Aubrey L. Gilley,                  )    Appeal No.
       Petitioner/Appellant,       )    01-A-01-9611-CH-00521
v.                                 )
Margaret Culpepper, as Commissioner)
of the Tennessee Department of     )    Rule No.
Employment Security and Forklifts )
Unlimited, Inc.                    )
                                        95-3496-II        FILED
       Respondents/Appellees       )                            May 30, 1997

                                                          Cecil W. Crowson
                   COURT OF APPEALS OF TENNESSEE         Appellate Court Clerk

                    MIDDLE SECTION AT NASHVILLE

    APPEAL FROM THE CHANCERY COURT OF DAVIDSON COUNTY

         THE HONORABLE ELLEN HOBBS LYLE, CHANCELLOR


JEFFREY RAPPUHN
Willis & Knight
215 Second Avenue North
Nashville, Tennessee 37201
      ATTORNEY FOR PETITIONER/APPELLANT


GEORGE E. COPPLE, JR.
Suite 218, 172 Second Avenue, North
Nashville, Tennessee 37201
      ATTORNEY FOR RESPONDENT/APPELLEE
      FORKLIFTS UNLIMITED, INC.


CHARLES W. BURSON
Attorney General and Reporter

KIMBERLY M. FRAYN
Assistant Attorney General
2nd Floor, Cordell Hull Bldg.
426 Fifth Avenue, North
Nashville, Tennessee 37243-0499
      ATTORNEYS FOR RESPONDENT/APPELLEE
      MARGARET C. CULPEPPER, as Commissioner of
      the Tennessee Department of Employment Security



                       REVERSED AND REMANDED



                                              SAMUEL L. LEWIS, JUDGE
                                     OPINION


      This is an appeal by petitioner/appellant, Aubrey L. Gilley, from the decision
of the chancery court affirming the decision of the Board of Review for respondent
/appellee, the Tennessee Department of Employment Security, to deny Mr. Gilley
unemployment compensation benefits. The facts out of which this matter arose are
as follows.


      Respondent/appellee, Forklifts Unlimited, Inc. (“Forklifts”), employed Mr.
Gilley from 3 September 1993 through 8 November 1994. Prior to September 1993,
Mr. Gilley was convicted of reckless driving and was ordered to pay a fine and court
costs of more than $700.00. Mr. Gilley made minimal payments of ten to twenty
dollars each month. In late 1993 or early 1994, Mr. Gilley experienced severe
financial difficulties as a result of a divorce. He quit making the monthly payments,
and the State suspended his licence in either August or September 1994.


      Mr. Gilley drove to various job sites as part of his job; thus, a condition of his
employment was that he have a valid driver’s license. Forklifts learned the State had
suspended Mr. Gilley’s license and informed Mr. Gilley it would have to terminate
him if he did not get his license reinstated. Mr. Gilley did not have the money to
reinstate his license, and Forklifts terminated him.


      Mr. Gilley applied for unemployment benefits on 20 June 1995.                The
Tennessee Department of Employment Security denied Mr. Gilley’s request for
benefits on 3 July 1995. The agency found as follows: “Claimant was discharged
from most recent employment because driver’s license was suspended. Evidence
shows that the job required a valid driver’s license. This is considered work-related
misconduct. Claim is denied under TCA 50-7-303.” Mr. Gilley appealed. The
Appeals Tribunal’s decision provided, in part, as follows:
      FINDINGS OF FACT: . . . The claimant was involved in several
      accidents while on the job. He had also received a traffic citation for
      reckless driving prior to his employment. As a result, the claimant’s
      driver’s license was suspended and the employer’s insurance company
      refused to cover the claimant while driving a company vehicle. . . .


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       CONCLUSIONS OF LAW: . . . The issue is whether the claimant was
       discharged for misconduct connected with work and therefore is
       disqualified for benefits, as provided in TCA 50-7-303(a)(2).1 The
       claimant’s employment was contingent upon him having a driver’s
       license. His driver’s license was suspended because he received a
       citation for reckless driving and because he was involved in several
       accidents. . . . The claimant lost his job because his driver’s license was
       suspended as a result of the manner in which he operated motor
       vehicles. Misconduct is intentional behavior that materially breaches a
       duty the employee owes the employer. The claimant owed the employer
       a duty of driving in such a manner so as to keep his license.
Thereafter, the Appeals Tribunal affirmed the agency’s decision. Mr. Gilley then
appealed to the Board of Review (“the Board”). The Board adopted the Appeals
Tribunal’s findings of fact and conclusions of law and affirmed the Appeals
Tribunal’s decision.


