Judith J. Reynolds, Respondent, vs. Osiris Holding Corporation, Relator, Commissioner of Economic Security, Respondent.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (1998).

IN COURT OF APPEALS

C5-99-1495

Judith J. Reynolds,

Respondent,

vs.

Osiris Holding Corporation,

Relator,

Commissioner of Economic Security,

Respondent.

Department of Economic Security

File No. 2992 UC 99

Charles D. Slane, R. Travis Snider, Birrell, Dunlap & Ritts, Ltd., 510 First Avenue N., Suite 500, Minneapolis, MN  55403 (for respondent Reynolds)

Kathleen M. Mahoney, David M. Wilk, Oppenheimer Wolff & Donnelly, L.L.P., 1700 First Bank Building, 332 Minnesota Street, St. Paul, MN 55101 (for relator)

Kent E. Todd, Minnesota Department of Economic Security, 390 North Robert Street, St. Paul, MN 55101 (for respondent commissioner)

            Considered and decided by Willis, Presiding Judge, Kalitowski, Judge, and Halbrooks, Judge.

WILLIS, Judge

            Relator Osiris Holding Corporation appeals from the commissioner's representative's determination that respondent Judith Reynolds is qualified to receive reemployment-insurance benefits because she was discharged for reasons other than misconduct.  Because we conclude that the commissioner's representative's findings are reasonably supported by the record, we affirm.

            Osiris Holding Corporation operates Sunset Funeral Chapel and Memorial Park in Minneapolis.  Judith Reynolds worked as Sunset's sales manager from 1995 until February 24, 1999.  Reynolds was paid 16% commissions on pre-need sales of burial contracts and 5% commissions on at-need sales.  She prepared her own commission reports and forwarded them to an administrator for review.  She was then compensated on the basis of the reviewed reports.

            In autumn 1998, Osiris's legal department audited Sunset.  According to Osiris, the audit showed that Reynolds had been claiming that at-need sales of burial contracts were actually pre-need sales, and she was thereby receiving higher commissions than she was entitled to. 

            At the time of the audit, Sunset was under investigation by the Minnesota Attorney General because of complaints from Sunset's customers.  Throughout 1998 and into early 1999, Osiris claims, and Reynolds admits, that Reynolds received "a number of customer complaints," that she was aware of complaints to the attorney general's office, that she received a letter from the state auditor's office regarding problems at Sunset, and that she received multiple complaints forwarded from the Better Business Bureau. 

            Osiris contends that as a result of the audit, and what it describes as an "inordinate number" of complaints, in January 1999, it directed Kim Powers, its regional manager, to terminate Reynolds.

            On February 20, 1999, Reynolds filed a complaint with OSHA claiming that Sunset exposed its employees to friable asbestos and refused to provide them with air-monitoring results when they were requested.  Reynolds claims that before she filed the OSHA complaint, she brought this issue to Powers's attention, but Powers took no action.

            On February 24, 1999, Powers discharged Reynolds, and Reynolds applied for reemployment-insurance benefits with the Minnesota Department of Economic Security.  The department determined that Reynolds was qualified to receive reemployment-insurance benefits because Osiris discharged her for reasons other than misconduct.  Osiris appealed the determination.  On May 10, 1999, a reemployment-insurance judge conducted an evidentiary hearing and affirmed the department's determination.  Osiris appealed, and a commissioner's representative affirmed the judge's decision.  Osiris appeals to this court by writ of certiorari. 

D E C I S I O N

An employee who is discharged for misconduct is disqualified from receiving reemployment-insurance benefits.  Minn. Stat. § 268.095, subd. 4(1) (1998).  The employer has the burden of proving, by a preponderance of the evidence, that an employee has committed misconduct.  Anderson v. Honeywell, Inc., 421 N.W.2d 740, 743 (Minn. App. 1988).  Whether an employee committed acts of disqualifying misconduct is a mixed question of fact and law.  Colburn v. Pine Portage Madden Bros., Inc., 346 N.W.2d 159, 161 (Minn. 1984).  The commissioner's representative's factual findings must "be viewed in the light most favorable to the decision, and if there is evidence reasonably tending to sustain them, they will not be disturbed."  White v. Metropolitan Med. Ctr., 332 N.W.2d 25, 26 (Minn. 1983).  Although we defer to the commissioner's findings of fact if they are reasonably supported by the record, we review de novo whether an employee's actions constitute misconduct.  Ress v. Abbott Northwestern Hosp., Inc., 448 N.W.2d 519, 523 (Minn. 1989). 

I.

Osiris contends that the commissioner's representative committed legal error by requiring it to prove Reynolds's misconduct by more than a preponderance of the evidence.  According to Osiris, the commissioner's representative erred in rejecting Powers's hearsay testimony and "requiring" Osiris to support its claim by producing corroborating evidence of misconduct, in the form of a copy of the audit.

