Case Title: Wyoming Bd. of Certified Public Accountants v. Christensen

Citation: 

Docket Number: 90-20

State: wyoming

Court: Wyoming Supreme Court

Date: 1990-11-15T00:00:00Z

Document:
Wyoming Bd. of Certified Public Accountants v. Christensen1990 WY 126800 P.2d 853Case Number: 90-20Decided: 11/15/1990Supreme Court of Wyoming
THE WYOMING BOARD OF 
CERTIFIED PUBLIC ACCOUNTANTS,

 APPELLANT 
(DEFENDANT),

v.

CURTIS W. CHRISTENSEN, 

APPELLEE 
(PLAINTIFF).

Appeal from the District 
Court, Sheridan County, James N. Wolfe, J.

Joseph B. Meyer, 
Atty. Gen., S. Jane Caton, Asst. Atty. Gen., for appellant. 

Tom C. Toner, 
Redle, Yonkee & Toner, and Michael K. Shoumaker, Sheridan, for 
appellee.

Before 
CARDINE,* C.J., and THOMAS, URBIGKIT, MACY and GOLDEN, 
JJ.

* Chief Justice at time of 
oral argument.

THOMAS, Justice.

[¶1]      The question 
posed in this case is whether the Wyoming Board of Certified Public Accountants 
(Board) lawfully was enjoined from continuing with one of the counts in a 
disciplinary proceeding initiated against Curtis W. Christensen (Christensen). 
The Board contends that disciplinary proceedings relating to certified public 
accountants are within its exclusive jurisdiction and that the injunction 
entered by the district court infringed upon the exercise of the Board's lawful 
jurisdiction. Christensen sought the injunction because the challenged count of 
the complaint was premised upon infractions of the Rules of Professional 
Conduct, adopted by the Board, alleged to have been set forth in a letter of 
comment issued as part of a peer review conducted pursuant to a Settlement and 
Resolution of Disciplinary Action entered into between the Board and 
Christensen. In that settlement agreement, the Board had committed itself to 
pursue any such further disciplinary action only by giving written notice of its 
decision to proceed within sixty days after its receipt of the letter of 
comment. The trial court found that the Board had failed to proceed in 
accordance with the Settlement and Resolution of Disciplinary Action entered 
into by the parties and that the Board, therefore, was foreclosed from pursuing 
the challenged count in the disciplinary proceeding. We agree with this ruling, 
and we affirm the Order on Plaintiff's Motion for Preliminary 
Injunction.

[¶2]      In its Brief of 
Appellant, the Board says that the issues to be resolved are:

"I. Did the district 
court abuse its discretion in assuming jurisdiction over a matter properly 
before the Board of Certified Public Accountants?

"II. Did the evidence 
support the district court's finding that appellee had not received timely 
notice that further disciplinary action was required?"

Christensen 
states the questions this way in his Appellee's Brief:

"I. Does the Wyoming 
Board of Certified Public Accountants have the jurisdiction and authority to 
decide whether or not the Board complied with the terms of a settlement 
agreement to which the Board is a party?

"II. Did the district 
court properly rule that the Board failed to decide whether or not the 1988 peer 
review letter of comment disclosed material violations of ethical codes of 
professional standards and, therefore, the Board is precluded by paragraph 10 of 
the settlement agreement from taking action on the peer review?"

[¶3]      Christensen is a 
certified public accountant in good standing in Wyoming and, currently, holds 
all certificates and permits required for the lawful practice of his profession. 
The Board is a state regulatory agency established by statute. Section 33-3-103, 
W.S. 1977 (June 1987 Repl.). Christensen is subject to the oversight of the 
Board while engaged in the practice of his profession and, therefore, subject to 
all of its rules, regulations, and appropriate disciplinary proceedings. See §§ 
33-3-108, 121, 123 and 129, W.S. 1977 (June 1987 Repl.).

[¶4]      In July of 1987, 
the Board initiated a disciplinary proceeding against Christensen in response to 
complaints that had emanated from a previous transaction. That disciplinary 
action was resolved "without any admission whatsoever of liability or fault for 
the alleged violations of the Rules of Professional Conduct set out in the 
Complaint," and the resolution was memorialized by a document entitled 
"Settlement and Resolution of Disciplinary Action" that was executed by the 
Board and Christensen on November 6, 1987. One key provision of that agreement 
provided that Christensen was to submit "two engagement oriented peer reviews by 
a CPA firm that would be acceptable by the peer review committee of the AICPA 
Division of Firms, and approved by the Board." The first peer review was to 
cover the period from October 1, 1986 to September 30, 1987, and the second was 
to cover the period from October 1, 1987 through September 30, 1988. The 
agreement provided that the peer reviews would be submitted directly to the 
Board, and both peer reviews were submitted as agreed.

