In the Matter of all Licenses Held by Pet Motortech, Inc., d/b/a Pet Auto Repair, for the premises at 44 Acker Street in St. Paul, Minnesota. ( 2016 )

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2014).
STATE OF MINNESOTA
IN COURT OF APPEALS
A15-0405
In the Matter of all Licenses Held by Pet Motortech, Inc.,
d/b/a Pet Auto Repair, for the premises at
44 Acker Street in St. Paul, Minnesota.
Filed February 1, 2016
Affirmed
Randall, Judge *
St. Paul City Council
File No. OAH 8-6020-31892
Marcus L. Almon, St. Paul, Minnesota (for relator Pet Motortech, Inc.)
Samuel J. Clark, St. Paul City Attorney, Geoffrey S. Karls, Assistant City Attorney,
St. Paul, Minnesota (for respondent St. Paul City Council)
Considered and decided by Cleary, Chief Judge; Stauber, Jr., Judge; and Randall,
Judge.
* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to
Minn. Const. art. VI, § 10.
UNPUBLISHED OPINION
RANDALL, Judge
Relator challenges respondent-city’s suspension of its business licenses, arguing
that there was not substantial evidence to demonstrate that relator violated the conditions
of its business licenses, the city acted arbitrarily and capriciously by imposing a fine, and
the city improperly imposed a penalty. We affirm.
FACTS
Relator Pet Motortech, Inc. d/b/a Pet Auto Repair (Pet Auto) operates an
automotive-repair business on two adjacent parcels located at 18 Acker Street East and 44
Acker Street East in St. Paul. Pet Auto holds an auto-repair-garage license, second-hand-
dealer license, and paint-shop license. Pet Auto’s business licenses were subject to
numerous conditions, including: no exterior storage of tires; all auto-repair work must
occur within an enclosed building; and no painting of vehicles or “any other kind [of]
painting activity on the premises” unless and until a paint booth had been installed under
permit and inspected and approved by city-inspection staff.
On September 26, 2014, respondent City of St. Paul notified Patrick Takuanyi,
President of Pet Auto, of its intent to impose a penalty and suspend all licenses held by Pet
Auto. The city stated that, despite the fact that Takuanyi was repeatedly warned by city
inspectors, Pet Auto had violated the conditions of its business licenses by storing tires
outside and painting vehicles.
2
An evidentiary hearing was held before an administrative-law judge (ALJ). Pet
Auto was represented by counsel. On December 8, the ALJ issued his findings of fact,
conclusions of law, and recommendation. The ALJ concluded that, from May 2014
through September 2014, Pet Auto engaged in a pattern of conduct of failing to comply
with the city’s business-licensing laws. The ALJ found that during the spring and summer
of 2014, vehicles had been painted at Pet Auto, and that, despite Pet Auto receiving a
warning in May from the city directing the removal of dozens of old tires stacked outside
the repair shop, some of the tires remained stored outside as of late August. The ALJ
determined that there were substantial and compelling reasons supporting an upward
departure from the presumptive sanction based on Pet Auto’s pattern of noncompliance,
and recommended that the city impose a $2,000 penalty and 10-day suspension of
operations.
About one month later, the city council held a public hearing to discuss the ALJ’s
recommendation. Both the assistant city attorney and Takuanyi appeared at the hearing.
The assistant city attorney requested that the city council impose a $2,400 fine against Pet
Auto in order to cover administrative costs related to the evidentiary hearing. The council
unanimously passed a resolution adopting the ALJ’s findings of fact, conclusions of law
and recommendations after considering the record evidence. The council imposed a $2,000
penalty, 10-day suspension, and $2,400 fine against Pet Auto.
This certiorari appeal follows.
3
DECISION
A city council’s “action is quasi-judicial and subject to certiorari review if it is the
product or result of discretionary investigation, consideration, and evaluation of
evidentiary facts.” Staeheli v. City of St. Paul, 732 N.W.2d 298, 303 (Minn. App. 2007)
(quotation omitted). We review a city’s quasi-judicial decision under a “limited and
nonintrusive standard of review.” Sawh v. City of Lino Lakes, 823 N.W.2d 627, 635 (Minn.
