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State, Dept of Commerce & Economic Development v. Schnell (9/22/00) sp-5314
State, Dept of Commerce & Economic Development v. Schnell (9/22/00) sp-5314
Notice: This opinion is subject to correction before publication in
the Pacific Reporter. Readers are requested to bring errors to the attention of
the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska 99501, phone
(907) 264-0608, fax (907) 264-0878.
THE SUPREME COURT OF THE STATE OF ALASKA
STATE OF ALASKA, DEPARTMENT )
OF COMMERCE AND ECONOMIC ) Supreme Court No. S-8313
DEVELOPMENT, DIVISION OF )
INSURANCE, ) Superior Court No.
) 3AN-95-9164 CI
Appellant, )
) O P I N I O N
v. )
) [No. 5314 - September 22, 2000]
ROBERT E. SCHNELL, )
)
Appellee. )
______________________________)
Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Anchorage,
Elaine M. Andrews, Judge.
Appearances: Signe P. Andersen, Assistant
Attorney General, Anchorage, and Bruce M. Botelho, Attorney
General, Juneau, for Appellant. Joe P. Josephson, Josephson &
Associates, Anchorage, for Appellee.
Before: Matthews, Chief Justice, Eastaugh,
Fabe, Bryner, and Carpeneti, Justices.
EASTAUGH, Justice.
CARPENETI, Justice, concurring.
I. INTRODUCTION
The superior court equitably estopped the Alaska Division
of Insurance from suspending and conditioning Robert Schnell's
individual insurance producer's license. Because we hold that
neither equitable estoppel nor laches barred the division from
acting in 1995, we reverse the superior court's ruling. But
because the division's director did not consider current evidence
that was highly relevant to the sanctions issue, we remand with
directions that the division reconsider its sanctions decision
after conducting further proceedings.
II. FACTS AND PROCEEDINGS
Robert Schnell petitioned for personal Chapter 7
bankruptcy in Alaska after suffering financial problems in the mid-
1980s. He filed a schedule of assets and liabilities in his
bankruptcy proceeding in January 1987. As the bankruptcy
progressed it became evident that Schnell had concealed assets. In
November 1987 Schnell admitted in bankruptcy court that he owned
valuable assets which he had not listed on his schedule of assets.
Soon after admitting his misrepresentation, Schnell
applied to New York Life Insurance Company for employment as an
insurance agent. New York Life and Schnell entered into an
"Agent's Contract" effective March 2, 1988. New York Life has
employed Schnell as an insurance agent ever since.
In June 1988 Schnell, who then worked in Arizona for New
York Life, applied to the Alaska Division of Insurance for a
nonresident individual insurance agent license. The division
issued him that license later that month. Not long after, Schnell
returned to Alaska and worked in New York Life's Anchorage office.
He applied for a resident license in November 1988. The division
also issued Schnell that license.
In December 1991 a federal grand jury indictment charged
Schnell with false declaration, fraudulent concealment of assets,
and perjury for his 1986 and 1987 conduct during his bankruptcy.
Schnell pled guilty to one count of false declaration, a felony; he
was sentenced in June 1992. The government's sentencing memorandum
asserted that there had been "on-going fraud which resulted in the
concealment of approximately $200,000 worth of property."
Soon after Schnell's conviction, David Walsh, the
director of the Alaska Division of Insurance, issued a statement of
accusation against Schnell, and sought to revoke Schnell's
insurance agent license. [Fn. 1] Walsh alleged that two grounds
existed for revocation: the felony conviction itself, and the "acts
giving rise" to the conviction, which "reflect[ed]
untrustworthiness."
Hearing Officer Frank Flavin conducted a hearing on the
accusation in November 1992 and issued a proposed decision in late
December 1992. He recommended that Walsh (1) suspend Schnell's
license for six months; (2) place Schnell on five years' license
probation following the suspension; (3) require Schnell to give the
division a semi-annual independent audit of his client accounts for
the first three years of probation; and (4) require Schnell, during
his probation, to provide written notice of his felony conviction
to all his existing and new clients.
In January 1993 Walsh rejected the hearing officer's
proposed decision and "order[ed] that the entire record be prepared
for [his] review of the decision." Walsh then twice renewed
Schnell's license; Walsh left the directorship in early 1995.
