In re Lakatos (2006-014)
2007 VT 114
[Filed 19-Oct-2007]
NOTICE: This opinion is subject to motions for reargument under V.R.A.P. 40 as well as formal revision before publication in the Vermont Reports. Readers are requested to notify the Reporter of Decisions, Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of any errors in order that corrections may be made before this opinion goes to press.
2007 VT 114
No. 2006-014
In re Peter A. Lakatos, D.M.D. Supreme Court
On Appeal from
Washington Superior Court
February Term, 2007
Helen M. Toor, J.
Kaveh S. Shahi of Cleary Shahi & Aicher, P.C., Rutland, for Petitioner-Appellee.
Robert H. Backus and Hugh L. Brady, Law Clerk, Secretary of State’s Office, Montpelier, for
Respondent-Appellant.
PRESENT: Reiber, C.J., Dooley, Johnson and Skoglund, JJ., and Bent, Supr. J.,
Specially Assigned
¶ 1. REIBER, C.J. The State of Vermont appeals from a superior court order vacating a decision of the Vermont Board of Dental Examiners. Following an evidentiary hearing and disciplinary recommendation by a specially appointed hearing committee, the Board suspended respondent Peter Lakatos, a licensed dentist, for failure to meet minimal standards of practice in numerous instances. After a summary affirmance by the administrative appellate officer, respondent appealed to the superior court, asserting that (1) the hearing committee utilized by the Board lacked statutory authority, (2) the Board violated his due-process rights by rendering a decision despite the absence of some members from the evidentiary hearing, (3) the evidence was insufficient to support the findings of unprofessional conduct, and (4) the sanctions imposed were arbitrary and capricious. The court agreed with the procedural and due-process claims, and accordingly vacated the decision and remanded for a new hearing without reaching respondent’s additional arguments. On appeal, the State contests the court’s conclusions and contends that respondent waived the claims in any event. For the reasons set forth below, we reverse and remand.
¶ 2. The material facts may be briefly summarized.[1] Respondent, an experienced dentist, practiced in Massachusetts for twenty years before moving to Vermont, where he renewed his practice in 1996. Respondent claims expertise in a number of practice areas, including endodontics, or the treatment of diseases relating to the tooth root and surrounding areas, which comprises about twenty-five percent of his practice. In October 2001, the Board of Dental Examiners, through the Office of the Attorney General acting as general counsel, filed a specification of charges against respondent containing a number of counts of unprofessional conduct, including one in connection with alleged improper bridge work, four relating to improperly performed root canals or post placements, and one alleging abandonment of a patient.[2]
¶ 3. Following an exchange of memoranda and motions among the parties and Board counsel relating to the time necessary for presentation of the case and the adequacy of pre-filed testimony, Board counsel sent the parties a letter in April 2002, outlining the procedure which the Board had determined to follow and the dates for the scheduled hearing. Counsel stated that the Board had “decided to proceed under 3 V.S.A. § 811,”[3] explaining that an evidentiary hearing would be held before a “Board hearing committee” with three members—a dentist, dental hygienist, and lay person, assisted by a presiding officer—who would then file a proposal for decision with the Board. The letter indicated that the parties would have an opportunity to discuss the hearing procedure at a previously scheduled prehearing conference in late May unless a more immediate response was required. Following the prehearing conference, Board counsel issued a memorandum reaffirming the hearing-committee procedure previously outlined and explaining in addition that the parties would have an “opportunity to file exceptions and present briefs and argument” concerning the proposed decision with the Board, which would consist of the hearing committee plus additional members necessary to reach a quorum of at least five. It was further agreed that the committee would not make a recommendation on sanctions.
¶ 4. The hearing committee held an evidentiary hearing over the course of four days from July to October 2002. It issued a report and proposal for decision in December 2002, concluding that respondent had failed to meet the standards of practice on six of the eight counts alleged.[4] The report contained numerous findings and conclusions, and respondent filed extensive exceptions and a brief with the Board, which held oral argument in February 2003. Thereafter, in July 2003, the Board—comprising the three hearing-committee members plus six additional members (four dentists, one dental hygienist, and one public member)—issued a lengthy decision containing exhaustive findings and conclusions with citations to the evidentiary record. Although the Board declined to adopt the committee’s proposed decision, it unanimously concluded—like the committee—that respondent had failed to comport with dental standards of practice on each of the substantive counts alleged, and had therefore committed unprofessional practice under the statutes and regulations governing the practice of dentistry. Although the parties subsequently reached a stipulation concerning sanctions, the Board rejected the stipulation, heard oral argument, and issued a sanction order suspending respondent from the practice of dentistry for six months, imposing a number of conditions for reinstatement, and requiring a two-year period of supervision by a licensed dentist following reinstatement. An appellate officer affirmed, and respondent then appealed to the superior court.[5] 3 V.S.A. § 130a.
