Martin Michaelson v. Dept. of Employment Security

FILED
APRIL 21, 2015
In the Office of the Clerk of Court
W A State Court of Appeals, Division III
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION THREE
MARTIN L. MICHAELSON, ) No. 33011-7-111
)
Appellant, )
)
v. )
)
EMPLOYMENT SECURITY ) PUBLISHED OPINION
DEPARTMENT, )
)
Respondent. )
BROWN, J. - Martin Michaelson successfully appealed to the Pierce County
Superior Court to review the Employment Security Department's Commissioner'S
decision affirming an order denying him unemployment benefits. We, like the superior
court, review the commissioner's ruling that adopted the findings of fact and conclusions
of law of the administrative law judge (ALJ). First, Mr. Michaelson contends the
commissioner erred in finding his employment was justifiably terminated after he was
involved in three chargeable accidents within a year while driving trucks for Food
Services of America (FSA). Second, he contends the commissioner erred in concluding
his behavior was misconduct disqualifying him from unemployment benefits. Mr.
Michaelson argues he was merely negligent in one accident and not at fault in two
accidents, and thus no misconduct occurred.
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We disagree with Mr. Michaelson's first contention because FSA followed its
progressive discipline policy, but we agree with his second argument. We hold the
commissioner erred in concluding his negligent behavior in the last year of his ten-year
employment was disqualifying misconduct because the record lacks evidence his
behavior was of "such degree or recurrence to show an intentional or substantial
disregard of [FSA's] interest." RCW 50.04.294(1)(d). Accordingly, we, like the superior
court, reverse the commissioner's decision denying unemployment benefits and award
attorney fees to Mr. Michaelson under RCW 50.32.160.
FACTS
Mr. Michaelson was a delivery driver for FSA from August 2003 through March
2013. He received FSA's handbook detailing corporate policy when he was hired. FSA
follows a progressive disciplinary policy where a written warning is issued for the first
chargeable incident, followed by another written warning and suspension for the second
chargeable incident, then termination for the third chargeable incident occurring within a
12-month period. A "chargeable" incident 1 is one where the driver is accountable for the
collision. This policy was designed to protect FSA's interests: three accidents in a 12­
month period led FSA to believe the potential of further accident was greater, which
would cause FSA liability.
First, on May 19,2012, Mr. Michaelson backed into a car. He claimed he
followed FSA's policy of getting out and looking (GOAL) before he began to reverse and
1 "Chargeable" incidents are also referred to as "preventable" incidents by the
parties and the ALJ.
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took other precautions, but he failed to notice a just-parked car behind him too late to
stop and caused over $1,000 in damage. FSA determined this accident was
chargeable and issued Mr. Michaelson a written warning. Second, on August 24,2012,
Mr. Michaelson rolled back into a car after stopping, costing FSA over $1,300 in
damages. He admitted the accident was chargeable and received his second written
warning and a work suspension. Third, on March 12,2013, Mr. Michaelson backed into
a loading dock, bending his bumper. He reported the damage to FSA and bent the
bumper back into place. FSA determined the March 12 incident was chargeable.
FSA discharged Mr. Michaelson, citing his three chargeable accidents within a
12-month period as the reason. FSA believed it had to protect itself from further
damage to property and potential damage to employees and others.
The Employment Security Department (the Department) denied Mr. Michaelson's
claim for unemployment benefits, stating U[d]ue to the potential serious consequences
and/or frequency of [his] preventable accidents, it is determined [his] actions can not
[sic] be deemed simple negligence but rather willful and deliberate misconduct." Clerk's
Papers (CP) at 59. Finding Mr. Michaelson's actions were misconduct, an ALJ and a
Commissioner's Review Judge affirmed the Department's decision.2 Mr. Michaelson
appealed. The Pierce County Superior Court reversed, deciding misconduct was not
established. The Department appealed.
2 The review judge adopted all the ALJ's findings and conclusions. We refer to
them as the commissioner's findings and conclusions.
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ANALYSIS
A. Misconduct
The issue is whether the commissioner erred in deciding Mr. Michaelson's three
accidents constituted misconduct disqualifying him from unemployment benefits.