After Walsh departed, Thelma Snow Walker became acting
director. Walker discussed Schnell's case with Assistant Attorney
General David Stebing. Walker indicated to Stebing that Walsh had
made no decision on the matter and that Stebing's file could be
closed.
But in May 1995 Stebing sent a "request for decision" to
the division's new director, Marianne Burke. Burke issued a notice
allowing the parties "to present written argument" before "the
director's final consideration of a decision in this matter." On
November 1, 1995, Burke issued her "final decision." Burke decided
to suspend Schnell's license for six months and to require Schnell,
upon reinstatement of his license, to give written notice of his
felony conviction to all new and existing clients for three years.
Schnell received this decision almost three years after the initial
hearing before Hearing Officer Flavin, and almost three years and
five months after his conviction.
Schnell appealed Burke's decision to the superior court,
which reversed. It held that the state was estopped from
sanctioning Schnell. It reasoned that "[r]ejection of the hearing
officer's recommended sanction and then inaction by the [division]
constituted conduct relied upon by Schnell in believing that the
matter was resolved. Because of this reliance[,] Director Burke is
estopped from issuing a new decision in this case." The superior
court characterized the division's delay in issuing the final
decision as "inexcusable." It also held that, if estoppel did not
bar the administrative decision, the grounds for the sanctions
required clarification.
The state appeals.
III. DISCUSSION
A. Standards of Review
The superior court sat as an intermediate court of appeal
reviewing the agency decision. [Fn. 2] In such cases, we
independently review the merits of the administrative
determination, giving no deference to the superior court's
decision. [Fn. 3]
The standard of review for appeals of administrative
decisions varies depending on the type of administrative
determination being challenged. [Fn. 4] Because this case
addresses multiple types of administrative determinations, we will
discuss the respective standards of review in context of each
issue.
B. Does Equitable Estoppel Bar the State's Action Against
Schnell's License?
The state argues that the superior court erred in holding
that the state was equitably estopped from suspending and
conditioning Schnell's insurance license. Schnell argues that the
following conduct of the state's agents estops the state from now
acting against his license: (1) Walsh's rejection of the hearing
officer's proposed decision; (2) Walsh's subsequent renewals of
Schnell's license; (3) the three-year lag between the hearing and
Burke's final decision; and (4) Walsh's statements to Schnell and
his New York Life supervisor that led them to believe that the
matter was concluded.
Although we give no deference to the superior court's
holding, Schnell urges us to affirm it based, among other things,
on the superior court's estoppel theory. Whether equitable
estoppel applies here is a question of law not involving agency
expertise. [Fn. 5] We therefore apply the substitution of judgment
standard of review as to this issue. [Fn. 6]
Courts may apply the doctrine of equitable estoppel
against the state, [Fn. 7] even when the state acts as the
sovereign. [Fn. 8] We have rarely applied estoppel to bar the
state's exercise of its sovereign police powers, reasoning that
where "a [government] acts for the good of its citizens rather than
a narrow proprietary interest," estoppel would be unjust to the
public. [Fn. 9] But the public interest does not altogether bar
the application of estoppel against the state when it acts as
sovereign. [Fn. 10] Rather, as we held in Municipality of
Anchorage v. Schneider, the public interest is best protected
through careful application of the estoppel test itself, which
weighs the prejudice to the public interest in each case. [Fn. 11]
In Wassink v. Hawkins, [Fn. 12] we reiterated the four-
part test that applies when a litigant seeks to invoke estoppel as
a defense against the government. [Fn. 13] Applied here, this test
would require Schnell to show that: (1) the division asserted a
position by conduct or words; (2) Schnell acted in reasonable
reliance on the division's assertion; (3) Schnell suffered
resulting prejudice; and (4) estopping the division from acting
against Schnell's license serves the interest of justice so as to
limit public injury. [Fn. 14]
Arguing that the four necessary elements are absent here,
the state first contends that the division did not assert a
position by words or conduct. Schnell argues that Walsh's conduct
was an assertion of a position for purposes of the estoppel test.
That Mr. Walsh rejected the recommendations of
the hearing officer, Mr. Flavin, failed to enter any order within
the statutory time period, issued two unconditional license
renewals, and indicated to [Schnell and Schnell's supervisor] that
the matter was resolved, are all indicative that a director's
decision had been made.
