Lightning Energy Services, LLC v. Board of Review, Workforce West Virginia

STATE OF WEST VIRGINIA
SUPREME COURT OF APPEALS
FILED
LIGHTNING ENERGY SERVICES, LLC,
Petitioner Below, Petitioner October 2, 2014
released at 3:00 p.m.
RORY L. PERRY II, CLERK
vs.) No. 13-1242 (Kanawha County No. 13-AA-77) SUPREME COURT OF APPEALS
OF WEST VIRGINIA
BOARD OF REVIEW, WORKFORCE WEST VIRGINIA,
RUSSELL L. FRY, AS COMMISSIONER AND/OR
ACTING EXECUTIVE DIRECTOR OF WORKFORCE
WEST VIRGINIA, JACK CANFIELD, AS CHAIRMAN OF
THE BOARD OF REVIEW, WORKFORCE WEST VIRGINIA,
AND AARON S. Horne,
Respondents Below, Respondents
MEMORANDUM DECISION
Petitioner, Lightning Energy Services, LLC (“Lightning”), by counsel Amy M.
Smith, appeals the November 6, 2013, order of the Circuit Court of Kanawha County that
affirmed the final decision of the Board of Review of WorkForce West Virginia awarding
unemployment compensation to Mr. Aaron Shane Horne (“Mr. Horne”). Mr. Horne, by
counsel Gregory H. Schillace, filed a timely response.
This Court has considered the parties’ briefs, the record on appeal, and oral
argument. Upon consideration of the standard of review, the briefs, the record presented, and
oral argument, the Court finds that the decision of the Circuit Court of Kanawha County
deprived Lightning of “a fair hearing and reasonable opportunity to be heard before an appeal
tribunal.” Syl. pt. 2, in part, Parks v. Board of Review of W. Va. Dep’t of Emp’t Sec., 188 W.
Va. 447, 425 S.E.2d 123 (1992). This case satisfies the “limited circumstances” requirement
of Rule 21(d) of the Rules of Appellate Procedure and is appropriate for a memorandum
decision rather than an opinion.
On January 20, 2013, Mr. Horne filed a claim for unemployment compensation
benefits. Accordingly, WorkForce West Virginia requested that Lightning, as Mr. Horne’s
last employer, complete a “Request for Separation Information” form to provide information
pertaining to Mr. Horne’s separation from its employ. On the form, a box was checked to
indicate that Mr. Horne had been discharged from his employment. In the space provided
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on the form for the employer to describe the “last incident that led to the discharge,”
Lightning stated:
Person was Chief Operating Officer of company, reporting
directly to Board of Directors, refused to communicate or
answer phone calls of chairman over weekend of 1/11-13/2013,
nor did he return urgent calls from Board members or chairman.
Horne did not show up for work nor contact anyone regarding
his absence. Horne abandoned his position on 1/14/2013.
Horne did not take or make phone calls to chairman of the
board. His desk was cleared and all personal effects were
removed from office sometime between close of business
1/11/13 – and 7:30 am January 14 (1/14/13).
It is our position Horne voluntarily left his position on
1/14/2013, official paperwork was completed 1/15/2013 stating
he was discharged.
Mr. Horne was interviewed by WorkForce West Virginia on January 23, 2013,
and stated:
I was discharged from this employment by Tracy Turner,
Chairman of the Board because I did not return a call to Tracy.
I was out of service and working in the field. I spoke with Tracy
the very next morning but it was not timely enough for him.
This was the final incident that caused the discharge.
On January 30, 2013, WorkForce West Virginia issued its “Deputy’s Decision”
concluding that “claimant [Mr. Horne] is determined to have quit when he failed to show up
for work on January 14, 2013 and failed to contact the employer. The claimant’s office had
been cleaned and all personal effect [sic] were removed during the weekend.” Accordingly,
the deputy ruled that Mr. Horne was disqualified from receiving unemployment benefits at
this time because he “failed to provide this office with proof that the separation involved fault
on the part of the employer.” Mr. Horne requested an appeal of the deputy’s decision.
