COURT OF APPEALS OF VIRGINIA 

Present: Judges Benton, Elder and Senior Judge Cole 

Argued at Richmond, Virginia 

WELLS FARGO ALARM SERVICES, INC. 

 OPINION BY 

v. Record No. 1051-96-2 JUDGE JAMES W. BENTON, JR. 

 MARCH 25, 1997 

VIRGINIA EMPLOYMENT COMMISSION and 

 CLAUDE H. COLLIER, JR. 

FROM THE CIRCUIT COURT OF THE CITY OF RICHMOND 

Melvin R. Hughes, Jr., Judge 

 James Emmett Anderson for appellant. 

 Lisa J. Rowley, Assistant Attorney General 

(James S. Gilmore, III, Attorney General; 

W. Rand Cook; McCaul, Martin, Evans & Cook, 

on brief), for appellees. 

 Wells Fargo Alarms Services, Inc., appeals from a decision 

of the trial judge affirming a ruling of the Virginia Employment 

Commission. Wells Fargo argues that (1) the trial judge erred in 

affirming the commission's finding that Claude H. Collier's 

conduct did not constitute misconduct for purposes of Code 

§ 60.2-618(2); (2) Wells Fargo did not condone Collier's conduct; 

(3) the commission erred in denying Wells Fargo's request to 

present additional evidence; and (4) the trial judge erred in 

refusing to remand the case to the commission for a hearing to 

determine whether the commission's decision was procured by 

extrinsic fraud. For the reasons that follow, we affirm the 

trial judge's decision. 
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 I. 

 Wells Fargo sells and installs fire alarms and security 

systems. Claude H. Collier began his employment as a sales 

representative in Wells Fargo's Richmond office on September 9, 

1991. Collier was discharged on April 22, 1994, for failure to 

follow company policy, and he filed a claim for unemployment 

compensation. The commission's deputy granted Collier 

compensation. Wells Fargo appealed from that decision. 

 The evidence at the appeals examiner's hearing proved that 

in 1992 Collier conducted extensive negotiations to obtain Allied 

Signal as a Wells Fargo customer. Allied Signal had been 

serviced by one of Wells Fargo's competitors for twenty-five 

years. When Collier learned that Allied Signal no longer wanted 

to use the services of the competitor, he began negotiating a 

transaction valued at $500,000. Because Collier was a relatively 

new employee, his "branch manager . . . was fully aware of every 

transaction that [he] was going through in negotiating" with 

Allied Signal. Collier testified that "Allied [Signal] was in 

the process of revamping [its] entire system" and would switch to 

Wells Fargo only "at a certain price." Collier also testified 

that after he showed his branch manager the documents about the 

cost of the job and informed him about the amount Allied Signal 

was willing to pay, his branch manager said, "Well, when we do a 

takeover from another company, [it] can't go in as a direct sale. 

 It has to go in as a leased system because of the investment." 
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Collier further testified that a contract was not prepared 

because his branch manager stated, "We will not enter into a 

contract at this time because we don't know how this thing is 

[going to] wind-up." 

 Collier testified that because of the structure of the 

transaction his branch manager had to obtain the approval of the 

district sales manager, Bill Winter. Collier also testified that 

he and the branch manager informed Winter of the transaction, 

sent him information by facsimile, and generally kept him 

informed. Collier testified that Winter approved the 

transaction. Collier further testified that after the 

transaction was approved, the following occurred: 

 I was called in to say, "Okay. This is how 

the job's gonna go." [The branch manager] 

said, "We will go with that figure." And 

that figure was $325,000.00 for the 

installation, which is money up front to 

Wells Fargo, and $40,000.00 to be paid to us 

annually. A purchase order was written from 

Allied Signal to Wells Fargo explaining 

exactly that. 

Collier testified that the branch manager, the applications 

engineer, and the accounting coordinator, the individual who 

calculated Collier's commissions, also approved the transaction. 

 Collier stated that three of his supervisors had to give their 

approval before he was paid. 

 Wells Fargo's representative at the hearing was Thomas N. 

Griffin, Jr., the current general manager for Wells Fargo's 

Washington D.C. office and a former general manager of the 
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Richmond office. Although Griffin had little personal knowledge 

of Collier's case, he testified that "on a job this large, it 

would be very unusual for folks at much higher places not to know 

about it" and that "it's fair to say . . . the job could not have 

been approved without . . . folks above [Collier] knowing about 

it." He also testified "that normally when we takeover something 

[from a competitor], we take over with a lease . . . [because] 

you try to go in with as an attractive . . . composition as you 

can, in order to make the fellow feel it is an attractive 

alternative to what he already has." He further testified that 

"the general manager must approve sales commissions." 

 After Wells Fargo's auditors raised questions regarding the 

transaction, a meeting was held among Collier, other employees at 

the Richmond branch, lawyers, and corporate officials. Collier 

testified that he and another employee were "instructed not to 

say anything" at that meeting. 

