Filed 4/30/13 Ebrahimian v. Dental Bd. of California CA2/7
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              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     SECOND APPELLATE DISTRICT

                                                DIVISION SEVEN


SHAHAB EBRAHIMIAN et al.,                                            B239646

         Plaintiffs and Respondents,                                 (Los Angeles County
                                                                     Super. Ct. No. BS131882)
         v.

DENTAL BOARD OF CALIFORNIA,

         Defendant and Appellant.




         APPEAL from a judgment of the Superior Court of Los Angeles County, James A.
Chalfant, Judge. Affirmed.
         Kamala D. Harris, Attorney General, Alfredo Terrazas, Senior Assistant Attorney
General, Karen B. Chappelle and Geoffrey Ward, Deputy Attorneys General, for
Defendant and Appellant.
         Bonne, Bridges, Mueller, O‟Keefe & Nichols, Peter R. Osinoff and Theresa Taing
for Plaintiffs and Respondents.
                                             ____________________
       The Dental Board of California revoked Shahab Ebrahimian‟s and Farhad Shafa‟s
licenses to practice dentistry several years after they pleaded no contest to a single count
of paying patient referral fees, a misdemeanor. The trial court granted Ebrahimian and
Shafa‟s petition for writ of administrative mandamus on the ground revocation was an
excessive penalty. On appeal the Dental Board argues the penalty imposed was within its
broad discretion in light of Ebrahimian‟s and Shafa‟s submission of more than $100,000
in false MediCal billings and contends the trial court erred in requiring the Dental Board
to prove fraudulent intent. We affirm.
                  FACTUAL AND PROCEDURAL BACKGROUND
       1. The Audit and Criminal Convictions
       Ebrahimian and Shafa, classmates in dental school, were licensed to practice in
July 1997. In August 1999 they formed a dental corporation and acquired Columbus
Dental Group in Reseda; in 2001 they acquired Warner Dental Care in Canoga Park.
Both practices were considered “high volume” and primarily treated MediCal patients.
       In mid-2001 the California Department of Health Services (Department) placed
Ebrahimian and Shafa on special claims review, generally triggered when there is
suspicious activity, requiring them to obtain prior authorization before performing certain
procedures. In 2003 the Department audited the dentists‟ billing records for the period
January 10, 2000 through January 10, 2003. After reviewing X-rays and interviewing a
sample of nine patients, Dr. Morton Rosenberg, the Department‟s expert, determined
Ebrahimian and Shafa had been overpaid more than $140,000, including payment for the
replacement of 394 fillings or “restorations” for 89 patients who did not actually receive
the treatment.
       In January 2005 the Department referred a complaint to the California Department
of Justice Bureau of MediCal Fraud (Fraud Bureau). Special Agent Tuan Phung
investigated the matter, interviewing Dr. Rosenberg and seven of the patients he had
examined. In February 2006 the Fraud Bureau filed criminal charges against Ebrahimian
and Shafa for grand theft (Pen. Code, § 487, subd. (a)), multiple counts of identity theft
(Pen. Code, § 530.5, subd. (a)) and presenting false MediCal claims (Welf. & Inst. Code,

                                              2
§ 14107, subd. (b)(4)(A)). In December 2006 Ebrahimian and Shafa pleaded no contest
to the misdemeanor offense of paying patient referral fees in violation of Business and
Professions Code section 650. Their sentences were suspended, and they were placed on
probation for three years (2006 through 2009) and ordered to pay a combined total of
$80,000 in restitution.
       In August 2007 Ebrahimian and Shafa settled the Department‟s administrative
claims against them for $110,000 with a credit of $80,000 for the restitution award they
had paid in connection with the criminal case.
       2. The Administrative Hearing and Dental Board Decision
       Ebrahimian and Shafa disclosed their criminal convictions to the Dental Board. In
May and November 2009 the Dental Board commenced disciplinary proceedings against
Shafa and Ebrahimian respectively. The accusations alleged Ebrahimian and Shafa had
been convicted of paying patient referral fees, which was undisputed, and also “had
engaged in repeated acts of fraud by billing Medi-Cal for purported services on numerous
patients that were never actually rendered.”
               a. Testimony
       At the consolidated administrative hearing in November 2010 Agent Phung
testified regarding his 2005 investigation, and his investigative report was admitted into
evidence. As discussed, based on Dr. Rosenberg‟s analysis and his own work, Agent
Phung concluded Ebrahimian and Shafa had submitted claims and been paid by MediCal
for replacing 394 fillings on 89 different patients for whom no dental work had been
           1
performed. In some instances Ebrahimian and Shafa had billed for fillings performed on
both sides of patients‟ mouths in the same office visit and in other cases had billed for
office visits occurring two days in a row—both of which practices, if they occurred,
would be improper. In addition, Agent Phung found Ebrahimian and Shafa had “up-
coded” for services, such as billing for cleanings with fluoride when the charts did not
reflect fluoride had been used. They had also provided patients with porcelain enamel

