Brian Bacardi v. Bd. of Registration in Podiatry

IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
March 19, 2003 Session
DR. BRIAN E. BACARDI v. TENNESSEE BOARD OF REGISTRATION IN
PODIATRY
A Direct Appeal from the Chancery Court for Davidson County
No. 01-1426-III The Honorable Ellen Hobbs Lyle, Chancellor
No. M2002-00558-COA-R3-CV - Filed May 30, 2003
This is an appeal from a final order, upholding the validity of a settlement agreement.
Appellant, a podiatrist, entered into a settlement agreement with the Tennessee Board of Registration
in Podiatry. The settlement agreement contained a provision whereby Appellant voluntarily
relinquished his right to reapply for a podiatry license in Tennessee. Upon discovering that loss of
the right to apply for license barred participation in all federal health care programs, Appellant
sought to have the provision excised from the agreement on the basis that the Board had no statutory
authority to mandate a bar on application for a license. The trial court upheld the validity of the
settlement agreement. We affirm.
Tenn. R. App. P. 3; Appeal as of Right; Judgment of the Chancery Court Affirmed
W. FRANK CRAWFORD , P.J., W.S., delivered the opinion of the court, in which ALAN E. HIGHERS,
J. and DAVID R. FARMER , J., joined.
W. Gary Blackburn, Nashville, For Appellant, Dr. Brian E. Bacardi
Paul G. Summers, Attorney General and Reporter; Sara E. Sedgewick, Assistant Attorney General,
Nashville, For Appellee, Tennessee Board of Registration in Podiatry
OPINION
Effective February 1995, Bacardi voluntarily retired his license to practice podiatry in
Tennessee. On March 13, 1995, the Department of Health filed a Notice of Charges (the “Notice”)
against Dr. Brian E. Bacardi (“Bacardi,” “Respondent,” or “Appellant”).1 The Notice alleged
1
As early as September 18, 1990, the Dep artment of H ealth received numerous comp laints against Bacardi for
various violations of the Tennessee Podiatry Act, T.C.A. §§ 63-3-10 1, et seq. Among the charges brought were
allegations that Bacard i had treated non-podiatric problems; that Bacardi made a post-operative charge for pads and
(continued...)
numerous violations and sought suspension, revocation, or other discipline of Bacardi’s podiatry
license. Furthermore, the Notice proposed civil penalties against Bacardi in the aggregate amount
of sixteen thousand dollars ($16,000.00). On January 24, 1996, Bacardi and the Board of
Registration in Podiatry (the “Board,” or “Appellee”) entered into a Settlement Agreement (the
“Agreement”). This Agreement reads, in pertinent part, as follows:
FINDINGS OF FACT
1. The Respondent has, by his signature on this Agreement, waived
his right to a contested case hearing and any and all rights to judicial
review in this matter.
2. The Respondent agrees that presentation to and consideration of
this Agreement by the Board for ratification and all matters divulged
during that process shall not constitute unfair disclosure such that the
Board or any of its members shall be prejudiced to the extent that
requires their disqualification from hearing this matter should this
Agreement not be ratified. Likewise, all matters, admission[s] and
statements disclosed or exchanged during the attempted ratification
process shall not be used against the Respondent in any subsequent
proceeding unless independently entered into evidence or introduced
as admissions.
3. On March 13, 1995, a Notice of Charges was filed against
Respondent which contained allegations which, if proven at hearing,
would constitute violations of the Podiatry Practice Act.
4. Respondent admits that the Tennessee Board of Registration in
Podiatry has jurisdiction in this matter and that had the matter gone
to hearing and had the allegations been proven, the Board would have
the authority to discipline Respondent’s license to practice podiatric
medicine.
5. Respondent was duly served with a copy of the aforementioned
Notice of Charges and retained legal counsel who reviewed the
charges with him.
1
(...continued)
splints when he had only changed the patient’s dressings and removed the bandages but had reused the same pad; that
Bacardi perfo rmed pod iatical surgical pro cedures on a patient without having obtained a valid consent; that Bacardi
billed a patient for procedures that were not performed; that Bacardi charged an individual, without providing any
treatment, for an initial comprehe nsive history and physical, and rendere d a diagno sis of onychom ycosis; that Bacardi
performed surgery on a patient’s third toe in addition to perfo rming surgery on the patient’s fourth and fifth toes,
although there was no prior pathology for the third toe noted or documented.
-2-
6. Respondent understands that he has a right to a hearing on the
charges and waives his right to a hearing in consideration of this
Agreement which constitutes full and final settlement of the pending
matter.
7. Effective February 1995, Respondent voluntarily retired his
license to practice podiatry in the State of Tennessee.
CONCLUSIONS OF LAW
Any person licensed to practice by the provisions of this chapter, who
has retired or may hereafter retire from such practice in this state,
shall not be made to register as required by this chapter if such person
shall file with this board an affidavit on a form to be furnished by the
board, which affidavit states the date on which such person retired
from such practice and such other facts as shall tend to verify such
retirement as the board shall deem necessary. If such person
thereafter reengages in such practice in this state, such person shall
apply for registration with the board as provided by this chapter, and
shall meet other requirements as may be set by the board. T.C.A.
§63-3-116(c).
REASONS FOR DECISION
The Respondent does not wish to practice podiatry in Tennessee and
has retired his license. He contends that he is innocent of the charges
and enters this Agreement as the most expedient and cost effective
manner of resolving the charges. Under this Agreement, the
Respondent will not practice podiatry in the State of Tennessee.
It is therefore AGREED:
1. Entry of this Agreement shall not constitute an admission of the
allegations in the Notice of Charges.
2. The Respondent will not reactivate his Tennessee license to
practice podiatry or apply for registration with the Board pursuant to
T.C.A. §63-3-116(c) or any other provision of the Podiatry Practice
Act (T.C.A. §63-3-101 et seq.).
3. Respondent hereby waives any right to a contested case hearing.
-3-
4. Breach of this Agreement would be grounds for discipline by the
Board pursuant to T.C.A. §63-3-119(a)(8).
SO ORDERED, this 24 day of January, 1996, by the Tennessee Board
of Registration in Podiatry.
/S/
Chairman, Tennessee Board of Registration
in Podiatry
Approved for entry by:
/S/ Brian E. Bacardi 12-4-95
Brian E. Bacardi, D.P.M. Date
Respondent
/S/ Amanda G. Crowell /S/ William B. Hubbard
Amanda G. Crowell (#015413) William B. Hubbard (#2770)
Assistant General Counsel Attorney for Respondent
Department of Health Weed, Hubbard, Berry & Doughty
11th Floor, Tennessee Tower Third National Financial Center
312 Eighth Avenue North 424 Church Street, Suite 2900
Nashville, Tennessee 37247 Nashville, Tennessee 37219
(615) 741-1611 (615)251-5444
This Order was received for filing in the Office of the Secretary of
State, Administrative Procedures Division, an[d] became effective
this 24th day of January, 1996.
/S/ Charles C. Sullivan, II
Charles C. Sullivan, II, Director
Administrative Procedures Division
Bacardi moved to Illinois and began practicing there. In January 1999, he received notice
from the United Stated Department of Health and Human Services (dated February 7, 1998) that
he was disqualified from participating in Medicare, Medicaid, and all federal health care
programs pursuant to §1128(b)(4) of the Social Security Act, 42 U.S.C. § 1320A-7(b). The basis
for his disqualification from participating in these federal programs was the fact that he was
prohibited from applying for licensure pursuant to Paragraph Two of the Agreement.2 On August
25, 2000, Bacardi filed a Petition to Set Aside Agreement (the “Petition”). Bacardi subsequently
2
§ 112 8(b)(4 ) of the Social Security Act provides that individuals “whose license to provide health care has
been revoked or suspended b y any State licensing authority, or who otherwise lost such license o r the right to apply...”
may be excluded “from participation in any Federal health care program.” 42 U.S.C. § 1320 a-7(b).
