{ "id": 8350517, "name": "STATE OF NORTH CAROLINA ON RELATION OF THE BANKING COMMISSION AGAINST DOUGLAS WEISS; BLAINE WEISS, Petitioner v. NORTH CAROLINA COMISSIONER OF BANKS & NORTH CAROLINA BANKING COMMISSION, Respondents", "name_abbreviation": "State ex rel. Banking Commission v. Weiss", "decision_date": "2005-10-18", "docket_number": "No. COA04-1467", "first_page": "78", "last_page": "93", "citations": [ { "type": "official", "cite": "174 N.C. App. 78" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "468 S.E.2d 557", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1996, "pin_cites": [ { "page": "562" } ], "opinion_index": 0 }, { "cite": "122 N.C. App. 58", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11915396 ], "year": 1996, "opinion_index": 0, "case_paths": [ "/nc-app/122/0058-01" ] }, { "cite": "269 S.E.2d 547", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1980, "pin_cites": [ { "page": "565", "parenthetical": "citations omitted" } ], "opinion_index": 0 }, { "cite": "300 N.C. 381", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8562647 ], "year": 1980, "pin_cites": [ { "page": "406", "parenthetical": "citations omitted" } ], "opinion_index": 0, "case_paths": [ "/nc/300/0381-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 53-243.11", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "opinion_index": 0 }, { "cite": "154 S.E.2d 548", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1967, "pin_cites": [ { "page": "555" } ], "opinion_index": 0 }, { "cite": "270 N.C. 323", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8567865 ], "year": 1967, "pin_cites": [ { "page": "332-33" } ], "opinion_index": 0, "case_paths": [ "/nc/270/0323-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 53-243.01", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "weight": 3, "year": 2003, "pin_cites": [ { "page": "(18)" }, { "parenthetical": "emphasis added" } ], "opinion_index": 0 }, { "cite": "N.C. Gen. Stat. \u00a7 53-243.05", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "weight": 5, "pin_cites": [ { "page": "(a)", "parenthetical": "4-6" }, { "page": "(b)", "parenthetical": "l-2" }, { "page": "(i)" } ], "opinion_index": 0 }, { "cite": "N.C. Gen. Stat. \u00a7 53-243.02", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "weight": 2, "year": 2003, "pin_cites": [ { "page": "(b)" }, { "page": "(c)" } ], "opinion_index": 0 }, { "cite": "480 S.E.2d 681", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1997, "pin_cites": [ { "page": "683", "parenthetical": "citations omitted" } ], "opinion_index": 0 }, { "cite": "345 N.C. 468", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 53883 ], "year": 1997, "pin_cites": [ { "page": "472", "parenthetical": "citations omitted" } ], "opinion_index": 0, "case_paths": [ "/nc/345/0468-01" ] }, { "cite": "582 S.E.2d 651", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2003, "pin_cites": [ { "page": "653", "parenthetical": "citations omitted" } ], "opinion_index": 0 }, { "cite": "159 N.C. App. 66", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8953952 ], "year": 2003, "pin_cites": [ { "page": "68", "parenthetical": "citations omitted" } ], "opinion_index": 0, "case_paths": [ "/nc-app/159/0066-01" ] }, { "cite": "599 S.E.2d 888", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2004, "pin_cites": [ { "page": "898" } ], "opinion_index": 0 }, { "cite": "358 N.C. 649", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2987357 ], "year": 2004, "pin_cites": [ { "page": "665" } ], "opinion_index": 0, "case_paths": [ "/nc/358/0649-01" ] }, { "cite": "483 S.E.2d 388", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1997, "pin_cites": [ { "page": "392" }, { "page": "392", "parenthetical": "citation omitted" } ], "opinion_index": 0 }, { "cite": "345 N.C. 699", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 53839 ], "weight": 2, "year": 1997, "pin_cites": [ { "page": "706" }, { "page": "706" } ], "opinion_index": 0, "case_paths": [ "/nc/345/0699-01" ] }, { "cite": "435 S.E.2d 359", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1993, "pin_cites": [ { "page": "363" } ], "opinion_index": 0 }, { "cite": "112 N.C. App. 161", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8520617 ], "year": 1993, "pin_cites": [ { "page": "165" } ], "opinion_index": 0, "case_paths": [ "/nc-app/112/0161-01" ] }, { "cite": "484 S.E.2d 808", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 5, "year": 1997, "pin_cites": [ { "page": "811" }, { "page": "811", "parenthetical": "citation omitted" }, { "page": "811" }, { "page": "811" }, { "page": "814-15", "parenthetical": "citation omitted" } ], "opinion_index": 0 }, { "cite": "126 N.C. App. 117", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11708933 ], "weight": 5, "year": 1997, "pin_cites": [ { "page": "122" }, { "page": "122" }, { "page": "123" }, { "page": "122" }, { "page": "128" } ], "opinion_index": 0, "case_paths": [ "/nc-app/126/0117-01" ] }, { "cite": "443 