1
       The amount reimbursed per filling ranged from $35 to $85.

                                               3
crowns, which were not permitted under MediCal rules, and billed for less expensive
                            2
metal crowns, which were. None of the Department‟s records regarding its
investigation, including how it arrived at the overpayment figure of $140,000, was
introduced into evidence.
       Ebrahimian and Shafa testified they had largely ignored the administrative
requirements of their practices after they purchased them and speculated the improper
billing resulted from a combination of an inadequate billing program, staff errors, poor
recordkeeping and their lack of oversight, partially because they were running two high
volume practices. For example, they explained they would orally identify a new patient‟s
existing fillings, which were to be noted on one piece of paper by the dental assistant, and
then identify the procedures that needed to be performed, which were to be documented
on a separate piece of paper. During this process the existing fillings may have been
noted on a third piece of paper, the therapy record, which would then be provided to the
person responsible for billing. In response to a question from the administrative law
judge (ALJ) how this type of procedural error could result in a billing for phantom
restorations over a two-day period, Ebrahimian testified, “[T]his is not something that
I‟m saying for sure happened, but a lot of times billers, when they‟re in there and they‟re
experienced, when they see that there [are] some fillings on the left side and fillings on
the right side, they—sometimes they bill it on different days, which is the wrong thing to
do, obviously, but that could have been a possibility why that would have happened.”
       Ebrahimian and Shafa testified the majority of the $140,000 the Department found
had been overpaid was for crowns: They explained they used porcelain-fused-to-metal
crowns instead of the full metal crowns authorized by MediCal because no one wanted
metal—they caused allergic reactions—and private insurance typically reimbursed for
metal crowns under such circumstances. Ebrahimian testified the Department gave them
the option of repaying $340 per crown or replacing the patients‟ porcelain crowns with
2
        Ebrahimian and Shafa testified they understood this practice is considered an
illegal payment to the patient, which was the factual basis for their plea to the
misdemeanor charge of paying patient referral fees.

                                             4
metal ones. Ebrahimian and Shafa decided to pay the money back. Estimating only
$11,000 to $15,000 of the overpayment was for restorations that had not been provided,
Ebrahimian further explained some of the $140,000 was attributable to services provided
by both offices, but improperly billed only under one of the office‟s provider number, as
well as to the erroneous coding of X-rays and teeth cleaning. Ebrahimian and Shafa
described changes they had implemented to ensure the errors did not recur, including
hiring a dental practice consultant, purchasing new billing software, redesigning patient
charts, training or replacing staff and personally verifying administrative functions were
being performed properly. Although Ebrahimian and Shafa dissolved their partnership in
2004, they both described how their careers had developed.
               b. The decision
       On February 14, 2011 the ALJ submitted her proposed decision to the Dental
Board recommending revocation of Ebrahimian‟s and Shafa‟s licenses. The ALJ found
unpersuasive Ebrahimian and Shafa‟s explanation, “uncorroborated by any independent
testimonial or documentary evidence,” staff errors had caused the improper billing for
restorations: “[Ebrahimian and Shafa] . . . place blame, in part, on inexperienced staff.
The evidence, however, shows that [Ebrahimian and Shafa] purchased a practice that was
an established fixture in the community. The staff from the previous practice would have
been experienced in charting and billing. [¶] . . . [¶] [Ebrahimian‟s and Shafa‟s]
assertion that there was a billing error caused by dental assistants, who charted their
recommendations for future dental work needed as work actually performed, does not
explain how billings, in some instances, ended up being divided over two days, with half
being billed as having been performed on one day, and the other half as having been
performed on the next day. If the false billings were caused by the dental assistant‟s
notation errors, the billing for all fillings should have occurred on one day. . . . [¶]
[Ebrahimian‟s and Shafa‟s] assertion that they provided patients with porcelain enamel
crowns, when Denti-Cal would authorize only for metal crowns, evidences that
[Ebrahimian and Shafa] engaged in activities they knew were prohibited under the Denti-
Cal system.”

