# In the Missouri Court of Appeals **Eastern District**

DIVISION THREE CHRYL BROWN, ) No. ED107598 ) Petitioner/Appellant, ) Appeal from the Circuit Court ) of St. Charles County vs. ) ) STATE BOARD OFACCOUNTANCY, ) Honorable Jon A. Cunningham ) Respondent/Respondent. ) Filed: August 27, 2019

Introduction Chryl Brown (Brown) appeals fr om the decision of the Missouri State Board of Accountancy (Board) placing her license on probation for three years, as well as requiring her to complete a supplementary ethics course and an increased yearly continuing professional education (CPE) requirement . We reverse and remand. Factual and Procedural Background Brown holds a certificate and l icense to practice accountancy in Missouri. In order to renew her license, Brown is requ ired to complete no less than 1 20 hours of CPE every three-year period, with a minimum of 20 hours completed every year. Licen se holders are required to maintain records of their CPE hour s and must regularly submit t hose records to the Board as a part of the license renewal. Li cense holders are also subject to audit by the Board of their claimed CPE hours. Should the Board contact a license holder a nd request a formal response,2 they are required to respond t o such communications by register ed or certified mail within 30 days. In 2011 Brown suffered a number of personal tragedies, includi ng the unexpected deaths of family members. By the end of 2011, Brown had logged no CPE hours. Brown contacted the Board, explained her circumstances , and requested a waiver for her yearly CPE requirements for 2011, as well as a reduction in the CPE requirements from 2009- 2011. In response, Samantha Green, an attorney representing the Board, sent a letter to Bro wn stating her CPE submission had been accepted for the 2009-2011 period and the matter had been closed. The letter stated Brown would be subject to another audi t during the next reporting per iod. In December 2014, Brown received a letter from Thomas DeGroodt , the executive director of the Board. This lette r informed Brown her CPE subm issions for the 2011-2013 period had also been accepted, and s he met the Board’s CPE requ irements for that period. In June 2015, Brown received another letter from Thomas DeGroo dt. This letter stated the Board had opened a complaint against Brown because she fail ed an audit of her 2011, 2012, 2013, and 2014 CPE requirements. This letter also stated she h ad failed to respond to an earlier letter sent in May 2015. The Board ’s letter warned Brown she w as to respond to the letter by July 16, 2015, or she would be in vio lation of Board rules. Th e record of this case contains a letter from Brown in response t o the Board’s June 2015 letter. This letter is dated July 16, 2015; however, nothing in the record indi cates if or when the Board r eceived it. In thi s letter, Brown states she failed to respond t o the May 2015 letter from the Bo ard because she set it aside and forgot about it. Brown also rem inded the Board she had previou sly sent all the requested CPE information for the period in que stion, at which time the Board told Brown it was accepting her hours.3 In February 2016, the Board filed aformal complaint against B rown with the Missouri Administrative Hearing Commissi on (AHC). This complaint allege d two rule violations by Brown. The first count alleged B rown had failed to complete he r required CPE hours for 2011, 2012, and 2013. The complaint alle ged Brown had filed zero hou rs in 2011, 23 hours in 2012, and 79 hours in 2013, for a total of 102 CPE hours for the peri od. The complaint claimed this made her deficient both for the minimum requirement of 2011 and the total requirement for that three-year period. The second c ount alleged Brown had violated Board rules by failing to respond to the letter sent by the Board in June 2015. After receiving the complaint, the AHC attempted to serve noti ce on Brown at her last known address by certified mail. This attempt was unsuccessful , and the mail was returned as “unclaimed.” In March 2016, the B oard attempted to serve Brownpersonally via private process server. This too was unsuccessf ul. Finally, on the Board’s mo tion, the AHC served notice on Brown via publication between J uly and September 2016. Brown n ever responded, and the Board motioned for a default de cision, which was granted by the AHC in September 2016. Notice of the default decision w as received by Brown that same month. Brown made no request the default be set aside, and it became final October 21, 2016. After the default became fina l, Brown obtained counsel. The B oard and Brown, through counsel, agreed on a date on whic h to hold a hearing to determi ne what, if any, discipline Brown should face. The disciplinary hearing was held in August 2017. Brown testified at the hearing and was allowed to introduce severa l exhibits into evidence. T he exhibits included the abovementioned letters Brown receive d from the Board informing her t hat her CPE deficiency from 2011 had been excused, and her CPE requirements were deemed acc eptable for the 2009-2011 period as well as the 2011-2013 pe riod. Brown testified she ha d received a letter in May 20154 warning her the previously excus ed CPE deficiencies were the su bject of a possible Board complaint. Brown testified she had attempted to respond to the letter by calling Samantha Green, attorney for the Boar d, several times, but had not respo nded in writing as required. When asked why, Brown replied she attem pted to resolve the matter in formally because she believed it must have been a mistake, since the Board had already accepted her CPE hours. Brown testified she received the June 2015 lette r from the Board on the same su bject, and responded to this letter in writing. After the disciplinary heari ng, the Board took the matter unde r advisement. Thereafter, the Board issued its Disciplinary Order placing Brown’s license to practice accountancy on probation for a period of three year s, ordering her to take an ethics course, and increasing her yearly CPE requirements. The D isciplinary Order contained a se ction titled Findings of Fact. This section stated the Boar d found 1) the Board had authority to regulate and discipline licensed accountants, 2) Brown is a licen sed accountant, 3) Brown receiv ed a default decision from the AHC, and 4) Brown appeared at the disciplinary hearing and pres ented evidence on her behalf. The Disciplinary Order made no specific mention of any of the e vidence presented at the hearing or how it affected what discip line the Board imposed on Brown. Brown appealed the Board’s Dis ciplinary Order t o the circuit c ourt, which affirmed the Board’s decision. This appeal follows. Standard of Review On appeal, we review the decisi on of the Board, not the circui t court. Tendai v. State Bd. of Reg. for Healing Arts , 161 S.W.3d 358, 365 (Mo. banc 2005). The standard of review is de

