Frank v. Louisiana State Board of Private Investigator Examiners

Citations: 212 So. 3d 1247; 2016 La.App. 1 Cir. 0994; 2017 WL 658253; 2017 La. App. LEXIS 262Docket: NO. 2016 CA 0994

Court: Louisiana Court of Appeal; February 16, 2017; Louisiana; State Appellate Court

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The Louisiana State Board of Private Investigator Examiners (LBPI) appeals a district court judgment that reversed the revocation of Scott C. Frank's private investigator licenses. Frank, licensed since 2007, was hired in late 2008 by Michael Landry and his son, Christopher, to find Christopher's biological mother. After initial meetings and a $2,500 retainer, Christopher expressed disappointment in the investigation's findings and chose not to continue. Following Christopher's tragic death in 2012, Landry attempted to resume the search but was informed by Frank that his files were likely destroyed and a new investigation would require an additional $5,000 retainer. Landry found this response inappropriate and filed a complaint with the LBPI, leading to the revocation of Frank's licenses. Frank's subsequent petition for judicial review resulted in the district court overturning the board's decision, prompting the board's appeal. Upon review, the appellate court determined that the license revocations were justified and reinstated the board's original decision.

The Private Investigators Law (PIL) in Louisiana mandates licensing and regulation of private investigators to protect public safety and welfare, as outlined in La. R.S. 37:3501 et seq. The law established the Louisiana Board of Private Investigators (LBPI) to oversee licensure, training, and regulatory compliance. Key provisions regarding the denial, suspension, revocation, or restriction of private investigator licenses are specified in La. R.S. 37:3519, including grounds such as felony convictions, deceit in obtaining licenses, false testimony, public deception, professional incompetency, and violations of regulations. Furthermore, La. R.S. 37:3520 delineates illegal activities for private investigators, including operating without a valid license, employing unlicensed individuals, making false statements in applications, misrepresenting license status, and failing to comply with board regulations. Additionally, private investigators are prohibited from misrepresenting their authority and from disclosing confidential information without proper authorization.

Possessing a license or registration card issued to another person is prohibited, with violations resulting in fines between $2,000 and $10,000, imprisonment for three months to one year, or both, as per La. R.S. 37:3521(B). Complaints to the board must be written, signed, and include contact information (LAC 46:LVII.111). Investigators are required to keep clients informed and provide necessary information for decision-making (LAC 46:LVII.707). Professional misconduct includes violating rules of conduct, committing criminal acts, and engaging in dishonesty (LAC 46:LVII.725).

Frank and his agency, licensed since 2007, faced allegations of professional misconduct, as communicated in letters dated December 19, 2013. An adjudicatory hearing was scheduled to evaluate these allegations under La. R.S. 37:3500-3525 and the Administrative Procedure Act. The specific allegations included efforts to deceive the public, professional incompetency, submitting false reports, and various violations of board regulations. Frank did not respond to the Administrative Complaint, and while he attended the initial hearing on March 18, 2014, he did not attend the resumed session on August 27, 2014, where witnesses testified and evidence was presented.

Frank voluntarily surrendered his license to the board on August 25, two days before the hearing continued. On November 18, 2014, the LBPI issued an opinion and order, concluding that a service contract existed between Frank and Landry, who was identified as the client. The board determined that Frank did not communicate adequately with Landry or produce an investigative file when requested, despite having the ability to do so. It concluded that these actions constituted violations of multiple statutes and regulations, including:

1. Failing to produce records to a client, indicating an effort to deceive (La. R.S. 37:3519(A)(4)).
2. Inadequate communication after receiving fees, demonstrating professional incompetency (La. R.S. 37:3519(A)(5)).
3. Providing false reports by claiming not to have a record but later being able to produce it (La. R.S. 37:3519(A)(6)).
4. Failing to maintain a competent professional relationship (La. R.S. 37:3519(A)(9)).
5. Professional incompetence and gross negligence were grounds for license suspension or revocation (La. R.S. 3519(A)(5)).
6. Not recognizing the client who paid for services as such, violating board regulations (La. R.S. 37:3520(B)(2)).
7. Not keeping a client informed and not responding promptly to requests, violating diligence requirements (LAC 46:LVII.705(A)).
8. Misleading a client about the existence of an investigative report, reflecting dishonesty (LAC 46:LVII.725(2) and (9)).
9. Claiming the investigation record was transferred to his son, indicating professional misconduct (LAC 46:LVII.725(3)).

Despite Frank surrendering his licenses before the second day of the hearing, the board proceeded with disciplinary action, revoking his licenses and imposing a fine of $5,000, $2,500 in restitution, and costs totaling $14,329.52, to be paid within two years. Frank sought judicial review of the board's decision on December 22, 2014. A joint stipulation later amended the board's order, making payment conditions for reinstatement. On June 10, 2016, the district court reversed the board's decision.

