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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Stosh's I/M v. Fairbanks North Star Borough (11/17/00) sp-5331

Stosh's I/M v. Fairbanks North Star Borough (11/17/00) sp-5331

     Notice:  This opinion is subject to correction before publication in
the Pacific Reporter.  Readers are requested to bring errors to the attention of
the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska 99501, phone
(907) 264-0608, fax (907) 264-0878.


a/k/a STOSH SOLSKI,           )
                              )    Supreme Court No. S-8887
             Appellant,       )
                              )    Superior Court No.
     v.                       )    4FA-98-308 CI
CONTROL COMMISSION,           )    O P I N I O N
             Appellee.        )    [No. 5331 - November 17, 2000]

          Appeal from the Superior Court of the State of
Alaska, Fourth Judicial District, Fairbanks,
                   Mark I. Wood, Judge pro tem.

          Appearances: Richard W. Wright, Richard W.
Wright, P.C., Fairbanks, for Appellant.  A. René Broker, Assistant
Borough Attorney, Fairbanks, for Appellee.

          Before:   Matthews, Chief Justice, Eastaugh,
          Fabe, Bryner, and Carpeneti, Justices.  

          CARPENETI, Justice.

          Stoshu Solski appeals the Fairbanks North Star Borough
Pollution Control Commission's decision to suspend his license to
perform vehicle emissions inspections after his unsatisfactory
performance on a covert performance audit.  Because we conclude
that the Pollution Control Commission followed proper procedures in
selecting Solski for a covert audit and that the lack of an auditor
training program did not render the covert audit defective, we
affirm. [Fn. 1]
     A.   Facts
          Stoshu Solski is a certified I/M mechanic [Fn. 2] who
owns and operates a certified I/M station in the Fairbanks North
Star Borough (FNSB).  Since 1994, FNSB has, through its Pollution
Control Commission (PCC), [Fn. 3]  tested Solski's compliance with
I/M program procedures through six covert performance audits, [Fn.
4] each of which resulted in a notice of violation. 
          On October 7, 1997 Auditor David Herring of the PCC's I/M
Referee Facility sent a covert vehicle to Solski's garage.  Solski
was not the original target of the test; the vehicle had been
scheduled to go to Gene's Chrysler, which was unable to conduct the
test as scheduled.  Because Herring did not want to lose an
opportunity to conduct a covert audit when he had an audit vehicle
in the facility, he went through his list of stations and directed
the vehicle owner to call three or four other stations in an
attempt to get an appointment.  The owner eventually obtained an
appointment with Solski.  FNSB admitted that Herring skipped over
stations on its list that had not yet been tested and chose Solski
for a covert audit because he was under "heightened scrutiny" as a
result of his unsatisfactory performance on five previous covert
          Herring prepared the vehicle for testing and supervised
the entire audit procedure.  To establish a baseline, Herring
tested the vehicle two times before the owner drove the car to
Stosh's I/M.  In the first test, the vehicle passed all portions of
the I/M test (function, visual, and tailpipe).  Herring then
disconnected one end of the oxygen sensor, which was both witnessed
by the vehicle's owner and videotaped.  After the disconnection,
Herring retested the vehicle.  This time, the vehicle failed
because of the disconnected sensor.  The failure was due only to
the disconnected sensor, not because of dirty emissions.
          The owner of the vehicle then brought it to Solski's I/M. 
Solski tested and passed the vehicle.  Even though the oxygen
sensor was disconnected, Solski entered a "Pass" on the oxygen
portion of the inspection sheet.   
          After Solski conducted the I/M test, the vehicle's owner
returned to the I/M referee facility.  Herring then retested the
vehicle and failed it once again because of the disconnected oxygen
sensor.  The following day, PCC issued Solski a notice of violation
for failing to detect the disconnected oxygen sensor.  Based on
Solski's previous record of noncompliance, the PCC also suspended
the I/M testing privileges of both Solski and Stosh's I/M for a
period of one year.   
     B.   Proceedings
          Solski appealed the suspension and notice of violation to
I/M Program Administrator Max Lyon, who affirmed the suspension and
violation after a hearing.  Solski sought review of Lyon's decision
before PCC.  Following a full hearing, PCC affirmed the violation,
but reduced the suspension to six months.    
          Solski filed a timely appeal of the PCC decision to the
superior court, where Judge Mark I. Wood upheld both the violation
and the PCC's imposition of the six-month suspension.  Judge Wood
subsequently awarded FNSB $1,000 in attorney's fees.  
          Solski appeals.
          We independently review the merits of an administrative
determination where the superior court acts as an intermediate
court of appeal. [Fn. 5]
          In this case, we must determine whether FNSB properly
interpreted its procedures governing its covert vehicle audit
program and properly exercised its discretion in subjecting Solski
to a covert vehicle audit.  We review an agency's interpretation of
its own regulations under the reasonable and not arbitrary
standard. [Fn. 6]   The reasonable and not arbitrary standard is
not demanding: "[W]here an agency interprets its own regulation .
. . a deferential standard of review properly recognizes that the
agency is best able to discern its intent in promulgating the
regulation at issue." [Fn. 7]  We review an agency's exercise of
its discretionary authority under the reasonable basis standard.
[Fn. 8]  Further, "[w]e will not substitute our judgment for that
of the agency with respect to the efficacy of a regulation nor
review the 'wisdom' of a particular regulation." [Fn. 9] 
          We review a trial court's award of attorney's fees for an
abuse of discretion. [Fn. 10]  We will find that a trial court
abused its discretion when, after reviewing the whole record, we
are left with a definite and firm conviction that the trial court
erred in its ruling. [Fn. 11]
     A.   Solski's Covert Audit Was Proper.
          1.   Solski has waived his argument that he followed
normal inspection methods.  
          The PCC suspended Solski from the I/M program because he
"failed to correctly perform the oxygen sensor visual inspection as
specified in the FNSB I/M Program Mechanics['] Handbook, resulting
in the passing of a vehicle documented as a failing vehicle by the
FNSB I/M office."  In one sentence in his brief, Solski states that
he followed "the normal inspection method set out in the mechanic's
guide book."  He does not elaborate on this matter and offers no
evidence to support his claim.  
          We have long held that "where a point is given only a
cursory statement in the argument portion of a brief, the point
will not be considered on appeal." [Fn. 12]
          Because Solski has effectively waived the issue of
whether he properly performed the oxygen sensor test, we limit our
discussion to whether the audit itself was defective.
          Solski next argues that his suspension should be vacated
because his October 1997 covert audit was unlawful.  In support of
his claim, he argues that the audit suffered from two specific
defects: (1) lack of randomness in his selection and (2) PCC's
failure to have properly trained auditors conducting the test.  