novo . Id. “To the extent that [the] conclusions of law contain st atements of fact or ultimate fact, the Court defers to the commissi on as fact finder if the conclu sions are supported by competent5 and substantial evidence when cons idering the record as a whole .” Id.; see Section 536.140.2. 1 No deference is given to the agency on questions of law. Gott v. Dir. of Revenue, 5 S.W.3d 155, 157 (Mo. banc 1999). Additionally, the agency’s decision may n ot stand where it is in violation of constitutional provisions, in excess of statutory authority, is made upon unlawful procedure, or where it is arbitrar y, capricious, unreasonable, or an abuse of discretion. Wilson v. City of St. Louis, 418 S.W.3d 501, 506 (Mo. App. E.D. 2013); see Section 53 6.140.2. Discussion The Board is a creature of st atute created by th e Missouri leg islature to regulate licensed accountants within the state. S tate Bd. of Account. v. Integra ted Fin. Solutions, 256 S.W.3d 48, 51 (Mo. banc 2008). Its purpose is “to protect the public by e nsuring the integrity of the CPA profession.” Id. The Board’s ability to discipline members of the profession is defined in Section 326.310. Under the statute , if the Board wishes to dis cipline a license hol der it must file a complaint with the AHC allegi ng they violated one of the enum erated provisions. Section 326.310.2. Upon the AHC finding cause f or discipline, the Boar d has discretion to impose a penalty up to a statutory max imum of $2,000 per violation, up t o five years of probation, or suspension of the offender’s license to practic e. Section 326. 310.3. Brown was alleged to have violated Section 326.310.2 by not complying with lawfully adopt ed rules and regulations; specifically, 20 CSR 2010-4.010, 2 which requires a certain numbe r of CPE hours over a given period, and 20 CSR 2010-3.060(7), wh ich requires license holder s to respond to written communications from the Board i n writing sent by certified or r egistered mail. On appeal, Brown raises several points of error, all related t o the standard under which we review the Board’s d ecision under Section 536.140. We do no t analyze all the claims raised

