244 N.C. App. 768
N.C. Ct. App.2016Background
- Board of Funeral Service initiated administrative proceedings (Dec 2012) against Wilson Funeral Directors, Inc. and Paul E. Wilson for alleged funeral-practice violations.
- A first show-cause hearing occurred 11 December 2013 with a seven-member quorum; two members (High and Willoughby) stated they would not participate in any subsequent hearing or vote. Petitioners chose to submit a proposed decision for a later hearing.
- A second hearing occurred 8 January 2014 with a quorum of five members; four members who participated in the first hearing were present and one new member replaced a prior member; after executive session the Board unanimously adopted a Final Agency Decision revoking licenses.
- Petitioners did not object at the administrative stage to the change in composition or to proceeding at the later date. They later sought judicial review in Henderson County Superior Court.
- The superior court reversed the Board’s Final Agency Decision, reasoning the hearing was not conducted by a "majority of the agency" under N.C. Gen. Stat. § 150B-40(b) because only four members participated in both hearings.
- The Court of Appeals reversed: it held petitioners waived procedural objections by failing to raise them at the agency level and interpreted § 150B-40(b) as not requiring identical membership to participate in all portions of a contested-case hearing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether petitioners waived their objection to the Board’s changed composition and procedure | Petitioners argued the hearing procedure was unlawful and invalidated the Final Agency Decision | Board argued petitioners acquiesced (chose later hearing), were notified two members would not participate, and failed to object at the administrative stage | Waiver: Court held petitioners waived objections by not raising them during the administrative process |
| Whether N.C. Gen. Stat. § 150B-40(b) requires the same majority of agency members to be present for the entire hearing and final decision | Petitioners (trial court) read § 150B-40(b) to require the same majority to conduct the hearing in its entirety, including adoption of the final decision | Board argued § 150B-40(b) requires a majority numerically but does not mandate identical membership throughout; absent majority, an ALJ may be designated | Statutory construction: Court held § 150B-40(b) requires a numeric majority but does not require the identical members to be present for the entire proceeding; trial court erred |
Key Cases Cited
- Crawford v. Wayne Cnty. Bd. of Educ., 275 N.C. 354 (1969) (an absent administrative member may review transcript and participate; due process requires the substitute to consider and appraise the evidence himself)
- Nantz v. Emp’t Sec. Comm’n, 28 N.C. App. 626 (1975) (failure to raise procedural objections at administrative level constitutes waiver)
- First-Citizens Bank & Trust Co. v. Camp, 409 F.2d 1086 (4th Cir. 1969) (challenges to panel composition suspect if not raised administratively)
- Evans v. Fran-Char Corp., 45 N.C. App. 94 (1980) (superior court lacks authority to consider grounds not presented to agency)
- Bulloch v. N.C. Dep’t of Crime Control & Pub. Safety, 223 N.C. App. 1 (2012) (standards for appellate review of trial court’s judicial-review order)