          2.   PCC followed proper procedures in selecting Solski
for the covert audit.
          Solski argues that his covert audit was invalid because 
PCC did not select him randomly as its own regulations require. 
          The FNSB I/M Program Procedures for Covert Vehicle Audits
sets forth two station and mechanic selection criteria for its
covert audit program, random audits and targeted audits:
          Covert vehicle audits of all Certified
Stations and Certified Mechanics are conducted on a random basis.
. . .  In addition, covert audits are performed on an as-needed
basis to investigate reported or suspected cases of Station or
Mechanic noncompliance with I/M program procedures.  (Emphasis
          Thus, there are two bases for conducting covert audits --
random testing and "as-needed" testing where there is a report or
suspicion of station or mechanic misconduct.  PCC interprets the
"as needed" language above to permit additional covert audits on
stations that have a history of poor performance on previous covert
tests or routine facility audits.  
          FNSB freely admits that in this case Solski was not
randomly chosen.  Instead, it places its reliance on the "as-
needed" language in its procedures, stating that it chose Solski
for a covert audit over other mechanics and stations that had not
yet been audited that year because he was under "heightened
scrutiny" resulting from his unsatisfactory performance on five
previous covert audits. [Fn. 13]  Therefore, the question before
this court is not whether Solski was randomly chosen for the audit,
but whether FNSB has properly interpreted the "as-needed" language
in its procedures.
          FNSB finds justification for its position in three
provisions in its Program Design Document, which it believes gives
it permission to perform covert vehicle audits at its own
discretion.  Section 3.3 of the Design Document requires the I/M
program administrator to enforce the requirements of the I/M
program and gives him or her broad discretion to conduct
inspections and other performance tests to monitor the performance
of the certified stations in the program. [Fn. 14]  Section 3.4 of
the Design Document expands upon this definition, stating that the
administrator can "investigate" and "gather evidence" of violations
both in response to complaints and on his or her "own initiative."
[Fn. 15]  The next section in the Design Document explicitly
describes the scope of the I/M program administrator's power with
respect to covert vehicle audits, clearly stating that the
administrator has the power to conduct any covert audits he or she
feels are necessary to ensure that program standards are being
followed. [Fn. 16]

