Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County Ct. No. BS095718. David P. Yaffe, Judge.
Cyrus Omead, in pro. per., for Plaintiff and Appellant.
Edmund G. Brown, Jr., Attorney General, Alfredo Terrazas, Assistant Attorney General, Arthur D. Taggart and Lorrie M. Yost, Deputy Attorneys General, for Defendant and Respondent.
DOI TODD, J.
Cyrus Omead, who is pro se, appeals from the judgment entered denying his petition for a writ of mandate (Code Civ. Proc., § 1094.5) to overturn the decision of the State Board of Accountancy (Board) revoking his certificate as a certified public accountant (CPA). We affirm the judgment.
Appellant contends: (1) the trial court exceeded its jurisdiction by interjecting new issues that were not before the Board, and thus, violated the exhaustion of administrative remedies doctrine; (2) the court abrogated its duty to exercise independent judgment by using improper criteria in reviewing the Board’s findings; (3) the court failed to determine whether the Board’s decision was a prejudicial abuse of discretion; (4) the court made erroneous legal assumptions about the requirements of applications for a CPA certificate under section 5095, subdivisions (a), and (d), of the Business and Professions Code; (5) his vested right as a certified professional in pursuit of his life long profession was taken away from him and revoked without the establishment of the competency test at the administrative level and for a reason other than protection of the public interest; and (6) the Board abused its discretion by keeping him on probation and under investigation year after year without any regard to a compelling interest of public protection.
All further section references are to the Business and Professions Code unless otherwise indicated.
We have reviewed each of these contentions as well as the record on appeal and conclude appellant’s contentions are without merit. The Board revoked appellant’s certificate in 1997, but stayed the revocation and granted appellant probation on the condition that he take and pass the audit portion of the CPA examination (audit exam). It is uncontroverted that appellant repeatedly took but never passed that exam. The trial court did not err in affirming the Board’s revocation of appellant’s certificate.
BACKGROUND
1. Relevant Administrative Proceedings
In December 1985, the Board issued appellant’s certified public accountant’s certificate. In August 1996, the Board served appellant with an accusation charging him with gross negligence in performing an audit and in preparing income tax returns. A settlement stipulation was reached whereby appellant admitted the alleged violations and stipulated to discipline.
In executing the stipulation, appellant expressly acknowledged that he had “carefully read and fully understand the stipulation and order” and that he had discussed their terms and conditions with his attorney. He also set forth his understanding that “in signing this stipulation I am waiving my right to a hearing on the charges set forth in the Accusation” and that “the Board may enter the foregoing order placing certain requirements, restrictions and limitations on my right to practice certified public accountancy in the State of California.”
In September 1997, the Board issued its decision and order based on the settlement stipulation. In October 1997, in furtherance of the settlement, the Board revoked appellant’s certificate, stayed its revocation, and placed appellant on probation for three years subject to certain terms and conditions, including the condition that he take and pass the audit exam and not perform audits until he passed. The order stated that appellant’s “[f]failure to pass the required . . . examination no later than 100 days before the termination of probation shall constitute a violation of probation.” Probation commenced and was set to terminate on October 28, 2000.
On February 25, 1999, a petition to revoke probation was filed. Effective October 24, 1999, the Board revoked appellant’s probation and certificate, stayed the revocations, and placed appellant on probation for three additional years until October 28, 2003 on certain terms and conditions, including the renewed condition that he take and pass the auditing section of the CPA examination.
On September 29, 2000, a second petition to revoke appellant’s probation was filed. One of the bases for that petition was appellant’s failure to take and pass the audit exam. The petition was later withdrawn.
In early November 2000, appellant filed a petition for modification of probation in which he requested that he be relieved of the condition that he take and pass the audit section of the CPA examination. On April 19, 2001, the Board issued its decision and order finding that appellant had not shown cause to be relieved of the condition but modified appellant’s probation to allow him additional time to pass the exam.
On May 23, 2003, appellant filed a second petition for modification of probation again seeking elimination of the probation condition that he pass the audit section of the CPA examination and, alternatively, requesting an unlimited amount of time to comply with that requirement. At that time, appellant had taken and failed the audit portion of the exam twice, once in May 1998 and again in May 2003. At the hearing on the petition, appellant informed the Board that he did not conduct audits in his present accounting practice and that he only prepared tax returns and performed bookkeeping functions. He stated that he had no plans to conduct audits.
On October 28, 2003, the Board denied appellant’s second modification petition. The Board found that “[e]even though he may be preparing tax returns and performing bookkeeping duties, he is still performing accounting duties. As a certified accountant, he should be able to pass the auditing portion of the CPA examination.”
