Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County No. BS122529, James C. Chalfant, Judge.
Norman L. Schafler for Plaintiff and Appellant.
Edmund G. Brown, Jr., California Attorney General, Alfredo Terrazas, Senior Assistant Attorney General, Karen B. Chappelle, Lead Supervising Deputy Attorney General, and Gregory J. Salute, Supervising Deputy Attorney General, for Defendant and Respondent.
MALLANO, P. J.
After a police investigation, Levon Solak, a dentist, was charged with a felony count of “capping, ” that is, paying a third person to procure patients for him. (See Bus. & Prof. Code, § 650, subd. (a).) Solak entered a plea of nolo contendere to a misdemeanor charge of capping instead of going to trial on the felony charge.
The Dental Board of California (Dental Board) then commenced disciplinary proceedings against Solak. A hearing officer conducted a two-day proceeding and recommended that Solak’s license be revoked based on his capping conviction. The Dental Board adopted the hearing officer’s proposed decision.
Solak filed a petition for a writ of administrative mandate in the trial court (Code Civ. Proc., § 1094.5), seeking to overturn the Dental Board’s decision. After reviewing the administrative record, the trial court denied the petition and entered judgment in favor of the Dental Board. Solak appealed.
We conclude the trial court’s determination of misconduct is supported by substantial evidence, but the Dental Board abused its discretion by imposing the penalty of license revocation in light of the pertinent factors.
I
BACKGROUND
The trial court’s tentative ruling on the petition, which became its final ruling, cogently describes the evidence and the applicable law. We therefore adopt the trial court’s well-reasoned ruling as our own with respect to the Dental Board’s finding of misconduct. We disagree with the trial court’s resolution of the penalty issue.
“The Dental Board issued a dental [license] to Solak in July 1997. In 2005, the Department of Justice, Bureau of Medi-Cal Fraud, was investigating a clinic named Hawthorne Healthcare Medical Center (Hawthorne). Special Agent Eric Froeschner (Froeschner) identified a known ‘capper’ named Jairo E. Gonzalez (Gonzalez) who brought patients to Hawthorne clinic for a fixed payment per patient. Agent Froeschner obtained a search warrant for Gonzalez’s capping business and searched it on April 4, 2006. During the search, Agent Froeschner located evidence suggesting that Gonzalez was also capping patients to Solak’s clinic.
“On June 29, 2006, Agent Froeschner obtained a search warrant for Gonzalez’s bank records. He located several checks in various amounts listing Levon Solak Dental Corporation as the payor and Gonzalez as the payee. The checks total[ed] $15,680. The checks are date[d] from February 6, 2006, through April 12, 2006, and are in the following amounts - $2,170, $1,490, $2,280, $1,060, $2,170, $920, [$2,000], $1,090, and $2,500.
“Agent Froeschner arrested Gonzalez, who agreed to cooperate with law enforcement. Gonzalez stated in a November 27, 2006 interview that he met Solak in late 2005. Solak called Gonzalez and asked if he could do ‘advertising’ for him. Gonzalez asked for a salary to do advertising and bring Solak patients, but Solak refused. Solak offered to pay Gonzalez $50 for each patient he brought to Solak, and Gonzalez agreed. Gonzalez told Agent Froeschner that he continued to bring patients to Solak’s office until his (Gonzalez’s) arrest on April 4, 2006.
“On February 16, 2007, Agent Froeschner outfitted Gonzalez with an electronic transmitter and directed him to enter Solak’s office and speak with him. During the recorded conversation between the two, Solak asked Gonzalez where he had been for [] almost a year. Gonzalez ignored the question and asked if Solak was ready to do business again. They went into a private office and the parties discussed their prior arrangement of $50 per patient, and whether Gonzalez should ‘check his list’ because he owed Solak [$1,800]. [Gonzalez said he would try to pay Solak back, but Solak told him to forget about it.] Solak stated that he wanted to do business with Gonzalez [but he ‘want[ed] to do it right.’ Solak insisted that Gonzalez sign a contract prepared by an attorney and that Gonzalez be put on the payroll, ‘basically making everything legal.’] [Solak] stated that he had a ‘marketer’ who was currently bringing him patients, but he did not bring as many as Gonzalez had. He told Gonzalez that if he wanted $100 per patient, he would have to be prompt in picking [the patients] up after the work was done, which was his arrangement with the other marketer.
