Court Opinion

ID: 2824372
Source: CourtListenerOpinion
Date Created: 2015-08-11 04:44:23.758764+00
Date Added: 2024-06-11T11:31:13.356759
License: Public Domain

131 Nev., Advance Opinion l el
                        IN THE SUPREME COURT OF THE STATE OF NEVADA

                 CLINTON HOHENSTEIN,                                   No. 58519
                 Appellant,
                 vs.
                 NEVADA EMPLOYMENT SECURITY
                 DIVISION, STATE OF NEVADA;                                   FILED
                 CYNTHIA JONES, IN HER CAPACITY
                 AS ADMINISTRATOR OF THE                                      APR 0 2 2015
                 NEVADA EMPLOYMENT SECURITY                                    .CIE K. LINDE
                                                                         CL      F .54-LiP2EME UFIT
                 DIVISION; KATIE JOHNSON, IN HER                         BY
                 CAPACITY AS CHAIRWOMAN OF THE
                 NEVADA EMPLOYMENT SECURITY
                 DIVISION BOARD OF REVIEW; AND
                 THE WASHOE COUNTY SCHOOL
                 DISTRICT AS THE EMPLOYER,
                 Respondents.

                            Appeal from a district court order denying judicial review of
                 an administrative decision denying unemployment benefits. Second
                 Judicial District Court, Washoe County; Robert H. Perry, Judge.

                            Reversed and remanded with instructions.

                 Lemons, Grundy & Eisenberg and Caryn S. Tijsseling, Reno; Lewis Roca
                 Rothgerber LLP and Darren J. Lemieux, Reno,
                 for Appellant.

                 J. Thomas Susich, Senior Legal Counsel, Nevada Employment Security
                 Division, Sparks,
                 for Respondents Nevada Employment Security Division, Cynthia Jones,
                 and Katie Johnson.

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                Office of General Counsel, Washoe County School District, and
                Christopher B. Reich, Randy A. Drake, and Sara K. Almo, Reno,
                for Respondent Washoe County School District.

                BEFORE PARRAGUIRRE, SAITTA and PICKERING, JJ.

                                                  OPINION
                By the Court, PICKERING, J.:
                            NRS 453.3363 affords certain first-time drug offenders the
                opportunity to avoid a criminal conviction if the offender pleads guilty,
                then successfully completes a probationary period. Upon successfully
                completing probation, the offender is discharged and the charges are
                dismissed. Addressing the civil consequences of such a plea to the
                offender who successfully completes probation, NRS 453.3363(4) provides:
                IDlischarge and dismissal under this [statute] is without adjudication of
                guilt and is not a conviction for purposes. . . of employment, civil rights or
                any statute or regulation or license or questionnaire or for any other
                public or private purpose." We must decide how this statute applies to a
                public school teacher who was terminated after pleading guilty but before
                completing probation, specifically, whether a guilty plea pursuant to NRS
                453.3363 may be used to deny unemployment benefits to the terminated
                teacher in this circumstance. We hold that the guilty plea may not be
                used as the basis for denying unemployment benefits, and therefore
                reverse and remand.
                                                      I.
                            Appellant Clinton Hohenstein, then a teacher for the
                respondent Washoe County School District (WCSD), was arrested for and

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                 pleaded guilty to possessing marijuana in his residence in violation of NRS
                 453.336. Because this was his first offense, the district court did not enter
                 a judgment of conviction Instead, it suspended Hohenstein's sentence
                 and placed him on probation for a period not to exceed 3 years. Per
                 NRS 453.3363(1), if Hohenstein fulfilled the conditions of probation, the
                 criminal proceedings would be dismissed in accordance with
                 NRS 453.3363(3).
                               On learning of Hohenstein's arrest the WCSD suspended him
                 and began termination proceedings, during which Hohenstein entered his
                 guilty plea. The WCSD specified its final grounds for terminating
                 Hohenstein, consistent with NRS 391.31297, 1 as: (1) immorality, (2)
                 conviction of a felony or of a crime involving moral turpitude, and (3) any
                 cause which constitutes grounds for revocation of a teaching license.
                               Hohenstein sought unemployment benefits. After a hearing,
                 the Employment Security Division (ESD) denied Hohenstein benefits on
                 finding that his guilty plea established that the WCSD had terminated
                 Hohenstein for "workplace misconduct," to wit: he had committed immoral
                 conduct under NRS 391.31297(1)(b), which disqualified him from
                 eligibility for unemployment benefits under NRS 612.385. Hohenstein
                 filed an unsuccessful petition for judicial review, followed by this appeal.

