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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Yost v. State, Division of Corporations, Busniness and Professional Licensing (7/16/2010) sp-6495
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,
e-mail corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
| ANN-MARIE YOST, M.D., | ) |
| ) Supreme Court No. S- 13212 | |
| Appellant, | ) |
| ) Superior Court No. | |
| v. | ) 3AN-07-04144 CI |
| ) | |
| STATE OF ALASKA, | ) |
| DEPARTMENT OF COMMERCE, | ) |
| COMMUNITY AND ECONOMIC | ) |
| DEVELOPMENT, DIVISION | ) |
| OF CORPORATIONS, BUSINESS | ) |
| AND PROFESSIONAL LICENSING, | ) O P I N I O N |
| ) | |
| Appellee. | ) No. 6495 - July 16, 2010 |
| ) | |
Appeal from the Superior Court of the State
of Alaska, Third Judicial District,
Anchorage, Sharon L. Gleason, Judge.
Appearances: Thomas V. Van Flein, Clapp,
Peterson, Van Flein, Tiemessen & Thorsness,
LLC, Anchorage, for Appellant. Robert C.
Auth, Assistant Attorney General, Anchorage,
and Wayne Anthony Ross, Attorney General,
Juneau, for Appellee.
Before: Carpeneti, Chief Justice, Fabe,
Winfree, and Christen, Justices. [Eastaugh,
Justice, not participating.]
CARPENETI, Chief Justice.
I. INTRODUCTION
A doctor encountered a problem with her medical license
application. Rather than pursue the administrative adjudication
process, she entered into a settlement agreement providing,
subject to the approval of the medical board, that she would be
issued a license, fined, and reprimanded. The doctor asserts
that the professional licensing division promised her an
opportunity to address the Board before it considered approving
the settlement and that this promise was a condition precedent to
the settlement. The Division denies it made such a promise. The
Board changed the meeting time without notifying the doctor and
voted to approve the settlement without hearing from her. In
response, the doctor filed a civil case for breach of contract.
The superior court converted the case to an administrative appeal
and affirmed the Boards decision. The doctor appealed. We hold
that although the superior court properly treated the case as an
administrative appeal, it was error to decide that no condition
precedent existed without first conducting a trial de novo on the
issue. Therefore, we vacate the superior courts decision and
remand for trial.
II. FACTS AND PROCEEDINGS
A. Facts
1. The application and settlement process
1. Dr. Ann-Marie Yost, a neurosurgeon, accepted a short-term
assignment at the Alaska Native Medical Center1 and, in January
2005, applied to the State of Alaska, Division of Corporations,
Business and Professional Licensing (the Division) for a license
to practice medicine in the state. The license application
included question 32(a): Have you ever been under investigation
by any medical licensing jurisdiction or authority? Dr. Yost
answered: No. In fact, as the Division soon became aware,
Dr. Yost had five years earlier been the subject of an inquiry by
the Washington state Medical Quality Assurance Commission, set in
motion by a patients complaint that Dr. Yost had misdiagnosed
him. On March 31, 2005, Colin Matthews, a division employee
assigned to conduct investigations for the Alaska State Medical
Board (the Board), was tasked with resolving the discrepancy.
According to Dr. Yost, she answered No to question
32(a) out of a good faith belief that the Washington inquiry did
not constitute an investigation for purposes of the application.
Dr. Yost said she understood the term investigation to mean a
formal proceeding with interviews, discovery, and a hearing, none
of which the Washington inquiry entailed. Indeed, the entirety
of the Washington inquiry involved a letter sent to Dr. Yost
informing her of the patient complaint and asking her to turn
over relevant records and to write a statement about the case.
The hospitals legal team handled all correspondence and, six
months later, the case was closed with a finding of no violations
and no need for disciplinary action. Dr. Yost considered the
incident a nuisance complaint and stated that it did not even
come to mind when she reached question 32(a) on the Alaska
medical license application.
Investigator Matthews had a different view of the
incident. He understood that Washington had characterized its
inquiry into Dr. Yost as an investigation and that Dr. Yost had
been so notified. The initial letter to Dr. Yost return address
Investigations Unit informed her that this was a preliminary
investigation, and that no charges have been issued in connection
with this investigation. The final letter Dr. Yost received
informed her that the investigation was complete. To Matthews,
whether Dr. Yosts answer to question 32(a) was innocent oversight
or intentional fraud was irrelevant; the answer was false, and
the statute2 prohibiting false answers on license applications
was indifferent to the reason.3 Faced with this dilemma, Dr.
Yost could have allowed the application process to run its
course; if the Board denied her application, she could have
requested a hearing4 complete with argument, discovery, and
testimony.5 If this was unsuccessful, she could have appealed to
the superior court, and if necessary appealed again to this
court.6 However, Dr. Yost was under a time constraint; her job
with theAlaska Native Medical Center was set to begin the next
day, April 1, 2005, and neurosurgeons in Alaska are not easily
replaceable.
In search of a solution, Matthews consulted a board
member who offered the opinion that this case should be dealt
with just as similar cases had been handled in the past: Dr.
Yost could enter into a memorandum of agreement (MOA) by which
she would be granted a license, but the Board would impose a
$1,000 fine and a reprimand. As soon as Dr. Yost signed the
draft MOA, she could be issued a temporary license so she could
begin her job. Then, if the Board adopted the MOA at its next
meeting, a permanent license would be issued and the fine and
reprimand would be imposed. If the Board rejected the MOA, Dr.
