Supreme Court of Iowa Decision
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Case Title: DON N. WEST, Appellant, vs. EMPLOYMENT APPEAL BOARD, DEPARTMENT OF INSPECTIONS AND APPEALS, and BUFFALO CENTER COMMUNITY SCHOOL DISTRICT, Appellees.
Date: 09/23/92
Bound Citation:
Summary: No. 259 / 91-1228
Decision: Appeal from the Iowa District Court for Winnebago
County, John S. Mackey, Judge.

Discharged school superintendent appeals from district
court affirmance of agency decision denying unemployment
compensation benefits. REVERSED AND REMANDED WITH
DIRECTIONS.

Mark S. Soldat, Algona, for appellant.

Joe E. Smith, Des Moines, and Thomas W. Lipps of
Peterson & Lipps, Algona, for appellee.

Considered by Harris, P.J., and Carter, Lavorato,
Neuman, and Snell, JJ.

LAVORATO, J.
In this judicial review proceeding involving unemploy-
ment benefits, the agency denied the claimant benefits.
The agency denied benefits because it found that the
employer had discharged the claimant for misconduct based
on the claimant's alleged refusal to answer the employer's
questions. On our review, we find no support for this
finding. For this reason, we reverse the district court's
decision that affirmed the agency's action denying benefits.
In addition, we reverse the district court's taxation
of court costs to the claimant. We tax those costs of
appeal relating to portions of the appendix we find
excessive to the claimant. All other costs on appeal are
taxed to the agency and the employer.
Don N. West, the claimant, was under contract to the
Buffalo Center Community School District as a school super-
intendent for one year beginning July 1, 1989. In January
1990, the school district's board held two meetings regard-
ing West's continued tenure with the school district. At
the first meeting, the board evaluated West and found his
performance unsatisfactory.
At the second meeting on January 10, the board gave
West a chance to go into executive session before the board
questioned him about his conduct in office. West refused,
insisting that the board ask its questions--thirty-eight in
all--in an open meeting before a large entourage of interested citizens.
The board then attempted to question West, but he
refused to answer any of the inquiries, stating that "[he]
would answer them at a hearing or a court of law."
At the close of the meeting, the board voted to con-
sider terminating West's contract. See Iowa Code Sec. 279.24
(1989) (According to Iowa Code section 279.24, West's
contract would automatically be extended for one year
beyond the contract's terms unless terminated as provided
in section 279.24.). He was notified of this at the end of
January. Pursuant to section 279.24, West had a hearing
before an administrative law judge (ALJ) in March 1990.
After a six-day hearing--during which West responded to
questioning--the ALJ determined that West could be dismissed
after his contract expired on June 30, 1990.
On April 30, 1990, the board voted to dismiss West,
effective June 30, 1990. West's duties were transferred to
the school principal on May 15, 1990.
In a separate proceeding, West immediately applied for
unemployment benefits under Iowa Code chapter 96. In the
claim form for unemployment benefits, four choices related
to separation are listed: (1) "laid off for lack of work,"
(2) "quit," (3) "discharged," and (4) "labor dispute."
West chose number (3): "discharged."
The board president, on behalf of the school district,
protested West's claim for unemployment benefits on the
ground that West "was discharged [on 5/15/90] for mis-
conduct in connection with work." In its protest, the
school district gave a number of reasons for West's
"discharge." All of these reasons centered on his past
unsatisfactory performance. No mention was made about
West's refusal to answer the board's thirty-eight questions
at the second meeting the previous January.
In a terse decision, the claims representative found
that the school district had failed to furnish sufficient
evidence of misconduct. For this reason, the representative
imposed no permanent disqualification on West regarding benefits.
The school district appealed and asked for an
evidentiary hearing. The hearing was by telephone before a
separate ALJ in the unemployment benefit proceeding. The
school district had the opportunity to expand upon the
facts alleged in its protest to the claims representative.
The board president testified at length. His testimony was
a consistent expansion of his statements in the school
district's protest of West's claim. All of these statements
centered on West's alleged unsatisfactory performance.
But none included West's refusal to answer the
board's thirty-eight questions in the prior January 10 meeting.
The inquiry about this refusal came from the ALJ in
this exchange:

ALJ: Were you at the meeting on January 10th
of this year? WEST: Yes.

ALJ: And did you, at that time, refuse to
answer the 38 questions we've heard about? WEST:
I said that I would answer them at a hearing.

ALJ: What--hang on. Well, did you have an
opportunity at that meeting to answer those 38
questions? WEST: Oh, it was a very--did I have
an opportunity?

ALJ: Yes. WEST: I--they asked me if I
wanted to respond, yes.

ALJ: And did you refuse? WEST: Yes, I did.

ALJ: All right. And what else did you say
as far as when you would answer those questions?
WEST: I said I would answer those at a hearing or
a court of law.

ALJ: And what was the purpose of that?
WEST: There was about a hundred and some citizens
there. The questions were framed in such a way as
to make the question, if you answered it, made you
think that you were guilty by the way [they] asked
the question--

ALJ: Is it true-- WEST: And I did not
think that was proper.

ALJ: Is it true you had the chance to go
into an executive private session? WEST: Yes.

ALJ: And did you refuse that? WEST: Yes.

ALJ: Well, why didn't you go into the
private session and answer them in private?
WEST: Because they, in my opinion, had their mind
already made up when they asked me to resign on
November 28, and then did an evaluation in January.

