Robert Reed v. Arkansas Auctioneer's Licensing Board

Annotate this Case









CA 03-472

JANUARY 28, 2004



[NO. CV2002-75-1]




John B. Robbins, Judge

Robert Reed appeals from the Boone County Circuit Court's decision affirming the Arkansas Auctioneer's Licensing Board's revocation of his auctioneer's license, pursuant to Ark. Code Ann. § 17-17-308(6) (Repl. 2001), because he had been convicted of a criminal offense involving moral turpitude. The Board based its decision on the fact that, in 1999, appellant pled guilty in a Missouri federal district court to a misdemeanor for which he served time in prison. On appeal, appellant raises three points: (1) the circuit court exceeded its authority in affirming the Board's decision for reasons that were not included in the proceedings before the Board; (2) the Board and the circuit court erred in their construction of Ark. Code Ann. § 17-17-308(6), and this argument can be raised for the first time on appeal; (3) appellant did not violate the terms of Ark. Code Ann. § 17-17-308(6). We affirm the Board's decision.

Factual and Procedural History

Appellant received his Arkansas auctioneer's license in 1995. In 1999, he entered into a plea-bargain agreement with the United States Attorney for the United States District Court for the Western District of Missouri wherein he pled guilty to a misdemeanor violation of 18 U.S.C. § 1920. Appellant agreed that he had made misrepresentations to the Office of Workers' Compensation Programs of the United States Department of Labor ("OWCP") and that, based on these misrepresentations, the OWCP had paid him worker's compensation benefits to which he was not entitled. Appellant was sentenced to ten months' incarceration at a federal penitentiary with a one-year term of supervised release.

The Board later refused to renew appellant's auctioneer's license, and a hearing was held on whether he had violated Ark. Code Ann. § 17-17-308(6). That statute provides that an auctioneer's license may be revoked for a conviction "in a court of competent jurisdiction of this or any other state of a criminal offense involving moral turpitude or a felony." At the hearing, appellant argued that the crime of which he had been convicted did not amount to moral turpitude within the meaning of the statute. On February 26, 2002, the Board issued its order, stating:



2. On or about January 4, 1999 the Respondent did plead guilty to willfully and knowingly making a false statement in a report required by 5 U.S.C. § 1806 which false statements were used as a basis for determining his continued eligibility for, and amount of, benefits under the Federal Employees Compensation Act in violation of 18 U.S.C. § 1920.

3. Based upon respondent's plea, the United States District Court for the Western District of Missouri, Southwestern Division, did enter a judgment of guilty and sentenced the respondent to spend time in jail.

4. Respondent served some amount of time in a federal penal institution and while there he did provide instruction to other inmates on how to be an auctioneer.


1. The Board finds that the respondent's conduct is in violation of Ark. Code Ann. § 17-17-308(6) in that respondent has been convicted in a court of competent jurisdiction of a criminal offense involving moral turpitude.

As such, the Board orders that the respondent's Arkansas Auctioneer License be and hereby is revoked.

Appellant appealed from the Board's action to the Boone County Circuit Court, arguing for the first time that Ark. Code Ann. § 17-17-308(6) did not include convictions in federal courts. After a hearing, the circuit court affirmed the Board's decision, finding that the offense to which appellant pled guilty in federal court was one involving dishonesty and thus an offense of moral turpitude. The court noted that appellant had failed to raise or obtain a ruling from the Board on his argument that Ark. Code Ann. § 17-17-308(6) did not include convictions in federal courts and held that appellant had failed to preserve it for appeal. Looking at the act as a whole, the circuit court found that other sections of the act, such as Ark. Code Ann. §§ 17-17-311 and 17-17-308(9) and (10), grant power to the Board to revoke a license for dishonesty, fraud, or dishonest dealings. Appellant brings this appeal from the circuit court's decision affirming the Board's order.

The Circuit Court's Decision

In his first point, appellant argues that the circuit court exceeded its authority by finding that sections of the statute, other than the section that appellant was charged with violating, permitted the Board to revoke appellant's license. This court, however, is not concerned with the circuit court's decision. This appeal is governed by the Arkansas Administrative Procedure Act. See Ark. Code Ann. § 17-17-408 (Repl. 2001). In an appeal from an administrative agency's order, our review is directed toward the agency's decision and not toward the circuit court's review of the agency's decision. Arkansas Contractors Licensing Bd. v. Pegasus Renovation Co., 347 Ark. 320, 64 S.W.3d 241 (2001); Arkansas Dep't of Human Servs. v. Thompson, 331 Ark. 181, 959 S.W.2d 46 (1998).

