Court Opinion

ID: 2787926
Source: CourtListenerOpinion
Date Created: 2015-03-20 15:04:47.163272+00
Date Added: 2024-06-11T12:09:17.859826
License: Public Domain

MEMORANDUM DECISION
                                                                                    Mar 20 2015, 7:42 am
      Pursuant to Ind. Appellate Rule 65(D), this
      Memorandum Decision shall not be regarded as
      precedent or cited before any court except for the
      purpose of establishing the defense of res judicata,
      collateral estoppel, or the law of the case.

      ATTORNEY FOR APPELLANT                                   ATTORNEYS FOR APPELLEE
      Terry A. White                                           Gregory F. Zoeller
      Olsen & White, LLP                                       Attorney General of Indiana
      Evansville, Indiana
                                                               Kyle Hunter
                                                               Deputy Attorney General
                                                               Indianapolis, Indiana

                                                   IN THE
          COURT OF APPEALS OF INDIANA

      Arnel J. Gallanosa, D.D.S.,                              March 20, 2015

      Appellant-Petitioner,                                    Court of Appeals Case No.
                                                               87A01-1407-PL-282
              v.                                               Appeal from the Warrick Superior
                                                               Court
                                                               The Honorable Keith A. Meier,
      Indiana State Board of Dentistry,                        Judge
      Appellee-Respondent,                                     Cause No. 87D01-1401-PL-42

      Bradford, Judge.

                                            Case Summary
[1]   On December 31, 2013, Appellee-Respondent the Indiana State Board of

      Dentistry (“the Board”) revoked Appellant-Petitioner Arnel J. Gallanosa’s

      Court of Appeals of Indiana | Memorandum Decision 87A01-1407-PL-282 | March 20, 2015        Page 1 of 13
      license to practice dentistry in the State of Indiana. Gallanosa had left and/or

      closed his practice, Access Dental Care (“ADC”), and failed to provide notice

      to his patients as he was required to do by administrative regulation. At the

      time of this statutory violation, Gallanosa’s license was on probation for

      committing several acts of Medicaid fraud in 2012. Gallanosa filed a petition

      for judicial review which was denied by the trial court. In this appeal,

      Gallanosa alleges that the Board misconstrued the notice regulation, that the

      Board’s decision was arbitrary and capricious and unsupported by substantial

      evidence, and that the notice regulation is unconstitutionally vague. We affirm

      the Board’s judgment.

                            Facts and Procedural History
[2]   The relevant facts, as originally found by the Board and incorporated as

      findings of the trial court, are as follows:

              1. [Gallanosa]’s address on record with the Indiana Professional
                 Licensing Agency (“ILPA”) is 137 Hiatt Drive, Carmel, Indiana
                 46074.
              2. [Gallanosa] is a licensed dentist in the State of Indiana having been
                 issued license number 12009962A on July 3, 1997.
              3. On or around June 21, 2012, [Gallanosa]’s license was placed on
                 probation, and is currently on probation.
              4. Prior to May 20, 2013, [Gallanosa] owned Access Dental Care,
                 located at 3750 North Meridian Street, Suite 200, Indianapolis,
                 Indiana 46028.
              5. In April 2013, Elizabeth Simpson, D.M.D. began her employment
                 at Access Dental Care as an associate.

      Court of Appeals of Indiana | Memorandum Decision 87A01-1407-PL-282 | March 20, 2015   Page 2 of 13
        6. On or around May 20, 2013, [Gallanosa] transferred ownership of
           Access Dental Care to Dr. Simpson for only $100.00, although no
           cash was exchanged. [Gallanosa] initiated and performed this
           transfer since Access Dental Care primarily serves Medicaid
           patients, and [Gallanosa] was prohibited from serving Medicaid
           patients. Dr. Simpson had made no attempt to obtain ownership
           of Access Dental Care prior to this. [Gallanosa] then discontinued
           providing services at this location, and in Indianapolis.
        7. On or around June 19, 2013, [Gallanosa] signed a termination of
           the lease, and the office was vacated by June 20, 2013.
        8. On or around June 26, 2013, Patient A attempted to call Access
           Dental Care to discuss a bill, but the number was disconnected.
           Patient A then went to Access Dental Care and found that it was
           permanently closed.
        9. On or around July 5, 2013, Patient B went to Access Dental Care
           to obtain her records and found that it was permanently closed.
        10. 828 IAC 1-1-24(a) states, “Upon retirement, discontinuation of
            practice, or leaving or moving from a community, a dentist shall:
            (1) notify all of the dentist’s active patients in writing, or by
            publication once a week for three (3) consecutive weeks in a
            newspaper of general circulation in the community, that the dentist
            intends to discontinue the dentist’s practice of dentistry in the
            community; and (2) encourage the dentist’s patients to seek the
            services of another dentist.”
        11. [Gallanosa] failed to comply with the provisions of 828 IAC 1-1-
            24(a) either upon discontinuation of his practice and leaving
            Indianapolis in May 2013, or upon his termination of the lease for
            Access Dental Care in June 2013.
        12. Dr. Simpson has taken custody of Access Dental Care’s records
            and has placed a publication in the Indianapolis Star for three
            weeks as required by 828 IAC 1-1-24(a).
        13. [Gallanosa] has had several prior disciplinary actions. In February
            2012, [Gallanosa]’s license was summarily suspended after
            [Gallanosa] was charged with ten counts of Medicaid Fraud, five
            counts of Theft, and three counts of Conspiracy to Commit
            Medicaid Fraud.

