Case Title: Elliott v. N.C. Psychology Bd

Citation: 348 N.C. 230

Docket Number: 340PA97

State: north-carolina

Court: North Carolina Supreme Court

Date: 1998-05-08T00:00:00Z

Document:
IN THE SUPREME COURT OF NORTH CAROLINA
No. 340PA97
FILED: 8 MAY 1998
STEPHEN S. ELLIOTT, Ph. D.,
Petitioner
v.
NORTH CAROLINA PSYCHOLOGY BOARD,
Respondent
On discretionary review pursuant to N.C.G.S. § 7A-31 of
a unanimous decision of the Court of Appeals, 126 N.C. App. 453,
485 S.E.2d 882 (1997), affirming an order entered by Allen (J.B.,
Jr.), J., on 4 January 1996 in Superior Court, Wake County, which
affirmed a decision of the North Carolina Psychology Board. 
Heard in the Supreme Court 11 February 1998.
Harry H. Harkins, Jr., for petitioner-appellant.
Michael F. Easley, Attorney General, by Anne J. Brown
and Robert M. Curran, Assistant Attorneys General, for
respondent-appellee.
ORR, Justice.
This case arises out of several incidents involving
petitioner, Stephen S. Elliott, and several of his former
patients.  Petitioner is a psychologist licensed by the North
Carolina Psychology Board and by the Virginia Board of
Professional Counselors.  Petitioner resided and was employed in
Martinsville, Virginia, until September 1987.  While residing in
Martinsville, petitioner spent one afternoon a week seeing
patients in Eden, North Carolina.  In September 1987, petitioner
relocated to Winston-Salem, North Carolina.  The incidents
-2-
involved in this appeal all occurred prior to petitioner’s
relocation.
The first incident involved a female adult patient who
initially sought treatment from petitioner on 22 August 1984. 
This patient sought counseling for marital problems, anxiety
attacks, and problems with coping skills.  She remained in
counseling until 12 February 1985 and took part in a total of
twenty-four counseling sessions with petitioner.  Subsequent to
the completion of therapy, the patient contacted petitioner and
“asked if [they] could be friends.”  Petitioner informed the
patient that if they were to talk outside of therapy, he could no
longer serve as her counselor.  By the summer of 1985, the
patient and petitioner had become close friends.  Around this
same time, both the patient and petitioner became separated from
their respective spouses.  In December 1985, the patient and
petitioner began dating and continued to see each other through
the winter of 1986.  Petitioner and the patient engaged in sexual
relations during this time.
The second incident involved a female adult patient who
was in counseling with petitioner from May 1985 to July 1985. 
During that time, petitioner conducted eight counseling sessions
with her.  In June 1985, while still in counseling with
petitioner, this patient separated from her husband.  Petitioner
did not hear from her again until December 1985.  At that time,
they encountered each other at a day-care center where the
patient’s daughter and petitioner’s son were enrolled.  After
that encounter, the patient called petitioner and asked whether
-3-
he would go out with her.  Petitioner explained to her that he
could never have a relationship with her as a counselor if he saw
her socially.  They dated from January 1986 through January 1988.
During 1986 and 1987, petitioner also had several dates
with two other former adult female clients.  In 1987, petitioner
relocated to Winston-Salem, North Carolina.  Subsequently, a
complaint was filed with the Virginia Board of Professional
Counselors by the first female client referenced above.  On
24 April 1992, the Virginia Board entered a consent order with
petitioner, which concluded that petitioner had violated various
principles of the Regulations of the Board of Professional
Counselors.  Petitioner was reprimanded by the Virginia Board and
ordered to submit an academic research paper on “the topic of the
ethical standards of the profession regarding the prohibition of
dual relationships of a sexual nature,” with emphasis on the
powerful position the counselor possesses over the patient.
Once the North Carolina Psychology Board became aware
of the disciplinary action taken against petitioner by the
Virginia Board, it conducted its own hearing concerning the
allegations.  The North Carolina Board concluded that petitioner
was in violation of Principles 2(f) and 6(a) of the American
Psychological Association’s Ethical Principles of Psychologists
and Code of Conduct (the Ethics Code), which is adopted by
reference in the North Carolina Psychology Practice Act. 