Notice of Mr. Horne’s requested appeal was issued by WorkForce West
Virginia. The notice specified that the appeal hearing before the Administrative Law Judge
(“ALJ”) was to be held by teleconference on March 15, 2013, at 1:00 p.m. The notice set out
the issue to be addressed during the telephonic hearing as follows: “[w]hether the claimant
left work voluntarily without good cause involving fault on the part of the employer; or
whether the claimant was discharged for misconduct, and if there was misconduct, was it
simple or gross misconduct?”
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During the hearing, Mr. Horne testified that he was terminated on January 15,
2013, and was paid his outstanding wages within seventy-two hours. He denied that he
failed to return phone calls as Lightning had alleged. Mr. Horne admitted that he had cleaned
out his office during the weekend prior to his firing. He explained that he had heard rumors
of his impending firing and did not want to suffer the embarrassment of cleaning out his
office after he had been discharged. Mr. Horne denied that he quit or abandoned his job.
Mr. Michael Iuliucci, Lightning’s Chief Financial Officer, testified on behalf
of Lightning. Mr. Iuliucci stated his belief that Mr. Horne had abandoned his job, and further
testified that “[w]hen Mr. Horne came in at nine o’clock on Tuesday, the 15th, he was let
known [sic] it was official he is no longer an employee of Lightning Energy because of his
actions.” Toward the end of Mr. Iuliucci’s testimony, the ALJ asked if there was anything
further Mr. Iuliucci wanted to say. Mr. Iuliucci stated that Mr. Horne had been charged with
embezzling $16,000 from the company. The following exchange was then had between the
ALJ and Mr. Iuliucci:
[Iuliucci] We have proof, checks signed by Mr. Horne
from–
[ALJ] Don’t tell me what proof you have unless you intend to
present it to me today.
[Iuliucci] I can fax it over to you –
[ALJ] Nope, nope. If you looked at your Notice of Hearing, all
written evidence must have been submitted more than 24 hours
before today’s hearing –
[Iuliucci] Okay.
[ALJ] – and provided – you’re not going to do it now. What
proof do you have other than an allegation you’ve made that he
is guilty of any crime?
[Iuliucci] I have plenty of proof, Your Honor. I have
nothing I can – that you have in front of you.
[ALJ] Well, I don’t have it; I don’t consider it. Is there
anything else you want to tell me?
[Iuliucci] No sir.
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Following the telephonic hearing, the ALJ issued his decision on March 22,
2013, reversing the decision of the deputy and ruling that Mr. Horne was not disqualified
from receiving unemployment benefits based upon the fact that, although he had been
discharged, his discharge was not for misconduct. The ALJ found that Mr. Horne had been
terminated, ostensibly for failing to return a call to his superior, and for alleged acts of
embezzlement. Due to the failure of the employer to provide proof of the allegations of
embezzlement at the hearing, however, the ALJ found that there was no evidence to establish
that Mr. Horne was guilty of embezzlement. Consequently, the ALJ concluded that,
[t]he employer discharged this claimant. Therefore, the
employer has the burden of establishing by a preponderance of
the evidence that the claimant was guilty of misconduct . . . in
order that the claimant be disqualified from receiving
unemployment compensation benefits. The employer has failed
to meet its burden of proof. Allegations of misconduct are not
proof of misconduct. The claimant cannot be disqualified on the
evidence presented.
....
The decision of the deputy is reversed. The claimant was
discharged but not for misconduct. The claimant is not
disqualified.
Lightning appealed the ALJ’s decision to the WorkForce West Virginia Board
of Review (“Board of Review”). Lightning also submitted a separate request to the Board
of Review seeking remand to the ALJ to present evidence pertaining to Mr. Horne’s alleged
embezzlement. Following a hearing, the Board of Review rendered its decision on May 21,
2013, stating that “[t]he Board of Review, having reviewed all documents in this matter,
finds the Administrative Law Judge has made a proper ruling and adopts the finding of the
Judge, by reference in its entirety.”
Lightning then appealed the Board of Review decision to the Circuit Court of
Kanawha County. The circuit court affirmed the decision of the Board of Review. Lightning
now appeals the circuit court’s order to this Court.
The findings of fact of the Board of Review of the West
Virginia Department of Employment Security are entitled to
substantial deference unless a reviewing court believes the
findings are clearly wrong. If the question on review is one
purely of law, no deference is given and the standard of judicial
review by the court is de novo.
