Sears v. Zumwalt

 Susan
 Williams       Cite as 

.12.
 27       ARKANSAS COURT OF APPEALS
 11:40:12              DIVISION II
 -06'00'              No. CV-13-124


                                                   Opinion Delivered September 11, 2013

DONALD SEARS                                       APPEAL FROM THE PULASKI
                                APPELLANT          COUNTY CIRCUIT COURT,
                                                   NINTH DIVISION
V.                                                 [NO. CV-10-6472]

JOAN ZUMWALT                                       HONORABLE MARY SPENCER
                                   APPELLEE        MCGOWAN, JUDGE


                                                   REVERSED AND DISMISSED



                            WAYMOND M. BROWN, Judge


       Appellant appeals from the circuit court’s adverse ruling in favor of appellee in

connection to appellee’s motion for declaratory judgment. On appeal, appellant argues that:

(1) the circuit court erred in holding it had jurisdiction over appellant after holding it had no

jurisdiction over co-defendant Arkansas Beverage Control Division (ABC) and by not holding

that appellant had failed to exhaust her administrative remedies; (2) the circuit court erred in

holding it had jurisdiction to decide the validity of an agency rule pursuant to 

 and then declaring appellant’s posting of a notice pursuant to the rule to be

invalid instead of declaring the ABC rule to be invalid; and (3) the circuit court erred in

substituting its judgment on a factual issue that was solely within the discretion of the director

of the ABC division. We reverse and dismiss.
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                                           I. Facts

       Appellant applied to the Director of the ABC to transfer his liquor license from a

North Little Rock address to a property located at 7950 T.P. White Drive in Northern

Pulaski County between Jacksonville and Cabot. On September 15, 2010, the ABC granted

appellant’s application for a retail liquor permit. Appellee notified ABC Director Michael

Langley of her opposition, declaring the letter as her notice of appeal, on October 15, 2010,

and filed a motion for declaratory judgment in circuit court on November 16, 2010. On

December 20, 2010, ABC filed a motion to dismiss appellee’s motion for declaratory

judgment for failure to state facts upon which relief can be granted pursuant to Rule 12(b)(6)

of the Arkansas Rules of Civil Procedure. Also on December 20, 2010, appellant filed a

motion to dismiss for lack of subject-matter jurisdiction on the ground that no adjudication

had been made, thereby prohibiting review, and that the property was properly posted and

notice properly published.

        In an order filed February 1, 2011, the circuit court ordered appellant “to produce a

legible photograph of the notice he allegedly posted in compliance with the applicable ABC

regulations and 

.” On that same date, the circuit court filed an

order dismissing ABC as a party to the matter for lack of subject-matter jurisdiction on the

ground that the court lacked jurisdiction to review the matter pursuant to 

(a) because the director’s decision did not constitute an adjudication

        A hearing was held on appellant’s motion to dismiss pursuant to Rule 12(b)(6) on

March 29, 2011. On March 30, 2011, appellant filed a second motion to dismiss for lack of


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subject-matter jurisdiction listing essentially the same grounds as ABC did in its motion to

dismiss. In addition, in his brief in support, appellant cited the court’s earlier dismissal of

ABC as a defendant on the same grounds appellant was now asserting as further support for

his argument.

           In an Order filed June 14, 2011, the circuit court held that appellant’s publication of

notice in the Daily Record was sufficient to meet the requirements of 

-

4-210 notice requirement, but denied appellant’s December 20, 2010 motion to dismiss,

finding that whether notice was appropriately posted on the property was in dispute. The

circuit court also denied appellant’s March 30, 2011 motion to dismiss on the ground that

relief was permissibly sought pursuant to 

, not Ark. Code. Ann.

§ 3-4-210. Finally, in an October 24, 2012 order, the circuit court acknowledged that it had

no jurisdiction to review the ABC’s decision under the Administrative Procedures Act

(APA), but the court found that it had authority to enter declaratory judgment pursuant to

, and ordered appellant to “properly post notice, allowing the

Plaintiff time to formally object to the application, after which ABC will render a decision

and if the Plaintiff opposes the decision, she will have the right to file an appeal with the

ABC board.”1

       This timely appeal followed.




