DANIELS v. DEPARTMENT OF MOTOR VEHICLES (1982)

This case presents the issue as to whether hearsay evidence in the form of an SR 1 report ¹ standing alone will support an order of the Department of Motor Vehicles (DMV) suspending driving privileges.

We conclude such evidence will not for reasons hereinafter discussed and therefore the judgment of the trial court is vacated with directions.

PROCEDURAL AND FACTUAL BACKGROUND

Appellant Wilfred Anthony Daniels (Daniels) appeals from a judgment of the superior court denying relief requested by way of a petition for writ of mandate filed pursuant to Code of Civil Procedure section 1094.5, subdivision (b).²

In May, 1979 the DMV received an SR 1 report purportedly made out and signed under penalty of perjury by Carlita Lynn Dorham (Dorham) describing an accident that allegedly occurred April 25, 1979, involving a 1978 Toyota owned and operated by Dorham and a 1968 Ford owned and operated by Daniels.   The report set forth the estimated cost of repair to the Toyota to be $400.

On October 10, 1979, the DMV issued its Order of Suspension of Daniels' driver's license effective November 3, 1979, for his failure to file an accident report and proof of financial responsibility.³  Prior to the effective date, Daniels demanded a formal hearing pursuant to section 16075.⁴

The hearing was conducted December 5, 1979, as a formal hearing provided for in section 14107.⁵  Present at the hearing were Daniels and his attorney and a referee appointed by the DMV.

At the start of the hearing, the referee produced documents and announced that the “documents are introduced and received into evidence.”   Exhibit 1 was the SR 1 report.   A timely and appropriate objection to its admission was made by Daniels' attorney on the grounds that it contained hearsay and that it had not been authenticated.   The objection was overruled on the referee's theory that the document was admissible under authority of sections 14104 and 14108.⁶

Daniels was called as a witness by the referee, was sworn and was asked whether he was involved in the accident of April 25, 1979.   He refused to respond on advice of counsel.

Following written argument, the referee prepared findings and a recommendation as follows:  “FINDINGS:  1. ․ Daniels was the driver and owner of a vehicle involved in the accident of 4–25–79 at Los Angeles.  [¶] 2. There was property damage in excess of $350.00, ․  [¶] 3. Mr. Daniels did not have insurance, or a bond, or one of the other types of financial responsibility in effect at the time of the accident which covered him for the accident.  [¶] RECOMMENDATION:  It is recommended that the driving privilege of ․ Daniels be suspended under the provisions of Section 16070 of the California Vehicle Code.”

DMV issued its Order of Suspension on January 28, 1980.   When Daniels' petition for writ of mandate was denied in the superior court, this appeal followed.

CONTENTIONS

Daniels contends that the DMV abused its discretion by ordering suspension of his driving privilege because the adjudication at the formal administrative hearing was based solely upon the inadmissible hearsay evidence contained in the SR 1 report.

The DMV urges that since it is mandated to consider the SR 1 report as one of the department's “official records” by section 14108, the report is competent evidence to support the suspension as a special statutory exception to the hearsay rule.

DISCUSSION

This case presents yet another fact situation which calls for the balancing of important societal interests.   On one side of the scale, the state has enacted legislation to protect California motorists from financially irresponsible drivers who cannot respond in monetary damages for personal injury and/or property.   On the other side rests the driver who seeks to retain a substantial property interest, a license, and who is protected by procedural due process as against the state's effort to suspend the license to drive.

The balancing process issue is not new or novel and many courts have discoursed on the subject.  (Mathews v. Eldridge (1976) 424 U.S. 319, 334–335, 96 S.Ct. 893, 902, 47 L.Ed.2d 18;  Burkhart v. Department of Motor Vehicles (1981) 124 Cal.App.3d 99, 110, 177 Cal.Rptr. 175.)   The license suspension and revocation cases come before the courts, as this one did, to test the due process of the procedure used by the governmental agency to suspend and/or revoke the license and usually involve the sufficiency of some form of hearsay evidence utilized to support the agency's findings.  (Bell v. Burson (1971) 402 U.S. 535, 91 S.Ct. 1586, 29 L.Ed.2d 90;  Walker v. City of San Gabriel (1942) 20 Cal.2d 879, 129 P.2d 349;  Fallis v. Depart. of Motor Vehicles (1968) 264 Cal.App.2d 373, 70 Cal.Rptr. 595;  Fankhauser v. Orr (1968) 268 Cal.App.2d 418, 74 Cal.Rptr. 61;  Fisk v. Department of Motor Vehicles (1981) 127 Cal.App.3d 72, 179 Cal.Rptr. 379.)