Osiris correctly points out that the fact-finder in a reemployment-benefit dispute may consider hearsay evidence.  See Posch v. St. Otto's Home, 561 N.W.2d 564, 566 (Minn. App. 1997).  It also accurately notes that an employer is not required to provide corroborating evidence of misconduct.  Norman v. Rosemount, Inc., 383 N.W.2d 443, 445 (Minn. App. 1986), review denied (Minn. May 22, 1986).  But, contrary to Osiris's assertion, the commissioner's representative is not required to accept the evidence presented by any party.  When the parties have presented conflicting evidence, the commissioner's representative weighs the evidence, and this court must defer to the commissioner's representative's credibility determinations.  Whitehead v. Moonlight Nursing Care, Inc., 529 N.W.2d 350, 352 (Minn. App. 1995).  Further, when presented with hearsay evidence, the commissioner's representative must consider its reliability, whether it is "probative of the facts," how detailed the statements are, whether there is any corroborating evidence, and whether there is a reason to fabricate the statements.  Posch, 561 N.W.2d at 566.

In this case, the commissioner's representative considered Powers's hearsay testimony regarding the content of the audit and the complaints filed with the attorney general's office, but she determined that the testimony was not sufficiently reliable to demonstrate that Reynolds was terminated for misconduct.  Thus, the commissioner's representative did not hold Osiris to a standard of proof higher than a preponderance of the evidence.  Rather, she assessed the reliability of the evidence advanced by Osiris.

II.

Having concluded the commissioner's representative applied the correct burden of proof in reviewing Osiris's evidence, we must consider whether the commissioner's representative's findings of fact are reasonably supported by the record.  The commissioner's representative found that Osiris failed to present credible evidence that Reynolds claimed commissions that she was not entitled to or knowingly accepted commissions that she had not earned or that Reynolds caused an "unusually high number" of customer complaints while she worked as Sunset's sales manager and that she improperly handled these complaints.

Powers testified that one basis for Osiris's claim that Reynolds committed misconduct is the conclusion in the audit that Reynolds had been claiming that at-need sales of burial contracts were actually pre-need sales.  But Powers did not provide the commissioner's representative with a copy of the audit or with a summary of the audit.  Powers also testified that she had not seen the audit and that she was relying on representations made to her by her supervisor about the contents of the audit.  Powers, therefore, had no personal knowledge of the audit, and she presented no evidence of the amount of commissions that Reynolds was allegedly overpaid. 

Although Powers testified that Sunset's ratio of at-need sales to pre-need sales was "skewed" in January 1999 because the number of pre-need sales far exceeded the number of at-need sales, she was unable or unwilling to testify what the proper ratio should have been.  Further, Powers testified that her review was not the basis of the decision to terminate Reynolds.

Reynolds, on the other hand, testified that she followed company procedures in claiming her commissions and that she had never claimed a commission that she was not entitled to receive.  She also specifically denied knowingly accepting higher commissions than she had earned. 

The commissioner's representative reviewed the evidence, weighed the conflicting testimony, and concluded that the testimony presented by Reynolds was more credible than that provided by Powers.  Viewing the evidence in the light most favorable to the commissioner's representative's decision, we conclude the evidence reasonably supports her decision.

We also conclude there is reasonable support in the record to affirm the commissioner's representative's finding that Reynolds was not dismissed because of the number of customer complaints made against Sunset or Reynolds's handling of the complaints.  Osiris points to the complaints received by the attorney general's office and to a fax to Reynolds from the Better Business Bureau describing her failure to respond to a customer complaint.  Osiris contends the fax is evidence of Reynolds's willful disregard of her employer's interests.

While Powers testified that there was an "unusually large amount" of complaints made to the attorney general's office while Reynolds was Sunset's sales manager, Powers did not testify to what would be a normal number of complaints.  She also failed to provide copies of any of the complaints or testimony as to the content of the complaints, and there was no evidence that the complaints were in any way related to Reynolds's actions.

Osiris argues that the fax from the Better Business Bureau was evidence of Reynolds's failure to respond to complaints.  But Powers testified that company policy required complaints to be forwarded to the regional manager, who in turn sent them to the company's legal department for response. 

Reynolds testified that she was unaware of the nature of the complaints made to the attorney general and that she had never seen the fax from the Better Business Bureau.  She also testified that she was not ultimately responsible for handling complaints and that she forwarded any complaints she received to her manager.

Again, the evidence here presented a fact dispute to be resolved by the commissioner's representative.  See Harringer v. AA Portable Truck & Trailer Repair, Inc., 379 N.W.2d 222, 224 (Minn. App. 1985) (holding that commissioner resolves fact disputes and this court does not reweigh evidence to determine where preponderance lies).  And we conclude there is reasonable evidence tending to support the decision of the commissioner's representative that Osiris failed to prove misconduct by a preponderance of the evidence. 

            Affirmed.