Yost would be back where she started, free to pursue the hearing
process.
On April 1, 2005, Dr. Yosts anticipated first day of
work, Matthews called her and explained the MOA process, then
spoke by phone with Dr. Yosts attorney, David Thorner, to work
out the details. When an acceptable agreement was reached,
Matthews faxed a copy of the proposed MOA to Thorner. That
afternoon, Dr. Yost came into the Division office, signed the
MOA, and was issued a temporary license.
This case arises from a disagreement about what else
happened that day. Dr. Yost alleges that she signed the MOA on
the express condition that before the agreement could be adopted
as final, she would have the opportunity to appear before her
peers on the medical board to explain directly her response to
question 32(a), and ask that no action be taken against her. She
alleges that Matthews, on behalf of the Division, orally promised
her and her attorney that she would have this opportunity, and
that this condition was fundamental to her participation in the
MOA. In her affidavit, Dr. Yost said that she wholeheartedly
disagreed with the allegations against her and would never have
signed the [MOA] without the assurance made by Investigator
Matthews that I would have a chance to explain myself to the
Board at the meeting where the draft agreement would be
presented. For its part, the Division acknowledges that Matthews
told Dr. Yost that the Boards meetings were open to the public
and offered to accommodate her request to listen in by
teleconference, but the Division denies representing to Dr. Yost
or her attorney that she would have an opportunity to address the
Board, or even guaranteeing the time at which the matter would be
considered.
The disagreement about what exactly Dr. Yost had been
promised would have major ramifications. On April 21, 2005, the
Board met to consider, among other things, whether Dr. Yosts MOA
should be adopted as final. Dr. Yost and Thorner were prepared
to telephone in to the meeting at 3:30 PM, the time they expected
the matter would be considered.7 The Board was running ahead of
schedule, however, and it reached the Dr. Yost matter at 12:30
PM. The executive administrator of the Board, Leslie Gallant,
advised the Board that Thorner wished to be on the phone while
the matter was discussed but, despite several calls to his office
and cell phone, Thorner could not be reached. Then, without
Thorner or Dr. Yost on the line, the Board unanimously voted to
adopt the MOA as final.
The next day, Thorner sent a letter to the Board
saying:
Dr. Yost signed the [MOA] with the
understanding that she
would be permitted to
submit mitigating and
explanatory information
to the Alaska State
Medical Board on April
21, 2005. Subsequently,
Mr. Matthews confirmed
with my office that the
matter would be presented
to the Board at 3:30 . .
. and that Dr. Yost and I
would be permitted to
participate by telephone.
Unfortunately, the matter was presented at
12:30 . . . when I was in a deposition in
another matter, with my cell telephone off.
When I got out of that deposition . . . [I]
learned that the hearing had already taken
place . . . .
Unfortunately, Dr. Yost was denied the
opportunity of making her presentation to the
Board. The purpose of this letter is to
request that this matter be placed on the
docket of the next board meeting for
reconsideration . . . .
Weeks later, Thorner wrote again, but he did not receive a reply
to either letter. Then, in a letter dated June 6, 2005, Dr. Yost
was informed that the case was now closed based on the Boards
April 21, 2005 approval of the [MOA] you signed on April 1, 2005.
Dr. Yost has not practiced medicine in Alaska since
her brief term at the Alaska Native Medical Center concluded in
May 2005.
2. Evidence concerning whether the Division made a promise to
Dr. Yost
Dr. Yost and Thorner8 submitted affidavits saying that
Matthews orally promised Dr. Yost the opportunity to address the
Board before the MOA could be adopted. Matthews submitted an
affidavit saying he never made that promise. Leslie Gallant, the
medical board executive administrator, submitted an affidavit
saying she spoke with Dr. Yost in Matthewss presence at the
Division office after the MOA was signed and that Matthews did
not make any promises to Dr. Yost at that time. In addition to
these conflicting affidavits, the parties support their positions
with competing selections from a cache of documentary evidence.
In a cover letter faxed to Thorner along with the
proposed MOA, Matthews wrote I will do my best to have the MOA
reviewed by the Board during the April 21, 2005 meeting, however,
as I advised you this date, the agenda is already quite full and
that may not be possible. Dr. Yost and you could certainly
attend the meeting either in person or telephonically. After Dr.
Yost signed the draft MOA, Matthewss detailed log notes reflect
that he told her the MOA was on the April board meeting agenda
for 4:30 PM April 21, 2005 [and] she could come to this office
and be on the phone at the time the Board reviews the MOA and
that Mr. Thorner could also be on the line. Next, Matthews wrote
I have spoken with Atty Thorner and advised him . . . that
[Yosts] appt with the Board was for 4:30PM, (est) on 04.21.05,
that I had told Yost she could come to the office and we could
hook her and Atty Thorner so they could be on line when board
reviews the MOA. Finally, along with a confirmation that Dr.
Yosts temporary license had been issued, Matthews faxed a
handwritten note to Thorner which said Appt with Board 4:30 P.M.
(EST) 04.21.05. In his deposition, Matthews read this to mean:
[a]ppointment with board 4:30 p.m. estimated. On April 13, 2005,
Matthews sent an email to Gallant informing her of the phone
number where Thorner could be reached during the board meeting.
