Hohenstein v. State, Emp't Sec. Div. , 2015 NV 17 ( 2015 )

131 Nev., Advance Opinion l el
IN THE SUPREME COURT OF THE STATE OF NEVADA
CLINTON HOHENSTEIN, No. 58519
Appellant,
vs.
NEVADA EMPLOYMENT SECURITY
DIVISION, STATE OF NEVADA; FILED
CYNTHIA JONES, IN HER CAPACITY
AS ADMINISTRATOR OF THE APR 0 2 2015
NEVADA EMPLOYMENT SECURITY .CIE K. LINDE
CL F .54-LiP2EME UFIT
DIVISION; KATIE JOHNSON, IN HER BY
CAPACITY AS CHAIRWOMAN OF THE
NEVADA EMPLOYMENT SECURITY
DIVISION BOARD OF REVIEW; AND
THE WASHOE COUNTY SCHOOL
DISTRICT AS THE EMPLOYER,
Respondents.
Appeal from a district court order denying judicial review of
an administrative decision denying unemployment benefits. Second
Judicial District Court, Washoe County; Robert H. Perry, Judge.
Reversed and remanded with instructions.
Lemons, Grundy & Eisenberg and Caryn S. Tijsseling, Reno; Lewis Roca
Rothgerber LLP and Darren J. Lemieux, Reno,
for Appellant.
J. Thomas Susich, Senior Legal Counsel, Nevada Employment Security
Division, Sparks,
for Respondents Nevada Employment Security Division, Cynthia Jones,
and Katie Johnson.
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Office of General Counsel, Washoe County School District, and
Christopher B. Reich, Randy A. Drake, and Sara K. Almo, Reno,
for Respondent Washoe County School District.
BEFORE PARRAGUIRRE, SAITTA and PICKERING, JJ.
OPINION
By the Court, PICKERING, J.:
NRS 453.3363 affords certain first-time drug offenders the
opportunity to avoid a criminal conviction if the offender pleads guilty,
then successfully completes a probationary period. Upon successfully
completing probation, the offender is discharged and the charges are
dismissed. Addressing the civil consequences of such a plea to the
offender who successfully completes probation, NRS 453.3363(4) provides:
IDlischarge and dismissal under this [statute] is without adjudication of
guilt and is not a conviction for purposes. . . of employment, civil rights or
any statute or regulation or license or questionnaire or for any other
public or private purpose." We must decide how this statute applies to a
public school teacher who was terminated after pleading guilty but before
completing probation, specifically, whether a guilty plea pursuant to NRS
453.3363 may be used to deny unemployment benefits to the terminated
teacher in this circumstance. We hold that the guilty plea may not be
used as the basis for denying unemployment benefits, and therefore
reverse and remand.
I.
Appellant Clinton Hohenstein, then a teacher for the
respondent Washoe County School District (WCSD), was arrested for and
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pleaded guilty to possessing marijuana in his residence in violation of NRS
453.336. Because this was his first offense, the district court did not enter
a judgment of conviction Instead, it suspended Hohenstein's sentence
and placed him on probation for a period not to exceed 3 years. Per
NRS 453.3363(1), if Hohenstein fulfilled the conditions of probation, the
criminal proceedings would be dismissed in accordance with
NRS 453.3363(3).
On learning of Hohenstein's arrest the WCSD suspended him
and began termination proceedings, during which Hohenstein entered his
guilty plea. The WCSD specified its final grounds for terminating
Hohenstein, consistent with NRS 391.31297, 1 as: (1) immorality, (2)
conviction of a felony or of a crime involving moral turpitude, and (3) any
cause which constitutes grounds for revocation of a teaching license.
Hohenstein sought unemployment benefits. After a hearing,
the Employment Security Division (ESD) denied Hohenstein benefits on
finding that his guilty plea established that the WCSD had terminated
Hohenstein for "workplace misconduct," to wit: he had committed immoral
conduct under NRS 391.31297(1)(b), which disqualified him from
eligibility for unemployment benefits under NRS 612.385. Hohenstein
filed an unsuccessful petition for judicial review, followed by this appeal.
