Natural Resources Commission of Dept. of Natural Resources v. Sullivan

• Decision Date: 30 November 1981
• Docket Number: No. 2-280A58,2-280A58
• Citation: 428 N.E.2d 92
• Parties: NATURAL RESOURCES COMMISSION OF the DEPARTMENT OF NATURAL RESOURCES of the State of Indiana, Appellant (Respondent Below), v. Robert SULLIVAN, Appellee (Petitioner Below).
• Court: Indiana Appellate Court

Page 92

428 N.E.2d 92

NATURAL RESOURCES COMMISSION OF the DEPARTMENT OF NATURAL RESOURCES of the State of Indiana, Appellant (Respondent Below), v. Robert SULLIVAN, Appellee (Petitioner Below).

No. 2-280A58.

Court of Appeals of Indiana, Fourth District.

Nov. 30, 1981.

Theodore L. Sendak, Atty. Gen., Steve Zlatos, Deputy Atty. Gen., Indianapolis, for appellant.

Richard O. Regnier, Tipton, for appellee.

MILLER, Presiding Judge.

The Natural Resources Commission (Commission) of the Indiana Department of Natural Resources brings this appeal from a judgment reversing its demotion of Captain Robert Sullivan, an employee of its Law Enforcement Division (Division). Sullivan was employed in the capacity of a Regional Commander from 1974 through February of 1975 and as a Quartermaster from July of 1976 (apparently a lateral transfer) until his demotion one year later. ¹ The demotion was effected before Sullivan was afforded a hearing to test the validity of the charges against him. Sullivan did, however, participate in a later hearing which resulted in the affirmance of his demotion.

Upon his petition for judicial review, the trial court sustained Sullivan's claims that his initial demotion without a hearing violated statutory and due process safeguards, and further that the findings of the later hearing were unsupported by substantial evidence. We find 1) the procedures utilized by the Commission preserved Sullivan's due process rights and 2) Sullivan's demotion was supported by substantial evidence. Accordingly, the trial court's decision is reversed.

FACTS

On February 4, 1977 the Division's Superintendent, with the Director's approval, filed a statement of charges against Sullivan, pursuant to Ind.Code 14-3-4-7, alleging "frequently repeated acts of incompetence," a major offense under Division rules and regulations. ² Such acts allegedly included the "(a) inability to properly supervise subordinates or manage his duties while in the capacity of a supervisor; (b) inability to properly carry out assigned duties while in the capacity of a supervisor; (c) inability to make proper reports, as required by the Division, in a complete and satisfactory way or manner while acting in the capacity of supervisor; and (d) failure to display a proper and positive attitude toward the conduct and performance of his duties while acting in the capacity of a supervisor." On the same day, the Superintendent issued Special Order 799 demoting Sullivan in rank and pay from Captain to Class A officer. No hearing was held before Sullivan's demotion.

Within 10 days after his demotion, and pursuant to IC 14-3-4-7, Sullivan requested a public hearing before the Commission. After an unexplained one year delay, Sullivan moved for and was granted a more specific statement of the charges which "2) That through the year 1974 and up to February, 1975, when transferred to central office, the respondent as north region commander caused dissention and low morale among the officers of District 4.

                identified several incidents 3 occurring within a three year period immediately preceding his demotion.  4  An evidentiary hearing was held on July 19, 1978 after which the hearing officer recommended approval of Sullivan's demotion.  This recommendation was supported by proposed findings of fact which read, in pertinent part, as follows: 5
                

3) That the respondent inadequately dealt with the morale problems that he knew existed in District 4 during 1974, and certain actions taken by the respondent exacerbated the existing morale problems in the district.

4) That the respondent as Acting Quartermaster failed to prepare a 'justification memorandum' necessary to explain why 'prior approval' was not obtained for payment of a bill for the repair and winterization of a twenty-eight foot patrol boat as ordered by the Superintendent in December of 1976 and as is proper and customary in the operation of the Quartermaster Section.

5) That when ultimately prepared the 'justification' referred to in paragraph 4 was inadequate in that it did not explain why a S.D.O. or requisition number was not assigned to the transaction.

6) That in November 1976 the respondent sent to central office a receipt for a one hundred dollar payment to Spanky's Navy for reimbursement when in fact the payment to Spanky's Navy had not yet been made. Such procedure is contrary to the established rules pertaining to use and control of the petty cash accounts within the division. The respondent was apprised of the rules and should have and did know that such practice was unacceptable.

