Opinion
C.A. Nos. 98A-01-010-WTQ, 98A-03-004-WTQ.
Supplemental Memoranda Ordered: January 13, 2000.
Decided: February 23, 2000.
Letter Opinion and Order on the Appeal from the Unemployment Insurance Appeal Board — AFFIRMED .
Ronald L. Stoner, Esquire 300 Delaware Avenue, Suite 1130 P.O. Box 89 Wilmington, DE 19899 for the Appellant, Richard Frunzi
Stuart B. Drowos, Esquire Department of Justice Carvel State Office Building 820 N. French Street Wilmington, DE 19801 for the Appellee, Department of Public Safety
James J. Hanley, Esquire Department of Justice Carvel State Office Building 820 N. French Street Wilmington, DE 19801 for the Unemployment Insurance Appeal Board
Gentlemen:
It appears that the parties disagree as to the effect of Regulation 19, Section 4 of the Regulations and Rules Issued by the Delaware Unemployment Compensation Commission on the instant appeal. Regulation 19, Section 4 reads as follows:
(4) The Hearing of Appeals by the Commission on Its Own Motion.
(a) Within 20 days following a decision by an Appeal Tribunal, and in the absence of the filing, by any of the parties to the decision of the Appeal Tribunal, of a notice of appeal or an application for leave to appeal to the Commission as provided for in paragraphs 1 and 2, the Commission, on its own motion, may order the parties to appear before it for a hearing on the claim or any' issues involved therein.
(b) Such hearing shall be held only after 7 days' prior notice to the parties to the decision of the Appeal Tribunal, and shall be heard in the manner prescribed in paragraph 3, for the hearing of appeals by the Commission.
I think the place to start is with this Court's January 13, 2000 opinion which is attached hereto as Exhibit A and incorporated herein.
As the Court noted in its opinion, the Regulation has been unchanged since September 1953. But, as counsel for the Unemployment Insurance Appeal Board helpfully noted in its letter memorandum dated January 26, 2000, the structure of State government has changed by the creation of the cabinet form of government in 1970. The letter memorandum of January 26, 2000 is attached as Exhibit B and a portion is incorporated herein. The portion beginning with the carryover paragraph which begins on the cover page and continues through the carryover paragraph ending on the second line of unnumbered page 3, marked A to B on the Exhibit, gives helpful background. I return to the questions raised in the Letter Opinion of January 13, 2000, starting with a modified question 2.
2. Did the Board abuse its discretion by assuming jurisdiction over the decision of the Appeals Referee on its own motion after, under 19 Del. C. § 3318(a) and Regulation 19, Section 4, the 10-day time limit had elapsed?
The Employee-Appellant takes the position that Regulation 19, Section 4 is applicable to this appeal and should govern. The Board takes the position that, while Regulation 19, Section 4 is of continuing applicability, it does not affect this case because in this case the Board did not take jurisdiction on its own motion within 10 days following the decision by an Appeal Tribunal; therefore, the Regulation is simply irrelevant.
The Board thus reconciles the Regulation with the Supreme Court's holding in Funk v. Unemployment Insurance Appeal Board, Del. Supr., 591 A.2d 222, 225 (1991). The Funk case appears to "hold" that 19 Del. C. § 3320 gave the Board authority in its discretion to act on its own motion beyond the 10-day appeal period set forth in 19 Del. C. § 3318(c).
I confess I have difficulty with the Board's position. One would customarily read a rule saying something may be done "within 10 days" as prohibiting such action thereafter. It is also not completely correct to suggest that the Board assumed jurisdiction of this case as a late appeal." The Board here expressly assumed jurisdiction "on its own motion" and not on the basis of a good cause justification for a late appeal by a party. Admittedly, the Board's "Decision" granting the "late appeal" might suggest otherwise, but the discussion as a whole is clear.
My difficulty with the Board's position seems to put me somewhat at odds with the Funk opinion. Frankly, I think the Funk opinion is questionable for two reasons. First, Funk never considered a regulation that both sides to this litigation view as having continuing applicability. Second, Funk did not overtly express any time limits on the Board's discretionary ability to act on its own motion. This strikes me as bad policy. Compare Superior Court Civil Rule 59(c) where the Court's power to order a new trial is subjected to the same time limit as a motion by a party under Rule 59(b). If Regulation 19, Section 4 is applicable, it would supply a time limit.
