South Carolina              
Administrative Law Court
Edgar A. Brown building 1205 Pendleton St., Suite 224 Columbia, SC 29201 Voice: (803) 734-0550

SC Administrative Law Court Decisions

CAPTION:
Hoyt L. Eagerton, Jr., D.D.S., License No. 1265 vs. SCDLLR

AGENCY:
South Carolina Department of Labor, Licensing and Regulation

PARTIES:
Appellant:
Hoyt L. Eagerton, Jr., D.D.S., License No. 1265

Respondents:
South Carolina Department of Labor, Licensing and Regulation, State Board of Dentistry
 
DOCKET NUMBER:
01-ALJ-11-0153-AP

APPEARANCES:
E. N. Zeigler, Esquire, for Appellant

Patrick D. Hanks, Esquire, for Respondent
 

ORDERS:

ORDER

STATEMENT OF THE CASE

Pursuant to S.C. Code Ann. §§ 40-15-200 (2001) & 1-23-380(B) (Supp. 2000), Appellant Hoyt Eagerton, Jr., appeals the Order of the South Carolina Board of Dentistry (Board) dated February 26, 2001. In that Order, the Board found that employees of Appellant's dental practice were unable to locate a dental record subpoenaed by the Board in August 1999 and that, therefore, Appellant had violated S.C. Code Ann. Regs. 39-11(1-B) (1976), which requires a dentist to maintain patient records "in a manner consistent with the protection of the welfare of the patient." Finding this violation, the Board suspended Appellant's license to practice dentistry for one year. The Board further ordered that this suspension would be stayed and Appellant's license reinstated on a probationary status on the condition that the Appellant:

(1) pay a $3,000 fine;

(2) complete a fourteen-hour course in record keeping;

(3) comply with all state and federal statutes and regulations governing the practice of dentistry;

(4) make his patient records and dental offices open to reasonable periodic inspections by the Board; and

(5) keep the Board apprised of any changes in his address, practice, professional status, or compliance with the Board's Order.

Appellant contends that the Board's Order should be overturned because it is (1) affected by errors of law, (2) clearly erroneous in view of the substantial evidence in the record, and (3) arbitrary and capricious in nature. Upon careful consideration of the record, the briefs filed, the applicable law, and counsel's oral arguments, the case is affirmed in part, reversed in part, and remanded to the Board.

BACKGROUND

Appellant is a dentist duly licensed to practice dentistry in South Carolina. He owns and operates the Sexton Dental Clinic, which consists of a main office in Florence, South Carolina, and a second, smaller office in Myrtle Beach, South Carolina. As owner and manager of those clinics, Appellant sets the policies and procedures for the maintenance of patient records used at those offices.

On June 4, 1999, employees of the Myrtle Beach office of the Sexton Dental Clinic treated and extracted a tooth from patient Frank W. McLaughlin. In response to an allegation of malpractice, the Board issued a subpoena on August 12, 1999, to the Sexton Dental Clinic for the medical records of Mr. McLaughlin. Board investigators delivered the subpoena to the Myrtle Beach clinic on that same day. The employees of the Sexton Dental Clinic were, however, unable to locate the patient records of Mr. McLaughlin at that time or at any time subsequent to the service of the Board's subpoena.

Following the clinic's failure to produce McLauglin's records, the Board issued a formal accusation which stated that because "the [subpoenaed] patient record was not available . . . . [Appellant] has failed to maintain dental records in a manner consistent with the protection of the patient." (Formal Accusation ¶ 3.) A hearing was held before the Board on February 9, 2001, and the Board's decision finding Appellant to have violated Regulation 39-11 (1-B) was issued on February 26, 2001. This appeal follows.