An ESD appeals referee "shall inquire into and develop all
facts bearing on the issues and shall receive and consider evidence without
1 NRS 391.31297 was numbered NRS 391.312 at the time the WCSD
terminated Hohenstein, but the statute has remained substantively the
same for purposes of this appeal. 2013 Nev. Stat., ch. 506, § 36.
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regard to statutory and common-law rules." NRS 612.500(2). At first
blush, this standard appears to sanctify the ESD's reliance on
Hohenstein's guilty plea as a basis for denying him unemployment
benefits. See also Taylor v. Thunder, 116 Nev. 968, 973, 13 P.3d 43, 45-46
(2000) ("[E]vidence of a guilty plea or offer to plead guilty from a prior
criminal proceeding is admissible in a subsequent civil proceeding, subject
to NRS 48.035(1)."). But upon entry of Hohenstein's guilty plea the
district court immediately suspended his criminal proceedings in order to
afford Hohenstein the opportunity to successfully complete his
probationary period and avoid entry of a final judgment of conviction, per
NRS 453.3363. Thus, the guilty plea, along with the district court's order,
effectively placed Hohenstein's criminal proceedings on hold and brought
his case within NRS 453.3363's specific directives.
Among those directives is NHS 453.3363(4), which reads in
pertinent part as follows:
Except as otherwise provided in subsection 5, 121
discharge and dismissal under this section is
without adjudication of guilt and is not a
conviction for purposes of this section or for
purposes of employment, civil rights or any statute
or regulation or license or questionnaire or for any
other public or private purpose, but is a conviction
for the purpose of additional penalties imposed for
second or subsequent convictions or the setting of
bail. Discharge and dismissal restores the person
2 NRS 453.3363(5) allows a professional licensing board to consider a
proceeding under the statute when "determining suitability for a license or
liability to discipline for misconduct." The WCSD does not argue that
NRS 453.3363(5) applies to this matter.
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discharged, in the contemplation of the law, to the
status occupied before the arrest, indictment or
information.
(Emphasis added.) When the ESD denied Hohenstein unemployment
benefits he was midway through his 3-year probationary period, so
"dismissal and discharge" of the criminal case had yet to occur. The
question is whether, given this statute, the ESD properly used
Hohen stein's conditional guilty plea as the basis for denying him
unemployment benefits.
A similar issue confronted the Maryland Court of Special
Appeals in Tate v. Board of Education of Kent County, 485 A.2d 688 (Md.
Ct. Spec. App. 1985). At issue in Tate was former Maryland Code, Article
27, § 292 (1987), on which statute the Uniform Law Commission drew in
crafting § 414 of the 1990 Uniform Controlled Substances Act (UCSA), on
which NRS 453.3363 in turn is modeled. 3 Like NRS 453.3363, section 292
3 The Nevada Legislature included the exact dismissal and discharge
language contained in the uniform law, save an irrelevant (to this appeal)
exception for professional licensing boards. A.B. 222, 66th Leg. (Nev.
1991); 1991 Nev. Stat., ch. 523, § 12, at 1647; UCSA § 414(c), 9 U.L.A. 838
(1990). The commentary to § 414 states that in addition to providing a
discretionary alternative to incarceration, the section "provides for
confidentiality of the defendant's record upon fulfilling all the terms and
conditions of probation This will preclude any permanent criminal record
from attaching to and following the individual in later life." UCSA § 414
cmt., 9 U.L.A. 838 (1990); see also State v. Alston, 362 A.2d 545, 547-48
(N.J. 1976) (recognizing a purpose behind allowing the court to dismiss
proceedings for first-time drug offenders is to allow that offender to avoid
the stigma of criminal conviction). The commentary then goes on to note
that the discharge and dismissal language is based on former Maryland
Code, Article 27, § 292 (1987). UCSA § 414 cmt., 9 U.L.A. 838 (1990).
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provided that an arrest or conviction expunged under the Maryland
statute could not "thereafter be regarded as an arrest or conviction for
purposes of employment, civil rights, or any statute or regulation or
license or questionnaire or any other public or private purpose." Md.