“On September 18, 2007, a felony complaint was filed and an arrest warrant issued against Solak, charging him with payment of an unlawful rebate in violation of Business & Professions Code § 650(a), a felony. On December 10, 2007, Solak was convicted on [a] plea of nolo contendere of violating B&P section 650(a) as a misdemeanor. Imposition of sentence was suspended, and Solak was placed on summary probation for two years, and ordered to pay $1,000 in restitution.
“On May 21, 2008, the Dental Board filed an Accusation against Solak alleging violations of the Dental Practice Act [(Bus. & Prof. Code, §§ 1600–1976)], including conviction of a substantially related crime, employing a solicitor, and unprofessional conduct.
“The administrative hearing occurred on June 16 and 17, 2009. The criminal complaint and [a] portion of the criminal docket sheet showing Solak’s conviction were received into evidence without objection.
“Gonzalez testified that between November or December 2005 and April 2006 he had an agreement with Solak to be paid $50 per patient. Gonzalez transported approximately 10 to 15 patients per week to and from Solak’s office. Solak would not pay Gonzalez for patients who did not qualify for Medi-Cal, or who did not need dental work.
“On June 26, 2007, while reviewing documents obtained during the search, Agent Froeschner had identified eleven sheets of paper, each of which was handwritten and bore the name ‘Dr. Luback’ at the top, dates beginning in November 2005 and ending January 6, 2006, and patient names. Gonzalez testified that he created these patient lists as a mechanism to keep track of the patients he brought to Solak’s office, for purposes of getting paid by Solak. The patients whose names were highlighted were those for whom he was not paid because they did not qualify. Gonzalez testified that the patient lists referred to Solak as ‘Dr. Luback’ because he misunderstood and mispronounced Solak’s name.
“Gonzalez testified that Solak paid him as a result of [their] agreement. Solak made out checks to JMY Enterprise, a business run by Gonzalez. The memo lines for the checks mention ‘advertising, ’ but Gonzalez performed no services for Solak other than to bring patients to his clinic in exchange for money. Gonzalez did not place any actual advertisements for Solak, such as billboards, circulars, print or broadcast media. Solak never saw any form of advertisement that Gonzalez allegedly created for him. Solak’s dental assistant, Ivette Hernandez, never saw Gonzalez do any advertising for Solak.
“On cross-examination, Gonzalez testified that he was cooperating because ‘he wanted to do the right thing.’ He denied that he was told what to say to Solak while wearing an undercover wire. Gonzalez stated that the list of patients taken to Solak’s office was prepared the same day the patient was taken to Solak’s office, and then stated “we prepared them after -.’ [Italics added.] Gonzalez denied that he agreed to perform advertising for Solak. [Gonzalez] was shown a document which states in pertinent part ‘Hour $75.00 Outreaching Community Service.’ Gonzalez admitted that the document was in his handwriting. He further admitted that the term ‘Outreaching Community Service’ meant distributing flyers.
“Agent Froeschner testified that he was sure he had a conversation with Gonzalez as to what he wanted Solak to admit [while Gonzalez was wearing the undercover wire]. [Froeschner] also acknowledged that Gonzalez’s cooperation would impact his criminal case. He acknowledged that it is not a violation of the capping law to pay for advertising or distribut[e] brochures.
“Solak testified that he had arranged with Gonzalez to pay him for distributing advertising brochures and was paid for that service by the hour. He denied ever agreeing to pay Gonzalez to bring him patients. He asked for [an] agreement in writing. Solak testified that he had pled no contest to the misdemeanor because going to trial was expensive [and there were risks in letting a jury decide the case].
