(dissenting).
I respectfully dissent from the holding of the majority decision.
Each of appellant’s four principal contentions rest upon the key issue of whether the State Board of Education accorded the local board a fair hearing in arriving at its decision following a de novo administrative hearing in this case.
The Alamogordo School Board, following an initial hearing, terminated appellee from his employment upon findings that his retention as an assistant principal at Alamogordo Mid-High was detrimental to the local school system because of his sexual harassment of school employees, and for gross inefficiency in the performance of his work. Thereafter, pursuant to § 22-10-20, N.M.S.A. 1978, appellee sought and obtained a de novo hearing before the State Board of Education.
Rather than conduct the de novo hearing itself, the State Board of Education elected under § 22-10-20, supra, to appoint a hearing officer to preside at the administrative hearing. Following the de novo proceeding, the hearing officer prepared a narrative report of the evidence at the hearing, and formulated proposed findings of fact and conclusions of law recommending dismissal of appellee and upholding the local school board’s decision to fire appellee.
The hearing officer specifically found that appellee and a secretary employed at Alamogordo Mid-High had participated in an extramarital affair and had engaged in a number of adulterous acts including at least one episode in the Home Economics Department at the Mid-High School.
The hearing officer concluded that the claim by the local board of sexual harassment by appellee of school personnel could not be upheld — because he had not been afforded a prior conference pointing out the specifics of his unsatisfactory work habits, nor given an opportunity to correct these deficiencies. Nevertheless, the hearing officer determined that the local board’s charges of gross inefficiency had been proven by a preponderance of the evidence.
Following the State Board’s review at its September, 1981 meeting, of the proposed findings and conclusions of law, prepared by its hearing officer, the Board by a vote of five to three, with two abstentions, rejected its hearing officer’s recommendation. The State Board advised its hearing officer that it would adopt findings of fact and conclusions of law contrary to that which he had recommended. The hearing officer then prepared revised findings of fact and conclusions of law altering his original recommendations to conform to the State Board’s decision.
At its November 10, 1981 meeting, the State Board adopted by reference, the revised findings of fact and conclusions of law of its hearing officer and entered a written decision ordering the local school board to implement reinstatement of appellee.
The State Board’s decision to overturn its hearing officer’s decision from that of upholding the local board, to an opposite result- — vindicating appellee was contrary to law. Although the State Board under § 22-10-20, supra, is not bound by the findings, conclusions or recommendations of its hearing examiner after a de novo hearing, Board of Education v. New Mexico State Bd. of Ed. 88 N.M. 10, 536 P.2d 274 (Ct.App.1975), the Board’s action in arriving at a contrary holding, without itself independently reviewing all of the evidence at the de novo hearing, and based upon a report of the hearing officer which it rejected, is contrary to the requirements of a fair hearing. This is especially true where the credibility of several key witnesses to the proceedings are a determinative factor in the Board’s ultimate decision. See McAlpine v. Garfield Water Commission, 135 N.J.L. 497, 52 A.2d 759, 171 A.L.R. 172 (Ct.App.1947); Morgan v. United States, 298 U.S. 468, 56 S.Ct. 906, 80 L.Ed. 1288 (1936). At a de novo hearing, the State Board serves as a quasi-judicial body. It has a duty to see that a fair hearing is held. See First Nat. Bank v. Bernalillo Cty. Valuation, 90 N.M. 110, 560 P.2d 174 (Ct.App.1977).
At the initial hearing conducted by the local board, and at the evidentiary de novo hearing before the hearing officer, both fact finders determined that the appellee had engaged in an affair with a school secretary and had sexual relations with her in a school building. This determination was based upon the testimony of the secretary involved and upon other corroborating evidence. Appellee vigorously challenged the credibility of his accuser and the evidence against him. The heart of the local board’s case rested upon the credibility of the secretary, Rose Willis. Both the local board and the hearing officer found her testimony creditable. The hearing officer’s narrative report noted that appellee’s own testimony had been flawed with inconsistencies. There was substantial evidence to uphold the findings of both the local board and that of the hearing examiner appointed by the State Board.
