# FILED

Novemb er 14, 1997 Cecil Crowson, Jr . App ellate C ou rt Clerk IN THE COURT OF AP PEALS OF

TENNESSEE WESTERN SECTION AT JACKSON

CITY OF MEMPHIS, ) ) Plaintiff/Appellee, ) Shelby Chancery No. 102642 ) vs. ) ) CIVIL SERV ICE CO MMISS ION O F ) Appeal No. 02A01-9607-CH-00158 THE CITY OF MEMPHIS, AND ) DAVID LOC ASTRO, ) ) Defend ants/Appe

llant. )

APPEAL FROM THE CHANCERY COURT OF SHEL BY COUNTY AT MEMPHIS, TENNESSEE

THE HONO RABL

E C. NEAL

SMALL , CHANCEL

LOR For the Plaintiff/Appellee : For the Defendant/Appellant , David Locastro: Mo ni ce Mo or e H ag le r W il li am D. Ma ss ey Alicia A. Howard Memphis, Tennessee Memphis, Tennessee

REVERSED

HOL LY KI RBY LI LL ARD , J.

CONCUR:

W. FRANK CR

AWFORD, P. J., W.S.

DAV ID R. F ARM ER, J.OPINION

This case in volves the review of a decision by the City of Memphis Civil Service Commission. A firefighter was terminated for conduc t unbecoming a firefighter. The

Civil Service Commission reinstat

ed the em ployee, a nd the tria

l court r ev ersed that decision. We find that the decision of the Civi l Service Commission w as not ar

bitrary o r capri c ious and was supported by substantial and material evidence. Consequently, we rever se the decision of the trial court. On April 21, 1 992, offi cers in th e Memphis Pol ice Dep artment’ s Organiz ed Crime U nit executed a search warrant at the re sidence leased to Brenda Sue Fowler (“Fowler”). At the time, Appel lant David Michael Locastro (“Locastro”) was living with Fowler. The officers announced their prese nce and

purpose a

nd then br

oke into the home. I

n respons e to the of

ficers’ questions , Locastro admitted that there was marijuana in the bedroom closet. The officers found a total of one and a half pounds of marijuana, a set of triple-beam sca les, and $710 in ca sh in the be droom. Locastro had $174 i n his walle t. Offic ers late

r found a n addition al si x pounds of marijuana and $2,000 in c ashat Fowler’s brother’s house. The officers arrested Fowler and Locastro on charges of possession of a controlled substance with intent to manufacture/deliver/sell. Both Fowler and L ocastro were qu estioned by the poli ce. Both th

en signed statemen ts prepar ed by the p olice of

ficers. Locastr

o’s state ment cont ained the following

admissions : Q. The marijuana found in your home[,] who did it belong too[sic]? A. The two of us, she arranged to have it in, I knew it was the re. Q. How long have you been selling marijuana from your home? A. 4 to 5 we eks. Locastro admitted t

hat Fowle r had gon e to Dalla s, Texas , to arrange to have the marijuana brought to Tenness ee. Loc astro took some of t he mariju ana to Fow ler’s br other’s house. He

said he did not know how much he transported. When questioned about how much of the money seized i n the arr

est

came from dru g sales, h

e answe red, “I guess tha

t mo ney that was found in her radio.” Locastro acknowl edged tha

t he had not been fo

rced to g ive the sta

tement and signed it

. In her statement, Fowler stated that the marijuana found at the reside nce belonged to her

. She admitted that she had been selling marijuana since February and tha t she had arranged for the marijuana to be brought in from Texas. Fowler said that $500 of the money found in her home had been obtained through the sale of marijuana. She stated that Locastro had taken approximately five and a half pounds of marijuana to her brother’s ho use. No ne of her other statements implicated1 Locastro was charged with violating Sections 3.26 and 3.8 of Article II I of the Fire Division Ru les and Re gulations . Section 3 .26 provid es: No member shall be in possession of, or use illegal drugs as forbidden by law, including marijuana, while on duty, in uniform, or on city property. Section 3. 8 provide s:

Any act or omission contrary to good order, discipline, or accepte d social practic e may subj ect an e mployee t o disciplin ary act

ion. When

an employ ee is unable or unwilling to perform the duties of his position in a satisfactory manner, or has omitted any act or acts it was his duty to perform either by training or experie nce, or w hose ser vice is be low satisf actory s tandard s, or whos e conduc t is unbecoming an employee of the City of Memphis, shall be subject to disciplinary action. 2 Locastro. At the time of his arrest, Locastro was employed a s a fi refighter with the Memphis Fire Departm ent. On April 24, the deputy director of the Fire Department contacted Division Chief Larry McKissick

