{ "id": 6777744, "name": "EQUITY SOLUTIONS OF THE CAROLINAS, INC., Petitioner v. NORTH CAROLINA DEPARTMENT OF STATE TREASURER, Respondent", "name_abbreviation": "Equity Solutions of the Carolinas, Inc. v. North Carolina Department of State Treasurer", "decision_date": "2014-02-18", "docket_number": "No. COA13-300", "first_page": "384", "last_page": "397", "citations": [ { "type": "official", "cite": "232 N.C. App. 384" } ], "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": "578 S.E.2d 666", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 7, "year": 2003, "pin_cites": [ { "page": "667" }, { "page": "668" }, { "page": "668" }, { "page": "668-69" }, { "page": "669" } ], "opinion_index": 0 }, { "cite": "157 N.C. App. 344", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 9186624 ], "weight": 2, "year": 2003, "pin_cites": [ { "page": "345" }, { "page": "347" } ], "opinion_index": 0, "case_paths": [ "/nc-app/157/0344-01" ] }, { "cite": "706 S.E.2d 254", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 2011, "pin_cites": [ { "page": "279, 282" } ], "opinion_index": 0 }, { "cite": "365 N.C. 87", "category": "reporters:state", "reporter": "N.C.", "year": 2011, "opinion_index": 0 }, { "cite": "691 S.E.2d 421", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 2010, "pin_cites": [ { "page": "423, 425" } ], "opinion_index": 0 }, { "cite": "203 N.C. App. 276", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 4175855 ], "year": 2010, "opinion_index": 0, "case_paths": [ "/nc-app/203/0276-01" ] }, { "cite": "436 S.E.2d 390", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1993, "pin_cites": [ { "page": "393" }, { "page": "393", "parenthetical": "\"Whereas a declaratory ruling by definition involves the application of a statute or agency rule to a given state of facts, the facts regarding [the petitioner's] proposed surgical services were established by the record in the contested case.\"" } ], "opinion_index": 0 }, { "cite": "112 N.C. App. 557", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8522697 ], "weight": 2, "year": 1993, "pin_cites": [ { "page": "563" }, { "page": "563" } ], "opinion_index": 0, "case_paths": [ "/nc-app/112/0557-01" ] }, { "cite": "550 S.E.2d 524", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 4, "year": 2001, "pin_cites": [ { "page": "525-26", "parenthetical": "setting out pertinent facts in record supporting agency's determination that good cause existed to decline to issue declaratory ruling" }, { "page": "526" }, { "page": "526-27" } ], "opinion_index": 0 }, { "cite": "145 N.C. App. 190", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11436650 ], "year": 2001, "pin_cites": [ { "page": "191-92", "parenthetical": "setting out pertinent facts in record supporting agency's determination that good cause existed to decline to issue declaratory ruling" } ], "opinion_index": 0, "case_paths": [ "/nc-app/145/0190-01" ] }, { "cite": "599 S.E.2d 888", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 2004, "pin_cites": [ { "parenthetical": "quoting Black's Law Dictionary 1512 (7th ed. 1999)" }, { "parenthetical": "internal citation omitted" } ], "opinion_index": 0 }, { "cite": "358 N.C. 649", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2987357 ], "year": 2004, "pin_cites": [ { "parenthetical": "quoting Black's Law Dictionary 1512 (7th ed. 1999)" } ], "opinion_index": 0, "case_paths": [ "/nc/358/0649-01" ] }, { "cite": "593 S.E.2d 764", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2004, "pin_cites": [ { "page": "769" } ], "opinion_index": 0 }, { "cite": "358 N.C. 190", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2986024 ], "year": 2004, "pin_cites": [ { "page": "199" } ], "opinion_index": 0, "case_paths": [ "/nc/358/0190-01" ] }, { "cite": "565 S.E.2d 9", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 2002, "pin_cites": [ { "page": "17" } ], "opinion_index": 0 }, { "cite": "356 N.C. 1", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 1511222 ], "year": 2002, "pin_cites": [ { "page": "13" } ], "opinion_index": 0, "case_paths": [ "/nc/356/0001-01" ] }, { "cite": "573 S.E.2d 572", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2002, "pin_cites": [ { "page": "579" } ], "opinion_index": 0 }, { "cite": "155 N.C. App. 225", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 9249787 ], "year": 2002, "pin_cites": [ { "page": "233-34" } ], "opinion_index": 0, "case_paths": [ "/nc-app/155/0225-01" ] }, { "cite": "675 S.E.2d 88", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 4, "year": 2009, "pin_cites": [ { "page": "94-95", "parenthetical": "quoting Cnty. of Wake v. N.C. Dep't of Env't & Natural Res., 155 N.C. App. 225, 233-34, 573 S.E.2d 572, 579 (2002)" }, { "page": "94" }, { "page": "94" }, { "page": "94" } ], "opinion_index": 0 }, { "cite": "196 N.C. App. 426", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 4166782 ], "weight": 4, "year": 2009, "pin_cites": [ { "page": "433-34", "parenthetical": "quoting Cnty. of Wake v. N.C. Dep't of Env't & Natural Res., 155 N.C. App. 225, 233-34, 573 S.E.2d 572, 