IN THE SUPERI OR COURT OF THE STA TE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
GARY L. SMITH )
) CIVI L ACTION NUMBER Appellant )
) 03A-0 4-01 7-JO H v. )
) KIMBE RLY A . F RANK LIN )
) Appellee )
Submitted: January 16, 2004
Decided: April 6, 2004
MEMORANDUM OPINION Appeal from a Decision of t he Unemployment Insurance Appeal Board -
Decision - REVERSED and REMANDED
Steven L. N owack, E squire, of Smyr na, D elaware, attorneys for appellant Gary L. Smith, Esquire, of Newark, Delaware, attorney for appellee
1
Employer Gary L. Smith appeals t he decision of the Unemployment Insurance Appeal Board which aw arded b enefits to Claimant Kimberl y A. Frankl in. The Bo ard awarded her benefit s because it det ermined that s he was discharged f rom her emplo ymen t without jus t cause in conne ction with h er emp loymen t.
In additio n making the argument below that Franklin was fi red for just cause i n connec tion wit h her work, Smit h asserted a second a rgument based on the doctine of equitable estoppel. He argued that Franklin should be est opped from receivi ng benefits b ecaus e she m isrepres ented to him on her resume that she had not been employed duri ng the base peri od. The importance of base period emplo ymen t, or lack ther eof, is that it de termine s eligibility for ben efits.
Smith learned, onl y a fter Fran klin f iled for benefits that, con trary t o what he knew when he hired her, she had worked duri ng the base peri od. This entitl ed her to benefit s when he believ ed she would not be so entitl ed.
The estoppel ar gument was clearl y stated i n the record bel o w. The Board, however, did not addr ess it i n its de ci sion. For t hat reason, t he matter must be returned to the Board. The Board's decisi on is REVERSED and REMANDED .
Facts Fran klin was employed as Smith' s legal se cretar y from Augu st 1, 20 02 un til October 22, 2002 when Smith di scharged her. Smith hired Fran klin afte r Sm ith's p revious secretary left her employment due to medical problems. Smit h was anxious
1
Tr. Appeals Ref. Hr'g at 4-5.
2
Id . at 9.
2
to hire a new secre tary an d only c ondu cted o ne inte rview. S mith a ccep ted Fra nklin's res ume which stat ed that sh e had not wo rked s ince Ju ly 2000. Smith te stifi ed that upon his ques ti oning du ring the i ntervi ew, Frankli n informed hi m that she had not
worked since that time because she stayed at home caring for her son.
1
Smith
a dmits, however, t hat he did not verif y or call any of the empl oyers employi ng he r
prior t o 2000 who were li sted on her resume. Because Smith nee ded a sec retary, Fran klin's assertio n during the interv iew about her l ack of employm ent for t he proceeding two years or so, and on her r esum e that she had a lot of legal experien ce, Sm ith hired he r.
Smith terminated Fr anklin on Octobe r 22, 2002 due t o an incident that occurred four days previ ously. On October 18, 2002, she t ook a phone message for Smith beca use h e was in the m iddle of a me eting with a client. Franklin wr ote the message on a legal pad and told S mith that Terry Croney had call ed and said that Denise Croney had died. Terry and Denise ar e sisters and t he latter has been
Smith 's client fo r o ver ten year s and is a cl ose personal f riend. Smit h knew that Denise was not in goo d health a t that time. S mith ask ed Fran klin to repeat who had
died and she said Denise. Smith testified that he was in shock and that the pa pers
he was carrying slippe d out of his hand and onto the floor.
2
Frank lin then stat ed, "It
3
Id. Smith Exhibit #2.
4
Id . at 11.
3
was Jamie Croney who died, not Denise. I made a mistak e. I'm sorry."
3
Jamie, who
was the sist er of Terry and Denise, had been very i ll and was ex pected to di e at that
time. Smith was in a state of shock at t he mistake of which sister had died. F ranklin did not offe r anothe r apolog y.
Smith testif ied that Fr anklin' s actions on Oct ober 18, 2002 w ere gross ly outside the acceptab le standards o f behavior.
4
He believes t hat she said the wr ong
name intenti onally and he was deeply dis turbed by the incident . He thought about the incident over the weekend and deci ded to ter minate Franklin's emplo ymen t. Fran klin called out sick on October 21, 2002, but reported to work the fol lowing day
and was fired. O ne mo nth prior t o the October 18, 2002 incident , Frankli n released informati on that Smith cons idered confid ential. Smith verba lly warn ed he r that if it
happened again, she woul d be terminated.