S.E.2d. 114", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1994, "pin_cites": [ { "page": "118" } ], "opinion_index": 0 }, { "cite": "114 N.C. App. 668", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8527936 ], "year": 1994, "pin_cites": [ { "page": "674" } ], "opinion_index": 0, "case_paths": [ "/nc-app/114/0668-01" ] } ], "analysis": { "cardinality": 1077, "char_count": 32322, "ocr_confidence": 0.757, "pagerank": { "raw": 8.062173537609868e-08, "percentile": 0.4664094315923438 }, "sha256": "0cf9923efae790b817f6d4d54f112d9aafa90611b26ac17e5e2a1acae3128008", "simhash": "1:98bf52f6fdadeeda", "word_count": 5000 }, "last_updated": "2023-07-14T21:19:44.302822+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges HUDSON and GEER concur." ], "parties": [ "STATE OF NORTH CAROLINA ON RELATION OF THE BANKING COMMISSION AGAINST DOUGLAS WEISS BLAINE WEISS, Petitioner v. NORTH CAROLINA COMISSIONER OF BANKS & NORTH CAROLINA BANKING COMMISSION, Respondents" ], "opinions": [ { "text": "HUNTER, Judge.\nDouglas Weiss (\u201cDouglas\u201d) and Blaine Weiss (\u201cBlaine\u201d) (collectively \u201cappellants\u201d) appeal from orders affirming denials by the North Carolina State Banking Commission (\u201cBanking Commission\u201d) of appellants\u2019 applications for licensure as mortgage loan officers entered 6 August 2004. As we find no error, we affirm the trial court\u2019s orders.\n. Appellants were the sole shareholders, directors, and officers of Superior Mortgage Company (\u201cSuperior\u201d). Superior received numerous consumer complaints filed with the Office of the Commissioner of Banks (\u201cOCOB\u201d). Superior was found to have engaged in unfair and deceptive trade practices, and a default judgment was awarded against the company for failure to honor a refinancing agreement. In 2000, Superior surrendered its mortgage broker registration to the OCOB and filed for bankruptcy. Appellants then became employed as loan officers for a mortgage broker, United Home Mortgage (\u201cUnited Home\u201d).\nIn 2001, legislation was enacted which required, for the first time, licensure by the OCOB of all mortgage brokers, bankers, and loan officers. This legislation, entitled the Mortgage Lending Act, became effective 1 July 2002.\nOn 9 September 2002, appellants each filed applications with OCOB for licensure as mortgage loan officers. Because of their previous experience in the industry, both appellants filed under the grandfather provision of an uncodified portion of the Mortgage Lending Act, enacted as 2001 N.C. Sess. Laws ch. 393, \u00a7 5(b). The OCOB denied both appellants\u2019 applications on 6 February 2003.\nAppellants appealed the denial and the matters were heard before the Commissioner of Banks (\u201cCommissioner\u201d) in June and July 2003. A Final Decision and Order was entered by the Commissioner on 8 September 2003, affirming the preliminary denials of the mortgage loan officer licenses.\nAppellants appealed the Commissioner\u2019s Orders to the Banking Commission on 25 September 2003. An Appellate Panel, after review of the appeals, recommended to the Full Banking Commission that the Orders be affirmed. On 21 January 2004, the Banking Commission upheld the Final Decision and Orders.\nAppellants filed for review of the Orders in superior court. On 6 August 2004, the superior court affirmed the decisions of the Banking Commission. Appellants now appeal to this Court. We note that where appellants raise identical issues, we address those assignments of error together.\nBefore addressing the merits of appellants\u2019 claims, we first note the applicable standard of review. The proper manner of review of a final agency decision \u201cdepends upon the particular issues presented on appeal.\u201d Amanini v. N.C. Dept. of Human Resources, 114 N.C. App. 668, 674, 443 S.E.2d. 114, 118 (1994). Our statutes provide that a reviewing trial court may\nreverse or modify the agency\u2019s decision, or adopt the administrative law judge\u2019s decision if the substantial rights of the petitioners may have been prejudiced because the agency\u2019s findings, inferences, conclusions, or decisions are:\n(1) In violation of constitutional provisions;\n(2) In excess of the statutory authority or jurisdiction of the agency;\n(3) Made upon unlawful procedure;\n(4) Affected by other error of law;\n(5) Unsupported by substantial evidence admissible under G.S. 150B-29(a), 150B-30, or 150B-31 in view of the entire record as submitted; or\n(6) Arbitrary, capricious, or an abuse of discretion.\nN.C. Gen. Stat. \u00a7 150B-51(b) (2003). De novo review is proper when the issue raised is whether an agency decision was based on an error of law. Beneficial North Carolina v. State ex rel. Banking Comm., 126 N.C. App. 117, 122, 484 S.E.2d 808, 811 (1997). However, when the appellant challenges \u201c(1) whether the agency\u2019s decision was supported by the evidence or (2) whether the decision was arbitrary or capricious, then the reviewing court must apply the \u2018whole record\u2019 test.