Yikes! Sorry about your situation! You failed out of the program after failing just one course?! That seems really strict. My school if you failed 2 nursing classes, then you failed the program and had to reapply to try and get another spot. You said you dragged a lot of people through the mud, including the chair of the program? That might affect you when you come back. I'm not sure about getting into another school, but it definitely wouldn't hurt to try. Especially, if appealing your grade works out. I'm not sure about suing the school either. There's always 3 sides to a story - your side, the instructor's side, and somewhere in between falls the truth. At my school, when a student had any type of issue, the instructor would write up the student. That would go in the student's file - it was a description of what had occurred, what the instructor wanted to fix the situation, and signatures of the student and instructor. When a student failed, the instructor would write out a detailed report of what he/she felt had occurred. I had 2 students I knew in a clinical with me where the instructor kept writing them up - I mean it was literally a daily basis, 2 or 3 write ups! Sometimes, the clinical day started with them getting a write up from the previous clinical day for something that happened at the end that she didn't have time to write up for at the time! Eventually, they failed the clinical. They appealed, but she had records that described each incident. Of course, they didn't keep detailed reports of each clinical day like that. They said they were able to win the appeal because the instructor had previous incidents where students were written up multiple times for small things and this was sort of a habit of the instructor - to pick 1 or 2 students and find multiple things wrong and write them up. I failed a clinical for missing one day. It was my last clinical, I only had one more semester to go after that. I got her email the day before she wanted me to make up 6 hours in the clinical, which there was no way I had to do because I had to work - and I'm a single mom and need every chance I can to work - so I couldn't call off. I was upset because I had only missed one day and she didn't give me much of a chance to make it up. She told me if I didn't like her decision to go above her to the faculty member overseeing the clinical, so I did. But, I ended up failing. I didn't know you could appeal the decision of failing a clinical - but if I did I'm not sure I would have. My failure wasn't going to make me lose my spot in the program, just put me a semester behind. So, I'm not sure I would have wanted to rock the boat and possibly upset the faculty and heads of the program. However, if the failure would have meant I failed out of the program and lost my spot, then I probably would have. But, you have to be careful how you say things.
It sucks that the instructor was employed by the school but wasn't qualified, as you say, but you still don't want drag people through the mud that are overseeing a program you are trying to be a part of again. You should appeal your case in as nice as way as possible.
I would see what happens with the appeal. If the decision is appealed and you feel the program is so bad and that you have made enemies, you might want to see if you can transfer your credits and get in at another school. Best thing would probably be to tough it out though since you are so close to the end. If the decision isn't appealed, I'm not sure what to do. Maybe see if you're able to transfer the credits you have to another school.
Sorry I don't really have much advice! I hope it all works out for you! Hang in there!