579 (2002)" }, { "page": "432" }, { "page": "433" }, { "page": "433" } ], "opinion_index": 0, "case_paths": [ "/nc-app/196/0426-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 75-1.1", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "year": 2013, "opinion_index": 0 }, { "cite": "N.C. Gen. Stat. \u00a7 1-339.71", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "year": 2013, "opinion_index": 0 } ], "analysis": { "cardinality": 982, "char_count": 33072, "ocr_confidence": 0.718, "pagerank": { "raw": 4.03580807328026e-08, "percentile": 0.1822615913128526 }, "sha256": "e7e93ebbbfc7e9c5e9a020bc78457b8482c43df61b3c6bb98073b8e09b1fcb1d", "simhash": "1:8ff557a4f732bef2", "word_count": 5271 }, "last_updated": "2023-07-14T19:34:41.441392+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Chief Judge MARTIN and Judge STROUD concur." ], "parties": [ "EQUITY SOLUTIONS OF THE CAROLINAS, INC., Petitioner v. NORTH CAROLINA DEPARTMENT OF STATE TREASURER, Respondent" ], "opinions": [ { "text": "GEER, Judge.\nPetitioner Equity Solutions of the Carolinas, Inc. appeals from the trial court\u2019s order affirming the North Carolina Department of State Treasurer\u2019s decision to deny Equity Solutions\u2019 request for a declaratory ruling and dismissing Equity Solutions\u2019 petition for judicial review of the State Treasurer\u2019s decision. On appeal, while Equity Solutions contends that the trial court applied an improper standard of review when reviewing the State Treasurer\u2019s decision to deny Equity Solutions\u2019 request for a declaratory ruling, we hold that the trial court employed the correct standard of review.\nFurther, Equity Solutions contends that the State Treasurer in fact issued a \u201cde facto ruling\u201d against Equity Solutions on the merits that the trial court should have reviewed. We disagree. The State Treasurer never rendered a declaratory ruling, and the merits of Equity Solutions\u2019 arguments were, therefore, not before the trial court and are not before this Court.\nFacts\nEquity Solutions is a business that identifies the possible existence of surplus funds remaining from foreclosure sales and contacts people or entities it believes are entitled to some or all of the surplus funds. After then entering into an agreement with the owner of the surplus funds, Equity Solutions files before the clerk of the superior court holding the surplus funds a special proceeding pursuant to N.C. Gen. Stat. \u00a7 1-339.71 (2013).\nEquity Solutions asserts that it attached to its \u201cPetition for Surplus Funds\u201d initiating the special proceeding a copy of its agreement with the owner of the surplus funds, which purports to assign the right to the funds to Equity Solutions in exchange for payment of a percentage of the amount of the funds. If the clerk of court allows the petition and directs that the foreclosure surplus funds be paid to Equity Solutions, then Equity Solutions pays the owner of the surplus funds the portion of the funds designated in the agreement.\nThe State has contended that Equity Solutions\u2019 business constitutes the recovery of abandoned and unclaimed property governed by the Unclaimed Property Act, N.C. Gen. Stat. \u00a7\u00a7 116B-51 et seq. (2013). N.C. Gen. Stat. \u00a7 116B-78(al) (2013) governs an \u201cagreement... if its primary purpose is to locate, deliver, recover, or assist in the recovery of property that is distributable to the owner or presumed abandoned.\u201d Agreements covered by the statute must be in writing and include certain disclosures regarding the property at issue and the fee being charged for the property\u2019s recovery. N.C. Gen. Stat. \u00a7 116B-78(b). The statute also generally limits the maximum allowable property finder\u2019s fee. N.C. Gen. Stat. \u00a7 116B-78(b)(6). A violation of the provisions of the statute constitutes an unfair or deceptive act or practice in violation of N.C. Gen. Stat. \u00a7 75-1.1 (2013). N.C. Gen. Stat. \u00a7 116B-78(g).\nOn 11 May 2010, the Attorney General of North Carolina issued an investigative demand to Equity Solutions seeking documents relating to Equity Solutions\u2019 business, claiming that it involved the recovery of abandoned or unclaimed property located in North Carolina. In April and June 2010, Allen Martin, an employee of the State Treasurer\u2019s office, sent letters to two county clerks of court stating that the agreements between Equity Solutions and its clients filed by Equity Solutions in superior court violated N.C. Gen. Stat. \u00a7 116B-78 and were, therefore, invalid.\nOn 18 June 2010, Equity Solutions submitted a letter to the State Treasurer describing its business model and attaching two sets of business documents that Equity Solutions claimed were representative of those it had used in the past and those it planned to use in the future. Equity Solutions requested that the State Treasurer issue \u201ca declaratory ruling as to the applicability of N.C. Gen. Stat. \u00a7 116B-78 to the assignment agreements which Equity Solutions has employed in its business operations in the past.. . and the agreements it intends to employ in the future ....