### FILED APRIL21, 2015 In the Office ofthe ClerkofCourt W AStateCourtofAppeals, Division III

IN THE COURT OF APPEALS OFTHE STATE OFWASHINGTON 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 Courtto reviewthe Employment Security Department's Commissioner'S decision affirming an orderdenying him unemployment benefits. We, like the superior court, review the commissioner's ruling that adopted the findings offact and conclusions of law ofthe administrative lawjudge (ALJ). First, Mr. Michaelson contends the commissionererred in finding his employmentwasjustifiablyterminated after he was involved in three chargeable accidentswithin a yearwhile driving trucks for Food Services ofAmerica (FSA). Second, he contends the commissionererred in concluding his behaviorwas misconductdisqualifying him from unemployment benefits. Mr. Michaelson argues hewas merely negligent in one accident and notatfault in two accidents, and thus no misconduct occurred.No. 33011-7-111 Michaelson v. Emp'tSec. Dep't
We disagreewith Mr. Michaelson'sfirst contention because FSAfollowed 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 employmentwas disqualifying misconduct becausethe record lacks evidence his behaviorwas 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 driverfor FSAfrom August 2003 through March 2013. He received FSA's handbookdetailing corporate policywhen hewas hired. FSA follows a progressive disciplinary policy where a written warning is issued forthe first chargeable incident, followed by anotherwritten warning and suspension for the second chargeable incident, then termination for the third chargeable incident occurring within a 12-month period. A "chargeable" incident1 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 FSAto believe the potential offurther accidentwas greater, which would cause FSA liability. First, on May 19,2012, Mr. Michaelson backed into a car. He claimed he followed FSA's policy ofgetting 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. 2

# I



# I I No. 33011-7-111 Michaelson v. Emp't Sec. Oep't 

# I I took other precautions, but he failed to notice ajust-parked car behind him too late to stop and caused over$1,000 in damage. FSA determined this accidentwas chargeable and issued Mr. Michaelson a written warning. Second, on August 24,2012, Mr. Michaelson rolled back into a car afterstopping, costing FSA over$1,300 in damages. He admitted the accidentwas chargeable and received his second written warning and awork suspension. Third, on March 12,2013, Mr. Michaelson backed into
a loading dock, bending his bumper. He reported the damage to FSA and bentthe bumper back into place. FSA determined the March 12 incidentwas chargeable. FSA discharged Mr. Michaelson, citing his three chargeable accidents within a 12-month period as the reason. FSA believed it had to protect itselffrom further damage to property and potential damageto 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/orfrequency of [his] preventable accidents, it is determined [his] actions can not [sic] be deemed simple negligence but ratherwillful 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 misconductwas not established. The Department appealed.

2 The reviewjudge adopted all the ALJ's findings and conclusions. We referto them asthe commissioner's findings and conclusions. 

### 3No. 33011-7-111 Michaelson v. Emp't Sec. Dep't
ANALYSIS A. Misconduct The issue is whetherthe commissionererred in deciding Mr. Michaelson'sthree accidents constituted misconduct disqualifying him from unemployment benefits. 1. Standard of Review. Washington's Administrative ProcedureAct (APA), chapter 34.05 RCW, governsjudicial review ofemployment benefits decisions. Griffith
v. State Dep'tofEmp't Sec., 163Wn. App. 1,6,259 P.3d 1111 (2011). "The []APA allows a reviewing courtto reverse an administrative decision when, interalia: (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." Tapperv. Emp't Sec. Dep't, 122 Wn.2d 397, 402,858 P.2d 494 (1993) (citing RCW 34.05.570(3». We, like the superior court, applyAPA standards to the administrative record. Id. We reviewthe commissioner's decision, notthe ALJ's decision orthe superior court's ruling. Markam Group, Inc. v. Dep'tofEmp't Sec., 148Wn. App. 555, 560, 200 P.3d 748 (2009). We review the underlying ALJ decision to the extent it is adopted bythe commissioner. Griffith, 163Wn. App. at6. We considerthe commissioner's decision prima facie correct. Id. The burden ofdemonstrating the decision's invalidity is on the party asserting invalidity. Id. We review the commissioner's fact findings for substantial evidence in light ofthewhole record. Smith v. Emp't Sec. Dep't, 155Wn. App. 24, 32, 226 P.3d 263 (2010). "Substantial evidence is evidence thatwould persuade a fairminded person ofthe truth or correctness ofthe matter." Id. at 32-33. We deferto



