Bruce D Serven v. Health Quest Chiropractic Inc ( 2017 )

STATE OF MICHIGAN
COURT OF APPEALS
BRUCE D. SERVEN, FOR PUBLICATION
April 6, 2017
Plaintiff-Appellee, 9:00 a.m.
v No. 330983
Genesee Circuit Court
HEALTH QUEST CHIROPRACTIC, INC., LC No. 2014-104032-CK
SILVIO COZZETTO, CHRISTOPHER DEAN,
RANDY WILCOX, MICHIGAN BUREAU OF
HEALTH PROFESSIONS- BOARD OF
CHIROPRACTIC, and QUEST HEALTH
SYSTEMS VI P.L.L.C., d/b/a HEALTH QUEST
OF BURTON,
Defendants,
and
SOLOMON COGAN, THOMAS KLAPP, and
RONALD WILCOX,
Defendants-Appellants.
Before: O’CONNELL, P.J., and GLEICHER and BOONSTRA, JJ.
PER CURIAM.
Bruce Serven is a chiropractor who was disciplined by the Disciplinary Subcommittee of
the Michigan Board of Chiropractic. This Court reversed the subcommittee, holding that its
order lacked legal and factual merit. Serven then filed suit, alleging that the board members
acted with self-interest and improperly penalized him. As to part of Serven’s claims, the circuit
court denied the defendant board members’ motion for summary disposition based on quasi-
judicial immunity and qualified immunity as well as failure to state a claim upon which relief
could be granted. Because the board members were entitled to absolute immunity as quasi-
judicial actors, we reverse and remand for dismissal of Serven’s complaint.
-1-
I. BACKGROUND
This case arises out of State Farm Insurance Company’s retention of Bruce Serven, a
licensed chiropractor, to perform an independent chiropractic examination (ICE) on AE. AE had
been involved in a motor vehicle accident in May 2004, and two years later sought chiropractic
treatment from Health Quest of Burton. Health Quest treated AE approximately three times
weekly. At the time, Health Quest was owned, in part, by Solomon Cogan and Silvio Cozzetto.
Cogan was also the chairman of the Michigan Board of Chiropractic. Defendants Thomas Klapp
and Ronald Wilcox were members of the Michigan Board of Chiropractic Disciplinary
Subcommittee.
Serven conducted a physical examination of AE and elicited his medical history. Serven
concluded that AE was “not currently suffering from any type of musculoskeletal condition of
spinal origin of causal relationship to the [subject] auto accident.” In fact, Serven opined that
AE’s condition was “normal,” negating the need for any further chiropractic services. Serven
further advised State Farm that Health Quest’s services provided to date were not “medically
necessary for the injuries sustained in this accident.” Based in part on this advice, State Farm
denied payment for additional treatment to AE. Health Quest filed suit against State Farm
seeking reimbursement; Serven and Cogan testified against each other during the trial. State
Farm prevailed. Serven alleges that Cogan threatened him, “Obviously I need to see you on a
higher level.”
Shortly thereafter, Cogan’s business partner, Cozzetto, filed a complaint against Serven
with the Michigan Board of Chiropractic. Cozzetto noted that he was sent by his own insurer to
Serven for an ICE following a 2000 car accident. Cozzetto alleged that Serven conducted
chiropractic and orthopedic tests improperly, leading to an inaccurate report and termination of
his insurance benefits. In relation to the current matter, Cozzetto indicated that his associate,
Dennis Borja, had examined and treated AE. Cozzetto accused Serven of improperly rendering
an opinion without reviewing Health Quest’s records and acting outside the scope of his
chiropractic license by considering records from medical care providers. The Attorney General
subsequently filed an administrative complaint against Serven alleging that his behavior
constituted negligence, incompetence, and lack of good moral character under the Public Health
Code. See MCL 333.16221. The lack of good moral character allegation was based on Serven’s
alleged comment during the Board’s investigation that Health Quest “had a track record of
performing unnecessary treatment.” The case was referred to an administrative law judge who
determined that Serven was not negligent, incompetent, or lacking in good moral character and
issued a proposal for a decision to this effect.
The Disciplinary Subcommittee of the Michigan Board of Chiropractic did not adopt the
ALJ’s proposal. At a March 15, 2012 meeting at which Cogan was present, the subcommittee
instead found that Serven was negligent because he had not reviewed Health Quest’s chiropractic
records before issuing his opinion regarding the ICE. In addition, the subcommittee determined
that it was “quite likely” that Serven made the comment that Health Quest “had a track record of
performing unnecessary treatment,” representing a lack of good moral character. The Board
placed Serven on probation for one year. Serven appealed the disciplinary subcommittee’s
decision.