About a month earlier, on September 2, 2003, a new petition to revoke probation had been filed. Appellant was accused of violating his probation by failing to pass the audit exam and of practicing public accountancy without a certificate.
Following hearings on August 5 and October 14, 2004, the administrative law judge (ALJ) found appellant had violated his probation by failing to pass the audit portion of the CPA examination. On December 7, 2004, the ALJ issued a proposed decision and order revoking appellant’s certificate as a CPA, effective February 24, 2005. On January 21, 2005, the Board adopted the decision and order. On February 22, 2005, appellant’s request for reconsideration was denied.
2. Trial Court Proceedings
In March 2005, appellant filed a petition for a writ of mandate to quash the order of the Board revoking his certificate and to set aside the February 24 order and decision and order an alternative discipline attainable by appellant. In June 2005, the Board filed its answer to the petition, and a hearing on the petition was held on February 8, 2006. The trial court denied the petition, finding that appellant had repeatedly taken the audit exam but never passed.
On March 16, 2006, judgment was entered.
APPLICABLE LEGAL PRINCIPLES
1. Vested Nature of CPA Licensure Not Absolute
“It is axiomatic that the right of an individual to engage in any of the common occupations of life is among the several fundamental liberties protected by the due process and equal protection clauses of the Fourteenth Amendment [of the United States Constitution]. [Citations.]” (Hughes v. Board of Architectural Examiners (1998) 17 Cal.4th 763, 788.) And, “although . . . his status as a licensee entitles [the licensee] to certain procedural protections consistent with a vested interest, he does not possess a substantive vested right to continue to pursue his occupation.” (Id. at p. 790, italics added.)
One does “not acquire a[n absolute] vested right to practice accountancy by reason of his registration certificate. As was so aptly stated in Gregory v. Hecke [1925] 73 Cal.App. 268, 283: ‘The general right to engage in a trade, profession or business is subject to the power inherent in the state to make necessary rules and regulations respecting the use and enjoyment of property necessary for the preservation of the public health, morals, comfort, order, and safety; such regulations do not deprive owners of property without due process of law. [Citation.] [Thus, n]o person can acquire a[n absolute] vested right to continue, when once licensed, in a business, trade, or occupation which [licensure] is subject to legislative control under the police powers. [Citations.]’” (Murrill v. State Board of Accountancy (1950) 97 Cal.App.2d 709, 711–712.)
2. Applicable Review Standards
“Code of Civil Procedure section 1094.5, subdivision (c) provides the basic framework by which an aggrieved party to an administrative proceeding may seek judicial review of any final order or decision rendered by a state agency. There are two tests for judicial review of the evidentiary basis for the agency’s decision. The ‘independent judgment’ rule applies when the decision of an administrative agency will substantially affect a fundamental vested right. The trial court must not only examine the administrative record for errors of law, but must also exercise its independent judgment upon the evidence disclosed in a limited trial de novo. [Citation.] The ‘substantial evidence’ rule applies when the administrative decision neither involves nor substantially affects a vested right. The trial court must then review the entire administrative record to determine whether the findings are supported by substantial evidence and whether the agency committed any errors of law, but need not look beyond the record of the administrative proceedings. [Citation.] Which standard is to be utilized thus depends upon whether the administrative action affects a fundamental vested right. [Citation.]” (Mann v. Department of Motor Vehicles (1999) 76 Cal.App.4th 312, 320.)
In this context, “‘[t]he term “vested” has been used in a nontechnical sense to denote generally a right “already possessed” [citation] or “legitimately acquired.” [Citation.] On this basis, [our Supreme C]ourt has distinguished generally between applicants and recipients in determining whether a right is “vested” for the limited purpose of determining the applicable scope of review.’ [Citation.]” (Hughes v. Board of Architectural Examiners, supra, 17 Cal.4th at pp. 789–790.) “A licensee, having obtained such a fundamental vested right, is entitled to certain procedural protections greater than those accorded an applicant. For example, [our Supreme C]ourt repeatedly has held, with exceptions not pertinent here, that the ‘independent judgment’ standard of review must be applied to an administrative decision that substantially affects such a fundamental vested right. [Citations.]” (Id. at p. 789, fn. omitted.)
“After an administrative agency imposes discipline on a professional licensee, the trial court to which application for mandate is made exercises its independent judgment on the facts. [Citations.] After the trial court exercises its independent judgment in reviewing the facts, the appellate court confines itself to determining whether substantial evidence supports the trial court’s findings. The appellate court, however, independently exercises its ability to decide issues of law. [Citation.]” (Griffiths v. Superior Court (2002) 96 Cal.App.4th 757, 767–768.)
