State ex rel. Basham v. Medical Licensing Bd. of Indiana

• Decision Date: 25 July 1983
• Docket Number: No. 3-882A188,3-882A188
• Citation: 451 N.E.2d 691
• Parties: STATE of Indiana, ex rel., Kenneth E. BASHAM, and Kenneth E. Basham, Individually, Appellant, v. MEDICAL LICENSING BOARD OF INDIANA, Robert Kopecky, Ernest R. Beaver, James N. Hampton, Bruce C. Brink, Isadore J. Kwitny, Edward L. Hollenberg, John H. Mader, Walter J. Beneville, and John D. Miller, as Members or Past Members of the Medical Licensing Board of Indiana, and Jack F. Crawford, in his capacity as Prosecutor of Lake County, Indiana, State of Indiana, Appellees.
• Court: Indiana Appellate Court

Page 691

451 N.E.2d 691

STATE of Indiana, ex rel., Kenneth E. BASHAM, and Kenneth E Basham, Individually, Appellant, v. MEDICAL LICENSING BOARD OF INDIANA, Robert Kopecky, Ernest R. Beaver, James N. Hampton, Bruce C. Brink, Isadore J Kwitny, Edward L. Hollenberg, John H. Mader, Walter J Beneville, and John D. Miller, as Members or Past Members of the Medical Licensing Board of Indiana, and Jack F Crawford, in his capacity as Prosecutor of Lake County, Indiana, State of Indiana, Appellees.

No. 3-882A188.

Court of Appeals of Indiana, Third District.

July 25, 1983.

David M. Hamacher, Hamacher & Hamacher, Crown Point, for appellant.

Linley E. Pearson, Atty. Gen., Peter C. Americanos, Deputy Atty. Gen., Indianapolis, for appellee Medical Licensing Bd. of Indiana.

Fred L. Mock, Crown Point, for appellee Jack F. Crawford.

STATON, Judge.

In October of 1975, the Medical Licensing Board of Indiana (the Board) denied Kenneth E. Basham's application for a license to practice naprapathy. ¹ In June of 1979 Basham filed the present action seeking various remedies in regard to his denied application under 42 U.S.C. Secs. 1983-1985. The trial court dismissed Basham's complaint concluding, among other things, that Basham had failed to exhaust the applicable administrative review procedure. For brevity and clarity, we have combined most of the issues which Basham presents for our review into the following three dispositive issues:

I. Was it proper to dismiss Basham's complaint because he had failed to exhaust the statutory procedure for review of his denied application?

II. Has Basham demonstrated extraordinary circumstances excepting him from the exhaustion requirement?

III. Was the trial court required to give Basham a hearing before dismissing his complaint?

Affirmed.

I. Failure to Exhaust

Pursuant to Basham's request, the trial court entered findings of fact and conclusions of law. These findings were based on the allegations set forth in Basham's amended complaint and contained the following. On October 30, 1975 the Board sent a letter to Basham indicating that his application had been denied. This letter was postmarked October 31, 1975. Basham waited until February 9, 1976 to request a hearing on the Board's decision. On April 12, 1976 the Board sent Basham a second letter reiterating that his application had been denied. The Board's second letter did not comment on Basham's request for a hearing. In June of 1979 Basham commenced the present action. The trial court dismissed Basham's complaint concluding that Basham had failed to follow the statutory procedure for review of the Board's denial of his application.

The procedure for review of the Board's denial of Basham's application is found in the Administrative Adjudication Act, Ind.Code 4-22-1-1 et seq. (Burns Code Ed., 1982 repl.) (the AAA). Under the AAA, after Basham received notice that his application was denied he had 15 days to file a written request for a hearing with the Board. IC 4-22-1-24. The trial court found that Basham's request for a hearing was late. Further, the trial court found that Basham had not timely sought judicial review when the Board failed to grant Basham's request for a hearing. Again, Basham had 15 days to seek judicial review after receiving the Board's second letter, which did not grant him a hearing but which simply reiterated that his application had been denied. IC 4-22-1-14.

Basham contends that the trial court erred in concluding that he had not followed the review procedure of the AAA. The Board's letters to Basham were sent by regular mail, not registered or certified mail. Therefore, it was not conclusively established when Basham received the Board's notices. Since the time limits under sections 14 and 24 of the AAA run from when notice is received, Basham asserts that any finding regarding those time limits is unsupported. We disagree.

It was reasonable for the trial court to infer that Basham's request for a hearing was late when it was sent more than three months after the date of the Board's first letter to him. As to his failure to seek judicial review, Basham concedes such is a permissible inference from a statement in his complaint that he heard nothing further from the Board after April 12, 1976, the date of the Board's second letter. Appellant's Brief at 38.

