(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).
Argued March 26, 2002 -- Decided August 13, 2002
ZAZZALI, J., writing for a unanimous Court
The issue in this appeal is whether Dr. Andrew T. Fanelli, D.O., who pled guilty to conspiracy to unlawfully abstract and convert funds of an employee benefit plan, has a statutory right to a hearing on the issue of the appropriate sanction.
Dr. Fanelli was co-administrator of the pension fund for Regional Gastroenterological Associates, P.A.
(RGA), a medical practice in which he was a partner. Dr. Fanelli was
licensed in both New Jersey and Pennsylvania. The RGA pension fund was a
fund within the meaning of the Employee Retirement Income Security Act of 1974
(ERISA), 29 U.S.C.A. § 1001 to 1461. Dr. Fanelli’s wife was RGA’s bookkeeper and
business manager. In order to meet a cash flow shortage, Mrs. Fanelli recommended
borrowing from the pension fund, assuring Dr. Fanelli that it was legal to
do so. Dr. Fanelli gave his consent. Without his knowledge, however, Mrs. Fanelli
borrowed additional funds with the approval of Dr. Kravitz, Dr. Fanelli’s partner. The
borrowed amounts exceeded the legal limit and beneficiaries of the pension fund sued
RGA’s accountants for malpractice.
In December 1997, the United States Attorney for the Eastern District of Pennsylvania
indicted Dr. Fanelli and his wife for breach of their fiduciary duties in
administering the pension fund. Although Dr. Fanelli claimed he had no knowledge of
the improper actions, he was presumed to have at least constructive knowledge of
the wrongdoing. In December 1998, Dr. Fanelli pled guilty to the indictment charging
him with conspiracy to unlawfully abstract and convert funds of an employee benefit
plan to his own use. Subsequently, the United States Attorney’s Office informed the
New Jersey State Board of Medical Examiners (Board) of the disposition. In October
2000, the Board issued a Provisional Order revoking Dr. Fanelli’s license.
Pursuant to the Board’s Order, Dr. Fanelli requested modification or dismissal of the
Board’s Findings of Fact and, in addition, requested an evidentiary hearing permitting him
to submit mitigating evidence on the issue of the appropriate sanction. Dr. Fanelli’s
request was denied. He was allowed, however, to submit forty-seven letters from family
members, friends, physicians, and others attesting to his good character and medical competence.
Noting that his plea of guilty to the conspiracy charge precluded him from
arguing that he was not part of the conspiracy, the Board entered a
Final Order of Discipline revoking Dr. Fanelli’s license to practice medicine and surgery
in the State of New Jersey.
Dr. Fanelli appealed the Board’s Order to the Appellate Division. He also petitioned
the Board for a stay pending appeal. Both were denied. Subsequently, the Supreme
Court granted Dr. Fanelli’s motion for a stay pending appeal. The Appellate Division,
in an unpublished per curiam opinion, affirmed the Board’s Order. The court rejected
Dr. Fanelli’s arguments that his actions were at best negligent and that they
did not constitute professional misconduct or involve moral turpitude.
The Supreme Court granted Dr. Fanelli’s petition for certification.
HELD: Dr. Fanelli has the right to an evidentiary hearing to determine whether
his criminal conviction relates adversely to the practice of medicine.
1. The Administrative Procedure Act (APA), N.J.S.A. 52:14B-1 to –15, does not create
a substantive right to an administrative hearing, except where an agency revokes or
refuses to renew a license in a contested case. The statute reflects our
State’s long-standing commitment to procedural fairness in administrative proceedings. (Pp. 10-12)
2. In accordance with the APA, a plenary hearing is required in the
circumstances of this appeal. As there exist contested adjudicative facts, Dr. Fanelli may
“respond, appear and present evidence and argument on all issues involved.” Under the
circumstances of this case, the court is required to determine the extent of
Dr. Fanelli’s knowledge and, in addition, determine whether Dr. Fanelli pled guilty to
a conspiracy “to commit any offense against the United States” or “to defraud
the United States.”