                               An ESD appeals referee "shall inquire into and develop all
                 facts bearing on the issues and shall receive and consider evidence without

                       1 NRS 391.31297 was numbered NRS 391.312 at the time the WCSD
                 terminated Hohenstein, but the statute has remained substantively the
                 same for purposes of this appeal. 2013 Nev. Stat., ch. 506, § 36.

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                   regard to statutory and common-law rules." NRS 612.500(2). At first
                   blush, this standard appears to sanctify the ESD's reliance on
                   Hohenstein's guilty plea as a basis for denying him unemployment
                   benefits. See also Taylor v. Thunder, 116 Nev. 968, 973, 13 P.3d 43, 45-46
                   (2000) ("[E]vidence of a guilty plea or offer to plead guilty from a prior
                   criminal proceeding is admissible in a subsequent civil proceeding, subject
                   to NRS 48.035(1)."). But upon entry of Hohenstein's guilty plea the
                   district court immediately suspended his criminal proceedings in order to
                   afford Hohenstein the opportunity to successfully complete his
                   probationary period and avoid entry of a final judgment of conviction, per
                   NRS 453.3363. Thus, the guilty plea, along with the district court's order,
                   effectively placed Hohenstein's criminal proceedings on hold and brought
                   his case within NRS 453.3363's specific directives.
                               Among those directives is NHS 453.3363(4), which reads in
                   pertinent part as follows:
                               Except as otherwise provided in subsection 5, 121
                               discharge and dismissal under this section is
                               without adjudication of guilt and is not a
                               conviction for purposes of this section or for
                               purposes of employment, civil rights or any statute
                               or regulation or license or questionnaire or for any
                               other public or private purpose, but is a conviction
                               for the purpose of additional penalties imposed for
                               second or subsequent convictions or the setting of
                               bail. Discharge and dismissal restores the person

                         2 NRS 453.3363(5) allows a professional licensing board to consider a
                   proceeding under the statute when "determining suitability for a license or
                   liability to discipline for misconduct." The WCSD does not argue that
                   NRS 453.3363(5) applies to this matter.

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                              discharged, in the contemplation of the law, to the
                              status occupied before the arrest, indictment or
                              information.
                (Emphasis added.) When the ESD denied Hohenstein unemployment
                benefits he was midway through his 3-year probationary period, so
                "dismissal and discharge" of the criminal case had yet to occur. The
                question is whether, given this statute, the ESD properly used
                Hohen stein's conditional guilty plea as the basis for denying him
                unemployment benefits.
                              A similar issue confronted the Maryland Court of Special
                Appeals in Tate v. Board of Education of Kent County, 485 A.2d 688 (Md.
                Ct. Spec. App. 1985). At issue in Tate was former Maryland Code, Article
                27, § 292 (1987), on which statute the Uniform Law Commission drew in
                crafting § 414 of the 1990 Uniform Controlled Substances Act (UCSA), on
                which NRS 453.3363 in turn is modeled. 3 Like NRS 453.3363, section 292

                      3 The Nevada Legislature included the exact dismissal and discharge
                language contained in the uniform law, save an irrelevant (to this appeal)
                exception for professional licensing boards. A.B. 222, 66th Leg. (Nev.
                1991); 1991 Nev. Stat., ch. 523, § 12, at 1647; UCSA § 414(c), 9 U.L.A. 838
                (1990). The commentary to § 414 states that in addition to providing a
                discretionary alternative to incarceration, the section "provides for
                confidentiality of the defendant's record upon fulfilling all the terms and
                conditions of probation This will preclude any permanent criminal record
                from attaching to and following the individual in later life." UCSA § 414
                cmt., 9 U.L.A. 838 (1990); see also State v. Alston, 362 A.2d 545, 547-48
                (N.J. 1976) (recognizing a purpose behind allowing the court to dismiss
                proceedings for first-time drug offenders is to allow that offender to avoid
                the stigma of criminal conviction). The commentary then goes on to note
                that the discharge and dismissal language is based on former Maryland
                Code, Article 27, § 292 (1987). UCSA § 414 cmt., 9 U.L.A. 838 (1990).

