Sep 03 2014, 10:27 am
Pursuant to Ind.Appellate Rule 65(D), this
Memorandum Decision shall not be regarded as
precedent or cited before any court except for the
purpose of establishing the defense of res judicata,
collateral estoppel, or the law of the case.
ATTORNEYS FOR APPELLANT: ATTORNEY FOR APPELLEE
MARY DIXON:
DAVID M. AUSTGEN
ADAM M. SWORDEN TERESA A. MASSA
Austgen Kuiper Jasaitis, P. C. Valparaiso, Indiana
Crown Point, Indiana
ATTORNEYS FOR APPLLEE
REVIEW BOARD:
GREGORY F. ZOELLER
Attorney General of Indiana
KRISTIN GARN
Deputy Attorney General
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
TOWN OF CEDAR LAKE, )
Appellant, )
)
vs. ) No. 93A02-1402-EX-072
)
REVIEW BOARD OF THE )
INDIANA DEPARTMENT OF )
WORKFORCE DEVELOPMENT and )
MARY J. DICKSON )
Appellees. )
APPEAL FROM THE REVIEW BOARD OF THE DEPARTMENT OF WORKFORCE
DEVELOPMENT
Steven F. Bier, Chairperson
George H. Baker, Member
Lawrence A. Dailey, Member
Cause No. 13-R-04534
September 3, 2014
MEMORANDUM DECISION - NOT FOR PUBLICATION
FRIEDLANDER, Judge
The Town of Cedar Lake (the Town) appeals from the decision of the Review
Board of the Indiana Department of Workforce Development (the Review Board) that
Mary J. Dickson is entitled to unemployment benefits following her discharge from
employment.1 The Town presents the following restated issue for our review: Is the
Review Board’s determination that Dickson was not dismissed for good cause supported
by substantial evidence?
We affirm.
The Town hired Dickson as the director of its Parks and Recreation Department in
1990, and she served in that capacity until her dismissal in 2013. Dickson was also active
in a number of civic organizations and, at the time relevant to this appeal, served as
president of the Cedar Lake Kiwanis Club. Every year, an event called Summer Fest is
held over the Fourth of July weekend in Cedar Lake. Numerous churches and non-profit
organizations participate in Summer Fest. In the spring of 2013, Adam Noel, who was
tasked with running a bingo tent at the 2013 Summer Fest on behalf of the Knights of
Columbus, approached Dickson and asked her if she would be interested in working a
shift in the bingo tent, and she agreed to do so. Noel mistakenly assumed that Dickson
would work the event on behalf of the Parks and Recreation Department. In fact,
Dickson planned to work the event on behalf of the Kiwanis Club, which voted to
1
We identify the claimant and employing unit by name because the parties have made no
affirmative request to keep their identities confidential. See J.M. v. Review Bd. of Ind. Dep’t of Workforce
Dev., 975 N.E.2d 1283 (Ind. 2012).
undertake the event as a group. The Kiwanis Club planned to use the profits from the
bingo event to purchase various items to donate to the Parks and Recreation Department.2
Dickson, along with other volunteers, ran the bingo tent on behalf of the Kiwanis
Club on the evening of July 3, 2013. At the end of the night, the proceeds from the event
were placed in the Summer Fest drop box located at the Town’s office for safekeeping.
After Noel deducted rental fees and corrected an accounting error, the Kiwanis Club
made a total of $541.82. The next day, the funds were turned over to Dickson because
the Kiwanis Club treasurer, Dana Griner, was on vacation. Dickson did not see Griner
again until an August 19, 2013 meeting of the Kiwanis Club, at which time Dickson
turned the money over to Griner.
