Kienast v. Sioux Valley Co-op

• Decision Date: 10 July 1985
• Docket Number: CO-O,No. 14796,E,14796
• Parties: Barbara KIENAST, Claimant and Appellee, v. SIOUX VALLEYmployer and Appellant.
• Court: South Dakota Supreme Court

Page 337

371 N.W.2d 337

Barbara KIENAST, Claimant and Appellee, v. SIOUX VALLEY CO-OP, Employer and Appellant.

No. 14796.

Supreme Court of South Dakota.

Submitted on Briefs May 23, 1985.

Decided July 10, 1985.

Nancy J. Turbak, Watertown, for claimant and appellee.

Thomas F. Burns of Gribbin, Burns & Eide, Watertown, for employer and appellant.

HENDERSON, Justice.

ACTION

This is an appeal from the circuit court's reversal of a decision by the Secretary of the South Dakota Department of Labor (Secretary). The Secretary affirmed a determination by an Appeals Referee denying unemployment benefits to Claimant Barbara Kienast on the basis of misconduct. We reverse the circuit court and reinstate the original determination of the Appeals Referee, as the record discloses work-connected misconduct.

FACTS

Barbara Kienast (Claimant) has been employed by Sioux Valley Cooperative (Sioux Valley) for a period of seventeen years with intermissions herein irrelevant. She was employed as a bookkeeper and knew all operations and procedures of Sioux Valley's bookkeeping department. Linda Pietz (Pietz) was also a bookkeeper and had been so employed by Sioux Valley since 1979. Pietz, however, did not know all of the bookkeeping department's operations and procedures. Sioux Valley is located in Watertown, South Dakota. Claimant and Pietz were the only employees in the bookkeeping department and they had a strained relationship.

At a Board of Directors' meeting on March 24, 1983, the Board presented Manager Russell Porath (Porath) with instructions on personnel items which included, inter alia, that both bookkeepers were to know all of the office duties and share the work role and that all employees were to bury the hatchet. Porath held an employee meeting that same day and read to them a "Want List" which included in part: "10. BOTH bookkeeper's [sic] will know all of the operations of the office. Including government reports and etc. 11. From this minute on all hatchets will be buried and everyone will get along...." Porath gave no further elaboration at this time about how both bookkeepers were to know all operations. Both Claimant and Pietz were present at this meeting.

On April 4, 1983, Claimant approached Porath to express her concern about taking responsibility for any errors that someone else might make on government reports. She also explained that if not done regularly, a person would not remember how to prepare the reports. Porath testified that he instructed Claimant to teach Pietz the procedures by showing the latter the reports, having Pietz do them and then check them over for correctness. Claimant testified, however, that when she left the meeting she felt the issue was "left hanging in the air" and that she should do what she thought best. This issue was never discussed again and neither Claimant nor Pietz approached the other about Pietz learning all office procedures.

In the middle of July 1983, Porath gave Claimant some delinquent accounts and told her to compile a list and send it to a local collection agency. Although this was usually done immediately, it was not so done this time. Both Claimant and Pietz were on vacation at one time or another and neither compiled a list and sent it to the collection agency. Claimant testified that she did not do this deliberately but was simply too busy to do it and was not instructed that it was a high-priority item.

On August 23, 1983, Claimant had not instructed Pietz and Porath terminated Claimant's employment with Sioux Valley. Claimant then applied for unemployment insurance benefits which the Department of Labor denied because Claimant's discharge had been for misconduct. Claimant appealed this determination and on November 18, 1983, a hearing was conducted before an Appeals Referee. The Appeals Referee decided that Claimant's discharge was for misconduct and that benefits should be denied. Principally, the misconduct was Claimant's failure to instruct Pietz on office procedures and additionally, her failure to forward a delinquent accounts list for collection as instructed. Claimant appealed this decision to the Secretary of Labor who affirmed the Appeals Referee's decision. Claimant then appealed the Secretary's decision to the circuit court. The circuit court, after hearing arguments and reviewing the transcript of the proceedings before the Appeals Referee, but hearing no testimony, reversed the Secretary's decision to deny benefits. The circuit court found "from the record that the findings of the Appeals Referee were clearly erroneous in many aspects." The circuit court more specifically found that Porath did not elaborate at the employee meeting about responsibilities for learning office procedures. It also found Porath's directive to be ambiguous and to be reasonably interpreted as requiring Pietz to learn by whatever sources were available and that Claimant was never given a concise or cogent instruction to teach Pietz all office operations. Based on these findings, the circuit court's Conclusions of Law concluded that Claimant was not guilty of misconduct by failing to instruct Pietz or by failing to notify the collection agency of delinquent accounts. It therefore ordered that Claimant receive unemployment insurance benefits. From these determinations, Sioux Valley now appeals.

DECISION

I. WAS THE APPEALS REFEREE'S DECISION THAT CLAIMANT HAD BEEN INSTRUCTED TO TRAIN PIETZ AND HAD FAILED TO CARRY OUT THAT DIRECTIVE CLEARLY ERRONEOUS?

Initially, we note our scope of review. In Matter of South Dakota Water Management Bd., 351 N.W.2d 119, 122 (S.D.1984), this Court stated:

Prior to the amendment of SDCL 1-26-37, this court reviewed the record of an administrative agency in the same manner as the circuit court, guided by SDCL 1-26-36 and not bound by any presumption that the circuit court was correct. We would uphold a ruling or decision of an administrative agency unless we found that in light of the entire record the decision was clearly erroneous or we were left with a firm and definite conviction that a mistake was made. Matter of Ackerson, Karlen & Schmitt, 335 N.W.2d 342 (S.D.1983); Deuter v. South Dakota Highway Patrol, 330 N.W.2d 533 (S.D.1983).

On July 1, 1983, the following addition to SDCL 1-26-37 became effective: "The Supreme Court shall give the same deference to the findings of fact, conclusions of law and final judgment of the circuit court as it does to other appeals from the circuit court. Such appeal may not be considered de novo." In the recent decision of State v. Miller, 349 N.W.2d 42 (S.D.1984), we decided that despite the new language in the statute, this court still reviews the administrative decision essentially in the same manner as did the circuit court; the required deference to the circuit court has not changed.

The 1983 amendment aforesaid has not essentially changed the scope of review of this Court. Thus, our review is of the decision of the administrative agency and our standard is the clearly erroneous standard. If the circuit court reversed the agency's decision, and "[i]f after review of the evidence we deem the agency findings clearly erroneous, we affirm the circuit court. If the agency findings are not clearly erroneous, then the circuit court was clearly erroneous in so concluding." State, Div. of Human Rights v. Miller, 349 N.W.2d 42, 46 n. 2 (S.D.1984).

Conflicting evidence was presented as to whether Claimant had been instructed to teach Pietz office procedures which the latter did not know. Porath testified that at the employee meeting on March 24, 1983, he read the Board's directive that both bookkeepers were to know all office operations and that he thought he was spelling it out pretty clear that Claimant was to instruct Pietz. Porath further testified that on April 4th, when Claimant approached him, he instructed her to teach Pietz the office procedures by showing Pietz the reports and to...