Fran klin did not appear at either hea ring befo re the Re feree or th e Boar d. The onl y "evidence" from her is her claim for b enefits. Therefo re, the only evidence i n the record is that appli cation f or unemployment benefi ts fil ed on October 22, 2003,
and testimony and documentary evi dence submitted by Smith at the he arings before the Referee and Board. The facts co ncern ing Fra nklin's e mplo ymen t betwe en Ju ly 2000 a nd Aug ust 200 2 are no t in the reco rd before the Cou rt.
5
Morgan v. Anchor Motor F reight , 506 A.2d 185, 188 (Del. Super. Ct. 1986).
6
DABCC v. Ne wsome , 690 A.2d 906, 910 (Del. 1996).
7
Streett v. State , 669 A.2d 9, 11 (Del. 1995).
8
Stigars v. Speakman Co. , Del. Super., C.A. No. 92A-08-21, Herlihy, J.
(March 19, 1993) at 4, aff'd ., No. 125, 1993, Moore, J. (September 28, 1993).
4
The Board determined t hat Frankli n's conduct of sta ting the wrong sister's name was a mistake and not a delib erate act and did not constit ute will ful or want on behavior. The Board affi rmed the Appeals Refer ee, who had also awarded benefits, and conclud ed that, although Smith was adm inistrative ly free to fire Fra nklin, h e did
not have just c ause to do so. Nei ther the Ref eree nor the Board addre ssed Smith 's argument made to them regarding Fr anklin bei ng estopped fro m receiving
unemployment benefits due to the false statements on her resume and during her interv iew about l ack of employment f rom 2000 - 2002.
Standard of Review On appeal from t he Board, the Court 's role is to ascer tain whether the Boar d's conclusions are supported by substanti al ev idence and free from legal error.
5
"Substanti al evidence" means "such relevant evi dence as a reasonable mind migh t accep t as adeq uate to su pport a c onclusio n."
6
Only w here th ere is n o sub stantia l,
competent evidence to su pport the Board's fac tual findings ma y this Court overturn the Board's deci sion.
7
In revi ewing the recor d for substanti al eviden ce, the Cour t will
consider the rec ord in t he lig ht most f avorabl e to the party prevai ling b elow.
8
9
Boulevard Electric Sales v. Webb , 428 A.2d 11, 13 (Del. 1981).
10
Keeler v. Metal Masters Foodservice Equip. Co. , 712 A.2d 1004, 1006
(Del. 1998).
11
19 Del. C. $ 3314(6)a.
12
Delaware Unemploym ent Insurance Handbook at 6-7.
5
This Court does not sit as the trier of fact with a uthority to weigh th e evidence, determine issues of credibility, or m ake it s own factual findi ngs and conclusions.
9
The credibil ity of witnesses, the weight of their t estimony and the factu al infer ences drawn theref rom are for t he Board to deter mine.
10
Discussion Smith does not argue on appeal that Franklin' s conduct on October 18, 2002 constit uted just caus e for ter mina tion. He raises only the issue o f wheth er Fra nklin sho uld be e stopped from col lectin g benefits due to her misr epresentati ons on her re sume and du ring her inte rview rega rding he r lack of em ployme nt d uring th e
applic able base period. Smith asks that this Court remand the case s o that the Board can co nside r his es toppe l argum ent. Alth ough not at is sue, the Court f inds tha t the Boa rd's deci sion that Franklin was not fir ed for just cause is support ed by substa ntial eviden ce in the re cord.
Under Delaw are law , a work er is elig ible for u nem ploym ent be nefits if he/she "has, during the ind ividual's base period, been p aid wag es for em ployme nt equa l to not less tha n 36 tim es the individu al's weekly b enefit am ount... ."
11
The base period
is the fir st four of the last f ive completed calendar quarters.
12
In this ca se, Fra nklin's
13
Tr. Appeals Ref. Hr'g at 4-5.
14
Appellant's Opening Bri ef at 2-3.
6
base period would be July 1, 2 001 thr ough Jun e 30, 2002 . Fr ankl in' s re sume does not list any employment between J uly 2000 and August 2002, and Fran klin stated in h er inter view that she had not worked si nce July 2000 because she stayed at home caring for her son.
13
Although it is unkn own whe re Franklin wor ked between
July 2000 and before st arting her job in August 2002 as Smith's secre tary, it is
known that Franklin worke d s omewhere because the Department of Labor determ ined that s he qua lified for unem ployme nt bene fits.