2012) (quotation omitted). “Under that standard, we may not substitute our own findings
of fact for those of a city, or engage in a de novo review of conflicting evidence.” Id. We
will affirm a city’s decision if it “has explained how it derived its conclusion and [the
city’s] conclusion is reasonable on the basis of the record.” Id. (alteration in original)
(quotation omitted).
I. Substantial evidence supports the city’s findings.
“Generally, decisions of administrative agencies, including cities, enjoy a
presumption of correctness and will be reversed only when they reflect an error of law or
where the findings are arbitrary, capricious, or unsupported by substantial evidence.” CUP
Foods, Inc. v. City of Minneapolis, 633 N.W.2d 557, 562 (Minn. 2001), review denied
(Minn. Mar. 13, 2001). Substantial evidence is: “(1) such relevant evidence as a reasonable
mind might accept as adequate to support a conclusion; (2) more than a scintilla of
evidence; (3) more than some evidence; (4) more than any evidence; and (5) evidence
considered in its entirety.” Id. at 563. “We defer to the [city’s] fact-finding process and it
is the challenger's burden to establish that the findings are not supported by the evidence.”
Id. The city council may take adverse action against a licensee who fails to comply with
4
any condition set forth in the license or engages in a pattern or practice of conduct of failure
to comply with laws reasonably related to the licensed activity. St. Paul, Minn., Legislative
Code (SPLC) § 310.06(b)(5)(6)c (2006).
Pet Auto first disputes the city’s finding that a vehicle was painted on the premises
on or shortly before May 27. At the hearing, an inspector for the City of St. Paul
department of safety and inspections testified that, on the day in question, he inspected Pet
Auto and observed a newly-painted vehicle on the premises. The inspector testified that
Takuanyi told him that a former employee had painted the vehicle in the building.
Takuanyi disputed the inspector’s version of events and testified that the vehicle, which
was a Nissan Maxima, had been painted at a nearby auto-repair shop. In support of his
defense, Takuanyi pointed to a billing invoice for the paint job of the Nissan Maxima, as
well as five other invoices for similar vehicle-painting transactions from the other auto-
repair shop.
The ALJ found Takuanyi’s testimony and the billing invoices to lack credibility,
noting that the dates of the completed paint jobs did not correlate with the sequential
numbering of the billing invoices from the auto-repair shop. And Takuanyi could not
explain the gaps in time between the invoice-billing dates and the completion of the paint
jobs.
The ALJ credited the testimony of the city inspector over Takuanyi, and we defer
to a factfinder’s determination regarding credibility. Sigurdson v. Isanti Cty., 386 N.W.2d
715, 721 (Minn. 1986). Where there is conflicting evidence or more than one inference
may be drawn from the evidence, findings will be upheld. City of Minneapolis v.
5
Richardson, 307 Minn. 80, 88, 239 N.W.2d 197, 202 (1976). Takuanyi’s contrary
explanation and evidence does not overcome the substantial evidence in the record
supporting the ALJ and the city council’s findings and conclusions. We also note that on
appeal, Takuanyi does not dispute record evidence demonstrating that on September 13,
he painted a Mazda Protégé on the premises, which violated the conditions of his business
license.
Pet Auto next argues that the city erred in concluding there was substantial evidence
to demonstrate he violated his business license by improperly storing tires outside. Again,
there is substantial evidence in the record to demonstrate that Pet Auto repeatedly failed to
comply with the conditions set forth in its business license by improperly storing tires
outside. The inspector testified that, in May, he observed approximately 100-200 tires
stored alongside the building on the property. The inspector took photographs of the tires,
which were admitted into evidence. The inspector’s notes documenting his licensing-
related interactions with Pet Auto reflect that, when he revisited Pet Auto in late August,
he observed approximately 40 tires stored on the west side of the building at 18 Acker
Street East. Takuanyi did not dispute the fact that there were numerous tires stored outside
of the building on May 27, but testified that all of the tires had since been removed.
