Schmitz v. N. D. State Bd. of Chiropractic Exam'rs

• Decision Date: 26 May 2022
• Docket Number: 20210135
• Citation: 974 N.W.2d 666
• Parties: Dr. Jacob SCHMITZ, Plaintiff and Appellant v. NORTH DAKOTA STATE BOARD OF CHIROPRACTIC EXAMINERS, Defendant and Appellee
• Court: North Dakota Supreme Court

974 N.W.2d 666

Dr. Jacob SCHMITZ, Plaintiff and Appellant

v.NORTH DAKOTA STATE BOARD OF CHIROPRACTIC EXAMINERS, Defendant and Appellee

No. 20210135

Supreme Court of North Dakota.

FILED MAY 26, 2022

Rehearing Denied July 20, 2022

Michael J. Geiermann, Bismarck, ND, for plaintiff and appellant.

Nathan J. Svihovec, Special Assistant Attorney General, Bismarck, ND, for defendant and appellee.

Jensen, Chief Justice.

[¶1] Dr. Jacob Schmitz appeals from a district court judgment affirming the final order of the State Board of Chiropractic Examiners ("Board") imposing discipline against him. He also appeals from an order entered after a limited remand denying his motion for post-judgment relief under N.D.R.Civ.P. 60(b). We conclude the Board's final order, adopting an administrative law judge's ("ALJ") recommended order for summary judgment, erred in granting summary judgment on the Board's claims against Dr. Schmitz. We reverse the judgment and the Board's final order and remand the case to the Board to conduct an evidentiary hearing and to supplement the administrative record.

I

[¶2] Dr. Schmitz is a chiropractor licensed to practice in North Dakota. Dr. Schmitz owns and practices chiropractic at Freedom Chiropractic Health Center in Fargo, North Dakota.

[¶3] In March 2019 the Board issued an administrative complaint against Dr. Schmitz. The complaint alleges that Dr. Schmitz failed to maintain the chiropractic standard of care for patient and clinical billing records in violation of N.D. Admin. Code § 17-03-01-01(3), that Dr. Schmitz's membership plans are in violation of N.D. Admin Code § 17-03-01-05, and that Dr. Schmitz used Noridian Medicare Private Contract (Noridian) and Advanced Beneficiary Notice (ABN) forms to have patients opt out of Medicare in violation of N.D. Admin. Code § 17-03-01-01(4). Dr. Schmitz denied the allegations and sought dismissal of the complaint with prejudice.

[¶4] The Board requested the Office of Administrative Hearings ("OAH") to appoint an ALJ to conduct an evidentiary hearing and issue recommended findings of fact, conclusions of law, and order. Both Dr. Schmitz and the Board moved for summary judgment. The ALJ held a telephonic hearing on the competing motions for summary judgment, issued a recommended order granting the Board's summary judgment motion on each of the claims, and cancelled the previously scheduled evidentiary hearing.

[¶5] In April 2020 the Board held a special meeting to discuss the recommended order followed by an open meeting during which the Board accepted the ALJ's recommended order. In May 2020 the Board held a second special meeting followed by an open meeting during which the final order was approved. The Board subsequently issued its final order, which concluded Dr. Schmitz had committed 18 separate violations of law and imposed discipline for those violations, including significant civil penalties.

[¶6] Dr. Schmitz appealed to the district court. The court affirmed the Board's final order and Dr. Schmitz initiated this appeal. While on appeal to this Court, the case was remanded for the district court to consider Dr. Schmitz's motion seeking post-judgment relief under N.D.R.Civ.P. 60. The court denied the requested relief.

II

[¶7] Section 43-06-04.1(1), N.D.C.C., provides that the Board "shall administer the provisions of [N.D.C.C. ch. 43-06] and the administrative rules of the board relating to the practice of chiropractic" and "has all powers, rights, and duties as provided in chapter 28-32." See also N.D.C.C. 28-32-01(2) (defining administrative agency to mean board, bureau, commission, department, or other administrative unit of the executive branch of state government). Section 43-06-15(7), N.D.C.C. (2019), stated:

If, based on the investigation or report from a peer review committee, the board has reasonable cause to believe that there is a basis for further proceedings, the board shall prepare a complaint and serve it, along with a notice of hearing, on the licensed chiropractor and thereafter proceed with a hearing on the matter under chapter 28-32.

(Emphasis added.)

[¶8] The Administrative Agencies Practice Act ("AAPA"), N.D.C.C. ch. 28-32, governs appeals from the Board's disciplinary orders. Courts exercise limited review in administrative appeals under N.D.C.C. ch. 28-32. Frokjer v. N.D. Bd. of Dental Exam'rs , 2009 ND 79, ¶ 9, 764 N.W.2d 657 ; N.D. State Bd. of Med. Exam'rs v. Hsu , 2007 ND 9, ¶ 11, 726 N.W.2d 216. Under N.D.C.C. § 28-32-46, the district court must affirm the order of the administrative agency unless:

1. The order is not in accordance with the law.

2. The order is in violation of the constitutional rights of the appellant.

3. The provisions of this chapter have not been complied with in the proceedings before the agency.

4. The rules or procedure of the agency have not afforded the appellant a fair hearing.

5. The findings of fact made by the agency are not supported by a preponderance of the evidence.

6. The conclusions of law and order of the agency are not supported by its findings of fact.

7. The findings of fact made by the agency do not sufficiently address the evidence presented to the agency by the appellant.