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Syl. pt. 3, Adkins v. Gatson, 192 W. Va. 561, 453 S.E.2d 395 (1994). This Court has further
recognized that “[u]nemployment compensation statutes, being remedial in nature, should
be liberally construed to achieve the benign purposes intended to the full extent thereof.”
Syl. pt. 6, Davis v. Hix, 140 W. Va. 398, 84 S.E.2d 404 (1954). Accord Syl. pt. 2, Smittle
v. Gatson, 195 W. Va. 416, 465 S.E.2d 873 (1995).
Although Lightning raises numerous errors,1 we find merit in only one:
Lightning should have been permitted to present additional evidence of Mr. Horne’s
embezzlement because the ALJ erred in refusing to allow it to argue embezzlement during
the teleconference hearing. Lightning complains that the Board of Review has not
established rules of procedure for conducting hearings by teleconference even though the
Board of Review is mandated to create rules for conducting appeals to it pursuant to W. Va.
Code § 21A-7-13. Lightning asserts that this Court criticized the lack of procedural rules for
telephonic hearings in Parks v. Board of Review of West Virginia Department of Employment
Security, 188 W. Va. 447, 450, 425 S.E.2d 123, 126 (1992). Lightning contends that, in
apparent response to Parks, only one general rule pertaining to telephonic hearings has been
promulgated. That rule states:
Telephonic Hearings.-- The Board, in its discretion, may
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Other errors asserted by Lightning are that Mr. Horne should be disqualified
from receiving unemployment compensation benefits because he voluntarily left his
employment without good cause; the Board of Review erred by refusing to consider its
alternative defenses (i.e. that Mr. Horne either voluntarily quit or abandoned his job without
good cause as an alternative to its assertion that Mr. Horne was discharged for gross
misconduct); the Board of Review erred by considering Lightning Energy’s payment of
wages to Mr. Horne within seventy-two hours of separation from employment as evidence
of discharge; the Board of Review improperly placed the burden on Lightning to prove that
Mr. Horne was guilty of misconduct; and the Board of Review and the circuit court failed
to adequately review the administrative record as demonstrated by the fact that they failed
to mention in their respective orders irrelevant information pertaining to an unrelated case
that was inadvertently included in the record. Based upon our review of the record, there was
sufficient evidence that Mr. Horne was discharged and, affording proper deference to this
factual determination of the Board of Review, that decision must stand. Furthermore, while
the Board of Review observed that Lightning Energy paid wages to Mr. Horne within
seventy-two hours of his separation from employment, we find there was sufficient evidence
of discharge without consideration of this fact. Because we determine the finding of
discharge was supported by the evidence, the burden of proof was properly on Lightning to
present evidence of misconduct. See 84 C.S.R. 1 § 6.7.4. Finally, the failure of an appellate
body to mention irrelevant information pertaining to an unrelated case in its decisional order
is not evidence of a failure to adequately review the record.
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schedule appeal tribunal hearings telephonically. Any party has
a right to an in-person hearing. In a case where a party is not a
resident of the State of West Virginia and does not have an
office or business location in the State of West Virginia, the
Board may permit that party to appear telephonically.
84 CSR 1 § 6.2. Lightning concedes that when the ALJ refused to allow the embezzlement
evidence he referenced the notice of hearing and the requirement that all evidence was to be
submitted more than twenty-four hours before the hearing. Lightning states that, while the
notice of hearing contains a reference to enclosed instructions, no instructions are included
in the record. Accordingly, Lightning contends that the matter should have been remanded
to the ALJ to permit it to present evidence of Mr. Horne’s embezzlement. We agree.
This Court has previously held that,
[t]he Legislature, in apparent recognition that a deputy
commissioner may rule on an unemployment compensation
claim without conducting an initial hearing, has provided a
statutory right to a hearing of an appeal from the deputy’s
decision. W. Va. Code, 21A-7-8 (1978), grants to either party
the right to an appeal from a deputy’s ruling and provides that
such party shall be entitled to a fair hearing and reasonable
opportunity to be heard before an appeal tribunal.
