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Midwest Crane and Rigging, Inc. v. Kansas Corp. Commission

August 3, 2007

MIDWEST CRANE AND RIGGING, INC., APPELLANT,
v.
KANSAS CORPORATION COMMISSION, APPELLEE.



Appeal from Johnson District Court; GERALD T. ELLIOTT, judge.

SYLLABUS BY THE COURT

1. It is well settled in this state that when an issue requires interpretation of a statute administered by an agency or when an agency could grant relief on some ground, exhaustion of administrative remedies is required.

2. In an action to determine whether appellant is a motor carrier by challenging the Kansas Corporation Commission's interpretation of K.S.A. 66-1,108 et seq., the trial court properly dismissed appellant's action for failure to exhaust administrative remedies before resorting to the courts.

The opinion of the court was delivered by: Green, J.

Affirmed.

Before GREEN, P.J., ELLIOTT and HILL, JJ.

Midwest Crane and Rigging, Inc. (Midwest Crane) appeals from the trial court's judgment dismissing its declaratory judgment action. Before Midwest Crane filed its judgment action, the Kansas Corporation Commission (the Commission) issued an order to show cause under the Kansas Administrative Procedure Act (KAPA), K.S.A. 77-501 et seq., as to why Midwest Crane should not be sanctioned for refusing to allow an inspection of its cranes. In the declaratory judgment action, Midwest Crane sought injunctive relief against the Commission and a declaration that it was not subject to oversight by the Commission. The trial court dismissed Midwest Crane's declaratory judgment action based on lack of subject matter jurisdiction after finding that Midwest Crane had failed to exhaust its administrative remedies. We affirm.

The Commission received a complaint from law enforcement that Midwest Crane might be conducting operations that would bring it under the definition of a motor carrier and thus subject to the Commission's safety regulations. After receipt of the complaint, the Commission issued a request on December 8, 2005, to Midwest Crane to inspect its records and to conduct a compliance review. On January 30, 2006, a special investigator for the Commission attempted to conduct an inspection of Midwest Crane's premises to determine whether any potential violations of the Commission's motor carrier safety rules and regulations existed, but Midwest Crane refused access to its premises. On February 17, 2006, the Commission issued an order to show cause to Midwest Crane. The Commission determined that a hearing on the matter was appropriate and allowed Midwest Crane the opportunity to show cause why any action against it would be unwarranted.

Simultaneous with the matter pending before the Commission, on March 23, 2006, Midwest Crane filed a verified petition for declaratory judgment and injunctive relief with the district court of Johnson County in Case No. 06-C-2280. In the petition, Midwest Crane sought a determination that the Commission lacked authority to regulate it because it was not a motor carrier under Kansas law. Moreover, Midwest Crane sought an injunction restraining the Commission from attempting to regulate Midwest Crane.

The Commission moved to dismiss the declaratory judgment action for lack of subject matter jurisdiction. The trial court granted the Commission's motion to dismiss after finding that it lacked subject matter jurisdiction to consider the issues raised in Midwest Crane's declaratory judgment action. Specifically, the trial court determined that subject matter jurisdiction was lacking because Midwest Crane had failed to exhaust its administrative remedies in the matter pending before the Commission.

During the pendency of the declaratory judgment action, the Commission determined in the administrative action that Midwest Crane was a motor carrier and was subject to the jurisdiction of the Commission. On August 16, 2006, Midwest Crane appealed the Commission's decision to the district court of Shawnee County in Case No. 06-C-1213. This appeal concerned whether Midwest Crane was subject to the jurisdiction of the Commission.

On August 11, 2006, Midwest Crane timely appealed the district court of Johnson County's decision.

Did the Trial Court Err in Dismissing Midwest Crane's Declaratory Judgment Action for Failure to Exhaust Administrative Remedies?

On appeal, Midwest Crane argues that the trial court erred in finding that it lacked subject matter jurisdiction to consider the issues raised in its declaratory judgment action. Specifically, Midwest Crane contends that it was not required to exhaust its administrative remedies before proceeding with its Chapter 60 declaratory judgment action. Whether a party is required to or has failed to exhaust its administrative remedies is a question of law over ...


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