STANDARD OF REVIEW

The provisions of the South Carolina Administrative Procedures Act (APA) govern an appeal from an action of the Board. S.C. Code Ann. § 1-23-380(B) (Supp. 2000). Under the APA, this tribunal "shall not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact." S.C. Code Ann. § 1-23-380(A)(6) (Supp. 2000). This tribunal, however, may reverse or modify a decision if substantial rights of an appellant have been prejudiced because the administrative findings or decisions are "affected by . . . error of law," "clearly erroneous in view of the reliable, probative and substantial evidence on the whole record," or "arbitrary or capricious." Idsee alsoLark v. Bi-Lo, Inc., 276 S.C. 130, 276 S.E.2d 304 (1981). 

This tribunal has the authority to review agency rulings on issues of law, and may substitute its judgement for that of the agency when necessary. 2 Am. Jur. 2d Administrative Law § 523 (1994). These purely legal issues are fit for review if they will not be clarified by further factual development and include an agency's construction of statutes and constitutions and its interpretation of its own regulations. Id. But, in conducting such review, the construction of a statute by the agency charged with its administration will be accorded the most respectful consideration and will not be overturned absent compelling reasons. Dunton v. S.C. Bd. of Exam'rs in Optometry, 291 S.C. 221, 353 S.E.2d 132 (1987). Nonetheless, the final responsibility for the interpretation of the law rests with the courts, Stone Mfg. Co. v. S.C. Employment Sec. Comm'n, 219 S.C. 239, 64 S.E.2d 644 (1951), and an agency's mistaken interpretation of a statute or regulation will constitute reversible error of law. See, e.g.,Adkins v. Comcar Indus., Inc., 316 S.C. 149, 447 S.E.2d 228 (Ct. App. 1994). 

A more deferential standard of review is applied to this tribunal's review of agency findings that are not pure matters of law. Such findings will not be disturbed unless clearly erroneous in light of the substantial evidence in the record. S.C. Code Ann. § 1-23-380(A)(6)(e). Substantial evidence is that evidence which, in considering the record as a whole, would allow reasonable minds to reach the conclusion of the administrative agency. E.g.Jennings v. Chambers Dev. Co., 335 S.C. 249, 516 S.E.2d 453 (Ct. App. 1999). The possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency's finding from being supported by substantial evidence. Id. Where there is a conflict in the evidence, the administrative agency's findings of fact are conclusive. Id. This tribunal cannot substitute its judgment for that of the Board upon a question as to which there is room for a difference of intelligent opinion. E.g.,Chem. Leamen Tank Lines v. S.C. Pub. Serv. Comm'n, 258 S.C. 518, 189 S.E.2d 296 (1972). However, while a decision of an administrative agency will normally be upheld, the findings may "not be based upon surmise, conjecture, or speculation, but must be founded on evidence of sufficient substance to afford a reasonable basis for it." Mullinax v. Winn-Dixie Stores, Inc., 318 S.C. 431, 443, 458 S.E.2d 76, 83 (Ct. App. 1995).

Finally, this tribunal may reverse an agency's final decision as arbitrary and capricious only if the decision is without a rational basis, is based alone on one's will and not upon any course of reasoning and exercise of judgment, is made at pleasure, without adequate determining principles, or is governed by no fixed rules or standards. Deese v. S.C. Bd. of Dentistry, 286 S.C. 182, 332 S.E.2d 539 (Ct. App. 1985). Thus, so long as the actions taken by an agency are within the guidelines established by law, this tribunal cannot characterize those actions as arbitrary and capricious under the law. Id.

The burden is on the Appellant to show convincingly that the Board's Order is affected by an error of law, without evidentiary support, or arbitrary or capricious as a matter of law. SeeHamm v. Am. Telephone & Telegraph Co., 315 S.C. 119, 432 S.E.2d 454 (1993); Hamm v. Pub. Serv. Comm'n of S.C., 310 S.C. 13, 425 S.E.2d 28 (1992)

ISSUES ON APPEAL

I. Did the Board err, as a matter of law, in finding a violation of S.C. Code Ann. Regs. 39- 11 (1-B) (1976) to lie on the sole ground that a patient record cannot be produced by a dentist's office, without any showing of fault or misconduct on the part of the dentist or his office?