The board meeting agenda included this note: In the Matter of
Anne-Marie Yost, MD Call Attorney David Thorner.
In his deposition, Matthews said I never, in the 18
years I worked for the Division, told anyone they could go to a
board meeting and present evidence, mitigating or otherwise. I
routinely said, You can attend the board meeting, but they dont
necessarily have to talk to you. He had no hesitation saying
this, he explained, because thats not the format for it . . . .
If the board wants to . . . ask you questions, they can do that.
But I never guaranteed that anyone could talk to the board
because . . . thats not the way its done. They dont do it.
To Dr. Yost, the above evidence demonstrates that
everyone knew it was part of the deal that she and her attorney
would have an opportunity to address the Board before the MOA
could be finalized. To the Division, the evidence shows that
while it tried to accommodate Dr. Yost and Thorners desire to
listen in on the public meeting, it never guaranteed the matter
would be considered at a specific time, let alone promised Dr.
Yost an opportunity to be heard.
3. The memorandum of agreement
The document that Dr. Yost signed on April 1, 2005, and
the Board adopted on April 21, 2005, is divided into three
sections: the Memorandum of Agreement, the Proposed Decision and
Order, and the Order. The Memorandum of Agreement provides in
relevant part:
2. Admission/Jurisdiction. Yost admits and
agrees that the Board has jurisdiction over
the subject matter of her license in Alaska
and over this Memorandum of Agreement (MOA).
3. Admission/Facts. Yost admits [that she
answered No to question 32(b) when in fact
she had been investigated by the State of
Washington and that this is grounds for
denial of her application.]
5. Waiver of Rights. Yost has consulted with
an attorney . . . and understands she has the
right to an administrative hearing on the
facts in this case. She understands and
agrees that by signing this agreement, she is
waiving her rights to a hearing. Further,
she understands and agrees that she is
relieving the Division of any burden it has
of proving the facts she admits above. Yost
further understands and agrees that by
signing this agreement she is voluntarily and
knowingly giving up her right to present oral
and documentary evidence, to present rebuttal
evidence, to cross-examine witnesses against
her, and to appeal the Boards decision to the
Superior Court.
7. Memorandum of Agreement, Decision and
Order. Yost agrees that the Board has the
authority to enter into this MOA and to issue
the following Order.
The Proposed Decision and Order section provided that
Dr. Yost would be issued a license subject to a civil fine and
reprimand, and concluded: this Order shall take effect
immediately upon its adoption by the Board . . . . Dr. Yost
signed the document at the end of this section under the line I,
Ann-Marie Yost, have read the MOA, understand it, and agree to be
bound by its terms and conditions. Finally, the Order section
consists of one sentence indicating the Boards adoption of the
MOA. The Order is signed only by the Board chairperson.
B. Proceedings
A. In January 2007 Dr. Yost filed a civil suit against the
Division in superior court. She asserted two causes of action.
First, Dr. Yost asserted breach of contract based on the
Divisions failure to give her an opportunity to address the
Board. Second, Dr. Yost asserted that this failure entitled her
to a declaration that the MOA was void.9 Her prayer for relief
included requests for a declaration and an injunction. Her
complaint did not seek money damages.
The Division moved for summary judgment on several
grounds, including that the complaint actually constituted an
untimely administrative appeal. Dr. Yost opposed summary
judgment on several grounds, including that the action was
properly brought as a civil contract claim, and not an
administrative appeal, because it collaterally challenged the
validity of the contract between the Division and Dr. Yost and
not the Boards action pursuant to the contract. Dr. Yost also
moved the court to grant partial summary judgment finding that
her ability to appear before the Board was a condition precedent
to the MOA which the Division failed to fulfill.
After oral argument, Superior Court Judge Sharon L.
Gleason decided to convert the civil action into an
administrative appeal, adopting the Divisions reasoning that the
action was properly characterized as administrative because it
essentially [sought] to set aside the Boards action that approved
the memorandum of agreement. The court noted that while under
normal circumstances the administrative appeal would be untimely
appeals from administrative agency decisions generally must be
taken within 30 days10 here, the 30-day period never began to
run because the Division never gave Dr. Yost notice of the
deadline.11 The superior court certified as the only question on
appeal: whether the Boards action should be invalidated because
Dr. Yost did not address the Board in person when the memorandum
of agreement was presented . . . . In light of the conversion to
an administrative appeal, the court vacated the scheduled jury
trial and denied most outstanding motions as moot. The court
essentially denied the Divisions motion for summary judgment as
moot12 and deferred ruling on Dr. Yosts motion for summary
judgment.13
Both parties submitted appellate briefs in the superior
court.14 Dr. Yost argued that the Boards decision to adopt the
MOA without first giving her an opportunity to be heard was both
an abuse of discretion unsupported by substantial evidence15 and a
violation of the Divisions contractual obligation to let her be
heard. Dr. Yost also argued that the Division breached its duty
of good faith by submitting a report to the National
Practitioners Data Bank16 which mischaracterized the action taken.
The Division argued several grounds on which the Boards
action should be upheld, including (1) that the evidence did not
support the existence of a promise to let Dr. Yost speak; (2)
that substantial evidence supported the Boards adoption of the
MOA; and (3) that Dr. Yosts appeal was barred by the terms of the
MOA itself. To support their evidentiary arguments, the parties
drew on the affidavits, depositions, and documents submitted in
support of previous motion practice while the case was still
classified as a civil suit.