The ALJ reversed the claims representative's decision,
finding that West had been discharged for a specific
instance of misconduct: his refusal to answer the
thirty-eight questions propounded by the school district's
board on January 10, 1990. The employment appeal board
affirmed the ALJ's proposed agency decision following
West's appeal to it. West's petition for rehearing was
denied by the appeal board.
West then filed a petition for judicial review in the
district court. The district court affirmed, finding
substantial evidence in the record to support the appeal
board's decision. It is from the district court's ruling that West appeals.
I. Judicial review of agency determinations regarding
unemployment compensation benefits is governed exclusively
by the Iowa Administrative Procedure Act. Iowa Code
Sec. 17A.19; 96.6(3). Our review of the district court's
decision is at law. Iowa Code Sec. 17A.20; Hy-Vee Food
Stores, Inc. v. Iowa Civil Rights Comm'n, 453 N.W.2d 512,
515 (Iowa 1990).
Under the mandate of section 17A.19, the district court
acted as an appellate court to correct errors of law that
section 17A.19(8)(f) specifies for contested cases such as
this one. We must decide whether the district court
correctly applied the law. Hy-Vee, 453 N.W.2d at 515.
Our review in this regard is bounded by the final
record made before the agency. Iowa Code Sec. 17A.19(8)(f);
Hussein v. Tama Meat Packing Corp., 394 N.W.2d 340, 341
(Iowa 1986). In determining whether the district court
applied the law correctly, we inquire whether the agency's
findings of fact are supported by substantial evidence when
the agency record is viewed as a whole. Iowa Code
Sec. 17A.19(8)(f); Hy-Vee, 453 N.W.2d at 515.
Evidence is substantial if "a reasonable person would
find it adequate to reach a given conclusion, even if we
might draw a contrary inference." Id. at 515-16 (citation
omitted). If we determine that the agency's findings of
fact are supported by substantial evidence, we are bound by
those findings and must affirm. Hussein, 394 N.W.2d at
341. If we find the facts unsupported by substantial
evidence, we reverse. Hy-Vee, 453 N.W.2d at 515.
II. We assume, without deciding, that West was discharged.
Iowa Code section 96.5(2) disqualifies a claimant
from receiving unemployment benefits "[i]f the division of
job service finds that the individual has been discharged
for misconduct in connection with the individual's employment."
The employer has the burden of proof on this issue. Cosper v. Iowa Dep't of Job Serv., 321 N.W.2d 6, 11 (Iowa 1982).
Chapter 96 does not define discharge or misconduct.
These definitions are found in the Iowa Administrative
Code. "Discharge" is defined as
[a] termination of employment initiated by the
employer for such reasons as incompetence, viola-
tion of rules, dishonesty, laziness, absenteeism,
insubordination, failure to pass probationary period.

345 Iowa Admin. Code 4.1(113)(c) (1990).
"Misconduct" is defined as
a deliberate act or omission by a worker which
constitutes a material breach of the duties and
obligations arising out of such worker's contract
of employment. Misconduct as the term is used in
the disqualification provision as being limited to
conduct evincing such willful or wanton disregard
of an employer's interest as is found in
deliberate violation or disregard of standards of
behavior which the employer has the right to
expect of employees, or in carelessness or negli-
gence of such degree of recurrence as to manifest
equal culpability, wrongful intent or evil design,
or to show an intentional and substantial dis-
regard of the employer's interests or of the
employee's duties and obligations to the
employer. On the other hand mere inefficiency,
unsatisfactory conduct, failure in good perform-
ance as the result of inability or incapacity,
inadvertencies or ordinary negligence in isolated
instances, or good faith errors in judgment or
discretion are not to be deemed misconduct within
the meaning of the statute.

345 Iowa Admin. Code 4.32(1)(a) (1988).
We agree that under section 96.5(2)
[d]ischarging an unsatisfactory employee is a
managerial prerogative of the employer, but to
sustain a charge of misconduct it is necessary to
establish that the claimant willfully and
intentionally committed an act or acts that were
detrimental to the best interests of the
employer. There must be a direct causal relation
between the misconduct and the discharge.

Note, The Iowa Employment Security Act--Unemployment
Compensation, 11 Drake L. Rev. 125, 133-34 (1962) (emphasis
added). Simply put, we think an employer must establish
that the employer discharged the claimant because of a
specific act or acts of misconduct. We said as much in a
case decided after the district court ruled against West.
See Larsen v. Employment Appeal Bd., 474 N.W.2d 570, 572
(Iowa 1991) (record revealed claimant was fired for
incompetence; claim that she was fired for deceit was
supplied by agency post hoc).
We find no evidence in the record that West's discharge
was for anything more onerous than poor performance. There
certainly was no evidence that he was discharged for refusing
to answer the school district board's questions at the
January 10, 1990, meeting. The appeal board's finding to
the contrary was not supported by substantial evidence.
Hence the district court's decision upholding the appeal
board's determination was error and must be reversed. We
remand the case to the district court for entry of judgment
directing the award of benefits.
Because the school district failed to prove a direct
causal connection between the discharge and West's refusal
to answer the questions, we do not reach the issue whether
such refusal constitutes misconduct.
III. Both parties agree that the district court's
assessment of court costs against West was error, and it
was. See Iowa Code Sec. 96.15(2); Geiken v. Lutheran Home for
the Aged Ass'n, 468 N.W.2d 223, 226-27 (Iowa 1991). That
portion of the court's decision is also reversed. On
remand the district court's judgment shall delete any
assessment of court costs against West.
IV. We agree with the appeal board and the school
district that West submitted an appendix excessive in
length. Two hundred and twenty-two pages of the appendix
were not necessary under Iowa Rule of Appellate Procedure
15(a). Costs for printing these pages are taxed to West.
All other costs of appeal are taxed to the appeal board and
the school district.
REVERSED AND REMANDED WITH DIRECTIONS.