MARY K. BEAN, Petitioner and Appellant, -vs- STATE OF MONTANA BOARD OF LABOR APPEALS; MONTANA DEPARTMENT OF LABOR AND INDUSTRY; and COMMUNITY NURSING, INC., d/b/a VILLAGE HEALTH CARE CENTER, Respondents and Respondents.
No. 94-278
Supreme Court of Montana
Submitted November 29, 1994. Decided March 15, 1995.
270 Mont. 253 | 891 P.2d 516 | 52 St.Rep. 169
For Appellant:
For Respondents: Maureen H. Lennon (argued) and Candace C. Fetscher; Garlington, Lohn & Robinson, Missoula; Melanie Symons (argued), Department of Labor and Industry, Helena.
For Amicus: Cary B. Lund, Special Ass‘t Attorney General, Department of Social & Rehabilitation Services, Helena.
JUSTICE GRAY delivered the Opinion of the Court.
Mary Bean (Bean) appeals from an opinion and order of the Fourth Judicial District Court, Missoula County, denying her petition for judicial review of a decision of the Board of Labor Appeals (BOLA) finding that her employer discharged her for misconduct and that she was not entitled to unemployment benefits. We reverse and remand.
We restate the issues presented on appeal as follows:
- Did the Department of Labor and Industry‘s telephonic hearings procedure deprive Bean of her constitutional right to due process of law by denying her the ability to confront and cross-examine witnesses?
- Did the appeals referee improperly exclude evidence offered by Bean to controvert her employer‘s allegations of misconduct?
- Is the BOLA‘s decision that Bean engaged in misconduct supported by substantial evidence?
- Did the BOLA violate applicable procedural requirements in making its findings and decision?
Bean‘s employment as a licensed practical nurse with Community Nursing, Inc., doing business as Village Health Care Center (Village Health), ended with her discharge on March 22, 1993, allegedly for failure to improve her conduct and inappropriate criticism of Village Health‘s operation. After her discharge, Bean filed for unemployment insurance benefits with the Montana Department of Labor and Industry (Department). A Department deputy twice denied Bean‘s claim on the basis that she was discharged for misconduct and, as a result, was ineligible to receive benefits. Bean appealed the decision to an appeals referee (referee).
A telephonic hearing was held on June 29, 1993; the parties were at separate locations in Missoula and the referee was in Helena. The referee subsequently issued written findings of fact and a decision concluding that Bean was discharged for misconduct and, thus, ineligible for unemployment benefits. Bean appealed to the BOLA. The BOLA, following a fifteen minute telephonic argument presented by Bean‘s counsel, issued a one-paragraph decision adopting the referee‘s findings of fact and decision.
Bean petitioned the District Court for judicial review of the BOLA‘s decision. The District Court denied her petition and affirmed the BOLA‘s decision denying unemployment benefits. Bean appeals.
Did the BOLA violate applicable procedural requirements in making its findings and decision?
A person dissatisfied with a referee‘s decision may appeal to the BOLA, which makes determinations related to unemployment insurance benefits claims pursuant to the procedures contained in
A. Did the BOLA err in not conducting a de novo hearing on Bean‘s appeal?
Bean argues first that the BOLA is required to conduct a de novo evidentiary hearing on an appeal from a referee. Neither the applicable administrative rule nor this Court‘s decisional law supports her position.
Pursuant to
B. Did the BOLA violate § 24.7.306(1), ARM, by not considering a transcript or recording of the proceedings before the referee?
Bean‘s second assertion of error regarding the BOLA‘s procedures is that
Section
Section
Moreover, it cannot be seriously disputed that a transcript or recording of Bean‘s hearing before the referee is a record of the Department. Section
“Material” records — whether from a common sense or legal perspective — are those records which are relevant to, and necessary for, the determination of issues presented to the BOLA. The issues Bean presented to the BOLA related to her general assertion that the BOLA should reject the referee‘s findings as erroneous. She argued that the referee incorrectly interpreted the evidence of record, inappropriately considered hearsay evidence, and rejected relevant evi- dence she sought to introduce regarding Village Health‘s alleged retaliatory discharge. It is clear that proper resolution of each of these issues required the BOLA to review the evidence previously submitted. Therefore, a recording or transcript of the testimony introduced before the referee was material.
As a quasi-judicial board, the BOLA is directed to evaluate and pass on facts. Section
The BOLA argues that, as an administrative board vested with quasi-judicial powers for purposes of
Insofar as is relevant here, City of Billings addressed whether the Montana Administrative Procedure Act applied to the BOLA and limited its power in reviewing unemployment insurance cases appealed from a referee. We rejected those limitations, noting that the BOLA is a quasi-judicial board performing an adjudicatory function “involving the exercise of judgment and discretion in making determinations in controversies.” City of Billings, 663 P.2d at 1171. In that regard, we stated that the BOLA was authorized to consider new evidence presented to it, in addition to the evidence presented to the referee. Our use of the word “may” in addressing the BOLA‘s authority did not relate to any discretion involving whether to consider the evidence from the referee‘s hearing; it related only to the BOLA‘s authority to consider new evidence. See City of Billings, 663 P.2d at 1171.