-2-
This Court held that the disciplinary subcommittee erred, reversed the decision, and
remanded with instructions to expunge Serven’s record. Bureau of Health Professions v Serven,
303 Mich. App. 305; 842 NW2d 561 (2013). We found the Board’s conclusion that Serven was
negligent legally unsound. Specifically, as an independent chiropractic examiner, Serven owed a
duty to State Farm to gather information and provide advice, a duty which Serven fulfilled.
Serven’s only duty to AE was to not cause physical harm, and there was no allegation Serven
had breached that duty. And Serven owed no duty to Health Quest. Id. at 309-310. This Court
also rejected the subcommittee’s conclusion that Serven’s conduct amounted to a lack of good
moral character. Serven’s alleged comment regarding Health Quest during the Board’s
investigation was an “attempt[] to be candid” and was not publicized further than necessary. Id.
at 310-311.
Thereafter, Serven filed this lawsuit against Cogan, Klapp, and Wilcox in their individual
capacities, alleging claims of malicious prosecution, tortious interference with Serven’s
advantageous business relationships, abuse of process, and violations of Serven’s due process
and equal protection rights.1 Defendants moved for summary disposition pursuant to MCR
2.116(C)(6), (C)(7) and (C)(8). The circuit court granted defendants’ motion with regard to the
constitutional and malicious prosecution claims but denied their motion with regard to Serven’s
claims for abuse of process and tortious interference. Defendants appeal, contending that the
circuit court should have dismissed these claims as well.
II. QUASI-JUDICIAL IMMUNITY
Defendants argue that they are entitled to quasi-judicial immunity because they are part
of the Michigan Board of Chiropractic. Summary disposition is appropriate under MCR
2.116(C)(7) where “[e]ntry of judgment, dismissal of the action, or other relief is appropriate
because of . . . immunity granted by law[.]” We review de novo a lower court’s summary
disposition ruling. Maiden v Rozwood, 461 Mich. 109, 119; 597 NW2d 817 (1999). “A party
may support a motion under MCR 2.116(C)(7) by affidavits, depositions, admissions, or other
documentary evidence,” which is otherwise admissible. Id. We must review this evidence “in
the light most favorable to the nonmoving party.” Denhof v Challa, 311 Mich. App. 499, 510;
876 NW2d 266 (2015). “The contents of the complaint are accepted as true unless contradicted
by documentation submitted by the movant.” Maiden, 471 Mich. at 119.
We begin our analysis with the doctrinal sire of quasi-judicial immunity—absolute
judicial immunity. “It is well settled that judges are accorded absolute immunity from liability
for acts performed in the exercise of their judicial functions.” Diehl v Danuloff, 242 Mich. App.
120, 128; 618 NW2d 83 (2000). The purpose of absolute immunity is to “protect[] the finality of
judgments and preserv[e] the judicial independence by ‘insulating judges from vexatious actions
prosecuted by disgruntled litigants.’ ” Id., quoting Forrester v White, 484 U.S. 219, 225; 108 S. Ct.
538; 98 L. Ed. 2d 555 (1988). “[T]he broad scope of the immunity . . . is ‘for the benefit of the
public, whose interest it is that the judges should be at liberty to exercise their functions with
1
Serven raised unrelated claims against various other named defendants which are not at issue in
this appeal.
-3-
independence and without fear of consequences.’ ” Id. at 129, quoting Pierson v Ray, 386 U.S.
547, 554; 87 S. Ct. 1213; 18 L. Ed. 2d 288 (1967) (citations omitted). Accordingly, judges “are not
liable to civil actions for their judicial acts even when such acts are in excess of their jurisdiction,
and are alleged to have been done maliciously or corruptly.” Bradley v Fisher, 80 US (13 Wall)
335, 351-352; 20 L. Ed. 646 (1872). Absolute immunity is necessary because “controversies
sufficiently intense to erupt in litigation are not easily capped by a judicial decree” and could
cascade into a never-ending river of actions in other forums. Butz v Economou, 438 U.S. 478,
512; 98 S. Ct. 2894; 57 L. Ed. 2d 895 (1978). And “safeguards built into the judicial process tend
to reduce the need for private damages actions as a means of controlling unconstitutional
conduct.” Id. For example:
The insulation of the judge from political influence, the importance of precedent
in resolving controversies, the adversary nature of the process, and the
correctability of error on appeal are just a few of the many checks on malicious
action by judges. Advocates are restrained not only by their professional
obligations, but by the knowledge that their assertions will be contested by their
adversaries in open court. Jurors are carefully screened to remove all possibility
of bias. Witnesses are, of course, subject to the rigors of cross-examination and
the penalty of perjury. Because these features of the judicial process tend to
enhance the reliability of information and the impartiality of the decisionmaking
process, there is a less pressing need for individual suits to correct constitutional
error. [Id.]