18 U.S.C.A.
§371. (P. 12-14)
3 The legislative history of N.J.S.A. 45:1-21 does not define moral turpitude and
therefore courts and governmental agencies must look elsewhere for its definition. In State
Board of Medical Examiners v. Weiner,
68 N.J. Super. 468, 483 (App. Div.
1961), the Appellate Division categorized moral turpitude as an “act of baseness, vileness,
or depravity in the private and social duties which a man owes to
his fellow men, to society in general, contrary to the accepted and customary
rule of right and duty between man and man . . . everything
done contrary to justice, honesty, modesty, or good morals.” Whether the Board in
this appeal acted arbitrarily and capriciously in finding moral turpitude turns on a
full understanding and interpretation of Dr. Fanelli’s crime. In the absence of plea
and sentencing transcripts and other evidence, we cannot decide on this record whether
Dr. Fanelli’s crime involved moral turpitude. The introduction of relevant evidence at a
hearing before the Board will permit the Board to make an informed decision.
(Pp. 14-20)
4 Whether Dr. Fanelli’s conviction on criminal charges related adversely to the practice
of medicine pursuant to N.J.S.A. 45:1-21(f) must be determined via an evidentiary hearing.
Our remand on this issue is for the purpose of allowing Dr. Fanelli
an opportunity to prove his contention and is not to be construed as
a conclusion on our part that the underlying offense does or does not
relate adversely to the practice of medicine. (Pp. 20-22)
5. At the remand hearing, Dr. Fanelli may not re-litigate his guilt or
innocence, but he should be permitted to develop the core facts concerning the
pension fund and his conduct. In addition, Dr. Fanelli may be heard on
the question of moral turpitude, the relationship between his actions and his practice,
and he may present evidence on mitigation and argue for a sanction less
than a full revocation of his license. If character is a contested issue,
character witnesses may be presented. If character is not an issue, the fact-finder
may nevertheless allow such testimony at its discretion. The Board retains the discretion,
subject to appellate review, whether discipline should be imposed and the quantum of
that discipline. (Pp. 23-24)
The judgment of the Appellate Division is REVERSED and the matter is REMANDED
to the Board of Medical Examiners for further proceedings consistent with this opinion.
CHIEF JUSTICE PORITZ and JUSTICES STEIN, COLEMAN, LONG, VERNIERO, and LaVECCHIA join in
Justice ZAZZALI’s opinion.
SUPREME COURT OF NEW JERSEY
A-
68 September Term 2001
IN THE MATTER OF THE LICENSE
OF ANDREW T. FANELLI, D.O.,
TO PRACTICE MEDICINE AND
SURGERY IN THE STATE OF NEW
JERSEY.
Argued March 26, 2002 – Decided August 13, 2002
On certification to the Superior Court, Appellate Division.
Jonathan L. Goldstein argued the cause for appellant, Andrew T. Fanelli, D.O. (Hellring
Lindeman Goldstein & Siegal, attorneys; Mr. Goldstein and Robert B. Rosen, on the
briefs).
Sandra Y. Dick, Senior Deputy Attorney General, argued the cause for respondent, New
Jersey State Board of Medical Examiners (David N. Samson, Attorney General of New
Jersey, attorney; Andrea M. Silkowitz, Assistant Attorney General, of counsel; Beatrice Michelle Albertson,
Deputy Attorney General, on the brief).
The opinion of the Court was delivered by
ZAZZALI, J.
Dr. Andrew T. Fanelli, D.O. (Fanelli) pled guilty to conspiracy to unlawfully abstract
and convert funds of an employee benefit plan to his own use in
violation of federal law. In a subsequent license revocation proceeding before the New
Jersey State Board of Medical Examiners (Board), Fanelli’s request for a full hearing
on the issue of the appropriate sanction was rejected. The Board then revoked
his license to practice medicine and surgery in this State. The Appellate Division
affirmed.
We find that Dr. Fanelli has a statutory right to a hearing. We
therefore reverse the Appellate Division and remand the matter to the Board for
further proceedings.
In 1991 and 1992, Fanelli, a physician licensed in New Jersey and Pennsylvania, was a partner in a medical practice known as Regional Gastroenterological Associates, P.A. (RGA). Fanelli and his partner, Dr. John Kravitz, were co-administrators of the pension fund for RGA. The fund contained approximately $1.5 million, of which $800,000 was attributable to Fanelli, $560,000 to his partner, and $85,000 to their employees. The RGA pension fund is a fund within the meaning of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C.A. §1001 to 1461.
Fanelli’s wife was RGA’s bookkeeper and business manager. Mrs. Fanelli informed her husband that RGA had a cash flow shortage and recommended that RGA borrow money from the pension fund. She advised him that this practice was permitted under the law and that she had obtained prior approval for the loan from Dr. Kravitz and RGA’s accountants. Fanelli gave his consent and approved the loan.