The different twist presented by this case is the DMV's bold effort to justify the suspension of Daniels' license solely with the use of the hearsay information contained in the SR 1 report.

Prior to the hearing, Daniels possessed a valid driver's license.   In Bell v. Burson, supra, 402 U.S. at page 539, 91 S.Ct. at page 1589, the United States Supreme Court stated that “[o]nce licenses are issued, ․ their continued possession may become essential in the pursuit of a livelihood.   Suspension of issued licenses thus involves state action that adjudicates important interests of the licensees.   In such cases the licenses are not entitled to be taken away without that procedural due process required by the Fourteenth Amendment.  [Citations.]”  (Cf. Dixon v. Love (1977) 431 U.S. 105, 97 S.Ct. 1723, 52 L.Ed.2d 172;  MacKey v. Montrym (1979) 443 U.S. 1, 99 S.Ct. 2612, 61 L.Ed.2d 321.)   In McConville v. Alexis (1979) 97 Cal.App.3d 593, 600, 159 Cal.Rptr. 49, this court held that “․ there can be little question but that possession of a driver's license rises to the level of a fundamental right under [Bixby v. Pierno (1971) 4 Cal.3d 130, 93 Cal.Rptr. 234, 481 P.2d 242] in terms of both the economic implications relating thereto and ‘the importance of’ the possession ‘to the individual in the life situation.’ ”

Burkhart v. Department of Motor Vehicles, supra, 124 Cal.App.3d at p. 107–108, 177 Cal.Rptr. 175, recognized the illusive essence of due process and cited to Mathews v. Eldridge, supra, 424 U.S. at pages 334–335, 96 S.Ct. at pages 902–903 as follows:  “ ‘[¶] ․ “ ‘[d]ue process,’ unlike some legal rules, is not a technical conception with a fixed content unrelated to time, place and circumstances.”  Cafeteria Workers v. McElroy, 367 U.S. 886, 895 [81 S.Ct. 1743, 1748, 6 L.Ed.2d 1230] ․  “[D]ue process is flexible and calls for such procedural protections as the particular situation demands.”   Morrissey v. Brewer, 408 U.S. 471, 481 [92 S.Ct. 2593, 2600, 33 L.Ed.2d 484] ․  Accordingly, resolution of the issue whether the administrative procedures provided here are constitutionally sufficient requires analysis of the governmental and private interests that are affected.  Arnett v. Kennedy, supra, 416 U.S. [134] at 167–168 [94 S.Ct. 1633, at 1650, 40 L.Ed.2d 15] ․ (Powell, J., concurring in part);  Goldberg v. Kelly, supra, 397 U.S. [254], at 263–266 [90 S.Ct. 1011, at 1018–1019, 25 L.Ed.2d 287] ․;  Cafeteria Workers v. McElroy, supra, 367 U.S., at 895 [81 S.Ct. at 1748] ․' ”

It is axiomatic that the burden rests with the agency that seeks to suspend a license to establish the facts upon which its case is based, and until sufficient competent evidence is adduced, the licensee is not bound to make any statement or proceed.  (La Prade v. Department of Water & Power (1945) 27 Cal.2d 47, 50–51, 162 P.2d 13;  Martin v. Alcoholic Bev. etc. Appeals Bd. (1959) 52 Cal.2d 259, 265, 341 P.2d 291.)

Here, the referee for the DMV introduced in evidence at the hearing the SR 1 report and made findings recommending that Daniels' license be suspended, as though the contents of the SR 1 report were self-proving.

The statutory scheme requires operators and/or owners of motor vehicles to be self-insured, to have insurance, or to be financially responsible in one of several statutorily approved ways.   If a driver or owner is involved in an accident and a certain amount of property damage results, someone is injured or killed, the event must be reported to the DMV on the approved SR 1 report.   If the driver or owner is not insured, self-insured, or otherwise in compliance, the driver or owner is required to prove financial responsibility.

If a driver or owner involved in an accident covered by section 16000 et seq. fails to file the SR 1 report with the appropriate information, that person receives a notice of intent to suspend.

Upon receipt of a notice of intent to suspend, the affected driver may request an administrative hearing in writing within 20 days.   Such a written request operates as an automatic stay of the suspension order until a determination is made after the hearing.   The hearing presided over by a referee is conducted pursuant to the Vehicle Code, commencing with section 14100.