                                               5
       In justifying revocation of their licenses, the maximum penalty notwithstanding
Ebrahimian and Shafa had no prior criminal record and had successfully completed
probation and paid restitution, the ALJ explained, “[Ebrahimian‟s and Shafa‟s] offenses
were serious, and the convictions resulting from their actions are relatively recent
[December 2006]. [Ebrahimian and Shafa] insist they did not engage in wrongdoing
other than failing to adequately oversee their dental practice. At its best, the scenario
urged by [Ebrahimian and Shafa] demonstrates a disregard of good dental practice,
recordkeeping, poor supervision, and overbilling that resulted in their receiving over
$140,000 to which they were not entitled. At its worst, this may be exactly what
[Ebrahimian and Shafa] intended. [Ebrahimian and Shafa] did not demonstrate a full
realization of what they did wrong and, therefore, what they needed to rehabilitate from.
There is thus insufficient evidence to conclude that [Ebrahimian and Shafa] would not
again commit similar misconduct in the future if confronted with the same
circumstances.”
       The Dental Board adopted the ALJ‟s proposed decision in full on March 10, 2011
and ordered the revocation of Ebrahimian‟s and Shafa‟s licenses effective April 10, 2011.
The effective date was stayed an additional 30 days to permit the Dental Board to decide
a petition for reconsideration. The petition was denied, and the revocations were to take
effect on May 10, 2011.
       3. The Amended Petition for Writ of Mandamus
       On May 9, 2011 Ebrahimian and Shafa petitioned for a writ of administrative
mandamus (Code Civ. Proc., § 1094.5), challenging only the penalty imposed by the
Dental Board, and also filed an ex parte application for a stay of the decision. The trial
court granted an amended stay application, and the dentists filed an amended petition in
early June.
       At the outset of trial on November 29, 2011 the court announced its tentative
decision to deny the petition, explaining it agreed with the ALJ that the dentists‟
explanation for the “false billings . . . does not particularly make good sense.” The court
found significant Ebrahimian and Shafa “did nothing to ascertain what actually

                                              6
happened.” Explaining it might have put Ebrahimian and Shafa on probation considering
they had just started out in practice when the misconduct occurred, the court nevertheless
indicated the Board did not commit a manifest abuse of discretion and thus it did not “see
how [it] could do anything but uphold what the Dental Board did.” After argument the
court, characterizing the penalty as a “close call,” adopted its tentative decision but
agreed to grant a further two-week stay to permit Ebrahimian and Shafa to file a notice of
appeal and seek a stay of the revocation in this court.
       Within a few days of the hearing, however, the court set a status conference to
inform the parties it had reconsidered its decision: “I reiterate my general feeling that
[Ebrahimian and Shafa] committed a fraud by billing for services not performed, that is
the 89 patients and 364 fillings, that the offense was serious and that [Ebrahimian and
Shafa] did not show complete rehabilitation by investigating the underlying facts. On
reflection, it seems to me that neither did the Dental Board do that. That is, the Dental
Board presented a summary witness who did an investigation that was . . . the selection of
random persons from the list of 89 patients who were interviewed to see whether or not
they had the fillings that were filled. The Dental Board didn‟t do anything to check the
records to ascertain whether [Ebrahimian and Shafa] committed fraud, and my general
feeling they committed fraud is not the same thing as proof that fraudulent intent was
shown in what [Ebrahimian and Shafa] did. So I think it‟s pretty clear, I think everybody
agrees there was no actual proof of fraud. . . . The amount involved was $15,000
approximately.”
       In concluding the Dental Board abused its discretion in revoking the dentists‟
licenses, the court also found significant Ebrahimian and Shafa had no prior criminal
record, had complied with the criminal probation, paid restitution, practiced for 10 more
years without incident and with no patient complaints about the quality of dental care. On
January 9, 2012 judgment was entered granting the petition and ordering the Dental
Board to fashion “an adequate probationary order . . . that would appropriately monitor
[Ebrahimian‟s and Shafa‟s] billing practices, in order to assure public protection.”



