IN THE MATTER OF Docket No. 94-36-ST
PIKEVILLE BEAUTY COLLEGE,
Respondent. Assistance Proceeding _________________________________________________________________
Appearances: Terry Hanner, President, Pikeville Beauty College,
McAndrews, Kentucky (no counsel of record).
Renee Brooker, Esq., Office of the General Counsel, U.S. Department of Education, Washington, D.C., for the Office of Student Financial Assistance Programs.
Before: Thomas W. Reilly, Administrative Law Judge
On May 24, 1995, Respondent was served with an Order To Show Cause why
Respondent's appeal should not be dismissed for failure to prosecute that
appeal. (Corrected Order, May 24, 1995; original Order To Show Cause, May 22,
1995.) Respondent, by the school's president, replied to that Order by
finally filing a Stipulation of Pikesville Beauty College, dated April 14,
1995, in which she withdrew the school's appeal and requested that a final
order be entered terminating the school from HEA Title IV programs, and
requested that the $95,000 fine be upheld. (N.B.: in various documents and
correspondence throughout this proceeding, this school has alternately been
referred to as "Pikeville" and "Pikesville".)
The history of Respondent's refusal to participate in this remanded proceeding
is clear and was summarized in the May 22d Show Cause Order. The Respondent
not only failed to comply with the requirements and deadlines set forth in the
Judge's March 15, 1995 Order Governing Proceedings, but informed SFAP counsel
that she had no intention of doing so, and had no interest in prosecuting her
appeal. Pursuant to 34 C.F.R. 668.89(c)(3), the Judge has the authority to
terminate a hearing and issue a decision against a party if that party fails
to meet time limits. [See also 34 C.F.R. 668.90(a)(1)(iii).] Additionally,
it is an inherent part of the Judge's authority, in controlling the course and
conduct of a proceeding, to terminate a proceeding if a party refuses to
cooperate or to participate in that proceeding. It would be a vain and
useless act to attempt to compel a party to continue to participate in a
proceeding (an appeal for her own benefit) that she has clearly expressed a
desire to ignore.
The summary of events contained in the May 22d Order To Show Cause is hereby incorporated by reference in this Decision.
On January 27, 1995, the Secretary issued an Order of Remand vacating
dismissal orders in this and three other termination and fine proceedings that
had been dismissed by Judges in the Office of Hearings and Appeals (OHA),
based upon the Secretary's earlier decision in In Re Bliss College, Docket No.
93-15-ST, U.S. Dept.of Education (Feb. 23, 1994). All four cases were remanded back to OHA
"for full adjudication below" and "for decisions on the merits."
On March 15, 1995, the Judge issued an Order Governing Proceedings setting
forth a list of preliminary matters the parties were to undertake in
preparation for a full evidentiary hearing on the appeal of an action
terminating the school's eligibility to participate in Title IV, Higher
Education Act (HEA) programs, and imposing fines ($99,500) for regulatory
violations. The termination and fine action was taken following an on-site
review conducted by program reviewers from the U.S. Department of Education's
(ED) Atlanta Regional Office, and the issuance of a formal Program Review
Report (PRR)(see letter to school's owner dated February 2, 1994). The school
filed an appeal on February 24, 1994. Two days after the Notice of Intent To
Terminate was sent to Ms. Hanner at the school, the school closed and moved
its operation to another school in Prestonburg, Kentucky, which Ms. Hanner
More recently, in view of Ms. Hanner's expressed disinterest in pursuing her
appeal, SFAP counsel mailed a drafted Stipulation of Dismissal to Ms. Hanner
for her to sign. Ms. Hanner indicated that she would review the stipulation
with her attorney, S.K. Belhasen (who has never filed a Notice of Appearance
in this proceeding and whose address is unknown), before deciding to withdraw
her appeal. Ms. Hanner later stated (by phone) that she wished to sign the
stipulation, that she had forwarded it to her attorney for review, and that
she had no intention of complying with the Judge's Order Governing Proceed-
ings. SFAP counsel spoke to Mr. Belhasen, who said he would complete his
review and then respond to SFAP counsel "as soon as possible." (See Consent Motion dated
April 11, 1995.) Since then, Ms. Hanner filed the Stipulation
withdrawing her appeal (dated April 14, 1995, but not filed in the Office of
Hearings and Appeals until June 2, 1995).
The details set forth in the February 2, 1994, letter to the school, giving
notice of the intent to terminate eligibility to participate in Title IV HEA
programs and to fine the school $99,500, appear to fully support the action
taken, and the imposition of the fine and termination are warranted.
In accordance with Ms. Hanner's Stipulation, and with the consent of counsel
for SFAP, (1) the appeal of Pikeville Beauty College has been WITHDRAWN;
(2) a Final Order is hereby entered TERMINATING the school from further participation in Title IV programs of the Higher Education Act of 1965, as amended; (3) a Final Order is hereby entered UPHOLDING THE $99,500 FINE assessed against the Pikeville Beauty College in accordance with the February 2, 1994, letter sent to the school by certified mail from the U.S. Department of Education, Office of Postsecondary Education, Director of Compliance and Enforcement Division; and (4) the original appeal filed by Pikeville Beauty College on February 24, 1994, is hereby DISMISSED WITH PREJUDICE.
IT IS SO ORDERED.
Thomas W. Reilly
Administrative Law Judge
Issued: June 8, 1995.
S E R V I C E L I S T
On June 8, 1995, a copy of the attached document was sent by Certified Mail,
Return Receipt Requested, to the following:
Terry Hanner, President
Pikeville Beauty College
P.O. Box 88
McAndrews, KY. 41543.
Renee Brooker, Esq.
Office of the General Counsel,
U.S. Department of Education
Room 5415 -- FOB-10B
600 Independence Avenue, S.W.
Washington, D.C. 20202-2110.