Moody v. Northland Royalty Co. , 54 State Rptr. 43 ( 1997 )


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  • 96-187
    No.       96-187
    IN THE SUPREME COURT OF THE STATE OF MONTANA
    1996
    JAMES DEAN MOODY,
    Plaintiff and Appellant,
    v.
    NORTHLAND ROYALTY CO. and
    THE DEPARTMENT OF LABOR
    & INDUSTRY,
    Defendants and Respondents.
    APPEAL FROM:          District Court of the Ninth Judicial District,
    In and for the County of Glacier,
    The Honorable Marc G. Buyske, Judge presiding.
    COUNSEL OF RECORD:
    For Appellant:
    Jeff R. Lynch, Lynch & Chisholm, Great Falls,
    Montana
    For Respondent:
    Robert J. Emmons, Emmons & Sullivan, Great Falls,
    Montana (Northland); Melanie Symons, Department of
    Labor & Industry, Helena, Montana
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    Submitted on Briefs:                     October 31, 1996
    Decided:           January 3, 1997
    Filed:
    __________________________________________
    Clerk
    Justice William E. Hunt, Sr. delivered the Opinion of the Court.
    Appellant James Dean Moody (Moody) appeals the order of the
    Ninth Judicial District Court, Glacier County, affirming the
    decision of the Board of Labor Appeals that Moody be denied
    unemployment benefits because his discharge from employment was a
    result of his own misconduct.
    We reverse.
    The sole issue for our review is whether Moody was discharged
    for misconduct.
    FACTS
    In November 1994, Moody was employed by Northland Royalty
    Company (Northland) as a gas plant field operator. Moody received
    a monthly salary of $2500.
    On November 19, 1994, Moody informed his supervisor at
    Northland, Bill Sheehan, that one of Northlandþs competitors had
    offered Moody a job. Sheehan told Moody that they would discuss
    the situation on the following Monday, November 21, 1994.
    On Monday morning Moody explained to Sheehan that he would
    remain working for Northland if he were given a $100 per month
    raise. Moody stated that he needed a decision from Northland by
    noon that day. Moody informed Sheehan that if he left Northland he
    would take with him Randy Brown, Northlandþs only other field
    operator. When Sheehan asked what would happen if Moody did not
    get a raise, Moody replied that "they would address that when the
    time came and would live with the decision."
    Later Monday morning Sheehan approached Randy Brown,
    Northlandþs other field operator. Brown informed Sheehan that he,
    like Moody, had been offered a job by the competitor. Sheehan then
    offered Brown a raise, which Brown accepted.
    Next, Sheehan drove to the Four Corners Cafe to make some
    phone calls. Sheehan had explained to Moody earlier that he would
    need to contact Northlandþs Billings office to discuss the
    situation before giving Moody an answer. One of the calls Sheehan
    made was to Steve Jackson, who had recently expressed his interest
    in working for Northland as a field operator. Jackson had
    previously been discharged by the same competitor now offering
    employment to Moody. Sheehan offered Jackson Moodyþs field
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    operator position with Northland, which Jackson accepted.
    While at the Four Corners Cafe that morning, Sheehan received
    a call from Moody, who advised Sheehan that he would not be
    quitting Northland and that he had already declined the
    competitorþs offer. Sheehan told Moody that they would discuss the
    matter when Sheehan got back to the field.
    When Sheehan returned to the field shortly after noon, he
    asked Moody to join him for a ride in his truck. After they had
    driven only a short distance, Moody asked Sheehan what was going
    on. Sheehan replied, "Youþre done," and when Moody asked why,
    Sheehan informed Moody that it was "about money" and that Jackson
    was "cheaper." Moodyþs employment with Northland was terminated.
    Moodyþs starting salary with the competitor would have been
    $1800 per month. When Moody informed Sheehan about the
    competitorþs employment offer, he did not disclose the competitorþs
    salary offer.
    On November 21, 1994, Moody filed for unemployment benefits.
    Initially, the Department of Labor and Industry, Unemployment
    Insurance Division, determined that Moody was eligible for
    unemployment benefits. After Northland protested this
    determination, the Department of Labor and Industry reconsidered
    Moodyþs eligibility and issued a redetermination letter which
    stated that Moody was not eligible for unemployment benefits. The
    benefits examiner concluded that Moody had been the moving party in
    the employment separation. The examiner further concluded that
    Moodyþs voluntary separation was without good cause attributable
    to, or the fault of, Northland, and that therefore Moody was deemed
    disqualified to receive unemployment benefits.
    After the redetermination, the matter proceeded to two
