Thomas v. State, No. 29753-1-II (Wash. App. 4/27/2004)
| Decision Date | 27 April 2004 |
| Docket Number | No. 29753-1-II,29753-1-II |
| Parties | TRACY THOMAS, Respondent, v. STATE OF WASHINGTON DEPARTMENT OF EMPLOYMENT SECURITY; and CITY OF RENTON, Appellants. |
| Court | Washington Court of Appeals |
Appeal from Superior Court of Pierce County. Docket No: 02-2-10510-1. Judgment or order under review. Date filed: 12/06/2002. Judge signing: Hon. Brian Maynard Tollefson.
Counsel for Appellant(s), Zanetta Lehua Fontes, Warren Barber & Fontes PS, 100 S 2nd, PO Box 626, Renton, WA 98057-0626.
David Ira Matlick, Atty Gen Ofc, 1019 Pacific Ave Fl 3, Tacoma, WA 98402-4488.
Counsel for Respondent(s), Joel Phillip Nichols, Deno Millikan Dale et al PLLC, 3411 Colby Ave, Everett, WA 98201-4709.
The City of Renton fired Tracy Thomas after she failed to reimburse the City for personal expenses charged to the City's credit card. Because Thomas was terminated for misconduct, the Employment Security Department (ESD) denied her unemployment benefits. Thomas appealed the denial of benefits to the Pierce County Superior Court, which reversed.
The City and ESD appeal asking that we reinstate ESD's decision denying Thomas unemployment benefits. Because substantial evidence supports ESD's findings that Thomas committed misconduct by willfully misusing her employer's financial resources and causing it harm as a result, we reverse the superior court and reinstate the order denying Thomas unemployment benefits.
Thomas worked for the City as a Victim's Advocate beginning in November 1996. In April and May 2001, Thomas made numerous personal calls on the City's cellular phone. But as late as September 2001, Thomas had not reimbursed the City for the cost of these calls.
On October 2, 2001, Thomas and two other City employees went to Hawaii to attend a conference. The City authorized the employees' attendance. The conference took place between Wednesday, October 3, 2001, and Friday, October 5, 2001. But Thomas and another City employee, Stephanie Dikeakos, extended their stay through the following weekend.
Thomas and Dikeakos agreed with one another that each of them would pay for one night at the hotel. Thomas put the hotel, meal, and car rental charges, including those for the weekend, on the City's credit card. The City's policy allowed employees to place personal charges on City credit cards but required prompt reimbursement. For travel expenses, the City required the employee to reimburse within seven working days of returning from the trip. Non-travel expenses were not authorized on City credit cards, but employees were required to submit receipts for official purchases within 21 calendar days. Shortly after their return to Washington on Sunday, October 7, 2001, Dikeakos paid her portion of the weekend charges directly to Thomas.
Thomas filed her expense report 12 days after returning from Hawaii, on October 19, 2001. She did not report the hotel charges for October 5 and 6, as personal charges, but she did report the meals and car rental. Thomas also cashed the check from Dikeakos but did not give the money to the City. Thomas claimed that she intended to give Dikeakos's money to the City but that she had the cash in her wallet at the time it was stolen on November 6, 2001. To cover their loss, the City deducted $548.18 from Thomas's paycheck on November 20, 2001, nearly six weeks after the Hawaii trip.
On November 29, 2001, the City's community services administrator sent Thomas a Notice of Intent to Terminate. The notice cited the dollar amount, Thomas's failure to inform her supervisors of the personal charges, the time delay in reimbursing the City, and the eventual involuntary nature of repayment as reasons justifying termination. Thomas responded on December 3, 2001, claiming that she mistakenly believed that she had 21 days and not seven days to make reimbursement and that her non-payment was unintentional and not the result of dishonesty. The City terminated Thomas's employment on December 5, 2001.
Because Thomas was terminated for misconduct, ESD denied Thomas unemployment benefits. The Administrative Law Judge (ALJ) and the ESD Commissioner both affirmed the denial. Thomas appealed and the Pierce County Superior Court reversed the denial stating that it was doing so `because {ESD} either erroneously interpreted or applied the law, or because it {was} not supported by substantial evidence.' Clerk's Papers (CP) at 68. Both ESD and the City appeal.