The district court's judgment reversing the board's decision to revoke Frank's licenses was based on a finding that the board lacked authority, as Frank was only required to keep copies of his investigative file for three years. The court noted that the last contact between Frank and Christopher occurred on January 12, 2009, indicating that the three-year retention period had expired. The board, however, contends that the district court's finding has no legal basis, asserting that its decision was founded on numerous documented violations by Frank of statutory provisions and board rules, independent of any file retention requirement. The board emphasizes that there is no statutory provision governing private investigators' client files, making the district court's conclusion erroneous. It cites Rule 717, established under La. R.S. 37:3505(3), which mandates that contracts include specific information and be retained for three years but does not extend this requirement to investigative files. The district court's ruling was viewed as an overreach of authority, improperly establishing a three-year limitation on liability not supported by statutory law or board regulations. Consequently, the judgment must be reversed. Additionally, the district court acts as an appellate court in reviewing administrative decisions, with no deference given to its factual findings or legal conclusions in subsequent appeals.

The court conducts a de novo review of the board's decision regarding the revocation of Frank's licenses, guided by La. R.S. 49:964. The court may affirm, reverse, or modify the agency's decision if substantial rights of the appellant are compromised due to violations of law, excess authority, unlawful procedures, other legal errors, arbitrary actions, or insufficient evidentiary support. The court's findings are based on its own evaluation of the entire record, although it must respect the agency’s credibility assessments from firsthand observations.

The review of the record indicates that Frank's licenses were revoked due to multiple statutory and regulatory violations, which the district court did not examine. Frank displayed significant uncooperativeness during testimony, often failing to recall key facts and providing inconsistent answers, raising doubts about his credibility. He did not affirmatively state that he destroyed the file in question but instead claimed he assumed it was destroyed after three years, without detailing the destruction process. Frank later asserted he had given the file to another individual for copying, who did not return it, yet struggled to explain why he could only retrieve parts of the file's contents from earlier emails.

Notably, Frank and his counsel attended the first day of the hearing but failed to appear for the second day. Prior to this hearing, Frank informed the board via a letter that he was ceasing business as an investigations agency and mentioned he could not physically surrender his license. He acknowledged that his license would expire on November 20, 2014, and he had not applied for renewal, but he did not reference the ongoing adjudicatory proceedings regarding the revocation of his licenses.

The timing of Frank's voluntary cessation of business and non-renewal of his licenses is viewed with suspicion, particularly as it coincided with an ongoing hearing regarding the potential revocation of those licenses. Frank and his counsel's absence from the second day of the hearing raises further doubts about his intentions and willingness to cooperate with the board in addressing allegations of misconduct. The record indicates significant incompetence and dishonesty on Frank's part, which could lead to sanctions. His testimony revealed a concerning lack of recall, not only about the specific case in question but also about his general investigative practices. Frank claimed he was not required to retain files longer than three years and could not recall details about the destruction of his records or whether he attempted to save any data from his destroyed computers. One board member expressed disbelief at Frank's practices, highlighting that an investigative professional should maintain records. Frank's selective memory and inability to provide details regarding his past cases and investigative steps were further criticized, demonstrating a lack of diligence in retaining crucial information. Ultimately, both his lack of recall and his failure to maintain records raise serious concerns about his competence and adherence to professional standards.

In the investigation regarding Scott C. Frank's professional conduct, he demonstrated significant deficiencies in his ability to articulate the steps taken to locate Christopher's biological mother. Although he mentioned performing "skip tracing" and conducting research, he failed to provide specific details about the methods or resources used, stating he could not recall without the client file. He could not specify how many individuals he contacted, the duration of the investigation, or whether he consulted any public agencies or records. Frank's vague answers included stating he would check online for public agencies but could not name any. The transcript indicated that Frank's behavior constituted incompetence and other violations of professional standards. Consequently, the revocation of his licenses was deemed justified and not arbitrary or capricious, supported by a preponderance of evidence. The district court's June 10, 2016 judgment reversing the board's findings was reversed, and the board's November 18, 2014 order revoking Frank's licenses was reinstated, with all appeal costs assessed to him. Additionally, the dispute over whether Landry or Christopher was the actual client was deemed irrelevant to the resolution of the appeal. Frank maintained that Christopher was his client, despite evidence showing that the retainer was paid by Landry and his later offer to restart the investigation for Landry without addressing the client issue. Furthermore, he could not recall details about a contract for his services that had been introduced into evidence.

Determining the identity of the "client" is not essential for the decision at hand, yet Frank's stance on this matter undermines his credibility, which influences the conclusion reached. Frank initially claimed he did not possess a copy of the professional services contract; however, evidence presented by Landry included a signed contract that Frank had returned and an email in which Frank was asked to sign and provide payment details. Despite this, Frank testified he could not recall having the contract. In a letter from his counsel regarding a preliminary complaint, Frank stated that Christopher signed a contract and paid a retainer during their October 2008 meeting but failed to provide any documentary evidence. Instead, he submitted an unsigned "form" of a contract that significantly differs from the one presented by Landry. Furthermore, during the hearing, Frank provided a letter from Christopher's psychologist but could not explain why he could access this letter while failing to produce the contract he claimed was destroyed after three years. Although the contract issue does not need resolution for the current decision, the evidence raises concerns about Frank's credibility and competence. The reinstatement includes amendments to the board's opinion and order regarding fines and attorney fees, stipulating these amounts become payable only if Frank seeks to reinstate or reapply for a license.