Court Opinion

ID: 4361735
Source: CourtListenerOpinion
Date Created: 2019-01-24 20:06:47.352158+00
Date Added: 2024-06-11T14:20:43.664939
License: Public Domain

The summaries of the Colorado Court of Appeals published opinions
  constitute no part of the opinion of the division but have been prepared by
  the division for the convenience of the reader. The summaries may not be
    cited or relied upon as they are not the official language of the division.
  Any discrepancy between the language in the summary and in the opinion
           should be resolved in favor of the language in the opinion.

                                                                  SUMMARY
                                                            January 24, 2019

                                 2019COA10

No. 17CA1992, Stiles v. Department of Corrections, Denver
Reception & Diagnostic Center — Government — State
Personnel System Act — Disciplinary Proceedings

     In this Colorado State Personnel Board case, a division of the

court of appeals considers the appropriate standard of review an

Administrative Law Judge should employ during an evidentiary

hearing under section 24-50-125(4), C.R.S. 2018 to decide whether

an appointing authority acted arbitrarily and capriciously in

disciplining a state-certified employee. Consistent with Dep’t of

Instits., Div. for Developmental Disabilities, Wheat Ridge Reg’l Ctr. v.

Kinchen, 886 P.2d 700, 705 (Colo. 1994), the division holds that a

section 24-50-125(4) hearing is a de novo hearing at which the

Administrative Law Judge makes credibility, factual, and legal

findings without deference to the appointing authority.
COLORADO COURT OF APPEALS                                         2019COA10

Court of Appeals No. 17CA1992
State Personnel Board Case No. 2016B034

Mathew Mark Stiles,

Petitioner-Appellee,

v.

Department of Corrections, Denver Reception & Diagnostic Center,

Respondent-Appellant,

and

State Personnel Board,

Appellee.

                              ORDER AFFIRMED

                                  Division VI
                          Opinion by JUDGE FREYRE
                         Furman and Dunn, JJ., concur

  OPINION PREVIOUSLY ANNOUNCED AS “NOT PUBLISHED PURSUANT TO
C.A.R. 35(e)” ON December 6, 2018, IS NOW DESIGNATED FOR PUBLICATION

                         Announced January 24, 2019

Greg D. Rawlings P.C., Greg D. Rawlings, Denver, Colorado, for Complainant-
Appellee

Philip J. Weiser, Attorney General, Katherine Aidala, Assistant Attorney
General, Denver, Colorado, for Respondent-Appellant

Philip J. Weiser, Attorney General, Leanne B. De Vos, Senior Assistant Attorney
General, Billy Seiber, First Assistant Attorney General, Denver, Colorado, for
Appellee
¶1    The Department of Corrections, Denver Reception and

 Diagnostic Center (DOC), appeals the order of the Colorado State

 Personnel Board (Board) reinstating appellee, Mathew Mark Stiles,

 because his termination from DOC was arbitrary and capricious.

 For the reasons described below, we affirm the Board’s order.

                           I.    Background

¶2    DOC hired Stiles as a part-time correctional officer in August

 2010. In December 2010, Stiles became a full-time employee, and,

 in 2011, he achieved state-certified status. In 2013, DOC

 transferred Stiles to a boiler room position in the facility. Every

 performance evaluation since Stiles’ hiring date rated him as a

 competent employee, and Stiles never received any corrective or

 disciplinary actions during his employment.

¶3    Beginning in 2015, Stiles experienced several unexpected and

 stressful events in his personal life, including an admitted affair by

 his wife, his teenage daughter’s diagnosis of and emergency

 hospitalization for schizophrenia, and disputes with his daughter’s

 birth mother concerning his daughter’s condition. Stiles sought

 professional help through the Colorado State Employee Assistance

 Program. Stiles’ personal challenges never adversely affected his

                                    1
 job performance. But the related stress of these challenges caused

 Stiles to experience bouts of insomnia.