“On cross-examination, Solak admitted that Gonzalez had brought approximately 200 patients, in total, to his office. He also admitted that 40%–50% of the names on Gonzalez’s patient list were his (Solak’s) patients.
“On July 10, 2009, the hearing officer[, requiring proof of clear and convincing evidence to a reasonable certainty, ] determined that Solak’s conviction and the facts underlying it warranted revocation of his license. The Dental Board adopted the proposed decision effective September 25, 2009.”
The record on appeal shows that on September 11, 2009, Solak filed a petition for a writ of administrative mandate in the trial court, seeking to overturn the Dental Board’s decision. The parties filed memoranda of points and authorities as well as the administrative record. The matter was heard on December 11, 2009. The tentative ruling was to deny the petition. The parties presented oral argument. The trial court adopted its tentative ruling as its final ruling. On January 27, 2010, judgment was entered in favor of the Dental Board. Solak appealed.
II
DISCUSSION
As the trial court stated: “CCP section 1094.5 is the administrative mandamus provision which structures the procedure for judicial review of adjudicatory decisions rendered by administrative agencies. (Topanga Assn. for a Scenic Community v. County of Los Angeles) (‘Topanga’) (1974) 11 Cal.3d 506, 514–515.) The pertinent issues under section 1094.5 are (1) whether the [Dental Board] has proceed[ed] without jurisdiction, (2) whether there was a fair trial, and (3) whether there was a prejudicial abuse of discretion. (CCP § 1094.5(b).) An abuse of discretion is established if the [Dental Board] has not proceeded in the manner required by law, the decision is not supported by the findings, or the findings are not supported by the evidence. (CCP §1094.5(c).)
“CCP section 1094.5 does not on its face specify which cases are subject to independent review, leaving that issue to the courts. (Fukuda v. City of Angels (1999) 20 Cal.4th 805, 811.) In cases reviewing decisions which affect a vested, fundamental right the trial court exercises independent judgment on the evidence. (Bixby v. Pierno (1971) 4 Cal.3d 130, 143; see CCP § 194.5(c).) The revocation of professional licenses is deemed to be a fundamental right requiring application of the independent judgment test. (Griffiths v. Superior Court (2002) 96 Cal.App.4th 757, 767.)
“Under the independent judgment test, ‘the trial court not only examines the administrative record for errors of law but also exercises its independent judgment upon the evidence disclosed in a limited trial de novo.’ [(Bixby v. Pierno, supra, 4 Cal.3d at p.] 143.) The court must draw its own reasonable inferences from the evidence and make its own credibility determinations. (Morrison v. Housing Authority of the City of Los Angeles Board of Commissioners (2003) 107 Cal.App.4th 860, 868.) In short, the court substitutes its judgment for the agency’s regarding the basic facts of what happened, when, why, and the credibility of witnesses. (Guymon v. Board of Accountancy (1976) 55 Cal.App.3d 1010, 1013–1016.) However, ‘[i]n exercising its independent judgment, a trial court must afford a strong presumption of correctness concerning the administrative findings, and the party challenging the administrative decision bears the burden of convincing the court that the administrative findings are contrary to the weight of the evidence.’ (Fukuda v. City of Angels, supra, 20 Cal.4th at p. 817.)
“The agency’s decision must be based on the evidence presented at the hearing. (Board of Medical Quality Assurance v. Superior Court (1977) 73 Cal.App.3d 860, 862.) The hearing officer is only required to issue findings that give enough explanation so that parties may determine whether, and upon what basis, to review the decision. (Topanga, supra, 11 Cal.3d at pp. 514–515.) Implicit in CCP section 1094.5 is a requirement that the agency set forth findings to bridge the analytic gap between the raw evidence and ultimate decision or order. (Topanga, 11 Cal.3d at p. 15.)
“An agency is presumed to have regularly performed its official duties (Evid. Code § 664), and the petitioner therefore has the burden of proof to demonstrate wherein the proceedings were unfair, in excess of jurisdiction, or showed prejudicial abuse of discretion. (Afford v. Pierno (1972) 27 Cal.App.3d 682, 691.)”