Fanelli claimed that without his knowledge his wife subsequently sought and received the approval from Dr. Kravitz for three additional loans totaling approximately $1,000,000. The amounts withdrawn by Mrs. Fanelli exceeded the legal limit fund administrators are authorized to borrow from a pension fund. See I.R.C. § 401 (a)(13)(A); Treas. Reg. § 1.401 (a)-13(d)(2). The record indicates that Mrs. Fanelli’s withdrawals depleted virtually all of the money in the fund. Fanelli contends that he later learned that at the time of the pension withdrawals his wife was suffering from a mental illness that manifested itself in pathological and reckless spending. Fanelli did not personally withdraw any money from the pension fund.
After discovery of the withdrawals, the beneficiaries of the pension fund sued RGA’s accountants for malpractice. In 1996, the accountants settled with the pension fund beneficiaries for $900,000. As a result of that settlement the fund was reimbursed, except for Fanelli’s interest in the fund. In 1996 and 1997, Fanelli repaid the plan those amounts that had not been repaid through the settlement proceeds, thereby fully reimbursing the fund.
In December 1997, the United States Attorney for the Eastern District of Pennsylvania indicted Fanelli and his wife for breach of their fiduciary duties in administering the pension fund. Although Fanelli claims that he did not have any knowledge of the improper actions, as administrator of the fund, and therefore a fiduciary, he was presumed to have at least constructive knowledge of the wrongdoing. An ERISA fiduciary is subject to a reasonable person standard of care in respect of the employee benefit plan with which the fiduciary is associated. See 29 U.S.C.A. § 1104(a)(1); 1105(a)(2).
In December 1998, Fanelli pled guilty in the United States District Court for the Eastern District of Pennsylvania to the indictment charging him with conspiracy to unlawfully abstract and convert funds of an employee benefit plan to his own use, in violation of Title 18, United States Code, Section 371 (Count One) and engaging in a monetary transaction derived from a specified unlawful activity, in violation of Title 18, United States Code, Section 1957 (Count Four). Fanelli then withdrew his guilty plea and entered a plea of guilty to Count One of the indictment only. The statute under which defendant pled guilty - the federal conspiracy statute - provides:
If two or more persons conspire either to commit any offense against the United States, or to defraud the United States, or any agency thereof in any manner or for any purpose, and one or more of such persons do any act to effect the object of the conspiracy, each shall be fined under this title or imprisoned not more than five years, or both.
If, however, the offense, the commission of which is the object of the
conspiracy, is a misdemeanor only, the punishment for such conspiracy shall not exceed
the maximum punishment provided for such misdemeanor.
[
18 U.S.C.A.
§371.]
As part of his plea agreement, Fanelli acknowledged that “[i]n conformity with the
United States Attorney’s Office for the Eastern District of Pennsylvania, the government will
inform the appropriate professional licensing and disciplinary board in Pennsylvania and other jurisdictions
of the disposition of the criminal charges filed against the defendant in this
case.”
The United States Attorney’s Office informed the Board that Fanelli’s “case does not
involve the care or treatment of patients nor does it involve any improprieties
in billing practices. The charges do not relate to Dr. Fanelli’s ability to
care for his patients.” Further, the plea did not guarantee the status of
his professional license because that determination was solely within the discretion of the
appropriate licensing authority, here the Board.
In October 2000, the Board issued a Provisional Order revoking Fanelli’s license. The
Order afforded Fanelli thirty business days to request a modification or dismissal of
the Board’s Findings of Fact and Conclusions of Law by (1) submitting a
written request for modification or dismissal; (2) setting forth in writing any and
all reasons why the findings should be modified or dismissed; and (3) submitting
all documents or other written evidence supporting the request, as well as any
other evidence Fanelli wished the Board to consider in mitigation of the penalty
set forth in the Order. The Order further stated:
Any submissions will be reviewed by the Board, and the Board will thereafter
determine whether further proceedings are necessary. If no material discrepancies are raised through
a supplemental submission . . . or if the Board is not persuaded
that submitted materials merit further consideration, a Final Order of Discipline will be
entered.
Fanelli requested modification or dismissal of the Board’s Findings of Fact contained in
the Provisional Order and an evidentiary hearing permitting him to submit mitigating evidence
on the issue whether his license should be revoked. Fanelli sought to introduce
testimonial evidence from patients and medical colleagues supporting his high ethical and moral
character. He also intended to explain that he had withdrawn his original guilty
plea and entered a new plea whereby he agreed to plead guilty only
to one count of conspiracy to unlawfully abstract and convert funds of an
employee benefit plan to his own use. Finally, he requested oral argument before
the Board. Fanelli’s requests to present testimony and oral argument were denied. However,
he was allowed to submit forty-seven letters from family members, friends, physicians, other
licensed professionals, employees, and patients attesting to his good character and medical competence.