¶4    Following an emotional counseling session with his wife and

 an argument with his daughter’s birth mother on Friday, September

 25, 2015, Stiles was unable to sleep. To alleviate his insomnia,

 Stiles smoked some marijuana around midnight. On Monday

 morning (September 28), Stiles returned to work and was randomly

 selected for drug testing. He complied with the testing, and, the

 next day, he submitted a confidential incident report to DOC

 admitting his marijuana use and explaining the extenuating

 circumstances that led to it. On October 2, DOC received the test

 results, which revealed a positive result for THC, the main

 psychoactive chemical in marijuana.

¶5    On October 13, Stiles received a hand-delivered Notice of Rule

 6-10 Meeting.1 The notice, dated October 9, was signed by the

 appointing authority, Warden David Johnson, and informed Stiles

 1A Rule 6-10 meeting “is not a formal hearing but rather an
 opportunity for the parties to exchange information. The appointing
 authority must consider any written or oral information that the
 employee provides before making a final decision.” Dep’t of Insts.,
 Div. for Developmental Disabilities, Wheat Ridge Reg’l Ctr. v.
 Kinchen, 886 P.2d 700, 705 (Colo. 1994) (citation omitted).

                                   2
 of an upcoming Rule 6-10 meeting concerning his continued

 employment in light of the test result. On October 19, Stiles met

 with Warden Johnson and provided an explanation for the positive

 test result. He was accompanied and supported by his immediate

 supervisor, Lieutenant James DeTello, who confirmed that Stiles

 was a valuable employee. On that same date, Lieutenant DeTello

 submitted Stiles’ final performance review, which provided an

 overall rating of Level II (meets expectations) and a Communications

 and Interpersonal Skills rating of Level III (exceptional).

¶6    On November 2, Warden Johnson issued a notice of

 disciplinary action immediately terminating Stiles. Stiles appealed

 his termination to the Board. An Administrative Law Judge (ALJ)

 conducted a hearing and issued an initial decision. That decision

 rescinded Stiles’ termination, modified the discipline to a ten

 percent pay reduction for six months, and ordered back pay and

 benefits. In reaching his decision, the ALJ found that Warden

 Johnson’s decision was arbitrary, capricious, and contrary to rule

 or law. In particular, the ALJ found that Warden Johnson (1) failed

 to candidly and honestly consider all of the evidence he procured,

 as required by Department of Personnel & Administration Board

                                    3
 Rule 6-9, 4 Code Colo. Regs. 801-1, particularly Stiles’ lack of prior

 disciplinary history and his extenuating mitigating circumstances;

 and (2) imposed discipline that was not within the range of

 reasonable alternatives by failing to consider the disciplinary

 alternatives set forth in the DOC regulation directed at marijuana

 use, DOC Admin. Reg. 1450-36(IV)(A)(1). On review, the Board

 adopted the ALJ’s initial decision, and this appeal followed.

¶7    DOC contends that the ALJ employed an incorrect standard of

 review and improperly reweighed the evidence when he reviewed

 Warden Johnson’s disciplinary action. DOC argues that the ALJ

 was required to defer to Warden Johnson’s findings and that such

 deference supports Stiles’ termination. We are not persuaded, for

 three reasons. First, the Rule 6-10 meeting is informal and does

 not sufficiently protect the property interests of a state-certified

 employee accused of misconduct. Second, section 24-50-125(4),

 C.R.S. 2018, provides for an adversarial proceeding at which the

 employee is entitled to representation by counsel of choice, and it

 requires the Board to make written findings of fact and conclusions

 of law — a hearing our supreme court has described as de novo.

 Finally, under the standard of review that binds this court, section

                                     4
 24-4-106(7), C.R.S. 2018, we conclude that the ALJ’s decision is

 supported by the record.

                  II.   The Board’s Appellate Process

¶8    “The state personnel system is established by Article XII,

 sections 13, 14, and 15, of the Colorado Constitution and is

 legislatively refined by” Title 24, Article 50 of the Colorado Revised

 Statutes. Dep’t of Insts., Div. for Developmental Disabilities, Wheat

 Ridge Reg’l Ctr. v. Kinchen, 886 P.2d 700, 705 (Colo. 1994). One of

 its central features is that “persons within the system can be

 subjected to discharge or other discipline only for just cause.” Id.