\u201d\nOn 13 August 2010, the State, through the Attorney General and the State Treasurer, filed an action against Equity Solutions and several individuals alleging claims for racketeering, unfair and deceptive practices, and unjust enrichment (the \u201cenforcement action\u201d). The complaint alleged that the assignment agreements referred to in Equity Solutions\u2019 request for a declaratory ruling were, in fact, \u201csham agreements\u201d that were not supported by consideration. The complaint further alleged that Equity Solutions\u2019 business model included inducing \u201cthe apparent owners to agree to pay defendant Equity Solutions a \u2018contingency fee\u2019 and other fees and charges\u201d that exceed the statutory maximum property finder\u2019s fee under the Unclaimed Property Act and that those contingency fee agreements constituted the real agreements between the parties. The complaint alleged that since the contingency fee agreements did not comply with N.C. Gen. Stat. \u00a7 116B-78 for several reasons, they were unenforceable.\nOn 16 August 2010, the State Treasurer sent a letter to Equity Solutions declining to issue a declaratory ruling and stating:\nPursuant to N.C.G.S. \u00a7 150B-4 and 20 N.C.A.C. 01F 0205,1 have determined that the issuance of a declaratory ruling is undesirable. Therefore, the Petitioner\u2019s request is denied for the following reasons:\n1. The subject matter of the request is the subject of active litigation in Wake County between Equity Solutions, the State Treasurer, and the Attorney General.\n2. The request seeks application of N.C.G.S. \u00a7 116B-78 to an \u201cAbsolute Assignment\u201d and \u201cConveyance Agreement\u201d without disclosing the full factual setting surrounding these documents, including any representations made to induce the apparent owner to sign these documents, and the manner in which any of these documents may have been used in court proceedings seeking disbursement of unclaimed or abandoned funds.\n3. The request involves disputed issues of material fact, including whether the \u201cAbsolute Assignment\u201d represents an actual agreement between the parties.\n4. The proposed \u201cPurchase Agreement\u201d offers only blank spaces for its material terms, such as the amount of the finder\u2019s fee, and the amount of the costs and expenses to be borne by the apparent owner.\nOn 15 September 2010, Equity Solutions filed a petition for judicial review of the State Treasurer\u2019s denial of its request for a declaratory ruling. On 15 October 2010, the State Treasurer moved to dismiss Equity Solutions\u2019 petition for judicial review pursuant to Rules 12(b)(1), (6), and (7) of the Rules of Civil Procedure.\nOn 18 October 2010, the defendants in the enforcement action, including Equity Solutions, filed an answer, motions to dismiss, amotion for Rule 11 sanctions, counterclaims against the State, and a third-party complaint against State Treasurer Janet Cowell, individually. On 17 November 2010, the State filed a motion to dismiss the third-party complaint against the State Treasurer, individually, and the counterclaims against the State. On 11 September 2012, the trial court entered an order denying the defendants\u2019 motions to dismiss in the enforcement action, but granting the State\u2019s motion to dismiss the counterclaims and third-party complaint in the enforcement action.\nAlso on 11 September 2012, the trial court entered an order affirming the State Treasurer\u2019s decision to deny Equity Solutions\u2019 request for a declaratory ruling and dismissing Equity Solutions\u2019 petition for judicial review. Equity Solutions timely appealed the order to this Court.\nDiscussion\n\u201cThis Court\u2019s review of \u2018a superior court order entered upon review of an administrative agency decision, . . . [involves a] two-fold task: (1) [to] determine whether the trial court exercised the appropriate scope of review and, if appropriate; (2) [to] decide whether the court did so properly.\u2019 \u201d In re Denial of NC IDEA\u2019S Refund of Sales, 196 N.C. App. 426, 433-34, 675 S.E.2d 88, 94-95 (2009) (quoting Cnty. of Wake v. N.C. Dep\u2019t of Env\u2019t & Natural Res., 155 N.C. App. 225, 233-34, 573 S.E.2d 572, 579 (2002)).\nHere, Equity Solutions sought a declaratory ruling from the State Treasurer pursuant to N.C. Gen. Stat. \u00a7 150B-4(a) (2009). N.C. Gen. Stat. \u00a7 150B-4(a) provides in relevant part: \u201cOn request of a person aggrieved, an agency shall issue a declaratory ruling as to the validity of a rule or as to the applicability to a given state of facts of a statute administered by the agency or of a rule or order of the agency, except when the agency for good cause finds issuance of a ruling undesirable.