I have considered whether this Court can proceed without seeking the advice of the Supreme Court by way of a certified question of law. Because the issue here probably does not qualify as "important or urgent" in the grand scheme of legal issues (Supreme Court Rule 41(b)) and because it hardly seems fair to burden this Employee-Appellant with the expense and delay of a Supreme Court certification procedure (the appeal route always being available at the end of the road), certification does not seem a happy alternative.
My inclination therefore is to search for an alternative route that does not do violence to my obligation to Supreme Court precedent without burdening the parties and the Supreme Court with an interlocutory application in this case at this time. I believe there is such a route if one examines Funk in more detail.
The law has recognized some good cause exceptions to the 10-day limit even on an appeal by a party. Indeed, the opinion in Funk taken in its factual context may stand for no more than that with regard to taking discretionary jurisdiction on the Board's own motion. The Supreme Court first said in Funk about an appeal by a party:
Funk first contends that his appeal was not untimely since he filed it within ten days of his receipt of the referee's decision. The Superior Court correctly interpreted 19 Del. C. § 3318(c) as meaning that a party in an unemployment compensation dispute has ten days in which to seek review by the Board of a referee's decision. When notification of the referee's decision is made through the mail, the ten-day period begins to run on the date of mailing unless the mailing fails to reach a party because of some mistake made by employees of the Department of Labor. (Footnote omitted and emphasis added).591 A.2d at 224. This is in accord with the general law which our Supreme Court has long applied to its own docket. Riggs v. Riggs, Del. Supr., 539 A.2d 163 (1988); Bey v. State, Del. Supr., 402 A.2d 362 (1979); Casey v. Southern Corporation, Del. Supr., 29 A.2d 174 (1942).
Later in the Funk opinion at 224-225, the Supreme Court turned to Funk's claim that the Board should have considered his case on the Board's own motion:
Funk's second contention raises the question of whether the Board could have (and as Funk contends, should have) acted sua sponte to consider his case after the ten-day appeal period when no timely appeal had been filed by the parties. We now hold that the Board, in the discretion granted it by 19 Del. C. § 3320 does have authority to act sua sponte beyond the ten-day appeal period to consider a case where no valid appeal has been filed by the parties, if, as the Board noted, the situation ". . . involved circumstances much more severe than those in this case." We agree with the Board and Superior Court that the circumstances of this case did not call for the unusual action of the Board taking an appeal upon its own motion. The Board had discretion in this matter, and under the circumstances it did not abuse its discretion by refusing to consider the case sua sponte. (Emphasis added).
It seems to me fair to read the "discretion" upheld in Funk as a limited discretion involving a somewhat "severe" circumstances calling for "unusual action." In this sense, it is similar to "good cause" and similar to the general law permitting late appeals because of errors by administrative or Court employees. Perhaps an administrative board responsible for substantive policy' should have slightly broader discretion to determine good cause, but the concept of within the discretion of the Board for good cause shown is a healthy limit on the assumption of judicial sua sponte.
Thus, even if the 10-day limit of Regulation 19, Section 4 applies to this case, as I tend to think it does, the Board could take jurisdiction on its own motion beyond 10 days. Here, good cause existed for the Board to take jurisdiction its own motion. Indeed, under the Funk language and the general law, the Board would have been justified in allowing a late appeal by a party for the same good cause. The reasons justifying good cause were: (1) the Employer's copy of the Appeals Referee's decision was sent to the wrong address; and (2) the Employer's attorney of record was not sent a copy of the opinion of the Appeals Referee. The reasons appear on their face to be factually correct. I find no abuse of discretion by the Board in assuming jurisdiction on its motion beyond the 10-day period in 19 Del. C. § 3318(c) and Regulation 19. Section 4.
I turn now to the other questions presented by the briefing.
1. Did the Board err as a matter of law in not holding a hearing before assuming jurisdiction of the decision of the Appeals Referee on its own motion?
There does not appear to be any statutory requirement for the Board to hold a hearing before assuming jurisdiction on its own motion. 19 Del. C. § 3320. Nor does Regulation 19, Section 4 require such a threshold jurisdictional hearing. It does require "a hearing on the claim or any issues involved therein." (Emphasis added). Regulation 19(4)(a). And, it does require seven days' prior notice to the parties. Regulation 19(4)(b). Since it is clear in this case that the Board's action in taking the case on its own motion was triggered by the letter from counsel for the Employer of December 19, 1997, it surely would have been better to ask for the Employee's position before the assumption of jurisdiction. This is a different context than the Board acting solely on its own initiative. It appears the Board intentionally chose to shortcut the procedure by ignoring any dispute with regard to the late filing of the appeal by the Employer (compare Funk where a jurisdictional hearing was held) through the expedition of going directly to acting on its own motion. There appears to be no legal prohibition on the Board's discretionary action so, if reviewed by this Court, an abuse of discretion standard would appear applicable.
