                      NOTICE: NOT FOR OFFICIAL PUBLICATION.
  UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
                  AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.




                                     IN THE
              ARIZONA COURT OF APPEALS
                                 DIVISION ONE


            TRI-STATE CABINET SOLUTIONS LLC, Appellant,

                                         v.

   ARIZONA DEPARTMENT OF ECONOMIC SECURITY, an agency,

                                        and

                        FLYNN McCARLEY, Appellees.

                              No. 1 CA-UB 17-0184
                                FILED 5-29-2018


                   Appeal from the A.D.E.S. Appeals Board
                           No. U-1500303-001-BR

                                   AFFIRMED


                                    COUNSEL

Tri-State Cabinet Solutions, LLC, Fort Mohave
Appellant

Arizona Attorney General’s Office, Phoenix
By Carol A. Salvati
Counsel for Appellee Arizona Department of Economic Security

Flynn McCarley, Henderson, NV
Appellee
                    TRI-STATE v. ADES/MCCARLEY
                          Decision of the Court



                     MEMORANDUM DECISION

Judge Kent E. Cattani delivered the decision of the Court, in which
Presiding Judge Diane M. Johnsen and Judge Jennifer M. Perkins joined.


C A T T A N I, Judge:

¶1            Tri-State Cabinet Solutions appeals from the final
administrative decision in this unemployment-benefits case, arguing that
the Appeals Board erred by concluding that former Tri-State employee
Flynn McCarley was discharged for reasons other than misconduct. For
reasons that follow, we affirm.

             FACTS AND PROCEDURAL BACKGROUND

¶2             Tri-State is a general construction company providing finish
carpentry and woodwork, and it had a contract to provide all millwork for
a local home improvement store. McCarley worked for Tri-State as an
installer for approximately 14 months before Tri-State discharged him on
July 9, 2015.

¶3           McCarley applied for unemployment benefits and was found
eligible by a determination of deputy.          Tri-State timely filed an
administrative appeal, alleging it had discharged McCarley for misconduct
based on two instances of poor workmanship (as well as unspecified
insubordination and unprofessional demeanor) between January and April
2015 and lack of available work in May and June 2015.

¶4            At the resulting Appeal Tribunal hearing, Clifford Copeland
(one of Tri-State’s owners) testified that the final incident precipitating
McCarley’s discharge was that as of June 2015, the home improvement store
would not allow McCarley to work on jobs because of his poor
workmanship. Copeland gave an example of an April 2015 project in which
flooring installed by McCarley had to be torn out and replaced because it
was installed poorly. Copeland testified that McCarley had been verbally
warned about his workmanship at least six times.

¶5            Copeland also noted that Tri-State did not schedule McCarley
to work after mid-June because business was slow that month (other than
projects for the home improvement store). Copeland also testified that
McCarley was insubordinate in January and March 2015, and had an


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                     TRI-STATE v. ADES/MCCARLEY
                           Decision of the Court

argument with the co-owner in June 2015, but Copeland did not provide
any description or detail. Copeland also suggested that McCarley had
refused to accept written documentation about his discharge, although the
only documentation Tri-State submitted for the hearing was an annual
evaluation with poor marks dated June 1 (over a month before the
discharge) and not signed by McCarley.

¶6             McCarley, on the other hand, testified that he had never
received any warning about poor workmanship. He acknowledged having
to tear out flooring from the April 2015 project, but attributed the issue to a
defective product rather than poor installation. McCarley further testified
that the home improvement store’s request that Tri-State not assign him to
the store’s projects—a request that he stated came in April—was not based
on the quality of his work, but rather stemmed from a private dispute
unrelated to his work with Tri-State (he said local store management was
irritated that McCarley went through their corporate office to resolve an
issue on a side project). McCarley denied ever seeing the purported annual
evaluation or any written documentation related to his performance or his
discharge.

¶7            The Appeal Tribunal ruled in favor of Tri-State, finding that
McCarley had been discharged for repeated poor performance, constituting
work-related misconduct. See A.A.C. R6-3-51300(A). McCarley timely
petitioned for review,1 and the Appeals Board reversed. The Board noted
that Tri-State had presented only a single instance of poor workmanship
(which McCarley attributed to defective materials, not poor workmanship)
that occurred several months before discharge, undermining the link
between the asserted poor workmanship and McCarley’s eventual firing.
The Board rendered its own findings of fact and concluded that McCarley
was discharged for reasons other than disqualifying misconduct: (1) the
home improvement store had directed Tri-State not to use McCarley on its

1      The only copy of McCarley’s petition for review of the Appeal
Tribunal’s decision that was in the originally filed record in this case
appeared to be untimely, and this court granted Tri-State’s application for
appeal with a directive that that parties address whether the Appeals Board
accordingly had authority to review the Appeal Tribunal’s decision. See
A.R.S. § 23-671; A.A.C. R6-3-1503(C). The Arizona Department of Economic
Security thereafter supplemented the administrative record to include a
timely filed petition for review submitted by McCarley less than 30 days
after the Appeal Tribunal’s decision asserting that his “dismissal was
unjust.” See A.R.S. § 23-671(D) (stating that the Appeal Tribunal’s decision
becomes final unless challenged within 30 days).


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                     TRI-STATE v. ADES/MCCARLEY
                           Decision of the Court

projects, but had done so because of a private dispute, not because of poor
workmanship, and (2) Tri-State lacked other work for him.

