SC Administrative Law Court Decisions

This matter is before the undersigned pursuant to the appeal of Gregory I. E. Hierholzer, D.M.D. ("Appellant"), of the decision of the South Carolina State Board of Dentistry ("Board") suspending Appellant's license for a period of one year and imposing a civil penalty of $10,000 for violation of S.C. Code Ann. § 40-15-190(A)(9) and (14) (2001) and 23A S.C. Code Ann. Regs. 39-11(1-C) (1983). Appellant contends that the Board's decision was in error. For the following reasons, I affirm the decision of the Board.

Appellant is a dentist licensed to practice dentistry in the State of South Carolina. Pursuant to a complaint filed with the Board, Appellant was served with a Formal Accusation alleging that he had engaged in misconduct that violated S.C. Code Ann. § 40-15-190(A)(9) and (14) (2001) and 23A S.C. Code Ann. Regs. 39-11(1-C) (1983) in that he had provided emergency treatment, including the administration of nitrous oxide, I.M. Versed and Fentanyl, to an unaccompanied female patient on a day when his office was normally closed without requesting that one of his staff report to his office to chaperone. The Formal Accusation notified Appellant that he had a right to a hearing regarding the charges in accordance with S.C. Code Ann. § 1-23-310, et seq. (Supp. 2002), including but not limited to the right to respond and present evidence and argument on all issues involved. The Formal Accusation also informed Appellant that he may wish to retain legal counsel to represent him in this matter.

On September 10, 2002, Appellant signed a Memorandum of Agreement and Stipulations ("MOA"), in which Appellant admitted the allegations of the Formal Accusation and agreed to waive formal evidentiary hearing procedures. The facts admitted in the MOA include the following:

[The patient, a thirty-one year old female,] called [Appellant] on a Saturday ⁽¹⁾ morning to request emergency treatment. [Appellant] canceled a fishing trip and reported to his office. The patient was unaccompanied. [Appellant] did not request that one of his staff report to his office to chaperone. The patient suffered from excess sensitivity to heat and cold in the left lower first molar. [Appellant] informed the patient that he intended to drill out the old amalgam and determine the source of the pain. The patient requested nitrous and anything else that would assist in tolerating the drilling. Patient phoned her husband to request transportation home after the procedure. On March 24, 2001 ⁽²⁾, [Appellant] provided emergency treatment to [the patient]. [Appellant] administered nitrous oxide, I.M. Versed and Fentanyl to the patient prior to initializing treatment. [Appellant] asserts that the patient never went beyond the ptotic stage. The tooth turned out to require only a filling. Subsequent to his treatment, [Appellant] administered Flumazanil .5 mg as a reversing agent.

. . . Arrangements were made by the patient to have her husband pick her up at the completion of the procedure. The patient alleges that she does not recall anything about her treatment or trip home. It is undisputed that the patient left the office and drove home.

Appellant further admitted in the MOA that he had been sanctioned by the Board twice previously: once in November 2000 for dispensing drugs to himself in a manner other than appropriate for the practice of dentistry, and again in December 2001 for treating a patient during a period in which his license was suspended. On both prior occasions Appellant signed a Consent Order stipulating as to the facts and agreeing to the sanctions imposed by the Board.

Finally, Appellant admitted in the MOA that "the aforementioned acts of [Appellant] present grounds that constitute misconduct as alleged." Appellant agreed to participate in a hearing before the Board for the purpose of determining the appropriate sanction under S.C. Code Ann. § 40-15-200 (Supp. 2002). Appellant agreed to answer questions by counsel or members of the Board under oath, and Appellant was informed that he could present mitigating testimony and other evidence to the Board regarding an appropriate sanction.

A hearing was held before the Board on December 8, 2002 for the purpose of determining the appropriate sanction. At the hearing, Appellant testified as to the events of the day in question, including the fact that his wife was present in the building, although not in the same room, during most of the emergency procedure. Following his testimony, counsel for the Board objected to Appellant's testimony in so far as it went beyond mitigation testimony and could be construed as collaterally attacking the stipulated facts set forth in the MOA. Appellant responded by indicating that he did not understand precisely what the MOA said, and that the codes were "a little vague." The Board instructed Appellant to reread the MOA if he had any questions regarding it. Appellant noted a couple of typographical errors in the MOA, which the Board stipulated and amended. Appellant agreed that everything set forth in the MOA happened, and Appellant signed the MOA again. The Board asked Appellant some additional questions regarding the emergency procedure. Following a brief adjournment, the Board decided to fine Appellant $10,000 and suspend his license for one year. The Board's decision was formalized in a Final Order dated December 17, 2002. It is from that Order that the Appellant appeals.