          Additional support for FNSB's position that it is
permitted to perform covert vehicle audits on stations and
mechanics with a previous history of noncompliance can be found in
the DEC regulations, which specifically state that local I/M
program personnel have the DEC's permission to perform covert
vehicle tests at the local program administrator's discretion. [Fn.
          FNSB's interpretation of the "as-needed" clause in its
procedures governing covert test site selection is consistent with
the provisions in its Design Document, all of which grant the I/M
program administrator great discretion in investigating and
enforcing the requirements of the I/M program.  It is also
consistent with the DEC regulations, which grant local I/M
implementing agencies the authority to investigate alleged
violations of its I/M regulations "on [their] own initiative,"
including through covert audits. [Fn. 18]  Since both the DEC
regulations and FNSB's other procedures permit the I/M program
administrator to perform covert audits on his or her own
initiative, DEC's reading of its procedures to permit "heightened
scrutiny" of stations and mechanics who have a history of breaking
program rules is reasonable and not arbitrary.  Under these
circumstances, FNSB did not violate its own procedures in choosing
to audit Solski.  Therefore, we affirm the PCC's determination that
Stosh's I/M was properly selected for the covert audit.   
          3.   FNSB's lack of an auditor training program as
delineated in its policy document does not make Solski's covert
audit defective.

          Solski further argues that his covert audit is invalid
because FNSB does not train its auditors in the manner described in
its policy document entitled "Program Procedures for Auditor
Training and Proficiency." [Fn. 19] FNSB does not contest Solski's
assertion that its covert vehicle auditors are not trained in
accordance with the scheme set forth in this document.  FNSB has
also stated that it is not disputing that an auditor training
program does not and never has existed. 
          An administrative agency is generally required to follow
its own regulations; [Fn. 20] an agency's compliance with its own
regulations is a strong indicator that it proceeded in the manner
required by law. [Fn. 21]  However, even assuming that the auditor
training program outlined in the "Program Procedures" document is
a regulation, [Fn. 22] there was substantial compliance with its
requirements in this case.  The goals established by the training
program were achieved, principally including the tester's
familiarity with and adherence to PCC procedures and state
     Solski's audit was performed by Herring, a person certified as
a referee mechanic, and Herring's actions in implementing the test
were consistent with FNSB's covert audit procedures: he tested the
referee vehicle to establish a baseline; he made the changes to the
vehicle; he properly documented the changes; he retested the
vehicle upon its return; and he contacted Solski after its return. 
In addition, Herring videotaped the change made to the subject
vehicle before the covert audit and afterwards.  In all these
respects, Herring conducted the audit in a way that comported with
the standards of the auditor training program. 
          Solski argues that Herring's decision to disconnect the
oxygen sensor was a reflection of his lack of training because it
is not the kind of defect one normally sees in a 1991 Jeep.  The
argument is unpersuasive.  First, this was a defect that could
easily be observed by a mechanic following the steps for the oxygen
sensor visual inspection delineated by FNSB in its Mechanics'
Handbook. [Fn. 23]  Inclusion of these steps in the handbook makes
clear that the defect was one deemed worthy of checking by the
pollution control agency.  Moreover, Solski had previously been
warned for failure to notice a disconnected oxygen sensor.  He was
unmistakably on notice that he must test for this precise defect. 
Finally, detecting that the oxygen sensor had been entirely
disconnected was a simple and straightforward test.  
          Under these circumstances, we hold that even if the
"Program Procedures for Auditor Training and Proficiency"
constituted regulations under state law (a question that we do not
decide here), the purposes of the training program were met because
the tester was familiar with and adhered to PCC and state
regulations concerning testing.  Accordingly, FNSB's lack of an
auditor training program as set out in its program document does
not render Solski's audit defective.
     B.   The Superior Court Did Not Err in Awarding Attorney's
Fees to FNSB.       
          Solski challenges the superior court's award of
attorney's fees to FNSB.  We will reverse an attorney's fees award
only if the superior court abused its discretion. [Fn. 24]  The
record demonstrates that the superior court carefully exercised its
discretion here.  First, it noted that FNSB was the prevailing
party and entitled to an award of attorney's fees.  Next, it
properly considered the number of hours spent by FNSB, reducing the
award because the number of hours FNSB claimed to have spent on its
case was disproportionate to its value.  Finally, it took into
account FNSB's conduct and further reduced the award because it
found that FNSB had behaved in a "casual and lax" manner which
"invited this litigation."  There is no evidence in the record that
demonstrates that the superior court's award of $1,000 in
attorney's fees to FNSB is an abuse of discretion or inconsistent
with the standards set by Appellate Rule 508(e). 
          Because FNSB behaved in accordance with law and properly
suspended Solski's license to perform I/M inspections, we AFFIRM
the decision of the FNSB Pollution Control Commission.  Because the
superior court did not abuse its discretion in awarding attorney's
fees, we also AFFIRM that award. 