\u201d In re Appeal by McCrary, 112 N.C. App. 161, 165, 435 S.E.2d 359, 363 (1993). \u201cThe \u2018whole record\u2019 test \u2018requires the reviewing court to examine all competent evidence (the \u201cwhole record\u201d) in order to determine whether the agency decision is supported by \u201csubstantial evidence.\u201d \u2019 \u201d Beneficial, 126 N.C. App. at 122, 484 S.E.2d at 811 (citation omitted).\n\u201cThe standard of review for an appellate court when reviewing a superior court order affirming or reversing a decision of an administrative agency requires the appellate court to examine \u2018the trial court\u2019s order for error of law\u2019 just as in any other civil case.\u201d Beneficial, 126 N.C. App. at 123, 484 S.E.2d at 811 (quoting ACT-UP Triangle v. Commission for Health Services, 345 N.C. 699, 706, 483 S.E.2d 388, 392 (1997)). \u201c \u2018The process has been described as a twofold task: (1) determining whether the trial court exercised the appropriate scope of review and, if appropriate, (2) deciding whether the court did so properly.\u2019 \u201d ACT-UP Triangle, 345 N.C. at 706, 483 S.E.2d at 392 (citation omitted). However, our Supreme Court has recently affirmed that:\n[I]n cases appealed from an administrative tribunal under the APA, it is well settled that the trial court\u2019s erroneous application of the standard of review does not automatically necessitate remand, provided the appellate court can reasonably determine from the record whether the petitioner\u2019s asserted grounds for challenging the agency\u2019s final decision warrant reversal or modification of that decision under the applicable provisions of N.C.G.S. \u00a7 150B-51(b).\nN.C. Dep\u2019t of Env\u2019t & Natural Res. v. Carroll, 358 N.C. 649, 665, 599 S.E.2d 888, 898 (2004).\nI.\nAppellants first contend the Banking Commission erred in not granting appellants\u2019 loan officer license applications under the grandfather provisions of the Mortgage Lending Act. As this assignment raises an error of law, we review the issue de novo and find no error.\nAppellants\u2019 contention raises a question of first impression for this Court. We therefore carefully examine the statutes which govern such licensure. In interpreting our state statutes, \u201cthe primary function of this Court is to \u2018ensure that the purpose of the Legislature in enacting the law, sometimes referred to as legislative intent, is accomplished.\u2019 To determine legislative intent, we examine the language and purpose of the statute.\u201d Albemarle Mental Health Ctr. v. N.C. Dep\u2019t of Health & Human Servs., 159 N.C. App. 66, 68, 582 S.E.2d 651, 653 (2003) (citations omitted). \u201c \u2018Statutory interpretation properly begins with an examination of the plain words of the statute.\u2019 \u2018If the language of the statute is clear and is not ambiguous, we must conclude that the legislature intended the statute to be implemented according to the plain meaning of its terms.\u2019 \u201d Three Guys Real Estate v. Harnett County, 345 N.C. 468, 472, 480 S.E.2d 681, 683 (1997) (citations omitted).\nThe Mortgage Lending Act, N.C. Gen. Stat. Ch. 53, Art. 19A (2003), requires a loan officer license for any individual who \u201cengage [s] in the solicitation and acceptance of applications for mortgage loans[.]\u201d N.C. Gen. Stat. \u00a7 53-243.02(b) (2003). Such a licence is only effective when the loan officer is employed by a licensed mortgage broker or mortgage banker. N.C. Gen. Stat. \u00a7 53-243.02(c).\nQualifications for licensure as a mortgage broker, mortgage banker, or loan officer are set out in section 53-243.05. The statute requires, among other information:\n(4) The qualifications and business history of the applicant and, if applicable, the business history of any partner, officer, or director, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling the applicant, including: (i) a description of any injunction or administrative order by any state or federal authority to which the person is or has been subject; (ii) a conviction of a misdemeanor involving fraudulent dealings or moral turpitude or relating to any aspect of the residential mortgage lending business; (iii) any felony convictions.\n(5) With respect to an application for licensing as a mortgage banker or broker, the applicant\u2019s financial condition, credit history, and business history; and with respect to the application for licensing as a loan officer, the applicant\u2019s credit history and business history.\n(6) The applicant\u2019s consent to a criminal history record check and a set of the applicant\u2019s fingerprints in a form acceptable to the Commissioner. Refusal to consent to a criminal history record check may constitute grounds for the Commissioner to deny licensure to the applicant.