Court Opinion

ID: 822663
Source: CourtListenerOpinion
Date Created: 2013-02-28 07:53:31.971241+00
Date Added: 2024-06-11T15:21:55.080591
License: Public Domain

IN THE SUPREME COURT, STATE OF WYOMING

                                        2013 WY 12

                                                         OCTOBER TERM, A.D. 2012

                                                                 January 31, 2013

ZACK D. KOCH,

Appellant
(Petitioner),

v.
                                                     S-12-0123
DEPARTMENT OF EMPLOYMENT,
UNEMPLOYMENT INSURANCE
COMMISSION,

Appellee
(Respondent).

                     Appeal from the District Court of Albany County
                        The Honorable Jeffrey A. Donnell, Judge

Representing Appellant:
      Bruce S. Asay, Associated Legal Group, LLC, Cheyenne, Wyoming.

Representing Appellee:
      Gregory A. Phillips, Wyoming Attorney General; John D. Rossetti, Deputy
      Attorney General; Michael J. Finn, Senior Assistant Attorney General; Brenda S.
      Yamaji, Assistant Attorney General.

Before KITE, C.J., and GOLDEN,* HILL, VOIGT, and BURKE, JJ.

*Justice Golden retired effective September 30, 2012.

NOTICE: This opinion is subject to formal revision before publication in Pacific Reporter Third.
Readers are requested to notify the Clerk of the Supreme Court, Supreme Court Building,
Cheyenne, Wyoming 82002, of any typographical or other formal errors so that correction may be
made before final publication in the permanent volume.
VOIGT, Justice.

[¶1] The appellant, Zack D. Koch, was terminated from his employment with
HIS-Garden Inn Laramie, Inc. (Hilton) on December 10, 2009. The appellant applied for
and was initially granted unemployment benefits. Hilton appealed that determination
and, after a telephonic hearing where testimony and evidence was received, a hearing
examiner affirmed the initial decision and found that the appellant was entitled to
unemployment benefits. Hilton then appealed the hearing examiner’s decision to the
Unemployment Insurance Commission (Commission), which reversed the hearing
examiner’s decision and found that the appellant was not entitled to unemployment
benefits. The appellant appealed the Commission’s decision to the district court, which
affirmed the Commission’s denial of benefits. The appellant now appeals the
Commission’s decision to this Court. We affirm the Commission’s decision.

                                         ISSUES

[¶2] 1. As a matter of law, did the Commission act within its authority when it
reviewed and reversed the hearing examiner’s decision to grant the appellant
unemployment benefits?

      2. Was the Commission’s decision that the appellant engaged in misconduct and
thereby not entitled to unemployment benefits supported by substantial evidence in the
record?

                                         FACTS

[¶3] The appellant was terminated from his employment with Hilton on December 10,
2009. The appellant applied for and was granted unemployment benefits. Hilton
contested the grant of benefits, and a hearing examiner held a telephonic contested case
hearing on April 27, 2010. Hilton claimed that the appellant was not entitled to
unemployment benefits because he was terminated for misconduct when he refused to
shovel snow from the property. The appellant asserted that he did shovel the snow and
was fired in retaliation for filing a previous complaint against Hilton. After receiving the
evidence submitted by each party, including witness testimony, the hearing examiner
concluded that the appellant had not engaged in misconduct and, therefore, was entitled
to receive unemployment benefits.

[¶4] Hilton then appealed the hearing examiner’s decision to the Commission. In its
notice to the parties regarding when the Commission would meet regarding Hilton’s
appeal, the Commission informed the parties that it “does not accept new evidence,
testimony or witnesses. Pursuant to Wyo. Stat. Ann. § 27-3-400(b), the Commission may
affirm, modify or reverse the findings and conclusions of the hearing officer based upon
evidence presented before the hearing officer at your previous hearing.” (Emphasis

                                             1
in original.) On June 22, 2010, the Commission found that the appellant had engaged in
misconduct when he did not shovel the snow and reversed the hearing examiner’s
determination that he was entitled to unemployment benefits. The appellant appealed the
Commission’s decision to the district court, which reversed and remanded the decision
because the Commission failed to notify the appellant’s attorney of the Commission’s
meeting.

[¶5] On August 23, 2011, the Commission held another meeting, which was attended
by the appellant and his attorney. In its order, the Commission stated that it did not
consider any additional evidence at the meeting and, instead, relied upon the evidence
presented before the hearing examiner and listened to the tape recording of the contested
case hearing. After reviewing the evidence, the Commission determined that the
appellant did not remove snow as he was supposed to on December 9, 2009, and that on
December 10, 2009, he told his supervisors at Hilton that he did not remove the snow.
The Commission found that the appellant’s behavior constituted misconduct and he was,
therefore, disqualified from receiving unemployment benefits.

