Board, not court, must judge licensee’s “good faith”

A trial court could not substitute its judgment of a licensee’s “good faith” to overrule a state licensing board’s discipline, the Court of Civil Appeals of Alabama held July 10.

Restoring a licensing board’s administrative order and sanction against a licensee for fraud, the appellate court reversed the holding of a circuit court and remanded the case to the trial court (Alabama Bd. of Examiners of Landscape Architects v. Bostick).

Chad Bostick became a landscape architect in 2009. Soon after, due to a dispute, Bostick resigned from a position he held with GRC Design Group.

In February 2010, a complaint was filed alleging that Bostick, while still employed with GRC, “misrepresented himself to clients as part owner in [GRC] and as a result had clients write checks payable to him which he cashed for his own personal use.”

The complaint also noted that Bostick denied the fraud allegations, stating “the clients in question paid me directly for the intellectual property that I provided for them, and were completely satisfied with the work that they received. Their payment was not directed by me, nor was it based upon any misrepresentation or fraudulent act whatsoever.”

The hearing officer, however, found that Bostick committed several violations including fraud, negligence, and willful misconduct, which the board accepted in their ruling, suspending Bostick’s license for one year and imposing a $250 fine.

“The Board finds that Bostick’s actions… show fraud or deceit… show negligence or willful misconduct… show conduct involving fraud or wanton disregard of the rights of others.”

Bostick appealed the board’s order on May 12, 2014. On May 22, 2014, the trial court ruled in favor of Bostick, overturning the board’s holding. “The section of the Board’s Order labeled: ‘Findings of Fact’ contains no findings of fact on any significant disputed issues. It simply recited undisputed testimony and recited, but did not resolve, conflicting testimony on several relatively minor points.” The court said.

Agreeing with Bostick’s claim that his conduct was done in “good faith,” the trial court asserted, “Neither the hearing officer’s Recommended Order nor the Board’s Order adopting it cited any evidence or made any specific finding that these deposits were made with fraudulent intent. The Board’s Order appears to equate the making of the deposit with fraud…. The Board’s Order states only in conclusory form that ‘the charges against Mr. Bostick have been substantially proved,’ … and that Mr. Bostick’s actions ‘showed’ fraud or deceit, negligence or willful misconduct, and fraud or wanton disregard of the rights of others….”

In appealing that trial court’s ruling, the board raised two issues: whether the trial court “failed to apply the correct legal standards for review of an administrative decision, and whether the trial court erred in relying on inapplicable legal authority.”

In reversing and remanding the trial court’s decision, Judge Donaldson of the Court of Appeals noted that a court considering an administrative decision cannot reinterpret the evidence for the agency. Rather, “an agency’s interpretation of its own rule or regulation must stand if it is reasonable, even though it may not appear as reasonable as some other interpretation.”

The factual finding that Bostick acted in “good faith” could not be made by the trial court in the judicial-review process, the Court of Appeals said. “Judicial review of an administrative decision by the Court of Civil Appeals, just like that of the circuit court, is limited to ascertaining whether the decision is supported by substantial evidence, that is, evidence of such weight and quality that fair-minded persons in the exercise of impartial judgment can reasonably infer the existence of the fact sought to be proved…. A court reviewing an administrative decision is not authorized to reweigh the evidence or to substitute its decisions as to the weight and credibility of the evidence for those of the agency.”

“Applying the deferential standard of judicial review of an administrative agency decision, we hold that there were no grounds to set aside the Board’s administrative order and sanctions imposed against its licensee, Bostick.”

Donaldson concluded that the record contained “substantial evidence, which if believed by the Board, would support the Board’s findings and conclusion that Bostick engaged in acts of deceit and willful misconduct while in the practice of landscape architecture.”