On July 3, 2008, Judge Gleason issued a memorandum
decision affirming the Boards actions in full and dismissing the
case. The court held that the Boards adoption of the MOA was not
subject to a condition precedent, explaining that
the plain, unambiguous language of the MOA
does not include a condition precedent; nor
does one arise by clear implication. Dr.
Yost received a temporary license to practice
medicine when she signed the MOA . . . and
agreed then, without conditions, to be bound
by its terms. The evidence that Dr. Yost
points to in support of her position
. . . merely indicates that the Division and
the Board would permit Dr. Yost and her
attorney to be present at the Boards meeting
not that their presence was required before
the MOA could be approved. (Emphasis in
original.)
The court also held that the content of the Boards report to the
NPDB was not an abuse of discretion and was adequately supported
by Dr. Yosts admissions in the MOA.17
Dr. Yost appeals.
III. STANDARD OF REVIEW
The proper interpretation of contract language is a
question of law which we review de novo.18 Whether a civil action
in a superior court is properly converted to an administrative
appeal is a question of law which we decide independently,
adopting the best rule in light of precedent, policy, and reason.19
We review a superior courts decision not to grant a trial de novo
in an appeal from an administrative agency for abuse of
discretion and will uphold the superior courts decision unless we
are left with a definite and firm conviction after reviewing the
whole record that the trial court erred in its ruling.20 We
review grants of summary judgment de novo and will affirm summary
judgment if there are no genuine issues of material fact and if
the moving party is entitled to judgment as a matter of law.
When making this determination, we draw all reasonable inferences
in favor of the non-moving party.21
IV. DISCUSSION
Although Dr. Yost raises several issues on appeal to
this court, her core contention is that the superior court erred
in converting her civil action to an administrative appeal rather
than allowing her civil suit to proceed. We conclude that
although the superior court properly treated the case as an
administrative appeal, the court erred by not holding a trial de
novo to determine the existence of a condition precedent to the
MOA. Because we remand for a trial on this issue, we do not
reach Dr. Yosts alternative arguments that the denial of a trial
violated her constitutional rights to due process and witness
confrontation.22
A. The Terms Of The MOA Do Not Bar Dr. Yosts Appeal.
A. As a threshold issue, the Division urges us to hold that Dr.
Yosts action, whatever its characterization, should be dismissed
as barred by the terms of the MOA itself. Although the superior
court did not rely on that conclusion in dismissing Dr. Yosts
case, the Division suggests this as an alternate basis for
affirming the superior courts decision.23 The Division argues
that Dr. Yosts appeal is barred by the MOA term in which Dr. Yost
knowingly and voluntarily waived her right . . . to appeal the
Boards decision to the Superior Court.
When interpreting contract language, our goal is to
give effect to the reasonable expectations of the parties.24
Here, the language of the MOA and the purpose for which it was
executed allow us to discern the parties reasonable expectations
with regard to the waiver. Like a typical settlement agreement,
the MOA attempted to facilitate the exchange of valuable promises
between two parties with the goal of avoiding further litigation:
Dr. Yost agreed to waive her right to an adjudicatory proceeding25
and accept discipline in return for an unrestricted medical
license; the Division agreed to waive its (asserted) right to
deny Dr. Yost a license in return for the right to impose
discipline without the full-scale adjudicatory proceeding that
would otherwise have been required.
The MOA itself states that the parties intended their
agreement to provide for the compromise and settlement of all
issues which could be raised by [a denial of Dr. Yosts
application] through a formal hearing process. The MOA provision
titled Waiver of Rights lists the rights to which Dr. Yost would
have otherwise been entitled under the Administrative Procedure
Act, including the right to an administrative hearing,26 the right
to present oral and documentary evidence,27 and the right to
appeal the Boards decision to Superior Court.28 In this context,
we conclude that the parties reasonably expected Dr. Yosts waiver
of her right to appeal to encompass only the appeal rights
associated with the administrative hearing to which Dr. Yost
would have been entitled absent a settlement. Thus, while Dr.
Yost is barred under the MOA from appealing the merits of the
Boards decision to discipline her, she is not barred from
challenging the enforceability of the underlying agreement which
granted the Board power to act. To interpret the waiver as the
Division suggests to bar an appeal of the agreements validity
related to the violation of a condition would presumably mean
also finding a waiver of the right to challenge the validity of
the agreement on other grounds, such as fraud29 or duress.30 This
interpretation would be unreasonable. Therefore, we reject the
Divisions argument that Dr. Yosts action should be dismissed as
barred by the terms of the MOA.
B. The Superior Court Did Not Err In Treating Dr. Yosts Civil
Suit As An Administrative Appeal.
A. Dr. Yost argues that the superior court erred in converting
her civil action for breach of contract into an administrative
appeal of the Boards decision. The Division argues that the
superior courts conversion of the case was correct. The parties
divergent characterizations of this case stem from their
different views of what the case is fundamentally about. To Dr.
Yost, her case presents a straightforward attack on the validity
of a contract. In her view, although she agreed to enter into a
settlement with the Division, her consent to the agreement hinged
on one express condition to which Matthews, a division
representative, had agreed: that she would have the opportunity
to appear before the Board, explain her mistake, and ask that
they reject the MOA and issue her a license without
qualification. Because this condition was never fulfilled, Dr.
