Court Opinion

ID: 9706574
Source: CourtListenerOpinion
Date Created: 2023-08-26 01:46:48.527735+00
Date Added: 2024-06-11T18:22:23.706814
License: Public Domain

PAPADAKOS, Justice
dissenting.
While I agree that the equitable doctrine of laches may be asserted against the Commonwealth in an administrative disciplinary proceeding by a licensing board, I dissent from the majority’s conclusion that Harold Weinberg (Appellee) failed to meet his burden of proving laches.
Appellee’s burden was to demonstrate that the State Board of Examiners of Public Accountants (Board) was guilty of want of due diligence in failing to institute its action to Appellee’s prejudice. Class of Two Hundred Administrative Faculty Members v. Scanlon, 502 Pa. 275, 466 A.2d 103 (1983).
As we stated in Scanlon, the prejudice required is established where, for example, witnesses die or become una*156vailable, records are lost or destroyed, and changes in position occur due to the anticipation that a party will not pursue a particular claim. Scanlon, 502 Pa. at 279, 466 A.2d at 103.
Appellee admitted that his unethical conduct occurred in 1974, and that from early 1975 onwards, he confessed his wrongdoing to the IRS and cooperated with them in investigating and prosecuting errant IRS agents and others, including his former accounting partner. In 1976, Appellee publicly testified at his partner’s trial about his own misconduct. Following the public conviction of the partner, it took four years for the Board to commence disciplinary proceedings against Appellee’s partner, and five years for the Board to issue a citation to Appellee charging him with violations of the C.P.A. Law and Board regulations. I find the unexplained five-year delay in this case to institute an action against Appellee to constitute a lack of due diligence on the part of the Board.
Unlike the majority, I agree with Commonwealth Court that once evidence of wrongdoing becomes a matter of public knowledge, the Board must be diligent to keep abreast of such matters and act promptly. Weinberg v. Comm. State Bd. of Ex. of P. Acc., 76 Pa.Commonwealth Ct. 216, at 220, 463 A.2d 1210, at 1212 (1983). Since the Board is charged with the responsibility of monitoring the ethical and professional conduct of those it licenses, I believe it has an affirmative duty to keep abreast of public information regarding the unprofessional conduct of those subject to its discipline.
Furthermore, the long delay in the Board prosecuting Appellee prejudiced him because, in the intervening years, Appellee had a change in position due to his anticipation of not being prosecuted.
The majority also concludes that since Appellee did not begin his sole proprietorship until after he testified against his partner, he did not change his position during the period the Board unreasonably failed to act and, therefore, he was *157not induced to change by the Board’s inaction nor did he rely on that inaction to his detriment. I disagree. Appellee did begin to change his position of opening a sole proprietorship after he began cooperating with the federal authorities and before he testified against his former partner, but had a good reason to rely on the Board’s inaction as indicative of its intent not to take disciplinary action against him. As Commonwealth Court noted:
Weinberg testified that the IRS agents with whom he cooperated indicated that they were grateful for his cooperation and would help him in any related matter which might come up. Weinberg was not prosecuted nor penalized by the IRS for arranging the bribe of Maker. We think that he had reason to believe that the Board had also not acted against him because of his extensive cooperation with the authorities.
Weinberg, 76 Pa.Commonwealth Ct. 216, at 222, n. 7, 463 A.2d 1210 at 1213, n. 7.
Appellee’s detrimental reliance on the Board’s inaction to prosecute after he began establishing a new accounting practice in my mind satisfies the requirement that for laches to apply, the change of condition must occur during the period the complainant unreasonably failed to act. Leedom v. Thomas, 473 Pa. 193, 373 A.2d 1329 (1977). The misconduct took place in 1974, Appellee voluntarily confessed in 1975, was granted immunity by the federal authorities in the same year, began a new practice in 1975, and testified against his former partner in March of 1976. Appellee’s change of conditions (confession, grant of immunity, testifying against his old partner and starting a new practice) are all close enough in time to when the Board had an affirmative duty to investigate Appellee and file its own charges against him, that not having done so for five years should act as a bar on their present attempt to discipline him.
I would affirm the Opinion and Order of Commonwealth Court.