But, for reasons we now discuss, these acts or omissions did not
amount to an assertion of a position by the state.
It is correct that Walsh rejected Flavin's proposed
decision, but he was entitled to do so under AS 44.62.500(b) and
(c). [Fn. 15] The state correctly argues that when Walsh did so,
"he was not expressly or implicitly asserting a position that the
matter was resolved without sanction." Alaska Statute 44.62.500
makes this point clear.
That statute gave the division several options when it
received the hearing officer's proposed decision. It could have
(1) adopted the proposed decision in its entirety; (2) reduced the
proposed penalty and adopted the balance of the proposed decision;
or (3) rejected the proposed decision in its entirety. [Fn. 16] If
an agency chooses to reject a proposed decision, it "may decide the
case upon the record, . . . or may refer the case to the same or
another hearing officer to take additional evidence." [Fn. 17] By
"not adopting" Flavin's proposed decision, Walsh did not "decide
the case" in Schnell's favor. Rather, he deferred reaching a
decision.
Walsh twice renewed Schnell's license after rejecting the
proposed decision. Schnell asserts that these "unconditional"
renewals signify that Walsh had, in fact, reached a final decision
not to revoke or suspend Schnell's license.
But the renewals bore no such explicit or implicit
assertion. The relevant statute does not condition renewal on the
absence of any pending division action against the license. [Fn.
18] Because the statute does not deny the director discretion to
renew pending an unresolved license proceeding, renewal is not an
assertion that an unclosed proceeding would be abandoned. We also
note that if renewal could be the basis for estoppel, it would put
a great burden on the state's licensing agencies, predictably
increasing both the cost of licensing and the risk that regulated
professions pose to the public.
Relying on AS 21.06.220(a), Schnell would next find an
"assertion" in Walsh's failure to issue a decision within the
thirty-day period specified in that statute, or in the asserted
untimeliness of Burke's decision. [Fn. 19] He cites Crum v.
Stalnaker [Fn. 20] for the proposition that "an agency's silence
can be relied upon to satisfy the first element of estoppel."
Despite the statute's "shall" language, the state argues
that the statutory time limit is "directory and not mandatory."
The state apparently means that the thirty-day limit defines a
period within which the director should issue a decision, but does
not bar the director from taking action even if it is not taken
within thirty days. Preclusion would arguably follow if we
construed the time period as "mandatory."
We have never before considered whether AS 21.06.220's
thirty-day limit is directory or mandatory. [Fn. 21] Another
court, however, has held that the thirty-day provision in a nearly
identical statute was directory and not mandatory. [Fn. 22] In
Commissioner of Insurance v. Stryker, [Fn. 23] the Georgia Court of
Appeals held that "[i]n its ordinary significance, 'shall' is a
word of command; however, in the absence of injury to the defendant
and in the absence of a penalty for failure to comply with the
statute, 'shall' denotes simple futurity rather than a command."
[Fn. 24] By that analysis, Schnell's argument that the thirty-day
limit barred action against his license turns on whether the delay
injured him and whether the statute imposes a penalty for lack of
compliance.
Schnell argues only that the division's three-year delay
harmed him. The type of reliance and prejudice he alleges -- time
futilely spent building an insurance practice, lost alternative
business opportunities, and lost deferred compensation -- was
potentially significant.
But, like the statute in Stryker, AS 21.06.220 imposes no
penalty or consequences for failing to rule timely. Schnell would
read into AS 21.06.220 an absolute bar on state action taken after
the thirty-day period expires, but it is unlikely that the
legislature intended such an interpretation of AS 21.06.220. To
read it that way could lead to absurd and undesirable results;
failing to issue a decision within thirty days would forever
insulate a license holder from justifiable action against his or
her license.
Nor do we agree with Schnell that failing to issue a
decision within the period specified in subsection .220(a) must be
deemed an "assertion" for equitable estoppel purposes. The failure
to make an "order on hearing" within thirty days was not an
assertion that Schnell's matter had been or would be favorably
resolved. Silence is not sufficient to bar state action in this
situation. Moreover, this was an administrative disciplinary
proceeding in a heavily regulated profession. Even if the delay
was unreasonable, it would be contrary to the public interest to
remedy the agency's delay by allowing a violation to go
undisciplined. As we held in In re Triem, "[t]he public's faith in
the system is harmed by lengthy adjudications of discipline
matters, but dismissing the matter would simply exacerbate the
injury to the public interest." [Fn. 25]
For similar reasons, we also reject Schnell's argument
that Burke's final decision was statutorily untimely.
