Burch v. Taylor Drug Store, Inc., s. 96-CA-1703-M
| Decision Date | 30 January 1998 |
| Docket Number | Nos. 96-CA-1703-M,96-CA-1822-MR,s. 96-CA-1703-M |
| Citation | 965 S.W.2d 830 |
| Court | Kentucky Court of Appeals |
| Parties | Linda BURCH, Appellant, v. TAYLOR DRUG STORE, INC. ; and Kentucky Unemployment Insurance Commission, Appellees, and KENTUCKY UNEMPLOYMENT INSURANCE COMMISSION, Appellant, v. TAYLOR DRUG STORE, INC. ; and Linda Burch, Appellees. |
Randall K. Justice, Frankfort, for Kentucky Unemployment Insurance Commission.
Oliver H. Barber, Jr., Rebecca Rudd Barnes, Gittleman & Barber, Louisville, for Linda Burch.
Kenneth S. Handmaker, Julie A. Gregory, Middleton & Reutlinger, Louisville, for Taylor Drug Stores, Inc.
Before DYCHE, HUDDLESTON and KNOPF, JJ.
These appeals are from a circuit court judgment reversing a decision by the Kentucky Unemployment Insurance Commission (the Commission) to award unemployment insurance benefits to the applicant. We reverse that portion of the circuit court's judgment holding that the Commission exceeded its statutory authority by removing the claim from the referee prior to the entry of a final order. However, we affirm the portion of the circuit court's order holding that the Commission's findings were not supported by substantial evidence. Therefore, we affirm the circuit court in result.
We take our recitation of the facts of this case from the Commission's factual findings. Linda Burch began her employment with Taylor Drug Store on August 26, 1992 as a part-time sales clerk. Prior to beginning her employment, she had been diagnosed as having a dissociative disorder and major depression with psychotic features. For these conditions, her physician prescribed the anti-depressant drug Zoloft, and she regularly saw a therapist. Her supervisor at Taylor Drug was aware of her therapy schedule and took steps to accommodate Burch's regular appointments.
In 1992, Burch's position changed to full-time pharmacy clerk. Taylor Drug acknowledges that Burch was a model employee. On two (2) separate occasions, Taylor Drug gave Burch commendations and awards for her work performance.
On April 26, 1994, an incident occurred between two (2) of Burch's co-workers. Burch took it upon herself to bring the incident to the attention of the store management. Her supervisor, Joyce Warner, informed Burch to stay out of the dispute, and that Warner would handle the situation. Store management did deal with the situation, but Burch continued to dwell on it to the point which it was upsetting her. From this time on, Burch began to withdraw and would not speak to anyone unless it was necessary to conduct business. On April 27, Burch informed Warner in a raised voice that she did not want to be assigned extra work hours because,
On April 28, Burch was scheduled to work until 9:00 p.m. with the pharmacist, Mike Ball. Around 4:45 p.m. another employee, Elaine Brooks, was about to end her shift and asked Ball if she should close down her register. Ball instructed Brooks to leave her register open as it was the only register from which money orders could be purchased. Burch overheard Ball's statement and announced, "Someone better count that register down because I'm not going to do it." When Ball suggested that Burch calm down, she repeated her statement. Ball then asked Burch to come into his office, at which point Burch refused. When Ball again asked Burch to go to his office, she again refused. Finally, after a third request from Ball, Burch accompanied Ball to his office.
When Ball and Burch reached the office, Ball sat down and asked Burch to be seated. She did not sit down but stood over him with her finger in his face yelling at him for five (5) to ten (10) minutes. Burch told Ball that she did not have to listen to him; she did not have to listen to anyone else; she was going to work her eight (8) hours and go home; and that there was not anything they could do about it. Burch then proceeded to bring up the earlier incident between the two (2) employees. Ball told Burch that management had taken care of that problem and that it was none of her business.
Ball then requested that Burch punch out and go home. Burch refused. When Ball again instructed her to leave, Burch returned to the pharmacy. Ball contacted the district manager, who agreed with Ball that Burch should be sent home. Shortly thereafter, Burch apologized to Ball and she agreed to go home.
The next day, Burch was questioned by Connie Adams, the human resources manager. Burch admitted that she had behaved in the manner described and stated that she just "lost it." After that meeting, Adams discharged Burch for insubordination. Subsequently, Burch presented Adams with a medical statement indicating that she had been diagnosed with dissociative disorder. Burch requested that she be given her job back. Adams declined to accept the medical statement since Burch had already been discharged.
