This appeal arises from a challenge to the latest version of the rules governing the North Carolina State Highway Patrol's wrecker rotation program, a voluntary program that uses private wreckers to tow disabled, seized, wrecked, and abandoned vehicles when a vehicle owner cannot or will not request a towing company. On 22 January 2009, Plaintiffs Danny's Towing 2, Inc., Doyle Sutton d/b/a Doyle's Garage and Wrecker, Donnie Sutton d/b/a Sutton Automotive and Wrecker Service, Brenda Edwards d/b/a B & H Towing, Ramdog Enterprises, LLC, James Autrey d/b/a Moe Bandy, Domestic Auto, Inc., Henry Grasty d/b/a Grasty's Service Center,
Plaintiffs' complaint sought relief in the form of a declaratory judgment on two questions: whether "the acts of the Defendants are arbitrary and capricious and violate [the] North Carolina Constitution" and whether the "methodology employed by the Defendants [in the wrecker rotation program] . . . is arbitrary and not consistent with the . . . rules." Plaintiffs also sought temporary, preliminary, and permanent injunctions of the rules.
In April 2009, the case was transferred from district to superior court. In June 2009, Defendants moved to dismiss and for partial summary judgment. In February 2010, the three named Highway Patrol officers were dismissed on the basis of public official immunity and Plaintiffs' claims for monetary damages were also dismissed; Defendants' motion was otherwise denied. Meanwhile, in the year and a half between the filing of the complaint and the order in this case, the North Carolina General Assembly passed a bill amending 14A NCAC 9H.0321(a), including, inter alia, a requirement that wreckers in the rotation program charge "reasonable prices." At a hearing on 17 May 2010, the parties agreed that six paragraphs of the rules were at issue. The trial court later issued an order enjoining the State from enforcing parts of five of the challenged paragraphs: (1) the requirement that wrecker services have a "land-based telephone line"; (2) the regulation prohibiting a driver with a valid Commercial Drivers License from driving in the rotation until the State receives a certified copy of his driving record; (3) the prohibition against wrecker services acquiring storage liens on freight or wares they were required to remove from a towed vehicle; and (4) the automatic by-pass provision, which allows the State to put a wrecker service at the bottom of the rotation list if it fails to answer a call. Finally, the trial court enjoined the State from setting fees for wrecker services provided through the rotation program. This appeal followed entry of the trial court's order.
On appeal, Defendants make two arguments: that the trial court (I) exceeded its authority and jurisdiction under the Declaratory Judgment Act in reviewing the reasonableness of the rules rather than their legality and (II) erred in enjoining certain portions of the rules as unenforceable. As discussed below, we agree in part and conclude that this matter must be remanded for further proceedings.
At the start of the hearing, the trial court expressed confusion over the matters before it:
The parties agreed that parts of six paragraphs of the rules were being challenged:
Plaintiffs argued that the paragraphs in dispute were preempted by federal law, in that the State can only regulate "motor carriers of property" under the safety regulatory authority exception. In general, "[f]ederal preemption occurs when: (1) Congress enacts a statute that explicitly preempts state law; (2) state law actually conflicts with federal law; or (3) federal law occupies a legislative field to such an extent that it is reasonable to conclude that Congress left no room for state regulation in that field." Tocher v. City of Santa Ana, 219 F.3d 1040, 1045-46 (9th Cir.2000), overruled on other grounds by City of Columbus v. Ours Garage & Wrecker Serv., 536 U.S. 424, 122 S.Ct. 2226, 153 L.Ed.2d 430 (2002). However, the relevant portion of the United States Code, 49 U.S.C. 14501(c)(1), only preempts state and local regulation related to price, route, or service of a motor carrier with respect to the transportation of property. 49 U.S.C. 14501(c)(1) (2009). It explicitly does not restrict "the safety regulatory authority of a State with respect to motor vehicles." 49 U.S.C. 14501(c)(2)(A); see also City of Columbus, 536 U.S. at 442, 122 S.Ct. at 2237, 153 L.Ed.2d at 446 (holding that rules which are "genuinely responsive to safety concerns" are exempted from preemption).
