Narinder Duggal, M.d. v. Medical Quality Assurance Commission

Filed
Washington State
Court of Appeals
Division Two
November 22, 2016
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION II
NARINDER DUGGAL, M.D., No. 48258-4-II
Appellant,
v.
MEDICAL QUALITY ASSURANCE UNPUBLISHED OPINION
COMMISSION,
Respondent.
LEE, J. —Dr. Narinder Duggal appeals a decision entered by an administrative law judge
(ALJ) prior to Dr. Duggal’s scheduled adjudicative hearing in front of the Medical Quality
Assurance Commission of the State of Washington (Commission) on charges of unprofessional
conduct and sexual misconduct. Dr. Duggal appeals the ALJ’s finding that he was bound by a
proposed agreed order that he and his attorney signed, even though he had withdrawn his approval
before the Commission accepted and signed the agreement. Dr. Duggal argues on appeal that the
ALJ’s decision was based on a misinterpretation of the law, violated his due process rights, and
lacked substantial evidence.1
1
Dr. Duggal also appeals the ALJ’s denial of his oral motion for a continuance made after he had
substituted counsel the day before. Because we reverse on other grounds, we do not address this
argument.
No. 48258-4-II
We hold that (1) the ALJ’s decision to bind Dr. Duggal to the proposed agreed order was
based on a misinterpretation of the law because the ALJ relied on WAC 246-11-270, a regulation
that only applies to a defendant’s responses to initiating documents, not agreed orders; (2)
language of the proposed agreed order, statements of the Department of Health’s staff attorney,
and basic contract law establish that the proposed agreed order was tentative and could be
withdrawn before the Commission accepted and signed it; and (3) the ALJ’s ruling caused Dr.
Duggal substantial prejudice. Accordingly, we reverse the ALJ’s decision and remand for further
proceedings.
FACTS
On November 28, 2012, based on the complaints of six patients, the Commission issued a
statement of charges against Dr. Duggal for unprofessional conduct under RCW 18.130.180(1),
(4), (7), and (24), sexual misconduct under WAC 246-919-630(2), and abuse under WAC 246-
919-640. Dr. Duggal filed an answer to the charges denying any wrongdoing and requesting an
adjudicative proceeding and opportunity for settlement. A status conference was held in front of
ALJ Frank Lockhart, and Dr. Duggal’s adjudicative hearing was set for August 19-23, 2013.
On April 30, 2013, the Commission took summary action and suspended Dr. Duggal’s
medical license pending further disciplinary proceedings before the Commission. The
Commission served an amended statement of charges against Dr. Duggal the next day. The
amended statement of charges added two more patients alleging violations of RCW 18.130.180(1),
(4), (7), and (24), WAC 246-919-630(2), and WAC 246-919-640. Again, Dr. Duggal denied any
wrongdoing, and requested an adjudicative proceeding and opportunity for settlement. In light of
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the amended statement of charges, an amended scheduling order set the adjudicative hearing for
January 27-February 3, 2014, with a prehearing conference on January 7, 2014.
On January 6, 2014, the day before the scheduled prehearing conference, and three weeks
before the scheduled adjudicative hearing, Dr. Duggal’s counsel filed a notice of withdrawal and
substitution of counsel. At the scheduled prehearing conference the next day, Dr. Duggal’s
substitute counsel orally moved for a 120-day continuance, stating that he had not yet been able to
familiarize himself with the case and had not seen any discovery. Substitute counsel noted in his
motion that he only accepted the substitution of counsel on the condition that he be granted the
continuance. The Commission objected to the continuance and substitution of counsel. ALJ
Lockhart entered Prehearing Order No. 3, denying the continuance.
Because it was not clear whether there would be a substitution of counsel when the motion
for continuance was denied, ALJ Lockhart continued the scheduled prehearing conference until
the next day, January 8. Substitute counsel represented Dr. Duggal at the prehearing conference
on January 8.
On January 15, Dr. Duggal and substitute counsel signed a Stipulated Findings of Fact,
Conclusions of Law and Agreed Order (Agreed Order) that acknowledged there was evidence
sufficient to justify the Commission concluding that Dr. Duggal had committed unprofessional
conduct in violation of RCW 18.130.180(1), (4), (7), and (24), WAC 246-919-630, and WAC 246-
919-640. The Agreed Order stated in pertinent part:
The [Commission], through Lawrence J. Berg, Department of Health Staff
Attorney, and Respondent, represented by counsel, Carol Sue Janes [original
counsel], stipulate and agree to the following:
....