Standard of Review

Arkansas Code Annotated section 25-15-212(h) (Repl. 2002) provides that we may reverse or modify an administrative agency's decision if the substantial rights of the petitioner have been prejudiced because the administrative findings, inferences, conclusions, or decisions are: (1) in violation of constitutional or statutory provisions; (2) in excess of the agency's statutory authority; (3) made upon unlawful procedure; (4) affected by other error or law; (5) not supported by substantial evidence of record; or (6) arbitrary, capricious, or characterized by abuse of discretion.

Statutory Construction

The Board concluded that appellant had violated Ark. Code Ann. § 17-17-308(6), which provides that it may revoke an auctioneer's license for "[b]eing convicted in a court of competent jurisdiction of this or any other state of a criminal offense involving moral turpitude or a felony." Appellant argues that this statute provides no basis for the revocation of his license as a result of his conviction in a federal, rather than a state, court. Admitting that he did not raise this statutory interpretation issue before the Board1, he contends that he may raise this argument for the first time on appeal because "it is the court's responsibility to determine what a statute means." Although it is true that we review questions of statutory interpretation de novo, Fields v. Marvell Sch. Dist., 352 Ark. 483, 102 S.W.3d 502 (2003),the cases cited by appellant do not support his argument that such an issue need not be preserved for review on appeal.

It is well settled that an appellant may not change the grounds for objection on appeal but is limited by the scope and nature of his objections and arguments presented at trial. City of Benton v. Arkansas Soil & Water Conservation Comm'n, 345 Ark. 249, 45 S.W.3d 805 (2001). In fact, it has been held many times that an appellate court will not set aside an administrative determination upon a ground not presented to the agency, because to do so would deprive the agency of the opportunity to consider the matter, make its ruling, and state the reasons for its action. McQuay v. Arkansas State Bd. of Architects, 337 Ark. 339, 989 S.W.2d 499 (1999). Accord H.T. Hackney Co. v. Davis, ___ Ark. ___, ___ S.W.3d ___ (June 26, 2003); Williams v. Arkansas State Bd. of Physical Therapy, ___ Ark. ___, ___ S.W.3d ___ (June 26, 2003); AT&T Communications of the S.W. v. Arkansas Pub. Serv. Comm'n, 344 Ark. 188, 40 S.W.3d 273 (2001); Brown v. Department of Human Servs., 330 Ark. 764, 956 S.W.2d 866 (1997); Wright v. Arkansas State Plant Bd., 311 Ark. 125, 842 S.W.2d 42 (1992). See also Arkansas Contractors Licensing Bd. v. Pegasus Renovation Co., supra. Further, it is possible to waive an argument involving the interpretation of a statute by failing to raise it at trial. In State v. Donahue, 334 Ark. 429, 978 S.W.2d 748 (1998), the supreme court held that such an argument will not be addressed for the first time on appeal. Because appellant failed to raise the statutory interpretation issue before the Board, the issue was not preserved for appellate review.

Even if we were to address the merits of appellant's argument, appellant could not prevail. The controlling issue on the merits is whether Ark. Code Ann. § 17-17-308(6) provides authority for the Board to revoke a license for a conviction in a federal court. Appellant asserts that it does not and argues that, because this statute is penal in nature, it must be strictly construed. While the law is well settled that penal statutes must be strictly construed, resolving any doubts in favor of the accused, it is equally established that such statutes must not be so strictly construed as to defeat an obvious intent of the legislature. Puckett v. State, 328 Ark. 355, 944 S.W.2d 111 (1997). We will not interpret a statute in a manner so as to reach an absurd conclusion that is contrary to legislative intent, Moses v. State, 72 Ark. App. 357, 39 S.W.3d 459 (2001), nor will we engage in interpretations that defy common sense and produce absurd results. Green v. Mills, 339 Ark. 200, 4 S.W.3d 493 (1999); Burcham v. City of Van Buren, 330 Ark. 451, 954 S.W.2d 266 (1997). Interpreting this statute in the manner urged by appellant would lead to a result that is at odds with common sense and legislative intent.

The basic rule of statutory construction is to give effect to the intent of the legislature. Arkansas County v. Desha County, 342 Ark. 135, 27 S.W.3d 379 (2000). When the language of a statute is plain and unambiguous, legislative intent is determined from the ordinary meaning of the language used. Id. Unambiguous statutes are construed by looking to all laws on the subject, viewing them as a single system, and giving effect to the general purpose of the system. Id.

