Case Name: James Truitt PHILLIPS v. MISSISSIPPI VETERANS' HOME PURCHASE BOARD
Court: Mississippi Supreme Court
Jurisdiction: Mississippi
Decision Date: 1996-04-04
Citations: 674 So. 2d 1240
Docket Number: No. 92-CC-00708-SCT
Parties: James Truitt PHILLIPS v. MISSISSIPPI VETERANS' HOME PURCHASE BOARD.
Judges: DAN M. LEE, C.J., SULLIVAN, P.J., and JAMES L. ROBERTS, Jr. and MILLS, JJ., concur.
Reporter: Southern Reporter, Second Series
Volume: 674
Pages: 1240–1245

Head Matter:
James Truitt PHILLIPS v. MISSISSIPPI VETERANS' HOME PURCHASE BOARD.
No. 92-CC-00708-SCT.
Supreme Court of Mississippi.
April 4, 1996.
Rehearing Denied June 20, 1996.
Robert N. Brooks, Barnett & Brooks, Carthage, for appellant.
Michael C. Moore, Attorney General and Mary Margaret Bowers, Sp. Asst. Attorney General, Jackson, for appellee.

Opinion:
PITTMAN, Justice,
for the Court:
This appeal requires us to look at the breadth of the Mississippi Employee Appeals Board's jurisdiction. The case arises from the State Personnel Board's approval of the abolition of the position of real estate appraiser at the Mississippi Veterans' Home Purchase Board. The appellant, James Truitt Phillips, contends that the Veterans' Home Purchase Board misled the State Personnel Board in an attempt to rid itself of Phillips for personal and political reasons. Phillips specifically cites his personal differences with the executive director of the Veterans' Home Purchase Board as to how the agency should have been run. The Veterans' Home Purchase Board maintains it had legitimate reasons for terminating Phillips' position. The State Personnel Board abolished the position of real estate appraiser on request of the director of the Veterans' Home Purchase Board. The reasons offered for the abolishment were a material change in the duties of the position and a shortage of work to justify the position. The Mississippi Employee Appeals Board (hereinafter EAB) ruled that the abolishment of the position was a mere pretext to terminate Phillips and ordered him reinstated with back pay. The circuit court reversed the EAB and restored the action of the State Personnel Board. We are called on to determine whether the circuit court erred in holding that the EAB acted beyond the scope of its authority by reinstating Phillips, and, assuming the EAB did have such authority, whether the EAB's decision was supported by substantial evidence. We find that the EAB had no such authority in this case, and even if it did, its decision was not supported by substantial evidence.
Phillips argues that the circuit court erred in finding that the EAB acted beyond the scope of its authority. Specifically, Phillips contends that Miss.Code Ann. § 25-9-127 and 25-9-131 (1972) and our holding in Gill v. Dept. of Wildlife Conservation, 574 So.2d 586 (Miss.1990), give the EAB authority to hear an employee's side on any action adversely affecting his employment status.
Miss.Code Ann. § 25-9-127 (1972) states the following:
No employee of any department, agency or institution who is included under this chapter or hereafter included under its authority, and who is subject to the rules and regulations prescribed by the state personnel system may be dismissed or otherwise adversely affected as to compensation or employment status except for inefficiency or other good cause, and after written notice and hearing within the department, agency or institution as shall be specified in the rules and regulations of the state personnel board complying with due process of law; and any employee who has by written notice of dismissal or action adversely affecting his compensation or employment status shall, on hearing and on any appeal of any decision made in such action, be required to furnish evidence that the reasons stated in the notice of dismissal or action adversely affecting his compensation or employment status are not true or are not sufficient grounds for the action; provided, however, that this provision shall not apply (a) to persons separated from any department, agency or institution due to curtailment of funds or reduction in staff when such separation is in accordance with rules and regulations of the state personnel system; (b) during the probationary period of state service of twelve (12) months; and (c) to an executive officer of any state agency who serves at the will and pleasure of the governor, board, commission or other appointing authority.
Miss.Code Ann. § 25-9-131 (1972) provides in pertinent part that:
(1) Any employee in the state service may appeal his dismissal or other action adversely affecting his employment status to the employee appeals board created herein. The proceedings before the employee appeals board shall be de novo, and the employee shall be afforded all applicable safeguards of procedural due process.... The employee appeals board may modify the action of the department, agency or institution but may not increase the severity of such action on the employee. Such appointing authority shall promptly comply with the order issued as a result of the appeal to the employee appeals, board.
On the other hand, the Veterans' Home Purchase Board argues that Miss.Code Ann. § 25-9-127 does not give the EAB authority over a reduction in staff which was accomplished in compliance with the state personnel system. They contend that subsection (a) of § 25-9-127 precludes any action by Phillips before the EAB. The Veterans' Home Purchase Board also asserts that the administrative rules of the EAB provide that only "grievable" issues may be appealed and that termination or layoff from duties because of shortage of funds or work is a "non-grievable" issue.