 Wells Fargo contended that Collier improperly treated the 

transaction, which should have been a lease-purchase arrangement, 

as a lease. Wells Fargo argued that, as a consequence, Collier 

was overpaid $11,570 in commissions and $5,021 in bonuses because 

under its commission policy sales representatives receive a 

greater commission for a lease than a sale. Wells Fargo also 

asserted that Collier failed to follow company policy because he 

used purchase orders that were submitted by Allied Signal and 

failed to execute Wells Fargo's approved, written contract in 
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making the transaction with Allied Signal. 

 Based upon evidence at the hearing, the appeals examiner 

found that Collier "did not misrepresent any facts to [Wells 

Fargo]" and that the "[m]isrepresentations were made by 

[Collier's] superiors." The appeals examiner affirmed the 

decision of the deputy that Collier was qualified to receive 

unemployment compensation. 

 Wells Fargo appealed that decision and requested that the 

commission take additional evidence. The commission denied Wells 

Fargo's request to take additional evidence. In ruling on the 

merits of the appeal, the commission found that Collier's 

"involvement in the [Allied Signal] transaction was monitored by 

[Collier's] superiors, including his supervisor, the accounting 

coordinator, and the branch manager [and that the] transaction 

was also coordinated by the branch manager." The commission 

further found that Collier "believed that approvals for certain 

aspects of the transaction had been obtained from the district 

sales manager." The commission also noted that Wells Fargo 

"presented no evidence of the policies which [Collier] is alleged 

to have violated." Although the commission stated that Collier 

demonstrated poor judgment by remaining silent as instructed at 

the meeting with Wells Fargo's lawyers, the commission found that 

"this alone is not sufficient to establish that [Collier] 

breached his duty of loyalty or honesty to the company." In view 

of the involvement of Collier's supervisors, the commission 
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concluded that Wells Fargo "did not present sufficient evidence 

to establish that [Collier] was guilty of misconduct connected 

with work." 

 Wells Fargo appealed to the circuit court. After the trial 

judge affirmed the commission's findings, Wells Fargo filed a 

timely appeal to this Court. 

 II. 

 Wells Fargo first argues that the commission erred in 

finding that Wells Fargo failed to prove Collier engaged in 

misconduct. We disagree. 

 "Initially, we note that in any judicial proceedings 'the 

findings of the commission as to the facts, if supported by 

evidence and in the absence of fraud, shall be conclusive, and 

the jurisdiction of the court shall be confined to questions of 

law.'" Israel v. Virginia Employment Comm'n, 7 Va. App. 169, 

172, 372 S.E.2d 207, 209 (1988) (citations omitted). In accord 

with our usual standard of review, we "consider the evidence in 

the light most favorable to the finding by the Commission." 

Virginia Employment Comm'n v. Peninsula Emergency Physicians, 

Inc., 4 Va. App. 621, 626, 359 S.E.2d 552, 554 (1987). 

 Furthermore, the following principle is well established: 

 [A]n employee is guilty of "misconduct 

connected with his work" when he deliberately

violates a company rule reasonably designed 

to protect the legitimate business interests 

of his employer, or when his acts or 

omissions are of such a nature or so 

recurrent as to manifest a willful disregard 

of those interests and the duties and 

obligations he owes his employer. 
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Branch v. Virginia Employment Comm'n, 219 Va. 609, 611, 249 

S.E.2d 180, 182 (1978). "Whether an employee's behavior 

constitutes misconduct, however, is a mixed question of law and 

fact reviewable by this court on appeal." Israel, 7 Va. App. at 

172, 372 S.E.2d at 209. 

 Wells Fargo argues that Collier violated its policies by 

structuring the Allied Signal transaction as a lease and by 

failing to use an approved Wells Fargo contract in the 

transaction. We agree with the commission's finding that Wells 

Fargo "presented no evidence of the policies that [Collier] is 

alleged to have violated." Moreover, the evidence proved that 

when Collier began negotiations with Allied Signal, he reported 

to his branch manager. Collier described the details of the 

negotiations to the branch manager and thereafter followed the 

instructions given to him by the branch manager. The evidence 

further proved that the details of the transaction were reported 

to the district sales manager, who also approved the transaction. 

 Thus, even if Collier violated company policy, the evidence 

proved that Collier's conduct was at all times authorized and 

directed by his superiors. Because Collier was following the 

instructions of his immediate supervisor, Collier's deviation 

from the rule was authorized. 

 Although misconduct may be established by proving "an act or 

omission showing willful disregard of the employer's interest," 

Branch, 219 Va. at 611, 249 S.E.2d at 182, we cannot ignore the 
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factual circumstances and say as a matter of law that an 

employee's conduct is not excused when the employee follows a 

supervisor's orders to deviate from a rule. The commission found 

and the evidence proved that the transaction, which involved the 

transfer of potentially profitable business from a competitor, 

was approved by Collier's immediate supervisor and also Wells 

Fargo's district manager. Collier's supervisors' approval could 

only have suggested to Collier that he was advancing Wells 

Fargo's interests. Therefore, we cannot say that the record 

necessarily proved that Collier engaged in misconduct. 

