New Trend Beauty School, Inc. v. Indiana State Bd. of Beauty Culturist Examiners

• Decision Date: 03 February 1988
• Docket Number: No. 49A02-8602-CV-55,49A02-8602-CV-55
• Citation: 518 N.E.2d 1101
• Parties: 44 Ed. Law Rep. 1287 NEW TREND BEAUTY SCHOOL, INC., Appellant (Plaintiff Below), v. INDIANA STATE BOARD OF BEAUTY CULTURIST EXAMINERS, and Elaine Bowers, Sandie Deig, Debby Krebs, Judith Stewart, Linda Thompson, Arthur J. Sumrall, M.D., Odessa Rody Walker, individually, and as members of the Indiana State Board of Beauty Culturist Examiners, Appellees (Defendants Below).
• Court: Indiana Appellate Court

Page 1101

518 N.E.2d 1101

44 Ed. Law Rep. 1287

NEW TREND BEAUTY SCHOOL, INC., Appellant (Plaintiff Below), v. INDIANA STATE BOARD OF BEAUTY CULTURIST EXAMINERS, and Elaine Bowers, Sandie Deig, Debby Krebs, Judith Stewart Linda Thompson, Arthur J. Sumrall, M.D., Odessa Rody Walker individually, and as members of the Indiana State Board of Beauty Culturist Examiners, Appellees (Defendants Below).

No. 49A02-8602-CV-55.

Court of Appeals of Indiana,

Second District.

Feb. 3, 1988.

Steven K. Huffer, Stephen E. Arthur, Bose McKinney & Evans, Indianapolis, for appellant.

Linley E. Pearson, Atty. Gen., Frederick S. Bremer, Deputy Atty. Gen., Office of Atty. Gen., Indianapolis, for appellees.

SULLIVAN, Judge.

New Trend Beauty School, Inc. (New Trend) appeals a summary judgment granted in favor of the Indiana State Board of Beauty Culturist Examiners and its individual members (Board) ¹ upon New Trend's complaint to forestall disciplinary proceedings initiated by the Board.

We affirm.

On November 12, 1985, the Board filed a Complaint and Notice of Hearing against New Trend, a beauty culture school licensee, for administrative discipline. The administrative complaint alleged statutory and regulatory violations. These included sanitation and health violations, failure to keep adequate records, inadequate instruction and curriculum, and shortage of equipment. New Trend promptly sought to depose each Board member and served subpoenas duces tecum in order to determine their "biases, conflicts of interest, and other bases affecting each member's ability to determine impartially and fairly the charges against New Trend." Record at 37-38. Upon motion, those subpoenas were quashed and the discovery sought by New Trend was denied.

New Trend then filed its complaint in the Marion Circuit Court. It lodged a variety of accusations against the Board, including that the Board was unlawfully constituted, ² that the Indiana Beauty Culture Law denies due process of law by prohibiting a stay of a license revocation or suspension pending review, and that the "entire demeanor of the Board ... suggests a strong bias and negative attitude concerning New Trend...." Record at 37. As a consequence, New Trend contended that the Board violated its right to due process under the Fourteenth Amendment to the United States Constitution and under Article 1, Sec. 12 of the Indiana Constitution. Furthermore, it added, the Board's actions were ultra vires and in violation of 42 U.S.C. Sec. 1983 (the federal Civil Rights Acts). To remedy these ills, New Trend requested a declaration that the Board was improperly constituted, an injunction against further proceedings by the Board, a declaration that New Trend will be denied due process of law under the current administrative statutes, and an order reinstating New Trend's discovery requests. On December 27, the Board filed a motion for summary judgment without supporting evidence, seeking dismissal for New Trend's failure to exhaust its administrative remedies. The trial court heard argument on the motion on February 3, 1986, and granted the Board's motion on February 6. After New Trend's motion to correct errors was denied, it instituted this appeal.

Before addressing the substantive issues preserved in New Trend's brief, it behooves us to first deal with the appropriate standard of review and, in so doing, dispose of New Trend's first issue. It is evident from the record that the Board, in advancing its grounds for summary judgment, presented no evidence as contemplated by Ind.Rules of Procedure, Trial Rule 56(C) ("depositions, answers to interrogatories, admissions and affidavits"). Instead, it rested on the complaint filed by New Trend and its incorporated exhibits. See generally Gregory & Appel, Inc. v. Duck (1984) 2d Dist. Ind.App., 459 N.E.2d 46 (exhibits attached to and made part of a complaint are integral portions of the pleading). In the absence of such evidentiary support, the Board's motion was transformed into a functional motion for judgment on the pleadings pursuant to Ind.Rules of Procedure, Trial Rule 12(C). Estate of Tanasijevich v. City of Hammond (1978) 3d Dist., 178 Ind.App. 669, 383 N.E.2d 1081; Jenkins v. Hatcher (1975) 3d Dist., 163 Ind.App. 95, 322 N.E.2d 117. We therefore review the judgment in light of that standard of review.