We therefore conclude that any failure to adhere to the
statute did not give rise to an "assertion," for Wassink purposes,
that Schnell would never be sanctioned.
Finally, Schnell claims that Walsh's conversations with
Schnell and Schnell's supervisor led them to believe that "the
matter was over" and that "the Director had decided to impose no
sanctions." We first reject the state's argument that these
statements are hearsay; they are admissions of a party-opponent --
the state -- and therefore admissible non-hearsay. [Fn. 26]
Nonetheless, these statements are not "assertions" for
estoppel purposes. As we held in In re Stephenson, [Fn. 27] "it is
well established that a state is not estopped to assert a result
dictated by its rules, even if a state officer has made a contrary
representation from the terms of the rules . . . and caused
reliance on such representation." [Fn. 28]
If Walsh's words were representations that the division
would not sanction Schnell, they would be "contrary representations
from the terms of the rules." That is, Walsh could not issue a
decision after rejecting Flavin's proposal without "giving the
parties the opportunity to present either oral or written argument
before the agency." [Fn. 29] Moreover, Walsh made his statements
ex parte, during informal conversations with Schnell and his
managing partner. Thus, whatever Walsh said, and however great
Schnell's reliance thereon, his words did not estop the state from
later rendering a decision in accordance with its rules.
Because the first element necessary for equitable
estoppel is absent, we need not consider the other three elements.
C. Does Laches Bar the State's Action Against Schnell's
License?
Schnell alternatively argues that we should affirm
because laches barred the state from acting. The state argues that
Schnell cannot overcome the threshold question in such cases:
whether the doctrine applies. [Fn. 30] It also argues that Schnell
cannot satisfy the two-part test for applying the doctrine, and
that applying laches for nonenforcement of law for agency delay
would be contrary to the public interest. Whether the doctrine of
laches applies here is a question of law not involving agency
expertise. We therefore apply the substitution of judgment
standard of review. [Fn. 31]
As we stated in Concerned Citizens of South Kenai
Peninsula v. Kenai Peninsula Borough, [Fn. 32] the doctrine of
laches "creates an equitable defense when a party delays asserting
a claim for an unconscionable period." [Fn. 33] To bar a claim
under laches, "[a] court must find both an unreasonable delay in
seeking relief and resulting prejudice to the defendant." [Fn. 34]
Laches is usually invoked to bar a claim because the plaintiff has
unreasonably delayed seeking relief or protecting a known right.
[Fn. 35] Laches has been invoked in special circumstances to bar
claims due to prosecutorial delay, [Fn. 36] but it does not bar
claims due to adjudicatory delay.
The division did not delay seeking relief or prosecuting
its case. It sought revocation of Schnell's license in July 1992,
two months after he was sentenced for false declaration. The
revocation hearing was held in November 1992 and the hearing
officer issued his recommendation in December. The division's
delay therefore was not in seeking relief, but in rendering its
decision and imposing sanctions. Schnell concedes as much when he
states in his appellate brief, "[T]he concern here is not about the
director's delay in first raising issues . . . in 1992, but about
the delay of directors in promulgating sanctions after the 1992
hearing until 1995."
Because the division's delay here was adjudicatory, we
decline to apply the doctrine of laches to bar the state's action
against Schnell's license.
D. Does Res Judicata Bar the State's Action Against
Schnell's License?
Schnell argues that because "Walsh rejected the sanctions
recommended by Hearing Officer Flavin, which are similar to the
sanctions now sought to be imposed by Director Burke," the doctrine
of res judicata bars Burke from reaching a result different from
the result Walsh reached. Whether res judicata bars the state's
action here is a question of law not involving agency expertise.
We therefore apply the substitution of judgment standard of review.
[Fn. 37]
Res judicata requires that a judgment be final. [Fn. 38]
As we saw above in Part III.B, Walsh's rejection of Flavin's
proposed decision was not a final decision. Schnell's res judicata
claim therefore fails.
