HIGHLANDER MORTGAGE COMPANY v. KENTUCKY UNEMPLOYMENT INSURANCE COMMISSION; AND ANGELA DELFINO
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RENDERED: MARCH 3, 2006; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth Of Kentucky
Court of Appeals
NO. 2005-CA-000359-MR
HIGHLANDER MORTGAGE COMPANY
APPELLANT
APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE BARRY WILLETT, JUDGE
ACTION NO. 04-CI-003179
v.
KENTUCKY UNEMPLOYMENT INSURANCE
COMMISSION; AND ANGELA DELFINO
APPELLEES
OPINION
AFFIRMING
** ** ** ** **
BEFORE:
COMBS, CHIEF JUDGE; DYCHE AND JOHNSON, JUDGES.
JOHNSON, JUDGE:
The Highlander Mortgage Company has appealed
from the judgment of the Jefferson Circuit Court entered on
January 31, 2005, which affirmed the order of the Kentucky
Unemployment Insurance Commission awarding unemployment benefits
to the appellee, Angela Delfino.
Having concluded the circuit
court was correct in ruling that the Commission’s findings of
fact were supported by substantial evidence and that it applied
the correct rule of law to those facts, we affirm.
While some of the facts surrounding the termination of
Delfino’s employment are in dispute, the circuit court
summarized the facts as follows:
[Delfino] worked as a loan originator
for Highlander from September 16, 2003[,]1
until December 30, 2003. She was
responsible for processing mortgages from
origination until closing and making sure
all the required paperwork was completed.
She was not paid a salary; her compensation
consisted solely of commissions.2 She
received commissions only for those loans
that she originated – though she would pitch
in to help complete work on other employees’
loans if the employee was absent.
[Delfino] was absent between four and
ten times during her tenure at Highlander;3
Highlander did not keep attendance records.4
[Delfino] admitted that she missed work once
because of illness and several additional
times because of required court appearances,
while her former employer maintained that
she missed work approximately ten days.5
1
It is undisputed that Delfino signed a mortgage originator employment
agreement with Highlander on September 15, 2003, in which she agreed “to
expend . . . her full-time and best efforts” in her employment.
2
All testimony discussed in this Opinion was obtained at the hearing before
the Referee on February 25, 2004. Those who testified at the hearing were
Delfino, James Heleringer, Delfino’s employer, and Michael Morrison,
Delfino’s supervisor. Heleringer testified that loan originators, such as
Delfino, were paid 50% of the fee collected by Highlander upon closing if
they “got their own lead” on the loan. Otherwise, upon closing, they were
paid on a sliding scale; i.e., the more loans they closed, the greater
percentage of the fee they received.
3
Morrison testified that Delfino always called if she was going to be absent.
4
Heleringer, upon reviewing a 2003 calendar, testified that Delfino did not
work on November 28, 2003, December 12, 2003, and December 19, 2003. Delfino
testified that she probably did miss those three days for illness or court
appearances.
5
Heleringer testified that, over time, Delfino’s absences escalated, and that
she missed mostly Fridays and some days would get to work late and leave work
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However, [Delfino] insisted that she worked
late every night in December 2003 to
complete all of her work.
On two occasions, the officer manager,
[Morrison], had to assist [Delfino] in order
for a loan to close. Assisting the loan
originators was one of his job duties.6 On
one occasion, [Delfino] was unable to
complete a necessary form to close a loan
because the computer was down. She was due
in court the following day, so she knew that
she would be unable to complete the
paperwork. Because of this, she made
arrangements for [Morrison] to fax the
required form the following day in her
absence. He did this and the loan closed
without a problem. The other occasion in
which [Morrison] assisted [Delfino] involved
him spending several hours on a particularly
complicated loan of hers during another
absence.7 This loan also closed – though it
took considerably more time than the first
occasion.8
On December 30, 2003, [Heleringer], the
owner and president of Highlander requested
that [Delfino] sign a statement drafted by
him that required her to work a set work
schedule and to contact either [Heleringer]
or [Morrison] if she needed to miss work.
In addition the statement read, “as a
penalty for missed work and in recognition
that others had to spend several hours
closing up current loans, I agree to give up
five percent (5%) on my December 2003
early. Morrison testified that Delfino had on one instance missed two or
three days in a row.
6
Morrison testified that part of his job was to make sure that loans were
closed if the loan originator was not present.
7
Morrison testified that he could not remember if Delfino was present at this
closing.
8
Heleringer testified that he had to pay Morrison extra for this work on
Delfino’s loans.
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scale.” [Delfino] was advised by her
employer that she either had to sign the
statement or pack her bags and leave.9 She
declined to sign the document, gathered her
belongings, and left the building. This was
her last day at Highlander.
On January 4, 2004, [Delfino] filed a
claim for unemployment compensation
benefits. Her claim was initially denied on
January 29, 2004. [Delfino] appealed the
denial, and an Unemployment Insurance
Appeals Referee (Referee) conducted an
administrative hearing on February 25, 2004.