II. Was the Board's decision finding Appellant guilty of a violation of Regulation 39-11 (1-B) and suspending his dental license clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record?

III. Was the Board's decision arbitrary and capricious?

ANALYSIS

I. Did the Board err, as a matter of law, in its construction of Regulation 39-11 (1-B)?

The Board did not commit reversible error in its construction of Regulation 39-11 (1-B). Regulation 39-11 (1-B) is a part of the regulatory scheme governing the practice of dentistry in this state. This regulation provides that:

Dentists are obliged to safeguard the confidentiality of patient records. Dentists shall maintain patient records in a manner consistent with the protection of the welfare of the patient. Upon request of a patient or another dental practitioner, dentists shall provide any information that will be beneficial for the future treatment of that patient.
 

S.C. Code Ann. Regs. 39-11 (1-B) (1976). S.C. Code Ann. § 40-15-190(A)(9) (2001) defines a dentist's violation of Regulation 39-11 as misconduct that constitutes grounds for sanction of the dentist by the Board, and S.C. Code Ann. § 40-15-200 (2001) prescribes the types of disciplinary action the Board may take in response to a finding of dentist misconduct under Section 40-15-190. The Board construes Regulation 39-11 (1-B) to require absolute compliance by the dentist: i.e., to the Board, the failure to maintain patient records as provided in the regulation constitutes a violation of that regulation, regardless of whether that failure was occasioned by a dentist's negligence or intentional wrongdoing. Accordingly, in both its Formal Accusation and its Final Order, the Board alleged that Appellant violated Regulation 39-11 (1-B) by his mere failure to produce the subpoenaed record. Appellant contends that this construction of Regulation 39-11 (1-B) is an error of law.

Appellant argues that statutes and regulations that provide for the revocation of medical licenses, such as Regulation 39-11 (1-B) and its related statutes, are penal in nature, and must, therefore, be strictly construed in favor of the licensee. Appellant claims that such a strict construction of Regulation 39-11 (1-B) would imply the application of a reasonableness standard to that regulation: i.e., the loss of a patient record would not constitute a violation of Regulation 39-11 (1-B) unless that loss were shown to be caused by some negligence or misconduct on the part of the dentist. As the Board in this case has made no allegation or finding of negligence or misconduct by Appellant, Appellant contends that he cannot be found in violation of the regulation as properly construed.

This argument must fail for at least two reasons. First, while South Carolina courts have not squarely addressed the issue, it does not appear that statutes authorizing the suspension or revocation of medical licenses, and proceedings under those statutes, are considered penal under South Carolina law. There is no national consensus as to whether or not statutes providing for the suspension or revocation of a medical license are penal in nature. See 70 C.J.S. Physicians and Surgeons § 35 (1987); see also, e.g.,Boring v. Miss. State Bd. of Dental Exam'rs, 300 So. 2d 135 (Miss. 1974) (holding that a statute providing for the revocation of a dental license is penal); Armstrong v. N.C. State Bd. of Dental Exam'rs, 499 S.E.2d 462 (N.C. Ct. App. 1998) (finding that a statute authorizing the revocation of dental licenses for misconduct is non-penal and therefore does not contain a mens rea requirement for violations). Despite this lack of controlling precedent and a clear trend among persuasive authorities, there is dictum from the South Carolina Supreme Court that suggests that South Carolina views the revocation of a medical license as a non-penal proceeding. In Wilson v. State Board of Medical Examiners, 305 S.C. 194, 406 S.E.2d 345, the Supreme Court adopted the language of a Massachusetts court in noting that "[t]he revocation of a physician's license, however, is designed not to punish the physician . . . but to protect the life, health and welfare of the people at large." Id. at 196, 406 S.E.2d at 346 (alteration in original) (emphasis added). See alsoHuber v. S.C. State Bd. of Physical Therapy Exam'rs, 316 S.C. 24, 446 S.E.2d 433 (1994) (citing to Wilson in a footnote). The Court's clear refusal to characterize the revocation of a physician's license as a punitive measure suggests that it would not consider statutes authorizing the suspension or revocation of medical licenses, including licenses to practice dentistry, to be penal statutes requiring strict construction. It seems, then, that under South Carolina law, Regulation 39-11 (1-B) and its related statutes are not penal in nature and do not require strict construction by the courts. 