Court of Appeals of Indiana | Memorandum Decision 87A01-1407-PL-282 | March 20, 2015   Page 3 of 13
              14. In April 2012, the Board suspended [Gallanosa]’s license after
                  [Gallanosa provided] treatment to five mental health patients
                  without obtaining the proper consent. [Gallanosa]’s license was
                  reinstated on probation in June 2012.
              15. In February 2013, an Order to Show Cause hearing was held and
                  [Gallanosa]’s probation was modified and [Gallanosa] was
                  assessed a $1000 fine.
      Appellant’s App. p. 8.

[3]   On October 9, 2013, the Consumer Protection Division of the Indiana Attorney

      General’s Office (“CPD”) filed a complaint with the Board against Gallanosa.

      The Board held a hearing on December 6, 2013 and, on December 31, 2013,

      revoked Gallanosa’s license and imposed a $1000.00 fine and a $5.00 fee

      against him. On January 8, 2014, Gallanosa filed a petition for judicial review.

      On April 30, 2014, the trial court held a hearing to review the Board’s decision.

      On June 2, 2014, the trial court affirmed the Board’s decision. Additional facts

      will be provided as necessary.

                                 Discussion and Decision
                                      I. Standard of Review
[4]           Judicial review of an administrative decision is limited under the
              Administrative Orders and Procedures Act (“AOPA”). Agency action
              subject to AOPA will be reversed only if the court “determines that a
              person seeking judicial relief has been prejudiced by an agency action
              that is: (1) arbitrary, capricious, an abuse of discretion, or otherwise
              not in accordance with law; (2) contrary to constitutional right, power,
              privilege, or immunity; (3) in excess of statutory jurisdiction, authority,
              or limitations, or short of statutory right; (4) without observance of
              procedure required by law; or (5) unsupported by substantial
              evidence.” See Ind. Code § 4–21.5–5–14(d). A trial court and an

      Court of Appeals of Indiana | Memorandum Decision 87A01-1407-PL-282 | March 20, 2015   Page 4 of 13
              appellate court both review the decision of an administrative agency
              with the same standard of review. In reviewing the decision of an
              administrative agency, we defer to the agency’s expertise and will not
              reverse simply because we may have reached a different result. The
              burden of demonstrating the invalidity of agency action is on the party
              to the judicial review proceeding asserting invalidity. Review of an
              agency’s decision is largely confined to the agency record, and the
              court may not substitute its judgment for that of the agency. We give
              deference to an administrative agency’s findings of fact, if supported by
              substantial evidence, but review questions of law de novo. On review,
              we do not reweigh the evidence.
[5]   Terkosky v. In. Dep’t of Educ., 996 N.E.2d 832, 841-42 (Ind. Ct. App. 2013) (some

      citations and quotation marks omitted). “An interpretation of a statute by an

      administrative agency charged with the duty of enforcing the statute is entitled

      to great weight, unless this interpretation would be inconsistent with the statute

      itself.” LTV Steel Co. v. Griffin, 730 N.E.2d 1251, 1257 (Ind. 2000) (citing Ind.

      Dep’t of State Revenue v. Bulkmatic Transport, Co., 648 N.E.2d 1156, 1158 (Ind.

      1995)).