(“McKis sick”) a

nd instruc ted him to co nduct an investigation and get back to him as

soon as possible. McKissick then obtained a copy of Locastro’s arr est tick et and his sta

tement to the police. M cKissick

called L ocastro ’s super

visor, telling him to in

form Loc astro tha

t h e wa s suspended pending investigation and to stay at the engine house until McKissick could get there to talk with him. At approximately 9:00 that morning, McKissick reached the engine house and gave Locastro a notice of investigation, charging him with possession of marijuana and “conduct unbecoming an employee of the city of Memphis.” 1 The notice info rmed Locastro that a hearing would be held at noon that day, that he was entitled to union representation at the hearing, a nd that the results of the hearing and inves tigation c ould result in disciplinary action, including termination. Locastro contacted his attorney. His attorney told him that he wo

uld be in tr

ial at the time of the hear in g, that Loca stro should request a continuance, and that Locastro should answer no questions without him and should instead plead his Fifth an d Sixth Amendment rights. Locastro askeda union representative if the hearing could be delayed. The union repre sentative contacted an unidentified official who told the representative that the hearing could not be put off. At the hearing, McKissick

read the charge s, Locas tro refu sed to re spond to the charge s without the assist anc e of counsel, and McKi ssick closed the hearing. During the hearing, Locastro did not ask for a continuance. Later that day, McKissick

prepared a letter informing Locastro of his termination. The letter2 While the notice of investigation had cited Sections 3.26 and 3.8, Locastro’s termination

letter actually cited Sections 3.4(5) and 3.8 as the bases for his ter mination. Even though the letter c ited Sect

ion 3.4(5) , it actua

lly quoted

Section 3. 4(20), not 3.4(5). Section 3. 4(20) is clearly the appli cable Se ction, an d it provid es: Disciplinary action may be taken for, but shall not be limited to the following causes:

*** (20.) That the employee, during non-duty hours, has engaged in an employme

nt, activity, or en

terprise that is inc onsistent, incompat ible, or in moral, legal, or technic al confl

ict with hisduties, f

unctions, and resp onsibilitie s as a city employee. 3 read, in pertine nt part: When questioned about these charges [by the police for possessio n with inte

nt to sell] in the administrative investigation, you stated that your lawyer had advised you not to answe r any que stions and

that you a

re takin g the fift

h amendme

nt. You were told by Division Chief McKissick that if you did not cooperate in a n administrative hearing , that you c ould be dis c ipli ned, up to and including terminat ion. You st

ated tha t you unde

rstood the charge s. Based upon the information received concerningyour arrest of April 21, 1992, and the circumstances surrounding such arrest, I find that your c onduct is unbecoming an employee

of the City

of Memphi s Fire Divi sion and ha s violated Fire Divis io n rules and regulations cited in this letter. The letter i nform ed Locastro that his termination was based on violations of Article III, Sections 3.4(5) and 3.8 of the Fire Divis ion Rules a nd Regula

tions. 2 Locastro appealed this decision to the Civil Service Commission (“the Commission”), which set a hearing. At the Commi ssion h earing, Locastro presented evidence that he had a good work record withthe Fire Department. He stated that, following his arrest, h e voluntarily entered the city’s Employee Assistanc e Progra m (“EAP” ) and joined Alcohol ics Anony mous, doing well in bot

h program s. He also presented evidence that Fowler had ple ad guilty as the one who had acquired the marijuana with the in

tent to sell , and that the charges against Locastro were dismissed at the

recomme ndation of

the Attor ney Gene ral. McKissick

testified that he had terminated Locastro based solely on the police re po rt and Locastro’s statement. He stated at one point that he would not have terminated Lo castro had he known the marijuana was not his, but then testified that he considered Locastro’s knowle dge that the marijuana was in the house as sufficient to warrant

termination. McKissick stated that Locastro’s

use of mariju ana did not play a r ole in the decision to terminate. He admitt

ed that the EAP was a4

disciplinary option but indicated that he did not like drug use and did not think highly of the EAP’s success rate. Locastro testified that he had used marijuana for several years but was not involved in selling it. Locastro testified that the police officer who prepared his signed statement had written both the questions and the answe rs on the s ta tement. Accordin g to Loca stro, the police of ficer a sked him how long Fowler had bee n selling ma