\nN.C. Gen. Stat. \u00a7 53-243.05(a)(4-6) (2003). The statute then specifically requires that loan officer applicants be at least eighteen years of age and have \u201csatisfactorily completed, within the three years immediately preceding the date application is made, a mortgage lending fundamentals course approved by the Commissioner.\u201d N.C. Gen. Stat. \u00a7 53-243.05(b)(l-2).\nHowever, 2001 N.C. Sess. Laws ch. 393 includes a grandfather provision governing individuals already employed in the mortgage lending business. 2001 N.C. Sess. Laws ch. 393, \u00a7 5(b) states:\n(b) Any qualified person who files, within 90 days after this act becomes effective, a sworn application with the Commissioner stating that he or she has met the definition of a qualified person under G.S. 53-243.01(18), enacted by Section 2 of this act, including a statement that he or she has not been convicted of any felony or any misdemeanor involving moral turpitude, shall be issued a license as a loan officer from the Commissioner without having to meet the training requirements for licensure under G.S. 53-243.05(b), enacted by Section 2 of this act.\nId. \u201cQualified person\u201d is defined in N.C. Gen. Stat. \u00a7 53-243.01(18) (2003) as:\nA person who is employed as a loan officer by a qualified lender, or by a mortgage banker or broker registered with the Commissioner under former Article 19 of this Chapter, or who is a general partner, manager, or officer of a qualified lender, registered mortgage banker, or registered mortgage broker.\nId.\nAppellants here contend that, as they were employed as loan officers, met the definition of qualified person, and filed within the required ninety days, the OCOB was required to issue them a loan officer license under 2001 N.C. Sess. Laws ch. 393, \u00a7 5(b). However, a plain language reading of 2001 N.C. Sess. Laws ch. 393, \u00a7 5(b) indicates that the grandfather clause exempts practicing loan officers only from the required training, not from the additional statutory requirements. The grandfather clause specifically states that such an applicant \u201cshall be issued a license . . . without having to meet the training requirements for licensure under G.S. 53-243.05(b)[.]\u201d Id. (emphasis added). Applicants are not relieved of the requirements of the remainder of \u00a7 53-243.05 discussed supra. Further, section 53-243.05(i) specifically states that:\n(i) If the Commissioner determines that an applicant meets the qualifications for licensure and finds that the financial responsibility, character, and general fitness of the applicant are such as to command the confidence of the community and to warrant belief that the business will be operated honestly and fairly, the Commissioner shall issue a license to the applicant.\nN.C. Gen. Stat. \u00a7 53-243.05(i). Therefore, when read as a whole, the plain language of the statute indicates that the grandfather clause provision was intended to exempt practicing loan officers only from the three-year training requirement at the time of licensure, not to automatically grant licenses to all current loan officers, including those whose qualifications would not \u201cwarrant belief that the business will be operated honestly and fairly[.]\u201d Id. We affirm the trial court\u2019s conclusion that the statute does not exempt appellants from the statutory requirements other than training, and that the Banking Commission therefore did not err in applying the governing statute.\nII.\nAppellants next contend the Banking Commission erred in making appellants, as corporate officers, personally responsible for conduct of a subordinate employee. We disagree.\nAppellants specifically refer to findings made regarding transactions conducted by one of Superior\u2019s employees, Michael D. Edwards (\u201cEdwards\u201d), which resulted in a judgment against Superior. The Banking Commission found as to Blaine that:\n12. Superior engaged in business dealings with Peter Pike and his wife Heather, including false and misleading representations by Edwards on behalf of Superior, that were found by the Superior Court of Alamance County to be unfair and deceptive trade practices, resulting in an award of treble damages against Superior.\n13. Although Appellant testified that he would have terminated Edwards for his conduct towards the PikesQ, there is no evidence that he took any such action. Further, there is no evidence that Appellant took any steps to address the Pikes\u2019 complaint or to supervise Edwards\u2019 conduct in any meaningful way prior to the time of such complaint.\n16. Superior had no code of ethics or conduct and does not appear to have had any system of oversight or controls to ensure compliance with law and fair treatment of customers. There is no evidence that Superior took any steps to correct its obvious deficiencies with regards to the payment of appraisers or closing shortages.