While the State Board is not bound to accept the findings of its hearing officer, nor to accept his recommended conclusions of law, fundamental fairness requires that when the State Board, in its role as a fact finder, elects to disregard the findings and conclusions of its own hearing officer and to arrive at a contrary result, it must review the entire record of the de novo hearing and based on a fair review thereof, arrive at its own findings and conclusions of law. Although the State Board is not required under such circumstances to conduct the de novo hearing anew, fairness requires that it should consider all of the evidence in the record prior to arriving at its decision. Where, as in this case, the ultimate decision rests upon the credibility of one of two opposing major witnesses, a review of the hearing officer’s report, without review of the entire record in the case, does not accord the fundamental due process. At the September meeting of the State Board, no transcribed record of the de novo hearing was available for the Board’s review when it voted not to accept the findings or recommendations of its hearing officer and when it voted to prepare a revised decision in the case.
This court held in Matter of Protest of Miller, 88 N.M. 492, 542 P.2d 1182 (Ct.App.1975), “When the administrative board has reached a decision and promulgated an order without considering all the evidence presented at the hearing, the ‘decision and Order’ is arbitrary and should be reversed.”
In not reviewing all of the evidence and failing to independently prepare its own findings of fact and conclusions of law, the State Board failed to follow its own regulation governing de novo hearings. On appeal, a court can take judicial notice of agency rules or regulations. T.W.I.W., v. Rhudy, 96 N.M. 354, 630 P.2d 753 (1981). N.M. State Bd. of Educ. Regulation no. 78-3 (May 1, 1978), governing appeals provides in part:
V. DECISION OF THE STATE BOARD
C. WHERE HEARING CONDUCTED BY HEARING OFFICER.
(1) Where a Hearing Officer is designated by the State Board to conduct a hearing * * *. The Hearing Officer shall * * * prepare and submit to the State Board of Education his formal written report * * *. The Hearing Officer’s analysis shall contain a narrative of the facts involved * * * and, if desired, recommended findings of fact and conclusions of law which are suggested as the decision of the State Board of Education.
(2) After receiving the report of the Hearing Officer, the State Board * * * shall either adopt the suggested findings of fact and conclusions of law, or modify said findings and conclusions of law, and render its decision. If it is not satisfied with the report, the Board may order the record transcribed * * *. [Emphasis supplied.]
The State Board may choose not to follow the hearing officer’s recommendations, but in such case it should adopt its own independent findings, conclusions and decision or modify the findings and conclusions of the hearing officer, based on its own proper review of the evidence. An administrative agency must follow its own regulations. Hillman v. Health & Soc. Services Dept. 92 N.M. 480, 590 P.2d 179 (Ct.App.1979). Failure to do so deprives the appellant of a fair hearing. See First National Bank v. Bernalillo Cty. Valuation, supra.
The State Board concluded that appellee’s conduct amounting to “sexual harassment” necessitated one or more prior warning conferences as a prerequisite to any termination proceedings. Sexual harassment as defined in 29 C.F.R. 1604.11(a) (1980), cited in the majority opinion, may fall under any one of three separate categories spelled out in such definition. Relying upon this definition, it is my opinion that conduct found to come within any of the first two categories of the definition relied upon by the majority should not necessitate prior warning conferences as a prerequisite for dismissal. Conduct which is within either of the first two categories, should constitute as a matter of law “other good cause” to terminate a school employee under § 22-10 — 17(D), N.M.S.A. 1978.
The local board has also raised an issue of whether it was legally bound to rehire appellee for the following school year. Neither under the hearing officer’s initial findings of fact and conclusions of law, nor under his revised findings and conclusions adopted by the State Board, was there formulated any ultimate conclusion that appellee was in fact rehired by a contract of employment for the school year 1980-1981. The written decision of the State Board also fails to address this. Although there is a finding of fact on this point (Finding No. 2), there is no board conclusion based on this finding. Section 22-10-20(1) supra, requires that the State Board’s decision “shall contain * * * conclusions of law.”
For the foregoing reasons, I would remand this cause to the State Board for reconsideration of the case predicated upon the Board’s review of the entire record of the de novo hearing, and for the adoption of new findings of fact and conclusions of law in accordance with the evidence of such hearing.