rijuana , to which he answered four to five wee ks, but that the officer wrote the question on the statement to indicate that Locastro had been asked how long he had been selling marijuana. Locastro stated that he had admittedto the police that he knew the marijuana

w as in the hous e but that , contra ry to the w

ritten sta tement, L ocastro

had neve r indica ted that th

e marijuana belonged to him. Locastro said he signed the statement without reading it, because he w as fearf ul and bec ause he t

rusted the offic er to cor

rectly r ecord th e questio ns and an swers. Jane Hardaway (“Hardawa y”), Deputy Director of Personnel for t he City of Memphi s, testified at the Commission hearing that attorneys werenot norm ally allowed in departmental investigative hearings, b ut that an att orney co

uld sit outsi de the he aring ro om to be av ailable t o confer with the employee. In response to questions from the Commission, Hardawa y testified: Q. So in your la st answer I hear t hat peopl e have a

n option asto when they can have the [inve stigative ] heari ng, is that correct? A. Well, they have an option. Of course, they can’t go on ad infinitum. There has to be -- so that’s why when we give a charge letter we give a date for the hear ing in the letter. A

nd when th

e heari n g come s then certainly the City feels they have an obligation to make a decision an d not leave an employee hanging out with many worries, that sort of thing, Ms. Hurd. Q. But is it the norm for you, if you are informed as this case is at 9:00, to be prepared by 12:00, does the employee know that hehas an op tion to say can I do i

t at 5:00? I mean is there an option here, that’s what I’ m asking. A. Well, I believe that the City always if the employee says I want to call my wife, I want to do this, I want to do that, I’ve never known the City to say oh, no, it must be immediately. We try to give that employee some time. She testifie d that atto

rneys usu ally bec ame invol ved only after a disciplinary action had been taken. After the hear ing, the Co mmission de cided to r einstate Locastro, finding that the City had failedto carry the burden of proof nece ssary to sustain Locas tro ’s termination. The Commission found: The proof has shown that more evidence was prese nted to the Commission than was before Chief McKissick when the decision was made to ter minate Mr. Locastro. The Commission is concerned that the investigation conducted by Chief McKissick5

was of limited scope and value and a more thorough evaluation of the fa cts should have been employed prior to a rendering of the termination decision. The Commission finds that the decision to term inate wa s not reasonable under the facts and circumstances as presente d during the hearing. The Commission conditioned Locastro’s reinstatement upon his remaining involv ed with EAP. The City appea

led this de cision to th

e Chance ry Court. O n appeal, after reviewing the rec ord and hearing argument from counsel, the trial cour t reversed the Commission. During the trial court hearing, the court commented:

It does app ear tha

t mo re notice could have been given before the a ctual hearing was held , but I

don’t know what could be presented that would change the facts. And the f

acts are that he admitted that he was involved with his girl friend in the acquisition and selling of illegal drugs. Either he did that or he misled the police. He signed a false statement, and he made statements that -- you know, you c ould get in to a lot of ramifications here, statements that would have hampered a po lic e investigation even if he was not involved. So it just appears to me that adding new proof or new evidenc e or new testimony to what

was already there, which is not needed a nd would not change the fact that eithe r he was actively

involved i n selling illegal dr ugs o r he made a false statement or statements, including signing a written s tatement

that would

certain ly hamper t he police investiga tion and ma

ke their job more d

ifficult

. I don’t think there is any question that in many cases such as this where more than one person is involved in a crime, you know, one will suffer more if nailed than the other. So you can perhaps speculate, but I think it’s pretty well accepte d that it’s notuncommon f

or one de fendant to take the blame and perhaps they settle up later on. The tria l court’sFindings of

Fact and O

rder pr ovided, in pertine nt part: 2. The Court finds that even if Lo castro was not involved in the selling of illegal drugs, hisconfession to police that he and his gir lfriend w ere invo lved in this illegal activity would have constitut e d making false and misleading official statemen ts and inter

ferenc e with a po lice inve stigation s ufficie nt to have justified

his termination. The trial co urt concluded that McKissick had enough evidence at the inve stigative hearing to warrant Locastro’s terminat

ion and tha

t the Commiss ion act ed arbitrarily in reversing McKissick’s decision. It reversed the decision of the Commission upholding the termination. From this decision, Locastro now appeals. On appeal, Locast

r o asserts that the trial court erred because there was substantial and material evidence to support the Commission’s decision. The City maintains that the decision of the6