Yost argues, the MOA and the Boards order entered pursuant to it
should be voided. To the Division, this is a case about an
applicant seeking to set aside a routine administrative decision:
the Boards decision to adopt the provisions of the MOA. Whatever
contract theory it may invoke, Dr. Yosts desired remedy is still
essentially a judgment voiding an administrative decision, and
therefore only an administrative appeal is appropriate.
We have consistently held that, [h]owever denominated,
a claim is functionally an administrative appeal if it requires
the court to consider the propriety of an agency determination.31
When a court could not grant the relief requested without
reversing the prior agency determination, the claim should be
treated as an administrative appeal.32 A decision of the Board is
considered an agency determination for purposes of this analysis.33
Here, although Dr. Yost framed her argument in contract theory
terms, it is inescapable that her request to void the MOA
functionally required the superior court to consider the
propriety of the Boards decision to adopt it. The court could
not have granted Dr. Yost the relief she sought without
simultaneously reversing the Boards decision. Therefore, we
conclude that the superior court correctly characterized
Dr. Yosts action as an administrative appeal.
C. It Was Error To Deny A Trial De Novo To Determine The
Existence Of A Condition Precedent To The MOA.
A. In an appeal to the superior court from an administrative
agency, the superior court has discretion to grant a trial de
novo in whole or in part.34 Although a court normally reviews an
agencys decision on the record, we have upheld or directed
application of de novo review where the agency record is
inadequate; where the agencys procedures are inadequate or do not
otherwise afford due process; or where the agency . . . excluded
important evidence in its decision-making process.35 Although it
is rarely warranted,36 an appellant has a right to a trial de novo
if an administrative adjudicative procedure does not afford due
process.37 In Keiner v. City of Anchorage,38 we held that the
requirements of procedural due process were satisfied in the
administrative adjudication context when:
[t]he Board made its findings only after due
notice and full opportunity to be heard; the
conduct of the hearing was consistent with
the essentials of a fair trial; there is no
assertion that the Board was anything but
impartial; and a complete record of the
proceedings was kept so that the reviewing
court was able to determine that there was no
substantial failure to observe applicable
rules of law and procedure, and that in all
other respects [the appellant] was afforded a
fair hearing.[39]
Here, we conclude that it was error to affirm the
Boards decision without first conducting a trial de novo to
determine the existence of a condition precedent.40 We reach this
conclusion because of the unusual course of proceedings below.
The agency determination that is the subject of this appeal is
the Boards decision to adopt the MOA. This decision was made by
a vote of the Board with no other procedural formalities.
Although the Board was aware that Dr. Yosts attorney wished to be
present for the vote, the Board made no findings relating to the
disputed condition precedent, indeed, it is unclear that the
Board was aware that such a dispute existed. At the superior
court level, the court defined the question on appeal as: whether
the Boards action should be invalidated because Dr. Yost did not
address the Board in person when the [MOA] was presented . . . .
It answered this question in the negative.
The superior courts decision attempted to apply the
standards of review typically used by superior courts reviewing
agency decisions, including the substantial evidence test for
questions of fact.41 However, the decision did not actually apply
this standard to the crucial factual question: whether the
Division had promised Dr. Yost an opportunity to appear before
the Board. Rather than reviewing an agency finding on the
existence of such a promise to determine whether that finding was
supported by substantial evidence which it could not do as the
question was never considered at the agency level the court
implicitly engaged in first-instance factfinding. The court
reviewed the affidavits and documentary evidence previously
submitted by the parties in support of their summary judgment
motions and concluded on the basis of this evidence that the MOA
does not include a condition precedent. The court explained that
the evidence that Dr. Yost points to in support of her position .
. . merely indicates that the Division and the Board would permit
Dr. Yost and her attorney to be present at the Boards meeting
not that their presence was required before the MOA could be
approved. (Emphasis in original.)
We conclude that it was an abuse of discretion to make
this finding without conducting a trial de novo. Dr. Yost had
the right to a trial de novo on the issue of a condition
precedent because the administrative proceedings in this case, a
vote by the Board to adopt the MOA did not afford her due
process on this outcome-determinative issue.42 The administrative
proceeding lacked important hallmarks of procedural due process,
such as notice and an opportunity to be heard.43 This is, of
course, because there was no agency proceeding which considered
the existence of a condition precedent. Thus, due process
entitled Dr. Yost to a trial de novo on this issue. The courts
decision, which made factual findings without the benefit of live
testimony or cross-examination, does not satisfy the requirement
of due process.
D. The Failure To Conduct A Trial De Novo Was Not Harmless
Error.