E. Must the Sanctions Against Schnell Be Reconsidered?
Schnell argues that his sanctions are excessive; he
claims that his trouble-free record during the long delay in
imposing the sanctions confirms his assertion that public
protection does not require the harsh sanctions imposed in 1995.
The most onerous sanction appears to be the requirement that he
give written notice of his conviction to new and existing clients
for three years after his suspension ends. [Fn. 39]
Before issuing her final decision in 1995, the director
issued a notice that permitted the parties to present "written
argument." She accepted additional written evidence from the
attorney general (bearing on Schnell's pre-1992 conduct) and from
Schnell (short 1995 letters from Schnell and his supervisor
alleging Schnell's good professional behavior). She conducted no
new hearing to supplement the 1992 hearing conducted by the hearing
officer, and did not reopen the 1992 hearing. The two short
letters Schnell submitted might have supported lesser sanctions;
there was no evidence of any misconduct between 1992 and 1995.
There was thus no unfavorable current information available to the
director in 1995.
The director noted Schnell's clean 1992-95 record when
she imposed sanctions in 1995; although she declined to revoke his
license, she imposed the sanctions "to affirm professional
standards and to protect the public."
After the sanctions were imposed, Schnell appealed and
sought a stay in the superior court. His stay motion papers
included detailed affidavits from Schnell and his supervisor
discussing the long delay, the facts on which Schnell based his
estoppel and laches arguments, the severe effect the sanctions
would have on Schnell, and Schnell's good professional record. The
superior court granted the stay pending appeal.
In addition to the equitable arguments we reject above in
Parts III.B and C, Schnell also argued in the superior court that
the sanctions were excessive and arbitrary, and were so harsh that
they were equivalent to revoking his license; he also argued that
lesser sanctions (such as increased monitoring and reporting by his
employer, special bonding, continuing education, and account
auditing) would suffice. He sought complete relief. He
alternatively asked the superior court to remand and instruct the
director to conduct a new hearing at which Schnell's record to the
date of the new hearing could be presented and considered.
The superior court granted Schnell complete equitable
relief, but also observed that if estoppel did not bar the
director, it would have been necessary to remand so the agency
could clarify the exact grounds for the sanctions.
It is undisputed that Schnell had been convicted of a
felony, and that the director has authority to suspend or revoke
the license of a person convicted of a felony. [Fn. 40] The state
correctly argues that the director has broad discretion to decide
what sanction is appropriate. But such broad discretion must be
exercised reasonably, based on the relevant information. Schnell's
professional record is highly relevant.
Although we have reversed the superior court's grant of
complete equitable relief to Schnell, we think it is necessary to
allow the alternative relief that the superior court indicated it
would grant if estoppel did not apply: remand to the division with
instructions to clarify its sanctions order. We further conclude
that, on remand, the division must conduct a hearing to consider
current evidence relevant to the issue of sanctions, including
evidence of Schnell's post-1992 conduct and other circumstances
addressed in the two affidavits supporting Schnell's 1995 superior
court motion for stay.
Schnell did not have an opportunity to present new
sanctions evidence before the director issued her final decision;
the director's July 1995 Notice of Opportunity only gave Schnell
"an opportunity to present additional argument" pursuant to AS
44.62.500(c). But the updated evidence that Schnell presented to
the superior court was highly relevant to the issue of sanctions.
It described Schnell's post-1992 conduct, the current effect that
the hearing officer's proposed sanctions would have, and
alternative supervisory controls available through Schnell's
employer.
As we have already indicated, this evidence was
insufficient to justify dismissal of the administrative action.
But given the exceptionally long period of delay before the
director's final sanctions decision, as well as the importance of
basing that decision on current information, we conclude that it
was incumbent on the director to offer Schnell an opportunity to
present updated sanctions evidence and to request a pre-decisional
hearing on the sanctions issue.
IV. CONCLUSION
Equitable estoppel does not bar the division because an
essential element of that doctrine is absent. And laches does not
apply to adjudicatory delay. We therefore REVERSE the superior
court's decision on these issues. But because the 1995 sanctions
decision was made without benefit of current evidence highly
relevant to the sanctions issue, we AFFIRM the superior court's
alternative disposition. Accordingly, we REMAND with directions
that the division reconsider its sanctions decision after
conducting a hearing on the sanctions issue in accordance with this
opinion.