On appeal, we review the trial court’s findings of fact to determine whether they are supported by substantial evidence on the record as a whole. (Kazensky v. City of Merced (1998) 65 Cal.App.4th 44, 52.)
A. Misconduct of Capping
The trial court explained: “Solak contends that the weight of the evidence does not support the conclusion that [he] violated the Dental Practices Act, and that the Dental Board abused its discretion in revoking his license.
“As a threshold matter, Solak points out that the Dental Board bore the burden of proof at the administrative hearing under a clear and convincing evidence standard. (See Ettinger v. Board of Medical Quality Assurance (1982) 135 Cal.App.3d 853[, 855–856].) Solak does not contend that the Dental Board failed to acknowledge and use the clear and convincing standard at the administrative hearing, and [his contention is ] therefore... irrelevant. The burden of proof before the administrative agency has no impact on Solak’s burden of proof in this [writ] proceeding. [Here, ]... the court independently evaluates the evidence under a weight of the evidence standard, which is synonymous with preponderance of the evidence. (Chamberlain v. Ventura County Civil Service Commission (1977) 69 Cal.App.3d 362, 368.) That is, the court determines whether the weight of the evidence supports the Dental Board’s decision.
“Business and Professions Code section 1670.1 provides: ‘The board shall undertake proceedings under this section upon the receipt of a certified copy of the record of conviction. A plea or verdict of guilty or a conviction following a plea of nolo contendere made to a charge of a felony or of any misdemeanor substantially related to the qualifications, functions, or duties of a dentist or dental auxiliary is deemed to be a conviction within the meaning of this section. The board may order the license suspended or revoked, or may decline to issue a license, when the time for appeal has elapsed, or the judgment of conviction has been affirmed on appeal or when an order granting probation is made suspending the imposition of sentence, irrespective of a subsequent order under any provision of the Penal Code, including, but not limited to, Section 1203.4 of the Penal Code, allowing such person to withdraw his or her plea of guilty and to enter a plea of not guilty, or setting aside the verdict of guilty, or dismissing the accusation, information or indictment.’ ([Italics] added.)
“The Dental Board’s findings are overwhelmingly supported by evidence in the Administrative Record. Solak’s misdemeanor conviction under B&P Code section 650(a) for paying for patients subjected his license to discipline pursuant to B&P sections 1670.1 and 490, in conjunction with [California Code of Regulations, title 16, section] 1019, in that the crime was directly related to the duties of a dentist.
“The circumstances of the crime are admissible in a license revocation proceeding, but not to impeach the conviction. (Arneson v. Fox (1980) 28 Cal.3d 440, 449.) Gonzalez testified in detail about the arrangement, which was confirmed by the patient lists and Solak’s payments to Gonzalez. While Solak claims that he paid Gonzalez for ‘advertising, ’ there was no evidence that Gonzalez did any advertising or distribution of brochures. There were no witnesses to advertising, and Solak admitted that he never saw any advertising. There were no bills or invoices for advertising submitted by Gonzalez to Solak. Nonetheless, Solak paid Gonzalez over $15,000.
“Additionally, Gonzalez had the list of patients he brought to Solak. Solak admitted that Gonzalez drove patients to his dental offices, and admitted that approximately half of the listed persons were his patients. Solak argues that the fact that some of the payments are in odd, not even dollar amounts and the fact that the list does not cover the entire period of Gonzalez’s [alleged] capping undermine Gonzalez’s testimony. It may undermine it slightly, but not significantly.
“Solak argues that Gonzalez was not credible in his testimony. While the hearing officer found that Gonzalez gave false testimony with respect to his cooperation with law enforcement, he also found that Gonzalez was credible in his testimony regarding the capping arrangement. This finding was not an abuse of discretion. The totality of the evidence supports Gonzalez. The only contrary evidence was Solak’s own self-serving testimony, which was not supported by anyone else or any documentary or other evidence.