The Division argues that even if the superior court
erred by not conducting a trial de novo, any error was harmless
because the Division was entitled to summary judgment on the
condition precedent issue.44 When a superior court conducts a
trial de novo in an appeal from an administrative agency, all
proceedings in the action are governed by the rules governing
procedures in the superior court.45 This includes the summary
judgment procedures set out in Alaska Rule of Civil Procedure 56.46
We review grants of summary judgment de novo and will
affirm summary judgment if there are no genuine issues of
material fact and if the moving party is entitled to judgment as
a matter of law. When making this determination, we draw all
reasonable inferences in favor of the non-moving party.47 The
party opposing summary judgment, in this case Dr. Yost, need not
establish that it will ultimately prevail at trial but only that
there exists a genuine issue of fact to be litigated.48
Here, Dr. Yost argues that summary judgment would be
inappropriate because there is a genuine issue of material fact
as to the existence of a condition precedent to the MOA. We
agree with Dr. Yost that the evidence raises an issue of fact
which must be litigated. Both Dr. Yost and her then-attorney
Thorner submitted affidavits asserting that Matthews promised
them an opportunity to address the Board. Matthews wrote a note
to Thorner stating that Dr. Yost had an appointment with the
Board.49 Matthews log notes also reference Dr. Yosts appointment
with the Board and the board meeting minutes show that the Board
knew Dr. Yosts attorney wished to be contacted. In addition,
evidence of Thorners contemporaneous understanding of the
situation can be found in the letter he wrote to the Board the
day after the MOA was adopted; in the letter, he asked the Board
to reconsider the MOA at its next meeting because Dr. Yost signed
the [MOA] with the understanding that she would be permitted to
address the Board, and was denied the opportunity of making her
presentation. Certainly the credibility of Dr. Yost and Thorner
must be weighed against that of Matthews and Gallant, who both
submitted affidavits asserting no promise was made. However,
[c]redibility is a factual issue . . . properly determined by the
factfinder at trial, not a matter of law determined by the court
in summary judgment.50 Similarly, while we agree with the
Division that the evidence could give rise to an inference that
Matthews told Dr. Yost she could attend the meeting but never
promised she could participate, on summary judgment we must draw
all reasonable inferences in favor of the non-moving party.51
The Division argues that it is entitled to summary
judgment because the condition was not memorialized in the MOA
and if Dr. Yosts participation at the board meeting was key to
the whole MOA process, then that participation should have been
specified in the MOA. The Division provides no support for this
proposition and we do not find any.52 In addition, the Division
argues that it is entitled to summary judgment because Dr. Yosts
asserted condition conflicts with terms contained in the MOA and
a contract should not be given an interpretation which creates
conflict among its provisions.53 This argument is misplaced.
This case does not involve an ambiguous contract term that
requires a courts interpretation, but rather involves the factual
question whether an additional term exists. If the court on
remand finds that a condition precedent is a part of the
agreement, it is at that point that the court should apply
interpretive rules to resolve any ambiguity.
Finally, the Division argues that it is entitled to
summary judgment because contract conditions are disfavored under
Alaska law. The Division is correct that to be enforceable, a
condition generally must be expressed in plain language or arise
by clear implication.54 The purpose of this rule is to avoid the
risk of forfeiture that may result when a slight failure to
perform wholly destroys all rights under the contract.55 Under
these circumstances, however, the purpose of the rule would not
be served by its strict application. Dr. Yost asserts that an
opportunity to address the Board was fundamental to her
participation in the agreement; thus, the denial of that
opportunity cannot be a called a slight failure to perform. In
addition, the Division faces no undue risk of forfeiture because
the occurrence of the condition is entirely within its power; to
satisfy the condition and obtain the full benefit of the bargain,
the Board needed only to provide Dr. Yost an opportunity to be
heard.56 Therefore, we conclude that the interpretive rule does
not apply to the facts of this case.57
In sum, we conclude that Dr. Yost has raised a genuine
issue of material fact as to the existence of a condition
precedent to the MOA, making the issue inappropriate for
resolution on summary judgment. Therefore, the superior courts
failure to conduct a trial de novo on that issue was not harmless
error. On remand, the court should conduct a trial to determine
whether the Division promised Dr. Yost that she could address the
Board before it voted on adoption of the MOA. If the court finds
such a promise, then the matter should be remanded to the Board
to provide Dr. Yost that opportunity. If the court does not find
such a promise, then it should affirm the Boards decision.58
V. CONCLUSION
Because Dr. Yosts claim required the court to consider
the propriety of an agency determination, we hold that the court
correctly treated her civil case as an administrative appeal.
However, because the agency proceeding did not provide due
process on the condition precedent question, we hold that Dr.
Yost was entitled to a trial de novo. Because the Division is
not entitled to summary judgment on the condition precedent
issue, we hold that the erroneous denial of a trial de novo was
not harmless. Therefore, we REMAND to the superior court for
further proceedings consistent with this opinion.
_______________________________
1 The medical center hired Dr. Yost to substitute while
the hospitals only other neurosurgeon took leave. The position
lasted approximately one month.
2 See AS 08.64.326(a)(1) (The board may impose a sanction
if the board finds . . . that a licensee secured a license
through deceit, fraud, or intentional misrepresentation.); AS
08.64.240(b) (The board may refuse to grant a license to any
applicant for the same reasons that it may impose disciplinary
sanctions under AS 08.64.326.).
3 This case does not present, and we do not decide, the
question of whether the Washington inquiry constituted an
investigation for medical licence application purposes, or
whether the Board may deny a license based on a mistake or
misunderstanding in the application process.
4 AS 44.62.390.
5 AS 44.62.430-440.
6 AS 44.62.560; AS 22.05.010(c).
7 The record cites both 3:30 PM and 4:30 PM as the
anticipated time the Board would discuss the Dr. Yost matter.
The discrepancy is not explained and the one hour difference is
not material to how the facts unfolded.