¶ 5. As noted, the trial court reversed the Board’s decision and remanded for a new hearing, concluding that the hearing-committee procedure utilized by the Board was not authorized by state law, and that the Board had violated respondent’s due-process rights by rendering a decision without having personally attended the evidentiary hearing. The court did not, therefore, reach respondent’s claims that the evidence failed to support the finding of unprofessional conduct, and that the sanctions were arbitrary and capricious. This appeal followed.[6]
I.
¶
6.
The
State contends the court erred in determining that the hearing-committee
procedure was contrary to law, and asserts that respondent waived the claim in
any event. We have held that, by failing to object and actively participating
in an administrative proceeding, parties may waive any objection to a process
which may not take “the exact form required by statute but which, nevertheless,
is in substantial compliance therewith.” In re Burlington Elec. Dep’t,
¶ 7.
As
the trial court noted, the statutory scheme does not “specifically authorize[]”
the creation of a hearing committee of the kind utilized here. It does not
necessarily follow, however, that the process followed by the Board was “prohibited
by law” or beyond the ability of the parties to “cure[] by waiver, consent or
agreement.” Id. To be sure, 3 V.S.A. § 129(f), which authorizes the
appointment of a hearing officer to conduct a hearing that would otherwise be
heard by the Board, does not similarly provide for the appointment of a hearing
committee comprising less than a quorum of the Board. Under 3 V.S.A. § 811,
however, a party adversely affected by a proposed administrative decision is
entitled to certain additional procedural protections when “a majority of the
officials of the agency who are to render the final decision have not heard the
case or read the record.” These include the right to notice of the proposed
decision and the opportunity to “file exceptions and present briefs and oral
argument” to the agency rendering the decision. Id. Although this
section does not expressly refer to the appointment of a hearing committee, its
reference to circumstances in which less than a “majority” of the
decisionmaking agency has heard the case or read the record plainly
contemplates hearings before a minority of the Board, as occurred here. This
was the Board’s reading of the provision as well, and we traditionally defer to
an agency’s interpretation of its enabling legislation absent a “compelling
indication” to the contrary. Lemieux v. Tri-State Lotto Comm’n,
¶
8.
Accordingly,
we discern no basis to conclude that the hearing-committee procedure was “prohibited
by law” such that a finding of waiver or acquiescence by the parties would “nullify
the statute prohibiting it.” Burlington Elec. Dep’t,
¶
9.
Thereafter,
the committee held four days of evidentiary hearings from July through October
2002. On more than one occasion during these hearings the presiding officer
re-summarized the procedures adopted by the Board and invited questions or
comments on the process. Although petitioner raised other issues, he never once
questioned or objected to the hearing-committee procedure itself, argued that
it was unauthorized, or claimed that it deprived him of due process. In these
circumstances, we have no difficulty concluding that petitioner’s direct and
active participation in proceedings that lasted several months, and failure to
raise any objection despite numerous opportunities to do so, amounted to a
waiver of any objection. The admonition in Burlington Electric Dep’t,
II.
¶ 10. The State also
challenges the trial court’s conclusion that petitioner was denied due process
of law because a majority of the Board was not present during the evidentiary
hearings. As the trial court correctly perceived, the issue is governed
largely by two decisions of this Court. In Lewandoski v. Vermont State
Colleges,
¶
11.
We
revisited the issue more recently in In re Villeneuve,
¶
12.
The
trial court relied on these as well as several out-of-state cases holding that
due process may require agency decision makers’ personal attendance at a
hearing when their decision rests in material part on credibility
determinations. Based on this authority, the trial court found that issues of
credibility—including assessments of demeanor—might have had a “material impact”
on the Board’s decision and that, as six of the nine members had not actually
observed the witnesses, the Board’s decision was constitutionally deficient.
Under the Villeneuve standard, in other words, the credibility of one or
more witnesses was “central to the decision” and the record did not therefore
provide “a reasonable basis for evaluating the kind of testimony in question” Id. at 455,
¶
13.