¶8             Tri-State timely requested review, asserting that McCarley
had performed poorly on several projects from January to June 2015 (not
just one project three months before termination), offering additional
details regarding poor workmanship, and attaching additional documents.
The Appeals Board affirmed its prior decision. The Board declined to
consider Tri-State’s additional evidence that could have been (but was not)
presented during the hearing. The Board further noted that Tri-State had
failed to provide evidence at the hearing of any poor work performance by
McCarley after the April 2015 flooring installation, and concluded that Tri-
State had failed to prove a causal link between that incident and McCarley’s
discharge in light of the three months that elapsed between the two events.
See A.A.C. R6-3-51385(B).

¶9          Tri-State timely filed an application for appeal to this court,
which we granted. We have jurisdiction under A.R.S. § 41-1993(B).

                                DISCUSSION

¶10           Tri-State challenges the sufficiency of the evidence to support
the Appeals Board’s decision that McCarley was discharged for reasons
other than work-related misconduct, and further urges that the Board erred
by declining to consider additional evidence attached to Tri-State’s request
for review.

¶11             On review, we are bound to accept the Appeals Board’s
findings of fact unless they are arbitrary, capricious, or an abuse of
discretion, and we will affirm the Board’s decision as long as substantial
evidence supports it. Rice v. Ariz. Dep’t of Econ. Sec., 183 Ariz. 199, 201 (App.
1995); see also Prebula v. Ariz. Dep’t of Econ. Sec., 138 Ariz. 26, 30 (App. 1983)
(noting that the Board’s decision will be affirmed “if it is supported by any
reasonable interpretation of the record”). We similarly defer to the Board’s
assessment of witness credibility. See Anamax Mining Co. v. Ariz. Dep’t of
Econ. Sec., 147 Ariz. 482, 486 (App. 1985).

¶12            A worker is disqualified from receiving unemployment
benefits if “discharged for wilful or negligent misconduct connected with
the employment.” A.R.S. § 23-775(2). Poor work performance may
constitute misconduct if the worker knowingly fails to exercise ordinary
care and diligence, or if the worker repeatedly does so negligently. A.A.C.
R6-3-51300(A)(1), (3).



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                     TRI-STATE v. ADES/MCCARLEY
                           Decision of the Court

¶13           The employer has the burden to show that the discharge was
for a disqualifying reason; if the worker denies misconduct, the employer
must present substantiating evidence to prove its allegations of misconduct.
See A.A.C. R6-3-51190(B)(2)(b), (c). Moreover, the worker is disqualified for
benefits due to misconduct only if the misconduct was the reason for the
discharge. A.A.C. R6-3-51385(A). If the discharge does not promptly
follow the misconduct, the employer must prove the misconduct caused the
discharge. A.A.C. R6-3-51385(B). And if an “unreasonable length of time”
elapsed between misconduct and discharge, “the employer has in effect
condoned the act, and the subsequent discharge is not for work-connected
misconduct.” A.A.C. R6-3-51385(B).

¶14           Here, the record supports the Appeals Board’s determination
that McCarley was discharged for reasons other than work-related
misconduct. Although Copeland testified generally that McCarley received
six warnings about poor workmanship over the course of his employment,
Tri-State provided no evidence—either by testimony at the hearing or in the
detailed narrative attached to its initial appeal—of any poor performance
after the April 2015 flooring incident. Even assuming the April incident
would qualify as poor performance constituting misconduct—contrary to
McCarley’s testimony that the issue was caused by defective materials—the
Appeals Board could reasonably conclude that the passage of three months
between that incident and discharge (without proof of further instances of
poor performance) broke any causal link between the two. See A.A.C. R6-
3-51385(B).

¶15            Moreover, Copeland characterized the final issue leading to
McCarley’s discharge as the fact that the home improvement store excluded
him from its projects. But Tri-State’s initial appeal stated that the store
excluded McCarley from its projects “[s]hortly after” the April 2015 flooring
incident, which still leaves an arguably significant delay before discharge
in July 2015. And although Copeland testified that the home improvement
store would not work with McCarley due to poor workmanship, McCarley
testified that the issue stemmed from his justified complaint to the store’s
corporate office in an unrelated dispute, so the Appeals Board had a basis
to conclude that even this did not reflect work-related misconduct. See
Anamax Mining Co., 147 Ariz. at 486 (“[T]he credibility of witnesses is a
matter peculiarly within the province of the trier of facts.”). The record thus
supports the Appeals Board’s conclusion that Tri-State discharged
McCarley for reasons other than work-related misconduct.

¶16         Tri-State objects to the Appeals Board’s decision not to
consider additional evidence that Tri-State attached to its request for


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                    TRI-STATE v. ADES/MCCARLEY
                          Decision of the Court

review. The rules governing the administrative process require that “[a]ll
interested parties shall be ready and present with all witnesses and
documents at the . . . hearing and shall be prepared at such time to dispose
of all issues and questions involved in the appeal or petition.” A.A.C. R6-
3-1502(L). The Appeals Board has discretion to allow the taking of
additional evidence. See A.R.S. §§ 23-672(C), 23-674(D); A.A.C. R6-3-
1504(B)(2); see also A.A.C. R6-3-1504(A)(1)(c) (newly discovered evidence as
ground for review). But here, the notice of hearing specified that “whether
the claimant was discharged for misconduct” was an issue to be determined
at the Appeal Tribunal hearing, and Tri-State offered no explanation for
why the late-submitted documents and details bearing on McCarley’s
alleged misconduct could not have been presented at the hearing.
Accordingly, Tri-State has not shown that the Appeals Board abused its
discretion by declining to consider additional evidence.

                               CONCLUSION

¶17          We affirm.




                        AMY M. WOOD • Clerk of the Court
                        FILED: AA




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