Nevertheless, Basham asserts that allowing the trial court to base its dismissal on such reasonable inferences improperly places the burden on him to have alleged facts which would indicate that he had exhausted the administrative review procedure, citing Thompson v. City of Aurora (1975), 263 Ind. 187, 325 N.E.2d 839; Palmer v. State (1977), 173 Ind.App. 208, 363 N.E.2d 1245; and Board of Commissioners of Delaware County v. Briggs (1976), 167 Ind.App. 96, 340 N.E.2d 373. The gist of the holdings in these cases, as pertinent here, is that a plaintiff need not plead compliance with a statutory tort claims notice provision. Presumably, Basham is alleging that the same rule applies with regard to exhaustion of administrative review. However, the cases Basham cites further hold that failure to give the required notice is a jurisdictional defense which can be asserted in an answer or in a motion under Ind.Rules of Procedure, Trial Rule 12(B). According to these cases, once a defendant has raised such a defense the burden is on the plaintiff to show that he has complied. We believe the same should hold true for Basham.

Once the trial court's jurisdiction over this matter was questioned by a motion to dismiss, it was incumbent upon Basham to show that he had exhausted the statutory procedure for administrative review. Basham did not do this. Indeed, he has never contended that he has exhausted administrative review.

Generally, failure to exhaust the administrative review procedure of the AAA terminates "all rights of recourse to the courts" to the extent that the relief available under the AAA is adequate to protect and preserve the substantive rights of the parties. IC 4-22-1-14; State, Dept. of Nat. Resources v. Taylor (1981), Ind.App., 419 N.E.2d 819, 824; St. Joseph's Hospital, etc. v. Huntington County D.P.W. (1980), Ind.App., 405 N .E.2d 627, 630; Thompson v. Medical Licensing Bd. (1979), Ind.App., 389 N.E.2d 43, 46-48, reh. denied, 398 N.E.2d 679, cert. denied, 449 U.S. 937, 101 S.Ct. 335, 66 L.Ed.2d 160; South Bend Fed., etc. v. National Education Ass'n (1979), Ind.App., 389 N.E.2d 23, 30. To be excepted from this exhaustion requirement Basham must demonstrate extraordinary circumstances which show that his remedy under the AAA is inadequate. Thompson, supra, at 48 (quoting State ex rel. Paynter v. Marion Cty. Superior Court, Room 5 (1976), 264 Ind. 345, 353, 344 N.E.2d 846, 851); South Bend Fed., etc., supra, at 30. Absent these extraordinary circumstances, the trial court would have been without jurisdiction over the present action and dismissal would have been proper. Taylor, supra, at 824; Thompson, supra, at 48; South Bend Fed., etc., supra, at 30. Therefore, we next examine Basham's claims that an exception exists to the requirement that he had to exhaust the AAA procedure for administrative review.

II. No Exhaustion Exception

Indiana courts have recognized a number of exceptions to the requirement that a party exhaust the procedure for administrative review prior to bringing an action in a trial court. The exceptions Basham urges are: 1) that a 42 U.S.C. Sec. 1983 action is itself an exception to exhaustion, b) that the Board's actions effectively prevented him from following the AAA procedure for administrative review, and c) that he is excepted from exhaustion because the allegations in his complaint raise constitutional issues.

a. Sec. 1983 action

Basham did not except himself from the requirement of exhaustion by filing a 42 U.S.C. Sec. 1983 action. This specific issue was decided by Judge Buchanan in his opinion on rehearing in Thompson, supra. Basham recognizes the decision in Thompson but argues that it must be changed in light of Patsy v. Board of Regents of the State of Fla. (1982), 457 U.S. 496, 102 S.Ct. 2557, 73 L.Ed.2d 172. We disagree. Patsy merely reiterated the general rule that exhaustion of state administrative remedies is not a prerequisite to bringing a Sec. 1983 action in a federal court. Thompson had noted this rule but held that exhaustion was still required in Indiana state courts. Thompson, supra, at 680 (opinion on rehearing).

b. The Board's actions

The Board's actions did not effectively prevent Basham from following the administrative review procedure. Basham asserts that he was unable to timely obtain a hearing because the Board's notice to him telling him that his application had been denied did not tell him of his right to a hearing and of the time limits for perfecting that right. He believes he had a constitutional and statutory right to this type of notice. The cases which he cites in support of his constitutional claim simply hold that procedural due process required that he be given the opportunity for a hearing by the Board and, if such hearing has been granted, reasonable notice of the time, place, and nature of the hearing. E.g.s., Willner v. Committee on Character and Fitness (1963), 373 U.S. 96, 105, 83 S.Ct. 1175, 1181, 10 L.Ed.2d 224; Milligan v . Board of Registration in Pharmacy (1965), 348 Mass. 491, 499, 204 N.E.2d 504, 511.

The AAA provided Basham with an opportunity for a hearing. IC 4-22-1-24. It also set forth the procedure for giving Basham reasonable notice of the time, place, and nature of the hearing, had the Board granted a timely request by Basham for a hearing. ² Contrary to Basham's assertions, the AAA does not require the Board to give Basham notice of his right to a hearing and the time limits for perfecting that right.

Basham also maintains that by not granting him a hearing, as he had requested in his letter of February 9, 1976, the Board prevented him from...