Ritland v. State Bd. of Medical Examiners, 1 CA-CV 05-0712.

• Decision Date: 17 August 2006
• Docket Number: No. 1 CA-CV 05-0712.,1 CA-CV 05-0712.
• Citation: 140 P.3d 970,213 Ariz. 187
• Parties: John M. RITLAND, M.D., Plaintiff/Appellant, v. ARIZONA STATE BOARD OF MEDICAL EXAMINERS, Defendant/Appellee.
• Court: Arizona Court of Appeals

140 P.3d 970

213 Ariz. 187

John M. RITLAND, M.D., Plaintiff/Appellant, v. ARIZONA STATE BOARD OF MEDICAL EXAMINERS, Defendant/Appellee.

No. 1 CA-CV 05-0712.

Court of Appeals of Arizona, Division 1, Department C.

August 17, 2006.

Gallagher & Kennedy, P.A. By Robert J. Milligan, Brian Schulman and Myers & Jenkins, P.C. By Stephen W. Myers, Phoenix, Attorneys for Plaintiff/Appellant.

Terry Goddard, Arizona Attorney General By Dean E. Brekke, Assistant Attorney General, Phoenix, Attorneys for Defendant/Appellee.

OPINION

KESSLER, Judge.

¶ 1 In this appeal we address whether an administrative agency is required to adopt an administrative law judge's ("ALJ") findings on witness credibility when the Board renders its final agency decision. We hold that an agency is not bound by an ALJ's credibility findings and may reject them, provided the agency reviews the record and provides factual support for declining to adopt the ALJ's credibility findings.

FACTUAL AND PROCEDURAL HISTORY

¶ 2 Defendant-Appellee Arizona State Board of Medical Examiners¹ ("the Board") initiated an investigation of Plaintiff-Appellant John M. Ritland, M.D. ("Ritland") in response to allegations made by complaining witnesses. The Board notified Ritland of the allegations and requested he provide a complete narrative statement in response to the allegations, a complete copy of the pertinent medical record, and any supporting documents. Ritland also appeared before the Board for an investigational interview. The Board issued Amended Interim Findings of Fact, Conclusions of Law and an Order for Summary Restriction of License, taking "emergency action" against Ritland's license to practice medicine pending a formal administrative hearing.

¶ 3 The Board referred the matter to the Office of Administrative Hearings, which conducted a hearing. After the hearing, the ALJ issued a decision, which included findings of fact and conclusions of law. In particular, the ALJ concluded:

A trier of fact may rely upon the demeanor of witnesses when giving weight to the credibility of witnesses. Based upon the Administrative Law Judge's observation of [Ritland and the witnesses against him] during the hearing and during their respective testimony, the Administrative Law Judge concludes that [the complaining witnesses] were credible.

Based upon his findings of fact and conclusions of law, the ALJ recommended restricting Ritland's license such that he could not treat patients under eighteen years of age or treat female patients outside the presence of a female chaperone, and placing his license on probation for five years.

¶ 4 The Board moved to adopt the ALJ's recommended decision.² Ritland requested the Board to reject the ALJ's decision. Specifically, Ritland argued that the ALJ's credibility determination was not supported by the record, and he requested the Board make its own credibility determination of his and the complaining witnesses' testimony.³ At the Board hearing on the motion, four of the Board members expressed reservation as to the credibility of the complaining witnesses. Counsel for the Board initially advised the Board that, if it were to make findings of fact independent of the ALJ's findings, it should point to evidence in the record to support the independent findings. The Board continued consideration of the motion until the following day, at which time counsel for the Board advised the Board that the ALJ was the finder of fact, and therefore the best course was to adopt the findings of fact as stated by the ALJ.⁴

¶ 5 Accordingly, the Board adopted the findings of fact as stated by the ALJ, with an additional finding that the Board's investigator had acknowledged inconsistencies in the witnesses' accounts. The Board further adopted a conclusion of law stating:

Because the hearing officer actually saw the witnesses and heard the evidence he is in the best position to determine the facts and may be the only appropriate person to make decisions on credibility of witnesses. In re Pima County Juvenile Action No. 63212-2, 129 Ariz. 371, 374, 631 P.2d 526, 529 (1981).

The Board ultimately revoked Ritland's license to practice medicine in Arizona, but stayed revocation and placed Ritland on probation for ten years pursuant to stated conditions.

¶ 6 Ritland moved for review or rehearing, arguing that the Board has the authority to make findings of fact regarding the credibility of witnesses. The Board denied the motion. Ritland filed a complaint for judicial review in the superior court. The court affirmed the Board's decision, specifically finding:

Given the ALJ's position, having heard all the testimony and evidence and having observed the witnesses, he was in the best position to make a credibility determination. Although there was evidence to the contrary (which Dr. Ritland's counsel pointed out), this Court cannot say that the ALJ's findings were not supported by substantial evidence. The ALJ was within his province as the trier of fact when he found that [the witnesses] were credible based on their demeanor.