Second, not only is there no reason to interpret Regulation 39-11 (1-B) in favor of Appellant, but also there is sound legal precedent requiring this tribunal to defer to the Board's construction of the regulation. As noted above, this tribunal must afford the Board's construction of Regulation 39-11 (1-B) the most respectful consideration and cannot overrule the Board's construction absent cogent, compelling reasons. Dunton v. S.C. Bd. of Exam'rs in Optometry, 291 S.C. 221, 353 S.E.2d 132 (1987); Stone Mfg. Co. v. S.C. Employment Sec. Comm'n, 219 S.C. 239, 64 S.E.2d 644 (1951). Appellant is correct in noting that requiring strict compliance with Regulation 39-11 (1-B) can lead to somewhat harsh results: e.g., the Board could sanction a dentist for a lost patient record despite a lack of any negligence or misconduct on the part of the dentist or his staff. The Board, however, is equally correct when it points out the public policy ramifications of requiring the Board to affirmatively prove negligence every time a patient record is lost by a dentist: e.g., it would be too easy for a dentist accused of malpractice to simply discard an incriminating record without leaving behind any evidence of negligent or fraudulent record keeping. The Board presumably weighed the competing interests of licensed dentists and the public when it construed Regulation 39-11 (1-B) to require strict compliance, and this tribunal will not re-weigh those interests and reach a different construction of the regulation absent a compelling reason to do so. The Board's construction of Regulation 39-11 (1-B) does not conflict with the plain language of the regulation and is clearly aimed at protecting the health and welfare of the public. Thus, while Appellant has raised valid concerns regarding the imposition of absolute compliance with Regulation 39-11 (1-B), he has not presented this tribunal will any compelling reasons to reject the Board's interpretation of that regulation.

In sum, the Board did not err when it construed Regulation 39-11 (1-B) to require strict compliance with its terms, as no principles of statutory construction or cogent, compelling reasons that would require a different construction of the regulation have been produced. 

II. Was the Board's decision clearly erroneous in light of the substantial evidence in the record?

The Board's finding that Appellant committed a minor violation of Regulation 39-11 (1-B) is supported by substantial evidence. However, the Board's conclusion that, in order to protect the public, Appellant's license must be suspended or, in lieu of suspension, Appellant must be required to pay a $3,000 fine and take a record keeping course is not supported by substantial evidence on the whole record.

Substantial evidence is "not a mere scintilla of evidence nor the evidence viewed blindly from one side of the case, but is evidence which, considering the record as a whole, would allow reasonable minds to reach the conclusion that the administrative agency reached." Lark v. Bi-Lo, Inc., 276 S.C. 130, 135, 276 S.E.2d 304, 306 (1981). But, while an agency's finding will normally be upheld, "such a finding may not be based upon surmise, conjecture, or speculation, but must be founded on evidence of sufficient substance to afford a reasonable basis for it." Mullinax v. Winn-Dixie Stores, Inc., 318 S.C. 431, 443, 458 S.E.2d 76, 83 (Ct. App. 1995). See alsoTiller v. Nat'l Health Care Ctr. of Sumter, 334 S.C. 333, 513 S.E.2d 843 (1999) (holding that worker's compensation awards are not supported by substantial evidence if based on surmise, conjecture, or speculation).