Meanwhile, at some point in August 2013, the Town Manager, Ian Nicolini,
became aware that Dickson had worked at the bingo tent. Nicolini believed that the
proceeds from the event belonged to the Town and that Dickson had unauthorized
possession of the funds and had failed to properly account for them pursuant to the
Town’s donation acceptance policy. Even after Dickson explained that she had worked
the event in her capacity as president of the Kiwanis Club and not as a Town employee,
2
We note that the Town repeatedly mischaracterizes the record by asserting that the Kiwanis
Club planned to donate the proceeds of the bingo event to the Parks and Recreation Department. This
assertion is not supported by the record. The testimony of the witnesses and the minutes of the Kiwanis
Club meeting uniformly establish that the Kiwanis Club intended to use the proceeds to purchase items
that it would then donate to the Parks and Recreation Department. We also remind counsel for the Town
of their duty under the Indiana Appellate Rules to state the facts in accordance with the standard of
review—i.e., the facts most favorable to the Review Board’s findings. Ind. Appellate Rule 46(A)(6)
(b)(providing that a statement of facts “shall be stated in accordance with the standard of review
appropriate to the judgment or order being appealed”); S.S. LLC v. Review Bd. of Ind. Dep’t of Workforce
Dev., 953 N.E.2d 597 (Ind. Ct. App. 2011) (noting that in an appeal from a decision of the Review Board,
we will consider only the evidence most favorable to the Board’s findings).
3
Nicolini still believed that the money earned should be considered a donation to the Parks
and Recreation Department.
On August 26, 2013, Nicolini sent Dickson written notice that she was “terminated
from [her] employment with the Town of Cedar Lake pending final action by the Cedar
Lake Town Council[.]” Exhibits at 176. In the notice, Nicolini alleged that Dickson had
received “a cash donation from a Knights of Columbus Bingo Fundraiser on July 3,
2013” in the amount of $541.82 and that she had not “provided any accounting for the
donations or sought to properly receipt the donation from a member of the Knights of
Columbus into Town Funds.” Id. Nicolini further stated that he had previously given all
department heads an oral directive explaining how to properly account for donations
using a donation acceptance form. Nicolini noted that Dickson had expressed an
intention to use the “donated funds” to buy materials for the Parks and Recreation
Department, but stated that Dickson had “a responsibility to properly receipt and account
for the donation prior to spending donation funds which also have protocols for the use of
such funds.” Id. The termination notice also indicated that Dickson had committed five
prior documented violations of the Town’s Personnel Policy Manual. Nicolini concluded
that “[i]n considering your previous violations of the Personnel Policy Manual, your
current insubordinate actions by failing to properly account for a cash donation or even
disclose that you were in receipt of a cash donation, and the previous instance of
improper financial management within the past six (6) months, your present
actions/inactions constitute serious misconduct.” Id. at 177. As a result, Dickson was
placed on suspension with pay pending a final termination decision by the Town Council
4
following a hearing.3 Id. at 178. An administrative hearing was held on September 3,
2013, at the conclusion of which the Town Council voted to terminate Dickson’s
employment.
Dickson subsequently applied for unemployment compensation. On October 3,
2013, a claims deputy of the Indiana Department of Workforce Development determined
that Dickson was not discharged for just cause and was therefore eligible for benefits.
The Town appealed the determination of the claims deputy, and an evidentiary hearing
was held before an Administrative Law Judge (ALJ). On December 13, 2013, the ALJ
issued a decision affirming the conclusion of the claims deputy. In pertinent part, the
ALJ found as follows:
In the present matter, [the Town] failed to meet its burden. There were
rules contained in [the Town’s] Handbook. The rules were reasonable
ensuring employees performed as instructed and properly maintained [the
Town’s] property so there was no loss to [the Town]. [The Town]
uniformly enforced the rules with all employees who violate them treated
equally with discharge. Claimant knew the rules as she signed stating she
read and intended to comply with its [sic] terms. However, [the Town]
failed to establish Claimant knowingly violated the policies.
The Kiwanis club worked the event and the profits were theirs not the
[Town’s] so Claimant did not misuse [the Town’s] property when she did
not turn it in. The club also voted to use the funds to make in kind
donations not a monetary donation. Therefore, Claimant had no duty to
create and submit a donation form for the profits so she did not fail to
follow instruction to fill out a donation form at that time. Therefore, [the
Town] discharged Claimant but not for just cause under Indiana
unemployment law.