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                  provided that an arrest or conviction expunged under the Maryland
                  statute could not "thereafter be regarded as an arrest or conviction for
                  purposes of employment, civil rights, or any statute or regulation or
                  license or questionnaire or any other public or private purpose." Md.
                  Code, Art. 27, § 292(b)(5) (1987). Tate addressed whether, consistent with
                  § 292, a school board could terminate a teacher who had pleaded guilty to
                  possession of marijuana and drug paraphernalia but was in the process of
                  completing her probationary period. 485 A.2d at 689-90. The trial court
                  had held that the teacher's guilty pleas established her guilt, validating
                  the termination. Id. at 689. The court of appeals reversed. Id. at 691. To
                  read § 292 otherwise, the court reasoned, would
                              ... deprive [1 the statute of effect during the
                              probationary period. The circuit court's ruling, if
                              allowed to stand, means that § 292(b) would be
                              effective only upon the satisfactory completion of
                              probation, and that during the probationary
                              period the probationer would be totally denied the
                              protection of the statute. The result of the trial
                              court's ruling is that in the instant case, had the
                              disciplinary proceeding before the County Board
                              not been instituted until after Tate satisfactorily
                              completed the 18 months['] probation, the pleas of
                              guilty could not have been used against her. On
                              the other hand, when, as here, proceedings are
                              initiated during the period of probation, § 292(b)
                              would not prevent the guilty pleas f1 being used as
                              evidence.
                  Id. at 689-90.
                              Section 292's "obvious goal" was "to afford a degree of
                  protection to first offenders in certain controlled dangerous substance
                  cases." Id. at 690. Because the statute mandated that an offender who
                  completes his or her probationary period "shall not" have a criminal record
                  and that an expunged arrest "cannot be taken into account insofar as
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                employment, civil rights or licensing are concerned," the court concluded
                that § 292 did not permit dismissing the teacher based upon her guilty
                pleas, despite the fact that she had yet to complete her probationary
                period. Id. Of note, the court did hold that the teacher's testimony before
                the county school board regarding her alleged misconduct, apart from her
                arrest and plea, could be considered in the dismissal proceedings as proof
                of the conduct underlying the pleas. Id. at 690-91.
                            Tate predated the 1990 UCSA, which, as noted, drew upon
                § 292 in crafting the uniform law provision that Nevada adopted as
                NRS 453.3363. Ordinarily, "a statute adopted from another jurisdiction
                will be presumed to have been adopted with the construction placed upon
                it by the courts of that jurisdiction before its adoption."   Ybarra v. State,
                97 Nev. 247, 249, 628 P.2d 297, 298 (1981). We see no reason why this
                rule would not equally apply in the uniform law context, where the state
                law upon which a uniform law is based has been interpreted by that
                state's courts before the uniform law's creation.     See also NRS 453.013
                (mandating that the Nevada UCSA "shall be so applied and construed as
                to effectuate its general purpose and to make uniform the law with respect
                to the subject of such sections among those states which enact it").
                Nothing in the legislative history of NRS 453.3363 suggests that the
                Legislature intended to depart from the UCSA, or the Maryland precedent
                on which it was based, on this issue. And though the Tate court
                determined that the guilty pleas could not be used to justify the teacher's
                dismissal, the same reasoning would apply here to preclude the use of a
                guilty plea to justify disqualification from unemployment compensation,
                given that the discharge and dismissal provision prohibits treating the
                discharge and dismissal as a conviction "for purposes of employment .. . or

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                 for any other public or private purpose." NRS 453.3363(4). We therefore
                 adopt the reasoning and interpretation offered in Tate and hold that, since
                 NRS 453.3363(4) forestalls a final judgment of conviction "for purposes of
                 employment, civil rights or any statute or regulation or license or
                 questionnaire or for any other public or private purpose" if the offender
                 successfully completes probation, the guilty plea may not be used to
                 establish misconduct-based grounds for termination for purposes of
                 denying unemployment compensation during the probationary period.
                             Here, the WCSD relied on Hohenstein's guilty plea as grounds
                 both for terminating him and for establishing that his termination was
                 misconduct-based, making him ineligible for unemployment compensation.
                 In the WCSD's first notice of intent to dismiss Hohenstein, which was
                 issued after his arrest but prior to his guilty plea, the deputy
                 superintendent recommended that Hohenstein be discharged for various
                 reasons, including immorality, unprofessional conduct, insubordination,
                 failure to comply with such reasonable requirements as a board may
                 proscribe, any cause which constitutes grounds for the revocation of a
                 teacher's license, willful neglect or failure to observe and carry out the
                 requirements of this title, and dishonesty. But once Hohenstein entered
                 his NRS 453.3363 plea, the WCSD issued an amended notice of intent
                 informing Hohenstein that "[i]n as much as [sic] you were convicted of
                 Possession of a Controlled Substance in violation of NRS 453.336," it was
                 adding immorality, conviction of a felony or crime involving moral
                 turpitude, and any cause which constitutes grounds for revocation of a
                 teacher's license to the reasons warranting his dismissal. Throughout the
                 ESD proceedings the WCSD likewise maintained that it was Hohenstein's
                 "conviction" that led to and warranted his discharge, and thus also

