexistence of required records, that the
tests were not conducted in the past, was
properly inferred from the nonexistence of
similar testing records in prior years.
. . . .
Overcash's facilities were inspected
eight times between December 1997 and the fall
of 2001, and the nonexistence of required
records observed at each facility remained
unchanged over that period. The fact that not
a single document was produced to show that
the required equipment was installed or
routinely operated or monitored supports the
permissible inference that the required
activity, which would have generated the
written record, had not occurred.
As Judge Payne explained below: "Because Ronald Overcash would have
created or received a written record at the time each of the
regulated activities was performed, his failure to provide records
when the facilities were inspected to show the required pollution
prevention actions had in fact been performed at each of his
facilities supported the logical, reasonable inference . . . that
he had not performed the activities as required." We find this
reasoning persuasive and hold that Judge Payne did not err inconcluding that Overcash's failure to provide to DENR records of
installation of the required equipment and performance of the
required tests _ even after having prior notice of the inspections
_ "was evidence admissible to prove the fact" that he did not
perform the installation or the tests.
 Overcash next contends that the findings of fact are
insufficient to support the conclusions of law because they amount
to evidentiary findings of fact and not ultimate findings of fact.
"'There are two kinds of facts: Ultimate facts, and evidentiary
facts. Ultimate facts are the final facts required to establish
the plaintiff's cause of action or the defendant's defense; and
evidentiary facts are those subsidiary facts required to prove
ultimate facts. . . . An ultimate fact is the final resulting
effect which is reached by processes of logical reasoning from the
evidentiary facts . . . .'" Smith v. Smith
, 336 N.C. 575, 579, 444
S.E.2d 420, 422-23 (1994) (quoting Peoples v. Peoples
, 10 N.C. App.
402, 409, 179 S.E.2d 138, 142 (1971)). Although the fact finder is
not precluded from including evidentiary findings of fact in a
decision, Rule 52(a) of the Rules of Civil Procedure "does require
of the ultimate facts established by the
evidence, admissions and stipulations which are determinative of
the questions involved in the action and essential to support the
conclusions of law reached." Quick v. Quick
, 305 N.C. 446, 452,
290 S.E.2d 653, 658 (1982).
An examination of the ALJ decision, adopted by the EMC,
reveals that some findings are ultimate, some are evidentiary, andsome are a mix of both. While there is some recitation of the
evidence, such as quotations from depositions and testimony, there
are also sufficient ultimate findings of fact to determine the
issues presented by the contested case.
We are left to examine whether those findings of fact support
the conclusions of law. "[W]hether the conclusions of law are
supported by the findings [is] a question of law fully reviewable
on appeal." State v. Campbell
, 359 N.C. 644, 662, 617 S.E.2d 1, 13
(2005), cert. denied
, __ U.S. __, 164 L. Ed. 2d 523, 126 S. Ct.
1773 (2006). Apart from Overcash's contentions that we have
discussed above, he makes no argument as to how the findings of
fact fail to support his conclusions of law, nor does he attempt to
demonstrate that the conclusions of law were in any other way
impermissible under N.C. Gen. Stat. § 150B-51(b).
(See footnote 4)
hold that the EMC's conclusions of law are sufficiently supported
by the findings of fact.
Untimely Permit Applications
 Lastly, Overcash argues that DENR improperly penalized him
for operating the USTs without a permit when DENR had placed his
pending applications on "administrative hold." Defendant contends
he was protected by N.C. Gen. Stat. § 150B-3(a) (2005), whichextends the expiration date for a permit until DENR makes a final
decision on whether the new application will be accepted.
N.C. Gen. Stat. § 150B-3(a) provides, in pertinent part:
When an applicant or a licensee makes a timely
and sufficient application for issuance or
renewal of a license or occupational license,
including the payment of any required license
fee, the existing license or occupational
license does not expire until a decision on
the application is finally made by the agency,
and if the application is denied or the terms
of the new license or occupational license are
limited, until the last day for applying for
judicial review of the agency order.
Thus, by its plain language, the statute only protects applicants
who make "timely and sufficient application for issuance or renewal
of a license."
In this case, Overcash's brief does not contend that the
applications were "timely." Indeed, Overcash stipulated in the
Order on Final Pre-Hearing Conference, before the hearing on the
contested case, that the last operating permits for the Shelton
Road and Bethpage Grocery sites expired in 1999. Overcash did not
file renewal applications until 2002. Further, as to two USTs at
Shelton Road, Overcash had not attempted, prior to 2002, to obtain
any permit, even though the USTs were in use. Since Overcash had
not made "timely and sufficient application for issuance or renewal
of a license" in 2002, N.C. Gen. Stat. § 150B-3(a) did not preventDENR from imposing fines on Overcash for a lack of UST permits.
(See footnote 5)
This last assignment of error is, therefore, overruled.
Judges WYNN and STEPHENS concur.