3
The Town incorrectly asserts that the termination notice instructed Dickson to tender receipts
and provide an accounting to the Town within five days, which she failed to do. Although Nicolini
testified that the termination notice contained such instructions, our review of the record reveals
otherwise. The termination notice did not instruct Dickson to provide an accounting; instead, it simply
demanded payment of $541.82, i.e., the proceeds from the bingo event, within five days.
5
Appellant’s Appendix at 3. The Town appealed to the Review Board, and on January 8,
2014, the Review Board issued a decision adopting and incorporating the ALJ’s findings
of fact and conclusion of law and affirming the ALJ’s decision. The Town now appeals.
The Indiana Unemployment Compensation Act provides that “[a]ny decision of
the review board shall be conclusive and binding as to all questions of fact.” Ind. Code
Ann. § 22-4-17-12(a) (West, Westlaw current with all 2014 Public Laws of the 2014
Second Regular Session and Second Regular Technical Session of the 118th General
Assembly). When the Review Board’s decision is challenged as contrary to law, the
reviewing court is limited to a two-part inquiry into the “sufficiency of the facts found to
sustain the decision and the sufficiency of the evidence to sustain the findings of fact.”
I.C. § 22-4-17-12(f); McHugh v. Review Bd. of the Ind. Dep’t of Workforce Dev., 842
N.E.2d 436 (Ind. Ct. App. 2006). Under this standard, we are called upon to review “(1)
determinations of specific or ‘basic’ underlying facts, (2) conclusions or inferences from
those facts, sometimes called ‘ultimate facts,’ and (3) conclusions of law.” McClain v.
Review Bd. of the Ind. Dep’t of Workforce Dev., 693 N.E.2d 1314, 1317 (Ind. 1998).
We review the Review Board’s findings of basic fact under a “substantial
evidence” standard. Id. In this analysis, we neither reweigh the evidence nor assess the
credibility of witnesses, and we consider only the evidence most favorable to the Review
Board’s findings. McClain v. Review Bd. of the Ind. Dep’t of Workforce Dev., 693
N.E.2d 1314. We will reverse only if there is no substantial evidence to support the
findings or if a reasonable person, considering only the evidence supporting those
6
findings, would be bound to reach a different result. KBI, Inc. v. Review Bd. of the Ind.
Dep’t of Workforce Dev., 656 N.E.2d 842 (Ind. Ct. App. 1995).
The Review Board’s conclusions as to ultimate facts involve an inference or
deduction based upon the findings of basic fact, and they are reviewed to ensure that the
Review Board’s inference is reasonable. McClain v. Review Bd. of the Ind. Dep’t of
Workforce Dev., 693 N.E.2d 1314. Finally, we review conclusions of law to determine
whether the Review Board correctly interpreted and applied the law. McHugh v. Review
Bd. of the Ind. Dep’t of Workforce Dev., 842 N.E.2d 436.
The Act provides unemployment benefits to individuals who are “unemployed
through no fault of their own.” I.C. § 22-4-1-1 (West, Westlaw current with all 2014
Public Laws of the 2014 Second Regular Session and Second Regular Technical Session
of the 118th General Assembly); Albright v. Review Bd. of Ind. Dep’t of Workforce Dev.,
994 N.E.2d 745, 749 (Ind. Ct. App. 2013). I.C. § 22-4-15-1(a) (West, Westlaw current
with all 2014 Public Laws of the 2014 Second Regular Session and Second Regular
Technical Session of the 118th General Assembly) provides that an unemployment
claimant is ineligible for unemployment benefits if the claimant is discharged from
employment for “just cause”. See Recker v. Review Bd. of Ind. Dep’t of Workforce Dev.,
958 N.E.2d 1136 (Ind. 2001). When an employer asserts that an employee was
discharged for just cause, the employer bears the burden of establishing a prima facie
case of discharge for just cause. Albright v. Review Bd. of Ind. Dep’t of Workforce Dev.,
994 N.E.2d 745. Once the employer satisfies this burden, the burden shifts to the
employee to rebut the employer’s evidence. Id. Whether an employer had just cause to
7
discharge an unemployment claimant is a question of fact for the Review Board. Gibson
v. Review Bd. of the Ind. Dep’t of Workforce Dev., 671 N.E.2d 933 (Ind. Ct. App. 1996).