1 All statutory references are to RSMo 2016. 2 All regulatory references are to Mo. Code Regs. (2010).6 because we agree with Brown’s second point: the Board abused it s discretion in imposing the discipline it did. The primary purpose of the Board ’s ability to d iscipline licen se holders is not to vindicate the Board’s own dignity upon bei ng defied, but to protect the m embers of the Missouri public from potential harm. Boyd v. State Bd. of Registration for Hea ling Arts, 916 S.W.2d 311, 317 (Mo. App. E.D. 1995). Thus, the discipline imposed must bear a rational relationship to that goal. Wasem v. Mo. Dental Bd., 405 S.W.2d 492, 497 (Mo. App. S t.L. 1966). Brown argues imposing a period of probation on her was an abuse of the Board ’s discretion because the uncontroverted evidence at the e videntiary hearing showed she h ad been excused by the Board for her CPE requirements dur ing the 2011-2013 period for which the complaint alleges she was deficient. An abuse of discreti on occurs when the Board’s deci sion “is so arbitrary and unreasonable as to shock the sense of justice and indicate a la ck of careful consideration.” Shirrell v. Missouri Edis on Co., 535 S.W.2d 446, 448 (Mo. banc 1976), quoting Anderson v. Robertson, 402 S.W.2d 589, 593 (Mo. App. St.L. 1966). The Board counters with several related arguments. It argues that because Brown defaulted before the AHC, that default is res judicata , and Brown is unable to later present evidence that goes to the veracity of the allegations in the co mplaint. The Board claims the default decision gives it all the authority it needs to impose the discipline it did. The Board also points out the evidence Brown was allowed to present at the dis ciplinary heari ng did not show she was in compliance with her CPE requirements for 2011-2013. Further, the Board characterizes the record at th e disciplinary hearing as “partia l,” and insufficiently developed for review by this Court.7 We disagree with the Board’s arguments. It is true Brown did not present evidence she was in compliance during the 2011-2013 period. However, she di d present uncontroverted evidence her noncompliance was due to a series of personal trag edies; that she had contacted the Board about these difficulties; and that the Board had waived h er CPE requirements and accepted her CPE hours for 2011-2013, the same period for whichit later filed the instant complaint. The Board has th e authority under 20 CSR 2010-4.041 (1)(B) to grant such a waiver. The Board’s Disciplinary Order offers no insight why the Board rejected its previous position that Brown was excused from her CPE requirements for that perio d. The Disciplinary Order merely referenced the default d ecision Brown had received from the AHC and imposed discipline on Brown. The Board argues against our c onsideration of Brown’s evidence , claiming Brown’s opportunity to present such evide nce came and went with the AHC hearing, and res judicata bars its consideration at the discipli nary hearing or on appeal as a n attempt to relitigate matters already settled. We do not share t he Board’s view. The statut es governing the complaint process create a bifurcated procedure. F irst, the Board files a compla int before the AHC, which determines whether cause to disc ipline the license holder exist s; if such cause exists, a hearing is held before the Board itself t o determine what l evel of discipl ine to impose. Sections 621.045 and 326.310; see also Peer v. Mo. Bd. of Pharmacy, 453 S.W.3d 7 98, 805 (Mo. App. W.D. 2014). It follows that the subjec t matter of the AHC hearing a nd the disciplinary hearing overlap substantially, such that evidence that is relevant at the AHC h earing to show whether discipline is appropriate might also be rel evant to what, if any, discipli ne to impose. Further, we note that while a license holder may default befor e the AHC, that default is not a final decision. S ection 621.145 provides:8 Except as otherwise provided by l aw, all final decisions of the administrative hearing commission shall be subj ect to judicial review as provi ded in and subject to the provisions of sec tions 536.100 to 536.140, except that i n cases where a disciplinary order may be entered by the agency, no decision of th e administrative hearing commission shall be deemed final until such order is entered . For purposes of review, the action of the commission and the order, if any, of the agency shall be treated as one decision. The right to judicial review as provided herein shall also be available to administrative agencies aggri eved by a final decision of the administra tive hearing commission. (emphasis added). To draw a parallel, in bifurcated judicial proceedings the iss ue of liability may be decided in a separate proceeding, e.g., via summary judgment, leaving dama ges to be determined in late r proceedings. Stotts v. Progressive Classic Ins. Co., 118 S.W.3 d 655, 661-62 (Mo. App. W.D. 2003). In such a procedure, the j udgment resolving the first i ssue is interlocutory in character and not a final, appealable judgment because it necessarily “re serves or leaves some further question or direction f or future determination.” Norwine v. No rwine, 75 S.W.3d 340, 343 (Mo. App. S.D. 2002). Here, we may com pare the issue of liability t o Brown’s default before the