The Referee awarded benefits to [Delfino],
finding “The evidence of record establishes
that claimant quit because she was not going
to be paid the entire amount of commission
owed her for her loans closed in December
2003.” Referee Decision at 2. The Referee
further reasoned that Highlander:
has not proved by a
preponderance of evidence that
claimant was excessively absent or
that it was policy to decrease the
percentage of commission for
excessive absenteeism. [Delfino]
worked late on several occasions
to assist with loans of other loan
originators when they were absent
and she was not compensate[ed] for
that work. Therefore, [Delfino]
quit with good cause attributable
to the employment and is not
disqualified.10
9
In its brief, Highlander denies that Delfino was given an ultimatum to sign
the paper or be fired. However, Heleringer testified that, while he did not
remember telling Delfino to sign the document or pack her bags, he did tell
her that he needed “some sort of a commitment.” He further told Delfino that
he needed a “full-time” employee, and if she could not commit to the hours,
“the choice was hers.” Delfino testified that the December 30, 2003, letter
was the first complaint that she had received about missing work.
10
The Referee’s award was set out in the corrected referee decision mailed
March 16, 2004. The original award was mailed on March 4, 2004, and stated
that the Referee’s decision was to affirm the denial of benefits to Delfino;
however, this appears to be a clerical error as all other portions of the
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Id. The Commission affirmed the Referee’s
decision.11
Highlander appealed to the Jefferson Circuit Court,12
which affirmed the decision of the Commission.
The circuit
court held that there was substantial evidence presented that
Delfino did not voluntarily quit her job on December 30, 2003,
and stated as follows:
[Delfino’s] employer gave her an ultimatum
either to take a retroactive pay cut for the
month of December for commissions that she
already earned or to quit. This ultimatum
was given to her even though no one from
Highlander expressed displeasure with
[Delfino’s] attendance prior to this date.13
Indeed, her employer did not even keep
attendance records while [Delfino] worked
there. Both of the options given to her
were punitive in nature, and [Delfino] chose
not to continue her employment with
decision supported the award of benefits to Delfino, as shown in the
corrected decision.
11
The Commission entered the order affirming the Referee’s decision on April
8, 2004. In the order, the Commission adopted the Referee’s findings and
conclusions of law as its own. The Commission further noted that “had the
separation been adjudicated as a discharge, the claimant would remain
qualified to receive benefits.”
12
Kentucky Revised Statutes (KRS) 341.450(1) requires a party seeking review
of the Commission’s decision to file a verified complaint in circuit court.
13
Heleringer testified that Delfino was good at her job and problems began
only after she found out she was losing her driver’s license. He further
testified that there was not an official meeting regarding Delfino’s
absenteeism, only “conversations.” Delfino denied such conversations.
Further, there was no written evidence to support that such discussions ever
took place. Delfino testified that not one of her absences was due to her
inability to drive without her license, despite Heleringer’s testimony to the
contrary. Delfino stated that her boyfriend carried her to and from work
during this time and that she arrived early on some days and worked late many
nights in December 2003. Heleringer testified that Delfino arrived early to
work at least two times and that she did work late sometimes.
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Highlander instead of taking the pay cut.
Her choice to leave clearly was not “freely
given” nor did it “proceed from her own
choice or full consent.” Additionally, this
unreasonable ultimatum given to her by her
employer gave [Delfino] good cause
attributable to the employment for leaving
her job. The Commission’s decision was
therefore supported by substantial evidence,
and [Delfino] was entitled to receive
unemployment compensation.
This appeal followed.
Highlander argues that Delfino chose to quit on
December 30, 2003, that Delfino’s action was not involuntary
because of circumstances so compelling as to leave her no
alternatives, and that the factual findings of the Commission
were not based on substantial evidence and should be reversed.
“CR14 52.01 requires that, in appeals of administrative
agency decisions, appellate courts review the determinations of
the circuit courts for clear error” [footnote omitted].15
The
standard of review of an appeal from the Commission is set forth
in Thompson v. Kentucky Unemployment Insurance Commission,16
which states in pertinent part as follows:
Upon review of an administrative
agency’s adjudicatory decision, an appeal
court’s authority is somewhat limited. The
judicial standard of review of an
14
Kentucky Rules of Civil Procedure.
15
Fayette County Board of Education v. M.R.D. ex rel. K.D., 158 S.W.3d 195,
201 (Ky. 2005).
16
85 S.W.3d 624 (Ky.App. 2002).
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unemployment benefit decision is whether the
[Commission’s] findings of fact were
supported by substantial evidence and
whether the agency correctly applied the law
to the facts. Substantial evidence is
defined as evidence, taken alone or in light
of all the evidence, that has sufficient
probative value to induce conviction in the
minds of reasonable people. If there is
substantial evidence to support the agency’s
findings, a court must defer to that finding
even though there is evidence to the
contrary. A court may not substitute its
opinion as to the credibility of the
witnesses, the weight given the evidence, or
the inferences to be drawn from the
evidence. A court’s function in
administrative matters is one of review, not
reinterpretation [footnotes omitted].17
Both the circuit court’s review and our review of this
case are limited to reviewing the Commission’s certified
record.18
Our primary concern is to deal with the question of
arbitrariness.19
A factual finding is not arbitrary if there is
substantial evidence in the record to support an agency’s
finding and, thus, it is not clearly erroneous.