Quasi-judicial immunity “is an extension of absolute judicial immunity to non-judicial
officers.” Comment, The Officer Has No Robes: A Formalist Solution for the Expansion of
Quasi-Judicial Immunity, 66 Emory LJ 123, 134 (2016). Quasi-judicial immunity “is available
to those serving in a quasi-judicial adjudicative capacity as well as those persons other than
judges without whom the judicial process could not function.” Maiden, 461 Mich. at 134
(quotation marks and citation omitted). In this vein, this Court has noted:
The doctrine of quasi-judicial immunity as developed by the common law has at
least two somewhat distinct branches: one branch focuses on the nature of the job-
related duties, roles, or functions of the person claiming immunity, and one
branch focuses on the fact that the person claiming immunity made statements or
submissions in an underlying judicial proceeding. [Denhof, 311 Mich. App. at
510.]
In relation to the first branch, a quasi-judicial body subject to quasi-judicial immunity is defined
as a board or commission with statutorily conferred power “to ascertain facts and make orders
founded thereon” and “to exercise discretion of a judicial nature.” Midland Cogeneration
Venture, LP v Nafalty, 489 Mich. 83, 91-92; 803 NW2d 674 (2011) (quotation marks and
citations omitted).
In addition to the reasons posited for extending absolute immunity to judicial officers,
quasi-judicial immunity is supported by:
-4-
(1) the need to save judicial time in defending suits; (2) the need for finality in the
resolution of disputes; (3) to prevent deterring competent persons from taking
office; (4) to prevent the threat of lawsuit from discouraging independent action;
and (5) the existence of adequate procedural safeguards such as change of venue
and appellate review. [Diehl, 242 Mich. App. at 131-132, quoting Duff v Lewis,
114 Nev 564, 569; 958 P2d 82 (1998) (quotation marks and additional citations
omitted).]
Defendants contend that they are entitled to quasi-judicial immunity because in their
Board positions, they acted as quasi-judicial adjudicators. The Board of Chiropractic is
comprised of nine members, five chiropractors and four public members, tasked with
“ascertaining minimal entry level competency of health practitioners and verifying continuing
education during licensure.” In addition, the Board must “take disciplinary action against
licensees who have adversely affected the public’s health, safety, and welfare.” Michigan Board
of Chiropractic, available at (accessed March 23, 2017).
Once a complaint is filed against a chiropractor, like the complaint filed by Cozzetto
against Serven, the “Complaint Intake Section” of the Board reviews the allegations and
determines if investigation is necessary. If an investigation is deemed necessary, a “trained
investigation staff” member interviews the appropriate witnesses and collects evidence. If the
investigator believes the challenged conduct “was below the minimal standards for the
profession,” the Board submits the matter to “an appropriate expert reviewer.” If the expert
substantiates the staff investigator’s assessment, the Board requests the Attorney General to file a
formal administrative complaint. What Happens After a Complaint is Filed?, available at
(accessed March
23, 2017). In this way, the Board acts as police and prosecutor.
Formal administrative complaints are placed before an ALJ for a hearing. Id. Matters
such as this are considered “contested cases.” A contested case is “a proceeding . . . in which a
determination of the legal rights, duties, or privileges of a named party is required by law to be
made by an agency after an opportunity for an evidentiary hearing.” MCL 24.203(3). The
evidentiary hearings in contested cases may be heard by ALJs, as was done in this case. An ALJ
must act “in an impartial manner” and can be disqualified for “personal bias.” MCL 24.279. But
the ALJ is not the final arbiter. At the end of the hearing, the ALJ issues a proposed decision to
which the parties may file exceptions. MCL 24.281(1). The disciplinary subcommittee issues
the final order. It “may adopt, modify, or reject, in whole or in part, the opinion or proposal for
decision of the [ALJ].” Mich Admin Code, R 338.1630(5). This final decision must be made
“within a reasonable time” and must be supported by “competent, material and substantial
evidence.” MCL 24.285. In this regard, the ALJ acts like a magistrate or hearing referee and the
Board’s disciplinary subcommittee as the judge who renders a final decision.