8 Thorner is not representing Dr. Yost before this court.
9 Dr. Yost also asserted that she was entitled to an
injunction requiring the Division to withdraw its report of
discipline from the National Practitioners Data Bank, a federally-
maintained database of disciplinary actions used by state
licensing boards, malpractice payers, hospitals, and professional
societies. National Practitioners Data Bank, Frequently Asked
Questions,
http://www.npdb-hipdb.hrsa.gov/faq-GeneralInformation.html.
State licencing authorities must report disciplinary actions
against physicians to the NPDB. 42 U.S.C. 11132; 45 C.F.R.
60.8; AS 08.64.335.
10 AS 44.62.560; Alaska R. App. P. 602(a)(2).
11 Alaska R. of App. P. 602(a) (The 30-day period for
taking an appeal does not begin to run until the agency has
issued a decision that clearly states that it is a final decision
and that the claimant has thirty days to appeal.).
12 The courts written rulings granted the Divisions
summary judgment motion in part, referring to its adoption of the
Divisions reasoning on the administrative appeal conversion
issue.
13 The court also issued written rulings which restated
its oral rulings.
14 Dr. Yost expressly reserved her right to challenge the
courts conversion of her civil action to an administrative
appeal.
15 Dr. Yosts argument was framed by the scope of review
for administrative appeals provided in the Administrative
Procedure Act. AS 44.62.570(b)-(c) (inquiry on appeal extends to
. . . whether there was a prejudicial abuse of discretion. . . .
[which] is established if [the court determines that] the
findings are not supported by . . . substantial evidence in the
light of the whole record.).
16 For a discussion of the significance of this report,
see supra note 9.
17 The court also rejected Dr. Yosts arguments that the
Board violated the Administrative Procedure Act. A discussion of
these arguments is not necessary to our resolution of the case.
18 Witt v. State, Dept of Corr., 75 P.3d 1030, 1033
(Alaska 2003).
19 Laidlaw Transit, Inc. v. Anchorage Sch. Dist., 118 P.3d
1018, 1023 (Alaska 2005) (citing Brandon v. State Dept of Corr.,
938 P.2d 1029, 1031-32 (Alaska 1992)).
20 Anchorage Concerned Coal., Inc. v. Municipality of
Anchorage Bd. of Adjustment, 172 P.3d 774, 778-79 (Alaska 2007).
21 Howell v. Ketchikan Pulp Co., 943 P.2d 1205, 1207
(Alaska 1997) (internal citations omitted).
22 In addition, we do not reach Dr. Yosts argument that
the superior courts decision violated her constitutional right to
a jury trial. Dr. Yosts attorney withdrew this argument at oral
argument in light of Dr. Yosts concession that she was seeking
only equitable relief and not money damages. See State v. First
Natl Bank of Anchorage, 660 P.2d 406, 424 (Alaska 1982) (holding
that no right to jury trial exists where plaintiff seeks only
equitable relief).
Finally, we do not reach Dr. Yosts argument that a
preliminary investigation is legally distinct from an
investigation, and therefore the Divisions original basis for
seeking disciplinary action was flawed. Because Dr. Yost raises
this argument for the first time in her reply brief, it is
waived. See Danco Exploration, Inc. v. State, Dept of Natural
Res., 924 P.2d 432, 435 n.1 (Alaska 1996). Even if Dr. Yost had
not waived the issue, it is not properly before this court.
Because Dr. Yost negotiated a settlement, neither the Board nor
the superior court had occasion to determine the underlying
question whether the Washington inquiry was legally an
investigation. Dr. Yost waived her right to challenge the legal
basis for the disciplinary action when she entered into the MOA,
and the only issue properly before this court is whether that MOA
is valid.
23 See United Parcel Serv. v. State, Dept of Revenue, 1
P.3d 83, 87 n.23 (Alaska 2000) (holding that prevailing party may
generally argue for affirmation on appeal on any legal theory).
24 Monzingo v. Alaska Air Group, Inc., 112 P.3d 655, 660
(Alaska 2005).
25 AS 08.64.326 (hearing must precede disciplinary
sanctions); AS 08.64.160 (board shall comply with Administrative
Procedure Act).
26 See AS 44.62.390(a)(1).
27 See AS 44.62.430-440.
28 See AS 44.62.560.
29 Cousineau v. Walker, 613 P.2d 608, 613 (Alaska 1980)
(holding that fraudulent or material misrepresentation may be
grounds for voiding contract).
30 Helstrom v. N. Slope Borough, 797 P.2d 1192, 1197
(Alaska 1990) (duress may be grounds for voiding contract).
31 Haynes v. State, Commercial Fisheries Entry Commn, 746
P.2d 892, 893 (Alaska 1987). Accord Carlson v. Renkes, 113 P.3d
638, 641 (Alaska 2005); Kleven v. Yukon-Koyukuk Sch. Dist., 853
P.2d 518, 524 (Alaska 1993); Fairbanks N. Star Borough v. State,
826 P.2d 760, 762 (Alaska 1992); Diedrich v. City of Ketchikan,
805 P.2d 362, 365 (Alaska 1991); Owsichek v. State, Guide
Licensing & Control Bd., 627 P.2d 616, 619 (Alaska 1981).
32 Haynes, 746 P.2d at 893; Diedrich, 805 P.2d at 366
(holding administrative appeal was proper where superior court
could not have granted the requested relief without reversing the
Boards determination).