Just cause for discharge includes “refusing to obey instructions” and “knowing
violation of a reasonable and uniformly enforced rule of an employer[.]” I.C. § 22-4-15-
1(d); see also Coleman v. Review Bd. of Ind. Dep’t of Workforce Dev., 905 N.E.2d 1015
(Ind. Ct. App. 2009). “To have knowingly violated an employer’s rule, the employee
must know of the rule and must know that his conduct violated the rule.” S.S. LLC v.
Review Bd. of Ind. Dep’t of Workforce Dev., 953 N.E.2d at 602.4 In this case, the ALJ
found that the rule regarding accounting procedures for donations was uniformly
enforced and that Dickson was aware of the rule. The ALJ concluded, however, that
Dickson had not violated the rule. Specifically, the ALJ found that Dickson ran the bingo
tent in her capacity as president of the Kiwanis Club, not as a Town employee. Further,
the ALJ found that the money raised at the event belonged to the Kiwanis Club, not the
Town, and that no cash donation was made. These findings are amply supported by the
evidence.
4
Additionally, this court has explained that “[a]n employer’s asserted work rule must be reduced
to writing and introduced into evidence to enable this Court to fairly and reasonably review the
determination that an employee was discharged for just cause for the knowing violation of a rule.” S.S.
LLC v. Review Bd. of Ind. Dep’t of Workforce Dev., 953 N.E.2d at 602. In this case, no written version of
the donation acceptance policy was introduced into evidence. In the termination notice provided to
Dickson, Nicolini asserted that he had given all department heads, including Dickson, “an oral directive
explaining how to properly account for donations[.]” Exhibits at 176. The record contains a copy of the
handwritten notes from the staff meeting at which this directive was apparently given, as well as a blank
donation acceptance form, but neither of these documents set forth the donation acceptance policy. See
KBI, Inc. v. Review Bd. of Ind. Dep’t of Workforce Dev., 656 N.E.2d 842 (concluding that an employer
failed to satisfy its burden of showing that the claimant was discharged for just cause for violating a
uniformly enforced work rule by failing to introduce into evidence a written policy). Because neither the
parties nor the ALJ have addressed this issue, however, we do not base our decision on the Town’s failure
to introduce into evidence a written copy of the donation acceptance procedures.
8
Nevertheless, the Town apparently believes that the funds raised at the bingo event
were a donation simply because the Kiwanis Club membership had voted at a recent
meeting to use them to purchase items for the Parks and Recreation Department. The
Town is incorrect. The evidence presented at the hearing clearly establishes that the
Kiwanis Club never delivered any cash to the Parks and Recreation Department and
never had any intention of doing so. The intention of the Kiwanis Club’s members to use
the funds to purchase items for the Parks Department does nothing to alter the ownership
of those funds. Indeed, the Kiwanis Club membership was in no way bound by its
previous decision to use the money to purchase items for the Parks and Recreation
Department and could have decided at any time to use the money for a different purpose.
Because no cash donation was made, Dickson cannot be said to have violated the Town’s
rules concerning the documentation of the receipt of cash donations.
The Town also argues that even if Dickson did not violate the procedures relating
to the acceptance of cash donations, she violated the procedures relating to the receipt of
in-kind donations. We note, however, that Dickson’s termination notice referred to a
cash donation only. Moreover, the evidence presented at the hearing established that
Dickson did not violate the donation acceptance procedures with respect to in-kind
donations. The evidence shows that the Kiwanis Club donated only one item, a telephone
system, to the Parks Department prior to Dickson’s termination. A receipt submitted into
evidence at the hearing shows that the telephone cost less than fifty dollars. Accordingly,
no donation acceptance form was required pursuant to the Town’s policy regarding de
minimis in-kind donations. The Town also seems to suggest that the Kiwanis Club
9
donated banners, which were valued at over one hundred dollars, prior to Dickson’s
termination. The evidence presented at the hearing, however, establishes that the banners
belonged to the Kiwanis Club and had been purchased for use at events the Club
sponsored jointly with the Town. Because the Kiwanis Club retained ownership of the
banners, they were never donated to the Town. The remaining receipts submitted into
evidence show that all additional purchases of items were made after Dickson was
terminated.