While the Court feels it would have been better to hear the Employee before assuming jurisdiction, it is hard to say in the administrative context that an abuse of discretion occurred. The statute is designed to preserve the Board's position as the ultimate policy maker responsible for policy determination and consistency' in decisions. The Board has an active administrative role beyond being a disinterested appellate body on cases brought before it. The Board did issue a formal decision wherein it felt the circumstances (which included no copy of the Appeals Referee's opinion to counsel of record) "so severe" as to require" the assumption of jurisdiction "in the interest of justice." Thus, the Board itself in effect paid tribute to a good cause prerequisite. It is difficult for this Court to say the Board abused its discretion in determining to "cut to the chase" by getting to the substantive issues. I would, however, caution the Board about appearances and advise the Board that it is sometimes better to aim for the most considerate procedural course rather than using a mere passing legal muster test. But, on the facts of this case, the Court finds no abuse of discretion in the Board's ex parte assumption of jurisdiction on its own motion.
3. Did the Board err as a matter of law in proceeding to hear and determine the merits of the case after an appeal in this Court had been filed on the Board's earlier jurisdictional decision?
With regard to the suggestion that the first appeal to this Court deprived the Board of jurisdiction, the Employee is incorrect. Indeed, the suggestion is not even formally raised as an argument. The statute, 19 Del. C. § 3322 does not contemplate interlocutory appeals, but rather requires exhaustion of administrative remedies. Holmes v. Rosbrow, Del. Supr., 297 A.2d 51, 53 (1972); Henry v. Dept. of Labor, Del. Super., 293 A.2d 578, 582 (1972). It appears that, at the hearing on February 4, 1998, counsel for the Board was fully aware that an appeal had been taken and jurisdiction was being challenged at the time the Board permitted the Employer to present additional evidence without the Employee or his counsel being present. See Transcript at 2. Again, that procedure could have been handled better. An effort could have been made to contact counsel for the Employee, or the Board could have decided on the basis of comity to defer further action in order to give this Court an opportunity to act on the jurisdictional appeal. But, the Employee and his counsel evidently made a conscious decision not to appear before the Board and can hardly complain about not being heard. The first appeal was filed improperly. Mr. Frunzi intentionally took the risk of a hearing and an adverse judgment.
4. Is the Board's denial of benefits to Mr. Frunzi supported by substantial evidence?
Since Mr. Frunzi and his counsel did not go to the hearing before the Board on February 4, 1998, it is somewhat difficult to deal with their claims as to the inadequacy of the proceedings. Unfortunately, the Board's written decision is not a demonstrable example of legal competence, focusing, as it certainly seems to, on a violation that was specifically not made as the basis for the Employee's dismissal by the Employer.
But the evidence before the Board was that Mr. Frunzi, while a State Police Officer, maintained a business relationship with a pedophile who was on parole. The witness further indicated that Mr. Frunzi knew of the situation and knowingly sent his business associate into homes where there were children. The witness, a State Police Captain, further suggested that such conduct was unbecoming of a Police Officer.
This was evidently a sensitive internal affairs matter and the Chairman chose not to explore the testimony deeply. Nor was the quality of the evidence explored for hearsay on other considerations. So the Court is left to review an evidentiary record that can generously be described as thin, compounded by a legally inadequate written opinion from the Board.
But the record which contains the proverbial smoking gun, admittedly in somewhat conclusory form, is formidable. Being in a home-visiting business with a pedophile on parole strikes this Judge as sufficient justification for the termination of a State Police Officer, even if it is not well articulated.
I note also Employee-Appellant's prayer for relief is reinstatement of the decision of the Appeals Referee. Given the overall quality of the proceeding below, a remand for a new hearing might normally be open for consideration. But the Employee-Appellant voluntarily absented himself from the hearing before the Board and the zinger evidence is not inadmissible on its face, particularly in an administrative proceeding. And, to put it bluntly again, the zinger evidence alone is substantial evidence of just cause for termination. Under these circumstances, this Court is satisfied that the decision below should be AFFIRMED. IT IS SO ORDERED.
If the Employee-Appellant wants to have the case remanded for a further hearing, the Court is open to such an application by way of reargument. But the argument should be persuasive, showing some possible expectation of a different result on the evidence.
Sincerely,
William T. Quillen