                                              7
                                       DISCUSSION
       1. Governing Law and Standard of Review
       Cause exists to revoke or suspend a professional‟s license when he or she is
convicted of a crime substantially related to the qualifications, duties and functions of the
profession. (See Bus. & Prof. Code, §§ 490, subd. (a), 1670.1; Hanna v. Dental Board of
                                                          3
California (2012) 212 Cal.App.4th 759, 764 (Hanna).) A conviction for MediCal fraud
is such a crime and may warrant revocation of a professional‟s license. (See Hanna, at
pp. 765; Matanky v. Board of Medical Examiners (1978) 79 Cal.App.3d 293, 305
[“[i]ntentional dishonesty, especially involving moral turpitude, demonstrates a lack of
moral character and satisfies a finding of unfitness to practice medicine”].) A
professional may also have his or her license revoked or suspended or be placed on
probation for “unprofessional conduct, or incompetence, or gross negligence, or repeated
acts of negligence . . . .” (Bus. & Prof. Code, § 1670.) Unprofessional conduct includes
the unlawful act of rebating fees for professional services. (Bus. & Prof. Code, §§ 650,
1680, subd. (g).)
       The Dental Board must consider the disciplinary guidelines entitled “Dental Board
of California Disciplinary Guidelines With Model Language” in reaching a decision on a
disciplinary action commenced under the Administrative Procedures Act. (Cal. Code
Regs., tit. 16, § 1018.) As revised August 30, 2010 and operative December 14, 2010,
the guidelines provide aggravating and mitigating factors to be considered, including the
nature and severity of the offense; actual or potential harm to the public or any patient;
prior disciplinary record; the number and variety of violations; evidence of rehabilitation;
the time passed since the acts or offenses occurred; and the length of time in practice.
Introductory language to the August 2010 revision to the guidelines states, “[W]ith the
safety of the public being paramount and to the extent not inconsistent with public
protection, disciplinary actions shall be calculated to aid in the rehabilitation of the
3
       Business and Professions Code section 493 provides the Dental Board may
“inquire into the circumstances surrounding the commission of the crime in order to fix
the degree of discipline . . . .”

                                               8
licensee. . . . [¶] . . . [¶] If, at the time of hearing, the ALJ finds that the Respondent for
any reason is not capable of safe practice, the Board favors outright revocation of the
license. If, however, the Respondent has demonstrated a capacity to practice dentistry
                                                                       4
safely, a stayed revocation order with probation is recommended.”
       “The propriety of a sanction imposed by an administrative agency is a matter
resting in the sound discretion of that agency, and that decision will not be overturned
absent an abuse of discretion.” (Hughes v. Board of Architectural Examiners (1998)
68 Cal.App.4th 685, 692; accord, Hanna, supra, 212 Cal.App.4th at p. 764.) We review
“the administrative determination, not that of the superior court, by the same standard as
was appropriate in the superior court.” (Schmitt v. City of Rialto (1985) 164 Cal.App.3d
494, 501 (Schmitt ).) “„Neither a trial court nor an appellate court is free to substitute its
discretion for that of an administrative agency concerning the degree of punishment
imposed.‟ [Citations.] This rule is based on the rationale that „the courts should pay
great deference to the expertise of the administrative agency in determining the
appropriate penalty to be imposed.‟” (Hughes, at p. 692.) Generally, an administrative
agency acts within its discretion if reasonable minds may differ regarding the propriety of
the penalty imposed. (See ibid.) Nevertheless, while the agency has broad discretion, it
is not unfettered. (Skelly v. State Personnel Bd. (1975) 15 Cal.3d 194, 217-218 [agency
“does not have absolute and unlimited power”].)