       1
        The circuit court refused to make any determination on the permit itself and left the
permit in effect unless, after thirty days of proper notice, an objection was lodged and the
ABC rendered its decision.

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                                       III. Standard of Review

          Review of administrative agency decisions, by both the circuit court and the appellate

courts, is limited in scope.2 The standard of review to be used by both the circuit court and

the appellate court is whether there is substantial evidence to support the agency’s findings.3

Our review is directed not toward the circuit court but toward the decision of the

administrative agency.4 Judicial review of an administrative agency’s decision is limited

because the agency is better equipped by specialization, insight through experience, and more

flexible procedures than courts, to determine and analyze the legal issues affecting it.5 When

reviewing such decisions, we uphold them if they are supported by substantial evidence and

are not arbitrary, capricious, or characterized by an abuse of discretion.6 We review issues of

statutory interpretation de novo; however, the interpretation placed on a statute or regulation

by an agency or department charged with its administration is entitled to great deference and

should not be overturned unless clearly wrong.7


      2
      Lamar Co., LLC v. Ark. State Hwy. & Transp. Dep’t, 

, 

 (citing Seiz Co. v. Ark. State Hwy. & Transp. Dep’t, 

, 

).
      3
          

      Capstone Oilfield Disposal of Ark., Inc. v. Pope Cty., 

, 408
  

 (citing Walls v. Ark. Oil & Gas Comm’n, 

, 

).
      5
          

      6
          Lamar Co., LLC, 

.
      7
          

.

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                                            III. Jusrisdiction

Appellant’s first argument is that the circuit court erred in holding it had jurisdiction over

appellant after holding it had no jurisdiction over co-defendant ABC and by not holding that

appellee had failed to exhaust her administrative remedies.

       The right to judicial review under the APA is limited to “cases of adjudication.”8

“Adjudication” is defined within the APA as the “agency process for the formulation of an

order.”9 “Order” is defined as “the final disposition of an agency in any matter other than rule

making, including licensing and rate making, in which the agency is required by law to make

its determination after notice and a hearing.”10 Where there has been no adjudication before

the administrative agency, there has been no final agency action to be reviewed pursuant to

 This court has held that it is only with respect to its judicial

functions, which are basically adjudicatory or quasi-judicial in nature, that the APA purports

to subject agency decisions to judicial review.12 Otherwise, courts lack subject-matter

jurisdiction to examine administrative decisions of state agencies.13



       Fatpipe, Inc. v. State, 

, 

 (citing Ark. Code Ann.
       8

§ 25-15-212(a) (Repl. 2002)).
       9
        

(citing 

(1) (Repl. 2002)).
       10
           

 (citing 

(5)).
       11
           

 (citing Walker v. Ark. State Bd. of Educ., 

, 

).
       12
         

 (citing Tripcony v. Ark. Sch. for the Deaf, 

, 

; Ark.
Livestock & Poultry Comm’n v. House, 

, 

 (1982)).
           13
            

 (citing 

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       The ABC director’s decision approving appellant’s application was predicated upon

the contents of the application file alone. No hearing or other process whereby testimony

was received took place. Therefore, the director’s decision in the instant case did not

constitute an “adjudication” for the purposes of the APA. Since the director’s decision did

not constitute an adjudication, the circuit court lacked subject-matter jurisdiction to review

it. We reverse the circuit court on this point. Because we reverse on this point, we do not

address appellant’s other arguments.

       Reversed and dismissed.

       GLOVER and WOOD, JJ., agree.

       Singleton Law Firm, P.A., by: Charles R. Singleton and Damon C. Singleton, for
appellants.

       Hilburn, Calhoon, Harper, Pruniski & Calhoun, Ltd., by: Sam Hilburn, Traci LaCerra, and
Lauren White Hamilton, for appellee.




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