Court Opinion

ID: 4272111
Source: CourtListenerOpinion
Date Created: 2018-05-02 21:05:28.906978+00
Date Added: 2024-06-11T09:24:12.869034
License: Public Domain

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

CAPITOL CLEANERS, :
: C.A. No. Kl7A-08-001 WLW

Appellant,

v.

JOSEPH PEDROTTY and THE
DELAWARE DEPARTMENT OF
LABOR UNEMPLOYMENT
INSURANCE APPEAL BOARD,

Appellees.

Submitted: February 5, 2018
Decided: May 2, 2018
ORDER
Upon the Appeal from the Decision of the

Unemployment Insurance Appeal Board.
Ajirmed.

Daniel F. McAllister, Esquire of Baird Mandalas Brockstedt, LLC, attorney for the
Employer-Appellant.

Carla A.K. Jarosz, Esquire of the Delaware Department of Justice, attorney for the
UIAB-Appellee.

Joseph Pedrotty, pro se, Employee-Appellee

VVITHAM, R.J.

Capitol Cleaners v. Joseph Pedrotty and UIAB
C.A. No. Kl7A-08-0()l WLW
May 2, 2018

This is an appeal filed by the employer, Capitol Cleaners, Inc. (hereinaf`ter, the
“Employer”), from a decision of the Unemployment Insurance Appeal Board
(hereinafcer, the “Board”), affirming the Appeals Referee’s determination that the
Employer’s prior employee, Joseph Pedrotty (hereinaf`ter, the “Employee”), was
discharged from his employment without “just cause.” For the reasons set forth
below, the decision of` the Board is AFFIRMED.

FACTUAL AND PROCEDURAL BACKGROUND

On August 12, 2015, the Employer hired the Employee as the Chief Financial
Officer (“CFO”) for the Employer.

On March 17, 2017, the Employer forced the Employee to resign due to
numerous claimed infractions. Thereafter, on that same day, the Employee filed for
unemployment benefits with the Delaware Department of Labor, whereby a Claims
Deputy for the Division of Unemployment Insurance conducted a fact-finding
interview.

On April 5, 2017, the Claims Deputy issued a decision, based on the fact-
finding interview.l The Claims Deputy determined that the Employer discharged the
Employee without “just cause” in connection with the Employee’ s worl<.2 Therefore,

the Employee was not disqualified from receiving unemployment insurance benefits

 

lR. at l9.

2 Id.

Capitol Cleaners v. Joseph Pedrotty and UIAB
C.A. No. Kl7A-08-001 WLW
May 2, 2018

pursuant to 19 Del. C. § 3314(2).3 The Employee was also eligible to receive benefits
for each week of unemployment insurance benefits claimed for which the Division
of Unemployment determined that the Employee met the eligibility requirements of
19 Del. C. § 3315.4

On April 10, 2017, the Employer appealed the Claims Deputy’s decision.5 In
a hearing before the Appeals Referee, the Employer presented uncontested
documentary evidence related to the Employee’s termination. The first document,
included as Exhibit l to the Referee’s Decision, constituted a memorandum
(hereinafter, the “Final Written Warning”) that memorialized a verbal conversation
between the Employer’s ChiefExecutive Officer, Stuart Outten, and the Employee.6
The Final Written Warning, in part, emphasized that Mr. Outten had informed the
Employee on multiple occasions that the Employee was not to issue any
disbursements on behalf of the Employer without Mr. Outten’s approval.7 If the
Employee continued to issue disbursements without approval, the Final Written

Warning stipulated that the Employee would be fired.8 The Employee signed the

 

3 Ia'.

4 Id.

5 R. at 23.
6 R. at ll().
7 Id.

8 Id.

Capitol Clecmers v. Joseph Pedrotty and UIAB
C.A. No. Kl7A-08-001 WLW
May 2, 2018

Final Written Warning, in apparent understanding of its’ terms.9 The second
document, included as Exhibit 2 to the Referee’s Decision, constituted email
correspondence between Mr. Outten and the Employee, whereby the parties discussed
the Employee’s progress in satisfying certain healthcare reporting requirements for
the Employer.10