CARPENETI, Justice, concurring.
After rejecting the hearing officer's recommendations,
Director Walsh failed to enter any order within the period required
by the statute, failed to issue any formal order for over two
years, issued two unconditional license renewals, and
affirmatively stated to Schnell or his supervisor on more than one
occasion that the matter was resolved in Schnell's favor. I would
hold that these facts, collectively, amount to "assertion of a
position" for purposes of the test regarding when estoppel may be
invoked against the government. [Fn. 1]
I agree with the court that rejection of the hearing
officer's recommendations, without more, is not an assertion of the
position that the case was being decided in Schnell's favor; [Fn.
2] the director was free to decide the case differently himself or
to refer it to another hearing officer. Nor did issuance of two
unconditional license renewals necessarily suggest anything more
than that the matter remained under review. And I agree that the
long period of delay after the director rejected the hearing
officer's recommendation did not constitute an assertion. [Fn. 3]
All of these occurrences, individually or collectively, can mean
something other than that the case was being resolved in Schnell's
favor.
But I cannot agree with the court that the director's
statements to Schnell and Schnell's employer, considered in the
context of all of the facts, do not constitue "assertions" within
the meaning of our cases. [Fn. 4] By affidavit, Schnell's
supervisor established that he had had a number of "conversations
with Mr. Walsh in which [Mr. Walsh] indicated that he had decided
that Mr. Schnell should be able to proceed with his career in the
industry, without sanctions." With specific reference to a meeting
in July 1994, that supervisor reported that he thanked Walsh for
refusing to impose sanctions and that "Mr. Walsh responded that he
just could not see taking away Mr. Schnell's livelihood, especially
'so late in the game,' or words to that effect, and that he was
glad that the issue was behind Mr. Schnell." The state has not
contested that these statements were made. In these circumstances,
the conclusion seems inescapable that the state asserted a position
in this matter.
The court avoids that conclusion by relying on a case
that is quite distinguishable from the present case, factually and
legally. [Fn. 5] In In re Stephenson, [Fn. 6] an applicant for
admission to the state bar argued that the bar should be estopped
from denying him admission because he was misled into believing
that he was eligible for reciprocity as the result of the state bar
supplying him with only a part of the information (state statutory
requirements) pertinent to bar admission and not providing him with
other relevant material (a state bar rule). [Fn. 7]
Stephenson is factually distinguishable because in the
present case there is no dispute from the state that Walsh made the
statements attributed to him by Schnell. Yet the state bar in
Stephenson denied Stephenson's allegations and we decided the case
on that distinguishing fact: "The Executive Director has further
denied under oath that he furnished erroneous information to the
applicant as to the requirements for admission. We thus find no
merit to this contention." [Fn. 8]
More importantly, Stephenson is legally distinguishable
from the present case. After disposing of Stephenson's claim on
factual grounds, we went on to state the rule the court relies on
today: "Furthermore, . . . a state is not estopped to assert a
result dictated by its rules, even if a state officer has made a
contrary representation from the terms of the rules . . . and
caused reliance on such representation." [Fn. 9] The "result
dictated by its rules" in Stephenson was that a bar applicant was
not entitled to admission by reciprocity under the facts of that
case. [Fn. 10] And that remained so no matter what the applicant
might have been told. But the rules in this case do not dictate
any particular outcome for Schnell. Walsh, the division director
charged with the responsibility of deciding Schnell's case, had the
power to "decide the case upon the record . . . with or without
taking additional evidence." [Fn. 11] He was free to do exactly
what he had told Schnell he had done: allow him to proceed in his
career without sanctions.
It is true, as the court notes, that Walsh was under the
statutory obligation to give the parties the chance to present oral
or written argument before rendering his final decision, [Fn. 12]
and that he did not do so. This procedural failure, however,
should not form a basis for concluding that the state did not make
an assertion to Schnell.
Concluding that Schnell met the first part of the Wassink
test, I would consider the other requirements of that case. While
Schnell's reliance on the state's assertions appears reasonable to
me, and there is evidence that he suffered some prejudice as a
result, I do not believe that estopping the division from taking
action in regard to Schnell's license "serves the interests of
justice so as to limit public injury." [Fn. 13] I reach this
conclusion for the reasons the court sets out in its discussion of
administrative delay: in a disciplinary proceeding in a heavily
regulated profession, it would be contrary to the public interest
to remedy the agency's delay by allowing a violation to go
undisciplined. [Fn. 14]
For this reason, and because I agree that the sanctions
decision should have been made (and should now be made) with
current information, I agree with the court's remand of this case
for a hearing to consider current evidence relevant to the issue of
sanctions.