That the disciplinary subcommittee acts as a judge is supported by “the job-related duties,
roles, or functions” of the subcommittee’s members. Denhof, 311 Mich. App. at 510. The
subcommittee considers the evidence gathered, findings made, and conclusions rendered by an
ALJ and reviews exceptions filed by the parties before rendering a final disciplinary decision.
The system is akin to that in domestic relations matters, in which a Friend of Court referee
-5-
conducts the evidentiary hearing and recommends a resolution which must be considered and
either entered or rejected by a circuit court judge. See MCL 552.507. The subcommittee
“serv[es] in a quasi-judicial adjudicative capacity,” Maiden, 461 Mich. at 134, with duties similar
to the circuit court in domestic relations matters.
Moreover, quasi-judicial immunity is frequently extended to a medical licensing board
charged with hearing license suspension and revocation matters. Watts v Burkhardt, 978 F2d
269, 270-271 (CA 6, 1992). See also Buckwalter v Nevada Bd of Medical Examiners, 678 F3d
737 (CA 9, 2012); Ostrzenski v Seigel, 177 F3d 245, 249 (CA 4, 1999) (“Every court of appeals
that has addressed the issue has concluded that members of a state medical disciplinary board are
entitled to absolute quasi-judicial immunity for performing judicial or prosecutorial functions.”).
As a general proposition, the United States Supreme Court has held “that adjudication within a
federal administrative agency shares enough of the characteristics of the judicial process” to
warrant immunity. Butz, 438 U.S. at 512-513.
Cloaking the disciplinary subcommittee with absolute quasi-judicial immunity also
serves public policy. Precluding civil suits against the members saves judicial time in repetitive
appellate-type challenges against disciplinary decisions and enforces finality. Competent
persons need not fear vexatious and harassing litigation arising from their official actions and are
therefore more likely to agree to serve on disciplinary boards. Board members can act
independently and without fear of repercussion for taking disciplinary action against an
individual in the regulated field. See Diehl, 242 Mich. App. at 131-132. Ultimately, insulating
board members protects the members and the judicial system from private lawsuits by
chiropractors disgruntled by disciplinary action. See Butz, 430 U.S. at 512. See also Watts, 978
F2d aqt 278, quoting Bettencourt v Bd of Registration in Medicine, 904 F2d 772, 783 (CA 1,
1990) (noting that “ ‘the act of revoking a physician’s license . . . is likely to stimulate a litigious
reaction from the disappointed physician, making the need for absolute immunity apparent’ ”);
Vosburg v Dep’t of Social Servs, 884 F2d 133, 137 (CA 4, 1989) (extending quasi-judicial
immunity to social workers who file petitions in child protective cases, in part, because “the
chances are high that suits against social workers would occur with some degree of regularity” as
“[p]arents, resentful of and humiliated by an attempt to usurp their rights, would likely channel
their frustration” at “the State’s advocate”).
The entire process also bears “adequate procedural safeguards” to merit absolute
immunity. Diehl, 242 Mich. App. at 132. First and foremost, when “all administrative remedies
available within an agency” have been exhausted, the aggrieved party is entitled to direct judicial
review by the courts. MCL 24.301. See also Const 1963, art 6, § 28 (requiring the opportunity
for direct judicial review of administrative officers’ judicial or quasi-judicial final decisions).
Accordingly, the aggrieved party need not file a separate civil action to secure relief. Indeed
Serven was vindicated by judicial review in this case.
Sufficient safeguards ensure that chiropractors against whom a complaint had been filed
would be reviewed by unbiased arbiters. See Butz, 438 U.S. at 512. Mich Admin Code, R
338.1604 has at all relevant times directed, “Any member of . . . a board . . . who takes an active
part in the investigatory or allegation process shall not participate in deciding the contested
case. . . .” Mich Admin Code, R 338.1605(3) grants the Board’s chair, Cogan, power to appoint
a replacement disciplinary subcommittee member if a previously named individual “is unable to
-6-
participate.” This would include replacement of a member removed pursuant to Mich Admin
Code, R 338.1604. Two years after Serven’s disciplinary matter, MCL 333.16216a was enacted
to clarify that anyone with a conflict of interest, such as “a personal or financial interest in the
outcome,” is subject to disclosure requirements. However, active efforts to protect against
conflicts of interest were already in place and were sufficient to protect a respondent’s rights.