\nThe Banking Commission made similar findings as to Douglas and concluded, in part based on the findings set out above, that appellants failed to meet the statutory standard required for licen-sure, that is \u201cthat the financial responsibility, character, and general fitness of the applicant are such as to command the confidence of the community and to warrant belief that the business will be operated honestly and fairly.\u201d Specifically, the Banking Commission concluded as to both applicants that:\nAppellant\u2019s actions and omissions as [officer], shareholder and de facto general partner in Superior show a reckless disregard for the fair treatment of customers and compliance with applicable law and ethical business practices. Appellant\u2019s management of Superior and his testimony in this matter do not show an appreciation for the needs of customers or the demands of the law. On the basis of the record, Appellant does not have the character, competence or financial responsibility to conduct business as a loan officer or any other position in the mortgage lending industry.\nAppellants\u2019 contention that the Banking Commission held appellants liable for the actions of a corporate agent when they did not directly participate in the wrongdoing themselves is not supported by the record. The Banking Commission\u2019s denials of licensure clearly state that the basis for its conclusions that appellants lacked \u201ccharacter [and] competence\u201d were based on appellants\u2019 own failure to address consumer complaints and ensure fair and ethical treatment of consumers, and further that appellants lacked \u201cfinancial responsibility\u201d based on appellants\u2019 own actions in failing to show financial responsibility by not correcting deficiencies in payments to appraisers. Thus as the Banking Commission\u2019s conclusions rely on findings supported by the record as to appellants\u2019 own actions and responses to consumer complaints against the business of which they were the sole shareholders, directors, and officers, we find appellants\u2019 second assignment of error without merit.\nIII.\nAppellants next contend the Banking Commission erred in treating as conclusive a default judgment against Superior where unfair and deceptive practices were found. We disagree.\nThe Commission found, as set out supra in Findings 12 and 13, that Superior had engaged in false and misleading representation to Peter and Heather Pike, and that the Superior Court of Alamance County found these representations to be unfair and deceptive trade practices. Appellants contend that the Commission improperly found unfair trade practices had been committed by relying on the trial court\u2019s findings in the default judgment.\nAfter a careful review of the Commission\u2019s order, we find no evidence that the Commission relied on the default judgment to conclusively establish unfair and deceptive trade practices. Rather, the record shows that independent evidence was offered by Peter Pike as to the unfair representations made by Superior regarding the mortgage transaction, and to the entry of a default judgment by the trial court after appellants failed to respond to the action. Testimony by Douglas also supports the Banking Commission\u2019s finding regarding the judgment. In his testimony before the Banking Commission, Douglas stated that the Pike transaction had been improperly handled, and that as an officer of the company he took responsibility for that error. The Commission\u2019s findings reflect this independent evidence, stating:\n13. ... Appellant did not present any evidence that the Pike claim was not justified or that the conduct of Superior personnel was ethical or appropriate in the circumstances. The Pike claim was the result of Superior\u2019s method of business operations for which Appellant was jointly responsible, and that claim was the probable consequence of such business operations.\nTherefore, the findings indicate that the Commission did not treat the default judgment as factually binding, but rather as evidence of a claim which, coupled with the testimony of Pike and Douglas, demonstrated a pattern of business operations regarding false and misleading representations. The Commission, therefore, did not improperly rely on the default judgment.\nIV.\nAppellants next contend the Banking Commission erred in finding validity in consumer complaints against Superior by reason of their large number. We disagree.\nWith regards t\u00f3 consumer complaints, the Banking Commission found:\n9. Superior was the subject of numerous consumer and appraiser complaints, characterized by witness George King of OCOB as, \u201cExceedingly high.\u201d . . . The twenty-nine complaints presented in this matter included non-payment of appraisers, misleading solicitation of business, and the allegations of the Pikes and Mussons referred to below.\n10. Appellant did not deny the existence of the complaints \u25a0 against Superior[.]