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                 disqualified him from receiving unemployment benefits under NRS
                 612.385. A WCSD human resources specialist who testified at the
                 administrative hearing—who had no personal knowledge other than from
                 reviewing Hohenstein's termination paperwork and was the only witness
                 to testify on the WCSD's behalf—informed the appeals referee that
                 Hohenstein "was discharged for pleading guilty to a felony" because that
                 plea resulted in a "conviction [for] the possession of [the] illegal
                 substance ... marijuana." The WCSD representative further explained
                 that an elementary level teacher typically would be terminated for such a
                 conviction, that a felony conviction also would be considered grounds for
                 revoking a teaching license, and that Hohenstein's offense supported the
                 three termination grounds provided in the amended notice of intent to
                 dismiss
                             The WCSD thus equated Hohenstein's guilty plea with a
                 felony conviction and persuaded the ESD that Hohenstein's termination
                 was felony-based. The ESD appeals referee seemingly attempted to
                 correct the WCSD's error by noting in his findings that Hohenstein
                 "confessed to the act in the [administrative] hearing," which, along with
                 his guilty plea, demonstrated that he committed acts that warranted his
                 dismissal. But the "act" discussed in the transcript was possession of one
                 or more marijuana plants (the amount is unclear) by Hohenstein in his
                 home for personal medical use. And while such conduct, if indeed
                 Hohenstein's testimony established it, might establish a basis to disqualify
                 him from unemployment benefits, whether it did or not was not argued,
                 since the WCSD, which carried thefl burden to prove Hohenstein was
                 terminated for misconduct connected with his work, focused on the felony
                 label attached to the acts, not the acts themselves. Clark Cnty. Sch. Dist.

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                v. Bundley, 122 Nev. 1440, 1447-48, 148 P.3d 750, 755-56 (2006) (employer
                bears burden to prove disqualifying misconduct); see also id. at 1446, 148
                P.3d at 755 ("[Aln employee's termination, even if based on misconduct,
                does not necessarily require disqualification under the unemployment
                compensation law."); Clevenger v. Nev. Emp't Sec. Dept.,    105 Nev. 145,
                150, 770 P.2d 866, 868 (1989) ("There are numerous cases where an
                employee's misconduct is sufficient ground for termination, but does not
                justify the denial of unemployment benefits because the misconduct was
                not shown to be connected with his or her work."). Since NRS 453.3363(4)
                prohibited the WCSD from using Hohenstein's guilty plea to establish
                misconduct, the ESD's finding that the WCSD terminated Hohenstein for
                misconduct connected with his work—conviction of a felony—lacks
                substantial evidentiary support. Kolnik v. Nev. Emp't Sec. Dep't, 112 Nev.
11, 16, 908 P.2d 726, 729 (1996).

                            This court deferentially reviews the ESD's factual findings,
                especially misconduct findings under NRS 612.385. Kolnik, 112 Nev. at
                16, 908 P.2d at 729; Garman v. State Emp't Sec. Dep't, 102 Nev. 563, 565,
                729 P.2d 1335, 1336 (1986). Even so, we cannot uphold a decision denying
                unemployment benefits for workplace misconduct where the employer
                relied on a felony conviction that didn't exist to establish the predicate
                finding. It may be, on remand, that the WCSD can establish a sufficient
                factual and legal basis to sustain the ESD's denial of benefits but the

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                  record does not support such a finding on this appeal. We therefore
                  reverse the district court's order denying judicial review and remand with
                  instructions that the district court remand to the ESD to determine,
                  without considering Hohenstein's guilty plea, whether the WCSD met its
                  burden to demonstrate that Hohenstein committed disqualifying
                  misconduct under NRS 612.385 for which he was terminated.

                                                                                ,   J.

                  We concur:

                                                J.
                  11).Char tn:
                  Parraguirre
                      \•   )/!

                  Saitta

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