When the superior court reverses an agency's decision, we sit in the same position as the superior court and apply the standards of the Administrative Procedure Act (APA) to the record before the agency. Hertzke v. Dep't of Ret. Sys., 104 Wn. App. 920, 926, 18 P.3d 588 (2001). We review an agency's findings of fact for substantial evidence and its conclusions of law de novo. Hertzke, 104 Wn. App. at 926-27. Here, we directly review the ESD decision that the superior court reversed. Under the APA, a reviewing court may reverse an agency's decision when: (i) the agency erroneously interpreted or applied the law; (ii) substantial evidence does not support the agency's decision; or (iii) the agency's ruling is arbitrary or capricious.1 Hertzke, 104 Wn. App. at 926. See also RCW 34.05.570(3). Although its ruling is somewhat unclear, it appears that the superior court ruled that ESD erroneously interpreted or applied the law or that substantial evidence did not support its findings. But our de novo review of ESD's decision under APA standards does not support this result.
The Employment Security Act (ESA) provides that an employee is disqualified from receiving unemployment benefits if he or she is `discharged or suspended for misconduct connected with his or her work.' RCW 50.20.060. Whether an employee has committed misconduct is a mixed question of law and fact. Dermond v. Employment Sec. Dep't, 89 Wn. App. 128, 132, 947 P.2d 1271 (1997). To resolve a mixed question of law and fact, we first establish the relevant facts, then determine the applicable law, and apply the law to the facts. Tapper v. State Employment Sec. Dep't, 122 Wn.2d 397, 403, 858 P.2d 494 (1993). We give deference to an agency's factual findings. Dermond, 89 Wn. App. at 132. But we review the agency's application of the law de novo. Dermond, 89 Wn. App. at 132.
Here, certain facts are undisputed. Thomas attended an authorized conference in Hawaii from October 3-5, 2001. Thomas and another employee extended their stay for the weekend after the conference and used the City's credit card for the hotel and meal expenses incurred during that time. The City's policy allowed such charges but required that the employee reimburse the City for personal travel expenses within seven working days of returning. Thomas did not reimburse the City for the expenses she charged.
The City recovered its loss by withholding the money from Thomas's November 20, 2001 paycheck, well after both the 7-and her erroneously assumed 21-day deadlines had expired. Thus, the parties' dispute is not factual. Rather, they dispute whether Thomas's failure to timely repay the City for her personal expenditures is misconduct sufficient to deprive her of unemployment benefits.
Misconduct is `{1} an employee's act or failure to act in willful disregard of his or her employer's interest {2} where the effect of the employee's act or failure to act is to harm the employer's business.' Hamel v. Employment Sec. Dep't, 93 Wn. App. 140, 145, 966 P.2d 1282 (1998), review denied, 137 Wn.2d 1036 (1999) (quoting RCW 50.04.293) (numbers added). See also RCW 50.04.293. We have previously held that to justify withholding unemployment benefits, the employee's conduct must be both `willful' and `harmful.' Hamel, 93 Wn. App. at 145. Moreover, `{m}ere incompetence, inefficiency, erroneous judgment, or ordinary negligence does not constitute misconduct for purposes of denying unemployment compensation.' Dermond, 89 Wn. App. at 133.
To constitute misconduct, the employee's violation must have been `intentional, grossly negligent, or continu{ous} . . . after notice or warnings.' Dermond, 89 Wn. App. at 133 (quoting Wilson v. Employment Sec. Dep't, 87 Wn. App. 197, 202, 940 P.2d 269 (1997)). The employee need not have an intent to harm her employer, but must act in voluntary or willful disregard of the employer's interest. See Hamel, 93 Wn. App. at 146. Because `willful' modifies the word `disregard,' the employee must have voluntarily disregarded the employer's interest but the employee's specific motivations are not relevant. Hamel, 93 Wn. App. at 146. To act in `willful disregard,' the employee must have (1) been aware of the employer's interest; (2) known or should have known that certain conduct jeopardizes that interest; and (3) nonetheless performed the act, willfully disregarding its probable consequences. Hamel, 93 Wn. App. at 146-47.
Here, Thomas acknowledged that she knew she was responsible for the personal charges assessed against the City's credit card. She contends that she intended to pay the charges and did not willfully disregard the consequences to the City of nonpayment. But the City need not prove that Thomas intended to harm the City in order to prove Thomas's misconduct. The City's policy required that Thomas reimburse it within seven working days of returning from the trip. Thomas claimed that she mistakenly believed that the policy required repayment within 21 calendar days. But it is undisputed that Thomas did not reimburse the City within 7 days or 21 days. In addition, according to Thomas, she cashed Dikeakos's check sometime before November 6, 2001, but she did not immediately reimburse the City for Dikeakos's share. Thomas's failure to pay the money owed was willful and disregarded the City's interest in timely...
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