N.C.G.S. § 90-270.15(a)(10) (1997).  Based upon its conclusions,
the Board suspended petitioner’s license for sixty months, with
an active period of suspension of thirty days.  During the
-4-
remaining period of suspension, the Board ordered petitioner to
practice under the supervision of a licensed psychologist. 
Petitioner was also ordered to undergo therapy and evaluation
with a psychologist.
Petitioner then filed a petition for judicial review. 
On 4 January 1996, the trial court affirmed the decision of the
North Carolina Psychology Board.  In its order, the trial court
concluded that (1) the Psychology Board did not exceed its
statutory authority, (2) the Psychology Board did not engage in
any unlawful procedure or commit any error of law,
(3) substantial evidence supports the Board’s findings and
conclusions, and (4) the final agency decision was not arbitrary
or capricious.
On 26 January 1996, petitioner filed a written notice
of appeal with the Court of Appeals.  In an opinion filed on
17 June 1997, the Court of Appeals unanimously affirmed the
decision of the trial court and, thus, that of the Psychology
Board.  On 2 October 1997, this Court allowed petitioner’s
petition for discretionary review.
The only issue presented to us by petitioner’s petition
for discretionary review is whether the Court of Appeals was
correct in affirming the trial court’s order concluding that
petitioner was in violation of Principle 6(a) of the Ethics Code. 
In the opinion below, the Court of Appeals focused on the policy
objectives underpinning the Ethics Code.  It noted that “[t]he
purpose of [the Ethics Code] is to ‘protect the public from . . .
unprofessional conduct by persons licensed to practice
-5-
psychology.’”  Elliott v. N.C. Psychology Bd., 126 N.C. App. 453,
457, 485 S.E.2d 882, 884 (1997) (quoting N.C.G.S. § 90-270.1
(1993) (incorporating by reference the Ethics Code)) (alteration
in original).  The Court of Appeals further stated that the
Ethics Code “never suggests that dual relationships of a sexual
or social nature are permissible after therapy is terminated.” 
Id. at 459, 485 S.E.2d at 885.  It concluded by holding that the
Psychology Board was correct in determining that petitioner was
in violation of Principle 6(a).  Id.  However, we disagree with
the Court of Appeals and accordingly hold that the Court of
Appeals erred in affirming the portion of the order concluding
that petitioner was in violation of Principle 6(a).
Article 18A of the North Carolina General Statutes
governs the practice of psychology.  N.C.G.S. § 90-270.15(e),
contained within article 18A, provides that “the procedure for
revocation, suspension, denial, limitations of the license or
health services provider certification . . . shall be in
accordance with the provisions of Chapter 150B of the General
Statutes.”  N.C.G.S. § 90-270.15(e).  In discussing judicial
review of a final agency decision, chapter 150B provides that
the court reviewing a final agency decision
may affirm the decision of the agency or
remand the case for further proceedings.  It
may also reverse or modify the agency’s
decision if the substantial rights of the
petitioners may have been prejudiced because
the agency’s findings, inferences,
conclusions, or decisions are:
(1)
In violation of constitutional
provisions;
(2)
In excess of the statutory
authority or jurisdiction of the
agency;
-6-
(3)
Made upon unlawful procedure;
(4)
Affected by other error of law;
(5)
Unsupported by substantial evidence
admissible under G.S. 150B-29(a),
150B-30, or 150B-31 in view of the
entire record as submitted; or
(6)
Arbitrary or capricious.
N.C.G.S. § 150B-51(b) (1995).
The issue presented to us by this appeal requires us to
determine (1) whether the Court of Appeals correctly construed
Principle 6(a), and (2) whether the Psychology Board’s findings
and conclusions regarding Principle 6(a) are supported by
substantial evidence.  First, we will address whether the Court
of Appeals properly construed Principle 6(a).  “‘When the issue
on appeal is whether a state agency erred in interpreting a
statutory term, an appellate court may freely substitute its
judgment for that of the agency and employ de novo review.’” 
Brooks v. McWhirter Grading Co., 303 N.C. 573, 580-81, 281 S.E.2d
24, 29 (1981) (quoting In re Appeal of N.C. Sav. & Loan League,
302 N.C. 458, 465, 276 S.E.2d 404, 410 (1981)).  Thus, in
determining the appropriate construction to be given Principle
6(a), we will apply de novo review.