Footnote 1:

     We also affirm the superior court's award of $1,000 in
attorney's fees to Fairbanks North Star Borough for Solski's
unsuccessful appeal to that court. 

Footnote 2:

     Vehicles in the Municipality of Anchorage and the Fairbanks
North Star Borough are required to pass a biennial inspection and
maintenance (I/M) test conducted by a certified I/M mechanic.  See
18 AAC 52.005(g)(1999).  The standards for I/M vehicle testing and
certification of I/M mechanics and stations, as well as guidelines
for the operation of municipal I/M programs, are specified in the
Alaska Administrative Code.  See 18 AAC 52.005-.400, .500-.550. 
The terms, conditions, and details of each individual municipal I/M
program are left to the discretion of the municipality.  See AS

Footnote 3:

     The PCC is an administrative agency of the FNSB charged with
conducting its I/M program.  Pursuant to the guidelines provided by
the Department of Environmental Conservation (DEC) regulations in
the Alaska Administrative Code, PCC creates its own procedures for
implementing the I/M program.  See 18 AAC 52.010, .035. 

Footnote 4:

     PCC procedures authorize I/M program officials to perform a
system of overt and covert tests at sites where certified mechanics
perform I/M tests.  In a covert vehicle audit, "a vehicle that has
been set to fail is taken to a certified I/M station for an
official I/M test" without the knowledge of the mechanic or the
station.  See Fairbanks N. Star Borough, FNSB I/M Program
Procedures for Covert Vehicle Audits (1994).  If the mechanic
passes the vehicle, he or she (and possibly the station), will be
issued a notice of violation.  Id.  Along with the notice, the
mechanic may be subject to a number of disciplinary actions ranging
from warning to suspension.  Id.

Footnote 5:

     See Handley v. State, Dep't of Revenue, 838 P.2d 1231, 1233
(Alaska 1992).

Footnote 6:


Footnote 7:

     Rose v. Commercial Fisheries Entry Comm'n, 647 P.2d 154, 161
(Alaska 1982).

Footnote 8:


Footnote 9:

     Anchorage Sch. Dist. v. Hale, 857 P.2d 1186, 1188-89 (Alaska

Footnote 10:

     See Davila v. Davila, 908 P.2d 1027, 1031 (Alaska 1995); 
McNett v. Alyeska Pipeline Serv. Co., 856 P.2d 1165, 1167 (Alaska

Footnote 11:

     See Buster v. Gale, 866 P.2d 837, 841 n.9 (Alaska 1994)
(quoting Peter Pan Seafoods, Inc. v. Stepanoff, 650 P.2d 375, 378-
79 (Alaska 1982)).

Footnote 12:

     See, e.g., Adamson v. University of Alaska, 819 P.2d 886, 889
n.3 (Alaska 1991); see also Petersen v. Mutual Life Ins. Co., 803
P.2d 406, 411 n.8 (Alaska 1990) (holding that argument was waived
where appellant mentioned it in main brief but failed to "advance
any legal argument as to why the court erred"); State v. O'Neill,
609 P.2d 520, 528 (Alaska 1980) (holding that "[f]ailure to argue
a point constitutes abandonment of it").