8. The conclusions of law and order of the agency do not sufficiently explain the agency's rationale for not adopting any contrary recommendations by a hearing officer or an administrative law judge.

[¶9] On appeal from the district court's decision in an administrative appeal, this Court reviews the agency order in the same manner. N.D.C.C. § 28-32-49 ; Frokjer , 2009 ND 79, ¶ 9, 764 N.W.2d 657 ; Hsu , 2007 ND 9, ¶ 12, 726 N.W.2d 216. An agency's decisions on questions of law are fully reviewable. Frokjer , at ¶ 9 ; Hsu , at ¶ 12. This Court, however, exercises restraint in reviewing an agency's findings of fact and does not substitute its judgment for that of the agency or make independent findings of fact. Hsu , at ¶ 12 ; see also Power Fuels, Inc. v. Elkin , 283 N.W.2d 214, 220 (N.D. 1979). In applying the preponderance-of-evidence standard, this Court decides only whether a reasoning mind reasonably could have decided the Board's factual conclusions were proved by the weight of the evidence from the entire record. Singha v. N.D. State Bd. of Med. Exam'rs , 1998 ND 42, ¶ 14, 574 N.W.2d 838 ; Power Fuels , at 220. This Court does not act as a "super board" when reviewing administrative agency decisions. Singha , at ¶ 14 (citing Skjefte v. Job Serv. N.D. , 392 N.W.2d 815, 817 (N.D. 1986) ).

III

[¶10] Dr. Schmitz argues that the Board erred in granting summary judgment. He acknowledges that both parties moved for summary judgment under N.D.R.Civ.P. 56 at the administrative level, but he contends his summary judgment motion was to eliminate the unlawful claims against him. He argues the ALJ erred in finding no material facts were in dispute and canceling the scheduled evidentiary hearing.

[¶11] Under N.D.C.C. § 43-06-15(7), after the Board prepares and serves its complaint with a notice of hearing on the licensed chiropractor, a hearing on the matter must be conducted under N.D.C.C. ch. 28-32. Section 28-32-21, N.D.C.C., provides the procedures that all administrative agencies "shall comply with" in adjudicative proceedings. Section 28-32-21(2), N.D.C.C., specifically states, "At any hearing in an adjudicative proceeding, the parties shall be afforded opportunity to present evidence and to examine and cross-examine witnesses as is permitted under sections 28-32-24 and 28-32-35." "In administrative contexts, we have held a hearing generally contemplates the presentation of evidence and testimony." Singha v. N.D. State Bd. of Med. Exam'rs , 1998 ND 42, ¶ 28, 574 N.W.2d 838 ; see also Gale v. N.D. Bd. of Podiatric Med. , 1997 ND 83, ¶ 20, 562 N.W.2d 878. Dr. Schmitz is entitled to an evidentiary hearing under N.D.C.C. § 28-32-21 on the Board's complaint against him.

[¶12] This Court has explained, however, that parties to administrative proceedings may, by stipulation, waive their rights to administrative hearings and formal dispositions and agree to some other form of informal disposition. See N.D.C.C. § 28-32-22 ; Karsky v. Kirby , 2004 ND 110, ¶ 10, 680 N.W.2d 257 ; Gale v. N.D. Bd. of Podiatric Med. , 2001 ND 141, ¶ 13, 632 N.W.2d 424. Section 28-32-22, N.D.C.C., provides for informal disposition of an adjudicative proceeding, stating:

Unless otherwise prohibited by specific statute or rule, informal disposition may be made of any adjudicative proceeding, or any part or issue thereof, by stipulation, settlement, waiver of hearing, consent order, default, alternative dispute resolution, or other informal disposition, subject to agency approval. Any administrative agency may adopt rules of practice or procedure for informal disposition if such rules do not substantially prejudice the rights of any party. Such rules may establish procedures for converting an administrative matter from one type of proceeding to another type of proceeding.

The Board argues summary judgment was properly granted because the Board afforded Dr. Schmitz a meaningful opportunity to respond to the Board's evidence and he failed to present any evidence that a genuine issue of material fact existed. The Board contends that under N.D.C.C. § 28-32-01(1) the adjudicative proceeding includes any informal disposition under N.D.C.C. § 28-32-22 or another specific statute or rule, and that our summary judgment standard under N.D.R.Civ.P. 56 is embodied in the OAH administrative rule, N.D. Admin. Code § 98-02-03-01. The Board asserts the Board afforded Dr. Schmitz a hearing on the motions and Dr. Schmitz "acquiesced" to a summary disposition, i.e. , informal disposition, of the administrative proceeding by moving for summary judgment.

[¶13] In Env't L. & Pol'y Ctr. v. N.D. Pub. Serv. Comm'n , 2020 ND 192, ¶ 19, 948 N.W.2d 838, this Court discussed harmonizing the Rules of Civil Procedure with the AAPA statutory provisions:

This Court has harmonized the Rules of Civil

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