FILED 


APRIL 23, 2015 


In the Office of the Clerk of Court 


WA 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. 
No. 33011-7-111 

Michaelson v. Emp't Sec. Dep't 

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" 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 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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Michaelson v. Emp't Sec. Oep't 

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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No. 33011-7-111 

Michaelson v. Emp't Sec. Dep't 

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 Wn.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, nOUhe ALJ's decision or the superior court's 

ruling. Markam Group, Inc. v. Dep't of Emp't Sec., 148 Wn. 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 Wn. 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 Wn. App. 24, 32, 

226 P.3d 263 (2010). "Substantial evidence is evidence that would persuade a fairminded person of the truth or correctness of the matter." Id. at 32-33. We defer to 

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Michaelson v. Emp't Sec. Dep't 

factual decisions and view the evidence in the light most favorable to the party who 

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 Wn. 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. Poris 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 Wn. 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 Wn. 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. Poris Transp., Inc., 

110 Wn. 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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Michaelson v. Emp't Sec. Dep't 

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 Wn. 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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No. 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 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 U[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 Wn. 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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No. 33011-7-111 

Michaelson v. Emp't Sec. Dep'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 court found 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 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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No. 33011-7-111 

Michaelson v. Emp't Sec. Dep't 

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 Wn. 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. 

Brown, J. 

I CONCUR: 

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33011-7-III 

FEARING, J. - (concurring) I concur. Three negligences do not make a 

misconduct. 

I CONCUR: 

Fearing, 1.