\u201d\nAfter the State Treasurer denied Equity Solutions\u2019 request for a declaratory ruling, Equity Solutions petitioned the trial court for judicial review. The trial court\u2019s review of the State Treasurer\u2019s denial was governed by N.C. Gen. Stat. \u00a7 150B-51(b) (2009). N.C. Gen. Stat. \u00a7 150B-51(b) provides that the trial court may\nreverse or modify the agency\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.\n\u201cDuring judicial review of an administrative agency\u2019s final decision, the substantive nature of each assignment of error dictates the standard of review.\u201d In re Denial, 196 N.C. App. at 432, 675 S.E.2d at 94. The first four grounds for reversing or modifying an agency\u2019s decision provided in N.C. Gen. Stat. \u00a7 150B-51(b) give rise to questions of law and the trial court, accordingly, reviews arguments based on those grounds de novo. In re Denial, 196 N.C. App. at 433, 675 S.E.2d at 94. However, the fifth and sixth grounds for reversing or modifying an agency\u2019s decision set out in N.C. Gen. Stat. \u00a7 150B-51(b) involve factual inquiries, and the trial court, therefore, reviews arguments on those two grounds under the whole record test. In re Denial, 196 N.C. App. at 433, 675 S.E.2d at 94.\n\u201cUnder the de novo standard of review, the trial court \u2018consider[s] the matter anew[] and freely substitu\u00ed [es] its own judgment for the agency\u2019s[.]\u2019 \"Id. (quoting Mann Media, Inc. v. Randolph Cnty. Planning Bd., 356 N.C. 1, 13, 565 S.E.2d 9, 17 (2002)). \u201cIn conducting \u2018whole record\u2019 review, the trial court must examine all the record evidence in order to determine whether there is substantial evidence to support the agency\u2019s decision.\u201d Id. \u201cWhen the trial court reviews an administrative decision under the whole record test, it \u2018may not substitute its judgment for the agency\u2019s as between two conflicting views, even though it could reasonably have reached a different result had it reviewed the matter de novo.\u2019 \u201d Id. (quoting Watkins v. N.C. State Bd. of Dental Exam\u2019rs, 358 N.C. 190, 199, 593 S.E.2d 764, 769 (2004)).\nIn this case, in reviewing the State Treasurer\u2019s decision, the trial court concluded (1) that \u201c[t]here is substantial, competent evidence to support each of the State Treasurer\u2019s reasons for denying the requested declaratory rulings\u201d and (2) that \u201c[t]he State Treasurer\u2019s reasons for denying the request, each standing alone or taken together, constitute \u2018good cause\u2019 for the denial.\u201d The trial court further observed that \u201cmaterial factual representations in, and omissions from, Equity Solutions\u2019 request. . . presented merely hypothetical circumstances and did not provide \u2018a given state of facts\u2019 regarding genuine and legally valid \u2018assignments\u2019 about which Equity Solutions is presently \u2018aggrieved\u2019 within the meaning of N.C. Gen. Stat. \u00a7 150B-4.\u201d\nThe order additionally found:\nRegarding Equity Solutions\u2019 proposed new \u201cPurchase Contracts,\u201d on the face of the record and Equity Solutions\u2019 pleadings, these documents are simply possible future contracts, with several material terms not provided by Equity Solutions. Therefore, Equity Solutions is not presently \u201caggrieved\u201d regarding the possible validity or invalidity of those potential contracts under N.C. Gen. Stat. \u00a7 116B-78 (whatever their material terms may end up being), and the State Treasurer therefore could not have lawfully rendered an advisory opinion on that matter as well.\nThe trial court ultimately concluded that \u201c[t]he State Treasurer\u2019s denial of the request for declaratory rulings was not arbitrary, capricious, an abuse of discretion, or otherwise in violation of substantive or procedural law.\u201d\nI\nEquity Solutions first argues that the trial court erred in limiting its decision to whether the State Treasurer properly declined to give a declaratory ruling. Equity Solutions argues that the trial court should have reached \u2014 and this Court should reach \u25a0\u2014 the merits of Equity Solutions\u2019 request for a declaratory ruling and hold that N.C. Gen. Stat. \u00a7 116B-78 does not apply to its business model. Equity Solutions contends that the State Treasurer issued a \u201cde facto ruling\u201d denying its request on the merits since the State Treasurer \u201cmade [her] position very clear, through [her] Complaint in the State Action and by the actions taken by Allen Martin and the Attorney General\u2019s Office, that Section 116B-78 did apply to Equity Solutions\u2019 business arrangements.\u201d\nHowever, investigative actions by the Attorney General\u2019s Office, letters from a State Treasurer\u2019s Office employee to two county clerks of court, and allegations in the enforcement action complaint do not individually or collectively constitute a formal decision by a State agency that is legally binding on Equity Solutions and the State Treasurer, as a formal declaratory ruling would be. See N.C. Gen. Stat. \u00a7 150B-4(a) (\u201cA declaratory ruling is binding on the agency and the person requesting it unless it is altered or set aside by the court.