Gurry v. Board of Public Accountancy
| Decision Date | 26 February 1985 |
| Citation | 474 N.E.2d 1085,394 Mass. 118 |
| Parties | Edward J. GURRY v. BOARD OF PUBLIC ACCOUNTANCY. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Michael E. Festa, Melrose, for plaintiff.
Kim E. Murdock, Asst. Atty. Gen., for defendant.
Before HENNESSEY, C.J., and WILKINS, LIACOS, ABRAMS and LYNCH, JJ.
Edward J. Gurry seeks review of a decision of the Board of Public Accountancy (board) that he surrender for two years his certificate and license to practice as a certified public accountant. The case reaches us pursuant to a reservation and report by a single justice of the Supreme Judicial Court for Suffolk County. We affirm the board's order suspending Gurry's certificate and license for two years.
The board issued its decision suspending Gurry's certificate and license after Lee Kennedy Co., Inc. (company), brought a complaint in July, 1982. The board held a hearing on the complaint and issued its decision on July 14, 1983, in which it concluded that Gurry had made an unauthorized appropriation of funds from the company, which constituted "discreditable conduct" for a certified public accountant in violation of 252 Code Mass.Regs. § 3.05(1) (1979).
After Gurry filed a complaint pursuant to G.L. c. 30A, § 14, in the Superior Court seeking review of the board's order suspending his certificate and license to practice as a public accountant, a single justice ordered that the matter be transferred to the Supreme Judicial Court for Suffolk County. 1 After a hearing, the single justice reserved and reported the case to the full court, and allowed Gurry's motion for a preliminary injunction to stay the board's action.
Gurry argues that we should overturn the board's decision because the suspension was for conduct unrelated to the profession of public accounting and, therefore, the board exceeded its authority under G.L. c. 112, § 87C(a). Gurry contends, alternatively, that the regulation proscribing discreditable conduct by a certified public accountant is impermissibly vague in violation of the due process clause of the Fourteenth Amendment to the United States Constitution. The board argues that the single justice erred in staying the board's decision pending review by this court, because G.L. c. 112, § 64, prohibits a stay prior to entry of a final judgment revising or reversing the board's decision.
We conclude that the board acted within its authority under G.L. c. 112, § 87C(a), in suspending Gurry. Furthermore, we hold that the board's regulatory standard proscribing "discreditable conduct," as applied in this case, is not impermissibly vague in violation of due process. We discuss but need not decide the board's challenge to the issuance of the stay by the single justice.
Gurry had been licensed as a certified public accountant by the Commonwealth since 1972. In 1980, the company became a client of Gurry, O'Neill & Company, the accounting firm in which Gurry was the only active partner. In October, 1980, after acting as the outside accountant for the company for about two months, Gurry was hired as an employee with the title "treasurer." As treasurer, Gurry organized and supervised the bookkeeping and financial planning functions for the company. Gurry's authority included the right to issue checks on the company account. 2 Gurry, O'Neill & Company continued to act as the outside accountant for the company and its related ventures until April or May, 1981.
On April 3, 1981, Gurry wrote a check for $11,000 on the company account payable to himself. Gurry testified that he wrote the check because Lee Kennedy had authorized him to borrow $20,000 from company funds with no repayment schedule. Kennedy testified, however, that he had authorized a loan of $3,000 for a few days only, and that initially he knew nothing of the April check. It was brought to his attention by the firm's bookkeeper, Catherine Graham.
Sometime before May 1, 1981, Gurry wrote a personal check dated May 1, 1981, for the full amount of the April "loan." On May 2, 1981, a second check for $11,000 was issued to Gurry on the company account. This check was also unauthorized and was signed with Graham's signature plate. Gurry testified that Graham had prepared it, but Graham denied this. In June, Gurry repaid $1,000 of the $11,000 that he had "borrowed."
On July 1, 1981, Kennedy directed a memorandum to Gurry in which he demanded full repayment by July 15, 1981, and informed him that "[u]nder no circumstances is anyone authorized or allowed to write checks without [Graham's] signature or my signature." Kennedy's secretary testified that she typed the memorandum on July 1, 1981, and delivered it to Gurry personally. Gurry testified that he never received the memorandum.