Clearly, the safeguards against biased individuals deciding a disciplinary matter did not
work in this case. Cogan was not a member of the disciplinary subcommittee, but he appeared at
the subject meeting and participated in off-the-record discussions. This violated the spirit of
then-MCL 333.16216(1), which provided that “[t]he chair of a board . . . shall not serve as a
member of a disciplinary subcommittee.”2 Cogan was an equity partner in Health Quest and
bore a financial interest in the outcome of Serven’s disciplinary matter, and therefore should
have played absolutely no role in the decision. The failure of the protective measures does not
warrant a private lawsuit against the Board members, however. Absolute immunity does not fall
away even when the judicial or quasi-judicial official acts “maliciously or corruptly.” Bradley,
80 US (13 Wall) at 351-352.
The circuit court erroneously relied on North Carolina State Bd of Dental Examiners v
Fed Trade Comm, ___ US ___; 135 S. Ct. 1101; 191 L. Ed. 2d 35 (2015), in denying immunity to
defendants on conflict-of-interest grounds. North Carolina was based on a completely different,
and much more narrowly drawn, immunity principle than that at play here.
In North Carolina, the state’s Board of Dental Examiners investigated several dentist
complaints to determine if nondentists could legally provide teeth whitening services. The
complaints filed by the various dentists challenged the lower prices offered by nondentists for
these services, but did not allege that any recipient of nondentist teeth whitening services had
been harmed. The board was made up of seven dentists, one dental hygienist and one public
member. It determined that teeth whitening fell within the practice of dentistry and therefore
entered cease-and-desist letters against any and all nondentists providing such services or
manufacturing teeth whitening products. Id. at 1108. The FTC filed a complaint against the
state board and conducted an investigation, believing the board’s conduct violated federal
antitrust law by illegally interfering with free enterprise. Id. at 1108-1109.
Specific to antitrust litigation, the United States Supreme Court interpreted federal
legislation “to confer immunity on anticompetitive conduct by States when acting in their
sovereign capacity.” Id. at 1110, citing Parker v Brown, 317 U.S. 341; 63 S. Ct. 307; 87 L. Ed. 2d
315 (1943). Parker immunity is most often applied to “[s]tate legislation and decision[s] of a
state supreme court, acting legislatively rather than judicially” as these “are an undoubted
exercise of state sovereign authority.” North Carolina, 135 S. Ct. at 1110 (quotation marks and
citation omitted). Parker immunity is strictly limited, however, when the state delegates
authority to a board controlled by “active market participants” because those members will
always have a financial interest in anticompetition decisions and actions. Id. at 1111.
2
This provision has since been relocated in MCL 333.16216(4). 2014 PA 413.
-7-
This case does not involve federal antitrust law. Therefore, the limited immunity
conferred by federal antitrust legislation is inapplicable and irrelevant. The Board of
Chiropractic is controlled by chiropractors with a ratio of five licensed chiropractors to four
public members. When the disciplinary subcommittee revokes or suspends one chiropractor’s
license, that chiropractor’s clients will likely move on and find another, competing chiropractor
for services. Even so, the disciplinary action does not violate federal antitrust legislation; it
conforms to state law to protect the public from unscrupulous or incompetent providers.
Moreover, defendants are not completely immune from any admonishment as there are
internal governmental mechanisms for handling their alleged misconduct, adding another
procedural safeguard. If defendants were elected state judges, Serven could have filed a
grievance with the Judicial Tenure Commission, MCR 9.207(A), which may have led to
disciplinary action. Here, Serven could have filed a complaint with the State Board of Ethics.
Defendants are “public officers” as defined in MCL 15.341(c), as they were “appointed by the
governor or another executive department official.” In that role, defendants were required to use
board personnel and resources for legitimate official purposes “and not for personal gain or
benefit.” MCL 15.342(3).3 “Any person or entity . . . may file a complaint charging a public
officer . . . with unethical conduct.” State Board of Ethics Rules of Practice & Procedure, R
15.5(1), available at (accessed March 27, 2017). Accordingly, Serven was not without the
means to bring public attention to defendants’ alleged wrongdoing.
Ultimately, as the Board’s disciplinary subcommittee was cloaked with absolute quasi-
judicial immunity, the circuit court should have dismissed Serven’s complaint against these
defendants in its entirety. Given this resolution, we need not consider the remainder of
defendants’ appellate challenges.
We reverse and remand for further proceedings consistent with this opinion. We do not
retain jurisdiction.
/s/ Peter D. O'Connell
/s/ Elizabeth L. Gleicher
/s/ Mark T. Boonstra
3
The state ethics act, MCL 15.341 et seq., does permit an aggrieved party to file a civil suit for
damages. The action must be filed within 90 days of the subject occurrence. MCL 15.342c.
Serven waited more than two years to file suit, well beyond the statutory limitation period.
-8-