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In re Twin County Motorsports, Inc.

Supreme Court of North Carolina

December 19, 2014

IN RE TWIN COUNTY MOTORSPORTS, INC

Heard  October 7, 2014,

N.C. Court of Appeals. No. 13-21. Mark A. Davis, Judge. Nash County. No. 11CVS1393. Frank R. Brown, Judge.

Roy Cooper, Attorney General, by Christopher W. Brooks, Assistant Attorney General, for respondant-appellant Michael D. Robertson, Commissioner, North Carolina Division of Motor Vehicles.

Jessica C. Williams, PLLC, by Ralph E. Stevenson, III, for petitioner-appellee Twin County Motorsports, Inc.

OPINION

Page 833

On discretionary review pursuant to N.C.G.S. § 7A-31 of a unanimous decision of the Court of Appeals, __ N.C.App. __, 749 S.E.2d 474 (2013), affirming an order entered on 17 October 2012 by Judge Frank Brown in Superior Court, Nash County, and remanding the matter for a new hearing. Heard in the Supreme Court on 7 October 2014.

BEASLEY, Justice.

In this appeal we consider whether a corporation may appear or proceed at hearings before the Division of Motor Vehicles (" DMV" ) without being represented by an attorney. Because we have determined that a hearing before an administrative agency is not an " action or proceeding," we hold that a nonattorney may appear or proceed on behalf of a corporation before an administrative hearing officer without engaging in the unauthorized practice of law under N.C.G.S. § 84-4.

Twin County Motorsports, Inc. (" Twin County" ) is licensed by the DMV to perform vehicle emissions and equipment inspections. On 7 October 2010, the DMV charged Twin County with six violations of N.C.G.S. § 20-183.7B(a)(3) for allowing a person not licensed as a [367 N.C. 614] safety inspection mechanic to perform safety inspections. Lance Cherry, an officer and shareholder of Twin County, requested a hearing before the DMV. On 19 May 2011, Cherry appeared on behalf of Twin County at the DMV hearing. He informed the hearing officer that he did not wish to have an attorney present. In his testimony, he stated that the allegations levied by the DMV were " accurate," but that the violations were " unintentional." The hearing officer concluded that sufficient evidence was presented to sustain that Twin County violated N.C.G.S. § 20-183.7B(a)(3). The hearing officer levied a civil penalty of fifteen hundred dollars and suspended Twin County's inspection license for 1080 days.

Twin County retained legal counsel and sought review of the hearing officer's decision by the Commissioner of the DMV. The Commissioner upheld the hearing officer's order on 5 August 2011. Twin County appealed the Commissioner's decision to the Superior Court of Nash County. In its appeal to the trial court, Twin County asserted that Twin County, as a corporation, should not have been represented by Cherry, a nonattorney, at the DMV hearing. The trial court agreed, concluded that Cherry's pro se representation of Twin County as an agent of Twin County constituted the unauthorized practice of law in violation of N.C.G.S. § § 84-4 and 84-5, and remanded the matter to the DMV hearing officer for a new hearing. The State appealed to the Court of Appeals.

The Court of Appeals affirmed the trial court. In re Twin Cnty. Motorsports, Inc., __ N.C.App. __, 749 S.E.2d 474 (2013). The court reasoned that its earlier holding in LexisNexis, Division of Reed Elsevier, Inc. v. Travishan Corp. that " 'a corporation must be represented by a duly admitted and licensed attorney-at-law and cannot proceed pro se '" controlled here. Id. at __, 749 S.E.2d at 476 (quoting LexisNexis, 155 N.C.App. 205, 209, 573 S.E.2d 547, 549 (2002)). The Court of Appeals explained that even though it had determined that a corporation may represent itself pro se in " contested case" proceedings under N.C.G.S. § 150B-23 before the Office of Administrative Hearings (" OAH" ), Allied Envtl. Servs., PLLC v. N.C. Dep't of Envtl. & Natural Res., 187 N.C.App. 227, 653 S.E.2d 11 (2007),

Page 834

disc. rev. denied, 362 N.C. 354, 661 S.E.2d 238 (2008), this exception to Lexis-Nexis's general prohibition against pro se representation by corporations did not apply here because DMV proceedings are exempt from the " contested case" provisions of N.C.G.S. Chapter 150B and are thus not governed by section 150B-23. Twin Cnty. Motorsports, N.C.App. at, 749 S.E.2d at 477. Because [367 N.C. 615] the reasoning employed by the Court of Appeals in announcing the Allied " exception" did not apply to administrative appeals not governed by N.C.G.S. § 150B-23, the court held that " in hearings before the DMV, corporations must be represented by legal counsel." Id. at __, 749 S.E.2d at 477.

The State sought our discretionary review of the court's decision, which we allowed on 6 March 2014. 367 N.C. 330, 755 S.E.2d 627 (2014). In its appeal to this Court, the State asks that we conclude that N.C.G.S. § 84-4, governing the unauthorized practice of law, does not prohibit an owner of a business licensed by the DMV from appearing on behalf of his entity at a license hearing. The State asserts that " administrative license hearings before [the] DMV are not by law an 'action or proceeding'" under N.C.G.S. § 84-4 and that, under State v. Pledger, 257 N.C. 634, 127 S.E.2d 337 (1962), a nonlawyer agent is allowed to perform a legal act on behalf of a corporation without violating section 84-4 if the act is in " the primary interest of the corporation." See Gardner v. N.C. State Bar, 316 N.C. 285, 289-90, 341 S.E.2d 517, 520 (1986) ( " When a corporation's employees perform ...


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