[¶6] The appellant again appealed the Commission’s decision to the district court. The
district court found that, despite the appellant’s claims to the contrary, the Commission
used the proper procedure when reviewing the hearing examiner’s decisions, that the
Commission’s decision was supported by substantial evidence, and that the
Commission’s decision was not arbitrary and capricious, not an abuse of discretion, and
was otherwise in accordance with the law. Thus, the district court affirmed the decision
of the Commission. The appellant has now appealed the Commission’s decision to this
Court.

                                    DISCUSSION

                   As a matter of law, did the Commission act within
                      its authority when it reviewed and reversed
                     the hearing examiner’s decision to grant the
                           appellant unemployment benefits?

[¶7] The appellant devotes most of his brief to the proposition that the Commission did
not review the hearing examiner’s decision to grant unemployment benefits using an
appellate standard of review, similar to what the district court and this Court employs
when reviewing an agency decision. He argues that the Commission’s second review of
the evidence presented at the contested case hearing goes beyond the Commission’s
authority and violates the Wyoming Administrative Procedure Act (WAPA). The
appellant asserts that the Commission’s decision was arbitrary, capricious, and an abuse
of discretion.

                                           2
[¶8] The standard of review we use when reviewing an agency decision is found at
Wyo. Stat. Ann. § 16-3-114 (LexisNexis 2011). That statute states that

             [t]he reviewing court shall:

                    ....

                    (ii) Hold unlawful and set aside agency action,
             findings and conclusions found to be:

                           (A) Arbitrary, capricious, an abuse of discretion
                           or otherwise not in accordance with law;

                           (B) Contrary to constitutional right, power,
                           privilege or immunity;

                           (C) In excess of statutory jurisdiction, authority
                           or limitations or lacking statutory right;

                           (D) Without observance of procedure required
                           by law; or

                           (E) Unsupported by substantial evidence in a
                           case reviewed on the record of an agency hearing
                           provided by statute.

Wyo. Stat. Ann. § 16-3-114(c). The appellant argues that the Commission acted in a
manner which was arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with law when it reversed the hearing examiner’s decision. However, the
appellant’s argument is premised upon the notion that the Commission acted outside its
authority when it re-evaluated the evidence presented at the contested case hearing and
came to a conclusion different than the one reached by the hearing examiner. Thus, we
are not determining whether the Commission acted in a manner that was arbitrary,
capricious, or an abuse of discretion but, instead, we are determining whether it acted
within its statutory authority and in observance of the procedure required by law. These
are questions of law we review de novo. Dale v. S & S Builders, LLC, 2008 WY 84,
¶ 26, 188 P.3d 554, 561-62 (Wyo. 2008).

[¶9] The statutes that govern the procedure used to request unemployment benefits are
found at Wyo. Stat. Ann. §§ 27-3-401 through 409 (LexisNexis 2011). A deputy
designated by the department makes the initial determination of whether to award
benefits, and that determination may be appealed to an appeal tribunal. Wyo. Stat. Ann.
§ 27-3-402(a) and (e) (LexisNexis 2011). The Commission appoints the appeal tribunal,

                                             3
which can, after a hearing, affirm, modify, or reverse the deputy’s determination
regarding benefits. Wyo. Stat. Ann. § 27-3-403 (LexisNexis 2011). The appeal
tribunal’s decision may then be reviewed by the Commission. Wyo. Stat. Ann. § 27-3-
404(a) (LexisNexis 2011). The Commission may review the evidence submitted before
the appeal tribunal or may direct that additional evidence be taken. Wyo. Stat. Ann. § 27-
3-404(b) (LexisNexis 2011). Based upon the evidence, the Commission may affirm,
modify, or reverse the findings and conclusions of the appeal tribunal. Id.

[¶10] Here, the appellant filed an application for benefits, which was granted by the
deputy. That decision was then appealed to the appeal tribunal, where the hearing
examiner held a contested case hearing and affirmed the deputy’s decision. Hilton then
sought review with the Commission, which, as it was authorized to do so by Wyo. Stat.
Ann. § 27-3-404(b), chose to make a decision based upon the evidence submitted in the
appeal tribunal. From that evidence, the Commission reversed the hearing examiner’s
decision--also authorized by Wyo. Stat. Ann. § 27-3-404(b). Thus, the record shows that
this action proceeded through the agency review process as authorized by the statutes.