\nAppellants correctly contend that under the North Carolina Rules of Evidence, lay witness testimony is limited to opinions rationally based on the perception of the witness. N.C. Gen. Stat. \u00a7 8C-1, Rule 701 (2003). Here, George King (\u201cKing\u201d) testified that during the period he was ombudsman for OCOB, twenty-nine complaints over a period ' of three and a half years were received regarding Superior\u2019s services, and that such a number was exceedingly high in comparison with other mortgage brokers. As King testified from personal knowledge as to the number, and not as to the validity of complaints received, and the Banking Commission made findings only to that effect, we find appellants\u2019 assignment of error is without merit.\nV.\nAppellants next contend the Banking Commission erred in making findings on the basis of opinion evidence as to the purpose of legislation. We disagree.\nThe Banking Commission found:\n22. On the basis of his involvement with Superior, George King of OCOB offered the opinion that the business practices of Superior were the kind of practices that resulted in the enactment of the Mortgage Lending Act, as was an intention by the General Assembly to keep people like Appellant and his brother out of the mortgage lending business.\nAppellant contends the Banking Commission erred in making such a finding as \u201c[t]estimony, even by members of the Legislature which adopted the statute, as to its purpose and the construction intended to be given by the Legislature to its terms, is not competent evidence upon which the court can make its determination as to the meaning of the statutory provision.\u201d Milk Commission v. Food Stores, 270 N.C. 323, 332-33, 154 S.E.2d 548, 555 (1967).\nHere, however, the Banking Commission\u2019s conclusions as to the purposes of the Mortgage Lending Act are based on the language of the statute, rather than on King\u2019s opinion. The Banking Commission concluded:\n6. It is important to note that the Mortgage Lending Act was enacted to address numerous fraudulent and unethical practices in the mortgage lending'industry, including the making of false or misleading statements, failure properly to apply loan proceeds, and failure promptly to pay appraisers. N.C. Gen. Stat. \u00a7 53-243.11. The record in this matter is replete with examples of the kind of conduct the Mortgage Lending Act is intended to prevent.\nAs the Banking Commission did not rely on the opinion testimony of King, but rather on the plain language of the statute itself in determining the purpose of the Mortgage Lending Act, we find the Banking Commission did not err in its findings of King\u2019s opinion.\nVI.\nAppellants next contend the Banking Commission erred in making findings of fact not based on competent, material, and substantial evidence. We disagree.\nAs noted above, a challenge as to whether an agency\u2019s decision was supported by the evidence requires review of all competent evidence, i.e. the \u201cwhole record,\u201d in order to determine whether the agency decision is supported by substantial evidence. Beneficial, 126 N.C. App. at 122, 484 S.E.2d at 811.\n. A careful review of the whole record in this case reveals that substantial evidence supported the challenged findings. Blaine first chai-lenges Finding of Fact 12 for the reasons stated supra in Section II of this opinion. As discussed in that section, sufficient evidence was presented to support the Banking Commission\u2019s finding.\nBlaine next challenges Finding of Fact 13, set out supra. A review of the record reveals no evidence was presented that appellant took any action towards Edwards for his improper actions in the Pike transaction. The Banking Commission\u2019s finding is therefore supported.\nBlaine finally challenges Finding of Fact 18: \u201cAppellant did not introduce evidence that such advances approximated what he had taken out of the firm while it was in operation.\u201d Appellant contends there was no basis for requiring such advances to be equal. However, ample evidence was presented that both appellants used company resources to purchase personal items unrelated to the business in excess of $100,000.00, and that unsatisfied debts remained after Superior filed for bankruptcy. Therefore substantial evidence supported the finding.\nDouglas first challenges Finding of Fact 11, that \u201c[a]ppellant knew, or in the exercise of reasonable care should have known, of Superior\u2019s non-payment of appraisers and pay-off shortages and did nothing to deal with either matter.\u201d Appellant\u2019s own testimony established that he was the Vice-President, Secretary, and Treasurer of Superior, and ample evidence was presented that appraisers were not paid and pay-off shortages were unremedied for varying lengths of time by Superior. As there is sufficient evidence in the record, the Banking Commission did not err in this finding.