Broadway v. ADES/Chase

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NOTICE: THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES. See Ariz. R. Supreme Court 111(c); ARCAP 28(c); Ariz. R. Crim. P. 31.24 IN THE COURT OF APPEALS STATE OF ARIZONA DIVISION ONE GREGORY T. BROADWAY, ) ) ) ) Appellant, ) ) v. ) ) ARIZONA DEPARTMENT OF ECONOMIC ) SECURITY, an Agency, ) ) & ) ) CHASE MANHATTAN BANK, ) ) Appellees. ) __________________________________) DIVISION ONE FILED: 11/09/10 RUTH WILLINGHAM, ACTING CLERK BY: DLL No. 1 CA-UB 08-0130 DEPARTMENT B MEMORANDUM DECISION (Not for Publication Rule 28, Arizona Rules of Civil Appellate Procedure) Appeal from the Appeals Board of the Department of Economic Security of the State of Arizona A.D.E.S. Appeals Board No. U-1071277-BR Administrative Law Judge Nobuhiko Yonekura REVERSED AND REMANDED Gregory T. Broadway Appellant In Propria Persona Terry Goddard, Arizona Attorney General By Eric Devaney, Assistant Attorney General Attorneys for Appellee ADES B R O W N, Judge Youngtown Phoenix ¶1 Gregory Broadway appeals from an Arizona Department of Economic Security ( ADES ) unemployment benefits. decision denying his claim for For the following reasons, we reverse and remand. BACKGROUND ¶2 Broadway was employed as a licensed personal banker by Chase Manhattan Bank ( Chase ) at its branch in Peoria, Arizona. As a former employee of Chase, Broadway s wife had opened an investment account for her parents. In December of 2007, Broadway s wife called him and asked that he have somebody in the annuity department complete a transaction [to] increase [his] mother-in-law s disbursement by 10 dollars each month [so] she would be able to pay her association dues. ¶3 Broadway sought the advice of L.V., a financial advisor at the bank. L.V. told Broadway to fill out a request form transaction to have department. the completed by the annuity Although the form is not in the record before us, testimony presented at the hearing indicated that Broadway faxed the form to the department. Broadway testified that the form did not require a signature. He also stated that a request such as this is handled by the annuity department calling the customer and asking if the request is an accurate representation of what the customer intended to have happen. After discovering Broadway s Chase participation in the 2 transaction, discharged him for failure to comply with one of the provisions of its code of conduct regarding bank transactions for family members. Broadway then filed a claim for unemployment compensation. ¶4 An ADES deputy initially allowed Broadway s claim and Chase filed a timely notice of appeal. administrative determining law that judge Broadway at the was Following a hearing, an Appeal discharged Tribunal for reversed, work-related misconduct and was therefore disqualified for benefits pursuant to Arizona Revised Statutes ( A.R.S. ) section 23-775(2) (Supp. 2009). The Appeals Board affirmed the Appeal Tribunal, and Broadway filed a request for further review by the three-member Appeals Board. A majority of the board held that Broadway had violated the company code of conduct and committed misconduct by completing a bank transaction that involved a family member. The dissenting member believed that Chase had failed to show that Broadway violated the code of conduct because he consulted an authorized unrelated employee and did not transfer funds. The dissent also concluded that Chase s failures both to provide testimony by the financial advisor Broadway had consulted, and to provide the form Broadway had filled out, created negative inferences to the employer s theory of events. timely requested judicial review. 2009). 3 Broadway then See A.R.S. § 41-1993 (Supp. DISCUSSION ¶5 We view the evidence in the light most favorable to upholding the decision unless discretion. Appeals it is Board decision arbitrary, and will capricious, or affirm an the abuse of Castaneda v. Ariz. Dep t of Econ. Sec., 168 Ariz. 491, 494, 815 P.2d 418, 421 (App. 1991). An agency abuses its discretion when it misapplies the law or fails to consider the relevant facts. Rios Moreno v. Ariz. Dep t. of Econ. Sec., 178 Ariz. 365, 367, 873 P.2d 703, 705 (App. 1994). by the legal conclusions of the board and We are not bound may independently determine whether it properly interpreted the law. Munguia v. Dep t of Econ. Sec., 159 Ariz. 157, 159, 765 P.2d 559, 561 (App. 1988). ¶6 Appeals grant In evaluating a claim for unemployment benefits, the Board benefits, benefits. protective liberally and Munguia, Unemployment (1995) must of narrowly 159 compensation workers (legislative interpret and interpret Ariz. from at the their intent the in law and facts to the same to deny 765 P.2d at 564. 