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Bruce Walters Ford Lincoln Kia v. Kentucky Motor Vehicle Commission

Court of Appeals of Kentucky

August 11, 2017

BRUCE WALTERS FORD LINCOLN KIA APPELLANT
v.
KENTUCKY MOTOR VEHICLE COMMISSION APPELLEE

         APPEAL FROM FRANKLIN CIRCUIT COURT HONORABLE THOMAS D. WINGATE, JUDGE ACTION NO. 15-CI-00252

          BRIEF FOR APPELLANT: Clayton B. Patrick

          BRIEF FOR APPELLEE: Trevor L. Earl

          BEFORE: COMBS, JOHNSON AND J. LAMBERT, JUDGES.

          OPINION

          COMBS, JUDGE

          This is an appeal from an order of the Franklin Circuit Court affirming a decision of the Kentucky Motor Vehicle Commission. The Commission concluded that Bruce Walters Ford Lincoln Kia (Bruce Walters Ford) made improper use of a dealer license plate in violation of provisions of KRS[1] 186.070 and its pertinent implementing regulations; as a consequence, it imposed a fine upon the dealership. Based upon our review of the record and the applicable law, we reverse and remand.

         Bruce Walters Ford is a licensed dealer of new and used motor vehicles. It provides sales, service, and collision repair for automobiles. On September 4, 2014, the Commission's inspector visited the dealership in Pikeville. The inspector observed a light-duty Ford pickup on the lot that appeared to be a parts truck. The lettering on its side indicated that the vehicle was affiliated with "Walters Collision Center." The truck bore a dealer plate, but it did not display a Federal Trade Commission (FTC) Buyer's Guide sticker. On September 5, 2014, Walters was issued an administrative citation for violation of the provisions of KRS 186.070 and 601 KAR[2] 9:220 for its alleged misuse of a dealer plate.

         By agreement of the parties, the matter was submitted to the Commission's hearing officer upon written briefs, photographs of the pickup truck, and the affidavit of Jim Reynolds, owner of Bruce Walters Ford. In his affidavit, Jim Reynolds indicated that he served as the executive vice president of the dealership. He explained that the Ford pickup truck was owned by Bruce Walters Ford and was "used for a multitude of services and activities for the necessary operation in furtherance of [the dealership's] business during the dealership's business hours" by the employees of the dealership. Reynolds attested that the pickup truck was part of the dealership's inventory and was subject to sale to any willing buyer. He stated that the truck originally had the required FTC Buyer's Guide sticker displayed in its window. The sticker had been temporarily removed as of the day of the alleged violation.

         On December 30, 2014, pursuant to the provisions of KRS 13B.110, the hearing officer issued findings of fact, conclusions of law, and a recommended order. From the evidence submitted, the hearing officer found that the pickup truck was used only by employees of the dealership in furtherance of the dealer's business and only during the dealership's business hours. With respect to the FTC Buyer's Guide sticker, the hearing officer found that the sticker had been temporarily removed on the date the inspection occurred. The hearing officer concluded that the dealer plate had not been misused, and he recommended that the citation be dismissed.

         Pursuant to the provisions of KRS 13B.120(2), the final order of the Commission was issued on February 13, 2015. The Commission accepted many of its hearing officer's findings of fact. However, in additional findings of fact, the Commission rejected the assertion contained in the affidavit submitted by Reynolds that the pickup remained part of the sales inventory of Bruce Walters Ford and was available for purchase by a member of the public. The Commission found that the lettering on the truck indicated that it was a company truck -- not inventory. It noted that there was no pricing information or anything else on the truck to indicate that it was for sale and that it lacked the FTC sticker that is required for all used vehicles offered for sale to the public at a dealership of this size. The Commission concluded that the truck was not being used by the dealership with the intent of offering or advertising the vehicle for sale to the public and that the dealership had failed to display the necessary FTC sticker on the truck. The Commission concluded that the dealer plate had been misused and fined the dealership $100 for these violations. Bruce Walters Ford petitioned the circuit court for judicial review of the Commission's order.

         Upon its review, the Franklin Circuit Court concluded that the Commission's findings were supported by substantial evidence. It also concluded that the Commission had properly applied the law when it imposed the fine of $100 for the violations. Its Order was entered on May 26, 2016. This appeal followed.

         On appeal, Bruce Walters Ford argues: (1) that the circuit court erred by failing to remand the Commission's order since its factual findings were not supported by the evidence and (2) that the Commission erred in its application of the law to the facts. We agree.

         The standard of review for administrative appeals is well established. "If the findings of fact are supported by substantial evidence . . . then they must be accepted as binding" even where there is conflicting evidence in the record. Kentucky Unemployment Ins. Comm'n. v. Cecil, 381 S.W.3d 238, 245 (Ky. 2012). Substantial evidence is "evidence which has sufficient probative value to induce conviction in the minds of reasonable people." Id. at 245. If the reviewing court concludes that the rule of law was ...


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