Froemming v. Tex. State Bd. of Dental Examiners

• Decision Date: 01 June 2012
• Docket Number: No. 03–11–00399–CV.,03–11–00399–CV.
• Parties: Gerald FROEMMING, D.D.S., Texas Dental License No. 12286, Appellant, v. TEXAS STATE BOARD OF DENTAL EXAMINERS, Appellee.
• Court: Texas Court of Appeals

380 S.W.3d 787

Gerald FROEMMING, D.D.S., Texas Dental License No. 12286, Appellant,

v.TEXAS STATE BOARD OF DENTAL EXAMINERS, Appellee.

No. 03–11–00399–CV.

Court of Appeals of Texas, Austin.

June 1, 2012.

Gershon D. Cohen, San Antonio, TX, for Appellant.

George C. Noelke, Assistant Attorney General, Environmental Protection & Administrative Law Division, Austin, TX, Appellee.

Before Justices PURYEAR, HENSON and GOODWIN.

OPINION

DIANE M. HENSON, Justice.

Appellant Gerald Froemming, D.D.S., appeals a district court judgment affirming a final order of the Texas State Board of Dental Examiners (the Board). The Board's order found Froemming in violation of the Texas Dental Practice Act and the Board's rules and revoked his license to practice dentistry in the State of Texas. See generallyTex. Occ.Code Ann. §§ 251.001–276.006 (West 2012). In three issues, Froemming contends that the district court erred in affirming the Board's final order. We will affirm the district court's judgment.

BACKGROUND

Prior to the disciplinary action from which this appeal arose, Froemming was a dentist, licensed by the Board on September 24, 1979.¹ In 2009, the Board brought a disciplinary action against Froemming by filing a complaint with the State Office of Administrative Hearings (SOAH). Id. § 263.003 (providing that when Board seeks to revoke license, person is entitled to hearing under chapter 2001 of government code); 22 Tex. Admin. Code § 107.23 (2012) (Tex. State Bd. of Dental Exam'rs, Commencement of Formal Disciplinary Proceedings) (providing that formal disciplinary proceedings are initiated by Board's filing of public formal complaint). In its complaint, the Board alleged that Froemming had twice entered into agreements to charge patients a certain amount for orthodontic services and then later attempted to increase the amount charged. The Board also alleged that Froemming had abandoned patients by failing to continue treatment due to balances owed for services. Based on Froemming's past disciplinary history, as set out in prior orders issued by the Board and attached to its complaint, the Board's staff sought revocation of Froemming's license.

On April 5, 2010, an administrative law judge (ALJ) conducted an evidentiary hearing. After the record was closed, the ALJ issued a proposal for decision, concluding that Froemming had engaged in unprofessional and dishonorable conduct in the billing of services for patients M.E. and F.S., in violation of Texas Occupations Code Section 259.008(1) and Texas Administrative Code Sections 108.2(e) and 109.103. Tex. Occ.Code Ann. § 259.008(1) (providing that person may not engage in unprofessional conduct by attempting to collect fee by fraud or misrepresentation); 22 Tex. Admin. Code § 108.2(e) (2012) (Tex. State Bd. of Dental Exam'rs, Fair Dealing) (providing that dentist shall not “flagrantly or persistently overcharge ... a patient”); 22 Tex. Admin. Code § 109.103 (2001) (Tex. State Bd. of Dental Exam'rs, Professional Responsibility) repealed and moved to22 Tex. Admin. Code § 108.3, 26 Tex. Reg. 1494 (2001) (a dentist's professional responsibility includes compliance with the Dental Practice Act and Board's rules). The ALJ also concluded that Froemming had abandoned M.E., a minor patient, in violation of Texas Administrative Code Sections 108.5 and 108.7. 22 Tex. Admin. Code §§ 108.5 (Tex. State Bd. of Dental Exam'rs, Patient Abandonment), 108.7 (2012) (Tex. State Bd. of Dental Exam'rs, Minimum Standard of Care).

With respect to the appropriate sanction against Froemming, the ALJ explained in the proposal for decision that revocation, as requested by the Board, was “too harsh a penalty.” The ALJ reasoned that while Froemming was on probation at the time of the hearing and would remain on probation until August 19, 2010, he had committed only one of the violations while on probation. In conclusion of law number 7, the ALJ stated that the Board should instead revoke Froemming's current probation of his license suspension and impose an additional probated five-year suspension after August 19, 2010.

The Board subsequently filed exceptions to the proposal for decision, arguing that conclusion of law number 7 should be reclassified as a recommendation. SeeTex. Gov't Code Ann. § 2001.062 (West 2008) (providing that proposal for decision may be amended in response to exceptions submitted by parties). In response to the Board's exceptions, the ALJ issued a letter opinion agreeing that conclusion of law number 7 should be reclassified as a recommendation. On August 20, 2010, the Board issued its order, which adopted all of the ALJ's findings of fact and remaining conclusions of law, vacated conclusion of law number 7, and revoked Froemming's license.