Burch then filed a claim for unemployment insurance benefits. Taylor Drug contested her eligibility. The Division of Unemployment Insurance issued a "Notice of Determination" on May 13, 1994, finding that Burch was disqualified from receiving unemployment insurance benefits because she was discharged for misconduct related to her work. Burch appealed the initial determination to an unemployment insurance referee, pursuant to KRS 341.420(2). Referee Janet Snider conducted an evidentiary hearing on the appeal on June 8, 1994. Due to time constraints, the hearing was not completed that day. Referee Snider scheduled a second hearing date for July 13.
Burch's counsel wrote a letter on July 8 informing Referee Snider's office that he was unavailable on July 13 and asking that the hearing be rescheduled. Unfortunately, the referee's office did not receive his letter until July 14, one day after the hearing. The hearing was conducted on July 13 in the absence of Burch and her counsel. Referee Snider entered her decision on July 15, affirming the initial determination made by the Division. Referee Snider found that Burch was discharged for misconduct relating to her employment and was thereby disqualified from receiving unemployment insurance benefits.
On July 19, Burch's counsel wrote the Commission informing them of the situation. He asked that the referee decision be set aside and that the second hearing date be rescheduled. The letter was referred to the appeals division, and the Commission treated it as an appeal of the July 15 referee's decision. On August 19, the Commission entered an order remanding the matter to the referee for an additional hearing. After the hearing, the Commission directed that the case was to be returned for review and decision by the full Commission.
The additional hearing was conducted by Referee Snider on September 20. The matter was then returned to the full Commission for a decision. On October 14, the Commission entered its findings of fact and conclusions of law. The Commission reversed the referee's decision, concluding that Burch did not engage in misconduct related to work. The Commission reasoned as follows:
Misconduct has been construed to mean any act or omission by a worker which demonstrates a willful or wanton disregard for the legitimate business interests of the employer.
An employee is responsible for their behavior only when they have the ability to control that behavior. The claimant cannot be held accountable for her actions on April 28, 1994, as she was incapable at that time of controlling her behavior due to her dissociative disorder. She did not willfully act in an insubordinate manner. In cases of this type, misconduct cannot be found. Therefore, the employer's reserve account may not be relieved of charges under this claim.
Commission Order, October 14, 1994, pp. 4-5.
Taylor Drug filed an appeal of the Commission's Order in the Jefferson Circuit Court, pursuant to KRS 341.450. Following a hearing and briefing of the issues, the circuit court vacated the Commission's order. The circuit court found that the Commission improperly removed the matter from the referee prior to the entry of a final order. As a result, the court found that the Commission overstepped its authority in substituting its decision for that of the referee. The lower court also found that the Commission applied the incorrect rule of law. The court concluded that Burch presented insufficient evidence of her mental condition to justify her admitted misconduct. The court remanded the matter to the Commission with directions to reinstate the referee's decision.
The Commission now appeals the circuit court's order. Burch filed an appeal and joins with the Commission in contending that the trial court erred in finding the Commission's order to be unsupported by substantial evidence. We find that the circuit court erred holding that the Commission improperly removed the matter from the referee prior to the entry of a final decision. However, we agree with the circuit court's ruling on the question of the sufficiency of the Commission's findings of fact.
Initially, the trial court felt that the Commission usurped the referee's power to render an initial decision. However, the referee's July 15, 1994 order was a final and appealable order. The referee made findings of fact and conclusions of law, and entered a decision holding that Burch was disqualified from receiving benefits. At that point, the Commission was authorized to review the referee's decision as an appeal.
Yet more significantly, the lower court approached this case as a matter of conventional appellate procedure. In trial courts and in many administrative agencies, there is a single finder of fact who hears and weighs evidence, makes factual findings and applies the facts to the law. A reviewing body is limited to a determination of whether the factual findings are supported by substantial evidence, and whether the...
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...with regard to the subject of Baker's second argument — an agency head's duty of independent fact-finding — in Burch v. Taylor Drug Store, Inc., 965 S.W.2d 830 (Ky.App. 1998). [I]n many administrative agencies, there is a single finder of fact who hears and weighs evidence, makes factual fi......
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