\nDouglas next challenges Finding of Fact 14, regarding the Mussons\u2019 transaction. Finding of Fact 14 states in part:\n(i) the Mussons\u2019 were solicited by means of a mailer that was at best misleading; (ii) representations were made to the Mussons\u2019 regarding the structure of the proposed refinancing that were false and misleading; (iii) the HUD closing statements prepared in respect of the refinancing were materially incorrect; (iv) there was a material shortage with regard to one of the two loans to be refinanced that resulted in the Mussons\u2019 being obligated for three loans and (v) even if competently completed, the transaction did not result in any material new benefit to the Mussons.\nEvidence in the record supports all of the Banking Commission\u2019s findings as to the Musson transaction, and further, Douglas himself testified before the Banking Commission that the loan was mishandled. Therefore the Banking Commission did not err in this finding.\nFinally, Douglas contends that the Banking Commission erred in Finding of Fact 22 regarding his testimony as to his wife\u2019s occupation, which the Banking Commission found showed \u201ca wanton indifference to the truthfulness of sworn testimony.\u201d A review of Douglas\u2019s testimony in this matter supports the finding. Douglas stated under oath that his wife was not employed outside the home and had no special skills, then retracted his testimony when confronted with evidence that his wife was a licensed mortgage loan officer employed by United Home. The Banking Commission therefore did not err in this finding.\nAs a review of the whole record reveals substantial evidence supporting the findings, we find no merit to appellants\u2019 assignment of error.\nVII.\nAppellants next contend the Banking Commission erred in failing to make findings of fact required by the evidence. Appellants argue that additional findings could have been made from evidence presented to the Banking Commission. We disagree.\nOur Supreme Court has previously addressed the issue of the role of the administrative agency in making findings of fact.\nNorth Carolina is in accord with the well-established rule that it is for the administrative body, in an adjudicatory proceeding, to determine the weight and sufficiency of the evidence and the credibility of the witnesses, to draw inferences from the facts, and to appraise conflicting and circumstantial evidence. The credibility of witnesses and the probative value of particular testimony are for the administrative body to determine, and it may accept or reject in whole or part the testimony of any witness.\nComr. of Insurance v. Rate Bureau, 300 N.C. 381, 406, 269 S.E.2d 547, 565 (1980) (citations omitted). Here, a review of the evidence and findings of fact demonstrates that the Banking Commission properly considered the evidence in the whole record in making the findings of fact. Appellants\u2019 contention is therefore without merit.\nVIII.\nAppellants next contend the Banking Commission erred in acting arbitrarily and capriciously in denying appellants\u2019 license applications. We disagree.\n\u201cAn arbitrary or capricious decision is one \u2018without any rational basis in the record.\u2019 \u201d Beneficial, 126 N.C. App. at 128, 484 S.E.2d at 814-15 (citation omitted). Here, the Banking Commission made detailed findings of fact and conclusions of law as to both appellants which rationally support the denial of appellants\u2019 applications. The Banking Commission specifically considered appellants\u2019 past actions in the mortgage lending industry in arriving at its conclusion that appellants failed to meet the statutory requirements for licensure. Further, as discussed supra, substantial evidence supported the Banking Commission\u2019s findings. Therefore, we find the Banking Commission\u2019s decision has a rational basis in the record and was not arbitrary or capricious.\nIX.\nDouglas finally contends the Banking Commission erred in denying his motion for rehearing and appointment of independent counsel. Douglas argues that as the prosecutor in this proceeding, L. McNeil Chestnut (\u201cChestnut\u201d), a Special Deputy Attorney General, is also general counsel to the OCOB, an impermissible appearance of impartiality was created. We disagree.\nIn Dorsey v. UNC-Wilmington, 122 N.C. App. 58, 468 S.E.2d 557 (1996), this Court held that:\nUnder G.S. \u00a7 114-2(2), it is the duty of this State\u2019s Attorney General \u201c[t]o represent all State departments, agencies, institutions, commissions, bureaus or other organized activities of the State which receive support in whole or in part from the State.\u201d ... In similar circumstances, we have held that no per se violation of due process arises from such a combination of advisory function and advocacy function in the absence of a showing of actual bias or unfair prejudice.\nId. at 66-67, 468 S.E.2d at 562.