RENDERED: APRIL 26, 2002; 10:00 a.m.

NOT TO BE PUBLISHED

C o m m o n w e a l t h O f K e n t u c k y

C o u r t O f A pp e a l s

NO. 2001-CA-000957-MR

BEECH FORK PROCESSING PLANT, INC. APPELLANT

APPEAL FROM JOHNSON CIRCUIT COURT v. HONORABLE DANIEL R. SPARKS, JUDGE

ACTION NO. 98-CI-00208

KENTUCKY UNEMPLOYMENT INSURANCE COMMISSION and VERNON D. DUTY APPELLEES

OPINION AFFIRMING ** ** ** ** **

BEFORE: BUCKINGHAM, GUIDUGLI, AND HUDDLESTON, JUDGES.

BUCKINGHAM, JUDGE: After working for Beech Fork for approximately seven years, Vernon D. Duty was terminated from his employment for allegedly stealing a 500-foot roll of No. 10 copper wire. Following termination, Duty applied for and received unemployment benefits. Beech Fork appealed the award of benefits to the Johnson Circuit Court. The court affirmed the award, and this appeal by Beech Fork followed.

Sometime before April 5, 1997, Beech Fork began to notice the loss of supplies and equipment. A decision was made to install a hidden security camera in the office of plant Kentucky Revised Statutes (KRS) 341.370(1)(b) would have1 precluded Duty from receiving benefits if he was discharged for misconduct or dishonesty in connection with his work. superintendent, Jim Chitti. On the evening of April 5, 1997, Duty reported for work at 11:00 p.m. His shift was completed at 7:00 a.m. on the following morning. At approximately that time, Chitti looked in his closet for time sheets and noticed that the coil of wire was missing.

Chitti and two shift foremen, Mike Maynard and Clyde Hammond, Jr., viewed the videotape made by the surveillance camera. All three were of the opinion that the person seen entering the office and taking the wire was Duty. Chitti interviewed Duty and asked him if he had taken the wire or had seen it. Duty denied the allegation, but he was nonetheless terminated from his employment due to the opinions of Chitti, Maynard, and Hammond that the person shown in the videotape was Duty.

The Division of Unemployment Insurance ruled that Duty could not be positively identified on the videotape as the person in question. Thus, it issued a Notice of Determination concluding that Duty was not disqualified from receiving benefits. Beech Fork appealed the Division's determination to a1 referee. On July 16, 1997, the referee entered a decision finding that Beech Fork had not proven misconduct by Duty and that he was therefore not disqualified from receiving benefits. The referee stated that "[t]he tape, at best, showed a resemblance of an individual that could be the claimant and just as likely could not have been the claimant." 

Beech Fork appealed to the Kentucky Unemployment Insurance Commission (KUIC), and the matter was remanded to the referee with instructions to conduct a second hearing. KUIC directed the referee to compel the attendance of William Jenkins, an individual Duty believed to be the person shown on the videotape, and Charles Moffett, a forensic science specialist employed by the Kentucky State Police Forensic Laboratory. Moffett had been directed by KUIC to make still photographs from the videotape. Further, KUIC directed Duty and Jenkins to provide the referee with a photo identification.

Upon remand to the referee, a second hearing was held. On February 27, 1998, the referee entered a decision again holding that Beech Fork had not proven misconduct by Duty. The referee held that "the employer and even the Commission's efforts to correctly and positively identify the perpetrator seen on the video tape fell short. The employer failed to prove that the claimant was guilty of the crime alleged." Beech Fork appealed the referee's second decision to the KUIC which affirmed the decision. In relevant part, the KUIC held as follows:

Although the record reflects conflicting testimony, we find there was, in light of all the evidence, substantial evidence to support the decision of the referee. As trier of the facts, the referee was in a superior position to evaluate the situation, the conduct and demeanor or each witness and to consider the credibility of the witness. Further, the referee was in the position to observe claimant and Mr. Jenkins; and to compare their physical appearances to those images on the video cassette recordings and still photographs taken therefrom.

Nevertheless, the referee was unable to identify the claimant as being the individual (seen in one of the video cassette recordings, and several still photographs) taking an object from the closet in the office. Therefore, the Commission affirms the referee decision.