-4-
filed two separate amended petitions to set aside the Agreement, in which he asserted that the
Agreement should be deemed unlawful and a nullity because the Board did not have authority to
restrict his right to reapply for his podiatry license in Tennessee; that the Board did not have
jurisdiction to discipline him; and that the Agreement had been entered into by mutual mistake.3
By Order dated September 13, 2000, Administrative Law Judge Thomas G. Stovall declined to
rule on Bacardi’s Petition. Citing the fact that the file of the Administrative Procedures Division
had been closed since January 24, 1996, Judge Stovall concluded that there was no longer a
contested case pending and that no further relief could be afforded under the Administrative
Procedures Act. Judge Stovall forwarded the matter to the Board for consideration. By
agreement of the parties, the Petition was handled as a contested case.
Bacardi’s petitions to set aside the Agreement were heard by the Board on January 12,
2001. The Board entered its Order on March 27, 2001, which reads, in relevant part, as follows:
FINDINGS OF FACT
1. That the State of Tennessee, Department of Health filed Notice of
Charges against the Respondent, Brian E. Bacardi, D.P.M, on March
13, 1995 based on allegations that he had practiced outside the scope
of practice for podiatrists; that he had charged patients for services
not rendered so that he could be compensated by insurance companies
for his time; that he performed surgical procedures on patients
without obtaining the patient’s consent; and, that he was performing
unnecessary medical procedures on patients. As a result of these
allegations, the Respondent was charged with various violations of
the Tennessee Podiatry Practice Act, pursuant to T.C.A. § 63-3-101
et seq., for which disciplinary action before and by the Board of
Registration in Podiatry is authorized.
2. As a result of the Notice of Charges filed against the Respondent,
he obtained legal counsel and in fact was represented by two (2)
attorneys at the time he entered into the Agreement on January 24,
1996 with the State to resolve the charges contained therein.
3. That the Respondent-Petitioner agreed to waive a contested case
hearing and also agreed that he would not reactivate his retired license
to practice podiatry or make application for registration with the
Board pursuant to T.C.A. § 63-3-116(c) or any other provision of the
Podiatry Practice Act pursuant to T.C.A. §§ 63-3-101 et seq. Said
agreement made by the Respondent-Petitioner is contained in the
3
The amended petitions were dated November 16, 2000 and November 30, 2000.
-5-
Agreement entered January 24, 1996 and is the same agreement that
the Respondent-Petitioner is seeking to set aside.
4. On August 25, 2000, the Respondent filed a Petition to Set Aside
Agreement. The State moved to dismiss said petition and Order was
subsequently issued by the Administrative Procedures Division
declining to rule on either pleading. Subsequent to this time, the
Respondent filed an Amended Petition to Set Aside Agreement on
November 16, 2000.
5. That the Respondent-Petitioner has been excluded from
participating in Medicare, Medicaid and all federal health care
programs pursuant to Section 1128(b)(4) of the Social Security Act.
CONCLUSIONS OF LAW
Based on the foregoing Findings of Fact, the Board addresses
the two (2) issues presented by this case. The first issue is whether
the Board had jurisdiction to discipline a retired license. The Board
finds that a “retired license” reflects only the status of the license.
Pursuant to T.C.A. § 63-3-116, a retired license is capable of being
reactivated by the licensee therefore; the Board has jurisdiction to
discipline the license holder for violations of the Practice Act for
Podiatry.
The second issue is whether or not the board of Podiatry has
the authority to prevent an individual from making application for a
license to practice podiatry in the State of Tennessee. The Board
finds that it does have the authority to preclude an individual from
making application for a license. Pursuant to T.C.A. § 63-3-106(1),
the Board is empowered to “[a]dopt and promulgate rules and
regulations as may be necessary to govern its proceedings and to carry
into effect the purpose of this chapter....” As a result of its rule
making authority, the Board promulgated Rule 1155-2.15(1)(e)(2)
which provides, “Revocation for Cause. This is the most severe form
of disciplinary action which removes an individual from the practice
of the profession and terminates the license previously issued. The
Board, in its discretion (emphasis added), may allow reinstatement
of a revoked license upon conditions and after a period of time it
deems appropriate....” The Board is not required to allow
reinstatement of a license that it revokes.
Based on the foregoing, the Board finds that it has authority
to preclude an individual from making future application for a license
to practice podiatry.
