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A Better Way Wholesale Autos, Inc. v. Commissioner of Motor Vehicles

Court of Appeals of Connecticut

July 26, 2016


          Argued March 8, 2016

         Appeal from Superior Court, judicial district of New Britain, Schuman, J.

          Kenneth A. Votre, for the appellant (plaintiff).

          Drew S. Graham, assistant attorney general, with whom, on the brief, was George Jepsen, attorney general, for the appellee (defendant).

          DiPentima, C. J., and Alvord and Agati, Js.


          AGATI, J.

         General Statutes § 14-54 (a)[1] requires automobile dealers who wish to obtain a license ‘‘for dealing in . . . motor vehicles’’ first to obtain and present to the Commissioner of Motor Vehicles a certificate of approval from local officials in the municipality where the dealer wishes to operate. The defendant, the Commissioner of Motor Vehicles (commissioner), determined after an administrative hearing that the plaintiff, A Better Way Wholesale Autos, Inc., failed to comply with this statutory provision. The sole issue raised in this appeal is whether the administrative record contains substantial evidence to support this determination. We conclude that the record lacks substantial evidence to show that the plaintiff violated § 14-54 (a) and, accordingly, reverse the judgment of the Superior Court.

         The following facts and procedural history are relevant to this appeal. The plaintiff is a used car dealer with a principal place of business located at 423 Rubber Avenue in Naugatuck. The Department of Motor Vehicles has issued the plaintiff two licenses to operate car dealerships at two separate locations in Naugatuck located at 423 and 381 Rubber Avenue, respectively. In addition to these parcels, the plaintiff leases a third, unlicensed parcel located on Old Firehouse Road in Naugatuck (storage lot), on which it stores several hundred cars. Pursuant to an anonymous complaint, the commissioner investigated whether the plaintiff was selling cars on the storage lot without a license. At the conclusion of this investigation, one of the commissioner’s investigators, Robert Bellante, determined that the plaintiff had violated § 14-54 (a). Subsequently, the commissioner sent the plaintiff notice that it was to appear for an administrative hearing. In its notice, the commissioner alleged that the plaintiff had operated a car dealership on an unlicensed lot in violation of § 14-54 (a) and General Statutes § 14-52 (a), [2] a provision which requires, inter alia, individuals and entities to obtain used car dealer’s licenses.

         The parties appeared before an administrative hearing officer on February 22, 2013. At the hearing, the commissioner submitted evidence to prove that the plaintiff had operated a car dealership on the unlicensed storage lot. Specifically, the commissioner submitted Bellante’s report, which stated that the storage lot contained several hundred vehicles; that he spoke with John Gorbecki, the plaintiff’s principal; that Gorbecki informed Bellante that potential customers are permitted to view cars on the storage lot, but that sales take place at 423 Rubber Avenue; and that the gate to the storage lot is never locked because emergency vehicles, which the town parks on the storage lot, need to be able to exit in the event of an emergency. Bellante also reported that a storage trailer containing car keys, a compressor, and a jump start was located on the storage lot. Steve Licitra, a different investigator employed by the commissioner, testified that he investigated the plaintiff independently of Bellante, [3] and that during his investigation, he spoke with two individuals on the storage lot. Licitra stated that when he asked these individuals what they were doing, they responded that they were looking at cars to buy. He testified that these individuals said that they were directed to the storage lot by a salesperson at the main office. He also stated that buyer guides were displayed prominently on the windows of the vehicles. When asked if he had any knowledge of whether the plaintiff had obtained approval from Naugatuck for the storage lot, Licitra stated that he did not know.

         The plaintiff sought to demonstrate that its activities on the storage lot did not constitute operating a car dealership. To this end, the plaintiff elicited testimony from Licitra that neither he nor anyone else employed by the commissioner ever had witnessed any transactional conduct on the storage lot, such as negotiation between customers and salespeople, the exchange of cash, or the execution of bills of sale. The plaintiff also elicited testimony from Gorbecki that the storage lot was used only to store excess inventory, not to sell or to service cars. Gorbecki admitted that salespeople at 423 Rubber Avenue sometimes would direct customers to the storage lot to view cars, but he also testified that if a customer was interested in a car, that customer would return to the main office at 423 Rubber Avenue and the transaction would occur there. Finally, Gorbecki testified about discussions he had with local officials in Naugatuck, including the town’s zoning manager. Specifically, Gorbecki testified that town officials wished to maintain a thoroughfare through the storage lot so that emergency vehicles could cut through in the event of an emergency.

         The plaintiff also produced minutes from the June 16, 2010 meeting of the Naugatuck Zoning Commission (zoning commission). The minutes state that at that meeting, the zoning commission discussed whether to grant the plaintiff’s application ‘‘to park cars on [the storage lot] located on Elm St[reet] and Rubber [Avenue].’’ The plaintiff also submitted a document, dated June 16, 2010, which appears to be approval from the zoning commission to park 400 cars on the storage lot. During cross-examination, Licitra admitted that he had not spoken with any local officials regarding approvals for the storage lot. Moreover, he conceded that he was not challenging the veracity or authenticity of the zoning commission minutes or the other documents submitted.

         On August 2, 2013, the hearing officer issued his findings of fact, conclusions of law, and order. Specifically, he found that the plaintiff’s activities at the storage lot constituted ‘‘merchandising, ’’ which he concluded was part and parcel of its business of offering for sale and selling used cars. The hearing officer also found that the storage lot ‘‘was not approved by local authority for anything other than the parking of cars.’’ Consequently, the hearing officer found that the plaintiff had operated a used car dealership at an unlicensed location in violation of §§ 14-52 (a) and 14-54 (a). Accordingly, the hearing officer ordered the plaintiff to pay a civil fine in the amount of $5000.

         The plaintiff filed an administrative appeal in the Superior Court, pursuant to General Statutes § 4-183, [4]claiming that the hearing officer improperly concluded that it had violated §§ 14-52 (a) and 14-54 (a). After a hearing on the matter, the court, Schuman, J., sustained the appeal with respect to the hearing officer’s determination that the plaintiff had violated § 14-52 (a), [5] but affirmed the hearing officer’s determination that the plaintiff had violated § 14-54 (a). In its analysis, the court sought to reconcile § 14-54 (a) with § 14-52 (a), notwithstanding the fact that it had found that the plaintiff had not violated § 14-52 (a). In particular, the court determined that ‘‘a person desiring a motor vehicle dealer’s license under § 14-52 must first, under § 14-54, obtain a certificate of approval of the municipal authorities for the location for which such license is desired and then present the certificate to the commissioner.’’ (Emphasis added.) Thus, the court determined that the license that a person ‘‘desires to obtain’’ under § 14-54 (a) is a license under § 14-52 (a). Although the court recognized that § 14-54 (a) ‘‘does not specifically state that a dealer must obtain a state license for each location where it wishes to operate, ’’ it nevertheless concluded that ‘‘the statute strongly implied that requirement by providing that a dealer shall obtain a certificate of local approval of the ‘location for which such license is desired.’ ’’ Ultimately, the court concluded that § 14-54 (a) requires ‘‘an entity ‘dealing in . . . motor vehicles’ [to] obtain local approval and then a state license for the location in which it desires to do business’’ under § 14-52 (a). (Emphasis added.)

         After reviewing the evidence in the administrative record, the court concluded that the plaintiff’s conduct on the storage lot constituted ‘‘ ‘dealing in . . . motor vehicles’ so that the plaintiff must obtain a local certificate of approval.’’ The court remanded the case for a determination of the fine to be imposed, but noted ...

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