“In applying the independent judgment rule, the trial court weighs the evidence and makes its own determination whether the [agency’s] decision should be upheld. [Citation.] . . . . On appeal, we decide whether the trial court’s findings are supported by substantial evidence. [Citation.] We do not apply our own independent judgment as to the facts in evidence, although we, of course, reserve the ability to independently decide issues of law. Applying the substantial evidence rule, we resolve conflicts in the evidence in favor of the trial court’s findings, and we accept the inferences of the trial court where alternative inferences are reasonably possible. [Citation.]” (Clare v. State Bd. of Accountancy (1992) 10 Cal.App.4th 294, 300.)
3. Revocation in Public Interest and Non-Penal
The purpose of the license revocation procedure is to protect the public, that is, “‘to determine whether a licensee has exercised his privilege in derogation of the public interest, and to keep the regulated business clean and wholesome.’” (Mann v. Department of Motor Vehicles, supra, 76 Cal.App.4th at pp. 319–320.) “Revocation of a license is not penal in any respect, and its only purpose is to protect the public from incompetence and lack of integrity in those practicing trades and professions.” (Murrill v. State Board of Accountancy, supra, 97 Cal.App.2d at p. 712, cited with approval in Hughes v. Board of Architectural Examiners, supra, 17 Cal.4th at p. 786.) A statute can bar a person from practicing a lawful profession only for reasons related to fitness or competence to practice that profession and there must be a logical connection between the licensees’ conduct and their fitness or competence to practice the profession or to the qualifications, functions, or duties of the profession. (Clare v. State Bd. of Accountancy, supra, 10 Cal.App.4th at pp. 302–303.)
DISCUSSION
I. No Excess of Jurisdiction Exercised by Trial Court
Appellant contends the trial court exceeded its jurisdiction by interjecting new issues regarding an application for a General or “G” accountancy certificate which were not before the Board, and thus, violated the exhaustion of administrative remedies doctrine. The record refutes this contention and reflects, instead, that these new issues were raised by appellant, not the trial court.
“‘Where a petitioner has not exhausted its administrative remedies a trial court has no jurisdiction to decide the dispute. [Citation.] The purpose of the rule of exhaustion of administrative remedies is to provide an administrative agency with the opportunity to decide matters in its area of expertise prior to judicial review.’ [Citation.]” (Gilroy Citizens for Responsible Planning v. City of Gilroy (2006) 140 Cal.App.4th 911, 920; see generally, Citizens for Open Government v. City of Lodi (2006) 144 Cal.App.4th 865, 874 [nature of exhaustion of administrative remedies doctrine]; Williams v. Housing Authority of Los Angeles (2004) 121 Cal.App.4th 708, 722 [various purposes served].)
At the beginning of the mandamus proceeding, the trial court announced its tentative ruling to deny the petition for a writ of mandate challenging revocation of appellant’s CPA certificate. Appellant, who was representing himself, argued that at the time his probation went into effect, there was only one type of CPA certificate. In response to the court’s inquires, appellant acknowledged that the one type of CPA license required passing the auditing portion of the CPA exam. He further acknowledged that his license was not restricted and permitted him to do auditing.
Appellant admitted that his license had been revoked; that the revocation had been stayed; and that he was placed on probation on certain conditions, including passing the audit exam again. He acknowledged that in 1997 he could have rejected the terms of probation and accepted the revocation of his license but he elected not to do so.
After making these admissions, appellant argued, “But at that time there was no new law. The tentative ruling of the court . . . does not take into account the existence of the new law, and that’s the right I am proclaiming under this court.”
It was appellant’s position that under section 5095, subdivision (a) he was not required to take the audit exam because he had already passed one audit exam. The court responded that it was “not up to this court to determine whether you are qualified for that license”; rather, “it’s up to the Board of Accountancy to determine whether you are entitled to that license,” and that if appellant wanted a different license he should apply for it.
Section 5095, which pertains to the qualifications and experience required to sign reports on attest engagements, provides in pertinent part: “(a) To be authorized to sign reports on attest engagements, a licensee shall complete a minimum of 500 hours of experience, satisfactory to the board, in attest services. [¶] (b) To qualify under this section, attest experience shall have been performed in accordance with applicable professional standards. . . . [¶] (c) An individual who qualified for licensure by meeting the requirements of Section 5083 shall be deemed to have satisfied the requirements of this section. [¶] (d) The board shall adopt regulations to implement this section, including, but not limited to, a procedure for applicants under Section 5092 or Section 5093 to qualify under this section.” (§ 5095.)