After exhausting his administrative remedies before the Board, Froemming sought judicial review of the Board's final order in district court, which affirmed the Board's order in full. SeeTex. Gov't Code Ann. § 2001.171 (West 2008). On appeal, in three issues, Froemming challenges the Board's decision to reject the ALJ's recommendation to impose a five-year probated suspension and instead impose the harsher sanction of revocation.

STANDARD OF REVIEW

Our review of the Board's final order is governed by the “substantial evidence” standard of the Texas Administrative Procedure Act (APA). See id. § 2001.074 (West 2008). This standard requires that we reverse or remand a case for further proceedings “if substantial rights of the appellant have been prejudiced because the administrative findings, conclusions, or decisions” are (A) in violation of a constitutional or statutory provision, (B) in excess of the agency's statutory authority, (C) made through unlawful procedure, (D) affected by other error of law, (E) not reasonably supported by substantial evidence considering the reliable and probative evidence in the record as a whole, or (F) arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion. Id.§ 2001.174(2)(A)-(F).

On appeal from the district court's judgment, the focus, as in the district court, is on the Board's decision. See Montgomery Indep. Sch. Dist. v. Davis, 34 S.W.3d 559, 562 (Tex.2000). With respect to subparagraph (E), the test is not whether we believe the Board reached the correct conclusion, but whether the agency's factual findings are reasonable “in light of the evidence from which they were purportedly inferred.” Granek v. Texas State Bd. of Med. Exam'rs, 172 S.W.3d 761, 778 (Tex.App.-Austin 2005, no pet.). Thus, we will sustain the Board's action if the evidence as a whole is such that reasonable minds could have reached the conclusion that the Board must have reached in order to justify its action. Texas State Bd. of Dental Exam'rs v. Sizemore, 759 S.W.2d 114, 116 (Tex.1988). We presume that the Board's order is supported by substantial evidence, and Froemming, as the party appealing the order, has the burden to prove otherwise. Texas Health Facilities Comm'n v. Charter Med.-Dallas, Inc., 665 S.W.2d 446, 452 (Tex.1984). Further, we may not substitute our judgment for that of the Board on the weight of the evidence on matters committed to agency discretion. SeeTex. Gov't Code Ann. § 2001.174; Pierce v. Texas Racing Comm'n, 212 S.W.3d 745, 751 (Tex.App.-Austin 2006, pet. denied).

DISCUSSION

Modification of conclusion of law number 7

In his first issue, Froemming argues that the Board improperly rejected the ALJ's conclusion of law number 7 because, in doing so, the Board failed to comply with rule 107.51 of the Texas Administrative Code. 22 Tex. Admin. Code § 107.51 (2012) (Tex. State Bd. of Dental Exam'rs, Findings of Fact and Conclusions of Law).

Rule 107.51(a) provides that the Board may change a finding of fact or conclusion of law made by an ALJ if the Board determines that: (1) the ALJ improperly applied or interpreted the law, agency rules, written policies, or prior administrative decisions; (2) the ALJ relied on a prior administrative decision which is incorrect or should be changed; or (3) a finding of fact contains a technical error which should be changed. See 22 Tex. Admin. Code § 170.51(a); see alsoTex. Gov't Code Ann. § 2001.058(e) (West 2008). In addition, under rule 107.51(b), the Board must explain with particularity the specific reason and legal basis for any change made. Compare 22 Tex. Admin. Code § 170.51(b) withTex. Gov't Code Ann. § 2001.058(e).²

Froemming asserts that rule 107.51 was not satisfied because the Board never found that the ALJ committed any error under rule 107.51(a) but instead simply ignored the recommendation of the ALJ. Further, Froemming argues that the Board failed to satisfy rule 107.51 because it failed to explain in writing its reasons for rejecting the ALJ's recommendation concerning the sanction. In response, the Board argues rule 107.51 is not implicated by its decision in this case because the ALJ merely issued a recommendation regarding the appropriate sanction, not a conclusion of law or finding of fact that is presumptively binding on the Board. In the alternative, the Board argues that even if rule 107.51 does apply, the Board properly explained its rationale by stating the specific reason and legal basis for its ruling.³

In essence, the Board argues that the ALJ's label of “recommendation” removes any limit on its discretion to change or modify the ALJ's penalty recommendation. We disagree that the labeling of the ALJ's proposed sanction as a “recommendation” rather than as a “finding of fact” or a “conclusion of law” ultimately determines its binding effect. While this Court has previously recognized that an agency, like the Board, is not required to give “presumptively binding” effect to an ALJ's recommendation regarding sanctions in the same manner as with other findings of fact and conclusions of law, we have nevertheless analyzed whether the requirements of section 2001.058(e) of the APA have been met.⁴S...