[¶11] The appellant argues that the Commission did not utilize the proper type of review
when considering the hearing examiner’s decision. Without citing any authority for the
proposition, the appellant asserts that, because the Commission is an appellate body, it
should have limited its review to whether the hearing examiner’s decision was supported
by substantial evidence. He then goes on to state that the district court should have also
limited its review to whether the hearing examiner’s decision, and not the Commission’s
decision, was supported by substantial evidence. Neither of these arguments is supported
by the law.

[¶12] Nothing in the unemployment statutes limits the Commission’s review of the
hearing examiner’s decision to the question of substantial evidence. In fact, Wyo. Stat.
Ann. § 27-3-404(b) specifically states the type of review permitted by the Commission.
The Commission may limit its review to the evidence presented in the appeal tribunal or
it may request additional evidence be presented. Id. After its review of the evidence, the
Commission “may affirm, modify or reverse the findings and conclusions of the appeal
tribunal.” Id. The unambiguous language of this statute “allows the Commission to look
at the same evidence and come to a conclusion different than that of the [hearing
examiner].” City of Casper v. Wyo. Dep’t of Emp’t, Unemp’t Ins. Div., 851 P.2d 1, 4
(Wyo. 1993). Additionally, the WAPA does not require that the Commission use an
appellate type review (i.e. reviewing for substantial evidence to support the decision)
when reviewing the hearing examiner’s decision. The only statute within the WAPA that
deals with an appellate standard of review is found at Wyo. Stat. Ann. § 16-3-114(c), and
that establishes the standard of review used by the district courts and this Court when
reviewing an agency’s action. Here, the Commission reviewed the evidence and
rendered a decision in accordance with its authority in Wyo. Stat. Ann. § 27-3-404(b).

                                            4
[¶13] The appellant makes a passing argument that the Commission erroneously
considered the tape recording of the contested case hearing in the appeal tribunal because
the tape recording was not part of the transmitted record. However, he also argues that
there is no evidence that the Commission actually listened to the tape recording. We find
this argument wholly without merit. First, the Commission in not limited to evidence in
the transmitted record. Instead, Wyo. Stat. Ann. § 27-3-404(b) allows the Commission to
consider “evidence previously submitted” in the appeal tribunal. There is no better
recitation of the “evidence previously submitted” than a recording of the evidence as it
was presented in the appeal tribunal. Further, the Commission stated in its decision letter
that it did listen to the tape recording. It is true that the Commission’s meeting was not
recorded, but that does not mean we necessarily should call into question whether the
Commission actually did what it indicated it did.1 There is no evidence in the record
before this Court to suggest that the Commission did not listen to the recording. 2

[¶14] The appellant’s argument that the district court erroneously reviewed the
Commission’s decision on appeal instead of the hearing examiner’s decision equally is
contrary to established law. Rule 12 of the Wyoming Rules of Appellate Procedure
governs the extent of judicial review of agency action, and Rule 12.01 states:

                       To the extent judicial review of administrative action
                by a district court is available, any person aggrieved or
                adversely affected in fact by a final decision of an agency in a
                contested case, or who is aggrieved or adversely affected in
                fact by any other agency action or inaction, or who is

1
  Chapter 32, Section 2 of the Department of Workforce Services, Unemployment Agency rules states:
“Commission hearings shall be recorded on tape or other appropriate means at the request of the claimant
or employer or when the commission deems appropriate. Otherwise, they do not have to be recorded.”
Wyo. Rules & Regulations, Department of Workforce Services, Unemployment Insurance, ch. 32 § 2
(2007). In its decision letter, the Commission indicated that neither party requested that the
Commission’s hearing be recorded.
2
  We find it worthwhile to note that, although the appellant takes issue with the fact that the tape
recording of the contested case hearing was not contained in the agency’s transmitted record, neither the
appellant nor the agency designated the tape recording as part of the record on appeal before this Court.
Instead, this Court has been provided a transcript of the hearing that was apparently transcribed by one of
the appellant’s attorney’s employees. The record on appeal is silent as to how this transcript became part
of the record. It appears the district court relied upon the transcript in reaching its decision in this case,
and neither of the parties raised an objection to its use of the transcript. Additionally, both parties
designated the transcript as part of the record on appeal to this Court, and neither party has claimed that
the transcript inaccurately reflects the contested case proceedings. While we would prefer to have the
actual tape recording of the contested case hearing to consider on appeal--as that is what the Commission
considered in rendering its decision--we will consider the transcript as an accurate reflection of the tape
recording.