The
State, on appeal, does not so much dispute the legal principles articulated by
the trial court as challenge its finding that credibility assessments exerted a
“material impact” on the Board’s decision such that the Board’s personal
observation of the witnesses was essential.[7]
We begin our analysis with a brief review of the of the principles relating to
credibility assessments on which the court and parties rely, succinctly
summarized by the New Hampshire Supreme Court in In re O’Dell, 668 A.2d
1024 (N.H. 1995). There, the court reaffirmed the general rule, recognized in Lewandoski
and Villaneuve, that “in an administrative proceeding . . . the board
may act on a written record of testimony by witnesses whom its members have not
personally seen or heard.” Id. at 1034. This general rule “may even
apply in a case where experts are in conflict, when the choice of whom to
believe is a function of logical analysis, credentials, data base, and other
factors readily discernible to one who reads the record.” Id. at 1034;
accord Stanley v. Review Bd. of Dep’t of Employ. & Training
Servs.,
The hearing officer’s sole advantage over the Commission as a fact-finder is his ability to observe the demeanor of the witnesses. There are numerous other indicia of credibility that can be ascertained as easily from the record as from live testimony. For instance, there may be significant inconsistencies in a witness’s testimony or between that testimony and other facts established at the hearing. There may be evidence indicating that the witness was biased, had a motive to lie, or was unable to perceive clearly the subject matter of the testimony. The force of other evidence may be so strong that the demeanor of a particular witness, however earnest, pales in comparison. Thus, there will be many cases where the Commission need not rely upon or accept the credibility determinations of its hearing officer.
Dep’t of Health &
Welfare v. Sandoval,
¶
14.
It
is thus only where the determination of disputed facts “rests, in some material
part, on the fact finder’s assessment of [the witness’] credibility, as shown
by their demeanor or conduct at the hearing,” that the decisionmakers must be
present for testimony. O’Dell,
¶
15.
Analyzed
in light of these principles, the trial court’s finding that the Board’s
decision rested in material part on assessments of witness demeanor and
conduct does not withstand scrutiny. The court here focused on the Board’s
findings relating to the credibility of the parties’ respective expert
witnesses, Dr. Van Meter for the State and Dr. Borgia for petitioner. While
explaining that it might rely on these experts for “guidance,” however, the
Board stressed throughout its decision that it was reviewing the “same records
and materials” that were available to the experts and was drawing its own
conclusions based on its members’ experience and expertise.[9]
See Braun v. Bd. of Dental Examiners,
¶ 16. Although the Board made few other express findings concerning credibility, the trial court here nevertheless concluded that credibility judgments (in the sense of demeanor assessments) “ought to have played some role” in the Board’s resolution of such factual disputes as whether petitioner actually saw blood or whether a patient had been abandoned by respondent or simply refused to continue treatment. On the contrary, the record shows that the Board’s findings were based on objective evidence assessed in light of the Board’s expertise and the inherent likelihood or unlikelihood of certain events, and that subjective judgments about demeanor or conduct played little or no role in its findings. For example, in the several cases where respondent had placed reinforcing “posts” that perforated the root structure of a patient’s tooth in what is called a “strip perforation,” the Board found—based on its own expertise and that of the experts—that bleeding is very common when strip perforation occurs, that there would “most likely” be a blood spurt, and that respondent’s consistent denial of ever having seen blood in any of his patients was “less than credible.” The Board’s additional finding that a certain patient had not voluntarily discontinued treatment but rather had been abandoned by respondent for nonpayment was based, in part, on letters from the patient requesting treatment and from respondent indicating that he would be willing to resume treatment when her bill was paid. Although the Board also characterized respondent’s testimony on the subject as “evasive or unresponsive,” a review of the transcript shows that, in fact, respondent was not responsive to several questions or claimed to be unable to recall much that was clearly documented. Thus, we find no support for the trial court’s conclusion that the Board’s decision was based in material part upon demeanor assessments that required its presence at the evidentiary hearing.
III.
¶
17.