Appellant argues the Board's decision was in error because the Board failed to allow witness testimony during Appellant's hearing. Appellant contends that due to the lack of witness testimony, the Board's decision was not supported by substantial evidence, and the Board's actions were arbitrary and capricious. Appellant argues that the Board's actions deprived him of his due process rights, including his right to introduce evidence and his right to confront and cross-examine witnesses. Appellant argues that the Board essentially developed a "will to win," thereby violating his rights to an impartial adjudication. Appellant contends that had the Board allowed the testimony of witnesses, including the patient and Appellant's wife, the Board would have determined that the patient was not unchaperoned during Appellant's emergency treatment of her. Appellant bases this argument on his contention that his wife was present in the building during most of the treatment.

As for the MOA, Appellant argues that he did not understand what it was that he was signing. Appellant argues that the Board should have halted the proceedings and asked him again whether he wanted an attorney when he indicated his confusion as to the contents of the MOA. Appellant argues that it should have been clear to the Board that he was trying to put up a defense, not just mitigation testimony.

Respondent contends that the Appellant waived his arguments by entering into the MOA. Respondent further argues that the Board followed proper procedure and did not violate Appellant's due process rights. Respondent contends that the Appellant was provided with an opportunity to present evidence and confront witnesses in an evidentiary hearing, which Appellant waived by entering into the MOA.

Jurisdiction on appeal from a decision of the Board is vested in the ALJD pursuant to S.C. Code Ann. § 1-23-600(D) (Supp. 2002). On appeal, the standard of review is limited to the record presented. S.C. Code Ann. § 1-23-380(A)(5) (Supp. 2002). The ALJD may not substitute its judgment for that of the Board as to the weight of the evidence on questions of fact. S.C. Code Ann. § 1-23-380(A)(6) (Supp. 2002). The ALJD may reverse the decision of the Board if substantial rights of the Appellant have been prejudiced because the administrative findings, inferences, conclusions or decisions are: (a) in violation of a constitutional or statutory provision; (b) in excess of the statutory authority of the agency; (c) made upon unlawful procedures; (d) affected by other error of law; (e) clearly erroneous in view of the reliable, probative and substantial evidence on the whole record; or (f) arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion. Id.

I. Appellant waived the issues raised in his appeal by entering into a valid stipulation of facts wherein Appellant admitted the allegations contained in the Formal Accusation and both parties agreed to limit the evidence presented at the hearing to that of mitigation.

The Administrative Procedures Act ("APA") permits parties to resolve disputes through informal stipulations. S.C. Code Ann. § 1-23-320(f) (Supp. 2000) ("Unless precluded by law, informal disposition may be made of any contested case by stipulation, agreed settlement, consent order or default."); Leventis v. SC Dep't of Health and Envt'l Control, 340 S.C. 118, 133, 530 S.E.2d 643, 651 (Ct. App. 2000). The Appellant and the Board resolved the allegations set forth in the Formal Accusation in this case by entering into the MOA, which contains a detailed factual recital and a stipulation that the Appellant's conduct presented grounds for misconduct. Appellant admitted in the MOA all of the allegations of the Formal Accusation, including the allegation that Appellant's conduct violated S.C. Code Ann. § 40-15-190(A)(9) and (14) (Supp. 2001) and 23A S.C. Code Ann. Regs. 39-11(1-C) (1983). The MOA was a valid way under the APA for the parties in this case to resolve the issues set forth in the Formal Accusation.

Appellant nevertheless contends that the Board should have halted the proceedings and asked Appellant whether he wanted a lawyer when he stated in the hearing that he had "a hard time understanding" the MOA.