Beech Fork appealed to the Johnson Circuit Court. In an order entered on April 9, 2001, the circuit court entered an order affirming the decision of the KUIC upholding the award of benefits to Duty. The court held that it would not substitute its judgment for that of the hearing officer as to the proper weight given to the evidence or as to the credibility of the witnesses. The court also held that it could not make a finding that the decisions made were not based on substantial evidence of probative value. This appeal by Beech Fork followed.

Beech Fork argues that the circuit court erred by not reversing the KUIC decision because such decision was not based on substantial evidence, was contrary to the evidence, and was arbitrary. The essence of this argument is that the testimony of the plant superintendent and the two shift foremen should have been given greater weight than the testimony of others. Beech Fork argues that their witnesses "have greater ability to identify the individuals shown in the video and photos" than the other witnesses who testified. Beech Fork also asserts that the referee, who saw Duty only at the hearings, based his decisions solely upon his viewing of the videotape and discounted entirely the testimony of Beech Fork's three primary witnesses.

As the appellees note in their briefs, however, there was other evidence, besides the testimony of the plant superintendent and the two foremen, upon which the referee could rely. First, Duty testified that the individual on the videotape was not him. The person in the tape was wearing a watch and was not wearing eyeglasses. However, Duty testified that he does not own a watch and never wears one, and he also testified that he wears glasses. In addition to Duty's testimony, there was testimony that Jenkins advised company management that he had used a piece of wire that could have come from the roll in question. Further, Jenkins testified that he could not identify the person seen in the still photographs of the videotape. Also, a roll of wire was found in a bucket with rags and bottles after Duty's employment was terminated. We also note that Moffett, the Kentucky State Police photographer, testified concerning the photographs but was unable to assist in the identification of the perpetrator.

When the facts before an administrative agency are in dispute, the findings of fact made by the agency must be affirmed by the court if they are supported by substantial evidence and if the agency has applied the correct rule of law to the facts. Brown Hotel Co. v. Edwards, Ky., 365 S.W.2d 299, 302 (1962). See also H & S Hardware v. Cecil, Ky. App., 655 S.W.2d 38, 40 (1983). "The test of whether evidence is `substantial' is `whether taken alone or in light of all the evidence' it has sufficient probative value to induce conviction in the minds of reasonable men." Blankenship v. Lloyd Blankenship Coal Co., Ky., 463 S.W.2d 62, 64 (1970). Furthermore, "the trier of facts in an administrative agency may consider all of the evidence and choose the evidence that he believes." Transportation Cabinet, Dept. Of Highways, Commonwealth of Kentucky v. Thurman, Ky. App., 897 S.W.2d 597, 600 (1995), quoting Commonwealth, Transp. Cabinet Dep't of Vehicle Regulation v. Cornell, Ky. App., 796 S.W.2d 591, 594 (1990).

We conclude that there was substantial evidence to support the award of benefits. It is true, as Beech Fork has noted, that the plant superintendent and the two shift foremen positively identified Duty as the person seen in the videotape leaving the room with the coil of wire. However, Duty testified that the individual in the videotape was not him and that he did not wear a watch and did wear glasses. Further, the testimony from Jenkins and his circumstances with a piece of wire after the theft and the discovery of a roll of wire in a bucket after Duty was terminated and no longer had access to the property, supported a different conclusion than that asserted by Beech Fork.

Finally, the referee was entitled to review the videotape and draw his own conclusions from that evidence. The referee was not bound by the testimony of the plant superintendent and the two shift foremen to evaluate the videotape and reach the same conclusions regarding it that they did. In short, we conclude that there was sufficient evidence to support the referee's decision and that neither the KUIC nor the circuit court erred in affirming that decision.

The order of the Johnson Circuit Court is affirmed. ALL CONCUR.


BRIEF FOR APPELLANT: Michael J. Schmitt Kevin P. Keene Paintsville, Kentucky

BRIEF FOR APPELLEE, KENTUCKY UNEMPLOYMENT INSURANCE COMMISSION:

Randall K. Justice Frankfort, Kentucky

BRIEF FOR APPELLEE, VERNON DUTY:

James D. Adams, II Prestonsburg, Kentucky