Syl. pt. 2, Parks v. Board of Review of W. Va. Dep’t of Emp’t Sec., 188 W. Va. 447, 425
S.E.2d 123 (emphasis added). In the instant case, Lightning was prepared to fax relevant
documents pertaining to its allegation of embezzlement to the ALJ during the course of the
hearing. The ALJ refused to accept documents by fax and further refused to entertain any
discussion pertaining to the information contained in those documents. In refusing to allow
Lightning to present evidence or testimony, the ALJ referred to Lightning’s failure to comply
with purported instructions contained in the hearing notice that required all documentation
to be submitted to the ALJ more than twenty-four hours prior to the telephonic hearing. Our
examination of the record, however, has revealed that no copy of the purported instructions
is contained therein. There also is nothing contained in the record to indicate that Lightning
received notification that it was required to submit its documentation pertaining to this matter
more than twenty-four hours prior to the telephonic hearing. Moreover, other than a single
rule that makes telephonic hearings optional, we find that “[d]espite its authority to establish
procedural regulations, the Board has not seen fit to promulgate such regulations with regard
to telephonic appeal hearings. Nor have rules for telephonic appeal hearings been issued
under the Commissioner’s rule-making authority contained in W. Va. Code, 21A-7-1
(1936).” Parks, 188 W. Va. at 450, 425 S.E.2d at 126 (footnotes omitted). See also W. Va.
Code § 21A-7-13 (1939) (directing, in part, that the Board of Review “shall establish, and
may from time to time modify and amend, rules and regulations for: (1) The conduct and
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determination of benefit cases appealed to it, or to an appeal tribunal; (2) The form of all
papers and records thereof; (3) The time, place, and manner of hearings . . . .”). In the
absence of a formally adopted rule or some evidence in the record before us that Lightning
received prior written notice that it was required to submit documentary evidence more than
twenty-four hours in advance of the telephonic hearing, we find Lightning was deprived of
“a fair hearing and reasonable opportunity to be heard before an appeal tribunal” on the issue
of whether Mr. Horne had committed embezzlement and whether the alleged embezzlement
was a ground for his discharge. Syl. pt. 2, in part, Parks 188 W. Va. 447, 425 S.E.2d 123.
Accordingly, we reverse the order of the Circuit Court of Kanawha County and remand this
case to the ALJ for the presentation of evidence pertaining to Mr. Horne’s alleged acts of
embezzlement.
Reversed and Remanded.
ISSUED: October 2, 2014
CONCURRED IN BY:
Justice Brent D. Benjamin
Justice Margaret L. Workman
Justice Menis E. Ketchum
Justice Allen H. Loughry II
DISSENTING:
Chief Justice Robin Jean Davis
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No. 13-1242 - Lightning Energy Services, LLC v. Board of Review, WorkForce West
Virginia, Russell L. Fry, as Commissioner And/or Acting Executive
Director of WorkForce West Virginia, Jack Canfield, as Chairman of
the Board of Review, WorkForce West Virginia, And Aaron S. Horne
Davis, Chief Justice, dissenting:
I would not remand this case for the employer to have a second bite at the
appellate apple. Therefore, I respectfully dissent. The employer, Lightning, received a
“Notice of Telephonic Hearing” from the Board of Review. Stated in all caps and in bold
text on this notice was the following instruction: “IMPORTANT SINCE THIS APPEAL
HEARING WILL BE CONDUCTED BY TELEPHONE, BE SURE TO READ THE
ENCLOSED INSTRUCTIONS.” The comments made by the ALJ during the course of the
telephonic hearing reveal that these instructions, in part, directed Lightning to submit
documentation relevant to the appeal more than twenty-four hours prior to the telephonic
hearing. Although the instructions themselves were not included in the record, it is important
to note that at no point during these proceedings, either before this Court or below, has
Lightning denied that it received the instructions or indicated that it was unaware of the
requirement. Instead, Lightning merely points out that no copy of the instructions is
contained in the record.
Lightning failed to properly submit its documentary evidence to the ALJ and
now seeks the opportunity to present such evidence after-the-fact. According to the rules
promulgated by the Board of Review:
Motions to present additional evidence will not be granted upon
appeal to the Board except for good cause shown. To establish
good cause, a party must demonstrate that the evidence was not
available prior to the appeal tribunal hearing or that he or she
did not know, nor reasonably could have known, of the evidence
in question at that time. . . .
84 CSR 1 § 5.8. Lightning has failed to meet this standard and, therefore, it should not be
allowed to present additional evidence that it failed to properly submit to the ALJ in the first
instance. For this reason, I would affirm.
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