4
       As will be discussed, although the matter was submitted for decision on
January 13, 2011, after the operative date of the August 30, 2010 Revised Disciplinary
Guidelines, the ALJ referred to the earlier (November 1996) Disciplinary Guidelines, as
well as to California Code of Regulations, title 16, section 1020, which lists criteria for
consideration in evaluating rehabilitation when deciding whether to suspend or revoke a
license on the ground of conviction of a crime. Section 1020(c) includes as factors the
nature and severity of the acts or offenses, the licensee‟s total criminal record, the time
that has elapsed since commission of the acts or offenses, whether the licensee complied
with the terms of probation and restitution and other evidence of rehabilitation.

                                               9
       2. The Dental Board Abused Its Discretion in Revoking Ebrahimian’s and Shafa’s
          Licenses
       Although we generally may not substitute our judgment a penalty is excessively
harsh for that of the Dental Board‟s view it is appropriate, under the circumstances
presented by the instant case we conclude the Dental Board abused its discretion in
revoking the dentists‟ licenses. The Dental Board essentially concedes the ALJ failed to
utilize the current disciplinary guidelines in her decision proposed to the Dental Board in
February 2011—guidelines that stress the goal of licensee rehabilitation when, as here,
the safety of the public is not jeopardized by discipline short of revocation. Citing
Borden v. Division of Medical Quality (1994) 30 Cal.App.4th 874 (Borden), the Dental
Board argues it was not required to consider the revised guidelines because the addition
of “non-substantive” language emphasizing the primacy of licensee rehabilitation merely
restates existing law, and the criteria for evaluating whether revocation, probation or
suspension should be imposed were unchanged. The Dental Board‟s argument turns the
Borden analysis on its head.
       In Borden an administrative law judge found cause to discipline Borden, an
anesthesiologist, after a patient had died and recommended Borden be placed on
probation. (Borden, supra, 30 Cal.App.4th at p. 877.) On review the Division of
Medical Quality of the Medical Board of California (Division) also found cause for
discipline, albeit in connection with two patient deaths, and like the administrative law
judge ordered only probation. After the Medical Board filed a petition for
reconsideration, however, the Division issued a revised decision revoking Borden‟s
license and finding, “The penalty imposed by the Division in the prior decision is not
consistent with the recent legislative mandate raising protection of the public above all
other concerns, including rehabilitation of the licensee.” (Ibid.)
       The trial court granted Borden‟s petition for writ of administrative mandamus in
part, ordering the Medical Board to reconsider the penalty. (Borden, supra,
30 Cal.App.4th at p. 878.) The court found revocation of Borden‟s license had resulted
from the improper retroactive application of an amendment to Business and Professions