In January 2000, the Board considered Fanelli’s written submissions. The Board accepted his
representation that he withdrew his original guilty plea and entered a subsequent plea,
in which he pled guilty to only one count of conspiracy. Although Fanelli
had attempted to shift blame from himself to his wife, the Board stated
that as the co-administrator of his employees’ pension fund he was responsible for
its safekeeping. Further, the Board found that his plea of guilty to the
conspiracy charge prevented him from arguing that he was not part of the
conspiracy. Thus, the Board issued a Final Order of Discipline revoking Fanelli’s license
to practice medicine and surgery in the State of New Jersey, citing N.J.S.A.
45:1-21(e) and (f).
The statute relied on by the Board provides:
A board may refuse to admit a person to an examination or may
refuse to issue or may suspend or revoke any certificate, registration or license
issued by the board upon proof that the applicant or holder of such
certificate, registration or license:
. . . .
e. Has engaged in professional or occupational misconduct as may be determined by
the board;
f. Has been convicted of, or engaged in acts constituting, any crime or
offense involving moral turpitude or relating adversely to the activity regulated by the
board. For the purpose of this subsection a judgment of conviction or a
plea of guilty, non vult, nolo contendere or any other such disposition of
alleged criminal activity shall be deemed a conviction[.]
[N.J.S.A. 45:1-21(e) and (f).]
The Board reasoned that Fanelli’s conviction on criminal charges that the Board found
to involve moral turpitude and to relate adversely to the practice of medicine
provided grounds for the revocation of his license.
After the Board issued its Final Order, the Pennsylvania State Board of Osteopathic
Medicine filed disciplinary charges against Fanelli based on the action taken by the
Board in this State. The record does not inform us of the results
of those proceedings.
Fanelli appealed the Board’s Order to the Appellate Division. He also petitioned the
Board for a stay pending appeal. The Board, and later the Appellate Division,
denied Fanelli’s motion. We subsequently granted Fanelli’s motion for a stay pending appeal.
The Appellate Division, in an unpublished per curiam opinion, affirmed the Board’s Order.
In its opinion, the court set forth the reasons why Fanelli had desired
a hearing:
Because of this statutory provision, the doctor believes he was entitled to an
evidentiary hearing, with an opportunity to cross-examine witnesses and present witnesses on his
own behalf. The doctor wanted to present evidence in an evidentiary hearing to
demonstrate that his unlawful actions were unrelated to the practice of medicine. He
wanted also to testify regarding the circumstances leading to his guilty plea. According
to the doctor, if given the chance, he would have shown that he,
not the public, was the only victim of the wrongful acts of which
the Board cites.
The court denied Fanelli a hearing and rejected his argument that N.J.S.A. 45:1-21(e)
and (f) are inapplicable because his crime did not involve professional misconduct or
moral turpitude. Fanelli had alleged that because his crime did not involve the
treatment or care of patients, he could not be said to have committed
professional misconduct. Rejecting that interpretation, the court observed that “[t]oday, the practice of
medicine includes more than patient care, and the Board can rightfully be concerned
with how doctors run their offices, keep their records, treat their employees[,] and
deal with any funds generated through their medical practice.” The court also dismissed
Fanelli’s argument that his actions were at best negligent and did not constitute
professional misconduct or involve moral turpitude. The court concluded that the Board properly
rejected Fanelli’s arguments because his explanation of his guilty plea to conspiracy conflicted
with his plea in federal court. In addition, it noted that although the
Board allowed Fanelli to submit documentation to raise material discrepancies, he failed to
provide the transcript of his guilty plea proceeding. Thus, based on the record,
Fanelli failed to raise any material discrepancies relating to his plea. In the
absence of such documentation, the panel found that the Board acted appropriately based
solely on the guilty plea. Accordingly, the court found that the Board’s decision
was not unconstitutional, arbitrary, or contrary to legislative policies.
We granted Fanelli’s petition for certification.