In applying the statutory scheme to this case the DMV contends, citing to Burkhart v. Department of Motor Vehicles, supra, 124 Cal.App.3d at p. 110, 177 Cal.Rptr. 175, that because of “․ the governmental interest and the fiscal and administrative burdens involved if additional or substitute procedures are mandated ․,” that it can rely on the information submitted in the SR 1 report standing by itself to suspend Daniels' license.

DMV further argues that because the court in Burkhart upheld the procedures used therein to suspend Burkhart's license as against a due process argument, the case establishes precedent to condone what occurred in this case.

The facts in Burkhart involve the implied consent law found in section 13353 which section mandates a driver to submit to a chemical test of blood, breath or urine when lawfully arrested for driving a vehicle under the influence of intoxicating liquor.   The test is required to be administered at the direction of a police officer, and calls for the officer to submit a sworn statement to the DMV that the officer had probable cause to believe the driver had been driving while under the influence, when such driver refuses to submit to one of the tests.

Burkhart refused the test and requested a hearing.   After the hearing had been rescheduled twice because the arresting officer failed to appear, an informal hearing was held without his presence.   Over objection, the referee introduced in evidence the officer's sworn statement.   Burkhart and his wife contested portions of the officer's statement, but the referee found against Burkhart and his driving privilege thereafter was suspended.

The Court of Appeal reversed the trial court's order reinstating Burkhart's license.   The court in Burkhart observed that section 14108 compels the DMV to consider its official records at any formal or informal hearing citing to Fankhauser v. Orr, supra, 268 Cal.App.2d 418, 74 Cal.Rptr. 61 and that the DMV records include the officer's sworn statement filed pursuant to section 13353 subdivision (b).   The court did not consider that the physical presence of the officer at the hearing would substantially enhance the reliability of the hearing process holding that the issues involved do not carry with them a substantial risk of error, and that an unproductive “swearing match” would likely result.

After consideration of several federal and state cases dealing with due process, the Burkhart court concludes, as did the court in Fankhauser, that the procedure providing for the admission of hearsay specially made admissible by the Vehicle Code statutory scheme, particularly section 14108, comports with due process.   For all its broad language, Burkhart was still dealing with a public official's statement, made within the scope of duty of said public official, reduced to a report.   This sworn statement of the arresting officer is clearly a recognized official record exception to the hearsay rule.  (Fisk v. Department of Motor Vehicles, supra, 127 Cal.App.3d at p. 76–79, 179 Cal.Rptr. 379.)

“The general rule is that in the absence of a special statute an administrative agency cannot over objection make findings of fact supported solely by hearsay evidence.  (Citations, including Walker v. City of San Gabriel (1942) 20 Cal.2d 879, 881, 129 P.2d 349.)”  (Steen v. Board of Civil Service Commrs. (1945) 26 Cal.2d 716, 726–727, 160 P.2d 816.)

We have difficulty with the rationale of Burkhart, Fankhauser and the recent case of Himelspach v. Dept. of Motor Vehicles, 129 Cal.App.3d 702, 181 Cal.Rptr. 419 (1982) to the extent that these cases hold this statutory framework authorizes the DMV to support its finding of license suspension based on hearsay allegedly specifically made admissible by statute.   We do not interpret the Vehicle Code sections as support for that premise.   Section 14108 states that “․ the department shall consider its official records and may receive sworn testimony ․”  (Emphasis added.)   The consideration of certain material is not the equivalent of relying on the material as the sole basis to support a finding of license suspension.

We also reject the DMV's argument that section 1806 somehow creates a statutory exception allowing for hearsay to be sufficient evidence to support a finding.⁷  Section 1806 merely provides that accident reports can be maintained and recorded in a convenient form and that the facts in such form shall constitute evidence in administrative actions.   This section provides nothing more than that DMV records shall be considered and may be considered in record-keeping form.

Nowhere in the statutory scheme does language exist justifying DMV's contention that section 14108 is a “special statute.”   To the contrary, the Administrative Procedure Act found in Government Code section 11500 et seq. specifically applies to the DMV.  (Gov. Code, § 11501, subd. (b).)  Section 11513 thereof provides:  “Hearsay evidence may be used for the purpose of supplementing or explaining other evidence but shall not be sufficient in itself to support a finding unless it would be admissible over objection in civil actions.”  (Emphasis added.)