Plaintiffs asserted that the challenged sections of the rules do not affect public safety and sought a declaration to that effect, as well as an injunction. Defendants argued that the rules in toto fall within the safety regulatory exception. The order subsequently entered by the trial court enjoined specific parts of five of the six paragraphs challenged:
We first note that the injunctive portion of the order does not set forth the reasons for its issuance as required by statute. Under N.C. Rule of Civil Procedure 65(d), "[e]very order granting an injunction. . . shall set forth the reasons for its issuance." N.C. Gen.Stat. § 1A-1, Rule 65(d) (2010) (emphasis added). However, "an injunctive order which does not state the reasons for its issuance is merely irregular, not void." Poor Richard's, Inc. v. Stone, 86 N.C. App. 137, 139-40, 356 S.E.2d 828, 830 (1987), rev'd on other grounds, 322 N.C. 61, 366 S.E.2d 697 (1988). Such irregular orders are properly corrected by a motion made before the trial court and will not be corrected on appeal. Schultz v. Ingram, 38 N.C. App. 422, 426, 248 S.E.2d 345, 349 (1978). Accordingly, even an irregular order is binding until corrected. Id.
Here, the order does not state the reasons for its issuance, beyond a bare statement that portions of the rules which the court did not enjoin are "reasonable and enforceable as written." Despite this failure to comply with our Rules of Civil Procedure, we consider the injunction on its merits and, for reasons which follow, we vacate in their entirety the injunctive terms of the trial court's order.
In Ramey v. Easley, a case considering the previous version of the wrecker rotation service rules, the plaintiff
Ramey v. Easley, 178 N.C. App. 197, 198, 632 S.E.2d 178, 179 (2006). In that case, we held that
Id. at 201, 632 S.E.2d at 181. Specifically, we held that
Id. at 203-04, 632 S.E.2d at 182-83. Thus, this Court has already determined that wrecker service rotation rules requiring a timely response to calls and imposing reasonable fees fall into the public safety regulatory exception. Further, our review of the record indicates that Paragraph 23 in the 2010 version of the rules considered here is virtually identical to Paragraph 22 of the version considered and approved in Ramey. We are bound by Ramey, and, therefore, the trial court's injunction as to Paragraphs 10 (reasonable fee requirement), 23 (return of personal property), and 28 (automatic by-pass provision) is vacated. See In re Civil Penalty, 324 N.C. 373, 384, 379 S.E.2d 30, 37 (1989) ("Where a panel of the Court of Appeals has decided the same issue, albeit in a different case, a subsequent panel of the same court is bound by that precedent, unless it has been overturned by a higher court.").
Further, the order purports to enjoin Paragraph 3 to the extent it "requires wrecker services to have a land-based telephone line" and "to own in fee simple the property upon which its business or storage facilities are located." However, Plaintiffs did not argue in their complaint, affidavits, or at the hearing that they were being subjected to such requirements. Indeed, our review reveals that Paragraph 3 of the rules contains neither the phrase "land-based" nor "fee simple."
Finally, we conclude that the trial court's injunction of Paragraph 22 "to the extent that it prohibits a driver holding a valid Commercial Drivers License from operating a wrecker while waiting on a certified driving record from the Division of Motor Vehicles" must be vacated because ensuring proper licensure is a matter "genuinely responsive to safety concerns." City of Columbus, 536 U.S. at 442, 122 S.Ct. at 2237, 153 L.Ed.2d at 446.
We next consider the order as a declaratory judgment. As noted above, the majority of the language in the order can only be construed as a permanent injunction. However, in paragraphs 2 through 8, the order's language enjoining specific portions of the challenged rules is followed by a "declaration" that "[a]ll other provisions of [the relevant rule section] are reasonable and enforceable as written."