On July 14, 1981, a check for $10,000 was issued to Gurry on the company account. Gurry testified that he had prepared this check and used Graham's signature plate. Graham testified that, unlike the first and second checks, the July 14 check was not taken from the top of the checkbook, but rather was taken out of sequence, so that she did not discover its disappearance until several days later through an interim bank statement. Graham and Kennedy testified that, when Kennedy learned of the July 14 check, he went directly to Gurry's office, informed him that he was fired, and obtained a promissory note for the $10,000. 3 The board found that Gurry had caused the July 14 check to be issued without authority.
1. The board's authority. Gurry argues that the board exceeded its authority under G.L. c. 112, § 87C(a), because it suspended him for conduct unrelated to the practice of public accounting. In its July 14, 1983, decision, the board found that Gurry had made an unauthorized appropriation of funds from his employer, the company. The board concluded that this conduct constituted "an act discreditable to the profession [of public accounting]" in violation of 252 Code Mass.Regs. § 3.05(1). The board promulgated § 3.05(1) under its power to adopt "such rules of professional conduct as may be instrumental in fixing and maintaining high standards of integrity and dignity in the profession of public accounting." G.L. c. 112, § 87C(a), as appearing in St. 1963, c. 663, § 2. The board suspended Gurry's license for two years under its power to "revoke or suspend any certificate ... [for] violation of a rule of professional conduct promulgated by the board under [§ 87C(a) ]." G.L. c. 112, § 87C(b)(4), as appearing in St. 1963, c. 663, § 2. Gurry contends that the conduct for which he was disciplined did not occur while he was practicing as a certified public accountant, but rather occurred when he was acting as an employee, in the capacity of treasurer, of the company and its related ventures. Gurry does not challenge the factual basis for the board's finding that he made an unauthorized appropriation of funds, 4 but rather argues, in effect, that, when acting as treasurer of the company, he was outside the scope of the board's disciplinary authority. We disagree.
We have considered the question of the scope of a regulatory board's authority in several recent cases involving other professions. In response to appeals from decisions of the Board of Registration in Medicine, we have ruled that that board has broad disciplinary authority. See, e.g., Raymond v. Board of Registration in Medicine, 387 Mass. 708, 712, 443 N.E.2d 391 (1982) (); Levy v. Board of Registration & Discipline in Medicine, 378 Mass. 519, 526, 392 N.E.2d 1036 (1979) (). The standard for testing the regulation in those cases was whether it "was reasonably related to the legislative purpose of promoting the public health, welfare, and safety." Raymond, supra, 387 Mass. at 711, 443 N.E.2d 391. Gurry contends that these cases are distinguishable because the Board of Registration in Medicine has broader authority than the Board of Public Accountancy. Since we conclude that there is a sufficiently close nexus between Gurry's profession and the misconduct found by the board to justify the exercise of its authority, it is unnecessary to decide whether the authority of the Board of Public Accountancy is as broad as that of the Board of Registration in Medicine. We do, however, conclude that our decisions involving the medical board provide some guidance as to the nature of the statutory disciplinary authority granted to other such regulatory boards.
In Raymond, supra at 712, 443 N.E.2d 391, we held that the board "correctly found that Raymond's conviction reasonably called into question his ability to practice medicine." Similarly, we upheld the board's decision in Levy, supra, 378 Mass. at 526, 392 N.E.2d 1036, because we agreed "with the Board's determination that the crimes of which Levy was convicted are closely related to the practice of medicine." There, the board had revoked Levy's license after he had been convicted of grand larceny from the Department of Public Welfare and of submitting false data to the Rate Setting Commission in connection with his ownership and management of eleven nursing homes. We reasoned that "an intentional misdeed relating to third-party payors [of medical expenses] reflects adversely on a physician's fitness to practice medicine." Id. at 527, 392 N.E.2d 1036. We find ample basis in the record in the instant case to support the board's finding that Gurry's unauthorized appropriation of the company's funds reflected adversely on his fitness to practice as a public accountant and, therefore, constituted an act discreditable to the profession of public accountancy.
Gurry was initially retained by the company in 1980 when the company became a client of Gurry, O'Neill & Company. After acting as the company's...
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