Courts in other jurisdictions have applied contract law to settlement agreements in administrative proceedings regarding professional licenses. See Frankel v. Bd. of Dental Examiners, Stermer v. Bd. of Dental Examiners, 115 Cal. Rptr. 2d 294 (Cal. Ct. App. 2002). Under contract law, to form a valid and enforceable contract there must be a "meeting of the minds" as to all essential terms of the contract. Columbia Hyundai, Inc. v. Carll Hyundai, Inc., 326 S.C. 78, 484 S.E.2d 468 (1997). From the record, it appears that the Appellant and the Board agreed on all essential terms of the MOA. Although Appellant showed some indications that he did not understand the code provisions in the MOA, Appellant was provided another chance to read the MOA and ask any questions regarding it. After re-reading the MOA, Appellant stated that everything in the MOA happened, and Appellant re-signed the MOA.

According to 16 Am. Jur.2d Contracts § 23,

[t]o form a contract, it is necessary that there be a party capable of contracting and a party capable of being contracted with. In other words, to enter into a valid, legal agreement, the parties must have the capacity to do so. The parties must be capable of intelligent assent in order to make a valid contract. Where there is no capacity to understand or agree, there can be no contract.

Appellant entered into two prior agreements with the Board. Appellant is highly educated and operates a dental practice. Appellant has not asserted that he did not have the capacity to enter into the MOA.

A contract can be rescinded upon unilateral mistake only when the mistake has been induced by fraud, deceit, misrepresentation, concealment, or imposition of the party opposed to the rescission, without negligence on the part of the party claiming rescission, or when the mistake is accompanied by very strong and extraordinary circumstances which would make it a great wrong to enforce the agreement. King v. Oxford, 282 S.C. 307, 318 S.E.2d 125 (Ct. App. 1984). The Appellant has presented no evidence that he was induced into signing the MOA by fraud, deceit, misrepresentation, or concealment. Nor has the Appellant shown strong and extraordinary circumstances which would make it a great wrong to enforce the MOA in this case. "Stipulations in administrative proceedings would not serve the purpose for which they are intended if they were voidable at the option of the licensee based on changes of circumstances or challenges to factual recitals." Stermer, 115 Cal. Rptr. 2d at 297.

Appellant has cited no case law, statutory law, or other legal authority in furtherance of an argument that the MOA is invalid or should not be enforced. Based on its own review of the record, this tribunal finds that the MOA is valid and enforceable.

II. Appellant failed to preserve the issue of whether the Board violated his due process rights by the procedures used in conducting the proceeding and resolving the case.

It is error for an appellate court to address an issue unless it was properly preserved for appeal. For an issue to be preserved for appellate review by this tribunal, it must have been raised to and ruled upon by the administrative agency. Kiawah Resort Assocs. v. S.C. Tax Comm'n, 318 S.C. 502, 458 S.E. 2d 542 (1998). An appellant who fails to raise an objection at an administrative hearing fails to preserve that issue for appeal. Id.

Applying the law to the facts of this case, Appellant signed the MOA as proposed by the Board without objection. Furthermore, the hearing transcript show that although Appellant tried to introduce into evidence a document from a pharmacy regarding the patient's medication, which was not admitted, Appellant did not request to present his wife or any other person as a witness to testify on his behalf at the hearing.

III. Appellant's Due Process rights were protected because the Board gave Appellant sufficient notice and opportunity to be heard before imposing sanctions.

Procedural due process requirements are not technical; no particular form of procedure is necessary." Humellmantel v. Greenville Hosp. Sys., 303 S.C. 549, 553, 402 S.E.2d 489, 491 (1991). Due process requires, at a minimum, adequate notice, opportunity for a hearing, right to introduce evidence, and the right to confront and cross-examine witnesses. Id. Here, the Board properly notified Appellant of the charges against him. The Board further notified Appellant of his right to an evidentiary hearing, his right to respond and present evidence and argument on all issues involved, and his right to retain counsel. By signing the MOA, Appellant stipulated that the Board's findings were correct and waived his right to substantively contest the issue of whether his conduct violated the Board's Practice Act. Therefore, Appellant cannot now argue that he was precluded from being given an adequate opportunity to be heard as to the Board's finding of a violation. See Marler v. Mo. State Bd. of Optometry, 102 F.3d 1453, 1456-57 (8^th Cir. 1996) (The fact that the licensee chose to enter into a settlement offer regarding the disciplinary action brought against him and did not actually utilize the procedural protections afforded to him did not mean that he was denied due process, "because the Due Process Clause requires merely a meaningful opportunity to be heard.") (Emphasis in original).