FOOTNOTES
Footnote 1:
See AS 21.27.410(a).
Footnote 2:
See AS 44.62.560(a).
Footnote 3:
See Bruner v. Petersen, 944 P.2d 43, 47 n.5 (Alaska 1997)
(citing Handley v. State, Dep't of Revenue, 838 P.2d 1231, 1233
(Alaska 1992)).
Footnote 4:
See Kachemak Bay Watch, Inc. v. Noah, 935 P.2d 816, 821
(Alaska 1997).
Footnote 5:
See Power Constructors, Inc. v. Taylor & Hintze, 960 P.2d 20,
26 (Alaska 1998).
Footnote 6:
See Kachemak Bay Watch, 935 P.2d at 821 (citing Handley, 838
P.2d at 1233; Kjarstad v. State, 703 P.2d 1167, 1170 (Alaska
1985)).
Footnote 7:
See, e.g., Crum v. Stalnaker, 936 P.2d 1254, 1258 (Alaska
1997) (holding that equitable estoppel barred state from rejecting
Crum's late application for retirement benefits); Property Owners
v. City of Ketchikan, 781 P.2d 567, 573 (Alaska 1989) ("Estoppel
may be asserted against a public agency."); Wassink v. Hawkins, 763
P.2d 971, 975 (Alaska 1988) ("Estoppel may be invoked as a defense
against the government . . . .").
Footnote 8:
See Municipality of Anchorage v. Schneider, 685 P.2d 94, 97
(Alaska 1984).
Footnote 9:
Id.
Footnote 10:
See id.
Footnote 11:
See id. at 97-98.
Footnote 12:
763 P.2d 971.
Footnote 13:
See id. at 975.
Footnote 14:
See id.
Footnote 15:
AS 44.62.500 provides in part:
(b) If a contested case is heard by a hearing
officer alone, the hearing officer shall prepare a proposed
decision in a form that may be adopted as the decision in the case.
. . . The agency itself may adopt the proposed decision in its
entirety, or may reduce the proposed penalty and adopt the balance
of the proposed decision.
(c) If the proposed decision is not adopted
as provided in (b) of this section the agency may decide the case
upon the record, including the transcript, with or without taking
additional evidence, or may refer the case to the same or another
hearing officer to take additional evidence. . . . The agency may
not decide a case provided for in this subsection without giving
the parties the opportunity to present either oral or written
argument before the agency.
Footnote 16:
See AS 44.62.500(b)-(c).
Footnote 17:
AS 44.62.500(c).
Footnote 18:
See AS 21.27.410(a).
Footnote 19:
AS 21.06.220(a) provides that "[w]ithin 30 days after
termination of the hearing, . . . the director shall make an order
on hearing . . . ."
Footnote 20:
936 P.2d 1254.
Footnote 21:
Cf. Crum, 936 P.2d at 1256 n.3 (declining to address whether
analogous statutory time period directory or mandatory); Oaksmith
v. Brusich, 774 P.2d 191, 201-02 (Alaska 1989) (holding time limits
for issuance of findings of fact directory, not mandatory).
Footnote 22:
See Commissioner of Ins. v. Stryker, 463 S.E.2d 163, 166 (Ga.
App. 1995).
Footnote 23:
463 S.E.2d 163.
Footnote 24:
Id. at 166.
Footnote 25:
929 P.2d 634, 641 (Alaska 1996); see also Attorney Grievance
Comm'n v. Kahn, 431 A.2d 1336, 1352 (Md. 1981) ("Because the
purpose of disciplinary action against an attorney is to protect
the public, dismissal of the disciplinary petition for the sole
reason that the Attorney Grievance Commission failed to proceed
with the proper dispatch is manifestly unwarranted."); Hickey v.
Department of Health & Consol. Lab., 536 N.W.2d 370, 372 (N.D.