1. Standard of Review. Washington's Administrative Procedure Act (APA),
chapter 34.05 RCW, governs judicial review of employment benefits decisions. Griffith
v. State Dep't of Emp't Sec., 163 Wn. App. 1,6,259 P.3d 1111 (2011). "The []APA
allows a reviewing court to reverse an administrative decision when, inter alia: (1) the
administrative decision is based on an error of law, (2) the decision is not based on
substantial evidence, or (3) the decision is arbitrary or capricious." Tapper v. Emp't
Sec. Dep't, 122 Wash. 2d 397, 402,858 P.2d 494 (1993) (citing RCW 34.05.570(3».
We, like the superior court, apply APA standards to the administrative record. Id.
We review the commissioner's decision, not the ALJ's decision or the superior court's
ruling. Markam Group, Inc. v. Dep't of Emp't Sec., 148 Wash. App. 555, 560, 200 P.3d
748 (2009). We review the underlying ALJ decision to the extent it is adopted by the
commissioner. Griffith, 163 Wash. App. at 6. We consider the commissioner's decision
prima facie correct. Id. The burden of demonstrating the decision's invalidity is on the
party asserting invalidity. Id. We review the commissioner's fact findings for substantial
evidence in light of the whole record. Smith v. Emp't Sec. Dep't, 155 Wash. App. 24, 32,
226 P.3d 263 (2010). "Substantial evidence is evidence that would persuade a fair-
minded person of the truth or correctness of the matter." Id. at 32-33. We defer to
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factual decisions and view the evidence in the light most favorable to the party who
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prevailed in the highest forum with fact-finding authority; here, this is the Department.
William Dickson Co. v. Puget Sound Air Pollution Control Agency, 81 Wash. App. 403,
411,914 P.2d 750 (1996). As such, we "will not substitute [our] judgment on witnesses'
credibility or the weight to be given conflicting evidence." W Ports Transp., Inc. v.
Emp't Sec. Dep't, 110 Wn. App. 440,449,41 P.3d 510 (2002). "Unchallenged findings
of fact are generally verities on appeal." Griffith, 163 Wash. App. at 6. We review the
commissioner's legal conclusions for legal errors. Id. While we may substitute our view
for the commissioner's, we nonetheless give "substantial weight to the [c]ommissioner's
interpretation due to the agency's special expertise." Id. at 6-7 (internal quotation marks
omitted).
Whether an employee's actions constitute misconduct is generally a mixed
question of fact and law. Markam, 148 Wash. App. at 561. "When reviewing mixed
questions of law and fact, we accept the [c]ommissioner's unchallenged factual findings,
apply the substantial evidence standard to the challenged findings of fact, independently
determine the applicable law, and apply the law to the facts." W. Ports Transp., Inc.,
110 Wash. App. at 450 (stating application of law to facts is de novo). Thus, we determine
if substantial evidence supports the commissioner's factual findings, and if so, if these
facts constitute disqualifying misconduct under the Employment Security Act.
2. Factual Findings. Mr. Michaelson challenges portions of the commissioner's
finding of fact 4 and 8. In finding of fact 4, the commissioner found Mr. Michaelson "was
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involved in a preventable accident" on May 19, 2012. CP at 79. Mr. Michaelson
contends that accident was not his fault. It is undisputed that Mr. Michaelson had to be
aware of his surroundings and use the GOAL method to ensure he safely reversed. In
its post-accident investigation, FSA determined Mr. Michaelson failed to adequately
comply with FSA's safety procedures when he hit a stationary vehicle positioned behind
his vehicle. FSA paid to repair the damaged car. The commissioner gave more weight
to FSA's version of the conflicting testimony; we do not substitute our judgment.
In finding of fact 8, the commissioner found FSA discharged Mr. Michaelson
"from employment for his third preventable accident during a one year period." CP at
79. Mr. Michaelson mainly disputes the description "preventable." However, all three
accidents were preventable. Substantial evidence supports the commissioner's finding
that the first accident was preventable. Mr. Michaelson admitted liability for the second
accident. The third accident was preventable because had he examined the trailer
before lowering it, as was dictated by FSA's policy, he would have noticed the trailer
lowered substantially more than other trailers he drove. Thus, this finding is supported
by substantial evidence.