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1.6 The parties agree to resolve this matter by means of this [Agreed
Order]. Patients referred to in this Agreed Order are identified in the Confidential
Schedule attached to the Amended Statement of Charges.
1.7 Respondent waives the opportunity for a hearing on the Amended
Statement of Charges if the Commission accepts this Agreed Order.
1.8 This Agreed Order is not binding unless it is accepted and signed by
the Commission . . . .
1.9 If the Commission accepts this Agreed Order, it will be reported to
the Health Integrity and Protection Databank . . . .
....
3.2 Respondent has committed unprofessional conduct in violation of
RCW 18.130.180(1)(, (4), (7), and (24), WAC 246-919-630, and WAC 246-919-
640.
....
4.1 Surrender. Respondent agrees to SURRENDER his physician
license, and agrees not to resume the practice of medicine in the state of
Washington, including any temporary, emergency or volunteer practice.
Respondent acknowledges that he is ineligible to renew, reactivate, or to practice
subject to a retired active license as physician in the state of Washington.
....
4.3 Effective Date. The effective date of this Agreed Order is the date
the Adjudicative Clerk Office places the signed Agreed Order in the U.S. Mail.
....
I, NARINDER M. DUGGAL, MD, Respondent, have read and understand
this Agreed Order. I agree to this Agreed Order solely for the purpose of resolving
this proceeding. This Agreed Order may be presented to the Commission without
my appearance. I understand that I will receive a signed copy if the Commission
accepts this Agreed Order.
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Clerk’s Papers (CP) at 16, 17, 34, 35, 36. The Agreed Order was not signed by a representative
of the Commission nor by Lawrence Berg, the Department of Health’s staff attorney who presented
the Agreed Order to Dr. Duggal, despite there being signature lines for those people on the Agreed
Order.
On January 16, staff attorney Berg filed a memorandum with the Adjudicative Services
Unit. The memorandum stated, “This case has been tentatively settled according to the terms set
forth in the attached [Agreed Order],” and that the Agreed Order would be “presented for approval
to the [Commission] on January 23, 2014.” Administrative Record (AR) at 3688. A copy of the
Agreed Order was attached, with minor revisions written on the signature page of the copy
submitted. A second memorandum was filed with the Adjudicative Services Unit by staff attorney
Berg the same day, again noting the case had been “tentatively settled,” but that a scheduling
conflict had arisen with the Commission, so the Agreed Order would be “presented for approval”
to the Commission on February 13. AR at 3711.
On January 17, Presiding Officer and Senior Health Law Judge (Senior ALJ) Laura Farris,
granted the State’s request for a continuance. Senior ALJ Farris noted that a “proposed Agreed
Order” would be presented to the Commission on February 13, and that “[i]f the Commission
approve[d] the Agreed Order, the status conference w[ould] be stricken.” AR at 3712.
On February 4, Dr. Duggal filed a letter with the Adjudicative Clerk Office. The letter was
received by the Commission and the Health Systems Quality Assurance the same day. The letter
stated that Dr. Duggal was “requesting a review of [his] case and a reopening of [his] case for a
review.” AR at 3714. In the letter, Dr. Duggal stated that he did not have his entire file from his
former attorneys until shortly before he signed the Agreed Order. Dr. Duggal further noted that
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his request for a continuance when he obtained new counsel was denied, despite the voluminous
record, and his new counsel had subsequently discovered that the former attorneys had not deposed
any of the eight individuals who had filed complaints against Dr. Duggal.
ALJ Lockhart treated the letter as a “Motion to Withdraw Stipulation,” where Dr. Duggal
was “requesting a full hearing on the matter, which could only happen if his stipulation was
withdrawn.” CP at 12; AR at 3718 (Prehearing Order No. 5).2 ALJ Lockhart denied the “Motion
to Withdraw Stipulation” on February 5, in Prehearing Order No. 5, without further briefing or
argument from the parties. CP at 14.
Prehearing Order No. 5 states that “much of that discovery [that Dr. Duggal claimed he
never reviewed] was the Respondent’s own medical records” and that “Respondent’s lack of
involvement in his own case, in failing to review his own records, cannot be cited as good cause
to withdraw his stipulation.” CP at 13. As to Dr. Duggal’s complaint about his attorney’s failure
to depose the patients lodging complaints against him, Prehearing Order No. 5 states that “a
difference in defense strategy is not grounds for a new trial.” CP at 13. Prehearing Order No. 5
concludes:
In his stipulation, the Respondent admitted to unprofessional conduct. The
administrative code governing these proceedings is clear. “Once admitted or not
contested, an allegation may not be denied.” WAC 246-11-270(d)(i). “When an
allegation is admitted, it shall be conclusively deemed to be true for all further
proceedings. No proof of the allegation need be submitted.” WAC 246-11-270(e).