Chancery Court should be affirmed because the Commission acted in an arbitrary, capricious, and illegal manner. Tennessee Code Annotated § 4-5-322 sets forth the standard of r eview for t he Chancery Court in re

viewing a gency de cisions: (h) The cou rt may affirm the decision of the agency or rema nd the case for further proceedings. The court may reverse or modify the decision if the rights of the petitioner have been prejudiced because the a dmin istrative

findings, infere

nces, conclusions or decisions are: (1) In vi olation of

constituti onal or st

atutory p rovisions ; (2) In excess of the statutory authority of the agenc y; (3) Made upon unlawful procedure; (4) Arbitrary or capricious or char acteriz ed by abu se of discr etion or c learly unwarranted exercise of discre tion; or (5) Un supporte d by evide nce whic h is both sub stantial a

nd mater ial in th e light of the entire record. In de termining the substantiality of evidence, the court shall take into accou n t whatever in the record fairly detracts from its weight, but the court sha ll not substitute its judgmen

t for that o f the agenc y as to the weight of the evidence on questions of fact

. (I) No agency decision pursuant to a hearing in a contested case shall be reversed, remande d or modif ied by the reviewing court u

nless for errors which

affect the merits of such decision. Tenn. Code Ann. § 4-5-322(h)-(I) (1991 & Supp. 1997). This revi ew is not de novo

. CF Indus. v. Tennessee Pub. Serv. Com m’n , 599 S .W.2d 536, 540 (Tenn. 1980). It is “narrower than the standardof review normally applicable in other civil cases.” Jackson Mobilphone Co. v. Tennessee Pub. Serv. Comm’n , 876 S.W.2d 106, 110 (Tenn. App. 1993). Thestandard for appellate review of such actions is the same as the standard for the Chancer y Court’s review. CF Indus. , 599 S.W.2d at 540. In order to

determine whether

the deci sion of the

Chancer y Court should be upheld, we mu st examine the two sta

tutory ba ses for r

eversa l raised b y Locastr

o and the C ity : ( 1) whether the Commission acted in an arbitrary or capricious manne r, o r a manner characterize d by an abuse of discretion, and (2) whether there was substantial and

material evidence to support the Commission’s action. See Tenn. Code Ann. § 4-5-322(h)(4) and (5). The issue of whether an agency’s decision is arbitrary or capricious or characte rized by an abuse of discretionis discussed in McCallen v . City of Me

mphis , 786 S.W.2d 633, 640-41 (Tenn. 1990). In McCallen , the Tennessee Supreme Court defines an abuse of discretion as being an action “in opposition to the intent and policy of the statute and of the ordinance adopted co nform ably to its p rovisions, as applied to the facts and circumstances of the ca se.” Id. at 641. The Court als o7

notes that “[a

]buse of discreti on, arbit

rarine ss, capr

iciousne ss, and un

reasona bleness are ter

ms often used interchangeably.” Id. McCallen pointed out that, with the arbitrary and capricious standard: [T]he court’s primary resolve is to refrain from substituting its judgment for that of the local gov ernment

al body. A

n action w ill be inva

lidated o nly if it constitutes an abuse of discr etion. If “any pos si ble reason” exists justifying the action, it will be upheld. McCallen , 786 S.W.2d at 641. The Tennessee Court of Appeals has stated that “agency decisions withadequate evidentiary support may still bearbitrary and capricious if cause d by a cle ar err or in judgment.” Jackson Mo bilphone Co. v. Tennes see Pub. Se

rv. Comm’

n , 876 S.W .2d 106, 110 (Tenn. App. 1993). The Jackson Mo bilphone Court explained that “[a]n arbitrary decision is one that is not based on any course of reasoning or exer

cise of ju dgment, or

one that d

isregar ds the fa cts

or circumstances of the case without some basis that would lea d a reason able person to reach the same conclusion.” Id. at 111 (citations omitted). Abuse of discretion was discussed by this Court recently in a review of a Civ il Service Commission decision, in City of Me mphis v. Civil Se

rvice Com mission of theCity of Me mphis and Shotwell , No. 02A01-9512-CH-00289 (Tenn. App. Nov. 4, 1997). In Shotwell , a police officer voluntar ily entered the City’s EAP for alcohol abuse and signed an agreement stating that “failure to remain su