Code, Art. 27, § 292(b)(5) (1987). Tate addressed whether, consistent with
§ 292, a school board could terminate a teacher who had pleaded guilty to
possession of marijuana and drug paraphernalia but was in the process of
completing her probationary period. 485 A.2d at 689-90. The trial court
had held that the teacher's guilty pleas established her guilt, validating
the termination. Id. at 689. The court of appeals reversed. Id. at 691. To
read § 292 otherwise, the court reasoned, would
... deprive [1 the statute of effect during the
probationary period. The circuit court's ruling, if
allowed to stand, means that § 292(b) would be
effective only upon the satisfactory completion of
probation, and that during the probationary
period the probationer would be totally denied the
protection of the statute. The result of the trial
court's ruling is that in the instant case, had the
disciplinary proceeding before the County Board
not been instituted until after Tate satisfactorily
completed the 18 months['] probation, the pleas of
guilty could not have been used against her. On
the other hand, when, as here, proceedings are
initiated during the period of probation, § 292(b)
would not prevent the guilty pleas f1 being used as
evidence.
Id. at 689-90.
Section 292's "obvious goal" was "to afford a degree of
protection to first offenders in certain controlled dangerous substance
cases." Id. at 690. Because the statute mandated that an offender who
completes his or her probationary period "shall not" have a criminal record
and that an expunged arrest "cannot be taken into account insofar as
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employment, civil rights or licensing are concerned," the court concluded
that § 292 did not permit dismissing the teacher based upon her guilty
pleas, despite the fact that she had yet to complete her probationary
period. Id. Of note, the court did hold that the teacher's testimony before
the county school board regarding her alleged misconduct, apart from her
arrest and plea, could be considered in the dismissal proceedings as proof
of the conduct underlying the pleas. Id. at 690-91.
Tate predated the 1990 UCSA, which, as noted, drew upon
§ 292 in crafting the uniform law provision that Nevada adopted as
NRS 453.3363. Ordinarily, "a statute adopted from another jurisdiction
will be presumed to have been adopted with the construction placed upon
it by the courts of that jurisdiction before its adoption." Ybarra v. State,
97 Nev. 247, 249, 628 P.2d 297, 298 (1981). We see no reason why this
rule would not equally apply in the uniform law context, where the state
law upon which a uniform law is based has been interpreted by that
state's courts before the uniform law's creation. See also NRS 453.013
(mandating that the Nevada UCSA "shall be so applied and construed as
to effectuate its general purpose and to make uniform the law with respect
to the subject of such sections among those states which enact it").
Nothing in the legislative history of NRS 453.3363 suggests that the
Legislature intended to depart from the UCSA, or the Maryland precedent
on which it was based, on this issue. And though the Tate court
determined that the guilty pleas could not be used to justify the teacher's
dismissal, the same reasoning would apply here to preclude the use of a
guilty plea to justify disqualification from unemployment compensation,
given that the discharge and dismissal provision prohibits treating the
discharge and dismissal as a conviction "for purposes of employment .. . or
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for any other public or private purpose." NRS 453.3363(4). We therefore
adopt the reasoning and interpretation offered in Tate and hold that, since
NRS 453.3363(4) forestalls a final judgment of conviction "for purposes of
employment, civil rights or any statute or regulation or license or
questionnaire or for any other public or private purpose" if the offender
successfully completes probation, the guilty plea may not be used to
establish misconduct-based grounds for termination for purposes of
denying unemployment compensation during the probationary period.
Here, the WCSD relied on Hohenstein's guilty plea as grounds
both for terminating him and for establishing that his termination was
misconduct-based, making him ineligible for unemployment compensation.
