Arkansas State Bd. of Cosmetology v. Roberts

John E. Jennings, Judge. Anna Roberts owns and operates Anna’s Beauty Shop in Greenbrier. On April 23, 1987, an inspector for the Arkansas State Board of Cosmetology stopped by the beauty shop and found that Mrs. Roberts’ establishment license and cosmetologist license had both expired. At a hearing on June 17,1987, the Board found that Mrs. Roberts had violated the Arkansas Cosmetology Act. She renewed the licenses on July 23, 1987. On August 19, 1987, the Board conducted another hearing at which time it fined Mrs. Roberts a total of $500.00. She appealed the agency’s decision to the Faulkner County Circuit Court. The court heard additional testimony and in an order dated March 11, 1988, held that the Board did not follow proper administrative procedure in its dealings with Mrs. Roberts and that the fine imposed was arbitrary and capricious. The court reduced the fine to $50.00. On appeal the Board contends that the trial court erred in taking additional testimony and in holding that the fine imposed by the Board was arbitrary and capricious. We hold that the trial court erred in modifying the fine imposed by the Board. Arkansas Code Annotated Section 25-15-212(g) (1987) relates to the manner of review by the circuit court of an administrative agency decision. It provides: The review shall be conducted by the court without a jury and shall be confined to the record, except that in cases of alleged irregularities in procedure before the agency, not shown in the record, testimony may be taken before the court. The court shall, upon request, hear oral argument and receive written briefs. Because Mrs. Roberts alleged in her pleading that she did not receive proper notice of the hearings conducted by the Board, the trial court did not err in taking additional testimony. The trial court’s finding that the Board did not follow proper procedures, however, is not supported by the record. Mrs. Roberts’ own testimony establishes that she received adequate and timely notice of both hearings. She did not attend the first meeting because she wanted to go to Florida and she threw away the notice of the second hearing because she thought she had resolved the matter by renewing her licenses. After the hearing the court said: I am also going to hold that the Board was arbitrary and capricious in what they did in the amount of the fine and failure to properly notify the respondent in this matter. There is some evidence here of good faith on her part because she has a letter in the file that she wrote in trying to find out about the hearing. She also called the office down there and tried to get some information from the receptionist and was told that with or without her presence the [Board] would go ahead and act. They should have advised her that if she came down to the Board and presented her case that maybe there would have been no penalty imposed on her. I find that the penalty of $500.00 is excessive and I am going to reduce it to $50.00. That will be the order and judgment of the court. Mrs. Roberts’ letter to the Board merely stated that she thought she had paid to renew her licenses, that she would be out of town at the time of the hearing, and that she would pay whatever penalty was necessary. We find no procedural irregularities. Under applicable state regulations the Board was authorized to fine Mrs. Roberts a total of $1,000.00 under the circumstances presented. While the fine imposed, $500.00, is certainly substantial, neither the trial court nor this court may substitute its judgment for that of the Board in assessing the penalty. See Arkansas State Board of Pharmacy v. Isely, 13 Ark. App. 111, 680 S.W.2d 718 (1984); Green v. Carder, 282 Ark. 239, 667 S.W.2d 660 (1984). In Garner v. Foundation Life Insurance Co. of Arkansas, 17 Ark. App. 13, 17, 702 S.W.2d 417, 419 (1986), we said: The reviewing court may not displace the Board’s choice between two fairly conflicting views even though the court might have made a different choice had the matter been before it de novo. The reviewing court may not set aside the board’s decision unless it cannot conscientiously find from a review of the entire record that the evidence supporting the decision is substantial .... The question of whether a board’s action is arbitrary and capricious is a narrow one, more restricted than the substantial evidence test. To set aside an agency decision on that basis, it must be found to have been willful and unreasoning and in disregard of the facts and circumstances of the case. This standard applies only where the board’s action was unreasoned; its decision was not supported by any reasonable basis, and was made in willful disregard of the facts and circumstances. (Citations omitted.) Here, the trial court had evidence before it that the Board did not have — that Mrs. Roberts had been in business for eighteen years and had never failed to renew her licenses. The reason the Board did not have that evidence, of course, is that Mrs. Roberts did not appear at either hearing. In effect, the trial court reviewed the penalty assessed by the Board de novo and set the penalty at a level the court thought was fair. In doing so the court exceeded its authority. The court was authorized to set aside the penalty only if the agency decision was “willful and unreasoning” as opposed to being merely wrong. We cannot say that the Board’s decision as to the penalty in the case at bar was arbitrary and capricious. We acknowledge that under certain circumstances the penalty imposed by the administrative agency may be so harsh that its imposition may be described as arbitrary and capricious. This was the holding of the Arkansas Supreme Court in Baxter v. Dental Examiners Board, 269 Ark. 67, 598 S.W.2d 412 (1980) and in Arkansas Board of Pharmacy v. Patrick, 243 Ark. 967, 423 S.W.2d 265 (1968). Both of these cases, however, involved an agency decision to permanently revoke a professional license. Those penalties are different in degree from that imposed here. Our conclusion is that the court erred in modifying the decision of the Board. Reversed. Cooper, J., dissents.