    separate hearings conducted by the Legal Services Division of the
    Department of Labor and Industry. At the first hearing, Appeals
    Referee James L. Keil determined that the benefits examiner had
    erred in concluding that Moody was the moving party responsible for
    his separation from employment. Keil concluded that Moody had been
    discharged from employment.
    At the second hearing, on May 9, 1995, the issue before
    Appeals Referee David Frazier was whether Moody was qualified or
    disqualified from receiving unemployment insurance benefits.
    Specifically, Frazier considered whether or not Moody was
    discharged for "misconduct" as that term is defined and interpreted
    in the Montana Code Annotated and the Administrative Rules of
    Montana. Frazier concluded that Moody had been discharged for
    reasons other than "misconduct," and reversed the benefits
    examinerþs determination that Moody be disqualified from receiving
    unemployment benefits.
    Northland appealed Referee Frazierþs decision to the Board of
    Labor Appeals. The Board initially affirmed Frazierþs decision on
    June 26, 1995, but then issued another statement on September 20,
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    1995, reversing itself and overturning Frazierþs decision.
    On October 18, 1995, Moody submitted a petition for judicial
    review to the Ninth Judicial District Court, Glacier County,
    requesting that the court reverse the decision of the Board of
    Labor Appeals. The District Court affirmed the Board of Labor
    Appeals on March 12, 1996. This appeal followed.
    STANDARD OF REVIEW
    Recently, in Hafner v. Montana Department of Labor and
    Industry, No. 96-105 (Mont. Dec. 10, 1996), this Court stated that
    "the question of whether conduct rises to the level of þmisconductþ
    is a question of law which this Court reviews for correctness."
    Hafner, No. 96-105, slip op. at 6. This standard we enunciated in
    Hafner required us to reverse two previous cases, Connolly v.
    Montana Bd. of Labor Appeals (1987), 
    226 Mont. 201
    , 
    734 P.2d 1211
    and Stine v. Western Federal Savings Bank (1994), 
    266 Mont. 83
    , 
    879 P.2d 53
    :
    Having reviewed this issue [of whether the determination
    of "misconduct" is a question of fact or a question of
    law] in the present case, we reverse Connolly and Stine
    to the extent that they hold that "misconduct" is a
    question of fact[.]
    Hafner, No. 96-105, slip op. at 6. We explained that
    [t]he question of whether an employee has disregarded
    standards of behavior, been careless or negligent, or
    violated company rules is a question of fact. Whether
    those "facts" then constitute "misconduct" involves
    interpretation and application of the Administrative
    Rules of Montana and is a legal conclusion reviewable by
    this Court.
    Hafner, No. 96-105, slip op. at 6-7. Therefore, we must determine
    whether the District Courtþs conclusion that Moody was discharged
    for "misconduct" is correct.
    DISCUSSION
    Moody concedes that the undisputed facts of this case, stated
    in Referee Frazierþs written decision and set forth in the Facts
    section of this Opinion, are supported by substantial evidence.
    Moody contends, however, that these facts do not constitute
    "misconduct" as that term is defined and interpreted in the Montana
    Code Annotated and the Administrative Rules of Montana. We agree.
    Section 39-51-2303, MCA, provides in relevant part:
    An individual shall be disqualified for benefits after
    being discharged:
    (1) for misconduct connected with the individualþs work
    or affecting the individualþs employment ....
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    Section 39-51-2303(1), MCA. The Administrative Rules of Montana
    define "misconduct." Section 24.11.460, ARM, states, in pertinent
    part:
    DISQUALIFICATION FOR MISCONDUCT
    (1) Misconduct as used in    39-51-2303, M.C.A., includes,
    but is not limited to, the following conduct by a
    Claimant:
    (a) Willful or wanton disregard of the rights,
    title, and interest of a fellow employee or the
    employer; . . .
    Section 24.11.460(1)(a), ARM. Section 24.11.461, ARM, identifies
    a number of specific acts which constitute "misconduct." Relevant
    for our purposes here is:
    (c) Dishonesty related to employment, including but not
    limited to, deliberate falsification of company records,
    theft, deliberate deception or lying; ....
    Section 24.11.461(1)(c), ARM. The Board of Labor Appeals, in its
    September 21, 1995 decision finding Moody ineligible for
    unemployment benefits stated:
    Testimony and evidence before the Board clearly indicate
    that the claimant tried to negotiate a raise by giving
    his employer an ultimatum requiring a raise within
    several hours and by also threatening to leave taking the
    only other employee of the company with him. This