[¶5]      The agreement 
went on to provide that further disciplinary action could be initiated against 
Christensen in the event that either peer review should disclose, in the letter 
of comment, any material violations of ethical conduct or professional standards 
by Christensen. The paragraph that encompassed this condition, the material one 
in this action, reads as follows:

"10. In the event the 
1987 peer review or the 1988 peer review disclose in the letter of comment any 
material violations of ethical conduct or professional standards by Christensen, 
the Board may bring a new disciplinary action based upon such material violation 
of an ethical code or professional standard in accordance with the statutory 
rights, powers and procedures of the Board. Material violations of ethical codes 
or professional standards are those violations which CPA's in good standing and 
in the same line of practice as Christensen would, under similar circumstances, 
consider a substantial and important violation of an ethical code or 
professional standard. If no material violations are cited in the letter of 
comment, the letter will be seen as a satisfactory review. The Board has 
sixty days from the date the letter of comment is received to decide and give 
written notice to Christensen whether it believes that the violations cited 
require further disciplinary action by the Board. If the Board does not, within 
the sixty day period, give such written notice to Christensen of a decision that 
further disciplinary action is required, then the Board is, and shall forever be 
precluded from taking action based on the letter of comment." (Emphasis 
added.)

[¶6]      The record is 
silent with respect to the exact date that the 1988 peer review was received by 
the Board, but the relevant letter of comment for the period from October 1, 
1987 through September 30, 1988 was dated November 17, 1988. On January 12, 
1989, a Board-appointed committee of one wrote to the chairman advising that he 
was filing a complaint with the full Board, one count arising out of what that 
committee person identified as material violations disclosed by the peer review 
for the period ending September 30, 1988. Then, on August 15, 1989, the 
executive director of the Board issued a Complaint and Notice against 
Christensen in which two separate violations of professional standards were 
alleged. Count 1 was predicated upon alleged deficiencies disclosed by the 1988 
peer review comment letter. Count 2 was predicated upon an audit report prepared 
in connection with an entirely different matter that was not addressed in either 
of the two peer reviews.

[¶7]      In response to 
the Complaint and Notice, Christensen filed a "Complaint for a Preliminary and 
Permanent Injunction and for Damages" in the state district court. Christensen's 
primary claim was that the action taken by the Board violated the Settlement and 
Resolution of Disciplinary Action agreement entered into in 1987. Testimony in 
the record demonstrates that Christensen had no notice of the pendency of any 
complaint made on behalf of the Board prior to the Complaint and Notice actually 
served upon him in August of 1989. The record does indicate that Christensen had 
received notice on February 14, 1989, via certified mail, that a committee of 
one, appointed by the Board, was filing a formal complaint against him as of 
January 12, 1989. Additional testimony also indicated that the Board knew 
nothing about these two counts in the Complaint and Notice as of December 4, 
1989 and that the Board never had made a decision with respect to pursuing any 
material violation of ethical conduct or professional standards that was 
disclosed in the 1988 letter of comment of the peer review.

[¶8]      A hearing was 
held, following which Christensen's demands were granted in part and denied in 
part. The district court found that Count 1 of the Board's complaint against 
Christensen arose out of the 1988 letter of comment and that the Board had "made 
no decision that further disciplinary action was required within the sixty day 
period specified in paragraph 10; therefore, the board is precluded from taking 
action on the letter of comment." The trial court further found that "[a]s to 
Count 2 of the complaint pending before the Board of Certified Public 
Accountants against Mr. Christensen, this count raises a new matter and is not 
dependent upon the letter of comment on the peer review." The district court 
went on to rule that "[t]he plaintiff is entitled to an injunction restraining 
and enjoining the Defendant from proceeding on count 1 of its complaint against 
Mr. Christensen, but the Plaintiff is not entitled to an injunction restraining 
and enjoining the Defendant from proceeding on count 2 of its complaint." 
Christensen had requested damages in his complaint, but that issue was not 
addressed in any way. This appeal is taken by the Board from the ruling of the 
district court as to count 1.

[¶9]      A settlement 
agreement is a contract and subject to the same legal principles as any legal 
contract. Andersen v. Corbitt, 777 P.2d 48 (Wyo. 1989); Wyoming Sawmills v. 
Morris, 756 P.2d 774 (Wyo. 1988). The fact that the proceedings out of which the 
settlement agreement arose were pending before an administrative agency should 
not make any difference with respect to the applicable legal principles. Under 
those principles, unless there is some valid reason not to do so, the intent of 
the parties as manifested by the agreement that they made must be given effect. 
Andersen. There can be no dispute about the proposition that our district courts 
are courts of general jurisdiction, and contract matters fall within the 
province of that jurisdiction. Matter of Larsen, 770 P.2d 1089 (Wyo. 
1989).