His stipulation was negotiated and signed by, his current counsel. There are simply
no grounds for allowing the Respondent to undo the stipulation he signed. Even if
the stipulation were not presented to the Commission at the February 13, 2014
2
There are actually two orders titled “Prehearing Order No. 5.” AR at 3712, AR at 3716. For the
purposes of this appeal, Prehearing Order No. 5 is the order entered on February 5 titled
“Prehearing Order No. 5: Order Denying Respondent’s Motion to Withdraw Stipulation.” CP at
10; AR at 3716.
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meeting, it could still be used at [the] hearing as an admission by the Respondent
of unprofessional conduct under WAC 246-11-270(e).
CP at 14. A copy of Prehearing Order No. 5 was directed to be sent to the Commission.
On February 13, the Adjudicative Clerk’s Office mailed the February 13, 2014 Agreed
Order to the Commission. This Agreed Order was signed and dated by the panel chair of the
Commission, and signed by staff attorney Berg. The version signed was the one with the minor
revisions that had been written in on the signature page after Dr. Duggal and substitute counsel
had signed. Dr. Duggal filed a petition for judicial review of Prehearing Orders Nos. 3 and 5.
On October 9, 2015, the superior court heard argument on Dr. Duggal’s petition for review.
Dr. Duggal argued that Prehearing Order No. 5 violated his due process rights because it held that
the Agreed Order was binding upon him but not upon the State and that the plain language of the
Agreed Order stated that it was not binding until approved by the Commission. Dr. Duggal further
argued that the decision in Prehearing Order No. 3, that “good cause” was not shown when counsel
was substituted three weeks before the hearing, was arbitrary and capricious. CP at 54. The State
argued that the Agreed Order was a binding contract when Dr. Duggal and substitute counsel
signed it, and that the consideration Dr. Duggal received was “not having to appear in a hearing
before his peers” in exchange for “surrendering his license and four of the patients[’ complaints]
were dropped.” Verbatim Report of Proceedings (VRP) (Oct. 9, 2015) at 20. The State analogized
the proceeding to divorce proceedings where the parties enter into an agreement, but the agreement
must still be approved by a judge.
The superior court denied Dr. Duggal’s petition for review. The written order denying
review did not contain a discussion or reasoning for the denial, but in its oral ruling, the superior
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court stated that a constitutional due process violation would be arbitrary and capricious, and so
the superior court reviewed whether the decision in Prehearing Order No. 5 was arbitrary and
capricious, as stated in RCW 34.05.570(3)(i). As to Prehearing Order No. 5, the superior court
held that the decision was not arbitrary and capricious because there was a basis for the ALJ’s
decision—“Dr. Duggal was represented by counsel” when the Agreed Order was signed, and
“there is a presumption that people are held to what they sign.” VRP (Oct. 9, 2015) at 38.
Dr. Duggal moved the superior court to reconsider. The superior court denied the motion.
Dr. Duggal appeals.
ANALYSIS
On appeal, Dr. Duggal challenges Prehearing Order No. 5. The disagreement between the
parties is whether Dr. Duggal was bound by the Agreed Order when he signed the document, even
though the Commission received his letter seeking to reopen his case for review before the
Commission accepted or signed the Agreed Order. We hold that under the facts of this case, Dr.
Duggal was not bound by an Agreed Order that the Commission had not accepted or signed.
A. STANDARD OF REVIEW
Judicial review of disciplinary proceedings under the Uniform Disciplinary Act (UDA),
chapter 18.130 RCW, is governed by the Washington Administrative Procedure Act (APA),
chapter 34.05 RCW. RCW 18.130.100. On appeal, we review the administrative decision.
Nguyen v. Dep’t of Health, Med. Quality Assurance Comm’n, 144 Wn.2d 516, 520-21, 29 P.3d
689 (2001), cert. denied, 535 U.S. 904 (2002).
