Watts v. Or. State Bd. of Nursing

• Decision Date: 07 December 2016
• Docket Number: A156115
• Parties: Dawn Osborne Watts, Petitioner, v. Oregon State Board of Nursing, Respondent.
• Court: Oregon Court of Appeals

282 Or.App. 705

386 P.3d 34

Dawn Osborne Watts, Petitioner,

v.Oregon State Board of Nursing, Respondent.

A156115

Court of Appeals of Oregon.

Submitted December 5, 2014.

December 7, 2016

Dawn Osborne Watts filed the briefs pro se.

Ellen F. Rosenblum, Attorney General, Anna M. Joyce, Solicitor General, and Carolyn Alexander, Assistant Attorney General, filed the brief for respondent.

Before Armstrong, Presiding Judge, and Egan, Judge, and Schuman, Senior Judge.

SCHUMAN, S.J.

Petitioner seeks judicial review of a final order of the Oregon State Board of Nursing (the board) denying her, by summary determination, a license to practice as a registered nurse in Oregon. The board concluded that petitioner's application included fraudulent documents purportedly showing that she met educational criteria for licensure by graduating from college when, in fact, she never did so. Petitioner does not deny that the board received the application, that she signed it, and that it contained fraudulent documents; she argues, however, that she deserved a hearing instead of a summary determination in order to prove her claim that an unscrupulous criminal filled in and submitted the material without her knowledge or permission. We vacate the board's decision and remand.

In July 2012, the board received an application under the name of Dawn Osborne Watts for licensing as a registered nurse. One of the requirements for obtaining the license is "evidence of having completed, a state approved pre-licensure, Diploma, Associate Degree, Baccalaureate Degree or Master's Degree Program in Nursing." OAR 851–031–0006(1)(a)(B). The application stated that petitioner had obtained the necessary degree from Long Island University (LIU) in Brooklyn, New York, in 2012. A transcript and letter supposedly from LIU accompanied the application, at the end of which was the following statement:

"I hereby certify that I have read this application. I also certify that the information provided on this application is true and correct and that I have personally completed this application. I am aware that falsifying an application, supplying misleading information or withholding information is grounds for denial or revocation of license/certification."

Petitioner concedes that she signed that statement, although she maintains that the application was blank when she did so and that another person sent it to the board.

A board employee responsible for investigating license applications suspected that the documents "looked very outdated" and "may be fraudulent." The investigator contacted the LIU registrar's office, which, after receiving copies of the documents, confirmed the investigator's suspicions. As a result, the board issued a Notice of Proposed Denial, citing ORS 678.111(1)(c), which authorizes denial of a license for "[a]ny willful fraud or misrepresentation in applying for or procuring a license," and OAR 851–045–0070(6)(e), authorizing denial for "[r]esorting to fraud, misrepresentation, or deceit during the application process for licensure." Petitioner, through counsel, requested a hearing, asserting, among other things, that a man falsely claiming to be an employee of LIU had defrauded her by collecting $ 4,000 from her in return for enrollment in a special accelerated program.

The board scheduled a hearing, but before it occurred, the board filed a Motion for Summary Determination, OAR 137–003–0580,¹ alleging once again that petitioner had committed willful fraud or misrepresentation in applying for a license. Petitioner, now pro se because her attorney could not obtain pro hac vice status, filed a document captioned "Opposition to Motion for Summary Determination." The first sentence began, "Dawn Osborne Watts swears as follows[.]" She repeated her assertion that the board

"alleged erroneously that I submitted fraudulent documents in support of my license application. They have relied on a bogus transcript from [LIU] to bolster the false allegations. That document was not submitted to Oregon Board of Nursing by me. It was submitted by an unscrupulous individual who claimed to be an employee of LIU."

The document was signed by petitioner and notarized. The board assigned the case to an administrative law judge (ALJ), who granted the board's motion for summary determination. The board voted to accept the ALJ's proposed order without substantive alterations, concluding, "It is appropriate that Ms. Watts' [s] Licensure by Examination Application be denied."

