Idaho State Ins. Fund v. Hunnicutt, 15469

• Decision Date: 23 December 1985
• Docket Number: No. 15469,15469
• Citation: 715 P.2d 927,110 Idaho 257
• Parties: IDAHO STATE INSURANCE FUND, Appellant-Respondent, v. Calvin J. HUNNICUTT, Respondent-Appellant.
• Court: Idaho Supreme Court

Page 927

715 P.2d 927

110 Idaho 257

IDAHO STATE INSURANCE FUND, Appellant-Respondent, v. Calvin J. HUNNICUTT, Respondent-Appellant.

No. 15469.

Supreme Court of Idaho.

Dec. 23, 1985.

On Denial of Rehearing

March 27, 1986.

Henry F. McQuade, and R.H. Young, Jr. (argued), of the Van Bishop Law Offices, Nampa, for respondent-appellant.

Jim Jones, Atty. Gen. and Fred C. Goodenough, Deputy Atty. Gen. (argued), for appellant-respondent.

BISTLINE, Justice.

I. BACKGROUND FACTS AND LAW

Calvin J. Hunnicutt was a twenty-six year, permanent employee of the state serving as a compensation insurance payroll auditor with the Idaho State Insurance Fund (ISIF). Hunnicutt was a "classified" employee of the state. This means he held a position with the ISIF "which ... is subject to the provisions of the merit examination, selection, retention, promotion, and dismissal requirements of chapter 53, title 67, Idaho Code." I.C. § 67-5302(4). As a classified employee, he could only be dismissed in a manner consistent with the laws and regulations under the jurisdiction of the Idaho Personnel Commission (Commission). I.C. § 67-5301. His discharge could only be grounded on certain enumerated causes. I.C. § 67-5309(n). Upon his discharge by the ISIF, Hunnicutt had the right to appeal for review to the Commission. I.C. § 67-5316.

A primary responsibility of the auditor position held by Hunnicutt is to conduct on-location payroll audits of firms and entities which offer workers' compensation through the ISIF. Pursuant to I.C. § 67-5309C, the ISIF set a productivity standard for these auditors of two audits per day. Although the quality of Hunnicutt's work was good, the quantity of his output fell short of the productivity standard. Ultimately, he was discharged on the grounds of inefficiency and incompetency as set out in I.C. § 67-5309(n)(2).

Hunnicutt appealed his discharge to the Personnel Commission as was his right under I.C. § 67-5316(a). Commissioner Ann Pasley-Stuart was assigned as hearing officer to Hunnicutt's case, as provided for in § 67-5316(d) and in the Idaho Personnel Commission Rules and Regulations 20.D.4. (hereinafter cited as "rules"). Hearing Officer Pasley-Stuart affirmed the discharge but only on the grounds of inefficiency.

Again invoking statutorily granted rights, Hunnicutt appealed the hearing officer's determination to the full Commission. I.C. § 67-5316(i). The Commission, in a three to one decision, rejected the decision of the hearing officer. The Commission noted that "quantity" of output was not a part of Hunnicutt's job description. The Commission noted the ISIF's admission that the two-audit quota was a "management tool only." The Commission found that Hunnicutt was not inefficient or incompetent in the performance of his required duties but rather was performing well his required duties. Noting Hunnicutt's testimony that, in order to meet the quota, he needed to be assigned extra audits to compensate for cancellations, the Commission found that "Mr. Hunnicutt's lack of averaging two audits per working day seemed to be [a problem] of scheduling." The Commission concluded that proper cause as defined in I.C. § 67-5309(n) did not exist, and reinstated Hunnicutt pursuant to I.C. § 67-5316(c). At this juncture, the ISIF appealed to the district court, such an appeal being provided for under I.C. § 67-5316(l ).

The district court in a summary disposition ruled that "[t]he record easily substantiates the hearing officer's determination that such a requirement [of two audits per day] is not unreasonable." The district court further found that the hearing officer's determination--that the ISIF discharge of Hunnicutt on the ground of inefficiency was justified--"was based upon a reasonable view of the evidence that was presented...."

The district court apparently saw itself as the third step in the appeal and review process, and saw its function as having to determine whether the Commission erred in its reversal of the hearing officer. In this perceived role, the district court reversed the Commission, and reinstated the hearing officer's affirmance of Hunnicutt's discharge.