-6-
REASONS FOR DECISION
The Board makes its Order based on the prior Agreement
signed by the Respondent five (5) years ago and entered January 24,
1996 and the Board’s authority to approve said Agreement pursuant
to the aforementioned cited legal authority.
IT IS THEREFORE ORDERED:
1. That the Agreement entered into by the Respondent-Petitioner
herein, Brian E. Bacardi, D.P.M., with the State of Tennessee,
Department of Health shall not be set aside.
Following the Board’s Order, on May 3, 2001, Bacardi filed a Petition for Review
pursuant to T.C.A. § 4-5-322, seeking reversal of the Board’s Order and to modify or excise
Paragraph Two of the Agreement.4 The Chancery Court of Davidson County issued its
Memorandum and Order on February 13, 2002. This Memorandum and Order upheld the
validity of the January 24, 1996 Agreement and reads, in pertinent part, as follows:
After reviewing the entire record and considering the argument of
counsel for both parties, the Court affirms the outcome of the
decision of the Tennessee Board of Registration in Podiatry,
upholding the validity of the January 24, 1996 Settlement Agreement.
However, the Court differs in reasoning and holds that the Board
erred, as a matter of law, in construing the settlement agreement as a
license revocation. Although this Court’s legal analysis varies from
that of the Board, the Court agrees that the settlement agreement in
this case remains valid and in effect. The Court’s reasoning is as
follows:
* * *
[Bacardi] contends that Paragraph Two of the Agreement
should be modified or excised because the Board acted outside of its
statutory authority in preventing [Bacardi] from reapplying for a
Tennessee license. [Bacardi] argues that because the Board’s powers
are statutorily circumscribed and because no statute or rule authorizes
4
Paragraph T wo of the Agreement reads as follows: “The R espond ent will not reactivate his Tennessee license
to practice podiatry or apply for registration with the Board p ursuant to T.C.A. §63-3-116(c) or any other provision of
the Podiatry Practice A ct (T.C.A. §63 -3-10 1 et seq .).”
-7-
the Board to prevent future reapplication for licenses, it is prohibited
from entering into a settlement agreement prohibiting the same.
The [Board] contends that [the Agreement] did not
unilaterally prevent [Bacardi] from reapplying. Rather, [Bacardi]
signed the Agreement, in consideration of the State not pursuing
allegations in the Notice of Charges, agreeing to not reactivate or
reapply for a license. Furthermore, the [Board] maintains that
Tennessee Code Annotated section 4-5-105 encourages the settlement
of administrative matters in lieu of more elaborate proceedings. The
[Board] maintains that the Board’s powers are both express and
implied and that because the Notice of Charges was properly brought
under the UAPA, the Board possessed the implied authority to enter
into a settlement agreement with [Bacardi].
Preliminarily, the Court examines the Board’s finding that it
has the authority, in this case, to preclude an individual from making
future application for a license to practice podiatry. In support of its
conclusion, the Board relies upon Rule 1155-2.15(1)(e)(2), entitled
Revocation for Cause. According to the record and according to the
provisions of the Agreement, [Bacardi’s] license to practice podiatry
in Tennessee was retired. A retired licensee, if such person reengages
in the practice of podiatry in Tennessee, may reenter active status by
applying for registration with the Board and completing other
requirements set by the Board.... The Court finds nothing in the
record to indicate that [Bacardi’s] license was, or has been, revoked.
Therefore, the Board’s reliance upon Rule 1155-2.15(1)(e)(2) is
misplaced and the Court holds, as a matter of law, that the Board, in
the case at bar, lacks the authority to abrogate [Bacardi’s] right to
make application to reactivate his retired license.
As such, the Court turns to Paragraph Two of the Agreement
to determine its validity, in keeping with the Court’s determination
that the Board lacks the authority to abrogate the right of a retired
licensee to reapply for registration with the Board to practice podiatry
in Tennessee.
In consideration of the Board agreeing to not prosecute the
Notice of Charges, [Bacardi] agreed not to reactivate his Tennessee
license to practice podiatry or reapply for registration with the
Board.... [Bacardi] contends that Paragraph Two is illegal and invalid.