Furthermore, at the hearing, Appellant was again asked whether or not he agreed with everything that was stated in the MOA. Appellant responded affirmatively, stating "it all happened."

IV. Appellant failed to establish that the Board's decision resulted from a "will to win" in violation of his rights.

Appellant argues that the Board's decision resulted from partiality and a "will to win." However, Appellant offers insufficient evidence to show actual bias. Appellant's assertions never move beyond bare allegations.

S.C. Const. Art. I, § 22 provides in part: "No person shall be finally bound by a judicial or quasi-judicial decision of an administrative agency affecting private rights except on due notice and an opportunity to be heard; nor shall he be subject to the same person for both prosecution and adjudication . . . ." The purpose of this section is to "ensure adjudications are conducted by impartial administrative bodies." Ross v. Med. Univ. of S.C., 328 S.C. 51, 70, 492 S.E.2d 62, 72 (1997). Partiality in administrative proceedings exists when an adjudicator has acquired ex parte information as a result of prior involvement with the case, or has developed a "will to win." Id. However, agency officials are presumed to be honest, fair, and unbiased in their decision-making process. See Withrow v. Larkin, 421 U.S. 35 (1975); Garris v. Governing Bd. of S.C. Reinsurance Facility, 333 S.C. 432, 511 S.E.2d 48 (1998). A hearing tribunal will not be disqualified unless actual bias, as opposed to a mere potential for bias, is shown.

There is no evidence in this case that the members of the Board who made the decision to suspend Appellant's license for one year and impose a $10,000 penalty upon him were not impartial. I find no constitutional violation.

V. The Board's findings of fact were properly supported by substantial evidence, and the Board's decision was neither arbitrary and capricious nor characterized by an abuse of discretion.

Appellant argues that the Board made its decision without allowing the testimony of either the patient or the Appellant's wife, and that the Board's decision was therefore not supported by substantial evidence. However, the Appellant stipulated as to all of the facts of his emergency treatment of the patient in the MOA, and the Appellant further stipulated that his conduct constituted grounds for misconduct. Appellant admitted in the MOA all of the allegations of the Formal Accusation, including the allegation that Appellant's conduct violated S.C. Code Ann. § 40-15-190(A)(9) and (14) (Supp. 2001) and 23A S.C. Code Ann. Regs. 39-11(1-C) (1983). Appellant further testified before the Board that he agreed with everything in the MOA and that "it all happened." Thus, the Board's decision suspending Appellant's license for a period of one year and imposing a civil penalty of $10,000 for violation of S.C. Code Ann. § 40-15-190(A)(9) and (14) (2001) and 23A S.C. Code Ann. Regs. 39-11(1-C) (1983) was based on substantial evidence in the record. Nor was the Board's decision arbitrary or capricious or characterized by an abuse of discretion.

For the foregoing reasons, I hold that the Board did not err in issuing its Final Order suspending Appellant's license for a period of one year and imposing a civil penalty of $10,000 for violation of S.C. Code Ann. § 40-15-190(A)(9) and (14) (2001) and 23A S.C. Code Ann. Regs. 39-11(1-C) (1983). Therefore,

IT IS HEREBY ORDERED that the decision of the Board is AFFIRMED;

AND IT IS SO ORDERED.

_______________________________

C. DUKES SCOTT

ADMINISTRATIVE LAW JUDGE

February 28, 2003

Columbia, South Carolina

1. As first signed by the Appellant, the MOA stated that the events took place on a Sunday. However, the parties agreed during the hearing that this was a typographical error and corrected the MOA to reflect that the events took place on a Saturday. Appellant initialed the correction.

2. As first signed by the Appellant, the MOA stated that the events took place on March 24, 2002. However, the parties agreed during the hearing that this was a typographical error and corrected the MOA to reflect that the events took place on March 24, 2001. Appellant initialed the correction.