II. OPINION

A. The Issue of Whether the Commission's Findings of Fact as a Matter of Law Supported Its Decision.

The district court's perception that it was to review the Commission's reversal of the hearing officer constituted a fundamental misconception of the relationship between the hearing officer and the full Commission, and of its own function as a reviewing court. Upon Hunnicutt's appeal of the hearing officer's decision, the Commission was entitled to review the record de novo, and "revise the decision and order of the member or presiding officer, in whole or in part...." I.C. § 67-5316(i). The decision of the full Commission was not a mere reversal of a lower tribunal; rather, the new decision effectively displaced the proposed decision of the hearing officer (albeit that in the absence of an appeal to the full Commission the hearing officer's decision would have become the decision for the Commission).

The full Commission's decision and order, then, was the final agency action to which the district court should have directed its attention. Swisher v. State Department of Environmental and Community Services, 98 Idaho 565, 567, 569 P.2d 910, 912 (1977). It was not the function of the district court to determine whether the hearing officer's determination was reasonable in light of the record, or to weigh the decision of the hearing officer against that of the Commission. Rather, the district court's function was to review the "decision of the commission " in order to determine whether to "affirm or set aside such order or remand the matter to the commission...." I.C. § 67-5316(l ) (emphasis added).

I.C. § 67-5316(l ) sets out exclusive grounds upon which the district court could set aside or remand a decision of the Commission:

Upon appeal of a decision of the commission, the district court may affirm or set aside such order or remand the matter to the commission only upon the following grounds, and shall not set the same aside on any other or different grounds, to wit:

(1) That the findings of fact are not based on any substantial competent evidence;

(2) That the commission has acted without jurisdiction or in excess of its powers (3) That the findings of fact by the commission do not as a matter of law support the decision and order.

The district court set aside the decision of the Commission based on the third ground, holding that "the reversal of this finding of fact [by the hearing officer] of inefficiency by the Commission does not as a matter of law support their ultimate decision and order."

A cursory examination of the Commission's decision belies this holding. The Commission found as a matter of fact that Hunnicutt "did not demonstrate inefficiency or incompetency in the performance of his required duties." Inefficiency and incompetency were the reasons given for Hunnicutt's discharge. To the contrary, the Commission found that Hunnicutt was "doing well the very things he is required to do ... in our job description." "Mr. Hunnicutt's lack of averaging two audits per working day," the Commission found, "seemed to be [a problem] of scheduling." Consequently, the Commission found that proper cause for Hunnicutt's discharge did not exist. I.C. § 67-5316(c) provides that "upon determination that proper cause did not in fact exist within the definitions set forth in section 67-5309(n), Idaho Code ... the commission shall order the reinstatement of the employee...." By definition the Commission's findings of fact that proper cause did not exist as a matter of law supported its determination that Hunnicutt was to be reinstated pursuant to I.C. § 67-5316(c).

B. The Issue of Whether the Commission's Findings of Fact Were Based on Any Substantial Competent Evidence.

At oral argument, the ISIF conceded that the district court erred in its ruling. However, the ISIF advanced as an alternative basis for affirmance the first ground enumerated in I.C. § 67-5316(l ): "(1) that the findings of fAct are not based on any substantial competent evidence." Accordingly, we examine the record to determine whether the Commission based its findings of fact on any substantial competent evidence.

1. The Substantial Competent Evidence Test.

In Local 1494 of the International Association of Firefighters v. City of Coeur d'Alene, 99 Idaho 630, 586 P.2d 1346 (1978), this Court discussed the test for determining what constitutes substantial evidence for the purposes of judicial review of an administrative agency's action. We observed:

The "substantial evidence rule" is said to be a "middle position" which precludes a de novo hearing but which nonetheless requires a serious review which goes beyond the mere ascertainment of procedural regularity. Id. at 633, 586 P.2d at 1349.

Such a review requires more than a mere "scintilla" of evidence in support of the agency's determination, id. at 634, 586 P.2d at 1350, though "something less than the weight of the evidence." Consolo v. FMC, 383 U.S. 607, 620, 86 S.Ct. 1018, 1026, 16 L.Ed.2d 131 (1966). "Put simply," we wrote, "the substantial [competent] evidence rule requires a court to determine 'whether [the agency's] findings of fact are reasonable.' 4 Davis, Administrative Law Text § 29.01-02 at 525-530." Local 1494, supra, 99 Idaho at 634, 586 P.2d at 1350; see also Universal Camera Corp. v. National Labor Relations Board, 340 U.S. 474, 477, 71 S.Ct. 456, 459, 95 L.Ed. 456 (1951) (Substantial evidence is " 'such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.' Consolidated Edison Co. v. National Labor Relations Board, 305 U.S. 197, 229, 59 S.Ct. 206, 217, 83 L.Ed. 126.") (cited with approval in Local 1494, supra ).

In deciding whether the agency's findings of fact were reasonable, reviewing courts should not "read only one side of the...