Commonwealth of Kentucky D/B/A Kentucky Department of Agriculture v. Lowell McGowan ( 2022 )

RENDERED: SEPTEMBER 23, 2022; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2021-CA-1368-MR
COMMONWEALTH OF KENTUCKY
D/B/A KENTUCKY DEPARTMENT
OF AGRICULTURE APPELLANT
APPEAL FROM FRANKLIN CIRCUIT COURT
v. HONORABLE THOMAS D. WINGATE, JUDGE
ACTION NO. 20-CI-00659
LOWELL MCGOWAN AND
KENTUCKY PERSONNEL BOARD APPELLEES
OPINION
REVERSING AND REMANDING
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BEFORE: CALDWELL, GOODWINE, AND JONES, JUDGES.
GOODWINE, JUDGE: The Kentucky Department of Agriculture (“KDA”)
appeals from an opinion and order of the Franklin Circuit Court reversing an order
of the Kentucky Personnel Board (“the Board”) dismissing Lowell McGowan
(“McGowan”) from his employment. The circuit court reversed the Personnel
Board ruling that it manifestly erred in failing to address the scoring analysis of
McGowan’s evaluation. After careful review, we conclude under the appropriate
standard of review, the circuit court erred and reverse reverse and remand with
instructions to reinstate the final order of the Kentucky Personnel Board.
The Franklin Circuit Court summarized the relevant facts and
procedural history as follows:
Petitioner, Lowell McGowan, was employed for
nineteen (19) years with Respondent, Kentucky
Department of Agriculture (“the Department”), most
recently as an Agricultural Inspector III. Petitioner’s
duties included applying chemicals to control weeds and
pests in twenty-two (22) western Kentucky counties.
Petitioner’s supervisor was Shawn Skidmore
(“Skidmore”) for the first five months of 2018 and John
Board (“Board”) for the remainder of the year. During
2018, Petitioner and his supervisors did not get along.
On July 3, 2018, Mark White, the Department’s Human
Resources Director, sent Petitioner a letter advising
Petitioner of the Department’s intent to dismiss him.
Accompanying this letter was another letter placing
Petitioner on paid administrative leave until the
Department’s final action. On July 24, 2018, Petitioner
appeared with counsel for a pre-termination hearing. The
pre-termination hearing resulted in the Department
rescinding the letter intending to dismiss Petitioner and
instead formally reprimanding Petitioner on July 26,
2018, with Petitioner returning to work on August 1,
2018.
On August 6, 2018, Petitioner received a mid-year
review from Skidmore that detailed seventeen (l7)
deficiencies in his job performance that year. Petitioner
also received a Performance Improvement Plan that
addressed the correction of the listed deficiencies, as well
as identified five specific areas in which the Department
felt Petitioner needed improvement. On January 23,
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2019, Petitioner received his final performance
evaluation for 2018 and year-end review. The
Department noted thirteen (l3) deficiencies in Petitioner’s
job performance and Petitioner was rated as either
“Barely Meets Expectations” or “Fails to Meet
Expectations” for all categories in the evaluation except
one. The total score assigned to the evaluation was 146,
which was in the Unacceptable category. On the same
day, Petitioner marked the box indicating “Disagree with
performance evaluation and request reconsideration.” On
January 24, 2019, Board conducted a reconsideration. As
part of the reconsideration, Petitioner had the opportunity
to submit evidence showing that his evaluation score was
incorrect. Petitioner submitted a handwritten note
stating that he believed his evaluation score should be
higher and alleged the Department was mounting a
campaign against him. Board made no change to
Petitioner’s evaluation. Petitioner then requested a
reconsideration by Skidmore, who also did not make a
change to the evaluation
Pursuant to 101 Kentucky [Administrative
Regulations] KAR 2:180 § 8, Petitioner’s unacceptable
evaluation score required that the DOA either demote
him or terminate him from employment. The
Department’s Human Resources Director, Mark White,
testified that there were no open positions commensurate
with Petitioner’s skills and abilities, thus there were no
jobs available for the Petitioner to be demoted. On
February 28, 2019, Petitioner was sent another notice of
intent to dismiss by the Department due to his evaluation
score of 146 and Unacceptable rating.