In addition to the documentary evidence, the Employer presented the in-person
testimony of Mr. Outten and James Teagle, the Employer’s Plant Manager. Mr.
Outten described numerous issues with the Employee’s performance of his duties.
For instance, Mr. Outten discovered that the Employee lied about his progress
regarding the healthcare reporting requirementsll The Employee, in fact, had not
made any progress at the time he responded to Mr. Outten’s email.12 The Employee
also failed to make timely payments related to payroll, wage garnishments, and child
support.13 As a direct result, Mr. Teagle was late in making several payments for his
personal vehicle.14 The Employee was permitted to cross-examine these witnesses,

as well as present testimony of his own.

 

9 Id.

10 R. at lll.
11R. at 36-39.
12 Id.

13 R. at 39-43.

14 R. at 46-49.

Capitol Cleaners v. Joseph Pedrotty and UIAB
C.A. No. Kl7A-08-001 WLW
May 2, 2018

In his testimony, the Employee described the difficulties that he faced
throughout his short employment. He claimed, in essence, that his poor performance
was due to the fact that he felt overworked and overwhelmed.15 But, the Employee
admitted that Mr. Outten informed him on January l3, 2017, by way of the Final
Written Warning, that he was no longer permitted to make any disbursements on
behalf of the Employer without Mr. Outten’ s approval.16 The Employee testified that
he complied with this directive by presenting invoices and bills to Mr. Outten, who
then either approved or rejected disbursement of the Employer’s funds.17 Although,
on at least one occasion, the Employee did not adhere to the typical procedure, stating
instead that:

I was trying ~ l thought I was helping [Mr. Outten] out, so I - I had
signed all the payroll checks - uh, and - uh, prior to, but I - I - uh, I told
him, but he wasn’t around at that - at that particular time, so I just
signed them, so l could get it out to the employees. l didn’t want the
employees not to get their checks.18

Nevertheless, despite the Employee’s poor performance, the Appeals Referee

was unable to find willful or wanton misconduct, or any prior pattern of misconduct

 

15 See R. at 49-81.

16 R. at 76 (where the Employee acknowledged that he received the Final Written Warning
from Mr. Outten).

17 R. at 66-67.

18 R. at 82-83.

Capitol Cleaners v. Joseph Pedrotty and UIAB
C.A. No. Kl7A-08-001 WLW
May 2, 2018

on the part of the Employee.19 Theref`ore, the Appeals Referee determined that the
Employee was not disqualified from the receipt of unemployment benefits because
the Employer failed to meet its’ burden to establish “just cause” for the Employer’s
discharge of the Employee.20

On May 1, 2017, the Employer appealed the Appeals Referee’s decision to the
Board,21 In a hearing before the Board, the Employer again presented the in-person
testimony of Mr. Outten. Mr. Outten, clarifying his previous testimony before the
Appeals Referee, stated that he specifically informed the Employee that, in
accordance with the Final Written Warning, the Employee was not allowed to sign
checks on behalf of the Employer.22 Yet, according to Mr. Outten, even after his
explicit direction, the Employee signed numerous checks without Mr. Outten’s
authorization23 The checks in question, signed by the Employee, are included as
Exhibit l to the Board’s decision.24 Additionally, the Employer presented the in-
person testimony of the Employer’s current office manager, Louis Armstrong. Ms.

Armstrong testified that one of the reasons the Employee was restricted from signing

 

19 R. at 107.

20 Id.

21 R. at 114.

22 R. at 131.

23 R. at 132-35.

24 R. at 183-190.

Capitol Cleaners v. Joseph Pedrotty and UIAB
C.A. NO. Kl7A-08-00l WLW
May 2, 2018

checks was because he had previously made “double payrnents” to a supplier.25
Again, the Employee was permitted to cross-examine the Employer’s witnesses, as
well as present testimony of his own.