Under the APA, a reviewing court may reverse an administrative order if the order violates
the constitution, exceeds statutory authority, is the result of faulty procedure, involves an error in
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interpreting or applying the law, is not supported by substantial evidence, omits issues requiring
resolution, involves improper rulings on disqualification issues, is inconsistent with an agency
rule, or is arbitrary or capricious. RCW 34.05.570(3)(a)-(i). The party challenging agency action
has the burden of demonstrating the action is invalid and must show substantial prejudice. RCW
34.05.570(1)(a), (d).
We review decisions based on interpretation of the law de novo, but accord substantial
weight to the agency’s interpretation of a law it administers. Ames v. Dep’t of Health, Med. Quality
Assurance Comm’n, 166 Wn.2d 255, 260–61, 208 P.3d 549 (2009), cert. denied, 559 U.S. 939(2010). Findings of fact are reviewed for substantial evidence, which is evidence “of sufficient
quantity to persuade a fair-minded person of the truth or correctness of the agency order.” Hahn
v. Dep’t of Ret. Sys., 137 Wn. App. 933, 939, 155 P.3d 177 (2007), review denied, 162 Wn.2d
1017 (2008). An action is arbitrary and capricious if it is made without consideration for and in
disregard of the facts and circumstances. Johnson v. Dep’t of Health, 133 Wn. App. 403, 414, 136
P.3d 760 (2006).
We apply the rules of statutory construction in interpreting regulatory language. Overlake
Hosp.v. Dep’t of Health, 170 Wn.2d 43, 51, 239 P.3d 1095 (2010). When construing the meaning
of the law, the plain language of the law controls. Koenig v. City of Des Moines, 158 Wn.2d 173,
181, 142 P.3d 162 (2006).
B. PREHEARING ORDER NO. 5
Dr. Duggal argues that the ALJ erred in entering Prehearing Order No. 5 for several
reasons. He contends that Prehearing Order No. 5 was based on a misinterpretation of the law,
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violated his due process rights, was arbitrary and capricious, and was not supported by substantial
evidence. We hold that Prehearing Order No. 5 was based on a misinterpretation of the law.3
1. Inapplicability of WAC 246-11-270
Dr. Duggal argues that the ALJ erroneously interpreted the law in relying on WAC 246-
11-270 to conclude that Dr. Duggal could not withdraw the stipulation because he had already
admitted to its contents when he signed the Agreed Order. We agree.
WAC 246-11-270 is titled “Request for adjudicative proceeding” and provides:
A respondent may respond to an initiating document by filing an application for an
adjudicative proceeding or by waiving the opportunity for [an] adjudicative
proceeding.
(1) If the respondent wishes to file an application for an adjudicative proceeding:
(a) An application for [an] adjudicative proceeding must be filed . . .
....
(d) The application for [an] adjudicative proceeding shall contain a response to the
initiating documents, indicating whether each charge is admitted, denied or not
contested, and responses shall be subject to the following conditions:
(i) Once admitted or not contested, an allegation may not be denied; and
(ii) An allegation denied or not contested may later be admitted.
(e) When an allegation is admitted or not contested, it shall be conclusively deemed
to be true for all further proceedings. No proof of the allegation need be submitted.
Under its plain language, WAC 246-11-270(1) only acts to bind respondents to their admission or
no-contest responses in the initiating documents.
3
Because we hold that Prehearing Order No. 5 was based on a misrepresentation of the law, we
do not reach Dr. Duggal’s other arguments challenging this ruling.
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In this case, the Commission initiated charges against Dr. Duggal on November 28, 2012.
In his response, Dr. Duggal admitted that the State of Washington had granted him a medical
license, but he denied every other charge. Also in his response to the initial charging document,
Dr. Duggal checked the box that said, “I request an adjudicative proceeding and opportunity for
settlement. If settlement is not reached, I am entitled to a hearing.” AR at 68. The Commission
then initiated amended charges against Dr. Duggal. Dr. Duggal again responded by denying every
charge except that the State of Washington had granted him a medical license, and he again
checked the box requesting an adjudicative hearing and an opportunity for settlement.
Applying these facts to WAC 246-11-270(1), the only allegation Dr. Duggal admitted, and
therefore “may not be denied” and “shall be conclusively deemed to be true for all further
proceedings,” is his admission to being licensed to practice medicine by the State of Washington.