 The Constitution creates the Board and authorizes it to adopt rules

 to implement it. Colo. Const. art. XII.

¶9    The legislature has enacted a statute that enforces these

 constitutional standards by requiring that (1) an appointing

 authority notify the employee of the discipline, § 24-50-125(2); (2)

 the employee be provided a hearing before the Board if requested,

 § 24-50-125(3); (3) the employee be afforded the right to legal

 representation at the hearing, § 24-50-125(4); and (4) the Board

 make findings of fact and conclusions of law affirming, modifying,

 or reversing the appointing authority’s discipline, id.

                                    5
¶ 10   Finally, the Board has prescribed rules that elaborate on the

  disciplinary procedures set forth in the statute. See Dep’t of Pers. &

  Admin. Ch 6, 4 Code Colo. Regs. 801-1; Dep’t of Pers. & Admin. Ch

  8, 4 Code Colo. Regs. 801-1. These rules permit an appointing

  authority to discipline a certified employee for failing to comply with

  efficient service or competence, for willful misconduct, or for an

  inability to perform assigned duties. Dep’t of Pers. & Admin. Board

  Rule 6-12, 4 Code Colo. Regs. 801-1. They require an appointing

  authority to meet with the employee before taking disciplinary

  action. Dep’t of Pers. & Admin. Board Rule 6-10, 4 Code Colo.

  Regs. 801-1. The appointing authority must inform the employee of

  the alleged misconduct and allow the employee to respond in this

  meeting. Id.

¶ 11   In deciding whether to discipline a certified employee, the

  appointing authority must take into consideration certain criteria

  set forth in Rule 6-9:

                 The decision to take corrective or
                 disciplinary action shall be based on the
                 nature, extent, seriousness, and effect of
                 the act, the error or omission, type and
                 frequency of previous unsatisfactory
                 behavior or acts, prior corrective or
                 disciplinary actions, period of time since a

                                     6
                prior offense, previous performance
                evaluations, and mitigating circumstances.
                Information presented by the employee
                must also be considered.

  Dep’t of Pers. & Admin. Board Rule 6-9, 4 Code Colo. Regs. 801-1.

  If discipline occurs, the employee must be notified of the decision

  and the right to appeal the decision to the Board within ten days of

  receipt of notice. § 24-50-125(3); Dep’t of Pers. & Admin. Board

  Rule 6-15, 4 Code Colo. Regs. 801-1; Dep’t of Pers. & Admin. Board

  Rule 8-8, 4 Code Colo. Regs. 801-1.

¶ 12   An ALJ may conduct the hearing on behalf of the Board.

  § 24-50-103(7), C.R.S. 2018. The ALJ must make written findings

  of fact and conclusions of law and render an initial decision

  affirming, modifying, or reversing the disciplinary action. §§ 24-50-

  125(4), -125.4(3), C.R.S. 2018; Colo. Dep’t of Human Servs. v.

  Maggard, 248 P.3d 708, 712 (Colo. 2011). Either party may appeal

  the ALJ’s initial decision by petitioning the Board to modify the

  decision. § 24-50-125.4(4); Kinchen, 886 P.2d at 706. On review,

  the Board must accept the ALJ’s findings of historical fact unless

  they are contrary to the weight of the evidence. § 24-4-105(15)(b),

                                    7
  C.R.S. 2018. The Board’s decision is reviewable in this court. § 24-

  50-125.4(3); Kinchen, 886 P.2d at 706.

                        A.   Standard of Review

¶ 13   We review the decision of an administrative agency for an

  abuse of discretion. Lawley v. Dep’t of Higher Educ., 36 P.3d 1239,

  1247 (Colo. 2001). We will reverse a Board’s decision only if we find

  that the Board acted arbitrarily and capriciously, made a decision

  that is unsupported by the record, erroneously interpreted the law,

  or exceeded its authority. Rice v. Auraria Higher Educ. Ctr., 131

  P.3d 1096, 1100 (Colo. App. 2005) (citing § 24-4-106(7)). We must

  sustain the Board’s decision “if it has a reasonable basis in law and

  is supported by substantial evidence in the record considered as a

  whole.” Farny v. Bd. of Equalization, 985 P.2d 106, 109 (Colo. App.