3. Legal Conclusions. Absent a statutory disqualification, unemployed workers
are generally eligible for benefits. Griffith, 163 Wash. App. at 8. "Construction of the
benefits statute which 'would narrow the coverage of the unemployment compensation
laws' is viewed 'with caution.'" Id. (quoting Shoreline Comm. College Dist. NO.7 v.
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Emp't Sec. Oep't, 120 Wash. 2d 394, 406,842 P.2d 938 (1992)); see also RCW 50.01.010
(stating the Employment Security Act "shall be liberally construed").
An employee is not entitled to unemployment benefits if he is discharged from
employment for misconduct. RCW 50.20.066(1). In relevant part, "misconduct" is
defined as "[c]arelessness or negligence of such degree or recurrence to show an
intentional or substantial disregard of the employer's interest." RCW 50.04.294(1 )(d).
'''Carelessness' and 'negligence' mean failure to exercise the care that a reasonably
prudent person usually exercises." WAC 192-150-205(3). RCW 50.04.294(3) excludes
the following acts from the definition of misconduct:
(a) Inefficiency, unsatisfactory conduct, or failure to perform well as the
result of inability or incapacity;
(b) Inadvertence or ordinary negligence in isolated instances; or
(c) Good faith errors in judgment or discretion.
The parties disagree about whether or not Mr. Michaelson's accidents constituted
misconduct. The Department relies on Markam and Smith. The holding in Markam is
that an employee's inability to perform work, regardless of how many mistakes were
made, is not misconduct. Markam, 148 Wash. App. at 564. Markam is inapplicable, as
neither party argues Mr. Michaelson was unable to perform his job.
In Smith, the court found a county employee engaged in misconduct when he
recorded his conversations with members of the public without the public's knowledge
and consent because this potentially damaged the county's reputation. Smith, 155 Wn.
App. at 36. The Smith court determined the commissioner's conclusion deciding the
employee's conduct disregarded the county's interest because it exposed the county to
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litigation and liability, as well as impacted citizens' willingness to discuss issues, was not
arbitrary or capricious. Id. at 36-37.
Similar to Smith, Mr. Michaelson disregarded FSA's interests by exposing FSA to
litigation and liability. But the employee's actions in Smith were not ordinary negligence;
the Smith court found the employee "intentionally performed an act in willful disregard
for its probable consequences." Smith, 155 Wash. App. at 37. Mr. Michaelson had three
chargeable accidents in the last year of his employment and just one in the nine
previous years. At most Mr. Michaelson failed to exercise ordinary negligence, the care
a reasonably prudent person would have exercised in similar circumstances. The
record lacks evidence to support a conclusion that Mr. Michaelson's carelessness or
negligence was of "such degree or recurrence to show an intentional or substantial
disregard of [FSA's] interest." RCW 50.04.294(1 )(d). Nothing indicates Mr.
Michaelson's behavior was willful, reckless, or even grossly negligent. Although Mr.
Michaelson's carelessness or negligence in the last year of his employment justified his
discharge according to FSA policy, considering his long, generally good driving record,
we cannot say his chargeable accidents evidence the necessary misconduct to
disqualify him from receiving unemployment benefits.
B. Attorney Fees.
Mr. Michaelson requests reasonable attorney fees pursuant to RCW 50.32.160,
RCW 50.32.100, and RCW 4.84.010. RCW 4.84.010(6) allows a prevailing party to
recover statutory attorney fees. Under RCW 50.32.160, unemployment benefits
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claimants are entitled to reasonable attorney fees and costs if the decision of the
commissioner is reversed or modified on appeal. "The purpose of [RCW 50.32.160],
when read with RCW 50.32.100 and RCW 50.32.110, is to provide for regulation of
attorney fees incurred in relation to administrative or court proceedings." In re Griswold,
102 Wash. App. 29, 46-47,15 P.3d 153 (2000) (internal quotation marks omitted).
Because he prevails here, Mr. Michaelson is entitled to attorney fees and costs on
appeal under RCW 50.32.160, assuming compliance with RAP 18.1 (d).
Reversed.
I CONCUR:
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33011-7-III
FEARING, J. -(concurring) I concur. Three negligences do not make a
misconduct.
I CONCUR: