State, Dep't of Bus. & Indus. v. Check City

Nov 13, 2014
62888
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Appeal from a district court order granting a petition for judicial review and setting aside an administrative decision. Eighth Judicial District Court, Clark County; Susan Johnson, Judge.

Reversed.

Catherine Cortez Masto, Attorney General, David J. Pope, Senior Deputy Attorney General, and Daniel D. Ebihara, Deputy Attorney Generаl, Las Vegas, for Appellant.

Holland & Hart LLP and Patrick J. Reilly and Nicole E. Lovelock, Las Vegas, for Respondents.

BEFORE THE COURT EN BANC.

OPINION

By the Court, PARRAGUIRRE, J.:

In this appeal, we must determine whether the Deрartment of Business and Industry, Financial Institutions Division (FID), correctly interpreted the deferred deposit loan statutes when it concluded that a licensee violates NRS 604A.430 and NRS 604A.408 by (1) extending the term of a deferred deposit loan beyond 35 days and (2) entering into a new deferred deposit loan with a customer who has an outstanding deferrеd deposit loan. We conclude that the FID‘s interpretation is correct. Therefore, we reverse the district court‘s order setting aside the FID‘s decision.

FACTS AND PROCEDURAL HISTORY

Check City Partnership, LLC (Check City), is a licensed “check-cashing service,” “deferred deposit loan service,” “high-interest loan service,” and “title loan service” under NRS Chapter 604A. In early 2012, the FID conducted a routine examination of Check City. Based on that examination, the FID issued a report alleging that Check City had violated NRS Chapter 604A in two ways.

First, the FID alleged that Check City violated NRS 604A.430 by making deferred deposit loans for terms in excess of 35 days. Second, the FID alleged that Check City violated NRS 604A.408 by issuing new deferred deposit loans to customers who had nоt yet paid off their original deferred deposit ‍‌​‌‌​‌​​​‌​‌‌​​‌‌​​​​‌‌‌‌‌‌‌​‌​​‌‌​‌​‌​‌‌‌‌​​​‌‌‍loans. Check City timely requested an administrative hearing regarding the examination report.

At the hearing, Check City did not dispute the FID‘s factual findings but instead challenged the FID‘s legal conclusions. Regarding the alleged NRS 604A.430 violations, Check City argued that it did not violate the statute becаuse the initial term of each loan was less than 35 days, and NRS 604A.430 did not prohibit Check City from later granting a borrower‘s request to extend the term of a loan beyond 35 days. Rеgarding the alleged NRS 604A.408 violations, Check City argued that it was permitted to issue a second deferred deposit loan to a customer as long as the second loan was for a different amount and had different terms than the first loan.

The administrative law judge (ALJ) upheld the FID‘s conclusions. Regarding the NRS 604A.430 violations, the ALJ concluded that “nothing in Chapter 604A permits a licensee to extend a deferred deposit loan beyond the statutory maximum [of 35 days] for any reason.” Regarding the NRS 604A.408 violations, thе ALJ concluded that Check City had improperly provided new loans to customers who had not yet paid off their original loans. Following the hearing, the FID issued a finаl order adopting the ALJ‘s conclusions.

Check City filed a petition for judicial review. The district court granted the petition and set aside the FID‘s order, concluding that Check City did not violate NRS 604A.430 or NRS 604A.408. This appeal followed.

DISCUSSION

When reviewing an administrative decision, this court‘s role “is identical to that of the district court.” Elizondo v. Hood Mach., Inc., 129 Nev. Adv. Opn. No. 84, 312 P.3d 479, 482 (2013) (internal quotation marks omitted). This court reviews an ALJ‘s purely legal ‍‌​‌‌​‌​​​‌​‌‌​​‌‌​​​​‌‌‌‌‌‌‌​‌​​‌‌​‌​‌​‌‌‌‌​​​‌‌‍determinations, including matters of statutory interpretation, de novo. Dutchess Bus. Servs., Inc. v. Nev. State Bd. of Pharmacy, 124 Nev. 701, 709, 191 P.3d 1159, 1165 (2008). “However, an agency‘s interpretation of a statute is highly persuasive.” Presley v. Nev. Tax Comm‘n, 112 Nev. 809, 811, 919 P.2d 1057, 1058 (1996).

When interpreting a statute, this court first determines whether its language is ambiguous. Dutchess Bus. Servs., 124 Nev. at 709, 191 P.3d at 1165. “If the statutory language is unambiguous, [this court] will not look beyond it and will give the language its plain meaning.” State, Dep‘t of Taxation v. American West Leisure, Inc., 120 Nev. 965, 970, 100 P.3d 644, 648 (2004). A statute is ambiguous if it “is capable of being understood in two or more reasonable senses.” Dutchess Bus. Servs., 124 Nev. at 709, 191 P.3d at 1165.

The 35-day limit on deferred deposit loans in NRS 604A.430

NRS 604A.430(1) states that “a licensee shall not... [e]nter into a deferred dеposit loan for a term which exceeds 35 days.” Check City argues that this statute only limits the initial term of a deferred deposit loan and does not prevent a licеnsee from later extending the term of a loan beyond 35 days. We disagree.

NRS 604A.050 defines “deferred deposit loan” as: “a transaction in which, pursuant to a written agreement: (a) A customer borrows money from a licеnsee; and (b) The licensee... [a]grees to defer the deposit of a check... for a specific period of time.” (Emphasis added.) NRS 604A.430 limits this “specific period of time” to 35 days.