After appellant confirmed that he was licensed “under the old law,” the court inquired: “And now you would like to be licensed under the new law, and you claim your right to be licensed under the new law [based] on your failure to comply with the terms of probation which were imposed upon you when your license was revoked under the old law; is that right?”
Appellant also appeared to take the position that the Board wanted him to pass the audit section of the CPA examination to show his ability to do attest engagement but that he did not perform attest engagements in his practice, and therefore should not be required to satisfy that requirement.
He argued: The Board is “saying that [it is] revok[ing my] license because [I] don’t know how to do attest engagements or attest function. I understand that. I agree, but the law allows me still to be continuing practicing the CPA,” because “under [the Board’s] website, they advertise . . . that there are two pathways to become a CPA. One is my type.”
At the October 14, 2004 administrative hearing, Gregory Knewington, who was the chief of the enforcement division of the Board, acknowledged that “[t]o the best of [his] knowledge,” appellant had “the qualifications to prepare tax returns under CTEC [i.e., California Tax Education Council]” and that appellant could continue to prepare such tax returns even if his CPA license were revoked. Knewington acknowledged that “there are CPAs currently in California licensed by [the] Board who do not do audits,” including himself.
The Board’s attorney argued that appellant’s “failure to comply with the terms of his probation is the reason why the Board now wishes to revoke his probation, and also revoke his license.” She further argued that appellant was not in fact qualified for the other type of license, and explained: Appellant “describes himself as qualified, and therefore deserving of the new type of license known as the General or G license, a license which did indeed come into existence after the time his probation began. In fact, he is not qualified. . . . All people [sic] who wish to hold a G license must pass the audit exam. [¶] Now, it is true [appellant] passed the exam back in 1986 [sic] when he first got his license, but he’s not been able to pass it since then. And if he were to try and get a G license at this time, . . . which he hasn’t specifically applied for, he would in all likelihood not be able to meet the burden that any applicant for a G license must . . ., because he has had repeated[ly] failed to pass the audit exam. [¶] Anybody who wishes to hold a G license must pass the audit exam. The only difference between an applicant for a (G) and a full [license] is that the applicant for the new type of license does not have to submit proof of 500 hours of attest engagement experience. Both types of applicants[, however,] must pass the audit exam because both types of licensees must be able to know something about how an audit is performed in order to effectively perform their duties as an accountant, regardless of which type of accountant they are [sic]. Even those who are not doing audits must be able to understand audits. [¶] Therefore, it is very relevant even now in these days with the existence of the G type of license, which does not permit the performance of audits, that the [Board] still hold all licensees to the standard which compels them to show that they are capable of understanding how audits are done and what they mean.”
Appellant argued that counsel “just amended the law by the virtue of” her argument, because the law did not require, nor was it the Legislature’s intent, that an applicant for a G license “go and retake the exam.” Rather, “the Board . . . is trying to legislate a new law that doesn’t exist in California.”
The trial court denied the petition.
The above summary of the mandamus proceeding thus reveals the discussion regarding appellant’s application and entitlement, or lack thereof, to a G license was initiated by appellant, not the trial court. Accordingly, appellant’s contention that the trial court exceeded its jurisdiction by interjecting these new issues is without merit.
II. Trial Court Exercised Independent Judgment
Appellant contends that the trial court abrogated its duty to exercise independent judgment by relying on improper criteria in reviewing the Board’s findings. We find no reliance by the trial court on “improper criteria.”
Appellant argues that the trial court had the duty to independently examine the revocation but failed to do so. The record reveals the trial court in fact exercised its independent judgment in upholding the Board’s decision to revoke appellant’s CPA certificate. The court stated that it “has independently reviewed the administrative record[] and finds that the weight of the evidence contained in the . . . record supports the [Board’s] decision.” We therefore need not, and do not, address the issue of whether the substantial evidence or the stricter independent judgment review standard applies here.
Having independently reviewed the record, the court expressly found that after being placed on probation, appellant “has repeatedly taken, but never passed, the audit portion of the CPA examination.” Noting appellant was “not now, and never was, required to accept probation,” the court concluded “[h]is alternative always was and now is to suffer the revocation of his license.”
III. No Erroneous Legal Assumptions Made by Trial Court
Appellant contends the trial court made erroneous legal assumptions about the requirements of applications for a CPA certificate under section 5095, subdivisions (a), and (d). We do not address this contention because it is merely a recasting of the same contention we already resolved adversely to appellant.