Footnote 13:

     Solski's first covert vehicle audit took place on November 2,
1994; Solski was given a warning for conducting an improper visual
inspection and failing to see that the oxygen sensor was
          Less than two weeks later, on November 14, the PCC
conducted a second covert audit of Solski's I/M, based upon a
consumer complaint.  Solski once again passed a vehicle which
should have failed, neglecting to perform a required visual and
functional inspection and entering false data onto the inspection
          In June 1995 the PCC conducted a third covert audit of
Solski and issued Solski a 30-day suspension for failing to catch
a problem with the air temperature sensor during the visual
inspection portion of the test.  Solski challenged this suspension
in a hearing before the PCC on June 28, 1995.  The PCC determined
that the suspension was too severe and reduced it to a warning.  
          On December 20, 1995 the PCC performed a fourth covert
audit and gave Solski a 30-day suspension for entering false data
and failing to perform a functional test.  
          Solski was subjected to a fifth covert audit in February
1996, for which he was issued another warning for, among other
things, entering the incorrect engine size on the inspection form. 

Footnote 14:

     See Fairbanks N. Star Borough, FNSB BAR-90 I/M Program Design
Document sec. 3.3, at 3-1 (1994).  Section 3.3 provides, in

               The I/M Program Administrator is the
representative of the Borough for the purposes of monitoring and
enforcing the requirements for Certified I/M Stations.  The I/M
Office shall routinely conduct inspections of the Certified I/M
Stations to ensure that all Program requirements are being met. . .
.  The I/M Office may perform other quality control checks and
monitoring of performance as the Program Administrator believes

Footnote 15:

     Id. sec. 3.4, at 3-1.  Section 3.4 provides, in relevant part:

               The Program Administrator shall, on his
or her own initiative or in response to complaints, investigate on
a continuous basis and gather evidence of violations of the
requirements of the I/M Program by any Certified I/M Station or by
any employee, partner, officer, or member of a Certified I/M

Footnote 16:

     See id. sec. 3.5, at 3-2.  Section 3.5 provides, in relevant

               The Program Administrator may conduct
such investigations and hearings as he or she believes are
necessary to enforce the requirements imposed upon Certified I/M
mechanics and Certified I/M Stations under the I/M Program Design. 
Such investigations may include both overt and covert performance
audits of Certified Stations and Mechanics by I/M staff or other
individuals designated by the Program Administrator.

Footnote 17:

     18 AAC 52.105 provides, in relevant part:

               (b) The implementing agency shall, on its
own initiative, or in its discretion in response to a complaint,
investigate an alleged violation of this chapter by a certified
mechanic or station or by an employee, partner, officer, or member
of a certified station. 
               . . . .
               (d) The implementing agency may use an
overt or covert performance review of a certified mechanic or
station in an investigation under this section. 

Footnote 18:

     See id.; 18 AAC 52.440(a)(1).

Footnote 19:

     FNSB's Program Procedures for Auditor Training and Proficiency
require that its auditors take a formal training course and receive
a score greater than eighty percent on a proficiency examination
before they can work as a qualified I/M program auditor.  As part
of this course, trainees are to be taught "how to conduct covert
audits, with emphasis on documentation, implanting defects in
vehicles, and use of the I/M program database to build a body of
evidence."  The course is also intended to cover the legal basis
for the I/M program and the "administrative laws and procedures of
both the State of Alaska and the Fairbanks North Star Borough
pertaining to evidence, licensing, revocation, and suspension of
licenses, penalties, and appeals." 

Footnote 20:

     See U.S. v. RCA Alaska Communications, Inc., 597 P.2d 489, 498
(Alaska 1979).

Footnote 21:

     See Jager v. State, 537 P.2d 1100, 1108 (Alaska 1975).

Footnote 22:

     The definition of "regulation" in the Administrative Procedure
Act excludes any rule that relates only to the "internal
management" of the agency in question.  AS 44.62.640(a)(3).  The
auditor training guidelines, which are concerned primarily with the
type of training FNSB's I/M auditors receive, arguably fall within
this internal management exception.  Because it is unnecessary to
decide this issue, however, we decline to do so here.

Footnote 23:

     See Fairbanks N. Star Borough, FNSB BAR-90 I/M Program
Mechanics' Handbook sec. 8, at 8-5 (1994).  Section 8 provides, in
relevant part:

          Visual Inspections
          Oxygen (O2) Sensor -- Inspect the O2 sensor to
determine if it is "Disconnected" . . . . Lightly tug on the wire
at the sensor.  If the wire feels "springy" or "give" is felt,
check to see if the wire is connected to the sensor.

Footnote 24:

     See Davila, 908 P.2d at 1031.