Smit h argues that he "ha d every righ t to assum e base d upon th e representat ions Franklin made i n her resume and oral ly duri ng the interv iew that s he did not have any ear nings during her base peri od which would hav e qualif ied her for
receipt of unemployment compensati on benefits at the ti me she was hi re d and for
many months the reafter at least until she m et the earn i ngs req uireme nt."
14
Therefore, Smith belie ves that Fr anklin shoul d not be able t o benefit from her misrep resenta tions.
Fran klin responds to Smit h's arguments by contending t hat Smith did not prope rly and a dequ ately ra ise the estop pel i ssue in the proceedin gs below. The Court finds, however, tha t Smith prope rly r aised the estoppel i ssue before t he Appe als Referee an d again befo re the Board. During h is closi ng statement t o the Referee, Smith' s attorney stated:
15
Tr. Appeals Ref. Hr'g at 17.
16
Tr. Bd. Hr'g at 4.
17
Id . at 4-5.
BOARD MEMBER: So this (res ume) has been offered to corroborate your statement that you think that the act that you terminated her for was indeed willful.
JOHN LANDIS ( Smi th's Attorney): That y es plus the, our position would be an estoppel argument which is that she should be estopped from now claiming unemploy ment which is the unemployment comes about as a result of the falsification. Anoth er (sic) words she falsified
her resume and her interview process and now she is relying on the information which was not included in the information.
BOARD MEM B ER: Oh, because the problem is that would be a different issue from us. If you are using it (sic) offering it as proof of
proffer because his testim ony bel ow is that he thinks that she willful (sic) did this and if you a re of fering this to show that in fact she has done something similar before then the weight of it cou ld go along
(continued...)
7
"W ell just brie fly I wanted to s uggest that the resume I t hink is r elevant on two ba ses. O ne is it seem s to me she has stopped ( sic) fr om claiming eligi bilit y based upon the rep res ent ati on i n her res ume which
was confirmed by her sta temen t to Mr. Smith tha t she had been stay ing home with her son and had not been working and the resume which indicated that she h ad not w orked fo r approxim ately two ye ars."
15
During the he aring b efore th e Boa rd, Sm it h's attorne y stated that on e of his argum ents is that F ranklin should be estopped from colle cting benefits because her employment is a resu lt of f alse inf ormation in her resume and fal se assurances during her int ervie w.
16
S m ith ass erted th at Fran klin's re sum e sup ported this
estoppel argum ent. However, the Boar d misconstrued Smit h's argument regar ding the res ume's rel evance as solel y being off ered to show that Franklin' s conduct on October 18, 2002 was will ful and to attack F ranklin's credibility.
17
The re cord reflec ts
(...continued)
with why you terminated her but y ou didn't terminate her for falsifying
the application.
GARY SMITH: That is ri ght. That is correct. BOARD MEMBER: Okay so it has been offered to corroborate y our statement that you thought it was willful.
GARY SMIT H: Or credib ility. BOARD MEMBER: For c redibility, Okay . All right so w e got that. 18
Del. Super., C.A. No. 93A-12-001, Graves, J. (July 13, 1994).
8
that the Board did not consider t he estoppel i ssue as it f ocused on the re ason for
terminati on and whether Franklin's conduct met the st andard of just cause , not because Smith fai led to rai se the estoppel issue.
Smith cites the case of Miller v. Delaw are State Univers ity
18
as su pport fo r his
ar gume nt. In Miller , an employee submit ted a resume which st ated that he had a college degree. The employee al so signed an applic ation w hich re ad tha t he co uld be discharged at any time if he lied on i t. The empl oyee was terminated f or providi ng false informati on on his job appl icatio n when the employer di scovered that the employee did not have a colleg e deg ree. T his Court upheld t he Board's deci sion disquali fying the empl oye e fr om th e re cei pt o f un empl oyme nt ben efit s based on a finding that the empl oyee will fully provided f alse info rmatio n on h is resu me. T his Court stat ed:
An employer has a l eg it imate int erest in ha ving accurat e informati on from prospecti ve employees so as t o make an informed hir ing decisi on.
19
Id. at 4 (quoting James v. Unemployment Insurance Appeal Board , et al. ,
Del. Super., C.A. No. 85A-FE-14, Babiarz, J. (May 7, 1986) (Letter Op.) at 3).