171 N.J. 336 (2002).
In 1969, the Legislature enacted the Administrative Procedure Act (APA), N.J.S.A. 52:14B-1 to –15. Although the APA provides a road map for navigating administrative proceedings, it does not create a substantive right to an administrative hearing. Valdes v. New Jersey State Bd. of Med. Examiners, 205 N.J. Super. 398, 404 (App. Div. 1985) (quoting In re Application of Modern Indus. Waste Serv., 153 N.J. Super. 232, 237 (App. Div. 1977)). “[T]he right to an administrative hearing generally must be found outside the APA in another statute or constitutional provision[.]” Christ Hosp. v. Department of Health and Senior Servs., 330 N.J. Super. 55, 61 (App. Div. 2000). There is one exception: “[T]the APA itself grants a right to a hearing when an agency revokes or refuses to renew a license.” Ibid. According to N.J.S.A. 52:14B-11,
[no] agency shall revoke or refuse to renew any license unless it has first afforded the licensee an opportunity for a hearing in conformity with the provisions of this act applicable to contested cases.
[(Emphasis added).]
A contested case is defined as
[a] proceeding including any licensing proceeding, in which the legal rights and duties,
obligation, privileges, benefits or other legal relations of specific parties are required by
constitutional right or by statute to be determined by agency decisions . .
. addressed to them . . . after opportunity for an agency hearing[.]
[N.J.S.A. 52:14B-2(b) (emphasis added).]
The statute thus reflects our State’s long-standing commitment to procedural fairness in administrative
proceedings. “‘The right to a hearing before a governmental agency, whose proposed action
will affect the rights, duties, powers or privileges of, and is directed at,
a specific person, has long been imbedded in our jurisprudence.’” Limongelli v. New
Jersey State Bd. of Dentistry,
137 N.J. 317, 328 (1993) (determining that even
if APA does not apply, fundamental fairness required Board to provide dentist adequate
notice and opportunity to respond to charges before denying relicensure) (quoting Cunningham v.
New Jersey Dep’t of Civil Serv.,
69 N.J. 13, 19 (1975). Similarly, in
In re Revocation of the License of Polk,
90 N.J. 550, 579-80 (1982),
we found that the Board could not summarily impose a revocation sanction without
allowing the physician a hearing.
N.J.S.A. 52:14B-11 provides that in a license revocation matter the licensee has the
right to a hearing and that the hearing must follow the procedures used
in contested cases. The statute establishing procedures in contested cases states that “all
parties shall be afforded an opportunity for [a] hearing after reasonable notice .
. . [and an] opportunity shall be afforded . . . to respond,
appear and present evidence and argument on all issues involved.” N.J.S.A. 52:14B-9 (emphasis
added).
As noted, N.J.S.A. 52:14B-11 represents the “one instance” in which the APA itself
provides parties the right to a hearing. See 37 New Jersey Practice, Administrative
Law and Practice, § 4.6, at 183-84 (Lefelt, et al.) (2000). Once the right
to a hearing is established, as it is in these circumstances, the issue
becomes what type of hearing is required under the law.
According to the plain language of N.J.S.A. 52:14B-11 and -9, a plenary hearing is required in the circumstances of this appeal. Because Fanelli’s license is subject to revocation, N.J.S.A. 52:14B-11 states that he must be afforded the opportunity to have a hearing conducted pursuant to the procedures for contested cases. Thus, he may “respond, appear and present evidence and argument on all issues involved.” N.J.S.A. 52:14B-9.
The Board contends, however, that Fanelli must demonstrate that in these circumstances adjudicative facts are contested before he can have an evidentiary hearing. There are contested adjudicative facts in this appeal.
The Board suggested at oral argument that the sentencing transcript will reveal that Fanelli was involved in the conspiracy and that he had actual knowledge of his wife’s embezzlement. Yet, Fanelli maintains that he did not have actual knowledge. Because neither the Board nor this Court have had the benefit of the plea or sentencing transcripts, a determination of the extent of Fanelli’s knowledge is critical. Moreover, even if Fanelli had actual knowledge the inquiry does not end there. An open question is whether Fanelli pled guilty to a conspiracy “to commit any offense against the United States” or “to defraud the United States.” 18 U.S.C.A. §371. That determination is relevant because the presence of fraud is a clearer indicator of moral turpitude than the more nebulous conspiracy to “commit any offense against the United States.” Infra at __ (slip op. at 17-18). Thus, the Board should be informed of, and reconcile if necessary, the underlying facts that resulted in Fanelli’s plea. Because there are facts in dispute in this matter, the right to present evidence includes, in these circumstances, the right to present testimony. Further, in light of the fact that a plenary hearing will be conducted in respect of those and related issues, Fanelli also should have the opportunity to dispute the findings concerning professional misconduct, and to argue that license revocation was not the proper sanction.