IV. Prejudicial Abuse of Discretion by Board Not Issue
Appellant contends the court failed to determine whether the Board abused its discretion within the meaning of subdivision (b) of section 1094.5 of the Code of Civil Procedure. But appellant’s failure to set forth specific points supported by applicable authority and record references results in a forfeiture of this conclusionary contention. (See, e.g., Berger v. Godden (1985) 163 Cal.App.3d 1113, 1117 [failure to set forth “pertinent or intelligible legal argument” abandonment of claim of error]; Atchley v. City of Fresno (1984) 151 Cal.App.3d 635, 647 [point asserted without argument, analysis, and authority “deemed to be without foundation and requires no discussion by the reviewing court”].)
Code of Civil Procedure section 1094.5 provides: “The inquiry in such a case shall extend to the questions . . . whether there was any prejudicial abuse of discretion. Abuse of discretion is established if the respondent [agency] has not proceeded in the manner required by law, the order or decision is not supported by the findings, or the findings are not supported by the evidence.” (Code Civ. Proc., § 1094.5, subd. (b).)
For the first time in his reply brief, appellant contends the Board abused its discretion “three (3) times,” but fails to identify and explain in coherent terms these three instances. To the extent appellant is complaining about the length of the Board’s investigation and the three-year extension of his probation period, we shall address these matters, post.
Because the trial court found sufficient evidence to support the Board’s decision to revoke appellant’s certificate, it did not have to reach the issue of whether the Board’s exercise of discretion to revoke his certificate was prejudicial to appellant. (See, e.g., People v. Galvin (1957) 148 Cal.App.2d 285, 287–288.)
V. No Impropriety Regarding Revocation Established
Appellant contends that his vested right as a certified professional in pursuit of his lifelong profession was taken away from him without due process and for a reason other than protection of the public interest. We disagree.
Appellant voluntarily and knowingly admitted the alleged violations that led to revocation of his certificate. As such, he waived any complaint he might have had regarding conditions of his probation by entering into the settlement stipulation. It is undisputed that appellant was unable to and failed to comply with the probation condition that he take and pass the auditing section of the CPA examination. The Board was therefore entitled to revoke probation and execute the stayed revocation of his certificate. We find no abuse of discretion on the part of the Board in revoking appellant’s CPA certificate.
VI. Lengthy Probation and Investigation Not Punitive or Improper
Appellant contends the Board was “allowed to have a free hand and an unlimited discretion to keep [him,] a Board Certified Professional on probation and [under] investigation for year, after year, after year, without any regard to a compelling interest of protection of public, for the same error.” This contention flies in the face of the record which reveals the extensions of his probation, which necessarily included a comparable period of investigation, were either for appellant’s benefit or at his behest, or both. As the trial court observed, the alternative was immediate revocation of appellant’s certificate.
DISPOSITION
The judgment is affirmed. Costs on appeal are awarded to the Board.
We concur: BOREN, P. J., CHAVEZ, J.
Section 5092, which concerns qualifications of and requirements for applicants for a certified public accountant, provides in pertinent part: “(a) To qualify for the certified public accountant license, an applicant who is applying under this section shall meet the education, examination, and experience requirements specified in subdivisions (b), (c), and (d), or otherwise prescribed pursuant to this article. The board may adopt regulations as necessary to implement this section. [¶] (b) [Such] applicant . . . shall present satisfactory evidence that the applicant has completed a baccalaureate or higher degree conferred by a college or university, meeting, at a minimum, the standards described in Section 5094 . . . . [¶] (c) [Such] applicant . . . shall pass an examination prescribed by the board pursuant to this article. [¶] (d) The applicant shall show, to the satisfaction of the board, that the applicant has had two years of qualifying experience. . . .” (§ 5092, italics added.)
Section 5093, which also sets forth the qualifications of and requirements for applicants, provides in pertinent part: “(c) An applicant for the certified public accountant license shall pass an examination prescribed by the board. [¶] (d) The applicant shall show, to the satisfaction of the board, that the applicant has had one year of qualifying experience. . . .” (§ 5093, italics added.)
In his reply brief, appellant contends the Board thus acknowledged both his competency and that a CPA had the option whether or not to perform audits. His reliance on these portions of the administrative record is misplaced. No inference arises therefrom that appellant therefore is excused from having to pass the audit portion of the CPA examination. When appellant asked whether he was “aware of two avenues to become a CPA,” Knewington expressly responded, “They’re all required to pass the exam” and explained that although under current law, individuals with “no experience, no documented experience in auditing” had the opportunity “to obtain a CPA certificate . . . they have to pass the exam.”