The Board's conclusion that Appellant violated S.C Code Ann. Regs. 39-11(1-B) (1976) is supported by substantial evidence. As detailed above, the Board was justified in interpreting Regulation 39-11(1-B) to require absolute compliance with its record keeping provisions. Consequently, the Board need not find any negligence or intentional wrongdoing on the part of Appellant or his staff to find a violation of the regulation; rather, all the Board need find is that a patient record that the Appellant is required to maintain cannot be produced, for whatever reason. Here, Appellant concedes that the subpoenaed patient record cannot be found. Therefore, there is substantial evidence in the record to support the Board's determination that Appellant violated Regulation 39-11 (1-B).

There is no substantial evidence, however, to support the Board's determination that the sanctions it imposed on Appellant are necessary for the protection of the welfare of the public. While the particular facts surrounding the loss of a patient record are essentially irrelevant to the Board in determining whether a technical violation of Regulation 39-11 (1-B) has occurred, those facts are relevant in determining what sanctions the Board should impose in order to protect society from "professional ineptitude and misconduct." (Final Order, Conclusion of Law # 3.) The sanctions imposed on Appellant by the Board must be "designed not to the punish [Appellant], but to protect the life, health and welfare of the people at large." Wilson, 305 S.C. at 196, 406 S.E.2d at 346. In making this determination, the Board "must, therefore, meticulously weigh the public interest and the need for the continued services of qualified medical professionals against the countervailing concern that society be protected from professional ineptitude." Huber, 316 S.C. at 28 n.2, 446 S.E.2d at 435 n.2. (1)Thus, the Board must consider how the patient record in question was lost in order to determine what sanction is appropriate to protect the public. 

It is not clear that the Board undertook such an analysis of the facts concerning the loss of the record before imposing its sanctions on Appellant. In the case at hand, the Board made no finding that Appellant or his staff was negligent regarding the loss of the record in question or regarding patient record keeping in general. The Board made no finding that Appellant or his staff intentionally discarded the record in question. The Board made no finding that the actions of Appellant or his staff caused the record in question to be lost. As noted by the Board's counsel at the disciplinary hearing, "we don't really have any information on the record" (R. at 7) as to what happened to the patient record after it was brought to the front desk of Appellant's clinic. Accordingly, throughout these proceedings, the sole ground asserted by the Board for discipline of Appellant is that the subpoenaed patient record could not be located (Formal Accusation ¶ 3; R. at 26 (testimony of Board investigator); Final Order, Finding of Fact # 2), not that Appellant was guilty of any negligence or had in any way caused the loss of the record.

While this one finding may support the conclusion that Appellant is guilty of a minor violation of Regulation 39-11 (1-B), it does not support the sanctions imposed on Appellant by the Board. For the Board to sanction Appellant in order to protect the public, it need not necessarily find that Appellant was negligent or guilty of intentional wrongdoing in losing the record; but, it must at least muster some facts to support its conclusion that the particular sanction imposed is a sanction designed to protect the life, health, and welfare of the people at large. In this case, no substantial evidence in the record indicates that the patient record was lost because of flaws in Appellant's record keeping, and thus, no substantial evidence supports the Board's decision requiring Appellant to attend record keeping classes and to allow periodic inspections of his records. (2) Similarly, as no substantial evidence in the record suggests that Appellant was negligent in the loss of the patient record or that Appellant intentionally discarded the record, no substantial evidence supports the Board's decision to fine Appellant nearly 1/3 of the maximum penalty allowed by statute. In short, there is no evidence in the record as to how the patient record in question was lost. Therefore, it was simply surmise, conjecture, or speculation on the part of the Board for it to conclude that the "protect[ion] of the life, health, and welfare of the people at large" (Final Order, Conclusion of Law # 4) required Appellant, in lieu of a year's suspension of his license, to pay a $3,000 fine, to complete fourteen hours of record keeping courses, and to submit to periodic inspections of his records by the Board. The Board's conclusion that the sanctions imposed in this case are required to protect society from professional ineptitude and to protect the life, health, and welfare of the people at large is not supported by substantial evidence on the whole record and must be reversed.