\u201d). Since there has been no declaratory ruling that actually binds Equity Solutions and the State Treasurer, there was no decision on the merits before the trial court or this Court.\nEquity Solutions nonetheless contends that because its request sought a decision on a solely legal issue \u2014\u2022 whether N.C. Gen. Stat. \u00a7 116B-78 applies to its business model as described in its request to the State Treasurer \u2014 and because this Court reviews legal issues de novo, this Court can properly reach the merits of the request for a declaratory ruling. Equity Solutions\u2019 argument appears to confuse the concept of a trial de novo, in which a court conducts a \u201c \u2018new trial on the entire case . . . as if there had been no trial in the first instance],]\u2019 \u201d N.C. Dep\u2019t of Env\u2019t & Natural Res. v. Carroll, 358 N.C. 649, 661 n.3, 599 S.E.2d 888, 895 n.3 (2004) (quoting Black\u2019s Law Dictionary 1512 (7th ed. 1999)), with the concept of a de novo standard of review \u201cthat applies when the trial court acts, as here, in the capacity of an appellate court and reviews an agency decision for errors of law and procedure,\u201d id. (internal citation omitted). Again, because there has been no agency decision on the merits in this case, there is no decision to which this Court can apply a de novo standard of review.\nWe, therefore, offer no opinion on the merits of Equity Solutions\u2019 request for a declaratory ruling. That issue was not before the trial court and is not before this Court.\nII\nEquity Solutions next argues that the trial court applied an improper standard of review when reviewing the petition from the State Treasurer\u2019s denial of its request for a declaratory ruling. We disagree.\nWhen reviewing the issue whether an agency had good cause to decline to issue a declaratory ruling, the reviewing court must first determine whether the record supports the reasons given by the agency for declining to issue a ruling. Cf. Charlotte-Mecklenburg Hosp. Auth. v. Bruton, 145 N.C. App. 190, 191-92, 550 S.E.2d 524, 525-26 (2001) (setting out pertinent facts in record supporting agency\u2019s determination that good cause existed to decline to issue declaratory ruling). If the reviewing court determines there is record support for the reason given by the agency, the reviewing court then reviews de novo whether the reason given constitutes good cause to decline to issue a ruling. Id. at 193, 550 S.E.2d at 526.\nHere, the trial court\u2019s order detailed the facts in the record supporting the State Treasurer\u2019s reasons for declining to issue a ruling. The court then determined that there was \u201csubstantial, competent evidence to support each of the State Treasurer\u2019s reasons for denying the requested declaratory rulings.\u2019\u2019 Thus, the order demonstrates that the court properly reviewed the record and found there was evidence supporting the State Treasurer\u2019s reasons for declining to issue a ruling.\nAfter determining that the record supported the reasons given by the State Treasurer, the trial court further concluded, in a separately numbered conclusion of law, that the \u201cState Treasurer\u2019s reasons for denying the request, each standing alone or taken together, constitute \u2018good cause\u2019 for the denial.\u201d Given this language, we hold that the trial court properly applied a de novo standard of review to the issue whether the reasons set forth by the trial court constituted good cause to decline to issue a ruling. We note, however, that the better practice is for a trial court reviewing an agency decision to expressly state which standard of review it has applied to each distinct issue decided in an order. \u2022\nEquity Solutions nonetheless points to the language in the trial court\u2019s order stating that the court \u201creviewed the whole record to determine whether there is substantial, competent evidence to support the denial of the request for declaratory rulings\u201d in support of its contention that the court erroneously applied the whole record test rather than de novo review. However, this language supports our determination that the trial court first properly concluded that the record contained evidence supporting the State Treasurer\u2019s reasons for declining to issue a ruling, and it does not demonstrate that the trial court erroneously applied whole record review to the legal issue before the trial court: whether the reasons given by the State Treasurer constituted good cause. The trial court, therefore, applied the proper standard of review.\nIll\nEquity Solutions next contends that even if the trial court did apply the proper standard of review, the court erred in affirming the State Treasurer\u2019s determination that good cause existed to decline to issue a ruling. We, like the trial court, review this issue de novo. Id.