On April 3, 2019, Petitioner appealed his
evaluation to the Kentucky Personnel Board (“the
Board”). On the same day, Petitioner participated in a
pre-termination hearing with the Department’s
appointing authority, Mark White. On April 15, 2019,
Petitioner received a letter terminating him from his
position. An administrative hearing took place over four
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days in November 2019, with the burden of proof on
Respondent to establish the correctness of the evaluation
score and whether dismissal was warranted based on
Petitioner’s evaluation score. After briefing, the
Personnel Board’s Hearing Officer entered Findings of
Fact, Conclusions of Law, and a Recommended Order of
dismissal on May 4, 2019. The Hearing Officer found
that Petitioner was given proper notice “of his actions
creating problems making disciplinary actions necessary
to correct his poor work performance.” The Hearing
Officer concluded that, by a preponderance of the
evidence, Petitioner’s dismissal was appropriate.
On July 15, 2020, the Board issued its Final Order,
altering the Hearing Officer’s Findings of Fact,
Conclusions of Law, and Recommended Order. The
Board altered some of the Hearing Officer’s Summary of
the Evidence and concluded that the Department “proved
by a preponderance of the evidence that [Petitioner] was
properly evaluated.” Additionally, the Board found that
“the evaluation score of 146 was supported by the
evidence and [Petitioner’s] work was ‘Unacceptable.’”
Thus, the Board concluded that Petitioner’s dismissal
was neither excessive nor erroneous and dismissed his
appeal. Petitioner timely appealed to this Court.
Record (“R.”) at 184-86 (footnotes omitted).
On July 13, 2021, the circuit court entered an opinion and order
holding “the Board’s Final Order is supported by substantial evidence in the
record.” R. at 189. Thus, the circuit court initially affirmed the final order of the
Board and made the order final and appealable.
McGowan subsequently filed a motion to alter, amend, or vacate the
circuit court’s order. The KDA opposed the motion. On September 30, 2021, the
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circuit court entered an order vacating its July 13, 2021, order and remanding the
matter to the Board for an additional hearing. The circuit court determined it
“overlooked the absence of scoring analysis in the record and certain other
discrepancies between the dismissal letter sent to [McGowan] and evidence relied
upon by Respondents.” R. at 246. Thus, the circuit court determined it manifestly
erred in entering its prior order and remanded the case to the Board “for an
additional hearing that considers that scoring of [McGowan’s] evaluation.” R. at
247.
The Board then moved to alter, amend, or vacate the circuit court’s
September 30, 2021, order, arguing the circuit court operated “in excess of its
statutory authority under [Kentucky Revised Statute] KRS 13B.150.” R. at 256.
On October 27, 2021, the circuit court entered an order denying the Board’s
motion, but it clarified it remanded the matter to the Board pursuant to its authority
under KRS 13B.150. The circuit court further found the Board’s final order was
“arbitrary due to [its] failure to consider the scoring issues raised by [McGowan].”
R. at 256. This appeal followed.
On appeal, the KDA argues the circuit court: (1) abused its discretion
in granting McGowan’s motion to alter, amend, or vacate; and (2) erred in ordering
the Board to act outside the scope of its statutory authority on remand.
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We apply the following standard of review in addressing the KDA’s
arguments:
When reviewing the action of an administrative
agency, a court is concerned with whether the agency’s
action was arbitrary, which is defined as “clearly
erroneous”; clearly erroneous means not supported by
substantial evidence. “Substantial evidence” is evidence
which, when taken alone or in light of all the evidence,
has sufficient probative value to induce conviction in the
minds of reasonable persons.
In reviewing whether an agency’s decision is
supported by substantial evidence, the reviewing court
must adhere to the principle that the agency, as fact
finder, is afforded great latitude in its evaluation of the
evidence heard and the credibility of the witnesses
appearing before it. In addition to the principles
established by case law, the judicial review process of
Kentucky’s administrative procedures act at KRS
13B.150(2) circumscribe the scope of judicial review of
factual determinations made in an agency’s due process
hearing, as follows: “The court shall not substitute its
judgment for that of the agency as to the weight of the
evidence on questions of fact.” What constitutes cause
for dismissing a merit employee is a fact question for
determination by the Personnel Board.
....
An administrative agency’s interpretation of its
own regulations is entitled to substantial deference. A
reviewing court is not free to substitute its judgment as to
the proper interpretation of the agency’s regulations as
long as that interpretation is compatible and consistent
with the statute under which it was promulgated and is
not otherwise defective as arbitrary or capricious.