    conduct was deliberate and was a disregard of the
    interests of the employer. That fact is underscored by
    the evidence that the claimant was making $2,500.00 per
    month with Northland and had only been offered $1,800.00
    per month by the competitor. It is found that claimantþs
    actions and statements amounted to deception related to
    his employment. It is concluded that such action by the
    claimant arose [sic] to the level of misconduct according
    to 39-51-2303 MCA, and ARM 24.11.461.
    We do not agree that Moodyþs actions "arose to the level of
    misconduct according to 39-51-2303 MCA, and ARM 24.11.461."
    In the briefs submitted to this Court and in the Boardþs
    findings, much was made of Moodyþs failure to disclose to Northland
    that his job offer included a monthly salary $700 dollars less than
    his existing monthly salary. Both Northland and the Board
    characterize this non-disclosure as "dishonesty related to
    employment." However, the record reveals that Northland did not
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    know, prior to terminating Moodyþs employment, that Moody had
    failed to disclose this salary disparity. Therefore, even if this
    failure to disclose can be considered a deceptive or dishonest act
    as contemplated by the definition of "misconduct," it logically
    could not have been a basis for Moodyþs discharge; Moody could not
    possibly have been terminated for dishonesty or deception if
    Northland did not know prior to termination that Moody was or had
    been dishonest or deceitful.
    Both the Board and Northland have characterized Moodyþs
    statement that he "had to have a decision by noon that day" as an
    "ultimatum," and his statement that he would "take" Randy Brown
    with him if he left Northland as a "threat." They argue that the
    statements constitute misconduct. There is no indication in the
    record that Moody did not need a decision by noon. The record
    establishes that Sheehan was operating under the understanding that
    Moody did need a decision by noon. The appeals referees and the
    Board did not find, and we cannot locate in the record, any facts
    showing that Northland believed prior to terminating Moody that his
    "ultimatum" was untrue. We fail to see the negative connotation
    given by Northland and the Board to Moodyþs statement that he "had
    to have a decision by noon that day." This statement did not
    constitute misconduct.
    Similarly, Northland and the Board have characterized Moodyþs
    statement that he would "take" Randy Brown with him if he left
    Northland as a "threat." Brown is an adult. There is no evidence
    that Moody had any control over Brownþs actions. It is
    unreasonable to believe that Moody could have "taken" Brown with
    him if Brown himself did not want to leave Northland. Instead, it
    is reasonable to believe that Brown could have left Northland of
    his own volition; indeed, he had been offered a job by the
    competitor, as Sheehan discovered shortly after speaking with
    Moody. Further, nothing prevented Northland from taking such steps
    as were necessary to counteract Moodyþs "threat" and secure Brownþs
    continuing employment, as in fact occurred when Sheehan sought out
    Brown and gave him a raise. Moodyþs statement that he would "take"
    Brown with him if he left Northland cannot reasonably be considered
    a threat to Northlandþs interests, and did not constitute
    misconduct.
    The parties have characterized Moodyþs conduct differently.
    Our review of the undisputed facts establishes that Moody
    essentially demanded a raise from his employer, Northland. Moodyþs
    particular actions and statements in demanding a raise may well
    have been undertaken in order to exert leverage in the bargaining
    process. Moody may have been somewhat deceptive. We cannot,
    however, conclude that upon the particular facts of this case
    Moodyþs conduct fits within the definition of "misconduct"
    contemplated by          24.11.460 and 461, ARM, and   39-51-2303, MCA.
    Moreover, and more importantly with respect to the issue in this
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    case, we cannot conclude that Northland fired Moody for
    "misconduct." When Northland terminated Moodyþs employment, it was
    largely unaware of conduct which it only later, after Moody was
    terminated, determined was dishonest or deceptive. The court erred
    in affirming the incorrect conclusion of the Board of Labor Appeals
    that Moody was discharged for misconduct.
    Reversed.
    /S/      WILLIAM E. HUNT, SR.
    We Concur:
    /S/ J. A. TURNAGE
    /S/ CHARLES E. ERDMANN
    /S/ KARLA M. GRAY
    /S/ W. WILLIAM LEAPHART
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Document Info

Docket Number: 96-187

Citation Numbers: 281 Mont. 26, 54 State Rptr. 43

Judges: Erdmann, Gray, Hunt, Leaphart, Turnage

Filed Date: 1/3/1997

Precedential Status: Precedential

Modified Date: 8/6/2023