                                             10
Code section 2229 providing “„[p]rotection of the public shall be the highest priority for
the [Division] . . . .‟” (Id. at p. 879; see Stats. 1990, ch. 1597, § 14.) In reversing the trial
court, the Court of Appeal rejected Borden‟s argument the amendment could not be
applied retroactively, holding “public protection has always been a predominant purpose
of the medical discipline system” and thus the amendment did not change existing law.
(Borden, at p. 884; see id. at p. 882 [noting “well-established exception to the general
rule that statutes are not construed to apply retroactively, i.e., when the legislation merely
clarifies existing law”].)
       Borden‟s holding, coupled with the Dental Board‟s concession the new language
in the August 30, 2010 revision merely clarifies or restates existing law, reinforces our
conclusion the ALJ and the Dental Board failed to effectuate the important policy
favoring rehabilitation of a licensee as long as public protection is not imperiled. As in
Borden the revision to the guidelines “did not change the penalty to which [the licensee]
was subject” and did “not make a lawful act unlawful or change the penalty for the
licensee‟s acts in a way that changes the legal effects of past events.” (Borden, supra,
30 Cal.App.4th at p. 884.) Rather, the revisions simply provide the Dental Board with
additional guidance in how to exercise its discretion. (Id. at p. 884.) By disregarding the
well-established preference for rehabilitation rather than revocation, reemphasized but
not created by the revised guidelines, the Dental Board failed to appreciate the scope and
contours of its discretion. (See People v. Belmontes (1983) 34 Cal.3d 335, 348, fn. 8
[“Defendants are entitled to sentencing decisions made in the exercise of the “informed
discretion” of the sentencing court. [Citations.] A court which is unaware of the scope of
its discretionary powers can no more exercise that „informed discretion‟ than one whose
sentence is or may have been based on misinformation regarding a material aspect of a
defendant‟s record.”]; F.T. v. L.J. (2011) 194 Cal.App.4th 1, 25 [“[i]f a trial court‟s
decision is influenced by an erroneous understanding of applicable law or reflects an
unawareness of the full scope of its discretion, it cannot be said the court has properly
exercised its discretion under the law”]; Paterno v. State of California (1999)



                                               11
74 Cal.App.4th 68, 85 [“trial court abuses its discretion when it applies the wrong legal
standards applicable to the issue at hand”].)
       Our conclusion the Dental Board abused its discretion is supported by the
overbroad rationale provided by the ALJ in her proposed decision, adopted by the Dental
Board, recommending revocation. The ALJ characterized the offenses as serious,
explaining, “Respondents admitted receiving overpayments totaling $110,000.
Respondents extensively billed Denti-Cal for services they did not perform.” This
summary, however, fails to distinguish between the types of misconduct at issue and the
amount of improper payments attributable to each category. The Dental Board does not
dispute Ebrahimian and Shafa‟s contention there was no more than $15,000 in billing for
restorations that were not provided. While charging for metal crowns instead of the more
expensive porcelain crowns provided to patients, billing under one office instead of two
and mislabeling X-rays, conduct that resulted in the bulk of the $110,000 figure, may
violate MediCal regulations, it is inconceivable that kind of misconduct would warrant
revocation of the dentists‟ licenses. Clearly, charging for work that was not performed
was the paramount factor in the revocation decision. But, as the trial court observed,
while Ebrahimian‟s and Shafa‟s explanation for how that may have occurred was not
credible, there was no finding the dentists had in fact engaged in fraud—the ALJ herself
concluded only the dentists‟ conduct at best was a flagrant disregard of good practice and
at worst “may be” intentional. The Dental Board is correct that proof of fraud is not
necessary to justify license revocation. But, absent such a finding here, the penalty of
revocation is too severe—that is arbitrary and capricious—based on the totality of the
facts and the relatively benign nature of the other misconduct involved.
       The ALJ‟s decision also characterizes the convictions as “relatively recent.” The
California Code of Regulations section 1020(c), cited by the ALJ, as well as the
disciplinary guidelines, however, describe the relevant factor as the time that has elapsed
since the acts or offenses occurred, not since conviction. Even if the outside date for the
offenses was January 2003, more than eight years had passed since the offenses occurred.
During that time Ebrahimian and Shafa had, among other things, modified their billing

                                                12
practices to ensure errors would not be repeated, taken ethics classes, completed
probation and paid restitution. Moreover, there were never any patient complaints and no
hint that the improper practices at issue jeopardized public safety (as opposed to the
public fisc).
       We reiterate it is rare to find an administrative agency abused its discretion in its
choice of penalty. Nevertheless, for a penalty range to have any meaning, revocation
must be reserved for the most egregious cases, unless the licensee is not capable of safe
practice. Here, when no physical harm was occasioned, and in light of the long record of
remedial action taken by the Ebrahimian and Shafa without any new incident of
misconduct, revocation was an abuse of discretion.
                                      DISPOSITION
       The judgment is affirmed. Ebrahimian and Shafa are to recover their costs on
appeal.



                                                  PERLUSS, P. J.


       We concur:



                ZELON, J.



                JACKSON, J.




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