We conclude that a recording or transcript of the hearing before the referee was a Department record material to issues raised by
Here, it is clear that the BOLA did not consider or review the material record. While the BOLA decision recites that it “reviewed the entire record,” the BOLA‘s counsel controverted that recitation in the District Court: “If there‘s a question about the facts, [the BOLA members] are certainly free to ask for a transcript or to listen to the tapes, and the Board does that on occasion. They did not do that in this case.” On the basis of this record, we conclude that the BOLA violated
C. Did the BOLA violate § 24.7.306(1), ARM, by adopting the referee‘s findings of fact without considering the transcript or recording of the hearing before the referee?
Bean‘s final argument is that the BOLA violated
As was the case in our discussion of whether the BOLA was required to review a transcript or recording of the hearing before the referee, use of the word “shall” with regard to the BOLA‘s duty to state findings of fact renders that duty mandatory. See Gaustad, 877 P.2d at 471. The BOLA‘s adoption of the referee‘s findings as its own apparently is a routine practice. See, e.g., Ward v. Johnson (1990), 242 Mont. 225, 227, 790 P.2d 483, 484.
By its terms,
At the same time, however, the BOLA‘s role in the determination of disputed unemployment insurance benefits claims is that of a quasi-judicial board directed to exercise its judgment in evaluating and passing on facts. Section
Here, as stated above, much of the controversy centered around whether the BOLA should accept the referee‘s findings based on the evidence of record. Given the BOLA‘s failure to consider the entirety of the record before it, we cannot conclude that its wholesale adoption of the referee‘s findings and decision reflected the exercise of its independent judgment in determining the facts. We conclude, therefore, that the BOLA‘s adoption of the referee‘s findings and decision in this case violated
Reversed and remanded to the District Court for entry of an order remanding the case to the BOLA for reconsideration and redetermination of Bean‘s appeal. Any subsequent petition for judicial review and, as appropriate or necessary, appeal to this Court shall proceed under applicable statutes and rules.
CHIEF JUSTICE
JUSTICE NELSON dissents as follows:
I respectfully dissent. Remanding this case to the BOLA for review of a recording or transcript of a hearing that was deficient in the first instance and for reconsideration of the appeal referee‘s findings in light of such a record will not, in my view, solve the problem.
All of the evidence in this case was introduced at a hearing conducted via a telephone conference call with the appeals referee situated in Helena, with Bean and her witnesses situated in her counsel‘s office in Missoula and with the Employer and its witnesses situated in its business premises in Missoula. Moreover, the entirety of the critical evidence against Bean on the issue of her “willful misconduct” consisted of hearsay reports from persons who were not present at the hearing and who were not, therefore, subject to confrontation and cross-examination. Under such circumstances, any decision of the appeal referee and any decision of the BOLA based on that record and the referee‘s findings, was, is and will be inherently flawed from the outset.
From statements made during the oral argument of this case, it appears that the Department of Labor is unique among State agencies in routinely holding contested hearings via telephone. Moreover, it also appears that requesting an in-person hearing will not, necessarily, guarantee that result nor will it guarantee that the employer and its witnesses will be at the hearing, even if one is allowed. In Niles v. Carl Weissman & Sons, Inc. (1990) 241 Mont. 230, 786 P.2d 662, without deciding the issue, we expressed concern that Department of Labor telephonic hearings may not afford the claimant the full right of cross-examination and may not comply with judicial standards of substantive and procedural due process. Niles, 786 P.2d at 666-67.
More recently, in Bonamarte v. Bonamarte (1994), 263 Mont. 170, 866 P.2d 1132, we reversed the district court in a marital dissolution case because one party was allowed to testify by telephone over the objection of the other party. Bonamarte, 866 P.2d at 1137. While that case did not involve an administrative proceeding, nevertheless, we stated that,
[r]equiring a witness to testify personally at trial serves a number of important policies and purposes. A witness’ personal appearance in court:
- assists the trier of fact in evaluating the witness’ credibility by allowing his or her demeanor to be observed firsthand;
- helps establish the identity of the witness;
- impresses upon the witness, the seriousness of the occasion;
- assures that the witness is not being coached or influenced during testimony;
- assures that the witness is not referring to documents improperly; and
- in cases where required, provides for the right of confrontation of witnesses.
I conclude that those reasons are no less valid, important and necessary to assure the integrity and fairness of contested proceedings before an administrative agency where, as here, the litigant‘s entitlement to state benefits hangs in the balance as a direct consequence of the hearings process.
Moreover, and to make matters worse, here, the crucial evidence against Bean on the issue of willful misconduct was in the form of hearsay reports and testimony that would not have been admissible under the Rules of Evidence nor should even have been admissible under a fair reading of the Department‘s own administrative rule, which allows consideration of evidence upon “which responsible persons are accustomed to rely in the conduct of serious affairs.”
That a claimant of unemployment compensation benefits is entitled to substantive and procedural due process is not, in my view, open to dispute. See, Goldberg v. Kelly (1970), 397 U.S. 254, 90 S.Ct. 1011, 25 L.Ed.2d 287; and California Department of Human Resources Development v. Java (1971), 402 U.S. 121, 91 S.Ct. 1347, 28 L.Ed.2d 666. I am at a loss to understand how a claimant has been afforded even minimal due process where she has been denied her right of confrontation and cross-examination by being required to litigate her case over a telephone, without crucial adverse witnesses being required to testify and where the factfinder‘s ultimate decision is based on rank, inadmissible hearsay.
If you put a teaspoon of sludge in a barrel of wine, you get sludge. If you put a teaspoon of wine in a barrel of sludge, you get sludge. Putting this case back in the barrel will not change, much less improve, the contents. I dissent.
JUSTICES TRIEWEILER and HUNT join in the foregoing dissent.