\nThe first three reasons given by the State Treasurer in declining to issue a ruling were (1) that the subject matter of the request was \u201cthe subject of active litigation in Wake County between Equity Solutions, the State Treasurer, and the Attorney General\u201d; (2) that the request failed to disclose the \u201cfull factual setting\u201d of Equity Solutions\u2019 business model, including \u201cany representations made to induce the apparent owner\u201d to sign the conveyance and assignment agreements used by Equity Solutions; and (3) that the request involved \u201cdisputed issues of material fact,\u201d including whether the assignment agreements represented \u201can actual agreement between the parties.\u201d The trial court agreed.\nEquity Solutions has conceded on appeal that this declaratory ruling action concerns \u201cthe same subject matter\u201d as the enforcement action and that the issues presented in its request for a declaratory ruling will probably be decided in the course of the enforcement action. In addition, in its request for a declaratory ruling, Equity Solutions did not disclose that it entered into contingency fee agreements with the owners of surplus funds prior to entering into subsequent conveyance and assignment agreements. Equity Solutions later filed an affidavit of its vice president in superior court that acknowledged its practice of entering into an initial \u201cAuthority to Represent & Contingency Fee Agreement\u201d with the apparent owners. It was these contingency fee agreements that the Attorney General and State Treasurer contended, in the enforcement action, constituted, in whole or in part, the actual agreements between the parties.\nThis Court has previously held that an agency had good cause to decline to issue a ruling where the agency had already issued a ruling on the same matter and issuing a second ruling would, therefore, constitute a waste of administrative resources. Id. at 192-93, 550 S.E.2d at 526-27; Catawba Mem\u2019l Hosp. v. N.C. Dep\u2019t of Human Res., 112 N.C. App. 557, 563, 436 S.E.2d 390, 393 (1993). Although the State Treasurer had not, in this case, already decided the issue presented in Equity Solutions\u2019 request, we believe that the principle underlying the holdings in Charlotte-Mecklenburg Hospital and Catawba Memorial Hospital is also applicable here.\nIt would be a waste of administrative resources for the State Treasurer to issue a ruling on a matter that would likely be judicially determined during the course of pending litigation between Equity Solutions and the State Treasurer. This is particularly true since the trial court ruling on the issues in the enforcement action will have the benefit of a fully developed factual record following discovery, while Equity Solutions\u2019 request to the State Treasurer presented only an alleged factual basis for a ruling that did not mention the contingency fee agreements that Equity Solutions has since admitted were part of its business model. Indeed, the State Treasurer was aware that the request submitted by Equity Solutions presented the State Treasurer with an inadequate record from which to issue a ruling.\nEquity Solutions, however, asserts that the State Treasurer should not be allowed to \u201cmanufacture \u2018good cause\u2019 to avoid issuing a ruling\u201d by, as here, \u201cfiling a complaint on the same subject matter after receiving the request for a ruling.\u201d However, the record shows that the Attorney General and State Treasurer were openly investigating Equity Solutions at least one month prior to the time of Equity Solutions\u2019 request and that Equity Solutions was aware of that investigation. We do not believe that the Attorney General or the State Treasurer\u2019s discretion in determining when to file their enforcement action resulting from months of investigation should have been curtailed because of the timing of Equity Solutions\u2019 decision to request a declaratory ruling from the State Treasurer. The State Treasurer was not required to allow Equity Solutions to preempt the enforcement proceedings by requesting a declaratory ruling.\nWith respect to the issue of a factual dispute, Equity Solutions contends that the \u201csole purpose\u201d of N.C. Gen. Stat. \u00a7 150B-4 is for an agency to aid an aggrieved person by applying the statute to a \u201cgiven set of facts.\u201d Equity Solutions asserts that \u201c[t]he agency is not charged with a broader authority to investigate the \u2018given set of facts\u2019 to determine whether other legal issues exist or to otherwise assess the legal validity or viability of the proposed transaction....\u201d\nHowever, in Catawba Memorial Hospital, this Court determined that the set of facts provided by the petitioner in its belated request for a declaratory ruling would not control where the agency had already closed the record of a contested case hearing on the same matter, and the agency had determined, in the contested case, the actual facts to be inconsistent with the set of facts provided in the petitioner\u2019s request. See 112 N.C. App. at 563, 436 S.E.2d at 393 (\u201cWhereas a declaratory ruling by definition involves the application of a statute or agency rule to a given state of facts, the facts regarding [the petitioner\u2019s] proposed surgical services were established by the record in the contested case.