[¶10]   Paragraph 10 of the Settlement and 
Resolution of Disciplinary Action is clear and unambiguous, and it manifests the 
intent of the parties. It sets forth the obligation of the Board to give written 
notice to Christensen of its decision to proceed with further disciplinary 
action based upon material violations disclosed by the letter of comment, and it 
clearly provides that the Board must furnish that written notice within sixty 
days from the time the letter of comment was received. If that requisite notice 
was not furnished, then the agreement provides that the Board should be forever 
precluded from so proceeding. The district court, assuming jurisdiction over the 
dispute in obvious recognition of the settlement agreement as a contract, 
considered paragraph 10 to be enforceable and ruled accordingly. Our examination 
of the record satisfies us that the facts support that resolution.

[¶11]   The Board contends that this case 
involves an administrative disciplinary proceeding instead of a contract, and it 
argues that the result that flows from that proposition is that neither the 
district court nor this court has jurisdiction to review the disciplinary action 
proceeding until all available administrative remedies have been exhausted. See 
§ 16-3-114, W.S. 1977. In urging this proposition, the Board simply ignores the 
agreement that it made with Christensen, but our study discloses that the 
Board's theory is not supported by the record. We are able to reject that theory 
without the need for resolving questions of primary jurisdiction or the 
exhaustion of administrative remedies. The original disciplinary proceeding 
pending against Christensen was resolved by a contract between the Board and 
Christensen. That single fact is dispositive in this case. The provisions of the 
contract control and, at that instant in time, no administrative remedies 
remained to be exhausted. The only option available to the parties was to 
perform that contract, and the resolution of whether the contract was broken was 
a matter for the trial court.

[¶12]   The Board claims, in addition, that 
the ruling of the district court should either be reversed or remanded for 
further proceedings because the record contains no evidence as to when the 
letter of comment actually was received by the Board. The Board contends that 
the consequence of that silence in the record is that there is no tangible 
evidence that notice was not given within the required sixty days. The argument 
sounds plausible, but the theory is not supported. The record, in fact, leads to 
an opposite conclusion. First, we note that the Board's "Complaint and Notice," 
dated August 15, 1989 and signed on behalf of the Board, refers to a certified 
letter of February 13, 1989 in which Christensen was notified that a complaint 
alleging material violations of professional standards apparent from the peer 
review report had been filed with the Board. Cross-examination of Christensen 
appearing in the record corroborates the fact that he received that 
letter.

[¶13]   This aspect of the record does not 
provide information as to exactly when the letter of comment, which was dated 
November 17, 1988, was received by the Board, or even if it was received at all. 
The evidence, however, is sufficient to demonstrate that the Board, through its 
agent, had been informed of the existence of the letter of comment and its 
significance to further disciplinary proceedings some time prior to February 13, 
1989. In view of the obligation imposed upon the Board under the settlement 
agreement, we are satisfied that the information alluded to in the letter of 
February 13, 1989 is sufficient to invoke paragraph 10 of the settlement 
agreement. Any other finding would render meaningless our rules of contract 
construction. Wyoming Game and Fish Commission v. Mills, 701 P.2d 819 (Wyo. 
1985). It also would negate our rules favoring the settlement of controversies. 
Peters Grazing Association v. Legerski, 544 P.2d 449 (Wyo. 1975). These parties 
entered into their "Settlement and Resolution of Disciplinary Action" to resolve 
a dispute between them and to provide some certainty with respect to the future 
disposition of the matter. We cannot, and do not, construe it 
otherwise.

[¶14]   It follows that, contrary to the 
contention of the Board, there is sufficient evidence as to when the letter of 
comment was received, or at least constructively received, to initiate the sixty 
day period provided in paragraph 10 of the settlement agreement. Since the Board 
had notice of that letter of comment on, or before, February 13, 1989, the Board 
did not satisfy its obligation under the agreement unless it served notice to 
Christensen by April 14, 1989. Nothing in the record indicates that the Board 
furnished any notification to Christensen of any decision by the Board, as 
distinguished from its Committee, to pursue further disciplinary action until it 
sent Christensen its "Complaint and Notice" on August 15, 1989.

[¶15]   We agree with the district court 
that this dispute is a contract matter and not an administrative disciplinary 
proceeding. The district court had jurisdiction over the contract case, and the 
record supports the determination by the district court that the Board did not 
comply with the provisions of the contract. Under the circumstances, the Board 
properly was enjoined from proceeding with count 1 of its "Complaint and 
Notice." The order of the district court is affirmed.