7) That the following items were charged and subsequently paid from the petty cash account contrary to rules controlling the use of said accounts:

(herein were listed 10 disbursements totaling $235.79.)

8) That in January 1977 the respondent failed to follow an order issued by the Superintendent directing him to prepare a 'memorandum of justification' as to why 'prior approval' for payment was not obtained, why the bill had not been paid for three and one-half months, and what misunderstanding may have existed between the division and Spanky's Navy with respect to the billing from Spanky's Navy.

....

10) That the respondent did not keep the Superintendent adequately advised on the activity in the Quartermaster Section as the Superintendent requested he do during his tenure as Acting Quartermaster.

11) That the respondent did not move a 22 foot boat located on the ground at the Quartermaster Depot to a location adequate to store said boat properly as the Superintendent ordered, but rather allowed the boat to sit on the ground for several weeks after receiving the order.

12) That from August 1976, until January 1977, the respondent failed to properly supervise and assist Deborah (Western) Cornwall, a secretary at the Quartermaster Depot;....

13) That over the course of his tenure as acting Quartermaster the respondent displayed an inability to properly prepare paperwork, a failure to adequately review the paperwork prepared by his subordinates, and an unwillingness to seek or accept assistance; all of which resulted in 14) That during July, August, and September 1976, the respondent failed to exercise due diligence in following an order of the Superintendent to hire a wage-rate employee at the Quartermaster Depot and instead substituted his own priorities for those reflected in a direct order from the Superintendent.

his failing to discharge his duties as Acting Quartermaster in a competent manner.

15) That the respondent refused to confront criticism or attempt to correct inadequacies or discuss existing problems with subordinates or superiors from 1974 through February 1977

16) That the above findings manifest deliberate and gross neglect of duty and repeated acts of incompetence (Section XIII, paragraph 1 (B) General Rules and Regulations of the Law Enforcement Division)."

Sullivan filed objections to the proposed findings, and although he did not object to the manner in which the evidentiary hearing was conducted he did challenge the initial summary demotion by the Superintendent as a denial of an opportunity to answer the charges, confront his accusers, or participate in a hearing to test the validity of the charges. Sullivan contended that such denials violated: 1) IC 14-3-4-7 governing the demotions of Division employees, 2) Division rules and regulations, 3) the Administrative Adjudication Act, Ind.Code 4-22-1-1 et seq., and 4) his due process rights under the Indiana and United States Constitutions. He also contended the proposed findings were unsupported by substantial evidence. On January 26, 1979 the Commission approved and adopted the hearing officer's report and recommendations as its final order.

Sullivan filed a petition for judicial review on February 12, 1979. After argument and pursuant to Sullivan's request, the trial court issued findings of fact and conclusions of law, reversing the Commission's order and directing Sullivan's restoration of rank and back pay. Specifically, the court found:

"No arraignment or for cause hearing was held prior to the demotion of Capt. Sullivan as required by IC 1971, 14-3-4-7, nor did the Superintendent or the Director have any verified evidence or sworn testimony before them on which to prefer said charges, but in fact said charges were based upon hearsay evidence" ⁶

and, further:

"all alleged acts of incompetence were proven to be erroneous at the public hearing by the Petitioner and other witnesses and it appears that there was much irrelevant and immaterial testimony permitted in the record over objection of Petitioner's attorney."

The court issued the following Conclusions of Law:

"1. The demotion of Capt. Sullivan by Supt. Murphy on 2/4/77 was arbitrary, capricious and not in accordance with I.C. 1971, 14-3-4-7 (Burns Code Ed.). The legislature in 14-3-4-7, by requiring that an employee of the division not be demoted except for cause after having charges preferred in writing requires a minimum of due process at the earliest stages of an inquiry which may lead to the demotion of an employee of the Law Enforcement Division. That is, there must be a preliminary hearing and a finding of cause for demotion before actual demotion can be ordered. (citing 63 Am.Jur.2d 752 § 202 (1972) and State ex rel. Lehman, (1978) Ind.App., 378 N.E.2d 31 for support) ....

2. .... (B)ecause the Superintendent or the Director failed to properly find a cause for demoting Capt. Sullivan before actually demoting him on February 4, 1977, as required in 14-3-4-7 such action was without observance of procedure required by law and contrary to Petitioner's constitutional right of due process of law.

3. The record of this case discloses that many of the alleged acts of incompetence The Commission filed its motion to correct errors on November 1, 1979 raising the following issues for review:

with which Capt. Sullivan was (sic) charged were brought to Supt....