The Arkansas Auctioneer's Licensing Act that was in effect at the time of the hearing clearly reveals a legislative intent to grant licenses only to individuals of good character. Arkansas Code Annotated § 17-17-301(a) (Repl. 2001) states: "Auctioneer licenses shall be granted only to persons who are found to be of good reputation, trustworthy, and competent to transact the business of an auctioneer, in such a manner as to safeguard the interest of the public." Also, subsections (9) and (10) of Ark. Code Ann. § 17-17-308 state that a license may be revoked for conduct demonstrating bad faith, dishonesty, or fraudulent dealings.

Additionally, it is well settled that this court may consider subsequent amendments to statutes as evidence of legislative intent. Lawyers Surety Corp. v. Flowers, 76 Ark. App. 415, 66 S.W.3d 669 (2002). In 2003, the General Assembly amended Ark. Code Ann. § 17-17-308(6) to provide that an auctioneer's license may be suspended or revoked, or a civil penalty may be imposed, for "[b]eing convicted of a criminal offense involving moral turpitude or a felony in a court of competent jurisdiction of this or any other jurisdiction." The legislature also enacted Ark. Code Ann. § 17-17-312 (Supp. 2003), which provides that each first-time applicant and each applicant seeking reinstatement of an expired license must submit to a state and national criminal background check to be conducted by the Federal Bureau of Investigation.

Therefore, it would make no sense to construe Ark. Code Ann. § 17-17-308(6) as permitting the revocation of the license of an individual convicted in a state court but not in a federal court. The Board's brief on appeal suggests construing the statute as including a conviction in a court of competent jurisdiction in a state, rather than in a state court, which is reasonable and in keeping with legislative intent. As the Board points out in its brief, the United States District Court for the Western District of Missouri "is in fact a court of competent jurisdiction in the State of Missouri." We therefore reject appellant's construction of the statute.

The Board's Decision

Appellant also argues that the Board's decision is not supported by the evidence. To set an agency decision aside as arbitrary and capricious, an appellant must demonstrate that the decision was a willful and unreasonable action, made without consideration and with a disregard of the facts of the case. Moore v. King, supra. The requirement that an administrative agency's decision not be arbitrary or capricious is less demanding than the requirement that the decision be supported by substantial evidence. Enviroclean, Inc. v. Arkansas Pollution Control & Ecology Comm'n, 314 Ark. 98, 858 S.W.2d 116 (1993). An administrative decision is not arbitrary and capricious simply because the reviewing court would have acted differently. McKinley v. Arkansas Dep't of Human Servs., 311 Ark. 382, 844 S.W.2d 366 (1993). If an administrative agency's decision was based on substantial evidence, it automatically follows that the decision cannot be classified as unreasonable or arbitrary. Wright v. Arkansas State Plant Bd., supra.

Substantial evidence is defined as valid, legal, and persuasive evidence or such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. Moore v. King, supra. Whether the agency's finding is supported by substantial evidence has to do with whether the evidence before the agency supports its finding and not whether the evidence would have supported a contrary finding. See Williams v. Scott, 278 Ark. 453, 647 S.W.2d 115 (1983). To establish the absence of substantial evidence, the appellant must demonstrate that the proof before the administrative agency was so nearly undisputed that fair-minded persons could not draw the conclusion that the agency drew. Moore v. King, supra. An administrative agency, like a jury, is free to believe or disbelieve any witness, and on review, the evidence is given its strongest probative force to support the administrative ruling. Arkansas Health Planning & Dev. Agency v. Hot Spring County Mem'l Hosp., 291 Ark. 186, 723 S.W.2d 363 (1987). Questions concerning the credibility of witnesses and the weight to be accorded the evidence presented lie within the prerogative of the administrative agency, rather than the reviewing court. Moore v. King, supra.

At the hearing before the Board, appellant argued that he had received bad legal advice from his attorney before entering into the plea-bargain agreement. However, he did not deny that he had entered into this agreement, which expressly stated that he had misrepresented his economic activity and marital status to the federal government in order to receive workers' compensation benefits. We believe that the term "moral turpitude" in Ark. Code Ann. § 17-17-308(6) can easily be construed as applying to appellant's behavior. Accordingly, we uphold the agency's decision.


Baker and Roaf, JJ., agree.

1 Appellant, appearing pro se at his administrative hearing, did not argue that a conviction in a federal court is not included within the grounds for revocation set forth in Ark. Code Ann. § 17-17-308(6). Instead, he asserted that the words "moral turpitude" were vague and ambiguous and did not cover the actions to which he pled guilty.