A hearing officer should hear the evidence and make findings of fact, but if the Board has the responsibility to make Findings of Fact and Conclusions of Law the Board must independently review the record.

BOMEX had the responsibility to review the matter and make an independent decision. After reviewing the record, this Court finds that BOMEX independently reviewed the evidence and came to its own determinations. . . . Dr. Hunter, on the second day of BOMEX's review, stated "the Board basically has found that the evidence presented is credible, and the charges are extremely serious."

(Internal citations omitted). Ritland timely appealed. This Court has jurisdiction pursuant to A.R.S. § 12-2101(B) (2003).

ANALYSIS

¶ 7 Ritland contends the Board erred by adopting the ALJ's findings of fact regarding the witnesses' credibility, rather than making its own findings of fact. In reviewing the Board's decision, we are not bound by the superior court's judgment because we review the same record. M & M Auto Storage Pool, Inc. v. Chemical Waste Mgmt., Inc., 164 Ariz. 139, 143, 791 P.2d 665, 669 (App.1990). Like the superior court, we will uphold the Board's decision unless it is "not supported by substantial evidence, is contrary to law, is arbitrary and capricious or is an abuse of discretion." A.R.S. § 12-910(E) (2003). If the Board's decision is supported by the record, there is substantial evidence to support that decision even if the record also supports a different conclusion. DeGroot v. Arizona Racing Comm'n, 141 Ariz. 331, 336, 686 P.2d 1301, 1306 (App. 1984). We review the agency's application of law de novo. Sanderson Lincoln Mercury, Inc. v. Ford Motor Co., 205 Ariz. 202, 205, ¶ 8, 68 P.3d 428, 431 (App.2003).

¶ 8 If the Board finds that information gained from an investigation into allegations of unprofessional conduct warrants suspension or revocation of a person's license, it must initiate a hearing before an ALJ. A.R.S. § 32-1451(J) (Supp.2005). Under the Administrative Procedure Act⁵ ("APA"), after conducting a hearing, an ALJ must issue a recommended decision containing an explanation of the reasons supporting the recommended decision. A.R.S. § 41-1092.08(A) (2004). The Board may review, accept, or modify the recommended decision. A.R.S. § 41-1092.08(B). It is the Board that ultimately finds a person guilty of unprofessional conduct and enters disposition of the person's license. A.R.S. § 32-1451(M). See also J.L.F. v. Arizona Health Care Cost Containment Sys., 208 Ariz. 159, 161-62, ¶ 12, 91 P.3d 1002, 1004-05 (App.2004) (agency head not ALJ, renders final agency decision subject to judicial review); Smith v. Arizona Long Term Care Sys., 207 Ariz. 217, 220, ¶ 15, 84 P.3d 482, 485 (App.2004) (same). If the Board rejects or modifies an ALJ's recommended decision, the APA requires the agency to provide a written justification to the ALJ and the parties setting forth the reasons for so doing. A.R.S. § 41-1092.08(B).

¶ 9 Arizona jurisprudence is less than clear as to the extent to which the Board, as ultimate decision maker, owes deference to an ALJ's credibility findings. In its decision, the Board cited In re Pima County Juv. Act. No. 63212-2, 129 Ariz. 371, 374, 631 P.2d 526, 529 (1981), for its contention that the ALJ may be the appropriate person to make decisions on witness credibility. That case does not in fact support the Board's contention. Juvenile Act. No. 63212-2 involved a juvenile proceeding in which the juvenile court referred the initial finding of delinquency to a referee pursuant to a statute then in effect under Title 8. 129 Ariz. at 372, 631 P.2d at 527. That statutory scheme is distinct from the APA. Significantly, the relationship of the juvenile court to the referee was one of appellate review. See H.R. 2227, 33rd Leg., 2d Reg. Sess. § 2 (Ariz.1978). Conversely, the Board is not an appellate body; it is the ultimate decision maker, A.R.S. § 32-1451(M); J.L.F., 208 Ariz. at 161-62, ¶ 12, 91 P.3d at 1004-05; Smith, 207 Ariz. at 220, ¶ 15, 84 P.3d at 485. We therefore focus our inquiry on law addressing deference to credibility findings in the context of an agency that is the ultimate decision maker.

¶ 10 Arizona courts have recognized that certain deference is owed to an ALJ's credibility findings. In holding that the credibility findings of an ALJ who replaced another ALJ midway through administrative proceedings was not owed deference on review, this Court discussed the rationale behind deferring to an ALJ's findings of fact on witness credibility:

[T]he predicate upon which our deference is given to the finder of fact is the assumption that he has indeed had the opportunity to look the witness in the eye and reach a conclusion with respect to his veracity or lack thereof. If this underpinning of judicial review is withdrawn, the appellate court has been deprived of the assistance which it...