\u201d). Similarly, here, the State Treasurer was not obligated to ignore the existence of the information regarding this same matter that had been discovered during the investigation that led to the enforcement action when deciding whether good cause existed to decline to issue a ruling on Equity Solutions\u2019 request.\nEquity Solutions also cites Hope-A Women\u2019s Cancer Ctr., P.A. v. N.C. Dep\u2019t of Health & Human Servs., 203 N.C. App. 276, 691 S.E.2d 421 (2010), disc. review denied, 365 N.C. 87, 706 S.E.2d 254 (2011), in support of its argument that its failure to provide a more factually complete request for a declaratory ruling did not constitute good cause for the State Treasurer to decline to issue a ruling. However, the Court in Hope did not address whether circumstances existed, in that case, that would have constituted good cause to deny issuing a ruling since the agency, in fact, issued a ruling on the relevant request. Id. at 279, 282, 691 S.E.2d at 423, 425. Hope does not, therefore, support Equity Solutions\u2019 argument.\nWe, accordingly, hold that the State Treasurer, and the trial court, properly determined that good cause existed to decline to issue a ruling on Equity Solutions\u2019 request, based on the first three grounds asserted by the State Treasurer, as it related to the business practices already used by Equity Solutions at the time of the request.\nThe issue remains whether the State Treasurer had good cause to decline to issue a ruling as to the business practice that Equity Solutions planned to employ in the future. With respect to the agreements that Equity Solutions\u2019 request stated that it proposed to use, the State Treasurer declined to issue a ruling regarding the propriety of those agreements because \u201c[t]he proposed \u2018Purchase Agreement[]\u2019 offer[ed] only blank spaces for its material terms, such as the amount of the finder\u2019s fee, and the amount of the costs and expenses to be borne by the apparent owner.\u201d As the State Treasurer noted, the purchase agreement Equity Solutions claimed it planned to use in the future had blank spaces for material terms, including the percentage of the surplus funds which would be paid by Equity Solutions to the apparent owner in exchange for the apparent owner\u2019s selling Equity Solutions the owner\u2019s right to the funds \u2014 in other words, Equity Solutions\u2019 fee.\nIn Diggs v. N. C. Dep\u2019t of Health & Human Servs., 157 N.C. App. 344, 345, 578 S.E.2d 666, 667 (2003), the petitioner was a custodial parent of three children and had previously been the caretaker of her niece, and she petitioned an agency for a declaratory ruling that the practice of calculating the debt owed to the State when an adult caretaker accepts payment of benefits under certain government programs was invalid. In order to demonstrate that she was a \u201cperson aggrieved\u201d under N.C. Gen. Stat. \u00a7 150B-4, the petitioner set out \u201ctwo hypothetical situations involving whether child support paid by the biological father of petitioner\u2019s children ... pursuant to a court order for the support of their biological children may be taken by the State for reimbursement of earlier and separate public assistance grants made solely for the use and benefit of petitioner\u2019s niece ....\u201d Diggs, 157 N.C. App. at 347, 578 S.E.2d at 668.\nOn appeal, this Court held that the petitioner was not entitled to a declaratory'ruling since she was \u201cnot presently aggrieved.\u201d Id. at 348, 578 S.E.2d at 668. The Court reasoned that the petitioner\u2019s request presented merely hypothetical scenarios that were not certain to occur and, therefore, the petitioner could not show that her legal rights had, in some way, been impaired. Id., 578 S.E.2d at 668-69. Because the agency had, nonetheless, issued a ruling on the petitioner\u2019s request, the court further held that \u201cthe request was ineffective to trigger the issuance of a declaratory ruling, and the declaratory ruling has no effect, binding or otherwise, on petitioner....\u201d Id. at 349, 578 S.E.2d at 669.\nSimilarly, here, the State Treasurer could properly determine that good cause existed to deny Equity Solutions\u2019 request for a declaratory ruling as to the potential future agreements since, given the missing material terms of the contracts, any ruling on whether the contracts were in compliance with N.C. Gen. Stat. \u00a7 116B-78 would be purely hypothetical. Notably, the allegations in the enforcement action that the agreements actually used by Equity Solutions in the past violated N.C. Gen. Stat. \u00a7 116B-78 are focused, in part, on allegations that the fees charged by Equity Solutions exceeded the statutory limit for property finder\u2019s fees. Yet, the proposed purchase agreements did not specify the amount of the finder\u2019s fee.