Specifically, [Bacardi] construes Paragraph Two to mean that the
Board is imposing discipline and punishment on [him] by removing
his right to reapply for a Tennessee license. The Court finds
[Bacardi’s] construction of Paragraph Two to be incorrect as a matter
of law.
-8-
Paragraph Two represents a voluntary conduct agreement
wherein [Bacardi], in consideration of the Board not prosecuting the
Notice of Charges, agrees to not exercise or assert his right to reapply
for a Tennessee license to practice podiatry. In addition to the text of
Paragraph Two of the Agreement, the Court’s construction of the
Agreement is bolstered by Tennessee Code Annotated section 4-5-
105, which encourages informal settlements in order to render
unnecessary more elaborate proceedings. The informal settlement of
matters allows parties a forum to agree to specific terms and
conditions in order to avoid penal consequences. Therefore, the
Court does not construe Paragraph Two to be a waiver of [Bacardi’s]
right to reapply nor an imposition of punishment or discipline by the
Board abrogating [Bacardi’s] right to reapply...
Bacardi appeals from this Order and raises one issue for our review, as stated in his brief:
“Whether parties may insert, by agreement, language in an administrative hearing order giving
such administrative agency powers that are beyond its statutory authority.”
The Chancellor’s review of the Board’s March 27, 2001 Order in this matter is governed
by T.C.A. § 4-5-322(h) (1998), which sets forth the standard of review on appeal of
administrative proceedings as follows:
(h) The court may affirm the decision of the agency or remand the
case for further proceedings. The court may reverse or modify the
decision if the rights of the petitioner have been prejudiced because
the administrative findings, inferences, conclusions or decisions are:
(1) In violation of constitutional or statutory provisions;
(2) In excess of the statutory authority of the agency;
(3) Made upon unlawful procedure;
(4) Arbitrary or capricious or characterized by abuse of discretion or
clearly unwarranted exercise of discretion; or
(5) Unsupported by evidence which is both substantial and material
in the light of the entire record.
In determining the substantiality of evidence, the court shall take
into account whatever in the record fairly detracts from its weight,
but the court shall not substitute its judgment for that of the agency
as to the weight of the evidence on questions of fact.
This Court’s scope of review is the same as in the trial court; to review the findings of
fact of the administrative agency upon the standard of substantial and material evidence.
DePriest v. Puett, 669 S.W.2d 669 (Tenn. Ct. App. 1984). Although T.C.A. § 4-5-322 does not
-9-
clearly define “substantial and material” evidence, courts generally interpret the requirement as
requiring “something less than a preponderance of the evidence, but more than a scintilla or
glimmer.” Wayne County v. Tennessee Solid Waste Disposal Control Bd., 756 S.W.2d 274,
280 (Tenn. 1988) (citations omitted).
While this Court may consider the evidence in the record that detracts from its weight,
the Court is not allowed to substitute its judgment for that of the agency concerning the weight of
the evidence. See T.C.A. § 4-5-322(h); see also Pace v. Garbage Disposal Dist., 390 S.W.2d
461, 463 (Tenn. 1965). The evidence before the tribunal must be such relevant evidence as a
reasonable mind might accept as adequate to support a rational conclusion and such as to furnish
a reasonably sound basis for the action under consideration. See Pace, 390 S.W.2d at 463.
Construction of a statute and application of the law to the facts is a question of law for the
court. See Sanifill of TN v. Solid Waste Disposal, 907 S.W.2d 807, 810 (Tenn. 1995). The
issue of whether the statute expressly or impliedly grants the Board authority to compromise and
settle a disciplinary proceeding by the Agreement between Dr. Bacardi and the Board is a
question of law for the Court. See Id. at 810.
In the case at bar, it is undisputed that Dr. Bacardi, faced with multiple charges of
unacceptable conduct, voluntarily chose to enter into the Agreement set out above. Although
there is no express statutory or regulatory provision prohibiting a reapplication for a license, Dr.
Bacardi, by his unequivocal Agreement, waived this right.