The DMV interpretation of section 14108 and Government Code section 11513 are in conflict in that the language of section 14108 does not come close to sounding like a legitimate hearsay exception admissible over objection in a civil action, and “ ‘[the legislature] will not be presumed to have used inconsistent provisions as to the same subject in the immediate context.’   [Citations.]”  (Brennfleck v. Workmen's Comp. App. Bd. (1970) 3 Cal.App.3d 666, 673, 84 Cal.Rptr. 50.)

The recognized statutory exceptions in some manner supply the essential ingredients of competency, reliability and trustworthiness of the proferred evidence, i.e., business records (Evid. Code, § 1271);  official records (Evid. Code, § 1280);  admissions of a party (Evid. Code, § 1220);  spontaneous statements (Evid. Code, § 1240);  dying declarations (Evid. Code § 1242).  (See also the statutory exceptions contemplated by Evid. Code, § 1205 (Witkin, Cal. Evidence (2d ed. 1966) § 628, p. 588).)

In Burkhart the court was dealing with a sworn statement that would have been admissible as an exception to the hearsay rule either as a business record (Evid. Code, § 1271) or as an official record (Evid. Code, § 1280) had a proper foundation been laid.  Section 1271 of the Evidence Code admits evidence of a writing as a record of the event to prove said event if the writing was made in the regular course of a business, at or about the time of the event, the sources of information, method and time of preparation were such as to indicate trustworthiness, and a qualified witness provides the proper foundation.

Section 1280 of the Evidence Code contains similar language and applies to records kept by public employees made within the scope of duty of said public employee.   While not requiring a witness to authenticate sources of information, method and time of preparation, case law requires the same showing of trustworthiness as under Evidence Code section 1271.  (Behr v. County of Santa Cruz (1959) 172 Cal.App.2d 697, 342 P.2d 987;  Hoel v. City of Los Angeles (1955) 136 Cal.App.2d 295, 288 P.2d 989.)

The Burkhart holding could be rationalized in terms of the presumption that official duty is regularly performed.  (Evid. Code, § 664;  County of Los Angeles v. Young (1961) 196 Cal.App.2d 405, 409–410, 16 Cal.Rptr. 553.)   By use of that presumption, the Burkhart court at least could have covered some of the authentication gap, since the officer was not present.

In Fisk v. Department of Motor Vehicles, supra, 127 Cal.App.3d at page 79, 179 Cal.Rptr. 379, this court utilized the presumption of official duty regularly performed to overcome the arresting officer's lack of independent recollection of the incident in question though present at the hearing.   The officer testified that he had personally arrested Fisk in the course of his duties as a police officer and had prepared the written “sworn statement” called for by section 13353 within an hour of the arrest when the events were fresh in his mind.   The referee admitted the document in evidence over objection under the past recollection recorded exception to the hearsay rule and pursuant to section 14108.

In reversing the trial court's ruling that the evidence was inadmissible hearsay, we ruled that Evidence Code section 1280 was authority for the admission of the officer's statement as an official record exception to the hearsay rule, holding that the requirement of “trustworthiness” was satisfied by the officer's being presumed to have fulfilled his official duty, citing People v. Baeske (1976) 58 Cal.App.3d 775, 780, 130 Cal.Rptr. 35.  (Fisk v. Department of Motor Vehicles, supra, 127 Cal.App.3d at p. 77, 179 Cal.Rptr. 379.)

In contrast to an officer's sworn statement, here we are dealing with a report to be made out “as completely as possible” by any private citizen who happens to be the unfortunate owner or operator of a motor vehicle involved in an accident covered under section 16000.   Although the form provides for a “COST ESTIMATE BY GARAGEMAN,” in this case the report reflects only a $400 estimate by Dorham as to the cost of repairs and no expert opinion regarding property damage was forthcoming.⁸  The estimated amount is crucial in that a certain monetary figure triggers the application of the statutory process.

An analysis of the SR 1 report discloses that it would not qualify as an exception either as a business record or as an official record.   Pursuant to the requirements of Evidence Code section 1271, Dorham did not make the writing “in the regular course of a business,” nor did she testify “to its identity and the mode of its preparation.”   Further, the SR 1 report is not a record of an act “made by and within the scope of duty of a public employee,” as required by Evidence Code section 1280.⁹  The SR 1 report is hearsay, pure and simple, and lacking in trustworthiness, and as such does not constitute substantial competent evidence to support the finding of the DMV suspending Daniels' driver's license.