Although,
as discussed, we find that respondent waived any challenge to the hearing
process, we agree with his additional argument that the Board improperly
departed from that process when it rejected the committee’s proposed decision
and issued its own without affording respondent an opportunity to file
exceptions to the new decision. Although the Board reached the same result as
the hearing committee, its findings and conclusions were substantially greater
in number and more detailed, and respondent should have been afforded an
opportunity to comment on those findings and conclusions under § 811, as he was
promised. See 3 V.S.A. § 811 (when a majority of the agency official have not
heard the case or read the record, the decision, if adverse to a party other
than the agency, shall not be made until a proposal for decision is served and
an opportunity afforded to “each party adversely affected to file exceptions
and present briefs and oral argument to the officials who are to render the
decision”). Although the State claims that § 811 ceased to apply when the
Board read the record, the Board had plainly committed itself to the process
outlined under § 811 in which respondent would be afforded an opportunity to
comment on the Board’s proposed decision, and respondent plainly relied on that
promise in proceeding with the hearing. Accordingly, we find that the Board is
estopped from refusing to comply with the statutory procedure. See Wesco,
Inc. v. City of Montpelier,
¶ 18. We conclude, therefore, that the matter must be remanded to the Board to afford respondent an opportunity to raise any objections to the decision, with the exception, of course, of any claims resolved in this opinion. Thereafter, either party may pursue an appeal to the superior court raising any issue not decided herein.
Reversed and remanded for further proceedings consistent with the views expressed herein.
FOR THE COURT:
_______________________________________
Chief Justice
Notes
[1] Because the trial court did not address respondent’s claims concerning the sufficiency of the evidence and the propriety of the sanctions imposed, we need not discuss in detail the facts underlying the allegations of unprofessional conduct except where relevant to the procedural and due-process claims.
[2] In November 2002, the State added an additional count alleging improper root-canal work.
[3] This statute in part provides:
When in a contested case a majority of the officials of the agency who are to render the final decision have not heard the case or read the record, the decision, if adverse to a party to a proceeding other than the agency itself, shall not be made until a proposal for decision is served upon the parties, and an opportunity afforded to each party adversely affected to file exceptions and present briefs and oral argument to the officials who are to render the decision.
[4] One of the counts had been previously dismissed by stipulation of the parties and another general count was dismissed by the committee as “duplicative.”
[5] The appellate officer initially reversed and remanded the matter for the Board’s alleged failure to comply with 3 V.S.A. § 811, but subsequently reversed himself, finding that the statute was inapplicable because the Board members who did not attend the hearing had read the record.
[6] Respondent has moved to dismiss the
appeal on the ground that the State is not a party that may appeal the superior
court’s ruling. The assertion is unpersuasive. The statutory scheme governing
appeals from professional boards such as the Board of Dental Examiners provides
that a “party aggrieved” by a final decision of a board may appeal to the
director and have the matter heard by an appellate officer. 3 V.S.A. § 130a.
Thereafter, a “party aggrieved” by the decision of the appellate officer may
appeal to the superior court. Id. The State, as the prosecuting
agency, was plainly a party to the proceedings and as such would have been
entitled to pursue an administrative appeal and an appeal to the superior
court, and was further entitled to appeal from an adverse ruling by the
superior court to this Court. See Office of Prof’l Reg. v. McElroy,
[7] The State also claims that petitioner waived the due-process argument by not raising it at the hearing, but petitioner could not realistically have asserted the argument until the Board issued the decision that petitioner claims relies impermissibly on credibility assessments. Although, as the State observes, petitioner filed a prehearing memorandum disagreeing with the State’s assertion that personal rather than pre-filed testimony of certain witnesses was essential, petitioner in the same memorandum conceded that, “[w]hen the credibility of a witness is at stake, [petitioner] agrees that live testimony is important to afford an opportunity to the trier of fact to assess demeanor, etc.” Accordingly, we find no waiver.
[8] A useful explanation of the distinction between demeanor-based credibility findings and other reliability assessments that we characterize as relating to “credibility” may also be found in Koskela v. Willamette Industries, Inc., as follows:
[D]emeanor is only one of many considerations that may, in a given case, bear on the weight to give to a witness’s statements; meaningful credibility assessments can be and often are made on the basis of written evidence alone: If the conclusion is that a decision-maker cannot make credibility findings because he has not observed the witnesses testifying, the simple answer is that credibility (more properly weight) is determinable from a number of factors other than witness demeanor. The credibility, i.e., weight, that attaches to testimony can be determined in terms of the inherent probability, or improbability of the testimony, the possible internal inconsistencies, the fact it is or is not corroborated, that it is contradicted by other testimony or evidence and finally that human experience demonstrates it is logically incredible.
[9] In discussing the experts’ testimony, the Board stressed “that the evidence presented to the Hearing Committee and to this Board is much the same as what Dr. Van Meter and Dr. Borgia examined in arriving at their opinions,” that “its deliberations concentrated more on the primary evidence than on expert testimony,” and that Dr. Van Meter’s testimony— while helpful—“did not substitute for the close evaluation of x-rays and records.”