1995) ("The primary purpose of professional disciplinary
proceedings is to protect the public, and it would be inconsistent
with the public interest to dismiss a disciplinary proceeding
simply because of delays in initiating, conducting, or concluding
the proceedings.").
Footnote 26:
See Alaska R. Evid. 801(d)(2)(D).
Footnote 27:
511 P.2d 136 (Alaska 1973).
Footnote 28:
Id. at 143.
Footnote 29:
AS 44.62.500(c).
Footnote 30:
Citing two other laches cases, we placed great emphasis on
this factor in Jackson v. Kenai Peninsula Borough, 733 P.2d 1038,
1043-44 (Alaska 1987) (citing Moore v. State, 553 P.2d 8, 20
(Alaska 1976)). See also Concerned Citizens of So. Kenai Peninsula
v. Kenai Peninsula Borough, 527 P.2d 447, 457 (Alaska 1974)).
Footnote 31:
See Kachemak Bay Watch, 935 P.2d at 821 (citing Handley, 838
P.2d at 1233; Kjarstad, 703 P.2d at 1170).
Footnote 32:
527 P.2d 447.
Footnote 33:
Concerned Citizens of So. Kenai Peninsula, 527 P.2d at 457.
While we have been reluctant to apply laches against the state, we
have refused to hold that laches may never be invoked against it.
See Jackson, 733 P.2d at 1043-44.
Footnote 34:
Concerned Citizens of So. Kenai Peninsula, 527 P.2d at 457.
In later decisions, we have tended to collapse these two "prongs."
See, e.g., McGill v. Wahl, 839 P.2d 393, 399 (Alaska 1992) ("The
analysis is actually less of a distinct two-part test than an
overall balancing of equities.") (citing City of Juneau v. Breck,
706 P.2d 313, 316 n.14 (Alaska 1985)).
Footnote 35:
See Dan B. Dobbs, Law of Remedies sec. 2.4(4), at 103 (2d ed.
1993) ("In its most orthodox form, laches is unreasonable delay by
the plaintiff in prosecuting a claim or protecting a right of which
the plaintiff knew or should have known, and under circumstances
causing prejudice to the defendant.").
Footnote 36:
See id. A plaintiff may be barred by delays occurring before
filing suit. See id. In unusual circumstances, claims arising
under the Civil Rights Act of 1965 may be barred by delays in
prosecution of a suit. See id. at 103-04 & n.9. But see Jackson,
733 P.2d at 1038 (refusing to apply laches to eighteen-year delay
in enforcing zoning ordinance by local government).
Footnote 37:
See Kachemak Bay Watch, 935 P.2d at 821 (citing Handley, 838
P.2d at 1233; Kjarstad, 703 P.2d at 1170).
Footnote 38:
See, e.g., In re Mackay, 416 P.2d 823, 838 (Alaska 1964)
(citing American S.S. Co. v. Wickwire Spencer Steel Co., 8 F. Supp.
562, 566 (S.D.N.Y. 1934)).
Footnote 39:
The notice the director required read:
As a condition of my State of Alaska insurance
license, I am required to give notice that I have been convicted of
felony perjury in the United States District Court at Anchorage,
Alaska, Case No. A91-122 CR, entered on June 9, 1992. Pursuant to
this condition, I must provide this "Notice" to new and existing
clients and secure your signature below, before I may practice on
your behalf as an insurance producer. Your signature below
verifies that you have read this "Notice" and understand it. If
you have any questions please contact the Division of Insurance at
269-7900.
Footnote 40:
See AS 21.27.410(a)(7).
FOOTNOTES (Concurrence)
Footnote 1:
See Wassink v. Hawkins, 763 P.2d 971, 975 (Alaska 1988)
(citation omitted).
Footnote 2:
See Op. at 9.
Footnote 3:
See id. at 11-12.
Footnote 4:
See id. at 12-13.
Footnote 5:
See id. at 13.
Footnote 6:
511 P.2d 136 (Alaska 1973).
Footnote 7:
See id. at 143.
Footnote 8:
Id.
Footnote 9:
Id.
Footnote 10:
See id. at 138-42.
Footnote 11:
AS 44.62.500(c).
Footnote 12:
See Op. at 13.
Footnote 13:
Wassink v. Hawkins, 763 P.2d 971, 975 (Alaska 1988) (citation
omitted).
Footnote 14:
See Op. at 12.