We therefore conclude that Fanelli is entitled to a plenary hearing pursuant to N.J.S.A. 52:14B-9 and -11.
In the Conclusions of Law section of its Final Order of Discipline, the Board stated that Fanelli=s “conviction on criminal charges involving moral turpitude and relating adversely to the practice of medicine provides grounds for the suspension or revocation of [Fanelli’s] license to practice medicine in New Jersey pursuant to N.J.S.A. 45:1-21(e) and (f).” As noted, N.J.S.A. 45:1-21(e) and (f) state, in pertinent part:
A board may . . . suspend or revoke any
. . . license issued by the board upon proof that the applicant or holder of such certificate, registration or license:
. . . .
e. Has engaged in professional or occupational misconduct as may be determined by the board;
f. Has been convicted of . . . any crime or offense involving
moral turpitude or relating adversely to the activity regulated by the board[.]
[(Emphasis added.)]
Fanelli maintains that the Board=s revocation of his license was arbitrary and capricious
because his guilty plea to conspiracy did not involve moral turpitude and did
not relate adversely to the practice of medicine. Because this matter will be
remanded to the Board, we provide the following guidance to the parties.
The legislative history of N.J.S.A. 45:1-21 does not define moral turpitude; courts and governmental agencies must look elsewhere for its definition. In State Board of Medical Examiners v. Weiner, a doctor challenged the State Board of Medical Examiners= temporary suspension of his license to practice medicine pending the outcome of a manslaughter indictment involving Weiner=s treatment of patients. 68 N.J. Super. 468, 471 (App. Div. 1961). The Appellate Division held that because the Board was without the statutory authority to suspend a medical license merely because of the pendency of a criminal indictment against a licensee, it was unnecessary to resolve the question whether manslaughter was a crime of moral turpitude. Id. at 482. Nevertheless, the court discussed the concept of moral turpitude. Id. at 482-485. In so doing, the court examined whether a manslaughter indictment, under any circumstances, could involve moral turpitude and, if so, whether N.J.S.A. 45:9-16, which empowered the Board to revoke a license, See footnote 1 permitted it to determine what constituted moral turpitude. Id. at 483. The Appellate Division observed:
What is ‘moral turpitude?’ It has been defined as an ‘act of baseness, vileness, or depravity in the private and social duties which a man owes to his fellow men, to society in general, contrary to the accepted and customary rule of right and duty between man an man,’ . . . and as, ‘in its legal sense * * * everything done contrary to justice, honesty, modesty, or good
morals.’ The United States Supreme Court, in connection with alien deportation proceedings, has held that, in addition to ‘crimes * * * of the gravest character,’ any crime in which fraud is an ingredient involves moral turpitude. But the attempt to apply these definitions to specific criminal acts, especially in the context of license revocation proceedings, has demonstrated only the elasticity of the phrase and its necessarily adaptive character, reflective at all times of the common moral sense prevailing throughout the community.
[(Emphasis added) (citations omitted).]
The Weiner court cited several out-of-state cases that found certain offenses warranted suspension
of a medical license. See DuVall v. Board of Med. Exam’rs of Arizona,
66 P.2d 1026 (Ariz. 1937) (dispensing and prescribing narcotics for non-medical use); Bancroft
v. Board of Governors,
210 P.2d 666 (Okla. 1949) (issuing check with insufficient
funds with intent to defraud); State Med. Bd. v. Rodgers,
79 S.W.2d 83
(Ark. 1935); (possession of counterfeit money with intent to circulate); State Bd. of
Med. Exam’rs v. Harrison,
159 P.2d 769 (Wash. 1916) (sending notices and information
advertising performance of criminal abortions); Brun, supra, 191 A. at 240 (repeated acts
of indecent exposure); Craft v. Balderston,
78 P.2d 122 (Idaho 1938) (fraudulent claims
of treatment of disabled veterans); In re Kindschi,
319 P.2d 824 (Wash. 1959)
(willful attempt to evade federal income taxes).