III. Was the Board's decision arbitrary and capricious?

Because the Board's determination that the sanctions it imposed on Appellant are necessary to protect the public is not supported by substantial evidence, that determination must also be characterized as arbitrary and capricious. A decision is arbitrary if it is without a rational basis. Deese v. S.C. State Bd. of Dentistry, 286 S.C. 182, 332 S.E.2d 539 (Ct. App. 1985). Further, an abuse of discretion-a term often used synonymously with arbitrariness-occurs when a ruling has no evidentiary support or is affected by an error of law. Allen v. S.C. Alcoholic Beverage Comm'n, 321 S.C. 188, 467 S.E.2d 450 (Ct. App. 1996). Here, the Board's conclusion that the protection of the life, health, and welfare of the public necessitates that Appellant pay a $3,000 fine and attend record keeping classes was not supported by the evidence in the record. This finding is, therefore, arbitrary and capricious and constitutes an abuse of discretion on the part of the Board. As such, it must be reversed.

CONCLUSION

The Board's construction of Regulation 39-11 (1-B) is not affected by error of law and its finding that Appellant is guilty of a minor violation of Regulation 39-11 (1-B) is supported by substantial evidence in the record; both are therefore affirmed. The Board's finding that the sanctions it imposed on Appellant are necessary for the protection of the public is not supported by substantial evidence in the record, is arbitrary and capricious, and is accordingly reversed. The case is remanded to the Board to reconsider the sanctions imposed in light of the factual circumstances surrounding the loss of the patient record to determine what sanctions are necessary to protect the public. See 2 Am. Jur. 2d Administrative Law § 630 (1994) ("A court will remand a case to the administrative agency where the court determines that the evidence on which the agency expressly relied in making its determination is not substantial.").

ORDER

IT IS THEREFORE ORDERED that this case is REMANDED to the Board of Dentistry to reconsider the sanctions imposed on Appellant in accordance with this Order. (3)

AND IT IS SO ORDERED.
 
 
 
 
 

______________________________

JOHN D. GEATHERS

Administrative Law Judge

Post Office Box 11667

Columbia, South Carolina 29211-1667
 

October 19, 2001

Columbia, South Carolina

1. It should be noted that when sitting in its appellate capacity, this tribunal may not second-guess the results of the Board's weighing of these interests. See S.C. Code Ann. § 1-23-380(A)(6). But, this tribunal is entitled to determine whether or not the Board has complied with the law and at least engaged in the required "meticulous weighing" of the public's need for medical services against the desire to protect the public from professional ineptitude. Id.

2. While some questions regarding Appellant's record keeping practices were raised in the record below, see, e.g., R. at 68-70, the Board made no finding that Appellant's record keeping methods were deficient or that those methods violated Regulation 39-11 (1-B); and this tribunal is not empowered to re-weigh the evidence considered by the Board to reach a different conclusion. See, e.g.,Rodney v. Michelin Tire Corp., 320 S.C. 515, 519, 466 S.E.2d 357, 359 (1996) (noting that a court "may not substitute its judgment for that of an agency as to the weight of evidence on questions of fact"). If this tribunal were to delve into the record on appeal to make findings not made by the Board, it would engage in a sort of fact-finding that would not only violate the deferential appellate standard of review set up in the APA, see S.C. Code Ann. § 1-23-380(A)(6), but also put this tribunal in a position ill-suited to its role as a reviewing court in this matter. SeePorter v. S.C. Pub. Serv. Comm'n, 333 S.C. 12, 22 n.3, 507 S.E.2d 328, 333 n.3 (1998) (holding that a reviewing court will not sua sponte "search the record for substantial evidence supporting a decision when an administrative agency's order inadequately sets forth the agency's findings of fact and reasoning").

3. SeeParker v. S.C. Pub. Serv. Comm'n, 288 S.C. 304, 342 S.E.2d 403 (1986); Piedmont Natural Gas Co., Inc., 301 S.C. 50, 389 S.E.2d 655 (1990) (stating that an administrative agency may not consider additional evidence upon remand unless the court allows it because it would afford a party two bites at the apple).


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