The language of the Agreement is clear and unambiguous. In Baird v. Fidelity Phenix
Fire Ins. Co., 178 Tenn. 653, 162 S.W.2d 384 (1942), our Supreme Court, quoting from a
Massachusetts case, stated:
“Waiver is a voluntary relinquishment or renunciation of some
right, a foregoing or giving up of some benefit or advantage,
which, but for such waiver, he would have enjoyed. It may be
proved by express declaration; or by acts and declarations
manifesting an intent and purpose not to claim the supposed
advantage; or by a course of acts and conduct, or by so neglecting
and failing to act, as to induce a belief that it was his intention and
purpose to waive.”
In Stovall of Chattanooga, Inc. v. Cunningham, 890 S.W.2d 442 (Tenn. Ct. App. 1994),
this Court said:
It is further held that waiver of a legal right must be evidenced by
a clear, unequivocal and decisive act of the party showing such a
purpose. . . .
-10-
Id. at 444, (emphasis added) (quoting Webb v. Board of Trustees of Webb School, 71 S.W.2d 6,
19 (Tenn. Ct. App. 1954)).
Although Dr. Bacardi concedes that he voluntarily signed the Agreement, he asserts that
the Board was without authority to make the Agreement the order of the Board, which would
prohibit him from reapplying or reactivating his license. We cannot agree with such an assertion.
The Administrative Procedures Act encourages informal settlements of controversies brought
pursuant to the Act. T.C.A. § 4-5-105 (1998) provides:
Informal settlements – Except to the extent precluded by another
provision of law, informal settlement of matters that may make
unnecessary more elaborate proceedings under this chapter is
encouraged. Agencies may establish specific procedures for
attempting and executing information settlement of matters. This
section does not require any party or other person to settle a matter
pursuant to informal procedures.
It is implicit from the above statute that settlement of the controversies by the agency
must be on terms established by the agency and within its discretion. Dr. Bacardi has cited no
authority that prohibits the Board from compromising and settling a dispute on the terms set out
in the Agreement between the parties herein, and we find no provision of the Act that prohibits
such a settlement.
Not only did Dr. Bacardi voluntarily enter into the Agreement waiving his right to
reactivate or reapply for his license, the Agreement was submitted to the Board and entered as a
consent order of the Board.
A consent order is defined as “a solemn contract or judgment of the parties put on file
with the sanction and permission of the court.” 49 C.J.S. Judgments § 182 (1997). It is well
settled in Tennessee that consent orders are valid and binding. Underwood v. Zurich Ins. Co.,
854 S.W.2d 94, 97 (Tenn. 1993). In Nance v. Pankey, 880 S.W.2d 944, 946 (Tenn. Ct. App.
1993), this Court stated:
[A consent] order is conclusive upon the consenting parties, and can
neither be amended nor in any way varied without like consent; nor
can it be reheard, appealed from or reviewed upon writ of error. After
a consent decree has become final it can only be attacked by a suit
against the counsel who consented to it or by a bill of review or some
original action. Kelly v. Walker, 208 Tenn. 388, 346 S.W.2d 253,
255-56 (1961); see also City of Shelbyville v. State ex rel. Bedford
County, 220 Tenn. 197, 415 S.W.2d 139, 144 (1967).
-11-
Moreover, in Gardiner v. Wood, 731 S.W.2d 889, 893 (Tenn. 1987), our Supreme Court
reaffirmed the validity of consent orders and stated that “the reason for the unassailability of a
consent decree is based on the well-founded maxim volenti non fit injuria (he who consents to
what is done cannot complain of it).” See also Rachels v. Steele, 633 S.W.2d 473, 477 (Tenn.
Ct. App. 1981).
Although the trial court ruled correctly, it appears that the court, at least in part, based its
decision on an erroneous reason. Where a trial court rules correctly but upon an erroneous
reason, the appellate court will sustain the ruling upon what it conceives to be the correct theory.
See Duck v. Howell, 729 S.W.2d 110 (Tenn. Ct. App. 1986).
Accordingly, for the reasons set out herein, we affirm the order of the trial court. Costs of
the appeal are assessed to the appellant, Brian E. Bacardi, and his surety.
__________________________________________
W. FRANK CRAWFORD, PRESIDING JUDGE, W.S.
-12-