Miss.Code Ann. § 25-9-127 dictates the prerequisites for dismissal of a state employee. A state agency, department or institution included under this may dismiss an employee only for inefficiency or other good cause and must provide notice and a hearing within the agency at which the employee must show the reasons given are insufficient or untrue. Section 25-9-127 excepts from these requirements persons such as Phillips, who are separated due to a reduction in staff when the dismissal is in accordance with the rules of the State Personnel Board. There is nothing in this statute indicating an intent to deny those excepted from appealing their dismissal to the EAB. Moreover, § 25-9-131 grants any employee in state service the right to appeal to the employee appeals board his dismissal or other action adversely affecting his employment status. Section 25-9-131 does not make the same exceptions for appeals as § 25-9-127 does for prerequisites to dismissal.
We have addressed § 25-9-127 in the context of whether a probationary employee enjoyed rights in his employment such that he could complain of his dismissal. In Gill, we affirmed the circuit court's interpretation of § 25 — 9—127(b), holding that it does not purport to deny probationary employees the right to appeal to the EAB. It merely denies these employees the protection of good cause or inefficiency for adverse action. This is equally true for employees excepted under subsection (a). Therefore, this section does not bar the EAB from hearing Phillips' claim.
As we noted in Gill, the legislature has vested in the State Personnel Board the authority to promulgate rules and regulations to enforce the statutory mandates of § 25-9-115, 25-9-129, and 25-9-131 (which allow the State Personnel Board to create the EAB and state employees the right to appeal their dismissal). Id. at 592. We noted that the Employee Appeals Board Administrative Rules contained a section granting probationary employees the right to appeal alleged acts of discrimination to the EAB. We upheld Gill's right to appeal to the EAB based on this. Justice Robertson, speaking for the Court, stated, "[tjhese regulations enjoy legal validity via SPB's appropriate exercise of its statutory authority." Id. at 592.
The EAB Administrative Rule germane to the case sub judice state:
APPEALS
The purpose of the Employee Appeals Board is' to provide a fair and impartial forum beyond the agency level for a full hearing on a grievable action.
2. WHO MAY APPEAL. ACTIONS WHICH MAY BE APPEALED.
C. No person may appeal a non-grieva-ble action.
Appendix B to the EAB Rules defines as non-grievable a "termination or layoff from duties because of shortage of funds or work, material change in duties or organization, or a merger of agencies." The record indicates there were material changes in the position of real estate appraiser. Phillips was not entitled to an appeal of the agency's decision based on the foregoing rules and their recognized legal validity.
Since we have found that Phillips did not have the right to appeal this particular matter to the EAB, it is not necessary to address the merits of that decision. However, we would stress for the record that "any decision of any administrative board or agency must be based upon substantial evidence appearing in the record." Department of Wildlife Conservation v. Browning, 578 So.2d 667, 668 (Miss.1991), quoting Eidt v. City of Natchez, 421 So.2d 1225 (Miss.1982). This is applicable to the Mississippi Employee Appeals Board. Browning, 578 So.2d at 668.
Substantial evidence exists in the case sub judiee to support the decision of the circuit court, the Personnel Board and the Veterans' Home Purchase Board.
The director of the Veterans' Home Purchase Board stated in his letter to the State Personnel Board the reasons for the abolishment of the real estate appraiser position-material changes in the duties of the position and a shortage of work to justify the position. One of the former functions of the appraiser, to cheek the tax roles to determine if the taxes had been paid on mortgaged property, was no longer performed by the appraiser. Also, the decision of the Board to escrow taxes eliminated the necessity of an appraiser going out into the field to check these tax records.
Another factor supporting the elimination of the appraiser position was that the Board decided to use non-guaranty loans as opposed to loans guaranteed by the Veterans Administration (VA) only as an exception to the rule when justified by particular circumstances. Regulations contained in the Veteran's Administration Lending Handbook do not allow the Veterans' Home Purchase Board to utilize in-house appraisers on VA-guaranteed loans. Phillips was an in-house appraiser. In 1990, the year preceding dismissal, there were 198 loans reviewed by the Board for approval or disapproval. Of that 198, 167 were presented for VA-guaranty, thirty-one were non-guaranty, and there were an additional twelve which were presented as VA-guaranty; however, depending on the purchase price, these could have gone non-guaranty. Assuming Phillips performed all forty-three appraisals, and taking his salary and benefits into consideration, the cost per appraisal averaged $1,033.84. When the veteran fills out an application, $250.00 is collected. $200.00 is for the appraisal, whether done in-house or not, and $50.00 for a credit report. Veterans' Home Purchase Board paid $44,000.00 to Phillips as real estate appraiser, the actual revenue offsetting that cost was $8600.00. This certainly justifies eliminating the position of appraiser, especially in light of the fact that the deputy director is also an appraiser.
The deputy director has already assumed a few duties of the appraiser requiring little time, such as insurance inspections.
The record contains substantial evidence in favor of the conclusion reached by the State Personnel Board and the circuit court, and far less evidence in support of the decision of the EAB. A reduction in force by the Veterans' Home Purchase Board evidences a sound management decision, not a vendetta against James Truitt Phillips.
AFFIRMED.
DAN M. LEE, C.J., SULLIVAN, P.J., and JAMES L. ROBERTS, Jr. and MILLS, JJ., concur.
PRATHER, P.J., dissents with separate written opinion joined by BANKS, McRAE and SMITH, JJ.