“Finally, Solak admitted in the undercover tape that he had an arrangement to buy patients from Gonzalez and that he was doing so with another marketer. Although Solak argues that he never says that he was paying Gonzalez $50 per patient, that is the clear import of his statements.”
On the issue of misconduct, the trial court concluded: “The evidence is overwhelming that Solak paid Gonzalez for patients and that he was convicted of a crime which is substantially related to the duties of a dentist.”
We agree. Solak’s appellate briefs merely point to some discrepancies or contradictions in the evidence, which the Dental Board and the trial court were empowered to resolve by making credibility determinations. In general, they found Gonzalez to be more credible than Solak. But not on every issue. For example, the trial court stated there was “no evidence that Gonzalez did any advertising.” But Gonzalez identified a document in his own handwriting which stated in part “Hour $75.00 Outreaching Community Service.” He admitted that “Outreaching Community Service” meant distributing flyers. Nevertheless, on appeal, we must defer to the trial court’s determination of credibility and its resolution of conflicts in the evidence. As an appellate court, we have no authority to reweigh the evidence and conclude that the arrangement between Solak and Gonzalez involved advertising instead of capping.
B. Penalty of License Revocation
As the Courts of Appeal have said before: “The appellate court conducts a de novo review of the penalty assessed, giving no deference to the trial court’s determination.... [It] reviews the agency’s selection of penalty and, if reasonable minds can differ with regard to the propriety of the disciplinary action, it finds no abuse of discretion.” (Deegan v. City of Mountain View (1999) 72 Cal.App.4th 37, 46.) “‘Neither an appellate court nor a trial court is free to substitute its discretion for that of the administrative agency concerning the degree of punishment imposed.’” (Schmitt v. City of Rialto (1985) 164 Cal.App.3d 494, 500.) Further, “the scope of review is the same in the appellate court as it was in the superior court, that is, the appellate court reviews the administrative determination, not that of the superior court, by the same standard as was appropriate in the superior court.” (Id. at p. 501.) We will reverse the trial court only if we find that the Dental Board committed a “manifest abuse of discretion.” (Ibid.)
As the trial court put it, “In determining whether there has been an abuse of discretion, the court must examine the extent of the harm to the public service, the circumstances surrounding the misconduct, and the likelihood that such conduct will recur. (Skelly v. State Personnel Board (1975) 15 Cal.3d 194, 217–218.)... The policy consideration underlying such allocation of authority is the expertise of the administrative agency in determining penalty questions. (Cadilla v. Board of Medical Examiners (1972) 26 Cal.App.3d 961.)
“The Dental Board has established Disciplinary Guidelines to be considered in every case, which are contained in [California Code of Regulations, title 16, section] 1018[, as follows: ‘In reaching a decision on a disciplinary action under the Administrative Procedures Act (Government Code Section 11400 et seq.), the [Dental] Board... shall consider the disciplinary guidelines entitled “Board of Dental Examiners Disciplinary Guidelines With Model Language, ” revised 11/8/96 which are hereby incorporated by reference. Deviation from these guidelines and orders, including the standard terms of probation, is appropriate where the [Dental] Board... in its sole discretion determines that the facts of the particular case warrant such deviation - for example: the presence of mitigating factors; the age of the case; evidentiary problems.’] The Guidelines provide that license revocation is the maximum discipline for Solak’s misconduct[, and the minimum penalty is ‘stayed revocation, 30 days’ suspension, five years probation, and at least 50 hours of community service if the unlawful practice was extensive.’] [California Code of Regulations, title 16, section] 1020 instructs the Dental Board on the criteria to consider as aggravating and mitigating factors, such as: [‘(1) The nature and severity of the act(s) or crime(s) under consideration as grounds for [revocation]. [¶] (2) Evidence of any act(s) committed subsequent to the act(s) or crime(s) under consideration as grounds for denial... [of a dental license]. [¶] (3) The time that has elapsed since commission of the act(s) or crime(s) referred to in subdivision (1) or (2). [¶] (4) The extent to which the applicant has complied with any terms of parole, probation, restitution, or any other sanctions lawfully imposed against the applicant. [¶] (5) Evidence, if any, of rehabilitation submitted by the applicant.’]”