The Agreed Order that Dr. Duggal signed not contesting the charges was not a response to
initiating documents, it was part of the settlement negotiations that Dr. Duggal had requested in
his responses to the initiating documents. WAC 246-11-270 simply does not contemplate actions
occurring in the settlement negotiations. Therefore, the ALJ’s reliance on WAC 246-11-270 in
concluding that Dr. Duggal could not withdraw his stipulation in the Agreed Order was based on
an erroneous interpretation or application of the law, and Dr. Duggal is entitled to relief from
Prehearing Order No. 5.
2. Ability to Withdraw Agreed Order
Even though WAC 246-11-270 is inapplicable, the question remains whether Dr. Duggal
could withdraw his approval of the Agreed Order before the Commission accepted it. We conclude
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for several reasons that the Agreed Order was not binding until the Commission accepted and
signed it, and therefore, Dr. Duggal could withdraw his approval of the Agreed Order.
First, WAC 246-11-360(1) allows for settlement conferences, or other settlement
processes, to be employed after a request for an adjudicative proceeding has been made. WAC
246-11-360(2) states, “The purpose of the settlement conference or other settlement process shall
be to attempt to reach agreement on the issues and on a proposed order to be entered. Any
agreement of the parties is subject to final approval by the board.”
Second, the language of Agreed Order that Dr. Duggal signed reflected the “proposed”
nature that WAC 246-11-360(2) requires. For example, paragraph 1.7 of the Agreed Order waived
a hearing “if the Commission accepts th[e] Agreed Order”; paragraph 1.8 stated that “[t]his Agreed
Order is not binding unless it is accepted and signed by the Commission”; the provision in
paragraph 1.9 was qualified with “[i]f the Commission accepts this Agreed Order”; and the
declaration above Dr. Duggal’s signature noted Dr. Duggal would receive a copy “[i]f the
Commission accepts this Agreed Order.” CP at 17, 36.
Third, the language in the two memos sent by staff attorney Berg referencing the Agreed
Order recognized the nonbinding nature of the Agreed Order. Both memos noted that the Agreed
Order “tentatively settled” the case, subject to its presentment to the Commission. AR at 3688,
3711. The memos were sent to the ALJ requesting a continuance of the scheduled adjudicative
hearing in light of the Agreed Order. In granting the continuance, the ALJ called the Agreed Order
the “proposed Agreed Order” multiple times and noted that further proceedings would be stricken
“[i]f the Commission approve[d] the Agreed Order.” AR at 3712.
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Finally, principles of contract law support Dr. Duggal’s ability to withdraw his approval of
the Agreed Order before the Commission accepted it. When interpreting contracts, we try to give
effect to the intent of the parties at the time of contract. RSD AAP, LLC v. Alyeska Ocean, Inc.,
190 Wn. App. 305, 315, 358 P.3d 483 (2015), review denied, 185 Wn.2d 1023 (2016). Contract
interpretation is a question of law where no ambiguity exists in the language of, or extrinsic
evidence surrounding, the contract. Id. at 316. “If contractual language is ‘clear and
unambiguous,’ we must enforce the written contract.” Id. (quoting Lehrer v. Dep’t of Soc. &
Health Servs., 101 Wn. App. 509, 515, 5 P.3d 722, review denied, 142 Wn.2d 1014 (2000)).
Here, the language of the Agreed Order states that the “Agreed Order is not binding unless
it is accepted and signed by the Commission.” CP at 17. Several other provisions within the
Agreed Order state that it is conditioned upon the Commission’s acceptance. This language is
clear and unambiguous. The memos sent by staff attorney Berg further support the interpretation
that the Agreed Order was conditioned upon the Commission’s acceptance. Thus, applying the
principles of contract law, the ALJ’s entry of Prehearing Order No. 5 was in error.
3. Substantial Prejudice
Having established that the ALJ’s decision was invalid, Dr. Duggal must also establish
substantial prejudice. RCW 34.05.570(1)(a), (d). Here, the substantial prejudice is the loss of his
medical license without a hearing. See Nguyen, 144 Wn.2d at 522-23 (holding that a medical
license is a protected property interest entitled to the protections of due process).
CONCLUSION
We hold that the ALJ erred in refusing to allow Dr. Duggal to withdraw his approval of the
Agreed Order before the Commission accepted and signed the Agreed Order. Accordingly, Dr.
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Duggal is entitled to relief from Prehearing Order No. 5. We reverse and remand for further
proceedings.
A majority of the panel having determined that this opinion will not be printed in the
Washington Appellate Reports, but will be filed for public record in accordance with RCW
2.06.040, it is so ordered.
Lee, J.
We concur:
Johanson, J.
Maxa, A.C.J.
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