Wells Fargo, etc. v. VEC and Claude Collier, Jr

Citation: Not availableDocket: 1051962

Court: Court of Appeals of Virginia; March 24, 1997; Virginia; State Appellate Court

Original Court Document: View Document

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Wells Fargo Alarm Services, Inc. appealed a decision from the Virginia Employment Commission, which affirmed a ruling granting unemployment compensation to Claude H. Collier, a former sales representative discharged for not following company policy. The key issues raised by Wells Fargo included: (1) the trial judge's affirmation of the commission's finding that Collier's actions did not amount to misconduct as defined by Virginia Code § 60.2-618(2); (2) the claim that Wells Fargo did not condone Collier's conduct; (3) a denial of Wells Fargo's request to present additional evidence; and (4) the trial judge's refusal to remand the case for a hearing on potential extrinsic fraud in the commission's decision.

Collier, employed since September 1991, was involved in negotiations with Allied Signal, a former competitor's client, for a significant contract worth $500,000. Throughout the negotiation process, Collier's branch manager was fully informed and involved, indicating that the transaction had to be structured as a lease rather than a direct sale. Collier testified that his branch manager had to secure approval from district sales manager Bill Winter and that all relevant supervisors approved the deal, which ultimately involved a $325,000 installation fee and an annual payment of $40,000. The commission's deputy had initially granted Collier unemployment benefits, leading to Wells Fargo's appeal. The court ultimately affirmed the trial judge's decision, upholding the commission's ruling.

Griffin testified regarding the significant nature of Collier's case, indicating that higher management must have been aware of the transaction in question. He explained that when taking over from a competitor, a lease is typically used to present an appealing alternative. Additionally, he noted that sales commissions require general manager approval. Following inquiries from Wells Fargo's auditors, a meeting occurred where Collier and an employee were advised to remain silent. Wells Fargo claimed Collier misclassified a transaction that should have been a lease-purchase as merely a lease, resulting in overpayments of $11,570 in commissions and $5,021 in bonuses due to differing commission rates. They also alleged that Collier violated company policy by using purchase orders from Allied Signal rather than an approved contract.

The appeals examiner found that Collier did not misrepresent facts and that any inaccuracies originated from his superiors. The examiner supported Collier's eligibility for unemployment compensation. Wells Fargo's request to present additional evidence was denied. The commission determined that Collier's actions were overseen by his supervisors and that he believed necessary approvals were secured. Despite noting Collier's poor judgment in following silence instructions at the meeting, the commission concluded this did not constitute a breach of loyalty or honesty. Ultimately, it ruled Wells Fargo failed to provide adequate evidence of Collier's misconduct. Upon appeal to the circuit court, the trial judge upheld the commission’s findings, leading to Wells Fargo's further appeal, arguing the commission erred in its conclusions about misconduct. However, the court emphasized that the commission's factual findings are conclusive if supported by evidence and absent fraud, limiting judicial review to legal questions.

The standard of review involves evaluating evidence favorably towards the Commission's findings. Misconduct by an employee is defined as a deliberate violation of company rules aimed at protecting the employer's business interests, or actions showing willful disregard for those interests. The determination of whether misconduct occurred is a mixed question of law and fact. 

Wells Fargo claimed that Collier breached company policies related to a transaction with Allied Signal. However, the Commission found no evidence of specific policies violated by Collier. Evidence indicated that Collier communicated with and received instructions from his branch manager and that the transaction was also approved by the district sales manager. Thus, even if there was a procedural deviation, it was authorized by superiors, suggesting Collier was acting in the employer's interest.

The Commission concluded that there was insufficient evidence to classify Collier's actions as misconduct. Consequently, since Wells Fargo could not demonstrate that Collier engaged in misconduct, the burden did not shift to Collier to provide mitigating evidence regarding the alleged condonation of his actions. Therefore, the Commission's refusal to address the condonation issue was appropriate.

Wells Fargo's request to reopen the record for additional evidence was also denied. The Commission's regulations permit reopening only if additional evidence is material, not cumulative, could not have been presented earlier with diligence, and is likely to alter the outcome of the hearing, or if the existing record is inadequate for making accurate findings.

Wells Fargo sought to introduce additional evidence before the commission, which included documents related to an unsuccessful wage claim by Collier and evidence supporting Wells Fargo's claim that Collier was discharged for cause. The bank attributed its failure to present this evidence during the hearing to a lack of direct knowledge among management, unavailability of key witnesses, and reliance on an employee with limited information. The commission denied Wells Fargo's motion to reopen the record, stating that the evidence could have been presented through due diligence and that the existing record was sufficient for accurate findings. Consequently, the commission's decision was upheld as not being an abuse of discretion.

Wells Fargo also argued that the trial judge erred in refusing to remand the case for a hearing on its claim of extrinsic fraud. The trial judge found the proffer insufficient to establish a prima facie case of extrinsic fraud, which is defined as conduct that prevents a fair submission of the case. Wells Fargo alleged that Collier concealed corporate records and actively deceived corporate officials. However, the trial judge determined that these issues were addressed during the hearings and concluded that a remand was unnecessary since Wells Fargo did not present a prima facie case of extrinsic fraud. Evidence of the allegedly concealed documents was found after Collier's termination, indicating that Wells Fargo had access to them post-discharge. Therefore, the judgment was affirmed.