\nHere, appellants do not contend that they suffered actual bias or prejudice as a result of Chestnut\u2019s involvement as prosecutor, merely alleging that the appearance created the harm of an unbiased decision maker. As appellants allege no actual harm, no per se violation of due process may be found.\nAfter a careful review of the record, we find no error of law and affirm the trial court\u2019s order affirming the Final Agency Decision of the Banking Commission.\nAffirmed.\nJudges HUDSON and GEER concur.", "type": "majority", "author": "HUNTER, Judge." } ], "attorneys": [ "Smith, James, Rowlett & Cohen, L.L.P., by Norman B. Smith, for petitioner-appellants.", "Attorney General Roy A. Cooper, III, by Special Deputy Attorney General L. McNeil Chestnut and Assistant Attorney General Anne J. Brown, for respondent-appellee." ], "corrections": "", "head_matter": "STATE OF NORTH CAROLINA ON RELATION OF THE BANKING COMMISSION AGAINST DOUGLAS WEISS BLAINE WEISS, Petitioner v. NORTH CAROLINA COMISSIONER OF BANKS & NORTH CAROLINA BANKING COMMISSION, Respondents\nNo. COA04-1467\n(Filed 18 October 2005)\n1. Banks and Banking\u2014 mortgage loan officer licensure\u2014 grandfather provisions\nThe Banking Commission did not err by refusing appellants\u2019 loan officer license applications under the grandfather provisions of the Mortgage Lending Act. A plain language reading of the statute indicates that the grandfather clause exempts practicing loan officers from the required training only, not from additional statutory requirements.\n2. Banks and Banking\u2014 mortgage loan officer licensure\u2014 responsibility for subordinate employee\nThere was no merit to the assertion that the Banking Commission erred by making applicants for licensure as mortgage loan officers responsible for the conduct of a subordinate employee. The Banking Commission\u2019s conclusions rely on findings supported by the record as to appellants\u2019 own actions and responses to consumer complaints.\n3. Banks and Banking\u2014 mortgage loan officer licensure\u2014 default judgment for unfair and deceptive practices \u2014 not conclusive\nThe Banking Commission did not treat as conclusive a default judgment for unfair and deceptive practices against a mortgage company owned by the applicants for mortgage loan officer licensure. The Commission\u2019s findings indicate that the default judgment was treated as evidence of a claim which, coupled with other testimony, demonstrated a pattern of business operations.\n4. Banks and Banking\u2014 mortgage loan officer licensure\u2014 complaints \u2014 reliance on number, not validity\nThe Banking Commission did not err when denying licenses for mortgage loan officers in its findings about the number of consumer complaints against a company owned by appellants. Testimony from the ombudsman in the Office of the Commissioner of Banks was from personal knowledge as to the number and not the validity of the complaints, and the Commission\u2019s findings were only to that effect.\n5. Banks and Banking\u2014 mortgage loan officer licensure \u2014 purpose \u2014 plain language of Act\nThe Banking Commission relied on the plain language of the Mortgage Lending Act in determining its purpose, and did not rely on opinion testimony.\n6. Banks and Banking\u2014 mortgage loan officer licensure\u2014 findings \u2014 sufficiency of evidence\nEvidence in the whole record supported the Banking Commission\u2019s findings in denying mortgage loan officer licensure.\n7. Banks and Banking\u2014 mortgage loan officer licensure \u2014 failure to make certain findings\nThe Banking Commission did not err by failing to make findings appellants contended could have been made in a case concerning mortgage loan officer licensure. The Commission properly considered the evidence in the whole record in making its findings.\n8. Banks and Banking\u2014 mortgage loan officer licensure\u2014 denial not arbitrary\nThe Banking Commission\u2019s decision to deny mortgage loan officer licensure was not arbitrary or capricious where the Commission made detailed findings and conclusions which rationally support the denial of appellants\u2019 applications.\n9. Banks and Banking\u2014 mortgage loan officer licensure\u2014 general counsel as prosecutor \u2014 due process\nAppellants alleged no bias or prejudice from the participation of the general counsel of the Office of Commissioner of Banks as the prosecutor in the proceeding in which they were denied mortgage loan officer licensure. As they allege no actual harm, no per se violation of due process may be found.\nAppeal by petitioners from orders entered 6 August 2004 by Judge Orlando F. Hudson, Jr. in Wake County Superior Court. Heard in the Court of Appeals 11 May 2005.\nSmith, James, Rowlett & Cohen, L.L.P., by Norman B. Smith, for petitioner-appellants.\nAttorney General Roy A. Cooper, III, by Special Deputy Attorney General L. McNeil Chestnut and Assistant Attorney General Anne J. Brown, for respondent-appellee." }, "file_name": "0078-01", "first_page_order": 108, "last_page_order": 123 }