162, State families. 1 creating is intended A.R.S. an § to be 23-601 unemployment compensation system is to lighten [the] burden [of involuntary 1 Employers pay contributions to an unemployment compensation fund to be administered by the State. Amounts of these payments are affected by past benefits paid to former employees. A.R.S. § 23-731 (Supp. 2009); see generally A.R.S. §§ 23-701, -709, 721, -751 (1995). 4 unemployment] that so often falls with crushing force upon the unemployed worker and his family ). Because benefits are limited to those who are unemployed through no fault of their own, employees are not entitled to benefits for work-related misconduct. ¶7 A.R.S. § 23-775(2). It was Broadway s burden to initially establish that he was eligible for unemployment benefits, but when Chase raised misconduct as the reason for termination, the burden shifted to Chase to establish the truth of the assertion. Ariz. at 367, 873 P.2d at 705; A.A.C. Rios Moreno, 178 R6-3-51190(B)(2)(b). Employee misconduct means any act or omission by an employee which constitutes a material or substantial breach of the employee s duties, such as violating a company rule without good cause. ¶8 A.R.S. § 23-619.01(A)-(B)(8) (1995). The code of conduct at issue states: In general, you may not act in behalf of JPMorgan Chase in any transaction or business relationship involving yourself, members of your family, or other persons or organizations with which you or your family have any significant personal connection or financial interest. These matters should be handled by an authorized unrelated employee. (Emphasis added.) ¶9 The plain language of this provision indicates that a violation occurs only when an employee acts on behalf of Chase. Here, it is undisputed that Broadway consulted a specialist in 5 investment matters with a question about changing an annuity amount. Broadway then filled out the form given him by the specialist. Chase did not introduce any evidence that in filling out the form, Broadway was acting on behalf of Chase; rather, the evidence indicates that he acted on behalf of his wife and in-laws. Perhaps the form would have shown otherwise, but it was Chase s burden to produce the form and introduce sufficient evidence that Broadway was acting on its behalf when he filled out the form and faxed it to the annuity department. A.A.C. R6-3-51190(C)(3) ( When the evidence . . . is evenly balanced, or weighs in favor of the claimant, misconduct has not been established and no disqualification is in order. ). find that Chase failed to meet its burden of proving We that Broadway acted on behalf of Chase. ¶10 Moreover, Chase does not contest that the investment advisor Broadway consulted with was unauthorized to give him the form or that Broadway faxed it authorized unrelated employee. to anyone other than an According to the record before us, Broadway did not input any information into Chase s computer system, make a change to the annuity disbursement, or authorize or participate in any disbursement of funds to anyone. Additionally, Chase failed to refute Broadway s testimony that a signature by the account owner was not required on the form he faxed because the annuity department s practice was to call the 6 account owner for verification. Thus, no change in status in the investment account occurred simply by Broadway faxing the form to the annuity occurred at that time. department and therefore no transaction Based on this record, Chase has failed to meet its burden of proving that Broadway s actions violated its code of conduct and therefore the Appeals Board abused its discretion in denying his claim for unemployment benefits. See Castaneda, 168 Ariz. at 496, 815 P.2d at 423 (reversing and remanding when the appeals board erred in its application of the law). CONCLUSION ¶11 For the foregoing reasons, we reverse the decision of the Appeals Board and remand for an award of benefits. /S/ _________________________________ MICHAEL J. BROWN, Judge CONCURRING: /S/ _________________________________ DIANE M. JOHNSEN, Presiding Judge /S/ _________________________________ JOHN C. GEMMILL, Judge 7

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