A stronger showing of legislative intent as to the proffered meaning of section 14108 which would withstand due process scrutiny is required for this court to follow Burkhart and Himelspach.   These cases purport to overrule the established case law and the Administrative Procedure Act which disallow the taking of a property right based on hearsay of the sort relied on herein.¹⁰

Therefore, Burkhart and Himelspach notwithstanding, the judgment of the trial court is hereby vacated and the trial court is directed to grant Daniels' petition and issue a writ commanding the DMV to set aside its order of suspension.

FOOTNOTES

1.   This accident report is provided for in Vehicle Code sections 16000, 16004, 16020 and 16021.  Section 16000 requires that “[t]he driver of every motor vehicle which is in any manner involved in an accident originating from the operation of a motor vehicle on any street or highway which accident has resulted in damages to the property of any one person ․ shall within 15 days after the accident, report ․ on a form approved by the department ․”Section 16004 states that the department must suspend the driving privilege of any person who willfully fails, refuses or neglects to make a report of an accident as required in this article.Section 16020 mandates that “[e]very driver of, and owner of, a motor vehicle shall, at all times, maintain in force one of the forms of financial responsibility specified in Section 16021.”Section 16021 defines how financial responsibility is established.Unless otherwise indicated, all code citations refer to the Vehicle Code.

2.   Code of Civil Procedure section 1094.5, subdivision (b) provides in pertinent part for review of administrative orders, and specifically here “[t]he inquiry ․ shall extend to the questions whether the respondent has proceeded without, or in excess of jurisdiction;  whether there was a fair trial;  and whether there was any prejudicial abuse of discretion.   Abuse of discretion is established if the respondent has not proceeded in the manner required by law, the order or decision is not supported by the findings, or the findings are not supported by the evidence.”

3.   Section 16050 sets forth that in order to establish proof of financial responsibility every driver involved in an accident and required to report such accident by section 16000 “shall establish to the satisfaction of the department that the provisions of this article are applicable to his responsibilities arising out of the accident.”Section 16430 et seq. spells out the proof required of ability to respond in damages.

4.   Section 16070 mandates the department to suspend driving privileges when a driver fails to establish proof of financial responsibility for an accident covered by section 16000 et seq.Section 16075 provides for hearings and states that “(a) [t]he suspension provisions ․ shall not apply ․ until 20 days after the department sends to the driver or owner notice of its intent to suspend his driving privilege and advises ․ of his right to a hearing as hereinafter provided․”

5.   Section 14107 makes provision for a formal hearing and sets forth notice requirements and states that such a hearing “shall be conducted by the director or by a referee ․”

6.   Section 14104 sets forth that “[w]henever an informal hearing is granted ․, it shall be conducted in a completely informal manner, the only requirement being that the applicant or licensee shall have the opportunity to make or file a written answer or statement in which he may controvert any point at issue or present any evidence or arguments for the consideration of the department, or the person may present orally to the department any evidence or statement pertinent to the question and submit the question for determination by the department.  [¶] The department may consider any records or reports referred to in Section 14108.”Section 14108 provides that at a formal hearing “the department shall consider its official records” and may receive sworn testimony.   The section makes provision for other forms of proof on the issue of whether a driver can safely operate a motor vehicle.

7.   Section 1806 states in pertinent part:  “The department shall file all accident reports ․, and ․, shall maintain convenient records ․  At its discretion the department may file and maintain these accident reports and abstracts by electronic recording and storage media and after transcribing electronically all available data from the accident reports ․ may destroy the original documents.   Notwithstanding any other provisions of law, the recorded facts from any electronic recording and storage device maintained by the department shall constitute evidence of such facts in any administrative actions instituted by the department.”

8.   The minimal amount requiring a reporting has been increased to $500 as of January 1, 1980.  (Stats.1979, ch. 549, § 1, p. 1753.)

9.   Himelspach v. Dept. of Motor Vehicles, supra, finds the SR 1 report admissible under Evidence Code sections 1270 and 1271 on the theory that the “trial court was entitled to presume that lawful duty has been performed.”  (Emphasis added;  id., 129 Cal.App.3d at p. 708, 181 Cal.Rptr. at p. 422.)

10.   Unfortunately, Burkhart was not brought to the attention of the Supreme Court and so we are without its guidance in the area.

KLEIN, Presiding Justice.

POTTER and LUI, JJ., concur.