The Employee once more emphasized that his performance for the Employer
suffered because he felt overworked and overwhelmed. He also admitted that he
signed the checks, introduced as Exhibit l, but denied not having the approval to do
so. For example, the Employee stated, “I think, at the time, I-I signed these checks,
either I told [Mr. Outten] I was gonna do it, maybe he doesn’t recall.”26 Furthermore,
he stated, “l don’t think l did this behind his back because, you know, after getting
this - this, uh memo or this ~ uh, directive, uh, l would have asked him. l would have
asked him on everything on this.”27 The Employee, on cross-examination, also stated
that, “I think [Mr. Outten] was bus[y] - he said, just -just, you know, ‘ Sign them and
get,’ you know, ‘Get - get them out.”’28

After reviewing the competing testimony presented to the Board, as well as the

evidence presented to the Appeals Referee, the Referee’s decision, and the

Employer’s Notice of Appeal, the Board determined that the Employee did have the

 

25 R. at 138-142.
26 R. at 151.
27 Id.

28 R. at 155.

Capl`tol Cleaners v. Joseph Pedrotty and UIAB
C.A. N0. Kl7A-08-001 WLW
May 2, 2018

authority to sign the checks provided to the Board.29 Conversely, the Board found
Mr. Outten’ s testimony, regarding the same issue, was not credible.30 The Board also
determined that Mr. Outten did not appropriately “follow-up” after he issued the Final
Written Warning to the Employee.31 Thus, the Board found that the Employer failed
to meet its’ burden of proving that it had “just cause” to terminate the Employee.32
On August 3 , 2017, the Employer appealed the Board’ s decision to this Court.33
The Employer raises three issues on appeal. The first issue, in essence, alleges that
the Board erred in finding the Employee’s testimony34 more credible than Mr.
Outten’s testimony,35 In support of this contention, the Employer emphasizes that:
(a) the Employee’ s assertion before the Board, that he never issued any disbursements
without Mr. Outten’s approval, apparently conflicts with the Employee’s prior
testimony, before the Appeals Referee, that he personally signed a series of payroll

checks while Mr. Outten was unavailable; (b) the Employee agreed that portions of

 

29 R. at 180.
20 Id.
311d.
32 Id.
33 R. at 195.

34 That he obtained Mr. Outten’s approval to sign the checks included as Exhibit 1 to the
Board’s Decision.

35 That he did not approve the Employee to sign the disputed checks.
8

Capitol Cleaners v. Joseph Pedrotty and UIAB
C.A. No. Kl7A-08-001 WLW
May 2, 2018

Mr. Outten’s testimony were accurate; (c) the Employee signed the checks, included
as Exhibit 1 to the Board’s decision, despite the Employee’s testimony that his
common practice, after the Final Written Warning, was to present checks to Mr.
Outten to sign; and (d) unlike the Employee’s testimony, Mr. Outten’s testimony
remained consistent in all aspects throughout both hearings before the Appeals
Referee and the Board. The second issue on appeal, alleges that the Board’s
determination that the Employer “did not appropriately follow up” after issuing a
final written warning is not supported by substantial evidence, nor does it constitute
a sufficient legal basis for ruling that the Employee is qualified to receive
unemployment benefits. The third issue on appeal, alleges that the Board ignored Ms.
Armstrong’s testimony regarding the Employee’s intentional evasion of the
Employer’S accounting software.
STANDARD OF REVIEW

The Superior Court is limited in its’ review to “a determination of whether the
Board’s decision is supported by substantial evidence and free from legal error.”36
Substantial evidence is that “relevant evidence that a reasonable mind might accept

as adequate to support a conclusion.”37 It is “more than a scintilla but less than a

preponderance.”38 ln reviewing the record for substantial evidence, the Court Will

 

36 Starkey v. Unemp’t Ins. Appeal Bd., 340 A.2d 165, 166 (Del. Super. 1975).
37 Wyatt v. Rescare Home Care, 81 A.3d 1253, 1258 (Del. 2013) (internal citations omitted).

