No. 89-284
IN THE SUPREME COURT OF THE STATE OF MONTANA

PIERREA. LAVE, Petitioner and Appellant,-vsMONTANA STATEDEPARTMENT OF LABOR AND INDUSTRY,BOARD OF LABOR APPEALS; and SUBARU OF BILLINGS, Respondents and Respondents.

--. APPEAL FROM: DistrictCourt of the Thirteenth ~udicial ~istrict, In and for the County of Yellowstone, C-CI The Honorable ~illiam Speare, Judgepresid$ng. t? ---3 COUNSEL OF RECORD: -a

ForAppellant: Michael G. ~iselein; Lynaugh,~itzgerald & ~iselein, ~illings, Montana
For Respondent: Charles K. 

### ail, Dept. of Labor & Industry,Helena, Montana Laura Mitchell; Crowley, Haughey, Hanson, Toole & ~ietrich, ~illings, Montana

submitted on ~riefs:Aug. 17, 1989 Decided: September 28, 1989 Filed:



### -Clerk


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## .. 5Justice William E. Hunt, Sr., delivered the Opinion of the Court.

Pierre LaVe, petitioner, appeals from an order of the District Court of the ~hirteenth Judicial District, Yellowstone County, affirming the Board of Labor Appeals decision denying his unemployment compensation benefits, pursuant to § 39-51-2410(5), MCA. We reverse. The issue raised on appeal iswhether theDistrictCourt erred in finding that a negligent failure to replace oil in the crankcase of a customer's automobile constituted "misconduct" within the meaning of the Montana Unemployment Compensation Insurance statutes and, based on that conclusion, erred in affirming the Board of Labor Appeals denial of unemploymentbenefits. LaVe was employedby Subaru of ~illings as an automobile mechanic for approximately two years. On March 11, 1988, LaVe was assigned to service a customer's vehicle which included changing the oil and filter. LaVe drained the oil and changed the filter. The next step in the process would have been to replace the oil but Lave's attention was diverted from the task when his supervisor directed him to work on another vehicle belonging to a "rush customer." LaVe drove the car he was servicing outside and proceeded to work
on the rush order. The original customer returned for his vehicle and drove it a short distance when the engine seized due to lack of oil. Approximately $2,300 worth of damage resulted. LaVe offered to pay for the damage. On March 12, 1988, LaVe was terminated for "misconduct" by Subaru of ~illings as a consequence of the incident. LaVe applied for unemployment benefits but the local Job Service representative and redetermination deputy denied theapplication on the grounds that LaVe was terminated for "misconduct." On May 12, 1988, a telephone hearing was held before an appeals referee who upheld the decision of the Job Service representative. On June 17, 1988, a hearing was held before the Board of Labor Appeals. The Board affirmed the decision of the appeals referee and adopted, as its own, the referee's findings of fact. LaVe then petitioned the District Court for review of the Board's decision. On March 27, 1989, the District Court entered its order affirming the decision of the Board and dismissing the petition for reviewbased on the conclusion that LaVe was terminated for "misconduct." From this order LaVe appeals. The issue raised on appeal iswhether the District Court erred in finding that a negligent failure to replace oil in the crankcase of a customer's automobile constituted "misconduct"within the meaning of the Montana Unemployment Compensation Insurance statutes and, based on that conclusion, erred in affirming the Board of Labor Appeal's denial of unemploymentbenefits. The standard of review utilized in Department of Labor and Industry disputes is set forth in part under § 39-51-2410(5),MCA, as follows: In any judicial proceeding under 39-51-2406 through 39-51-2410, the findinss of the board as to the facts,

## if supportedb~ evidence and in the absence of fraud, shall be conclusive and the jurisdiction of said court shall be confined to questions of law. (Emphasisours.)
In Zimmer-Jackson Associates, Inc., v. Department of Labor and Industry (Mont. 1988), 752 P.2d 1095, 1097, 45 St.Rep. 679, 681,we stated that, upon review of a decision of the Department of Labor and Industry, the ~istrict Court,
as well as this Court, must "treat the findings of the Boardas conclusive if they are supported 