New Jersey courts also have held that certain crimes involve moral turpitude. See,
e.g., In re Schmidt and Sons,
79 N.J. 344, 352 (1979) (crimes of
fraud, dishonesty, and attempting to obstruct justice); Berardi v. Rutter,
23 N.J. 485,
485 (1957) (falsification of tax return); DeMoura v. Newark,
90 N.J. Super. 225,
229 (App. Div. 1966) (filing false and fraudulent tax returns); Fromm v. Bd.
of Dirs. of Police and Firemen=s Ret. Sys.,
81 N.J. Super. 138, 144-45
(App. Div. 1963) (fixing parking tickets); Raphalides v. New Jersey Dep’t Civil Serv.,
80 N.J. Super. 407, 409 (App. Div. 1963), certif. denied,
41 N.J. 597
(1963) (larceny); O’Halloran v. DeCarlo,
156 N.J. Super. 249, 254 (Law Div.), aff’d,
162 N.J. Super. 174 (App. Div.), certif. denied,
79 N.J. 469 (1978), cert.
denied,
442 U.S. 917,
99 S. Ct. 2837,
61 L. Ed.2d 284
(1979) (conspiring to prevent administration of state laws pertaining to public advertisement for
bids and public bidding in public contracts).
However, in Matter of Meisnere,
471 A.2d 269, 270 (D.C. 1984), the Court
of Appeals for the District of Columbia considered whether an attorney’s guilty plea
pursuant to
18 U.S.C.A.
§371, the same crime at issue in this appeal,
involved a crime of moral turpitude that would subject the attorney to disbarment
pursuant to D.C. Code § 11-2503(a). There, the attorney pled guilty to conspiracy to
defraud the Internal Revenue Service, contrary to 18 U.S.C.A. § 371, and perjury, contrary
to
18 U.S.C.A.
§1623. Id. at 269-70. The District of Columbia Board on
Professional Responsibility found that the attorney was convicted of crimes involving moral turpitude,
and therefore was subject to discipline. Id. at 270. Although the appeals court
affirmed the attorney’s disbarment, it noted that
[a] violation of 18 U.S.C. [§] 371, the conspiracy statute[,] does not necessarily
constitute moral turpitude per se since the statute prohibits both conspiracy to commit
an offense against the United States and conspiracy to defraud the United States.
In this case, however, the information to which Respondent pleaded guilty, specifically charged
conspiracy knowingly to defraud the United States by obstructing the Treasury Department in
its attempt to ascertain the assets of and the taxes due from one
Leon Durwood Harvey. Thus[,] the information to which [Meisnere] pleaded guilty necessarily required
proof of intent to defraud. Intent to defraud inherently involves moral turpitude.
[Id. at 270-71 (emphasis added).]
Whether the Board in this appeal acted arbitrarily and capriciously in finding that
Fanelli’s crime involved moral turpitude turns on a full understanding and interpretation of
Fanelli’s crime. The record reflects that Fanelli pled guilty to conspiracy to unlawfully
abstract and convert funds of an employee benefit plan to his own use,
in violation of
18 U.S.C.A.
§371. Although Fanelli pled guilty to 18 U.S.C.A.
§ 371, unlike the attorney in Meisnere, it is unclear whether he pled guilty
to conspiracy to knowingly defraud the United States. Fanelli pled guilty to “conspiracy
to unlawfully abstract and convert to his own use, funds of an employee
benefit plan[.]”
18 U.S.C.A.
§371. As in Meisnere, we note the distinction in
18 U.S.C.A.
§371 between conspiracy to commit an offense against the United States
and conspiracy to defraud the United States.
In the absence of plea and sentencing transcripts and other evidence, we cannot
decide on this record whether Fanelli’s crime involved moral turpitude. The introduction of
relevant evidence at a hearing before the Board will permit the Board to
make an informed decision. We expect that the parties will offer all available
transcripts of his plea and sentencing hearings as well as any other relevant
evidence on various issues, including whether he had actual or constructive knowledge of
his wife’s misappropriation. However, we emphasize that the Board has the burden of
proving the elements of moral turpitude.
We also must evaluate the Board’s determination that Fanelli’s “conviction on criminal charges . . . relat[ed]
adversely to the practice of medicine . . . pursuant to N.J.S.A. 45:1-21(f)[.]”