33 Olney v. Cooch, 425 A.2d 610, 614 (Del. 1981) (quoting Cross v. Califano, 475 F.Supp.
896, 898 (D. Fla. 1979)).

Capitol Cleaners v. Joseph Pedrotty and UIAB
C.A. NO. Kl7A-08-001 WLW
May 2, 2018

consider the record in the light most favorable to the party prevailing below.39
However, the “[C]ourt is not authorized to make its own factual findings, assess
credibility of witnesses or weigh the evidence.”‘“) lnstead, the Court merely decides
“if the evidence is legally adequate to support the agency’s findings.”41
DISCUSSION

The Board ’s Credibilily Determination

As to the Employer’s first contention, the Court must clarify that its role, as the
reviewing Court, is simply to ascertain if the Board’s conclusions are supported by
substantial evidence and free from legal error.42 If this standard is satisfied, the
Board’s resolution of evidentiary and credibility conflicts is c'onclusive.43 In a

discharge case, an employer has the burden of proving, by a preponderance of the

evidence, that the claimant Was terminated for “just cause.”44 Where, as here, the

 

39 Gen. Motors Corp. v. Guy, 1991 WL 190491, at *3 (Del. Super. Aug. 16, 1991).
40 Sokoloffv. Bd. of Med. Practice, 2010 WL 5550692, at *5 (Del. Super. Aug. 25, 2010).

41 Bradfield v. Unemp’t Ins. Appeal Bd., 2012 WL 5462844, at *1 (Del. Super. Mar. 13,
2012) (quoting McManus v. Christiana Serv. Co., 1997 WL 127953, at *1 (Del. Super. Jan. 31,
1997)).

42 Air Mod Corp. v. Newton, 215 A.2d 434, 438 (Del. 1965).

43 Ridings v. Unemp ’t Ins. Appeal Bd., 407 A.2d 23 8, 239 (Del. Super. 1979) (citing Abex
Corp. v. Todd, 235 A.2d 271 (Del. Super. 1967)).

44 Wilson v. Unemp ’t Ins. Appeal Bd., 2011 WL 3243366, at *2 (Del. Super. Jul. 27, 2011)
(citing Country Life Homes, Inc. v. Unemp ’t Ins. Appeal Bd., 2007 WL 1519520, at *3 (Del. Super.
May 8, 2007); MRPC Fin. Mgmt. LLC v. Carter, 2003 WL 21517977, at *4 (Del. Super. Jun. 20,
2003)).

10

Capitol Cleaners v. Joseph Pedrotty and UIAB
C.A. No. Kl7A-08-001 WLW
May 2, 2018

party bearing the burden of proof fails to convince the Board below, the resulting
findings of fact can be overturned by the Court “only for errors of law,
inconsistencies, or capricious disregard for competent evidence.”45

After a comprehensive review of the record in this case, the Court finds that the
Employer has failed to overcome the heavy burden for overturning the Board’s
credibility determination, particularly because the evidence identified by the
Employer is not as clearly damning as the Employer urges. The Employee’s apparent
admission, for instance, indicates that he signed a series of payroll checks while Mr.
Outten was allegedly unavailable to grant his approval. However, the Employer
leaves out a key piece of the Employee’s testimony, as the Employee also stated that
he had previously told Mr. Outten that he intended to issue the payroll disbursements
Thus, the Board could have reasonably inferred that Mr. Outten gave the Employee
approval to sign those particular payroll checks on Mr. Outten’s behalf, possibly in
anticipation of Mr. Outten’s unavailability. Based on the facts presented to the
Board, it is not implausible for the Board to infer. And, as a result, the Employee’s
apparent admission does not conflict With his subsequent testimony before the Board,
that he never issued any disbursements without Mr. Outten’s approval.

Similarly, the fact that Mr. Outten typically gave his approval to the Employee
for disbursements by signing checks himself, does not mean that he never permitted

the Employee to sign checks on Mr. Outten’s behalf after obtaining Mr. Outten’s

 

43 Id. (citing Ridings, 407 A.2d at 239).

11

Capitol Cleaners v. Joseph Pedrotty and UIAB
C.A. No. Kl7A-08-001 WLW
May 2, 2018

approval. Although Mr. Outten claims that he never did, as discussed in the previous
paragraph, the Employee’s testimony illustrates that Mr. Outten may have given the
Employee approval to do so on at least one occasion. Seeing as the parties’
contentions directly contradict, the Board was entirely within its discretion to credit
the Employee’s testimony over the Employer’s.