                            II. Substantial Evidence Analysis
[6]           Indiana courts have defined substantial evidence as something “more
              than a scintilla, but something less than a preponderance of the
              evidence.” State v. Carmel Healthcare Mgmt. Inc., 660 N.E.2d 1379, 1384
              (Ind. Ct. App. 1996), trans. denied; see also Ind. Family and Soc. Servs.
              Admin. v. Pickett, 903 N.E.2d 171, 177 (Ind. Ct. App. 2009)
              (“Substantial evidence means such relevant evidence as a reasonable
              mind might accept as adequate to support a conclusion.”) (internal
              quotations omitted), aff’d and clarified on reh’g. Only if the agency
              action is unsupported by substantial evidence or is contrary to law may
              it be reversed.
      Terkosky, 996 N.E.2d at 842.

      Court of Appeals of Indiana | Memorandum Decision 87A01-1407-PL-282 | March 20, 2015   Page 5 of 13
             A. Whether Gallanosa’s Actions Triggered the Notice
                     Requirements of 828 IAC 1-1-24(a)
[7]   Gallanosa claims that his decision to leave ADC did not trigger the

      requirements of 828 IAC 1-1-24(a). Specifically, he argues that the “Board

      misconstrued 828 IAC 1-1-24(a) by determining that Gallanosa was required to

      send notice to patients, who were generally unassigned to a particular dentist,

      when he left [ADC] intact with others to service the existing patients.”1 828

      IAC 1-1-24(a) provides as follows:

               Upon retirement, discontinuation of practice, or leaving or moving
               from a community, a dentist shall: (1) notify all of the dentist’s active
               patients in writing, or by publication once a week for three (3)
               consecutive weeks in a newspaper of general circulation in the
               community, that the dentist intends to discontinue the dentist’s
               practice of dentistry in the community; and (2) encourage the dentist’s
               patients to seek the services of another dentist.
[8]   Gallanosa’s first argument–that the patients were not assigned to a particular

      dentist and so would not be entitled to notice under the 828 IAC 1-1-24(a)–fails

      for several reasons. At the Board hearing, Patient A testified that she was a

      patient at ADC for approximately three years and that Gallanosa was the only

      doctor practicing at ADC until he “ran into the legal problems” in 2012.

      Petitioner’s Ex. A p. 27. Gallanosa hired Dr. Simpson on April 17, 2013, and

               1
                Gallanosa also contends that 828 IAC 1-1-24(a) is highly penal in nature due to the gravity of the
      punishment (license revocation), and so the regulation should be strictly construed under the rule of lenity.
      Under the rule of lenity, any ambiguity in a criminal or penal statute must be resolved against the imposition
      of the penalty. Dye v. State, 984 N.E.2d 625, 630 (Ind. 2013). It is unnecessary for us to address this
      argument because the regulation is unambiguous as applied to this case and a more strict interpretation
      would not affect our decision.

      Court of Appeals of Indiana | Memorandum Decision 87A01-1407-PL-282 | March 20, 2015              Page 6 of 13
      Diana Taverbaugh sometime in 2012. Patient A said that her “preference was

      to be seen by Dr. Gallanosa and [she] didn’t want to be seen by any of the other

      doctors that were working in his office....” Petitioner’s Ex. A p. 19. Patient A

      went on to testify, “I came [to ADC] specifically to see Gallanosa, which is

      why I didn’t ever go to any other doctors.” Petitioner’s Ex. A p. 24.

      Additionally, Patient B testified that she “became a patient of Dr. Gallanosa’s”

      on April 2, 2013. Petitioner’s Ex. A p. 7. There is substantial evidence that

      that the two patient witnesses were both “active patients” of Gallanosa’s at the

      time he left ADC. Accordingly, they were entitled to notice under 828 IAC 1-1-

      24(a).

[9]   Gallanosa’s second argument–that he left ADC intact with others available to

      service patients–is also contradicted by the evidence in the record. Gallanosa

      did not, in fact, leave the practice intact. Gallanosa transferred a portion of the

      practice to Dr. Simpson via an agreement on May 20, 2013. 2 However,

      Gallanosa subsequently terminated the lease for the property where ADC was

      located on June 19, 2013. Dr. Simpson attempted to negotiate with the

      landlord to renew the lease under her name, but the landlord refused to deal

      with anyone other than Gallanosa. Both Patient A and Patient B testified that

      they attempted to call the office with questions but the office line was

               2
                  It is not entirely clear what portion, if any, was actually transferred to Dr. Simpson under the
      agreement. At the Board hearing, Dr. Simpson was asked, “[I]n June 2013 [after the agreement was
      executed], who did you consider the owner of [ADC], you or Dr. Gallanosa?” To which Dr. Simpson
      responded, “Sort of both,” and went on to say it “wasn’t very clear” and that her attorney told her she was
      just the registered agent, not the owner. Petitioner’s Ex. A p. 42.

      Court of Appeals of Indiana | Memorandum Decision 87A01-1407-PL-282 | March 20, 2015              Page 7 of 13
       disconnected. Subsequently, both patients went to the office only to find that it

       was closed and appeared to be empty. Patient A testified that, despite her close

       relationship with Gallanosa’s former office manager, April Hall, she was still

       unable to recover her dental records after the ADC closed.

[10]   There is substantial evidence that Gallanosa had active patients when he left

       ADC and that he did leave or discontinue the practice by transferring

       ownership, terminating the lease, and/or discounting his work at ADC. The

       Board did not misconstrue 828 IAC 1-1-24(a) by determining that Gallanosa’s

       actions triggered his duty to notify his patients thereunder.

         B. Whether Gallanosa Fulfilled the Notice Requirements of
                            828 IAC 1-1-24(a)
[11]   Gallanosa claims there was not substantial evidence (1) that his patients did not

       receive public or private notice, and (2) in the alternative, that he knowingly

       failed to provide notice. Both Patient A and Patient B testified that they did not

       receive written notice of any kind. Patient A also testified that she was aware of

       other patients of Gallanosa’s who did not receive any notice. Simpson testified

       that she provided public notice in the Indianapolis Star newspaper in July of

       2013, approximately one month after the practice closed, in order to comply

       with 828 IAC 1-1-24(a). Gallanosa argues that Simpson assumed his duty to

       provide notice when she assumed ownership of ADC, and that her public

       notice satisfied his notice requirement as well. This argument is without merit.

       The obligation to provide notice is imposed on practitioners individually, and

       not on a dental practice generally. See 828 IAC 1-1-24(a); Ind. Code § 25-1-9-

       Court of Appeals of Indiana | Memorandum Decision 87A01-1407-PL-282 | March 20, 2015   Page 8 of 13
       4(a)(3); and Ind. Code § 25-1-9-2. Furthermore, a professional cannot contract

       away or otherwise transfer his or her personal professional ethical duties.

[12]   Gallanosa also argues that he did not “knowingly”3 fail to serve notice because

       he claims that Hall told him that she had sent postcards to his patients

       informing them of his departure from ADC. However, both Patient A and Dr.

       Simpson testified that Hall informed them that she did not send any such

       notice. Patient A also testified that Gallanosa asked Hall to falsely testify in

       front of the Board. Additionally, Hall contacted the investigating Deputy

       Attorney General to inform him that she had not written or signed a letter

       which Gallanosa had purportedly written in her name and requested that she

       sign and affirm as true.

[13]   After gauging the credibility of the witnesses’ testimony and weighing the

       evidence, the Board was not inclined to believe Gallanosa’s self-serving

       testimony and determined that Gallanosa had knowingly failed to provide

       notice to his patients. The Board had substantial evidence to reach this

       conclusion. Gallanosa’s arguments to the contrary are no more than a request

       for this court to reweigh the evidence, which we will not do. Terkosky, 996

       N.E.2d at 842.

                3
                Under Indiana Code section 25-1-9-4(a)(3), a practitioner is only subject to discipline for
       “knowingly” violating a professional regulation such as 828 IAC 1-1-24(a).

       Court of Appeals of Indiana | Memorandum Decision 87A01-1407-PL-282 | March 20, 2015              Page 9 of 13
                    III. Constitutionality of 828 IAC 1-1-24(a)
[14]   Gallanosa argues that 828 IAC 1-1-24(a) is unconstitutionally vague for failing

       to specify a time period in which notice must be provided to patients following

       the dentist’s retirement or discontinuation of practice.

               When reviewing a challenge to the constitutionality of a statute, we
               observe a high level of deference to the legislature’s decision-making.
               Collins v. Day, 644 N.E.2d 72, 80 (Ind. 1994). The statute or regulation
               is presumed to be constitutional “until clearly overcome by a contrary
               showing.” Boehm v. Town of St. John, 675 N.E.2d 318, 321 (Ind. 1996);
               see also Collins, 644 N.E.2d at 80. The challenging party bears the
               considerable burden of proving this contrary showing, and any doubts
               are resolved against that challenge. Ledbetter v. Hunter, 842 N.E.2d
               810, 815 (Ind. 2006); Boehm, 675 N.E.2d at 321.
       Fry v. State, 990 N.E.2d 429, 434 (Ind. 2013). “If a statute can be construed to

       support its constitutionality, such construction must be adopted.” Boss v. State,

       702 N.E.2d 782, 784 (Ind. Ct. App. 1998) (citing State v. Land, 688 N.E.2d

       1307, 1311 (Ind. Ct. App. 1997), trans. denied.).