Finally, the Town argues that even if Dickson did not violate the Town’s donation
acceptance policy, she was nevertheless terminated for just cause pursuant to the Town’s
“Progressive Discipline Policy” based on five previous violations of the Town’s
Personnel Policy Manual.5 Appellant’s Brief at 8. Dickson and the Review Board argue
that the Town has waived this argument, and we agree. At the hearing before the ALJ,
the Town focused exclusively on Dickson’s actions with respect to the proceeds from the
bingo event. Although the Town made passing reference to previous infractions, it did
not discuss what those infractions were or set forth any clear argument that they were
alternative grounds for termination. Moreover, in its notice of appeal to the Review
Board, the Town made no reference to previous infractions, arguing only that it had
carried its burden to show just cause for the termination because “[Dickson] did not
5
The Town cites Wynkoop v. Town of Cedar Lake, 970 N.E.2d 230 (Ind. Ct. App. 2012), trans.
denied, for the proposition that this court “has reviewed and held valid” the Town’s Progressive
Discipline Policy. Appellant’s Brief at 14. The “validity” of the Progressive Discipline Policy was not at
issue in Wynkoop. Instead, this court considered whether the Town’s Personnel Policy Manual created a
property right in continued employment, and concluded that it did not. Wynkoop did not address issues of
unemployment compensation, and it is therefore irrelevant to the issues before us.
10
follow [the Town’s] uniform rule for disclosure of donated money or property in-kind.”
Appellees’ Appendix at 1. See Cunningham v. Review Bd. of Ind. Dep’t of Workforce
Dev., 913 N.E.2d 203, 205 (Ind. Ct. App. 2009) (explaining that “a party who fails to
raise an issue before an administrative body has waived the issue on appeal”).
Nevertheless, the Town argues that it has not waived this argument because the record
contains evidence of Dickson’s prior violations of the Personnel Policy Manual.
Specifically, the Town notes that the violations were referenced in Dickson’s termination
notice and in a memorandum of law submitted to the ALJ. But in light of the Town’s
failure to argue at the hearing or in its notice of appeal to the Review Board that the prior
infractions constituted just cause for Dickson’s termination, it was reasonable for the ALJ
and the Review Board to conclude that the Town had abandoned that argument.
Moreover, it is apparent that the Town’s mistaken belief that Dickson had violated
the donation acceptance procedures was the determining factor in its decision to
terminate Dickson. Although the Town reprimanded Dickson for the previous violations,
it chose not to terminate her for those infractions. While the previous infractions might
have been a contributing factor, the Town’s ultimate decision to terminate Dickson was
clearly based on its belief that Dickson had failed to properly account for donations to the
Parks and Recreation Department. See Voss v. Review Bd. of Emp’t & Training Servs.,
533 N.E.2d 1020, 1021 (Ind. Ct. App. 1989) (explaining that “[w]hether or not other
grounds may have existed for [a claimant’s] discharge is irrelevant because [the
employer] did not exercise its discretion to discharge [the claimant] on those grounds”).
In other words, Dickson would not have been discharged but for the Town’s incorrect
11
conclusion that she had violated the donation acceptance policy.6 For all of these reasons,
we conclude that the Review Board’s finding that Dickson was not discharged for just
cause was supported by substantial evidence.
Judgment affirmed.
NAJAM, J., and BAILEY, J., concur.
6
In its reply brief, the Town alleges several “other violations”, including misuse of the Town’s
tax exempt identification number and Sam’s Club commercial account and failure to follow purchasing
procedures. Reply Brief at 9. Because the Town did not raise these arguments in its principal appellate
brief, they are waived. See Showley v. Kelsey, 991 N.E.2d 1017, 1021 n.2 (Ind. Ct. App. 2013) (noting
that “it is well settled that grounds for error may only be framed in an appellant’s initial brief and if
addressed for the first time in the reply brief, they are waived”), trans. denied.
12