Next, in regards to the Employee’s agreement that a portion of Mr. Outten’s
testimony was accurate, the Court finds that such a concession should not require the
Board to accept all of Mr. Outten’s testimony as credible. Especially because, after
considering the Employee’s quoted testimony provided by the Employer, it is
apparent that the Employee never actually admitted that he issued checks without Mr.

1.46

Outten’s approva Rather, he merely agreed, as he did on numerous occasions

throughout his testimony, that Mr. Outten informed him that he would be terminated

 

46 See The Employer’s Opening Brief at 8, quoting the following testimony by the Employee:

BOARD MEMBER ONE: I just have one [question]. The statement from the CEO, were
you told that you would be terminated if there were no changes made?

[THE EMPLOYEE]: Pardon?

BOARD MEMBER ONE: That statement, from the CEO, that there was a conversation that
you Would be terminated if the problems would not be fixed?

[THE EMPLOYEE]: Right. Right. He did, that’s - that is correct in What he said. So -
BOARD MEMBER ONE: That’s all I needed. You answered my question.
[THE EMPLOYEE]: Yeah.

12

Capitol Cleaners v. Joseph Pedrotty and UIAB
C.A. No. Kl7A-08-001 WLW
May 2, 2018

if the problems with his performance did not improve.47 This mere agreement to an
already undisputed fact, therefore, does not mandate that the Board accept all of Mr.
Outten’s testimony as credible.

In sum, the Court holds that the evidence identified by the Employer does not
warrant the overturning of the Board’s credibility decision.

The Employer’s Failure to “Follow-Up ”

As to the Employer’s second contention, the Court agrees that the Board’s
finding was curious. The Board’s decision provides in part that, “the Employer, after
issuing a final written warning about signing checks without authorization, did not
appropriately follow-up.”48 But, the Board did not indicate how it came to this
conclusion. Nor did the Board identify the legal basis for considering the waiver of
an Employer directive. Nonetheless, since the Board’s finding constituted only a
single consideration in the Board’s ultimate decision to grant the Employee benefits,
the Court holds that this issue is de minimus. Accordingly, under these
circumstances, the Employer’s second contention does not merit reversal.

Ignoring Ms. Armstrong ’s Testimony

As to the Employer’s third argument, the Court concedes that the Board did not
address Ms. Armstrong’s testimony in the Board’s final analysis. Nevertheless, after

reviewing the Employer’s closing argument before the Board, the Employer did not

 

47 Id.

48 R. at 180.

13

Capitol Cleaners v. Joseph Pedrotty and UIAB
C.A. No. Kl7A-08-001 WLW
May 2, 2018

raise the Employee’s issuing of double payments to a supplier as grounds for finding
“just cause” for his terrnination.49 Instead, the Employer focused entirely on the
Employee’s purported failure to comply with the Final Written Warning, which the
Court notes was drafted, in part, as a result of the double payments.50 Consequently,
the Court concludes that this contention was not “fairly presented”51 before the Board
and it cannot now constitute grounds for relief from the Board’s decision because,

“issues not properly raised before an agency or board may not be raised on appeal.”52

 

CONCLUSION
F or all of the foregoing reasons, the decision of the Unemployment Insurance
Appeal Board is AFFIRMED.
IT IS SO ORDERED.
/s/ Hon. William L. Witham Jr.
Resident Judge
WLW/dmh

 

49 R. at 161-65.

30 See R. at 142 (where Ms. Armstrong stated “Yes, indeed” in response to the following
question by the Employer’s counsel: “Was it your understanding that it Was these types of double
payments that were contributing to - or that contributed to the restriction that Mr. Olten [sic] placed
on - on [the Employee’s] ability to write checks?”).

31 See Delstar Indus., Inc. v. Delaware Dept. of Labor Div. of Unemp’t Ins. Appeals Bd.,
1997 WL 27109, at *6 (Del. Super. Jan. 8, 1997).

32 Id. (citing Wilmington T rust C0. v. Conner, 415 A.2d 773, 781 (Del. 1981); Tatten
Partners, L.P. v. New Castle Counly Bd. OfAssessment Review, 642 A.2d 1251, 1262 (Del. Super.
1993)).

14