20
Smith states: "...the [public] policy...that it is inequitable and unjust for a
person to gain employment based upon a false statement an d then to qualify for unemployment benefits is equally s trong when the employer takes a chance on an individual with a work h istory with l ong per iods of u nemp loyment." Appellant's Opening Brief at 3.
9
It is a violat ion of that int erest for a job appli cation deliberat ely to furni sh false informa tion. I ndeed , an unt rut hfu l ap pli cat ion pot ent ial ly har ms not only the em ployer bu t also othe r applicatio ns. It sh ould also be noted that it seems unjust for a pers on to gain employ ment based on a false st atement and then t o qualif y for unemployment benefits when
the falsehood is discov ered a nd he is disch arged . Acco rdingly , it is held that a fal se statement on an e mploym ent ap plicatio n, wilfully made, can constitute just ca use for d ischarge under 19 Del. C. $ 3315(2).
19
As conce ded by S mith, Mil ler is factual ly dist inguishabl e from the present case. Miller deals wit h an employer fi ring an employee for mis statements on hi s/her resume. The present case i nvolves misst atements being di scovered aft er the employee was f ired. H owev er, Sm ith argu es tha t the pu blic po licy ann ounc ed in Miller is appli cable to t he present case.
20
Smith conte nds th at he re lied on Frank lin's
representat ions on her resume and duri ng the inter view regardi ng her lack of recent employment to conclude t hat he would be f ree to disc harge her if t hings did not work out and not have to be responsibl e for unemployment benefi ts. Smith f urther ar gues that the earnings requirement is esse ntially a "statut orily created probat ion period" for the emplo yer, and that th is requir ement is an inducement for employers to hire individu als who have been out of the work for ce for an extende d period.
21
Appelle e's Answering Bri ef at 7. See Howell v. Supermark ets General
Corp. , 340 A.2d 833, 836 (Del. 197 5) ("The purpose of providing unemployment insurance benefits is to compensate the employee for his loss of earning capacity.").
22
Del. Super., C.A. No. 96A-07-003, Herlihy, J. (March 19, 1997).
10
Fran klin argues that Smith's asser ted business pr actice of hiring i nd i viduals with no apparent work hi story dur ing the appl icable base per iod so th at he can discharge them without just cause and without them being able to collect u nempl oyment benefits "stri kes at the v ery heart of the publ ic purpose of
unem ployme nt com pensa tion insura nce."
21
Smith cites the ca se of Scarberry v. C hrysler Corp .
22
as au thorit y for his
argument that the p resent case shoul d be remanded to the Board to rule on t he estoppel issue. I n Scarberry , this Court reman ded the decision to the Bo ard to consider the issu e of whether the i nsurance carri er was estopped f or denying coverage because it had not given timely not ice of the denial of benefi ts as requi red by Industri al Accident Board Rule 4(b). This Court deci ded that the estoppel i ssue
was raised by the claim ant in his closing arg ument, albe it barely, but the Bo ard did not rule on it.
In order to estab lish a cla im of estoppel, three fac tors must be satisf ied: (1) the person lac ked know led ge of and me a ns of learn ing the tr ue facts; (2) the per son relied upon th e party against whom estoppel is clai med; and (3) the per son suffered
23
Bailey v. Milford Me morial Hosp. , Del. Super., C.A. No . 94 A-03-001,
Graves, J. (November 30, 1995) at 22.
24
Moore Business Forms, Inc. v. Cordant Holdings Cor p. , Del. Ch. C.A. No.
13911, Jacobs, V.C. (November 2, 1995).
25
Scarberry , Del. Super., C.A. No. 96A-07-003, Herl ihy, J. (March 19, 19 97)
at 7.
11
a prejud icial cha nge in his or her positi on as a consequence of such reli ance.
23
The
conduct upon which the party reli es m a y be eithe r an affirm ative act or a failure to act when duty r equired.
24
The Court is not ruling, and by thi s decision d oes not inf er a ruli ng, on the issue of estopp el asserte d by Sm ith. The B oard m ust first a ddress the issue.
Wh ere the Bo ard ha s not m ade a ll required f indings, the Superior Court can remand so that i t may do so.
25
Conclusion This Court rem ands the ca se to the Une mploym ent Insurance Appeal B oard so that it may hear furthe r t est imony and argument on t he estoppel i ssue. The Board should then i ssue a decisi on consistent with thi s opinion. Therefore, t he decision of t he Un empl oyment Insurance Appeal Board is REVERSED and REMANDED for fur ther proceedi ngs consistent herewith.
IT I S SO ORDERED.
12