Opinion
NO. 2013-CA-001738-MR
03-13-2015
MELISSA JONES APPELLANT v. KENTUCKY UNEMPLOYMENT INSURANCE COMMISSION; AND FLORA T. STUART APPELLEES
BRIEFS FOR APPELLANT: Matthew J. Baker Bowling Green, Kentucky BRIEF FOR APPELLEE KENTUCKY UNEMPLOYMENT INSURANCE COMMISSION: James C. Maxson Frankfort, Kentucky BRIEF FOR APPELLEE FLORA T. STUART: Peter L. Ostermiller Louisville, Kentucky
NOT TO BE PUBLISHED APPEAL FROM WARREN CIRCUIT COURT
HONORABLE STEVE ALAN WILSON, JUDGE
ACTION NO. 12-CI-00613
OPINION
AFFIRMING
BEFORE: COMBS, D. LAMBERT, AND VANMETER, JUDGES. VANMETER, JUDGE: Melissa Jones appeals from the Warren Circuit Court's order affirming the Kentucky Unemployment Insurance Commission's ("KUIC") decision finding Jones ineligible for unemployment benefits. For the following reasons, we affirm.
Jones began working as a paralegal for Flora T. Stuart's law office in May 2011. Jones took medical leave from September 26, 2011, to September 29, 2011, and, during that time, Stuart discovered continuing issues with Jones's performance, issues which she had previously discussed with Jones. Stuart sent Jones a letter on September 27, 2011, stating that she wanted to meet with her regarding these issues at 8 a.m. on September 30, 2011. Stuart also called Jones that same day to confirm the appointment. Jones received the letter and agreed to meet with Stuart.
On September 30, 2011, Jones did not show for her 8 a.m. appointment with Stuart and she failed to report her absence. The employer's rule requires workers to call and report their absence prior to the start of the shift. Jones claims she sent an email to Stuart at 9:42 a.m. saying she would be reporting to work for the 10 a.m. appointment but had to go to Nashville. This email was excluded by the referee at Jones's hearing since this evidence had not been previously produced and Jones failed to provide copies for both the referee and the opposing party. 787 KAR § 1:110(4)(1) (" [p]arties to a teleconference hearing who wish to introduce documents or written materials into the record at the referee hearing shall provide copies of the documents to the referee and the opposing party prior to the hearing[]"); 787 KAR § 1:110(4)(2) ("[f]ailure to provide both the referee and the opposing party with copies of the evidence shall result in its being excluded from the record[.]"). Jones was ultimately discharged for failure to report to work and failure to report her absence.
Kentucky Administrative Regulations.
Jones filed a claim for unemployment benefits, which she was granted until a referee decision dated January 26, 2012, held that benefits were not payable due to a finding of discharge for misconduct connected with the employment. Jones appealed the referee's decision to the KUIC, which affirmed. Then, Jones appealed the KUIC's decision to the Warren Circuit Court, which also affirmed. This appeal follows.
On appeal, Jones argues that the referee's decision to exclude from evidence the email she sent to Stuart on September 30, 2011, was in error. She also claims the referee improperly refused to allow her to call a witness in support of her case. Accordingly, Jones maintains that she is entitled to unemployment benefits, for if she had been permitted to present this evidence, it would have shown that she did not violate her employer's policy, and thus was not discharged for misconduct.
The Supreme Court has described the judicial standard of review in unemployment cases as follows:
Judicial review of a decision of the Kentucky Unemployment Insurance Commission is governed by the general rule applicable to administrative actions. If the findings of fact are supported by substantial evidence of probative value, then they must be accepted as binding and it must then be determined whether or not the administrative agency has applied the correct rule of law to the facts so found. Substantial evidence has been defined as evidence which has sufficient probative value to induce conviction in the minds of reasonable people. If there is substantial evidence in the record to support an
agency's findings, the findings will be upheld, even though there may be conflicting evidence in the record. An agency's findings are clearly erroneous if arbitrary or unsupported by substantial evidence in the record. If the reviewing court concludes the rule of law was correctly applied to facts supported by substantial evidence, the final order of the agency must be affirmed.Kentucky Unemployment Ins. Comm'n v. Cecil, 381 S.W.3d 238, 245-46 (Ky. 2012) (internal citations and quotations omitted).
The standard of review at the KUIC level is substantially less deferential. "The commission may on its own motion affirm, modify, or set aside any decision of a referee on the basis of the evidence previously submitted in such case, or direct the taking of additional evidence, or may permit any of the parties to such decision to initiate further appeals before it." KRS 341.430(1). This court has detailed the KUIC's review process accordingly:
Kentucky Revised Statutes.
"Except in instances where the commission orders cases removed to it from a referee, all appeals to the commission may be heard upon the records of the division and the evidence and exhibits introduced before the referee." 787 KAR 1:110(2)(2)(a); formerly 903 KAR 5:130(2)(2)(a). Thus, while the Commission generally does not hear evidence directly from witnesses, it has the authority to enter independent findings of fact. 787 KAR 1:110(2)(4)(a). Necessarily, such authority allows the Commission to judge the weight of the evidence and the credibility of witnesses and to disagree with the conclusion reached by the referee.Burch v. Taylor Drug Store, Inc., 965 S.W.2d 830, 834 (Ky. App. 1998), abrograted on other grounds by Cecil, 381 S.W.3d at 247. Thus, the KUIC may enter new findings of fact and owes no deference to the referee's decision, whereas this court must uphold the KUIC's decision if the decision was supported by substantial evidence and reached through a correct application of the law.