Accordingly, we hold that the evidence supports the commission's 

decision. 

 III. 

 Wells Fargo next asserts that Collier failed to prove that 

Wells Fargo condoned Collier's conduct. Because Wells Fargo 

failed to prove that Collier engaged in misconduct, the burden 

never shifted to Collier to introduce evidence in mitigation. 

See Virginia Employment Comm'n v. Gantt, 7 Va. App. 631, 635, 376 

S.E.2d 808, 811, aff'd on reh'g en banc, 9 Va. App. 225, 385 

S.E.2d 247 (1989). Therefore, we need not consider the issue of 

condonation, because the commission properly declined to rule on 

that issue. 

 IV. 

 Wells Fargo also argues that the commission erred in 

refusing to reopen the record for additional evidence. We 
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disagree. 

 The commission's regulations state as follows: 

 The commission, in its discretion, may direct 

the taking of additional evidence after 

giving written notice of such hearing to the 

parties, provided: 

 1. It is shown that the additional evidence 

is material and not merely cumulative, 

corroborative or collateral, could not have 

been presented at the prior hearing through 

the exercise of due diligence, and is likely 

to produce a different result at a new 

hearing; or 

 2. The record of proceedings before the 

appeals examiner is insufficient to enable 

the commission to make proper, accurate, or 

complete findings of fact and conclusions of 

law. 

16 VAC 5-80-30(B) (formerly VR 300-01-08 § 3(B)). 

 After the hearing, Wells Fargo sought to introduce before 

the commission (1) "documents pertaining to an unsuccessful wage 

claim which . . . [Collier] perfected with the Virginia 

Department of Labor and Industry," and (2) "documents supporting 

the contention of Wells Fargo that [Collier] was discharged for 

cause." Wells Fargo stated that it failed to introduce the 

evidence at the hearing because (1) the "bifurcation of duties 

[within Wells Fargo's management structure] . . . prevented all 

interested corporate officials at Wells Fargo . . . from having 

any direct knowledge of all ongoing employment matters concerning 

[Collier];" (2) at the time the hearing was scheduled, the Wells 

Fargo official who coordinated the hearing with the commission 

was unaware that Wells Fargo's key witnesses would be 
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unavailable; and (3) the Wells Fargo employee who appeared at the 

hearing had, at best, second-hand knowledge of the facts of this 

case. 

 Finding that "the additional documents and other evidence 

could have been presented at the Appeals Examiner's hearing 

through the exercise of due diligence," the commission denied the 

motion to reopen the record. The commission also found that the 

record was adequate "to enable the Commission to make proper, 

accurate and complete findings of fact and conclusions of law." 

Because the evidence supports the commission's findings, we hold 

that the commission did not abuse its discretion in refusing to 

accept additional evidence. See Old Dominion Elec. Coop. v. 

Virginia Elec. and Power Co., 237 Va. 385, 394-98, 377 S.E.2d 

422, 427-29 (1989). 

 V. 

 Wells Fargo further contends that the trial judge erred in 

refusing to remand the case to the commission for a hearing on 

Wells Fargo's claim of extrinsic fraud. Because the proffer was 

insufficient to establish a prima facie case of extrinsic fraud, 

we hold that the trial judge did not err. 

 Extrinsic fraud is "conduct which prevents a fair submission 

of the controversy to the court." Jones v. Willard, 224 Va. 602, 

607, 299 S.E.2d 504, 508 (1983). Wells Fargo argues that Collier 

committed extrinsic fraud by concealing corporate records, acting 

in concert with his supervisor in a plan to deceive corporate 
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officials, and submitting documents to Allied Signal. The trial 

judge found that "whether these matters involve extrinsic fraud 

is of no moment [because] [t]hey were covered extensively in the 

hearings which afforded Wells Fargo an opportunity to present its 

position on them." The trial judge concluded that a remand was 

unnecessary because "Wells Fargo ha[d] not made out a prima facie 

case of extrinsic fraud as contemplated by Va. Code § 60.2-625 

and Jones v. Willard, 224 Va. 602, 299 S.E.2d 504 (1983)." 

 The documents that Wells Fargo alleges Collier concealed 

were found in Collier's desk, at Well's Fargo's Richmond office, 

after August 25, 1994. However, Collier had been discharged four 

months earlier, in April 1994. Wells Fargo clearly had access to 

the documents after Collier's termination in April. Thus, we 

cannot say that Collier engaged in conduct that prevented a fair 

resolution of the case. 

 For these reasons, the judgment is affirmed. 

 Affirmed.