  1999). Substantial evidence is “the quantum of probative evidence

  that a fact finder would accept as adequate to support a conclusion,

  without regard to the existence of conflicting evidence.” Black

  Diamond Fund, LLLP v. Joseph, 211 P.3d 727, 730 (Colo. App.

  2009). All reasonable doubts about the correctness of the Board’s

  ruling must be resolved in its favor. Lawley, 36 P.3d at 1252.

                                    8
        B.   The ALJ Employed the Correct Standard of Review

¶ 14   The issue before us is whether, as DOC contends, the ALJ

  must defer to the appointing authority’s weighing of the Rule 6-9

  factors or whether, as Stiles contends, the hearing before the ALJ is

  de novo and requires no deference to the appointing authority’s

  Rule 6-9 findings. DOC correctly asserts that Rule 6-9 provides no

  guidance on how an appointing authority should weigh the factors.

  And it reasons that this absence implies that an ALJ should defer to

  the appointing authority’s findings because permitting the ALJ to

  reweigh the factors would “read into the rule a requirement that

  does not exist.” See Beruman v. Dep’t of Human Servs., 2012 COA

  73, ¶ 26. We disagree and find more persuasive and binding our

  supreme court’s analysis of section 24-50-125 and its conclusion

  that only a de novo hearing can properly protect a certified

  employee’s property interests. Kinchen, 886 P.2d at 707; People v.

  Gladney, 250 P.3d 762, 768 n.3 (Colo. App. 2010) (this court is

  bound by supreme court precedent).

¶ 15   In Kinchen, our supreme court held that the appointing

  authority bears the burden of proof in disciplinary hearings before

  the Board. 886 P.2d at 710. In doing so, it recognized that the

                                    9
  Colorado Constitution provides state-certified employees with a

  property interest in their employment and that such employees can

  only be discharged for just cause based on constitutionally specified

  criteria. Id. at 707. In analyzing disciplinary procedures, the court

  noted that the Board has prescribed rules requiring the appointing

  authority to notify and meet with the employee before taking

  disciplinary action. Of importance here, the court said, “[t]his

  meeting is not a formal hearing but rather an opportunity for the

  parties to exchange information.” Id. at 705.

¶ 16   The supreme court further explained that the forum in which

  a certified employee’s property interest is properly protected is the

  section 24-50-125 hearing before the Board. Id. at 707. Indeed,

  unlike the procedures leading up to the imposition of disciplinary

  action, which are informal and afford little protection to an

  employee accused of misconduct, the Board hearing ensures that a

  certified employee is discharged “only for just cause based on

  constitutionally specified criteria.” Id. And the court found this

  was a de novo hearing where “the scales are not weighted in any

  way by the appointing authority’s initial decision to discipline.” Id.

  at 706. We view this language as dispositive and in conflict with

                                    10
  DOC’s deference argument. Moreover, if the Board were required to

  defer to the appointing authority, “there would be little check on the

  constitutional sufficiency of an appointing authority’s standards in

  imposing discipline.” Id. at 707. Accordingly, we hold that an ALJ

  is not bound by the appointing authority’s initial decision and need

  not defer to it. Instead, the ALJ conducts a de novo review of the

  appointing authority’s decision, weighs the evidence presented, and

  must make findings of historical fact and ultimate conclusions of

  fact based on that evidence.

¶ 17   Because rulings and rationale necessary to reach conclusions

  on the issues presented are binding law, we are not convinced that

  we may depart from the language of Kinchen based on DOC’s

  argument that this language constitutes nonbinding dicta. Super

  Valu Stores, Inc. v. Dist. Court, 906 P.2d 72, 78-79 (Colo. 1995)

  (“Conclusions of an appellate court on issues presented to it as well

  as rulings logically necessary to sustain such conclusions become

  the law of the case.”); Hardesty v. Pino, 222 P.3d 336, 340 (Colo.