Principle 6(a) of the Ethics Code provides as follows:
Psychologists are continually cognizant of
their own needs and of their potentially
influential position vis-à-vis persons such
as clients, students, and subordinates.  They
avoid exploiting the trust and dependency of
such persons.  Psychologists make every
effort to avoid dual relationships that could
impair their professional judgment or
increase the risk of exploitation.  Examples
of such dual relationships include, but are
not limited to, research with and treatment
of employees, students, supervisees, close
-7-
friends, or relatives.  Sexual intimacies
with clients are unethical.
Ethical Principles of Psychologists, 36 Am. Psychologist 633, at
636 (June 1981) (emphasis added).  Petitioner argues that both
the Psychology Practice Act and the Ethics Code, incorporated
therein by reference, must be strictly construed.  He notes that
Principle 6(a) specifically states that it is unethical to have
sexual relations “with clients.”  Petitioner contends that
because he engaged in social or sexual relationships only with
former clients, after the counseling relationship had terminated,
there is no violation of Principle 6(a).
It is well settled that statutes which are in
derogation of the common law and which are penal in nature are to
be strictly construed.  Vogel v. Reed Supply Co., 277 N.C. 119,
131, 177 S.E.2d 273, 280 (1970).  North Carolina common law did
not provide for the regulation of the practice of psychology. 
Further, under the Psychology Practice Act, the Board has the
authority to “deny, suspend, or revoke licensure and
certification, and may discipline, place on probation, limit
practice and require examination, remediation and
rehabilitation.”  N.C.G.S. § 90-270.15(a).  Thus, the Psychology
Practice Act should be strictly construed because it is both in
derogation of the common law and penal in nature.
In the case of In re Dillingham, 257 N.C. 684, 127
S.E.2d 584 (1962), this Court discussed N.C.G.S. § 93A-6(a),
which authorizes the North Carolina Real Estate Licensing Board
-8-
to hold a hearing and to revoke or suspend the license of a real
estate broker or a real estate salesman.  The Court stated:
The portion of our Act which empowers
The Board to revoke the license of a real
estate broker or salesman is penal in its
nature and should not be construed to include
anything as a ground for revocation which is
not embraced within its terms.
Id. at 695, 127 S.E.2d at 592.  Similarly, as the statute in the
present case gives the Psychology Board the right to deny,
suspend, or revoke the license of a psychologist and impose other
disciplinary and remedial actions for violations of the Ethics
Code, it “should not be construed to include anything as a ground
for revocation which is not embraced within its terms.”  Id.
Further, in McArver v. Gerukos, 265 N.C. 413, 144
S.E.2d 277 (1965), this Court construed a criminal statute
requiring the licensing of real estate brokers and salesmen.  The
Court noted the criminal nature of the statute and stated:
For this reason, and for the further reason
that it is a statute restricting to a special
class of persons the right to engage in a
lawful occupation, the act must be strictly
construed so as not to extend it to
activities and transactions not intended by
the Legislature to be included.
Id. at 417, 144 S.E.2d at 280.  In the present case, by requiring
that psychologists be licensed, the statutes contained within
article 18A are statutes “restricting to a special class of
persons the right to engage in a lawful occupation.”  Id.  This
additional factor provides further support for the strict
construction of N.C.G.S. § 90-270.15, and, accordingly, Principle
6(a).
-9-
In the opinion below, the Court of Appeals addressed
petitioner’s contention “that he did not violate [Principle 6(a)]
because it did not explicitly prohibit romantic involvement with
former clients.”  Elliott, 126 N.C. App. at 456, 485 S.E.2d at
884.  However, it declined to adopt petitioner’s “interpretation
of the ethical principles of psychologists with regard to sexual
relationships with former clients.”  Id. at 457, 485 S.E.2d at
884.  Instead, as noted above, the Court of Appeals focused on
the policy objectives and general purpose of the Ethics Code.