On appeal, petitioner concedes that she never attended LIU and that the documents received by the board are fraudulent. She also concedes that she signed the documents, but maintains that she did so before they were filled out and that she was not the person who filled out or submitted them. Although her appellate brief maintains also that the board reached the wrong conclusion, the actual argument is only that the board erred in granting the motion for summary determination—that, in other words, she was entitled to a hearing. The board responds that her claim of error is not preserved and, even if we reject that argument, that the board's decision to grant summary determination was correct.

The board's contention that petitioner's claim of error is not preserved derives from ORAP 5.45(1), which provides, "No matter claimed as error will be considered on appeal unless the claim of error was preserved in the lower court and is assigned as error in the opening brief[.]" The board maintains that, despite its reference to a "lower court" and "appeal," the rule applies to judicial review of agency action. We agree. Thomas Creek Lumber v. Board of Forestry , 188 Or.App. 10, 30, 69 P.3d 1238 (2003). We part ways with the board, however, when it asserts that failure to file exceptions to the ALJ's proposed final order necessarily precludes judicial review. See OAR 137–003–0650(1) ("If the recommended action in the proposed order is adverse to any party or to the agency, the party or agency may file exceptions * * *."). In support of that argument, the board relies on Becklin v. Board of Examiners for Engineering , 195 Or.App. 186, 97 P.3d 1216 (2004), rev. den. , 338 Or. 16, 107 P.3d 26 (2005). In that case, the ALJ issued a proposed order favorable to the petitioner, but the respondent board amended the proposed order by making additional findings of fact. Id. at 200, 97 P.3d 1216. Despite being notified of its opportunity to file exceptions, the petitioner

"chose not to file any exceptions to the amended proposed order. As a result, [the] petitioner never argued to the board that it lacked authority to make the additional findings of fact. Even assuming for the sake of argument that the board erred in making those additional findings, [the] petitioner never gave the board the opportunity to avoid that error in adopting its final order.

"[The p]etitioner's argument that he preserved his assignment of error by arguing to the ALJ that the exceptions apply misses the point. The assignment of error is not about whether the exceptions apply. It is about whether the board had the authority to address them. [The p]etitioner never advanced that issue until now. Accordingly, it is unpreserved[.]"

Id. As we noted, "In general, to preserve a contention for appeal or judicial review, a party must provide the lower court or agency with an explanation of his or her objection that is specific enough to ensure that the court or agency is able to consider the point and avoid committing error." Id. at 199–200, 97 P.3d 1216. In other words, Becklin stands for the proposition that the court will not review arguments presented for the first time on judicial review. The holding would apply in a case like Becklin , where the board allegedly committed an error for the first time in an amended order, because, in that situation, the petitioner's only opportunity to alert the board to its alleged error is by way of exceptions. Becklin does not stand for the proposition, or even imply, that, in other situations such as the one here, failure to file exceptions constitutes a waiver. Indeed, it implies that filing exceptions is not necessary to preserve an argument that is already before the board.

That implication is bolstered by language in the rules governing exceptions to proposed orders. Both OAR 137–003–0645 and OAR 137–003–0650 provide that filing exceptions is optional, and both provide that the agency must give specified information to a party choosing that option. Neither informs a party that filing an exception to a finding or conclusion is necessary in order to file a later petition for judicial review.² Likewise, the "Notice of Contested Case Rights and Procedures" that the board sends to applicants tells them:

"The ALJ will issue a proposed order in the form of findings of fact, conclusions of law and recommended Board action. You will be provided with a copy and you will be given an opportunity to make written objections, called ‘exceptions,’ to the ALJ's recommendations. You will be notified when you may submit written exceptions and arguments."

The applicant is not informed of any adverse consequences if she does not avail herself of the "opportunity" to file exceptions. We conclude that, if an applicant's submissions contain "an explanation of his or her objection that is specific enough to ensure that the court or agency is able to consider the point and avoid committing error," Becklin , 195 Or.App. at 199–200, 97 P.3d 1216, it is misleading and fundamentally unfair to inform petitioner that filing exceptions is optional, without also informing her that failure to do so deprives her of the right to judicial review. In such situations, the claim of error is preserved, regardless of the fact that the applicant opted not to file exceptions.

That situation obtains here. In her response to the board's "Notice of Proposed Denial of Registered Nurse License," petitioner asserted, among other things, that an unnamed man falsely claiming to be...