### 4

## i



# I No. 33011-7-111 Michaelson v. Emp'tSec. Dep't

j factual decisions and view the evidence in the light most favorable to the party who prevailed in the highestforum with fact-finding authority; here, this is the Department. William Dickson Co. v. PugetSoundAirPollution ControlAgency, 81 Wn. App. 403, 411,914 P.2d 750 (1996). As such, we "will not substitute [our]judgment on witnesses' credibility orthe weight to be given conflicting evidence." W Ports Transp., Inc. v. Emp'tSec. Dep't, 110 Wn. App. 440,449,41 P.3d 510 (2002). "Unchallenged findings offact are generally verities on appeal." Griffith, 163Wn. App. at 6. We review the commissioner's legal conclusions for legal errors. Id. While we may substitute ourview forthe commissioner's, we nonetheless give "substantial weightto 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 offact and law. Markam, 148Wn. App. at 561. "When reviewing mixed questions of law and fact, we accept the [c]ommissioner's unchallenged factual findings, applythe substantial evidence standard to the challenged findings offact, independently determine the applicable law, and apply the law to the facts." W. Ports Transp., Inc., 110 Wn. App. at 450 (stating application of law to facts is de novo). Thus, we determine ifsubstantial evidence supports the commissioner's factual findings, and ifso, ifthese facts constitute disqualifying misconduct underthe Employment SecurityAct. 2. Factual Findings. Mr. Michaelson challenges portions ofthe commissioner's finding offact4 and 8. In finding offact 4, the commissionerfound Mr. Michaelson "was



### 5

### No. 33011-7-111 Michaelson v. Emp't Sec. Dep't
involved in a preventable accident" on May 

### 19, 2012. CP at

### 79. Mr. Michaelson contends that accidentwas not his fault. It is undisputed that Mr. Michaelson had to be
aware of his surroundings and usethe 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 ofthe conflicting testimony; we do notsubstitute ourjudgment. In finding offact 8, the commissionerfound FSA discharged Mr. Michaelson "from employmentfor his third preventable accident during a one year period." CP at 

### 79. Mr. Michaelson mainly disputesthe description "preventable." However, all three accidents were preventable. Substantial evidence supports the commissioner's finding thatthefirst accidentwas preventable. Mr. Michaelson admitted liability for the second accident. The third accidentwas preventable because had he examined the trailer before lowering it, as was dictated by FSA's policy, he would have noticed thetrailer lowered substantially morethan othertrailers 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 Wn. App. at 

### 8. "Construction ofthe benefits statutewhich 'would narrowthe coverage ofthe unemployment compensation laws' is viewed 'with caution.'" Id. (quoting Shoreline Comm. College Dist. NO.7 v.



### 6No. 33011-7-111 Michaelson v. Emp't Sec. Oep't Emp't Sec. Oep't, 120 Wn.2d 394, 406,842 P.2d 938 (1992)); see also RCW 50.01.010 (stating the Employment SecurityAct "shall be liberally construed"). An employee is notentitled to unemployment benefits if he is discharged from employmentfor misconduct. RCW 50.20.066(1). In relevant part, "misconduct" is defined as "[c]arelessness or negligence ofsuch degree or recurrence to show an intentional or substantial disregard ofthe 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 ofmisconduct: (a) Inefficiency, unsatisfactory conduct, orfailure 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 ordiscretion. The parties disagree aboutwhether or not Mr. Michaelson's accidents constituted misconduct. The Department relies on Markam and Smith. The holding in Markam is that an employee's inabilityto perform work, regardless of how many mistakes were made, is not misconduct. Markam, 148Wn. App. at 564. Markam is inapplicable, as neither party argues Mr. Michaelson was unable to perform hisjob. In Smith, the court found a county employee engaged in misconductwhen he recorded his conversations with members ofthe publicwithoutthe public's knowledge and consent because this potentially damaged the county's reputation. Smith, 155Wn. 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 

### 7No. 33011-7-111 Michaelson v. Emp't Sec. Oep't 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 courtfound the employee "intentionally performed an act in willful disregard for its probable consequences." Smith, 155 Wn. App. at 37. Mr. Michaelson had three chargeable accidents in the last year ofhis 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 showan intentional orsubstantial disregard of[FSA's] interest." RCW 50.04.294(1)(d). Nothing indicates Mr. Michaelson's behaviorwas willful, reckless, or even grossly negligent. Although Mr. Michaelson's carelessness or negligence in the lastyear of his employmentjustified his discharge according to FSA policy, considering his long, generally good driving record,
we cannot say his chargeable accidents evidence the necessary misconductto 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 RCW4.84.010. RCW4.84.010(6) allows a prevailing party to
recover statutory attorney fees. Under RCW 50.32.160, unemployment benefits



### 8No. 33011-7-111 Michaelson v. Emp'tSec. Oep't
claimants are entitled to reasonable attorneyfees and costs ifthe decision ofthe 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, 102Wn. App. 29, 46-47,15 P.3d 153 (2000) (internal quotation marks omitted). Because he prevails here, Mr. Michaelson is entitled to attorneyfees and costs on appeal under RCW 50.32.160, assuming compliance with RAP 18.1(d). Reversed.

I CONCUR:



### 9

### 33011-7-III FEARING,

### J. 

### -(concurring)Iconcur. Three negligences do notmake a misconduct.

I CONCUR: