Edwards v. Independence Services, Inc.

• Decision Date: 15 December 2004
• Docket Number: No. 29954.,29954.
• Citation: 140 Idaho 912,104 P.3d 954
• Parties: Gary EDWARDS, Claimant-Appellant, v. INDEPENDENCE SERVICES, INC., Employer-Respondent, and State of Idaho, Department of Labor, Respondent.
• Court: Idaho Supreme Court

104 P.3d 954

140 Idaho 912

Gary EDWARDS, Claimant-Appellant, v. INDEPENDENCE SERVICES, INC., Employer-Respondent, and State of Idaho, Department of Labor, Respondent.

No. 29954.

Supreme Court of Idaho, Lewiston, October 2004 Term.

December 15, 2004.

Gary A. Edwards, Coeur d'Alene, pro se appellant.

Richard K. Kuck, Coeur d'Alene, for employer-respondent.

Hon. Lawrence G. Wasden, Attorney General, Boise, for respondent State of Idaho.

TROUT, Justice.

Claimant-appellant Gary Edwards appeals from the Industrial Commission's decision denying him unemployment insurance benefits. The Commission found that Edwards was not discharged from employment and had voluntarily quit his job without exploring viable employment options that were available to him through the corporation. The decision of the Industrial Commission is supported by substantial and competent evidence and is, therefore, affirmed.

I. FACTUAL AND PROCEDURAL BACKGROUND

Edwards began employment in November 2000, when he and a partner formed a corporation named Independence Services, Inc. (the Corporation). Edwards managed the Case Management Division of the Corporation, which provided case management services to mentally ill adults under a contract with Idaho's Medicaid program. His partner, Ethelle Bartosovsky, managed the Psycho-social Rehabilitation (PSR) Division, with each division of the Corporation operating as a separate entity with its own expenses, payroll, and billing. In September 2002, the State of Idaho announced Medicaid cuts, wherein the number of hours of case management eligible for Medicaid reimbursement was significantly reduced.¹ The cuts were scheduled to take effect on December 1, 2002, but did not actually take effect until December 16, 2002. Edwards concluded that the cuts would adversely affect his profits.

In a meeting with Bartosovsky on September 30, 2002, Edwards proposed merging both of the corporate divisions to offset his expected profit losses. Bartosovsky rejected that proposal. However, the record indicates that Bartosovsky offered Edwards other positions within the Corporation as well as opportunities for Edwards to recoup the expected loss in income the Medicaid reimbursement changes would bring to his division. Edwards rejected these proposals and on November 4, 2002, told Bartosovsky that he was suspending operations of the Corporation's Case Management Division by November 30, 2002. Edwards' last day of work at the Corporation was November 21, 2002. At that time, he suspended operations of the Corporation's Case Management Division without board approval, and without dissolving the Corporation. However, it appears he remained one of the corporate officers.

Edwards also began operations of a newly formed business as a sole proprietor on December 1, 2002, hoping to provide both case management and psycho-social rehabilitation services. He told Bartosovsky that his staff and clients from the Corporation would be moving to his new company. Operation of the new company began on December 4, 2002, but Edwards did not take his first compensation from the business until April 2003.

On December 5, 2002, Edwards applied for unemployment insurance benefits, indicating that his employment ended on November 21, 2002, because the business closed. Edwards initially received unemployment benefits until the beginning of February, when the Department of Labor determined that he was not eligible for the benefits he had received because he had quit voluntarily. Edwards opposed the determination and a hearing was held in front of an Appeals Examiner. The Examiner also denied benefits, finding Edwards did not have good cause for voluntarily separating himself from his employment because he had viable options available to him and he failed to explore those options. It was also determined that Edwards was not eligible for a waiver of repayment of the unemployment benefits received to which he was not entitled.

The decision was appealed to the Industrial Commission, which conducted a de novo review of the record and affirmed the Examiner's decision on the same basis, also finding that the evidence did not indicate that Edwards faced an imminent substantial wage reduction at the time he left his employment. Edwards timely filed this appeal, arguing the Commission's conclusions were in error because Bartosovsky's offers of employment were not viable and he had good cause for terminating his employment.

II. STANDARD OF REVIEW

When this Court reviews a decision from the Industrial Commission, it exercises free review over questions of law, but reviews questions of fact only to determine whether the Commission's findings are supported by substantial and competent evidence. Hughen v. Highland Estates, 137 Idaho 349, 351, 48 P.3d 1238, 1240 (2002). Whether or not good cause existed to quit employment is a question of fact. Teevan v. Office of the Attorney General, 130 Idaho 79, 936 P.2d 1321 (1997). Therefore, factual findings of the Industrial Commission that there was not good cause to quit employment, if supported by substantial and competent evidence, will not be disturbed by this Court. Ewins v. Allied Security, 138 Idaho 343, 346, 63 P.3d 469, 472 (2003). Substantial and competent evidence is relevant evidence that a reasonable mind might accept to support a conclusion. Uhl v. Ballard Medical Products, Inc., 138 Idaho 653, 657, 67 P.3d 1265, 1269 (2003). The Court will not re-weigh the evidence or consider whether it would have reached a different conclusion from the evidence presented. Hughen, 137 Idaho at 351, 48 P.3d at 1240. As such, the function of the Court on appeal is not to review independently the Commission's decision, but to simply review the factual findings and determine whether or not there is substantial and competent evidence to support the facts found. Id.

III. ANALYSIS

The only issue before the Court is whether the Commission erred in denying unemployment benefits to Edwards. When an employment separation occurs, a claimant is eligible for unemployment insurance benefits if "unemployment is not due to the fact that he left his employment voluntarily without good cause connected with his employment, or that he was discharged for misconduct in connection with employment." Idaho Code § 72-1366(5). At the hearing in front of the Appeals Examiner, Edwards maintained that his separation from employment stemmed from the closure of the business brought on by changes in Medicaid reimbursement that would have left him with too little work to maintain profitability.

The record clearly indicates Edwards chose to suspend operations of his division of the Corporation, not due to the fact that there was no continuing work for him, but because he felt it unprofitable to continue in business in the way he had previously conducted it. Because this action is best defined as a voluntary separation under § 72-1366, Edwards had the burden of proving that such separation was for good cause by a preponderance of the evidence. Teevan v. Office of the Attorney General, 130 Idaho 79, 82, 936 P.2d 1321, 1324 (1997). A "preponderance of the evidence" is evidence that, when weighed with that opposed to it, has more convincing force and from which a greater probability of truth results. Cook v. Western Field Seeds, Inc., 91 Idaho 675, 681, 429...