                                                      5
              adversely affected in fact by a rule adopted by that agency,
              may obtain such review as provided in this rule.

W.R.A.P. 12.01.

[¶15] With respect to unemployment benefits, we have long held that “[t]he
Commission’s final decision is the decision to be reviewed by the district court under
W.R.A.P. 12, not those decisions which were made at intermediate stages in the process.”
Wyo. Dep’t of Emp’t, Div. of Unemp’t Ins. v. Rissler & McMurry Co., 837 P.2d 686, 691
(Wyo. 1992). Thus, the district court was not at liberty to review the decision made by
the hearing examiner, but analyzed the precise issue that it had the authority to consider--
whether the Commission’s decision to deny the appellant benefits was supported by
substantial evidence.

[¶16] The appellant’s request for unemployment benefits proceeded through the review
process in the agency as mandated by the applicable unemployment insurance statutes
and in accordance with the WAPA. The Commission properly considered the evidence at
the contested case hearing and rendered a decision as authorized by Wyo. Stat. Ann.
§ 27-3-404.

              Was the Commission’s decision that the appellant engaged
               in misconduct and thereby not entitled to unemployment
               benefits supported by substantial evidence in the record?

[¶17] The appellant claims that the Commission’s decision to deny him unemployment
benefits was erroneous because the hearing examiner’s decision that the appellant did not
engage in misconduct was supported by substantial evidence. The appellant then
highlights the portions of the record that support the hearing examiner’s decision.
However, this Court’s appellate review is the same as that of the district court, which
means this Court’s review is limited to the “final decision of an agency.” Wyo. Stat.
Ann. § 16-3-114(a); W.R.A.P. 12.01. As stated above, “[t]he Commission’s final
decision is the decision to be reviewed by the [appellate] court under W.R.A.P. 12, not
those decisions which were made at intermediate stages in the process.” Rissler &
McMurry Co., 837 P.2d at 691; see also Weidner v. Life Care Ctrs. of Am., 893 P.2d 706,
709 (Wyo. 1995) (“We review only the decision of the Commission for substantial
evidence.”). Further, we give no deference to the district court’s decision and, instead,
review the case “as if it had come directly to us from the administrative agency.” Dale,
2008 WY 84, ¶ 8, 188 P.3d at 557 (quoting Newman v. State ex rel. Wyo. Workers’ Safety
& Comp. Div., 2002 WY 91, ¶ 7, 49 P.3d 163, 166 (Wyo. 2002)).

[¶18] For that reason, this Court will not review whether there is substantial evidence in
the record to support the hearing examiner’s decision that the appellant was not
terminated for misconduct. Instead, we will review whether there is substantial evidence

                                             6
in the record to support the Commission’s determination that he was terminated for
engaging in misconduct. Wyo. Stat. Ann. § 16-3-114(c)(ii)(E). We use the following
procedure when determining whether substantial evidence exists to support the
Commission’s decision:

             When the burdened party prevailed before the agency, we will
             determine if substantial evidence exists to support the finding
             for that party by considering whether there is relevant
             evidence in the entire record which a reasonable mind might
             accept in support of the agency’s conclusions. If the
             [Commission] determines that the burdened party failed to
             meet his burden of proof, we will decide whether there is
             substantial evidence to support the agency’s decision to reject
             the evidence offered by the burdened party by considering
             whether that conclusion was contrary to the overwhelming
             weight of the evidence in the record as a whole.

Dale, 2008 WY 84, ¶ 22, 188 P.3d at 561. “Importantly, our review of any particular
decision turns not on whether we agree with the outcome, but on whether the agency
could reasonably conclude as it did[] based on all the evidence before it.” Id.

[¶19] Here, the Commission found that Hilton, the burdened party in this case, proved
that the appellant was terminated from his employment because he engaged in
misconduct. See Rissler & McMurry Co., 837 P.2d at 690 (“When an employer contends
that violation of its rule constitutes misconduct, the employer bears the burden of
establishing the existence of the rule and its violation. If the employer establishes these
elements, the burden shifts to the employee to demonstrate either that the violation was
justified or that the rule was unreasonable.”). Thus, this Court must review the entire
record and consider whether there is relevant evidence which a reasonable mind might
accept in support of the Commission’s decision.

[¶20] In its decision, the Commission made the following relevant findings of fact:

              ....