AHC, which established a legal ba sis for her discipline. The d efault AHC decision left for future determination the que stion of Brown’s disc ipline, which, continuing the comparison, is like damages in a bifurcated civil case. Following this parallel, i t is correct to sa y jurisdiction over the entire matter remained with the Board, and with them rested discretion to determine Brown’s discipline in accordance with the AHC’s determination of its gr ounds, even if such discipline amounted to naught; being functiona lly interlocutory, such a re sult does nothing to offend the force and effect of Brown’s default before the AHC. See Truman Bank v. N.H. Ins. Co., 370 S.W.3d 675, 678-79 (Mo. App. E.D. 2012) ( “The trial court remai ns free to add to, amend, or set aside its ruling at any time pr ior to final judgment... and thu s partial summary judgment does not serve as a final resolution.”).9 Accordingly, we reject the Board’s position that, because of th e limited scope of the disciplinary hearing, we must viewthe record as being incomple te. Implied in this argument is the suggestion that the Board’s failure to contest any of the m itigating evidence presented by Brown was due to that evidence be ing outside of the scope of th e hearing. Admittedly, the circumstances of this case cause it to come before this Court i n a unique position where the Board is both respondent and prior ad judicator of the matter. But in our view the Board may not admit mitigating evidence into the record, fail to contest it, and then on appeal complain it was outside of the scope of the proceedings over which it presided. Having allowed Brown to present evidence that she had bee n excused from the noncomplian ce alleged in the AHC complaint, the Board had an oblig ation to consider, or contest, such evidence before crafting her discipline. Restrain ing this Court from considering the eviden ce on the record would eviscerate the purpose of judicial r eview under Section 621.145. The facts of this case are s ubstantially similar to Gard v. Sta te Bd. of Registration for the Healing Arts, 747 S.W.2d 726 (Mo. App. W.D. 1988). There, the state medical board filed a complaint before the AHC regarding a physician who had been con victed of a criminal offense and had his medical license revoke d in a different state years earlier. Id. at 726-27. The AHC ruled in the medical board’s fa vor and a disciplinary hearing w as held. Id. at 727-28. At the disciplinary hearing, the physician presented substantial evide nce of his rehabi litation in the intervening years. Id. at 728. T he medical board nevertheless chose to impose a harsh penalty. Id. On appeal, the Western District reversed, noting it was ap parent from the record the medical board had not considered the subs tantial mitigating evidence pr esented by the physician at the disciplinary hearing before im posing a harsh penalty, thereby a busing its discr etion. Id. at 729- 30.10 Similarly, although here the Boar d was authorized by virtue of the default decision before the AHC to discipline Brown, it is c lear from the record it fai led to consider the mitigating evidence presented by Brown before doing so. When confronted a t oral argument with the Board’s letter accepting Br own’s 2011-2013 CPE hours, the Board failed to account for why it later filed a complaint against Brown for that same period. In stead, the Board reiterated its position it had no burden to account for such discrepancy, as the time to have litigated such matters was before the AHC, where Brown defaulted. The Board’s response supports our concerns it failed to consider this relevant mitigating evidenc e before disciplining Brown. The Board has wide discretion in choos ing an appropriate sanction f or noncompliance with its rules. At oral argument, the Board con ceded it could have chosen to in stitute no discipline at all. Per Gard, we hold the Board’s failure to consider relevant mitigati ng evidence before imposing discipline was an abuse of its discretion. This leaves unsettled the matte r of the second count of the Boa rd’s complaint: Brown’s failure to respond to the Board’s June 2015 letter by certified mail as required. At the disciplinary hearing, Brown tes tified she attempted to respond to the Board’s communications by telephoning Samantha Green, atto rney for the Board. The record also contains a letter from Brown responding to the Board’s J une 2015 letter; but there is no indication Brown’s letter was sent by certified mail. At oral a rgument, Brown conceded her r esponses to the Board’s communications were deficient, and accepts whatever sanction may result. Given the Board’s mandate to discipline accountants only to the extent necessary to protect the Missouri public, this transgression itself is insuffi cient to uphold Brown’s discipli ne. Accordingly, we reverse the Board’s decision, and remand the ma tter for a determination of an appropriate sanction for Brown’s failure to communicate as required by the Board’s rules

.11 Conclusion The decision is reversed and the case is remanded to the Board with directions to set aside Brown’s discipline, and f or further proceedings consisten t with this opinion. 3

SHERRI B. SULLIVAN, J. Mary K. Hoff, P.J., and Angela T. Quigless, J., concur.

3 Appellant’s Motion for Attorney’s Fees is denied.