33 See State v. Lundgren Pac. Const. Co., 603 P.2d 889,
892 (Alaska 1979) (holding Board of Adjustment to be
administrative agency for purposes of characterizing challenges
to its determinations and defining administrative agency as a
governmental authority, other than a court and other than a
legislative body, which affects the rights of private parties
through either adjudication or rule making).
34 AS 22.10.020(d); Alaska R. App. P. 609(b)(1).
35 Anchorage Concerned Coal., Inc. v. Municipality of
Anchorage Bd. of Adjustment, 172 P.3d 774, 778 (Alaska 2007).
36 Id.
37 Lundgren Pac. Const. Co., Inc., 603 P.2d at 895.
38 378 P.2d 406 (Alaska 1963).
39 Id. at 409-10.
40 We note that Dr. Yost did not specifically request a
trial de novo after the superior court converted the case to an
administrative appeal. Arguments not raised in the trial court
are waived and will not be considered on appeal, except to the
extent that plain error has been committed. Plain error exists
where the trial court has made an obvious mistake . . . .
Wettanen v. Cowper, 749 P.2d 362, 364 (Alaska 1988) (citations
omitted). Here, because we conclude that the courts failure to
conduct a trial de novo was plain error, especially in light of
Dr. Yosts vigorous pursuit of a trial in the civil context, we
hold that Dr. Yost did not waive the possibility of a trial de
novo in the administrative context.
41 See Lakloey, Inc. v. Univ. of Alaska, 157 P.3d 1041,
1045 (Alaska 2007).
42 See Lundgren Pac. Const. Co., Inc., 603 P.2d at 895
(holding that appellant has right to trial de novo if an
administrative adjudicative procedure does not afford due
process).
43 Keiner, 378 P.2d at 409-410.
44 Specifically, the Division suggested during oral
argument that we review the superior courts memorandum decision
as if it were a grant of summary judgment and affirm on the basis
that summary judgment was proper. Although not designated as
such, the courts decision did essentially function as a ruling on
summary judgment because it drew from the affidavits and other
evidence submitted in support of the parties prior summary
judgment motions. See Alaska R. Civil P. 56(c) (describing types
of evidence that may be used to support motion for summary
judgment).
45 Alaska R. App. P. 609(b)(2).
46 See Nenana City Sch. Dist. v. Coghill, 898 P.2d 929,
932 (Alaska 1995) (holding that application of summary judgment
rules is identical whether case was treated as administrative
appeal or independent civil suit).
47 Howell v. Ketchikan Pulp Co., 943 P.2d 1205, 1207
(Alaska 1997) (internal citations omitted).
48 Alaska Rent-A-Car, Inc. v. Ford Motor Co., 526 P.2d
1136, 1139 (Alaska 1974).
49 As evidence that Matthews never guaranteed Dr. Yost an
opportunity to speak, the Division points to Matthewss earlier
note to Thorner saying I will do my best to have the MOA reviewed
by the Board during the April 21, 2005 meeting, however
. . . that may not be possible. However, this note was written
before the MOA was signed and does not foreclose the possibility
that the details were cemented sometime before Matthewss
subsequent note about the app[ointmen]t with board.
50 Broderick v. Kings Way Assembly of God Church, 808 P.2d
1211, 1216 (Alaska 1991).
51 Howell, 943 P.2d at 1207 (internal citations omitted).
52 Perhaps the Division means to reference the parol
evidence rule, which holds that an integrated written contract
may not be varied or contradicted by prior negotiations or
agreements. Alaska Diversified Contractors, Inc. v. Lower
Kuskokwim Sch. Dist., 778 P.2d 581, 583 (Alaska 1989). A written
agreement is integrated if it in view of its completeness and
specificity reasonably appears to be a complete agreement, . . .
unless it is established by other evidence that the writing did
not constitute a final expression. Lower Kuskokwim Sch. Dist. v.
Alaska Diversified Contractors, Inc., 734 P.2d 62, 64 (Alaska
1987) (quoting Restatement (Second) of Contracts 209(3) (1981)).
The question of integration is one for the court. Id. at 63.
Here, the MOA is not an integrated agreement. The agreement does
not contain an integration clause and Matthews in his deposition
stated that an applicants desire to appear before the Board is
not something you would put in the MOA to start with. Thus,
evidence of a consistent additional term is not barred as a
matter of law.
53 McBain v. Pratt, 514 P.2d 823, 828 (Alaska 1973).
54 Jarvis v. Ensminger, 134 P.3d 353, 358 (Alaska 2006).
55 Id. at 358 nn. 13 & 15.
56 See id. at 358 n.13 (citing Restatement (Second) of
Contracts 227 (1981)) (interpretive rule disfavoring conditions
does not apply if the event is within the obligees control).
57 We note that even if the rule did strictly apply here,
it would not result in a grant of summary judgment to the
Division. In our view, the evidence does raise a genuine issue
of fact as to whether a condition precedent arose by clear
implication.
58 Dr. Yost also argued that her civil case should have
been allowed to proceed on a bad faith theory arising from the
contents of the Boards report to the National Practitioners Data
Bank. The Division responded that Dr. Yost had no private cause
of action based on the report and that she had waived her
administrative remedy. Because we remand for trial on the
condition precedent issue, we do not reach Dr. Yosts bad faith
claim.
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