              D. The claimant was expected to perform snow removal as
                 one of his job duties.

              E. The claimant knew that one of his job duties was snow
                 removal.

              ....

                                            7
             L. When the claimant began his shift on December 10,
                2009, he met with the employer’s human resource
                manager, chief engineer and general manger.

             M. During the December 10, 2009, meeting, the claimant
                told the employer that he had not removed snow during
                his shift the night before.

             ....

             O. On December 10, 2009, the chief engineer and the
                employer’s general manager discharged the claimant
                from his employment because the claimant did not
                remove snow on December 9, 2009.

             P. During the claimant’s working hours on December 9,
                2009, he did not remove snow from the front and side
                exits, or from the front door of the conference center.

             Q. The testimony of the employer’s witnesses is more
                credible than the testimony of the claimant for the
                following reasons:

                 a.   The claimant provided inconsistent testimony and
                      evidence with regard to when and where he claimed
                      to have removed snow;

                 b. The claimant took pictures purportedly to protect
                    himself from the employer’s harassment to show that
                    the daytime employees had not shoveled snow, but
                    produced no pictures to show that he had shoveled
                    snow; and

                 c.   The evidence and testimony of the employer’s
                      witnesses were more consistent with one another, the
                      facts and circumstances presented, and the reasons
                      given for claimant’s termination.

We find that there is substantial evidence in the record to support the Commission’s
findings.

[¶21] At the hearing, the chief engineer testified that shoveling snow was “an
outstanding expectation of the engineering position. All engineers are expected to be out

                                           8
there shoveling anytime it snows.” The appellant testified that he understood that one of
his job duties was to remove the snow from the walkways. The chief engineer and the
general manager of Hilton both testified that on December 10, 2009, during a meeting
with the appellant, the appellant told them that he did not shovel the snow the previous
day. The general manager said that the appellant stated he did not shovel the snow
because he believed that none of the engineers working earlier in the day shoveled the
snow. This testimony establishes that shoveling the snow was part of the appellant’s job
duties, he knew that he was supposed to shovel the snow, and that he admitted that he did
not shovel the snow the day before he was terminated.

[¶22] The appellant, of course, claims that he did shovel the snow, and that his
testimony established that fact. However, his testimony was directly contrary to the
testimony of the chief engineer and general manager of Hilton, requiring a determination
of whose testimony was most credible. The agency--in this case the Commission--“is
charged with determining the credibility of the witnesses.” Weidner, 893 P.2d at 710.

[¶23] Here, the Commission found that Hilton’s witnesses were more credible than the
appellant because the appellant provided inconsistent testimony, took photos of not
shoveled snow purportedly to protect himself from harassment instead of providing
evidence that he did shovel the snow, and that the Hilton’s witnesses’ testimony was
consistent with one another. These findings of fact are supported by the record. The
appellant testified about whether he completed other required tasks, which included
testimony about “backdating” his “to-do” sheets. While this testimony could be
interpreted simply as a clerical error of sorts, it also has a tendency to make the appellant
appear inconsistent and less than forthcoming when it comes to explaining if and when he
completed assigned tasks. When this is compared to the consistent testimony of the chief
engineer and the general manager--that the appellant stated he did not shovel the snow
from the walkways--it is clear that there was substantial evidence in the record to support
the Commission’s findings on the credibility of the witnesses.

[¶24] We admit that there was not an overwhelming amount of evidence presented by
either party; instead, this was a case that hinged upon witness credibility. If Hilton’s
employees were more credible, the evidence clearly supported a finding that the appellant
engaged in misconduct when he did not shovel the snow. However, if the appellant’s
testimony was more credible, the Commission could have found that he did shovel snow
and did not engage in misconduct. As mentioned above, our task is not to determine
whether we agree with the outcome of the case. Dale, 2008 WY 84, ¶ 22, 188 P.3d at
561. Our review is limited to whether, based upon all of the evidence presented before it,
the agency could reasonably conclude as it did. Id. We conclude that the Commission’s
decision that the appellant engaged in misconduct by not shoveling snow is a reasonable
decision based upon the evidence that was before it.

                                             9
                                   CONCLUSION

[¶25] The appellant’s claim for unemployment benefits was considered properly by the
appeal tribunal and the Commission in accordance with the statutory requirements.
Further, the district court conducted the proper review of the agency decision by
reviewing the decision of the Commission and not of the hearing examiner in the appeal
tribunal. Finally, the Commission’s determination that the appellant was terminated for
engaging in misconduct is supported by substantial evidence in the record. Affirmed.

                                          10