Appeal from the District Court of the Second Judicial District of the State of Idaho, Nez Perce County. Honorable Carl B. Kerrick, District Judge.
The opinion of the court was delivered by: J. Jones, Justice
The decision of the district court is affirmed.
Michael A. Duncan appeals from the decision of the district court affirming the ruling of the Idaho State Board of Accountancy. We affirm.
Duncan had prepared tax returns for Randy and Evelyn Forsmann since 2001. After Duncan's firm, Sellman & Duncan, PLLC, did the initial preparation of the Forsmanns' 2003 tax return, Duncan was contacted by Evelyn Forsmann on April 28, 2004. Evelyn asked Duncan to recommend a divorce attorney. At some point in May 2004, Duncan formed a personal relationship with Evelyn that developed during the course of the Forsmanns' divorce. The Forsmanns' divorce became final on August 13, 2004. Although Duncan alleges that all substantive work on the return was completed prior to his relationship with Evelyn, an extension was filed during the relationship, and the return itself was not filed until after the divorce. A letter regarding the extension was sent from Duncan's firm to Randy Forsmann on August 11, 2004, with Duncan listed as the contact person. It also appears that a substantive review of the return was completed prior to its filing in September 2004. In addition, a letter signed by Duncan was sent to the Forsmanns regarding their return on September 9, 2004. A completed return was eventually filed.
Randy Forsmann filed a verified complaint with the Idaho State Board of Accountancy. The complaint alleged that Duncan continued to work on a joint tax return for Randy and Evelyn after Duncan became aware that they were seeking a divorce and after Duncan began a personal relationship with Evelyn. Randy alleged that Duncan's relationship with Evelyn constituted a conflict of interest in violation of American Institute of Certified Public Accountants (AICPA) Rule 102.3 and Idaho Administrative Rule 01.01.01.004.001. A hearing was held before the State Board of Accountancy. The Board issued Findings of Fact, Conclusions of Law, and Final Order holding that Duncan had a conflict of interest that he failed to disclose as required by AICPA Rule 102.3. As a result, the Board ordered Duncan to pay $1,000 in administrative penalties, $2,000 in administrative costs, and to undergo four hours of ethics training. Duncan filed a petition for judicial review of the Board's decision. Duncan also filed a motion to dismiss the proceedings based upon the Board's failure to prepare a complete transcript of the administrative hearing. The district court denied the motion to dismiss and affirmed the Board's findings. The district court found that Duncan's challenge was simply a request for new findings of fact by the court, that the Board's findings were supported by substantial evidence, and that Duncan had failed to demonstrate prejudice. Duncan then appealed to this Court.
The following issues are presented on appeal: (1) whether the district court erred in refusing to overturn the Board's decision and (2) whether the Board is entitled to attorney fees on appeal.
The district court reviewed the Board's decision in its appellate capacity pursuant to Idaho Code sections 54-224 and 67-5279. When the district court acts in its appellate capacity, this Court reviews the record independently. Cooper v. Bd. of Prof'l Discipline, 134 Idaho 449, 454, 4 P.3d 561, 566 (2000). We will defer to the Board's findings of fact unless they are clearly erroneous and unsupported by evidence in the record. Id.
The actions of an agency like the Board are afforded a strong presumption of validity. Id. This Court may not substitute its judgment for that of the Board. Id. The Board's decision may be overturned if it: "(a) violate[s] constitutional or statutory provisions; (b) exceed[s] the agency's statutory authority; (c) [is] made upon unlawful procedure; (d) [is] not supported by substantial evidence on the record as a whole; or (e) [is] arbitrary, capricious, or an abuse of discretion." Id. (citing I.C. § 67-5279(3)). Further, the Board's decision ...