               A statute will not be held to be unconstitutionally vague if individuals
               of ordinary intelligence would comprehend it adequately to inform
               them of the proscribed conduct. The statute need only inform the
               individual of the generally proscribed conduct; it need not list with
               exactitude each item of prohibited conduct. A statute may also be
               impermissibly vague if its terms invite arbitrary or discriminatory
               enforcement….However, a statute is void for vagueness only if it is
               vague as applied to the precise circumstances of the present case.
       Baumgartner v. State, 891 N.E.2d 1131, 1136 (Ind. Ct. App. 2008) (citations

       omitted).

       Court of Appeals of Indiana | Memorandum Decision 87A01-1407-PL-282 | March 20, 2015   Page 10 of 13
[15]   Gallanosa alleges that the word “upon,” as used in 828 IAC 1-1-24(a), “can be

       interpreted in many ways by reasonable people….In fact, ‘upon’ can be

       construed to include a span of expressions from ‘soon’ to ‘shortly’ to ‘just’ to

       ‘only a short time away’ to ‘separated by only a short time’ to ‘during the period

       of time that is not very far into the future,’ or it could also mean ‘immediately’.”

       Appellant’s Br. p. 22 (citation omitted). Gallanosa’s own definitions rebut his

       argument that “upon” is ambiguous. The definitions provided reveal that

       “upon” is commonly understood to encompass only a narrow scope.

       Gallanosa goes on to admit that, “the regulation would appear to mean to a

       reasonable person that a patient notification should be placed within a

       reasonably short period of time.” Appellant’s Br. p. 22. We agree. A

       reasonable dentist would know to provide notification as soon as is reasonably

       possible once the notice requirement is triggered. As an example, Dr. Simpson

       provided public notice within a month of the termination of the lease and

       continued taking ADC patients at another office until the three week public

       notice period had concluded.

[16]   Gallanosa’s argument fails regardless of the exact meaning of “upon” because,

       as we determined above, he did not provide any form of notice to his patients.

       “[A] statute is void for vagueness only if it is vague as applied to the precise

       circumstances of the present case.” Baumgartner, 891 N.E.2d at 1136.

       Gallanosa cannot claim that his failure to comply with the rule was due to its

       alleged temporal vagueness when he made no attempt to comply with the rule

       in any respect or within any period of time.

       Court of Appeals of Indiana | Memorandum Decision 87A01-1407-PL-282 | March 20, 2015   Page 11 of 13
                        IV. Arbitrary and Capricious Analysis
[17]           The challenging party has the burden of proving that an administrative
               action was arbitrary and capricious. An arbitrary and capricious
               decision is one which is patently unreasonable. It is made without
               consideration of the facts and in total disregard of the circumstances
               and lacks any basis which might lead a reasonable person to the same
               conclusion.
       Fornelli v. City of Knox, 902 N.E.2d 889, 892 (Ind. Ct. App. 2009) (quoting City of

       Indpls. v. Woods, 703 N.E.2d 1087, 1091 (Ind. Ct. App. 1998), trans. denied).

[18]   As we have explained above, there was substantial evidence in the record

       supporting the Board’s decision to find that Gallanosa breached his duty to

       provide notice to his patients. Furthermore, it was not unreasonable for the

       Board to revoke Gallanosa’s license as a consequence of his actions based on

       Gallanosa’s disciplinary history. On January 3, 2012, Gallanosa was charged

       with ten counts of Class D felony Medicaid fraud, five counts of Class D felony

       theft, and three counts of Class D felony conspiracy to commit Medicaid fraud.

       These charges were filed as a result of allegations that Gallanosa had made cash

       payments to several mentally unstable persons in exchange for them becoming

       new patients, which is a violation of Indiana Medicaid laws. Gallanosa also

       made several fraudulent claims to patients’ Medicaid accounts for procedures

       that were not actually conducted. On April 13, 2012, Gallanosa’s license to

       practice was suspended for three months and he was placed on probation for

       five years.

[19]   It is particularly troubling that Gallanosa’s actions which predicated the instant

       claim took place less than a year after his license was reinstated and while he
       Court of Appeals of Indiana | Memorandum Decision 87A01-1407-PL-282 | March 20, 2015   Page 12 of 13
       was still on probation. With the seriousness and recentness of Gallanosa’s

       previous discipline in mind, we cannot say that the Board’s decision to revoke

       Gallanosa’s license was patently unreasonable or made without consideration

       of the circumstances.

[20]   We affirm the judgment of the Board.

       Najam, J., and Mathias, J., concur.

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