Viewing the record as a whole, there is substantial evidence supporting the city’s
suspension of Pet Auto’s business license based on its continued noncompliance with its
license conditions.
6
II. The city did not arbitrarily and capriciously impose a fine.
Pet Auto contends that the city’s imposition of the $2,400 fine was arbitrary and
capricious because there were no findings of the costs associated with the evidentiary
hearing, and that the city did not request or recommend the fine before the ALJ.
“An agency decision is arbitrary and capricious if it is an exercise of the agency’s
will, rather than its judgment, or if the decision is based on whim or is devoid of articulated
reasons.” CUP Foods, Inc., 633 N.W.2d at 565. When there may be more than one opinion
on a matter, the agency’s choice of one course of action is not arbitrary and capricious. Id.SPLC § 310.05(k) (2013) authorizes the city council to impose upon a licensee some
or all of the costs of a contested hearing in any given case “if the position, claim or defense
of the licensee was frivolous, arbitrary, or capricious.” Here, the city council articulated
grounds for imposing the $2,400 fine on Pet Auto. In October 2014, the city put Pet Auto
on notice that it would seek the costs of the evidentiary hearing “[d]ue to the clear nature
of the violation.” At the city council hearing, the assistant city attorney requested $2,400
to cover the costs associated with the evidentiary hearing, and the city council fined Pet
Auto the exact requested amount.
On appeal, Pet Auto does not present any authority for its argument that the city
must detail all of its associated legal and administrative costs arising from the evidentiary
hearing. The relevant legal standard is that the city council does not act arbitrarily or
capriciously when it imposes the fine. CUP Foods, Inc., 633 N.W.2d at 565. Here, we
conclude that the city council acted within its discretion.
7
III. The city properly assessed the penalty.
Pet Auto challenges the $2,000 penalty assessed by the city, arguing that the city
erred in attributing the first adverse action for failing to pay its license-renewal fee for 18
Acker Street East to impose a presumptive penalty for a second adverse action for
violations of its business license at its 44 Acker Street East premises. Pet Auto contends
that the consolidation of its business licenses extinguished its license for 18 Acker Street
East. Therefore, it argues the first adverse action never applied to its business license at
44 Acker Street East.
The record reflects that, in the spring of 2014, Pet Auto received its first adverse
action when the city imposed a $500 fine for Takuanyi’s failure to timely renew his
business license at the 18 Acker Street East premises. See SPLC § 10.01 (2012). Payment
of a fine is considered an “appearance” for the purpose of determining presumptive
penalties for subsequent violations. SPLC § 310.05(m)(i)A (2013). On August 26, after
Takuanyi paid the late fee, the city consolidated Takuanyi’s business licenses. There is
no evidence that, by consolidating the two business licenses, any of Pet Auto’s business
licenses were extinguished.
The city’s legislative code provides a matrix of penalties according to the type of
violation and the licensee’ history of violation. Id. (m) (2013). The council may increase
the penalty if the licensee has one or more prior appearances. Id. The presumptive penalty
for violating the SPLC relating to licensed activity on a second appearance is a $1,000
penalty. Id. However, the council may depart from the presumptive penalty when it “finds
8
and determines that there exist substantial and compelling reasons making it more
appropriate to do so.” Id.
Pet Auto cites no authority for its claim that the first adverse action should not apply
in the instant case. As the licensee, Pet Auto knew of its failure to timely pay its business
license, that it was an adverse action, and that it constituted a first appearance. The record
demonstrates that Pet Auto repeatedly failed to comply with the conditions of his business
licenses despite receiving multiple warnings from the city. We conclude the city acted
within its discretion in imposing a $2,000 penalty against Pet Auto.
Affirmed.
9