In the WCSD's first notice of intent to dismiss Hohenstein, which was
issued after his arrest but prior to his guilty plea, the deputy
superintendent recommended that Hohenstein be discharged for various
reasons, including immorality, unprofessional conduct, insubordination,
failure to comply with such reasonable requirements as a board may
proscribe, any cause which constitutes grounds for the revocation of a
teacher's license, willful neglect or failure to observe and carry out the
requirements of this title, and dishonesty. But once Hohenstein entered
his NRS 453.3363 plea, the WCSD issued an amended notice of intent
informing Hohenstein that "[i]n as much as [sic] you were convicted of
Possession of a Controlled Substance in violation of NRS 453.336," it was
adding immorality, conviction of a felony or crime involving moral
turpitude, and any cause which constitutes grounds for revocation of a
teacher's license to the reasons warranting his dismissal. Throughout the
ESD proceedings the WCSD likewise maintained that it was Hohenstein's
"conviction" that led to and warranted his discharge, and thus also
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disqualified him from receiving unemployment benefits under NRS
612.385. A WCSD human resources specialist who testified at the
administrative hearing—who had no personal knowledge other than from
reviewing Hohenstein's termination paperwork and was the only witness
to testify on the WCSD's behalf—informed the appeals referee that
Hohenstein "was discharged for pleading guilty to a felony" because that
plea resulted in a "conviction [for] the possession of [the] illegal
substance ... marijuana." The WCSD representative further explained
that an elementary level teacher typically would be terminated for such a
conviction, that a felony conviction also would be considered grounds for
revoking a teaching license, and that Hohenstein's offense supported the
three termination grounds provided in the amended notice of intent to
dismiss
The WCSD thus equated Hohenstein's guilty plea with a
felony conviction and persuaded the ESD that Hohenstein's termination
was felony-based. The ESD appeals referee seemingly attempted to
correct the WCSD's error by noting in his findings that Hohenstein
"confessed to the act in the [administrative] hearing," which, along with
his guilty plea, demonstrated that he committed acts that warranted his
dismissal. But the "act" discussed in the transcript was possession of one
or more marijuana plants (the amount is unclear) by Hohenstein in his
home for personal medical use. And while such conduct, if indeed
Hohenstein's testimony established it, might establish a basis to disqualify
him from unemployment benefits, whether it did or not was not argued,
since the WCSD, which carried thefl burden to prove Hohenstein was
terminated for misconduct connected with his work, focused on the felony
label attached to the acts, not the acts themselves. Clark Cnty. Sch. Dist.
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v. Bundley, 122 Nev. 1440, 1447-48, 148 P.3d 750, 755-56 (2006) (employer
bears burden to prove disqualifying misconduct); see also id. at 1446, 148
P.3d at 755 ("[Aln employee's termination, even if based on misconduct,
does not necessarily require disqualification under the unemployment
compensation law."); Clevenger v. Nev. Emp't Sec. Dept., 105 Nev. 145,
150, 770 P.2d 866, 868 (1989) ("There are numerous cases where an
employee's misconduct is sufficient ground for termination, but does not
justify the denial of unemployment benefits because the misconduct was
not shown to be connected with his or her work."). Since NRS 453.3363(4)
prohibited the WCSD from using Hohenstein's guilty plea to establish
misconduct, the ESD's finding that the WCSD terminated Hohenstein for
misconduct connected with his work—conviction of a felony—lacks
substantial evidentiary support. Kolnik v. Nev. Emp't Sec. Dep't, 112 Nev.
11, 16, 908 P.2d 726, 729 (1996).
This court deferentially reviews the ESD's factual findings,
especially misconduct findings under NRS 612.385. Kolnik, 112 Nev. at
16, 908 P.2d at 729; Garman v. State Emp't Sec. Dep't, 102 Nev. 563, 565,
729 P.2d 1335, 1336 (1986). Even so, we cannot uphold a decision denying
unemployment benefits for workplace misconduct where the employer
relied on a felony conviction that didn't exist to establish the predicate
finding. It may be, on remand, that the WCSD can establish a sufficient
factual and legal basis to sustain the ESD's denial of benefits but the
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record does not support such a finding on this appeal. We therefore
reverse the district court's order denying judicial review and remand with
instructions that the district court remand to the ESD to determine,
without considering Hohenstein's guilty plea, whether the WCSD met its
burden to demonstrate that Hohenstein committed disqualifying
misconduct under NRS 612.385 for which he was terminated.
, J.
We concur:
J.
11).Char tn:
Parraguirre
\• )/!
Saitta
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