Although there is no caselaw interpreting N.J.S.A. 45:1-21(e), decisions in other jurisdictions interpreting similar language in other statutes provide guidance. The Supreme Court of Washington in Haley v. Medical Disciplinary Board, addressed the relationship between the practice of medicine and allegedly unprofessional conduct. 818 P.2d 1062, 1068 (Wash. 1991) (en banc). The issue in that case was whether a doctor’s sexual conduct with a patient under his care violated a Washington statute providing that “the commission of any act involving moral turpitude, dishonesty, or corruption relating to the practice of the person’s ‘profession’ constitutes unprofessional conduct.” Ibid. (quoting Wash. Rev. Code § 18.130.108(1) (1990)). In finding that the doctor’s actions did relate to the practice of medicine, the Court observed that “the conduct must indicate unfitness to bear the responsibilities of, and to enjoy the privileges of, the profession.” Ibid. The court took a broad view in respect of what may be “related to” the practice of medicine:
The conduct need not have occurred during the actual exercise of professional or occupational skills, nor need the conduct raise general doubts about the individual=s grasp of those skills. In the context of medical disciplinary proceedings, and in the light of the purposes of such proceedings, conduct may indicate unfitness to practice medicine if it raises reasonable concerns that the individual may abuse the status of being a physician in such a way as to harm members of the public, or if it lowers the
standing of the medical profession in the public’s eyes.
[Haley, supra, 818 P. 2d at 1069.]
The Haley court relied on a prior Washington Supreme Court decision, In re Revocation of License of Kindschi, where the Board suspended a physician’s license after he was convicted of tax fraud. 319 P.2d 824, 825 (Wash. 1958). Although the tax fraud was not related to the physician’s diagnosis, care, or treatment of a patient, the court upheld the Board’s findings, determining that the physician’s crime related to the practice of medicine. Specifically, the Court stated:
The daily practice of medicine concerns life and death consequences to members of the public. They have an understandable interest in the maintenance of sound standards of conduct by medical practitioners. The public has a right to expect the highest degree of trustworthiness of the members of the medical profession. We believe there is a rational connection between income tax fraud and one’s fitness of character or trustworthiness to practice medicine, so that the legislature can properly make fraudulent conduct in such instances a ground for revoking or suspending the license of a doctor.
[Id. at 826.]
In so holding, the court noted that a medical disciplinary proceeding serves two
purposes: (1) to protect the public; and (2) to protect the standing of
the medical profession in the eyes of the public. Ibid.
Here, the Appellate Division stated:
Today, the practice of medicine includes more than patient care, and the Board
can rightly be concerned with how doctors run their officers, keep their records,
treat their employees and deal with any funds generated through the medical practice.
The Appellate Division also noted that Fanelli “wanted to present evidence in an
evidentiary hearing to demonstrate that his unlawful actions were unrelated to the practice
of medicine.” Fanelli should have that opportunity.
We emphasize that our remand on this issue is for the purpose of
allowing Fanelli to prove his contention and is not to be construed as
a conclusion on our part that the underlying offense does or does not
relate adversely to the practice of medicine.
In respect of the remand hearing, we offer the following guidance to all parties.
We accept Fanelli’s representation that he is not repudiating his plea or requesting a full trial on the issue of his liability for conspiracy. Fanelli may not re-litigate his guilt or innocence in light of his guilty plea. However, he should be permitted to develop the core facts concerning the pension fund and his conduct, particularly in regard to his knowledge, whether actual or constructive. He also may be heard on the question of moral turpitude and the relationship between his crime and the activities regulated by the Board. Further, he may present evidence on mitigation and argue that a sanction less than a full revocation of his license is justified under the circumstances.
It is unclear whether character witnesses will be required at the hearing. If character is a contested issue in this matter, Fanelli will be entitled to offer witnesses. If character is not in issue but the fact-finder believes that a character witness could assist it on a particular issue, such as moral turpitude or mitigation, such testimony may be allowed in the sole discretion of the fact-finder.
Finally, the Board retains the discretion to determine, subject to appellate review, whether discipline should be imposed and, if so, the quantum of that discipline.
Reversed and remanded.
CHIEF JUSTICE PORITZ and JUSTICES STEIN, COLEMAN, LONG, VERNIERO, and LaVECCHIA join in JUSTICE ZAZZALI’s opinion.
SUPREME COURT OF NEW JERSEY
NO. A-68 SEPTEMBER TERM 2001
ON CERTIFICATION TO Appellate Division, Superior Court
IN THE MATTER OF THE LICENSE
OF ANDREW T. FANELLI, D.O.,
TO PRACTICE MEDICINE AND
SURGERY IN THE STATE OF NEW
JERSEY.
DECIDED August 13, 2002
Chief Justice Poritz PRESIDING
OPINION BY Justice Zazzali
CONCURRING OPINION BY
DISSENTING OPINION BY
CHECKLIST
Footnote: 1
N.J.S.A. 45:9-16 was repealed in 2000. See L. 1999, c. 403. Today,
the Board’s authority to revoke a license derives from N.J.S.A. 45:1-21.