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Hughes v. Kentucky Horse Racing Authority, 179 S.W.3d 865, 871-72 (Ky. App.
2004) (footnotes omitted).
First, the KDA argues the circuit court abused its discretion in
granting McGowan’s motion to alter, amend, or vacate. More specifically, the
KDA argues it should be an abuse of discretion for the circuit court, having
previously found substantial evidence in the record supporting a final agency
decision, to grant a Kentucky Rule of Civil Procedure (“CR”) 59.05 motion on the
basis that there is not substantial evidence in the record.
In reviewing the Board’s final order, the circuit court was bound by
KRS 13B.150, which provides:
(1) Except as provided in KRS 452.005, review of a final
order shall be conducted by the court without a jury and
shall be confined to the record, unless there is fraud or
misconduct involving a party engaged in administration
of this chapter. The court, upon request, may hear oral
argument and receive written briefs. Challenges to the
constitutionality of a final order shall be reviewed in
accordance with KRS 452.005.
(2) The court shall not substitute its judgment for that of
the agency as to the weight of the evidence on questions
of fact. The court may affirm the final order or it may
reverse the final order, in whole or in part, and remand
the case for further proceedings if it finds the agency’s
final order is:
(a) In violation of constitutional or statutory
provisions;
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(b) In excess of the statutory authority of the
agency;
(c) Without support of substantial evidence on the
whole record;
(d) Arbitrary, capricious, or characterized by abuse
of discretion;
(e) Based on an ex parte communication which
substantially prejudiced the rights of any party and
likely affected the outcome of the hearing;
(f) Prejudiced by a failure of the person conducting
a proceeding to be disqualified pursuant to KRS
13B.040(2); or
(g) Deficient as otherwise provided by law.
In its order granting McGowan’s motion to alter, amend, or vacate,
the circuit court found its initial order was based on a manifest error of fact.
Guillon v. Guillon, 163 S.W.3d 888, 893 (Ky. 2005). In its order denying the
KDA’s motion to alter, amend, or vacate, the circuit court further found the
Board’s findings of fact were arbitrary because it failed to consider the scoring
issues raised by McGowan.
Despite the circuit court’s determination that the Board did not
consider the scoring of McGowan’s evaluation, our review of the Board’s final
order shows the Board did consider the validity of the evaluation in reaching its
decision. The Board did not parse out each of the duties and expectations.
However, based on our review of McGowan’s 2018 annual performance evaluation
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and the Board’s final order, the Board addressed each item in the evaluation and
supported its conclusions with his supervisors’ testimony. In its final order, the
Board discussed the evidence supporting McGowan’s evaluation score. The
following is a summary of the Board’s findings: “McGowan did not follow the
work plan that was detailed for him by his supervisors and did not inform them in a
timely manner of the difficulties he encountered in performing his duties. While
McGowan performed some work duties, . . . he did not communicate with his
supervisors so that they would know what he was doing.” R. at 28-29. The Board
further found, “McGowan did not accept either Skidmore or Board as his
supervisor and insisted on doing things the way he had done in the past. He did
not respond to his supervisors and did not meet work deadlines.” R. at 29. Based
on these findings, the Board concluded, the KDA “proved by a preponderance of
the evidence that McGowan failed to meet expectations with respect to these parts
of his evaluation, based on the testimony of Shawn Skidmore and John Board,”
and documentary evidence. R. at 30. The Board, as fact finder, had great latitude
to evaluate the evidence before it, and we will not substitute our judgment for the
Board’s. The Board clearly carefully considered the testimony and documentary
evidence presented, and its final order was based on substantial evidence and was
not arbitrary. Thus, based on the evidence presented, McGowan’s evaluation score
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was supported by substantial evidence, and dismissal was appropriate under 101
KAR 2:180 § 8.
Because we held the circuit court abused its discretion in determining
the Board’s final order was not supported by substantial evidence, we need not
address the KDA’s remaining argument that the circuit court ordered the Board to
act outside the scope of its statutory authority.
For the foregoing reasons, we reverse the order of the Franklin Circuit
Court and remand with instructions to reinstate the final order of the Kentucky
Personnel Board.
ALL CONCUR.
BRIEFS FOR APPELLANT: BRIEF FOR APPELLEE:
Joseph A. Bilby Paul F. Fauri
Nicole T. Liberto Frankfort, Kentucky
Frankfort, Kentucky
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