  App. 2009) (“A holding and its necessary rationale . . . are not

  dicta.”). The cited language provided the rationale of the court’s

  holding that the appointing authority bears the burden of proof at

                                    11
  the Board hearing. And, the court expressly held that the hearing

  before the Board is de novo. See Kinchen, 886 P.2d at 706 n.10

  (“We hold . . . that the hearing before the Personnel Board is de

  novo.”).

         C.    The ALJ Properly Applied the Standard of Review

¶ 18   DOC next contends that the ALJ misapplied the arbitrary and

  capricious standard in modifying Warden Johnson’s decision. We

  disagree.

¶ 19   Section 24-50-103(6) authorizes an ALJ to overturn an

  appointing authority’s actions only if it finds that those actions were

  arbitrary, capricious, or contrary to rule or law. Lawley, 36 P.3d at

  1251-52. An appointing authority acts arbitrarily or capriciously in

  one of three ways:

              (a) By neglecting or refusing to use reasonable
                 diligence and care to procure such evidence
                 as it is by law authorized to consider in
                 exercising the discretion vested in it.

              (b) By failing to give candid and honest
                 consideration of evidence before it on which
                 it is authorized to act in exercising its
                 discretion.

              (c) By exercising its discretion in such
                 manner after a consideration of evidence
                 before it as clearly to indicate that its action

                                     12
                is based on conclusions from the evidence
                such that reasonable men fairly and
                honestly considering the evidence must
                reach contrary conclusions.

  Id. at 1252 (quoting Van DeVegt v. Bd. of Cty. Comm’rs, 98 Colo.

  161, 166, 55 P.2d 703, 705 (1936)).

¶ 20   The ALJ determined that Warden Johnson used reasonable

  diligence to procure evidence and appropriately conducted the Rule

  6-10 meeting. But, he found that Warden Johnson violated Rule 6-

  9 by failing to properly weigh the mitigating evidence and the

  absence of any prior discipline. The ALJ noted Stiles’ “mistake” in

  consuming marijuana one time, Stiles’ “solid performance” record,

  Stiles’ “absence of any prior corrective action,” Stiles’ “documented

  desire to improve his job,” and Stiles’ “dedication to his job.”

  Because the ALJ was free to weigh these facts and because these

  evidentiary facts are well supported by the record, we may not set

  them aside. Lawley, 36 P.3d at 1245; Kinchen 886 P.2d at 706.

¶ 21   As well, the ALJ found that Warden Johnson violated Rule 6-9

  by imposing the most severe form of discipline for Stiles’

  misconduct. While the ALJ agreed that Stiles’ marijuana use was

  serious (as reflected in the six month, ten percent pay reduction),

                                     13
  he found that it was not so egregious as to warrant termination

  because this was a one-time bad decision, the effects of the

  marijuana wore off well before Stiles returned to work, and no

  evidence was presented that this one-time use ever affected Stiles’

  job performance. The ALJ also cited DOC’s marijuana consumption

  regulation, DOC Admin. Reg. 1450-36(IV)(A)(1), and found that its

  violation could result in any type of corrective action and “need not

  result in the severest form of disciplinary action.” Because these

  findings of evidentiary fact are supported by the record, we affirm

  the Board’s order adopting the ALJ’s initial decision.

¶ 22   Last, we reject DOC’s argument that the ALJ was required to

  make findings under all three factors of the three-part test for

  arbitrary and capricious action, and that the third factor

  (reasonable men would reach a different conclusion) somehow acts

  as a check on the other two factors and therefore requires deference

  by the ALJ. DOC cites no authority for this argument and we

  conclude that supreme court authority contradicts it. See Lawley,

  36 P.3d at 1252 (upholding Board’s decision that university failed to

  give candid and honest consideration to evidence before it (second

  factor)); Kinchen, 866 P.2d 706 n.10 (requiring the ALJ to make “an

                                    14
  independent finding of whether the evidence presented justifies a

  dismissal for cause”). Accordingly, because the ALJ’s decision and

  the Board’s order adopting it are supported by the record, we affirm

  the Board’s order.

                            III.   Conclusion

¶ 23   The order is affirmed.

       JUDGE FURMAN and JUDGE DUNN concur.

                                    15