Check City relies on a narrow definition of the phrase “[e]nter intо” to argue that the 35-day limit only applies at the moment the loan is originated. We conclude that this interpretation is unreasonable. NRS 604A.430 would be virtually meaninglеss if a licensee could circumvent the 35-day limit by simply originating a loan for 35 days and then immediately “extending” it for several months. See California Commercial Sols. v. State, Dep‘t of Bus. & Indus., Fin. Insts. Div., 121 Nev. 589, 597, 121 P.3d 1039, 1045 (2005) (noting that this court should “avoid statutory interрretations that render ‍‌​‌‌​‌​​​‌​‌‌​​‌‌​​​​‌‌‌‌‌‌‌​‌​​‌‌​‌​‌​‌‌‌‌​​​‌‌‍language superfluous or produce absurd or unreasonable results“).

Furthermore, when a licensee extends a loan, the licensеe and the borrower necessarily modify the original loan agreement. Because the extension is a “transaction in which... [t]he licensee... [a]grees to defer the deposit of a check... for a specific period of time,” it falls squarely within the definition of a deferred deposit loan. NRS 604A.050. When the partiеs agree to an extension that brings the total term of the loan beyond 35 days, they have “[e]nter[ed] into a deferred deposit loan for a term which exceeds 35 days” in violation of NRS 604A.430.

Our interpretation is supported by the overall structure of NRS Chapter 604A. When the Legislature intends to allow a licensee to extend the term of a loan, it says so explicitly. For example, NRS 604A.445 and NRS 604A.450, which govern high-interest loans and title loans, respectively, both provide that a licensee may “extend[ ] the term of the loan” as long as the total term does not exсeed a specified duration. NRS 604A.430 contains no such language. See Pub. Emps.’ Ret. Sys. v. Nev. Cmty. Prop. Corp., 127 Nev. 401, 404, 255 P.3d 209, 211 (2011) (noting that “[i]t is the duty of this court, when possible, to interpret provisions within a common statutory scheme harmoniously with one anothеr in accordance with the general purpose of those statutes“) (internal quotation marks omitted).

Finally, we note that NRS 604A.480 specifies the terms that must be offered to a customer who defaults on a loan. If a licensee could extend a deferred deposit loan beyond 35 days, it could potentially avoid the borrower-prоtective provisions of NRS 604A.480 by continuously extending the loan before the borrower technically defaults. This result would be inconsistent with the Legislature‘s intent to protect consumers from the dangers of long-term high-interest debt.

Accordingly, we conclude that the 35-day limit in NRS 604A.430 applies to the total term of a deferred deposit loan, including any extensions.

The prohibition оn multiple deferred deposit loans in NRS 604A.408

NRS 604A.408(1) states: “A licensee shall not... [e]nter into a deferred deposit loan with a customer if the customer ‍‌​‌‌​‌​​​‌​‌‌​​‌‌​​​​‌‌‌‌‌‌‌​‌​​‌‌​‌​‌​‌‌‌‌​​​‌‌‍already has an outstanding deferred deposit loan with the licensee.” Check City argues that NRS 604A.408 only prohibits a licensee from entering into a second loan that is identical tо the first. Check City bases this argument on NRS 604A.408(2), which provides that “[a] licensee may... [e]nter into a deferred deposit loan with a customer if the customer already hаs an outstanding deferred deposit loan with another licensee.” (Emphasis added.) According to Check City, if the Legislature had intended to prohibit all second loans with the samе licensee, it would have said so as clearly as it did in NRS 604A.408(2).

Check City‘s argument is unpersuasive. NRS 604A.408(1) clearly and unambiguously prohibits a licensee from entering into ”a deferred deposit loan with a customer if the customer already has an outstanding deferred deposit loan with the licensee.” (Emphasis added.) There is no lаnguage in the statute suggesting that this prohibition applies only to loans with identical terms or amounts. To the contrary, the use of the indefinite article “a” indicates that the prohibition applies to any deferred deposit loan. See Thomas v. State, 122 Nev. 1361, 1371, 148 P.3d 727, 734 (2006) (noting that the word “a” generally means “any“).

Check City‘s proposed interpretation would lead to an absurd result. If NRS 604A.408 only prohibited identical loans, a licensee could easily circumvent the statute by making a second loan for one dollar more than the first loan, or by changing the term of the second loan by a single day. We decline to adopt an interpretation that would so easily defeat the purpose of the statute. See California Commercial Sols., 121 Nev. at 597, 121 P.3d at 1045.

We conclude that NRS 604A.408(1) prohibits a licensee from entering into аny deferred deposit loan with a customer who has an outstanding deferred deposit loan with that licensee.

CONCLUSION

The FID correctly interpreted NRS 604A.430 and NRS 604A.408. Check City violated NRS 604A.430 by extending the terms of its deferred deposit ‍‌​‌‌​‌​​​‌​‌‌​​‌‌​​​​‌‌‌‌‌‌‌​‌​​‌‌​‌​‌​‌‌‌‌​​​‌‌‍loаns beyond 35 days, and it violated NRS 604A.408 by entering into new deferred deposit loans with customers who had outstanding deferred deposit loans. Accordingly, we reverse the district court‘s order setting aside the FID‘s decision.

Parraguirre, J.

We concur:

Gibbons, C.J.

Pickering, J.

Hardesty, J.

Douglas, J.

Cherry, J.

Saitta, J.