The opinion of the court was delivered by: Orr, Justice
On discretionary review pursuant to N.C.G.S. § 7A-31 of a unanimous decision of the Court of Appeals, 126 N.C. App. 453, 485 S.E.2d 882 (1997), affirming an order entered by Allen (J.B., Jr.), J., on 4 January 1996 in Superior Court, Wake County, which affirmed a decision of the North Carolina Psychology Board. Heard in the Supreme Court 11 February 1998.
This case arises out of several incidents involving petitioner, Stephen S. Elliott, and several of his former patients. Petitioner is a psychologist licensed by the North Carolina Psychology Board and by the Virginia Board of Professional Counselors. Petitioner resided and was employed in Martinsville, Virginia, until September 1987. While residing in Martinsville, petitioner spent one afternoon a week seeing patients in Eden, North Carolina. In September 1987, petitioner relocated to Winston-Salem, North Carolina. The incidents involved in this appeal all occurred prior to petitioner's relocation.
The first incident involved a female adult patient who initially sought treatment from petitioner on 22 August 1984. This patient sought counseling for marital problems, anxiety attacks, and problems with coping skills. She remained in counseling until 12 February 1985 and took part in a total of twenty-four counseling sessions with petitioner. Subsequent to the completion of therapy, the patient contacted petitioner and "asked if [they] could be friends." Petitioner informed the patient that if they were to talk outside of therapy, he could no longer serve as her counselor. By the summer of 1985, the patient and petitioner had become close friends. Around this same time, both the patient and petitioner became separated from their respective spouses. In December 1985, the patient and petitioner began dating and continued to see each other through the winter of 1986. Petitioner and the patient engaged in sexual relations during this time.
The second incident involved a female adult patient who was in counseling with petitioner from May 1985 to July 1985. During that time, petitioner conducted eight counseling sessions with her. In June 1985, while still in counseling with petitioner, this patient separated from her husband. Petitioner did not hear from her again until December 1985. At that time, they encountered each other at a day-care center where the patient's daughter and petitioner's son were enrolled. After that encounter, the patient called petitioner and asked whether he would go out with her. Petitioner explained to her that he could never have a relationship with her as a counselor if he saw her socially. They dated from January 1986 through January 1988.
During 1986 and 1987, petitioner also had several dates with two other former adult female clients. In 1987, petitioner relocated to Winston-Salem, North Carolina. Subsequently, a complaint was filed with the Virginia Board of Professional Counselors by the first female client referenced above. On 24 April 1992, the Virginia Board entered a consent order with petitioner, which concluded that petitioner had violated various principles of the Regulations of the Board of Professional Counselors. Petitioner was reprimanded by the Virginia Board and ordered to submit an academic research paper on "the topic of the ethical standards of the profession regarding the prohibition of dual relationships of a sexual nature," with emphasis on the powerful position the counselor possesses over the patient.
Once the North Carolina Psychology Board became aware of the disciplinary action taken against petitioner by the Virginia Board, it conducted its own hearing concerning the allegations. The North Carolina Board concluded that petitioner was in violation of Principles 2(f) and 6(a) of the American Psychological Association's Ethical Principles of Psychologists and Code of Conduct (the Ethics Code), which is adopted by reference in the North Carolina Psychology Practice Act. N.C.G.S. § 90-270.15(a)(10) (1997). Based upon its Conclusions, the Board suspended petitioner's license for sixty months, with an active period of suspension of thirty days. During the remaining period of suspension, the Board ordered petitioner to practice under the supervision of a licensed psychologist. Petitioner was also ordered to undergo therapy and evaluation with a psychologist.
Petitioner then filed a petition for judicial review. On 4 January 1996, the trial court affirmed the decision of the North Carolina Psychology Board. In its order, the trial court concluded that (1) the Psychology Board did not exceed its statutory authority, (2) the Psychology Board did not engage in any unlawful procedure or commit any error of law, (3) substantial evidence supports the Board's findings and conclusions, and (4) the final agency decision was not arbitrary or capricious.
On 26 January 1996, petitioner filed a written notice of appeal with the Court of Appeals. In an opinion filed on 17 June 1997, the Court of Appeals unanimously affirmed the decision of the trial court and, thus, that of the Psychology Board. On 2 October 1997, this Court allowed petitioner's petition for discretionary review.
The only issue presented to us by petitioner's petition for discretionary review is whether the Court of Appeals was correct in affirming the trial court's order concluding that petitioner was in violation of Principle 6(a) of the Ethics Code. In the opinion below, the Court of Appeals focused on the policy objectives underpinning the Ethics Code. It noted that "[t]he purpose of [the Ethics Code] is to `protect the public from . . . unprofessional conduct by persons licensed to practice psychology.'" Elliott v. N.C. Psychology Bd., 126 N.C. App. 453, 457, 485 S.E.2d 882, 884 (1997) (quoting N.C.G.S. § 90-270.1 (1993) (incorporating by reference the Ethics Code)) (alteration in original). The Court of Appeals further stated that the Ethics Code "never suggests that dual relationships of a sexual or social nature are permissible after therapy is terminated." Id. at 459, 485 S.E.2d at 885. It concluded by holding that the Psychology Board was correct in determining that petitioner was in violation of Principle 6(a). Id. However, we disagree with the Court of Appeals and accordingly hold that the Court of Appeals erred in affirming the portion of the order concluding that petitioner was in violation of Principle 6(a).
Article 18A of the North Carolina General Statutes governs the practice of psychology. N.C.G.S. § 90-270.15(e), contained within article 18A, provides that "the procedure for revocation, suspension, denial, limitations of the license or health services provider certification . . . shall be in accordance with the provisions of Chapter 150B of the General Statutes." N.C.G.S. § 90-270.15(e). In discussing judicial review of a final agency decision, chapter 150B provides that the court reviewing a final agency decision may affirm the decision of the agency or remand the case for further proceedings. It may also reverse or modify the agency's decision if the substantial rights of the petitioners may have been prejudiced because the agency's findings, inferences, conclusions, or decisions are:
(1) In violation of constitutional provisions;
(2) In excess of the statutory authority or jurisdiction of the agency;
(3) Made upon unlawful procedure;
(4) Affected by other error ...