Herbert W. Lux, Jr. v. Jack Kotvas, Dir., etc.

• Court: Court of Appeals of Virginia
• Decided: July 8, 1997
• Docket: 0366972
• Status: Unpublished

Opinion

COURT OF APPEALS OF VIRGINIA

Present: Judges Bray, Annunziata and Overton

HERBERT W. LUX, JR.

v. Record No. 0366-97-2 MEMORANDUM OPINION * PER CURIAM JACK KOTVAS, DIRECTOR, JULY 8, 1997 DEPARTMENT OF PROFESSIONAL AND OCCUPATIONAL REGULATION

FROM THE CIRCUIT COURT OF SPOTSYLVANIA COUNTY William H. Ledbetter, Jr., Judge (Herbert W. Lux, Jr., pro se, on brief).

(James S. Gilmore, III, Attorney General; John B. Purcell, Jr., Assistant Attorney General, on brief), for appellee.

Herbert W. Lux appeals the decision of the circuit court

affirming the decision of the Department of Professional and

Occupational Regulation (Department), Board for Contractors

(Board) to pay a claim pursuant to the Contractor Transaction

Recovery Act (Act). Code §§ 54.1-1118 through 54.1-1127. Upon

reviewing the record and briefs of the parties, we conclude that

this appeal is without merit. Accordingly, we summarily affirm

the decision of the trial court. Rule 5A:27. Standard of Review

Under the Virginia Administrative Process Act, Code

§§ 9-6.14:1 through 9-6.14:25, the burden is on the party

complaining of the Board's action to demonstrate an error of law * Pursuant to Code § 17-116.010 this opinion is not designated for publication. subject to review. Code § 9-6.14:17; Johnston-Willis, Ltd. v.

Kenley, 6 Va. App. 231, 241, 369 S.E.2d 1, 6 (1988). We will

review the facts in the light most favorable to sustaining the

Board's action, with due consideration of "the presumption of

official regularity, the experience and specialized competence of

the [Board], and the purposes of the basic law under which the

[Board] has acted." Code § 9-6.14:17. See also Bio-Medical

Applications of Arlington, Inc. v. Kenley, 4 Va. App. 414, 427,

358 S.E.2d 722, 727 (1987). Facts

Viewed in the light most favorable to sustaining the Board's

decision, the record proves that in April of 1989, William and

Delores Owens entered into a contract with Lux, a licensed

contractor, for the construction of a residence. On January 12,

1994, Lux was convicted of grand larceny by false pretenses and

"grand larceny-mechanic's lien fraud" concerning the Owens'

contract. As part of his sentence, the trial court ordered Lux

to pay the Owens restitution of $2,500. On September 2, 1994,

when Lux failed to pay the restitution, the Owens filed a claim

with the Board under the Act.

The Board's Recovery Fund Committee (Committee) recommended

that the Board approve the Owens' claim. On April 10, 1996, the

Board authorized payment of the claim. Lux appealed the Board's

decision to the circuit court, and the circuit court affirmed the

Board's decision.

2 Timeliness of Filing of Claim Issue

Lux first contends that the Owens did not comply with the

requirements of the Act by failing to file a verified claim

within the mandatory period of six months. Code § 54.1-1120(3).

Code § 54.1-1120, in effect at the applicable time,

provided, in pertinent part: Whenever any person is awarded a judgment in a court of competent jurisdiction in the Commonwealth of Virginia against any individual or entity which involves improper or dishonest conduct occurring (i) during a period when such individual or entity was a regulant and (ii) in connection with a transaction involving contracting, the claimant may file a verified claim with the Director [of the Department of Professional and Occupational Regulation] to obtain a directive ordering payment from the fund of the amount unpaid upon the judgment subject, to the following conditions: * * * * * * *

3. A verified claim shall be filed with the Director no later than six months after the judgment became final.

The sentencing order requiring the payment of restitution

was entered on March 23, 1994. The Owens filed their initial

Contractor Recovery Act claim on September 2, 1994, within six

months after the judgment became final. Although the Board twice

requested additional information from the Owens, the record

indicates that the Board did not question the timeliness of the

filing of the claim, but merely requested information to

3 supplement the claim. Therefore, the record indicates that the

claim was filed in compliance with the statutory requirement.

4 Bankruptcy Issue

Lux next complains that the Board's decision to pay the

Owens' claim was invalid because the restitution order was void.

Lux contends that the restitution order was void because his

debt to the Owens was discharged when he filed for bankruptcy.

However, nothing in the Act precluded the payment of a claim from

the fund where a claimant's unpaid judgment against a contractor

was uncollectible because the contractor declared bankruptcy.

Moreover, 11 U.S.C. § 523(a)(4) prevents a discharge in

bankruptcy for "fraud or defalcation while acting in a fiduciary

capacity, embezzlement, or larceny." Therefore, Lux's argument

is without merit. Code § 54.1-1120(6) Issue

Lux contends that the Board erroneously issued the directive

ordering payment from the fund because the Owens' claim did not

comply with the requirements listed in Code § 54.1-1120(6)(a)

through Code § 54.1-1120(6)(d). Code § 54.1-1120(6)(a) provides

that the verified claim must contain a statement that the

claimant has "conducted debtor's interrogatories to determine

whether the judgment debtor has any assets which may be sold or

applied in satisfaction of the judgment." The other requirements

listed in Code § 54.1-1120(6)(b) through Code § 54.1-1120(6)(d)

concern additional information about the debtor's assets.

However, Lux had filed for bankruptcy prior to December 23, 1994,

when he amended his debtor schedule listing the Owens as

5 creditors. The record contains a copy of this amended debtor

schedule. Therefore, the Board was aware of Lux's bankruptcy

filing.

Further, on September 15, 1994, the Department sent the

Owens a form letter which contained a list of the types of

information typically requested by the Department concerning

claims. The form had a line for each item on which an "X" was

placed to indicate which items of information the Department

requested from the Owens. In this letter, the Department placed

on "X" on the line indicating a request for a copy of the

bankruptcy notice. The form did not contain an "X" on the lines

indicating requests for information concerning debtor's

interrogatories. Thus, in light of Lux's bankruptcy filing, it

was not necessary to provide the Department information regarding

debtor's interrogatories. Therefore, this argument is without

merit.

Notification and Continuance Issues Whether to grant Lux's request for a continuance was within

the discretion of the Board. Cf. GTE Sprint Communications Corp.

of Virginia v. AT & T Communications of Virginia, Inc., et al.,

230 Va. 295, 306, 337 S.E.2d 702, 709 (1985) (addressing the

denial of a request for a continuance of a hearing conducted by

the State Corporation Commission).

The record indicates that the Committee scheduled a hearing

for the Owens' claim for March 18, 1996. On March 7, 1996, Holly

6 Erickson, Assistant Administrator for the Recovery Fund, sent a

letter to Lux informing Lux of the scheduled hearing. On March

14, 1996, Lux telephoned Erickson and requested a deferral in

order to prepare for the hearing. On that same date, Lux sent a

letter to Erickson requesting a continuance because his wife had

grand jury duty on March 18, 1996 and he had to "watch" their

daughter on that date. However, the Committee considered and

approved the Owens' claim on March 18, 1996. On March 22, 1996, Erickson sent a letter to Lux advising

him that the Committee recommended payment of the Owens' claim.

Erickson also informed Lux that the Board would meet on April 10,

1996 to ratify the Committee's decision. Lux responded by letter

dated March 27, 1996, stating that he intended to be present at

the April 10, 1996 meeting and that he planned to address the

Board. On April 3, 1996, Lux asked for a continuance because he

had to attend a court hearing on that date. The Board met on

April 10, denied his request for a continuance, and approved the

Owens' claim.

Clearly, Lux was given adequate notice of each step in the

process and was given the opportunity to be heard at each

proceeding. Nothing in the record indicates that the Committee

or the Board abused its discretion in denying Lux's requests for

continuances and in conducting the hearings as scheduled.

Further, Lux argues that he did not receive notice of the

Board's decision to pay the Owens' claim. However, the agency

7 record contains the April 11, 1996 letter to the Owens from

Erickson informing the Owens that their claim was approved. In

addition, Code § 54.1-1122 provides that when the Board issues a

directive ordering payment from the fund to the claimant, then

"[t]he claimant shall be notified in writing of the findings of

the Board." There is no statutory requirement that the regulant

must be notified of the payment. Therefore, this argument is

without merit.

Final Order Issue

Lux contends that the Board erred in making

payment of the Owens' claim without entering

a final order or case decision pursuant to

Code § 9-6.14:14. However, the record does

not indicate that this argument was presented

to the trial court. The trial court's

November 13, 1996 opinion letter does not

address this issue. Further, Lux's written

statement of facts was filed more than fifty-

five days after entry of the final order and

is not part of the record on appeal. See

Rule 5A:8(c)(1). In addition, Lux filed no

transcript of the proceeding before the trial

court. Therefore, we are unable to determine

whether this argument was presented to the

trial court. We have many times pointed out

8 that on appeal the judgment of the lower

court is presumed to be correct and the

burden is on the appellant to present to us a

sufficient record from which we can determine

whether the lower court has erred in the

respect complained of. If the appellant

fails to do this, the judgment will be

affirmed.

Justis v. Young, 202 Va. 631, 632, 119 S.E.2d 255, 256-57 (1961).

Accordingly, Rule 5A:18 bars our consideration of this

question on appeal. Moreover, the record does not reflect any

reason to invoke the good cause or ends of justice exceptions to

Rule 5A:18.

For the reasons stated, the decision of the circuit court is

summarily affirmed.