"The Declaratory Judgment Act, [N.C. Gen.Stat. § ] 1-253 et seq., affords an appropriate procedure for alleviating uncertainty in the interpretation of written instruments.. . ." Hejl v. Hood, Hargett & Associates, Inc., 196 N.C. App. 299, 302, 674 S.E.2d 425, 427 (2009) (citation omitted). Such declarations "may be either affirmative or negative in form and effect; and such declarations shall have the force and effect of a final judgment or decree." N.C. Gen.Stat. § 1-253 (2009). "The trial court's declaratory judgment need not be in any particular form so long as it actually decides the issues in controversy." Poor Richard's, Inc., 86 N.C.App. at 139, 356 S.E.2d at 830 (citing 26 C.J.S. Declaratory Judgments, §§ 158, 161 (1956)). However, the trial court's judgment should clearly declare the rights of the parties and effectively dispose of the dispute.
"The standard of review in declaratory judgment actions where the trial court decides questions of fact is whether the trial court's findings are supported by any competent evidence. Where the findings are supported by competent evidence, the trial court's findings of fact are conclusive on appeal." Cross v. Capital Transaction Grp., Inc., 191 N.C. App. 115, 117, 661 S.E.2d 778, 780 (2008) (citation and quotation marks omitted), disc. review denied, 363 N.C. 124, 672 S.E.2d 687 (2009). "`However, the trial court's conclusions of law are reviewable de novo.'" Id. (quoting Browning v. Helff, 136 N.C. App. 420, 423, 524 S.E.2d 95, 98 (2000)).
Here, the trial court's order states that the parties have agreed that the only uncertainty to be alleviated is the "legality" of various portions of the rules. Our review of the hearing transcript affirms this assertion. Plaintiffs' arguments at the hearing were focused entirely on whether Defendants had the authority to enact the challenged portions of the rules pursuant to the safety regulatory authority exception. Plaintiffs sought a declaration that the challenged sections of the rules are federally preempted because they do not affect public safety, a legal determination. Thus, because there were no factual disputes and the trial court made no findings of fact, we review the order de novo.
We conclude that the trial court failed to clearly declare the rights of the parties and effectively dispose of the dispute by making "a full and complete declaration." Importantly, the order fails to directly address the questions raised by Plaintiffs in their complaint and at the declaratory judgment hearing: whether "the acts of [] Defendants are arbitrary and capricious and violate [the] North Carolina Constitution," whether the "methodology employed by [] Defendants [in the wrecker rotation program] . . . is arbitrary and not consistent with the . . . rules," and whether the challenged portions of the wrecker rotation rules are federally preempted because they are not related to public safety and, thus, fail to fall within the safety regulatory authority exception. As the trial court acknowledged in its order, these issues are questions of law, not fact.
As previously discussed, however, the order enjoins specific portions of the rules and then declares the remainder "reasonable and enforceable as written." While this construction might permit a logical inference that the enjoined portions are "unreasonable and unenforceable as written," this was not the issue before the trial court. Whether rules are "reasonable" does not resolve the question of whether they are federally preempted, a determination which requires an analysis of whether the challenged rules relate to public highway safety. Ramey, 178 N.C.App. at 202, 632 S.E.2d at 181-82. However, as discussed above, this Court's decision in Ramey precludes the trial court from reconsidering whether these portions of the rules are federally preempted. Moreover, the trial court's determination regarding the "reasonableness" of the rules also failed to resolve the question of whether they are being implemented in a manner that is arbitrary. Because the trial court failed to decide this issue in controversy, we remand for it to do so.
In sum, we vacate the order to the extent it purports to enjoin portions of paragraphs 3, 10, 22, 23 and 28. On remand, the trial court may not revisit the question of federal preemption as to these or any other rules controlled by Ramey. Instead, on remand, the trial court shall decide the issue of whether Defendants are implementing and applying the wrecker rotation service rules in an arbitrary manner.
VACATED IN PART; REMANDED IN PART.
Chief Judge MARTIN and Judge THIGPEN concur.