The Court of Appeals agreed that the Ethics Code
prohibits sexual relations “with clients.”  Id. at 459, 485
S.E.2d at 885.  However, it noted that the Code “never suggests
that dual relationships of a sexual or social nature are
permissible after therapy is terminated.”  Id.  By focusing on
the underlying objectives and general principles of the Ethics
Code, rather than the conduct specifically prohibited, the Court
of Appeals erred.  Accordingly, we reverse the Court of Appeals
and hold that the Ethics Code must be strictly construed.
Having determined that Principle 6(a) is to be strictly
construed, we must determine whether there is substantial
evidence to support the Board’s conclusion that petitioner
violated Principle 6(a).  This determination requires application
of the “whole record test.”  This test
“does not allow the reviewing court to
replace the Board’s judgment as between two
reasonably conflicting views, even though the
court could justifiably have reached a
different result had the matter been before
it de novo.  On the other hand, the ‘whole
record’ rule requires the court, in
-10-
determining the substantiality of evidence
supporting the Board’s decision, to take into
account whatever in the record fairly
detracts from the weight of the Board’s
evidence.  Under the whole evidence rule, the
court may not consider the evidence which in
and of itself justifies the Board’s result,
without taking into account contradictory
evidence or evidence from which conflicting
inferences could be drawn.”
Associated Mechanical Contractors, Inc. v. Payne, 342 N.C. 825,
832, 467 S.E.2d 398, 401 (1996) (quoting Thompson v. Wake County
Bd. of Educ., 292 N.C. 406, 410, 233 S.E.2d 538, 541 (1977)
(citation omitted)).
While applying the “whole record” test, we must also
strictly apply the terms of Principle 6(a).  In applying the
standard of strict construction, this Court has stated:
[T]he rule requiring strict construction does
not mean that such statutes are to be
stintingly construed to provide less than
what their terms would ordinarily be
interpreted as providing.  Strict
construction of statutes requires only that
their application be limited to their express
terms, as those terms are naturally and
ordinarily defined.
Turlington v. McLeod, 323 N.C. 591, 594, 374 S.E.2d 394, 397
(1988).
The Board’s findings of fact, which are pertinent to
this determination, are as follows:
6.  During the period of time from 8/84
through 2/85, [petitioner] had a counseling
relationship with a female client with whom
he subsequently entered into a dual and
sexual relationship.
7.  Between 1/86 and 1/88, [petitioner]
entered into a social/sexual relationship
with a second female client who was his
client between 5/85 and 7/85.
-11-
8.  [Petitioner] dated a third and
fourth female, each of whom was a former
client.
Thus, the Board’s findings demonstrate that petitioner had
social/sexual relationships only with former clients and only
after the counseling relationships had ended.  Principle 6(a)
prohibits only “[s]exual intimacies with clients.”  Here, there
is no finding or evidence that any of petitioner’s social
interactions with former clients ever occurred during the
professional relationship.  Accordingly, the conclusion that
petitioner violated Principle 6(a) is unsupported by the
evidence.
We note that a new version of the Ethics Code became
effective 1 December 1992 and applies to conduct occurring on or
after that date.  The new Ethics Code contains Standard 4.05,
which provides that “[p]sychologists do not engage in sexual
intimacies with current patients or clients.”  Ethical Principles
of Psychologists, 47 Am. Psychologist 1597, at 1605 (Dec. 1992). 
New Standard 4.07(a) goes on to clarify that “[p]sychologists do
not engage in sexual intimacies with a former therapy patient or
client for at least two years after cessation or termination of
professional services.”  Id.  Thus, in the future, there will be
no question of the limitation placed on psychologists entering
into relationships with former clients.  There is a clear two-
year “waiting period” now in effect.
However, as this subsequent amendment to the Ethics
Code was not in effect at the time of the incidents involving
petitioner, a strict construction of Principle 6(a) requires us
-12-
to conclude that the Court of Appeals erred in affirming the
trial court’s order concluding that petitioner was in violation
of Principle 6(a).  Accordingly, the decision of the Court of
Appeals is reversed as to this issue, and this case is remanded
to that court for further remand to the superior court for
further remand to the North Carolina Psychology Board for further
proceedings not inconsistent with this opinion.  Because the
issue involving Principle 2(f) is not before us on appeal, the
Court of Appeals’ holding on that issue stands.
REVERSED IN PART AND REMANDED.