### & substantial evidence and are absent fraud.

### " (Emphasis ours.) Also, in Zimmer-Jackson, 752 P.2d at 1097, we stated that it is for this Court to determine whether the DistrictCourt committed
an abuse of discretion. In the present case, the District Court found that, "Petitionerhere did not have a bad purpose in not replacing the oil nor did he desire the injury sustained." However, the court still found that Lave's inadvertent failure to replace oil in a customer's automobile constituted statutory "misconduct," which precluded unemployment benefits under S 39-51-2303(l), MCA. We disagree with the District Court's finding. Section 39-51-2303(1), MCA,provides in part: An individual shall be disqualified for benefits after being discharged:



# . . . for misconduct connected with the individual's work or affecting the individual's employment until the individual has performed services, other than self-employment, for which remuneration is received equal to or in excess of eight times the individual's weekly benefit amount subsequent to theweek in which the act causing the disqualification occurred. While the definition of "misconduct"isnot set forth in the above statute, it is provided for under S 24.11.418, A.R.M., inpart as follows: (1 This rule defines and interprets disqualification for discharge due to a claimant's misconduct or misconduct affecting his employment as set forth inM.C.A. 39-51-2303. (2) "Misconduct"defined: Conduct on the part of the employee evincing such wilful or wanton disreqard of an employer's interest as isfound in 

### - - deliberate violations or disregard of standards of behavior which the employerhas the right to expect

- - of his employee, or in carelessness 

### - or neslisenceof such degree or recurrence as to manifest equal 

### -- -- culpability,wrongful intent or evil design, or to 

### -- show an intentionalor substantialdisregard of the employer-'sinterest

# or of the employee's duties and - - obligations to his employer. Mere inefficiency, 

# - unsatisfactory conduct, failure - ~n good performance as the result of inabilit 

# - or incapacity, ~nadvxencesor ordinary negl?igen~e 

### .- in isolated instances, 

## or good faith errors in judgment, or discretion 

### ---- are not to be deemed "mi~onduct" within themeaning -- of the statute. (6) The statutory term misconduct shall not be literally applied so as to operate as a forfeiture except in clear instances of wilful or wanton misconduct by the claimant which affects the employer's interest. (Emphasisours.) Further, this Court has had the opportunity to define "misconduct" on several occasions. SeeAshland oil, Inc., 

### v. Department of Labor and Industry (Mont. 1988), 765 ~.2d 727, 45 St.Rep. 2169 (misconduct found where employee wrote several non-sufficient fund checks to employer); Connolly v. Montana Board of Labor Appeals (Mont. 1987), 734 ~.2d 1211, 44 St.Rep. 587 (misconduct found where employee refused to follow his supervisor's instructions, falsified records, refused to assist a patient in distress, and harassed and played gameswith his subordinates); Gauncev. Board of Labor Appeals (1974), 164 Mont. 445, 524 P.2d 1108 (misconduct found where employee refused to work overtime and train new employees). In each of these cases,an intentionaldisregard of the employer's expectationwas committed by the employee. In the present case, however, Lave was discharged for a negligent,not an intentional,act. In Gaunce, 524 P.2d at 1110, this Court specifically defined misconduct as: [A] deliberate, wilful, or wanton disregard of an employer's interestor of the standardsofbehavior which he has a right to expect of his employee, or



# .

# .. carelessness or negligence of such a degreeor recurrence as to manifest equal culpability, wrongful intent, or evildesign. Citing Boynton Cab Co. v. Neubeck (1941), 237 Wis. 249, 296 N.W. 636, as summarized in the Annot., 26 A.L.R.3d 1356, 1359.Here, a single incident of negligence was the basis for Lave's discharge. The evidence supports the fact that his inadvertence to replace oil in a customer's automobile was nothing more than an incidentof negligence. The actwas not wilful, wanton, deliberate, intentional, done with wrongful intent, evil design,nor was it a deliberatedisregard of the employer's interest as required to support a finding of "misconduct." In fact, LaVe offered to pay for the damage that resulted fromhis inadvertence. In light of the evidence, Lave's conduct did not constitute "misconduct" as statutorily defined. Lave

### 's unemployment compensationbenefits were improperly denied and the District Court abused its discretion in affirming the decision of the Board of LaborAppeals. The ~istrict Court's order is reversed and remanded for
a reconsideration of Lave's petition consistent with this

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