As with a motion for summary judgment, a motion for judgment on the pleadings is properly granted when there are no genuine issues of material fact. Gregory & Appel, Inc. v. Duck, supra. The movant "admits for purposes of the motion all facts well pleaded, and the untruth of his own allegations which have been denied. All reasonable intendments and inferences are to be taken against the movant." Claise v. Bernardi (1980) 1st Dist. Ind.App., 413 N.E.2d 609, 611. The trial court in granting the motion declared to New Trend that regardless of the facts set forth in its complaint, the Board was still entitled to judgment as a matter of law. We agree.

The posture of New Trend's complaint, in and of itself, precludes New Trend from proceeding any further in the trial court at this time. The crux of the matter is whether New Trend, by alleging bias and partiality of the Board, may avoid the normal administrative procedure and be awarded interim relief by the trial court.

Without question, New Trend must concede that as a general proposition, "[i]n Indiana ... no one is entitled to judicial relief for an alleged or threatened injury until the prescribed administrative remedy has been exhausted." Board of School Commissioners of City of Indianapolis v. Eakin (1983) Ind., 444 N.E.2d 1197, 1201. The reason for this rule is that courts are generally loathe to interfere with ongoing proceedings before an administrative agency until the agency has had an opportunity to render a final decision. See Blinzinger v. Americana Healthcare Corp. (1987) 2d Dist. Ind.App., 505 N.E.2d 449; Indiana Alcoholic Beverage Commission v. McShane (1976) 2d Dist., 170 Ind.App. 586, 354 N.E.2d 259; Downing v. Board of Zoning Appeals of Whitley County (1971) 149 Ind.App. 687, 274 N.E.2d 542. Interference by the judiciary with the specialized functions of administrative agencies is authorized only in extreme and necessary situations. And we do not deviate from this rule even when a plaintiff requests relief under 42 U.S.C. Sec. 1983. Thompson v. Medical Licensing Board (1979) 2d Dist., 180 Ind.App. 333, 398 N.E.2d 679, cert. denied (1980) 449 U.S. 937, 101 S.Ct. 335, 66 L.Ed.2d 160. The remedial nature of a Sec. 1983 claim cannot obviate the remedial procedures provided by the Indiana legislature in pertinent statutes such as the Administrative Adjudication Act (I.C. 4-22-1-1 et seq. (Burns Code Ed.Repl.1982 (repealed effective July 1, 1987)). May v. Blinzinger (1984) 1st Dist. Ind.App., 460 N.E.2d 546. Avoidance of this exhaustion requirement may occur only in exceptional circumstances.

In Indiana, the extraordinary situations in which a plaintiff need not exhaust administrative remedies before turning to the courts are three: (1) if plaintiff's compliance with the administrative procedure would be futile; (2) if the applicable administrative procedural statute is void; or (3) if the plaintiff would suffer irreparable harm if required to complete the process. Northside Sanitary Landfill, Inc. v. Indiana Environmental Management Board (1984) 1st Dist. Ind.App., 458 N.E.2d 277; Bowen v. Sonnenburg (1980) 3d Dist. Ind.App., 411 N.E.2d 390. New Trend presents a hybrid argument involving a bit of all three when it contends that it will be deprived of certain constitutional rights and irreparably harmed if forced to undergo a futile administrative proceeding (futile because of Board bias and prejudice) resulting in a determination against which the pertinent procedural statute provides no stay pending judicial review. Our resolution requires a balancing of various considerations. As stated in Indiana State Department of Welfare v. Stagner (1980) 4th Dist. Ind.App., 410 N.E.2d 1348 at 1351, they are:

"... the character of the question presented and the competency of the administrative agency to answer that question; the avoidance of premature interruption of the administrative process in recognition of the interest of the agency in developing a factual record upon which to exercise its discretion and apply its expertise without the threat of litigious interference; the interest in permitting an agency to correct its own errors, a process by which unnecessary judicial proceedings are obviated; and the avoidance of deliberate or frequent flouting of established administrative processes."

In this light New Trend's specific contentions fall short.

As best we can decipher from its brief on appeal, New Trend seeks to escape the exhaustion requirement on one or both of the following bases:

1. An administrative proceeding before the Board is futile because the Board's bias and prejudice against New Trend has preordained a negative result.

2. If the Board does indeed suspend or revoke New Trend's license, there is no statutory provision for stay of the decision during judicial review.

The result of either of these events, New Trend claims, will be an unlawful deprivation of its Sec. 1983 civil right to due process and will cause irreparable harm to its professional reputation and loss of income. We disagree.

Due process requirements in the context of administrative proceedings are clear in requiring that a hearing be conducted before an impartial body. City of Anderson v. State ex rel. Page (1979) 4th Dist. Ind.App., 397 N.E.2d 615; City of Gary v. Gause (1974) 3d Dist., 162 Ind.App. 97, 317 N.E.2d 887; Guido v. City of Marion (1972) 3d Dist., 151 Ind.App. 435, 280 N.E.2d 81. "[T]he fact finding process should be free of suspicion or appearance of impropriety." City of Mishawaka v. Stewart (1974) 261 Ind. 670, 677, 310 N.E.2d 65, 69. This, of course, means that agency members may...