First, Jones argues that the email explaining her absence from the 8 a.m. meeting on September 30 should not have been excluded. She claims that refusing to admit the evidence simply because she did not have enough copies was a violation of her rights. KRS 341.370(1)(b) provides that a "worker shall be disqualified from receiving [Unemployment Insurance] benefits ... [if she] has been discharged for misconduct[.]" [Absent the exclusion of the email, Jones claims the referee and KUIC would not have found that she was discharged for misconduct.] Discharge for misconduct includes "refusing to obey reasonable instructions[.]" KRS 341.370(6). In response, Stuart and KUIC note that Jones did not object when the evidence was excluded by the referee, did not introduce the evidence by avowal, and did not raise this issue before the commission. Therefore, they argue that this issue is unpreserved and cannot be raised now. "It is well settled that failure to raise an issue before an administrative body precludes the assertion of that issue in an action for judicial review[.]" Wilson v. Kentucky Unemployment Ins. Comm'n, 270 S.W.3d 915, 917 (Ky. App. 2008) (internal citation and quotations omitted).
We agree that Jones did not properly preserve this issue, and thus it may only be reviewed for palpable error. CR 61.02 states:
Kentucky Rules of Civil Procedure.
A palpable error which affects the substantial rights of a party may be considered by the court on motion for a new trial or by an appellate court on appeal, even though insufficiently raised or preserved for review, and appropriate relief may be granted upon a determination that manifest injustice has resulted from the error.In Commonwealth v. Jones, 283 S.W.3d 665 (Ky. 2009), the Kentucky Supreme Court discussed the palpable error rule of RCr 10.26, stating:
an unpreserved error may be noticed on appeal only if the error is "palpable" and "affects the substantial rights of a party," and even then relief is appropriate only "upon a determination that manifest injustice has resulted from the error." An error is "palpable," we have explained, only if it is clear or plain under current law, Brewer v. Commonwealth, 206 S.W.3d 343 (Ky.2006), and in general a palpable error "affects the substantial rights of a party" only if "it is more likely than ordinary error to have affected the judgment." Ernst v. Commonwealth, 160 S.W.3d 744, 762 (Ky.2005). But see United States v. Olano, 507 U.S. at 735, 113 S.Ct. 1770 (discussing the federal "plain error" standard and noting, without deciding, that there may be forfeited errors so fundamental that they "can be corrected regardless of their effect on the outcome."). An unpreserved error that is both palpable and prejudicial still does not justify relief unless the reviewing court further determines that it has resulted in a manifest injustice, unless, in other words, the error so seriously affected the fairness, integrity, or public reputation of the proceeding as to be "shocking or jurisprudentially intolerable." Martin v. Commonwealth, 207 S.W.3d 1, 4 (Ky.2006).283 S.W.3d at 668.
Kentucky Rules of Criminal Procedure.
We recognize that Jones discusses RCr 10.26, the criminal rule regarding palpable error. However, since the criminal and civil rules regarding palpable error employ identical language, we find no reason or precedent for the analysis under the civil rule to be any different from that of the criminal rule.
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In other words, palpable error relief is not available unless three conditions are present. The error must have (1) been clear or plain under existing law, (2) been more likely than ordinary error to have affected the judgment, and (3) so seriously affected the fairness, integrity or public reputation of the proceeding to have been jurisdictionally intolerable. Id. Here, no clear or plain error occurred. The rules require all evidence to be provided prior to the hearing and for copies to be provided to the referee and the opposing party. Jones concedes that she did not follow these rules. Consequently, we find no abuse of discretion in the referee's decision to exclude the email, and thus the KUIC properly affirmed.
Next, Jones claims the referee abused her discretion by refusing to permit Jones to call a witness, Jerry Burns, a bankruptcy attorney and trustee, and Jones's former employer. However, the transcript of the January 9, 2012, hearing before the referee shows that Jones herself declined to call Burns as a witness. Jones intended to have Burns testify to alleged unethical practices concerning adjusting budgets for bankruptcy clients in Stuart's law office. The referee initially stated that Burns's testimony would probably be redundant given the testimony of Mark Flener, another bankruptcy trustee called by Stuart to testify to the ethics issue, but noted that Jones could raise the issue again if she felt that Flener's testimony was insufficient. Jones did not object to Flener's ability to testify to that issue, and she cross-examined Flener regarding the practices she claimed were unethical. Following Flener's testimony, the referee asked Jones if she required the testimony of Burns. Jones said no, that Flener had said what she needed him to say. Jones made no other objections concerning the testimony presented or lack thereof. Accordingly, we find no abuse of discretion in the referee's decision to exclude Burns as a witness.
In sum, we believe the KUIC had substantial evidence to support its decision and properly applied the law in upholding the referee's decision. For that reason, the order of the Warren Circuit Court is affirmed.
ALL CONCUR. BRIEFS FOR APPELLANT: Matthew J. Baker
Bowling Green, Kentucky
BRIEF FOR APPELLEE
KENTUCKY UNEMPLOYMENT
INSURANCE COMMISSION:
James C. Maxson
Frankfort, Kentucky
BRIEF FOR APPELLEE
FLORA T. STUART:
Peter L. Ostermiller
Louisville, Kentucky