The trial court summarized the administrative decision to revoke Solak’s license, saying: “The Dental Board considered that Solak’s conduct harmed the profession of dentistry; capping patients is a form of unfair competition. The crime was financially motivated and serious. It also was relatively recent. Solak committed the crime in early 2006. In early 2007, he was willing to commit the crime again. He was convicted in December 2007 and his probation expired after the administrative hearing. Solak expressed no remorse for his conduct, and maintains that he committed no wrong. This suggests that he may engage in similar conduct in the future.”
But the Dental Board did not adequately consider: (1) Solak had no previous criminal record; (2) he had complied with the terms of his probation, although it was not established he had completed his restitution obligation; and (3) he had an unblemished record during his first eight years of practice, from the end of 1997 to the end of 2005, when he committed the capping offense. Further, there was no evidence Solak: (1) provided poor quality services; (2) performed unnecessary services; (3) charged for services not performed; (4) committed any type of fraud; or (5) had been the subject of any patient complaints.
Although capping is a serious crime, the Dental Board offered no evidence as to how Gonzalez procured patients for Solak other than Gonzalez’s statement he did not use billboards or print or broadcast media. We think the way in which Gonzalez procured patients is relevant to the appropriate penalty. As Agent Froeschner testified, “advertising” is not capping. Yet, it is also true that advertising is not limited to billboards or print and broadcast media. The burden was on the Dental Board to support the penalty with sufficient evidence. (See Ettinger v. Board of Medical Quality Assurance, supra, 135 Cal.App.3d at pp. 855–856.)
The Dental Board emphasizes that Solak showed no signs of remorse and failed to acknowledge he had done anything wrong. As to this factor, we must distinguish between Solak’s behavior and his attorney’s handling of the case. The attorney advised Solak to enter a plea of nolo contendere apparently under the mistaken belief that the plea could not be used as a basis for discipline. Solak testified he did not know the plea could affect his license. The attorney maintained during the Dental Board proceedings, in the trial court, and on appeal that a nolo plea was not an admission of wrongdoing, citing cases in which there was no statute authorizing the particular administrative agency to treat a nolo plea as a conviction. But there is such a statute governing the discipline of dentists (Bus. & Prof. Code, § 1670.1), which became clear to Solak and his attorney during the disciplinary hearing. By then, however, the attorney was committed to the position that - as he told the Dental Board - “[Solak] did not admit that he did anything wrong [by entering the plea].” Thus, Solak’s lack of remorse before the Dental Board was merely a reflection of his attorney’s flawed approach to the entire case, dating back to the entry of the nolo plea, which was made without full knowledge of its possible consequences.
In addition, there was evidence Solak sought to rehabilitate himself. During the conversation with Solak when Gonzalez was wearing a wire, Gonzalez suggested they “do [business] like before.” Solak shook his head and said, “I’m sorry. I’d rather not do it. I don’t care. It isn’t worth the money.” Solak said he wanted “to do it right” - to put Gonzalez on the payroll and have him sign the contract prepared by an attorney - “basically making everything legal.” Thus, before learning about the investigation into his practice, Solak consulted an attorney and attempted to conduct his business in a lawful manner.
In short, given the circumstances of this case, it was a manifest abuse of discretion to impose the maximum penalty - the lifetime forfeiture of Solak’s dental license. Under the Dental Board’s disciplinary guidelines, even the minimum penalty requires proof that the “unlawful practice was extensive.” (Italics added.) The board’s showing on that issue was weak. Accordingly, the Dental Board must impose an appropriate penalty.
III
DISPOSITION
The judgment is affirmed as to the finding of misconduct and reversed as to the penalty of license revocation. On remand, the trial court shall grant the petition for a writ of administrative mandate as to the penalty only and direct the Dental Board of California to impose an appropriate penalty. The parties are to bear their own costs.
We concur: ROTHSCHILD, J., JOHNSON, J.