\nIn the absence of a proposed agreement setting out all terms material to the request for a declaratory ruling, the State Treasurer did not have authority to issue a ruling because, as in Diggs, she was presented only with a hypothetical scenario, and Equity Solutions could not show that any of its legal rights were legally impaired. We, therefore, hold that the State Treasurer had good cause to decline to issue a ruling as to the future purchase agreements based upon the fourth ground provided by the State Treasurer.\nIn sum, the trial court applied the proper standard of review and did not err in affirming the State Treasurer\u2019s decision to decline to issue a ruling on Equity Solutions\u2019 request based upon all four grounds provided by the State Treasurer. Consequently, we affirm the trial court\u2019s order.\nAffirmed.\nChief Judge MARTIN and Judge STROUD concur.\n. The General Assembly enacted a revised version of N.C. Gen. Stat \u00a7 150B-4 in 2011 N.C. Sess. Law ch. 398, \u00a7 56 (effective June 18, 2011). Given the date of Equity Solutions\u2019 request for a declaratory ruling and the State Treasurer\u2019s denial of Equity Solutions\u2019 request, the revised version of N.C. Gen. Stat. \u00a7 150B-4 does not apply to this case.\n. The General Assembly\u2019s revised version of N.C. Gen. Stat. \u00a7 150B-51, enacted in 2011 N.C. Sess. Law ch. 398, \u00a7 27, applies \u201cto contested cases commenced on or after\u201d 1 January 2012 and, therefore, does not apply to this case. Id.", "type": "majority", "author": "GEER, Judge." } ], "attorneys": [ "Ward and Smith, P.A., by A. Charles Ellis and Joseph A. Schouten, for petitioner-appellant.", "Attorney General Roy Cooper, by Assistant Solicitor General Gary R. Govert, Special Deputy Attorney General K.D. Sturgis, and Special Deputy Attorney General M.A. Kelly Chambers, for respondent-appellee." ], "corrections": "", "head_matter": "EQUITY SOLUTIONS OF THE CAROLINAS, INC., Petitioner v. NORTH CAROLINA DEPARTMENT OF STATE TREASURER, Respondent\nNo. COA13-300\nFiled 18 February 2014\n1. Appeal and Error \u2014 appealability\u2014review of agency \u2014 no agency ruling\nThe merits of Equity Solutions\u2019 arguments were not before the trial court or the Court of Appeals where Equity Solutions, which assisted people with the recovery of surplus funds from foreclosure sales, requested from the State Treasurer a declaratory ruling that N.C.G.S. \u00a7 116B-78 did not apply to its business plan. The State Treasurer never rendered a declaratory ruling, despite investigative actions, letters, and allegations in an enforcement action complaint.\n2. Administrative Law \u2014 trial court review of agency denial \u2014 de novo \u2014 properly applied\nThe trial court properly applied the de novo standard of review when reviewing Equity Solutions\u2019 petition for review of the State Treasurer\u2019s denial of its request for a declaratory ruling. The order demonstrated that the court properly reviewed the record, found there was evidence supporting the State Treasurer\u2019s reasons for declining to issue a ruling, and concluded that the State Treasurer\u2019s reasons, separately or together, constituted good cause for the denial.\n3. Administrative Law \u2014 request for declaratory ruling\u2014 denied \u2014 good cause\nThe State Treasurer and the trial court properly determined that good cause existed to decline to issue a ruling on Equity Solutions\u2019 request for a declaratory ruling that N.C.G.S. \u00a7 116B-78 did not apply to its business plan, as it related to business practices at the time of the request. The State Treasurer was not obligated to ignore the existence of information discovered during an investigation that led to an enforcement action, it would have been a waste of administrative resources to issue a ruling on a matter that would likely be judicially determined in pending litigation, and the State Treasurer was not required to allow Equity Solutions to preempt the enforcement proceedings by requesting a declaratory ruling.\n4. Administrative Law \u2014 request for declaratory ruling \u2014 hypothetical question\nIn a case which involved a company (Equity Solutions) that assisted people with the recovery of surplus funds from foreclosure sales, the State Treasurer could properly determine that good cause existed to deny Equity Solutions\u2019 request for a declaratory ruling as to potential future agreements because material terms were missing from the contracts. Any ruling would have been purely hypothetical.\nAppeal by petitioner from order entered 11 September 2012 by Judge W. Osmond Smith, III in Wake County Superior Court. Heard in the Court of Appeals 9 September 2013.\nWard and Smith, P.A., by A. Charles Ellis and Joseph A. Schouten, for petitioner-appellant.\nAttorney General Roy Cooper, by Assistant Solicitor General Gary R. Govert, Special Deputy Attorney General K.D. Sturgis, and Special Deputy Attorney General M.A. Kelly Chambers, for respondent-appellee." }, "file_name": "0384-01", "first_page_order": 394, "last_page_order": 407 }