bstance free wi ll result in

terminat ion.” Slip

Op. at 2. The officer subsequently tested positive for cocaine and admitted use of alcohol. Id. He w as terminated. Id. The Civil Service Commission reversed his termination, finding that “a self refer ral employee should not be required t o sign his disciplinary death warrant in order to obtain the help the EAP Program was cr eated t o provide. . .,” and that termination wa s too harsh a result. Slip Op. at 3-4. The Chancery Court reversed this decision and upheld the ter mination, f

inding tha t the Citysought to implement a “zerotolerance” drug policy and that the Commission had “ruled, in essence, that they disagree with that zero-tolerance policy.” Slip Op. at 4,6. On appeal, we affirmed the Chancery Court. Since Shotwell had admittedly tested positive for cocaine and had acknowledged use of alco hol, after

signing an agreement stating that “failure to remain su

bstance free wi ll result in termination. . . , “ we agreed that the Commission in essence disagreed with the City’s zero-tolerance policy and concluded that the Commission’s reversal of the termination was arbitrary and capricious. Slip Op. at 5-6.8

In this case , the City’ s initial inv estigatio n had virt uall y no particip ati on by Loca stro, bec ause it was held with almost no notice to Locastro and his attorney advised him to refrain from answering questions in the attorney’s absence. As noted by the Commission, the Commission was in a position to receive additional evidence, such as Fowler’s statement to the police, the dismissal of the charges against Locastro, and Locastro’s explanation of his statement to the police. McK issick’s testimony

was somewhat contradictory; at one point he stated that he would not have terminated Locastro if he had known

that the ma

rijuana did not bel ong to him; h owever , he state d that Loc ast ro’ s knowledge that the marijuana was in the house was sufficient to terminate him. The termination decision did not appear to involve a Fire D epartment drug policy, since McKissick indicated that Locastro’s use of marijuana was not a factor in the termination. Therefore, unlike Shotwell , the employee had not signed an agreement acknowledging that the admitted conduct would result in termination. Unlike Shotwell , the Commission’s decision does notappear to be a disagreement with the City over its drug policy. The Com mission had the opportuni ty at its h earing to assess Locastro’s credibility and review the a dditional information which was unavaila

ble to McK

issick. Under the c ircumsta nces, we cannot c onclude t

hat th e Commission’s decision was arbitrary or capricious or an abuse of discr etion. Second, the Chanc ery Cour t may rev erse the

Commission’ s decisio n if it is not supported by substantia

l and material evidence in the light of the entire rec ord. This standard “require s a searching and car

eful inqu iry that su

bjects the agency ’s de cision to close scrutiny.” Sanifill of Tennessee, I

nc. v . Tennessee Solid Waste Disposal Control Bd. , 907 S.W.2d 807, 810 (Tenn. 1995). “Substant

ial and ma

terial evid ence is such relevant evidence as a reasonable mind might accept to support a rational conclusion, and such as to furnish a sound b asis for the action under consideration.” Ogrodowczyk v. Tennessee Bd. for Licensing Health Care Facilities , 886 S.W.2d 246, 251 (Ten

n. App. 19 94). Substa

ntial and mate rial evidence “requires something less than a preponderance

of the evidence, but more than a scintilla or glimmer.” Wayne County v. Tennessee Solid Waste Disposal Control Bd. , 756 S.W.2d 274, 280 (Tenn. App. 1988) (citations omitted). The Memphis Charter sets forth the Commission’s role in reviewing the City’s action in an9

appeal: If, after presentation of the proof, the commission finds that ther e exists a reasona ble basis for the disciplinary action taken, the action of the City shall be sustained. City of Memphis Charter § 248. The Commission can reverse an action by the City if it finds that the City had no reasonable basis for the disciplinary action it took. In this case, after hear

ing the te stimony, the

Commission a

pparent ly found c

redible Locastro’s denial that the marijuana belonged to him or that he was involved in selling it, as well as Locastro’s explana

tion of his s tatement

to the polic e. However, it is undisputed that Locastro had knowledge of the presence of marijuana in h is househol d and the fact that Fowler was selling it. Neverth eless, the Commission found that the deci sion to ter minate was “not reasonable.” Although the issue is somewhat close, we cannot conclude that the Commission’s decision was not supported by substantial and material evidence. The deci sion of the Chancery Court must be reversed, and the Commission’s decision to reinstate Locastro must be upheld. T he decision

of the tri al court

is rever sed. Costs a

re asse ssed aga

inst Appelle e, for w hic h execution may issue if necessary.

HOLLY KIRBY LILLARD, J. CONCUR:

W. FRAN K CRAWF ORD, P.J., W.S.

DAVID R. FARMER, J.