In such cases,
even though there may be conflicting evidence in the record,20 we
17
Thompson, 85 S.W.3d at 624.
18
Travelodge International Inc. v. Kentucky Unemployment Insurance
Commission, 710 S.W.2d 232, 234 (Ky.App. 1986).
19
Burch v. Taylor Drug Store, Inc., 965 S.W.2d 830, 834 (Ky.App. 1998).
20
Kentucky Commission on Human Rights v. Fraser, 625 S.W.2d 852, 856 (Ky.
1981).
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cannot make our own findings of fact nor substitute our judgment
for that of the agency.21
Although there is conflicting evidence in the record
supporting Highlander’s version of the case, the Commission’s
factual findings as to the circumstances surrounding the
termination of Delfino’s employment are supported by substantial
evidence.
In particular, the Commission found that while the
number of days Delfino was absent was in dispute and ranged from
four days to ten days, Delfino “worked late every night in
December 2003 to complete work on the loans she originated.”
The Commission further found that the owner and president of
Highlander told Delfino that for the days of work she had missed
that she would either have to accept a 5% penalty on the
commissions she had earned for December 2003 or “pack her bags
and leave.”
The Commision found that Delfino “quit because she
was not going to be paid the entire amount of commission owed
her for loans closed in December 2003[, and the] Small Claims
Court of Jefferson County found in [her] favor that the employer
owed her the entire commission.”22
The Commission also found
that Delfino was not “excessively absent” nor did Highlander
have a “policy to decrease the percentage of commission for
21
Piper v. Singer Co., Inc., 663 S.W.2d 761, 763 (Ky.App. 1984).
22
Highlander notes that its appeal of the Small Claims judgment is pending in
the Jefferson Circuit Court.
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excessive absenteeism.”
Since these findings are not arbitrary
or clearly erroneous, they are binding on this Court.
Our only remaining task is to determine whether the
Commission applied the correct rule of law.
Our decision in the
present case turns on the application of KRS 341.370(1)(c),
which provides in relevant part that a worker is disqualified
from receiving unemployment benefits if “[h]e [or she] has left
his [or her] most recent suitable work . . . voluntarily without
good cause attributable to the employment.”
Delfino had the
burden of proof to establish that she did not quit voluntarily
without good cause attributable to her employment.23
“‘[V]oluntary’ connotes a decision to quit that is ‘freely
given’ and ‘proceeding from one’s own choice or full consent’”
[footnote omitted].24
Good cause for voluntarily quitting work
“‘exists only when the worker is faced with circumstances so
compelling as to leave no reasonable alternative but loss of
employment’” [footnote omitted].25
“[T]he question of good cause
is essentially one of reasonableness to be determined by the
particular facts of each case.”26
23
Thompson, 85 S.W.3d at 625.
24
Id.
25
“The primary key in resolving
Id. at 624-25.
26
Nichols v. Kentucky Unemployment Insurance. Commission, 677 S.W.2d 317, 321
(Ky.App. 1984).
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conflicts such as this must be based on who causes the employee
to quit.”27
Our review at this point is limited to determinig
whether the Commission misapplied the law to its factual
findings.
Highlander cites Raines v. Kentucky Unemployment
Insurance Commission,28 and Delfino cites International Spike,
Inc. v. Kentucky Unemployment Insurance Commission, Department
for Human Resources,29 but these cases are not relevant to our
analysis because they involved prospective decreases in the
wages to the employees.
As noted by the Commission, the wage
dispute before us involved Highlander’s attempt to “dock”
Delfino’s pay based on its belief that she had not performed all
of the work required to earn 100% of the commission.
The
Commission made a factual finding that Highlander’s attempt to
deprive Delfino of 5% of her earnings for December 2003 was not
supported by the evidence.
Accordingly, as a matter of law,
Delfino quit her job for good cause.
We therefore conclude that
the Commission properly applied the law to the facts in this
case in determining that Delfino was eligible to collect
unemployment benefits due to her quitting for good cause and the
circuit court was correct in affirming the decision.
27
Kentucky Unemployment Insurance Commission v. Melvin’s Grocery Co. Inc.,
696 S.W.2d 791, 792 (Ky.App. 1985).
28
669 S.W.2d 928 (Ky.App. 1983).
29
609 S.W.2d 374 (Ky.App. 1980).
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For the foregoing reasons, the opinion and order of
the Jefferson Circuit Court is affirmed.
ALL CONCUR.
BRIEFS AND ORAL ARGUMENT FOR
APPELLANT:
Robert L. Heleringer
Louisville, Kentucky
BRIEF AND ORAL ARGUMENT FOR
APPELLEE, KENTUCKY
UNEMPLOYMENT INSURANCE
COMMISSION:
B. Amy Peabody
Frankfort, Kentucky
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