       Next, Mr. Gilley filed a petition for writ of certiorari in the chancery court. The
petition alleged the Board misapplied Tennessee law for determining an individual’s
entitlement to unemployment compensation benefits, the Board’s decision was
arbitrary and capricious, and the Board’s findings were not supported by substantial
and material evidence. After a hearing, the court affirmed the Board’s decision. The
court found “[t]he petitioner’s license was suspended by the State of Tennessee in
November 1994 and for that reason the petitioner was terminated.” The court then
concluded as follows: “The misconduct in this case was failing to pay a fine to
maintain a driver’s license. . . . Given these circumstance, this Court can not say that
the decision of the Board of Review is arbitrary or is unsupported by substantial and
material evidence.” Mr. Gilley filed a timely motion to alter or amend claiming the
Board’s decision was without basis in law or fact. The court denied the motion on
28 August 1996. Mr. Gilley filed a timely notice of appeal.


I.     The Standard of Review


       The standard of review in cases such as this is set forth in Tennessee Code
Annotated section 50-7-304(I). This section provides:


       1
         “(a) DISQUALIFYING EVENTS. A claimant shall be disqualified for benefits: . . . (2) If
the commissioner finds that a claimant has been discharged from such claimant's most recent
work for misconduct connected with such claimant's work . . . .” Tenn. Code Ann. § 50-7-
303(a)(2) (Supp. 1996).

                                                3
          (2) The chancellor may affirm the decision of the board or the
       chancellor may reverse, remand or modify the decision if the rights of
       the petitioner have been prejudiced because the administrative findings,
       inferences, conclusions or decisions are:
               (A) In violation of constitutional or statutory provisions;
               (B) In excess of the statutory authority of the agency;
               (C) Made upon unlawful procedure;
               (D) Arbitrary or capricious or characterized by abuse of discretion
       or clearly unwarranted exercise of discretion; or
               (E) Unsupported by evidence which is both substantial and
       material in the light of the entire record.
         (3) In determining the substantiality of evidence, the chancellor shall
       take into account whatever in the record fairly detracts from its weight,
       but the chancellor shall not substitute the chancellor's judgment for that
       of the board of review as to the weight of the evidence on questions of
       fact. No decision of the board shall be reversed, remanded or modified
       by the chancellor unless for errors which affect the merits of the final
       decision of the board.
Tenn. Code Ann. § 50-7-304(i)(2)&(3) (Supp. 1996). The same standard applies to
this court. Armstrong v. Neel, 725 S.W.2d 953, 955 n.1 (Tenn. App. 1986).


        This statute not only sets forth the standard of review, but it also establishes
which decision the court is to review. Based on the plain language of the statute, this
court’s role is to review the Board’s decision, not the chancery court’s decision.
Thus, in this case, we must look to the Appeal Tribunal’s reasoning because the
Board adopted that reasoning as the basis of its decision to affirm.


        This is an important distinction because the various bodies examining the
evidence in this case have come to different conclusions. To explain, the agency
initially determined Mr. Gilley was discharged because his driver’s license was
suspended. The agency did not provide any further explanation. The Appeals
Tribunal also found Mr. Gilley lost his job because his driver’s license was
suspended. In addition, the Appeals Tribunal found the suspension was the result of
Mr. Gilley receiving a reckless driving citation and having several accidents while on
the job.2 The Board adopted and affirmed this finding of fact. Finally, the chancery
court also agreed Mr. Gilley was discharged because his driver’s license was
suspended. The chancery court, however, concluded the license was suspended

       2
         This finding appears in both the findings of fact and the conclusions of law portions of
the Appeals Tribunal’s decision. It is the opinion of this court that this is a finding of fact, not a
conclusion of law.

                                                   4
because Mr. Gilley had failed to pay the fine resulting from his reckless driving
citation. The Appeals Tribunal’s decision does not even mention Mr. Gilley’s failure
to pay the fine.


II.    Findings of Fact


       The evidence in this case consisted of the testimony of Mr. Gilley and Mr.
Douglas Carrigan, the president of Forklifts. The administrative record also included
the documents completed by Mr. Gilley when he applied for unemployment and a
statement from Mr. Carrigan regarding Mr. Gilley’s termination. Finally, there was
a letter from State Farm, Forklifts’ insurance company, to Mr. Carrigan regarding
State Farms’ inability to insure Mr. Gilley.


       The administrative findings were all supported by substantial and material
evidence save one. Specifically, the finding that the State suspended Mr. Gilley’s
license as a result of Mr. Gilley receiving a reckless driving citation and having
several accidents while on the job is not supported by any evidence. There is
substantial and material evidence that Mr. Gilley received a citation and a fine for
reckless driving. There is also substantial and material evidence that Mr. Gilley had
several, that is more than two, accidents while on the job.3 There is, however, no
evidence these two facts were the reason why the State suspended Mr. Gilley’s
license. Mr. Gilley reported in his application for unemployment that his license was
revoked because he “got behind in a wreckless [sic] driving fine.” He later testified
at the hearing that “[t]he suspension came as a result of failing to make monthly
payments.” There was no evidence that contradicted Mr. Gilley’s statements.


III.   Conclusion


       Pursuant to Tennessee Code Annotated section 50-7-304(i)(3) this court may
not reverse, remand, or modify a decision of the Board unless the error affects the
merits of the case. It is the opinion of this court that this error is significant and

       3
           Mr. Gilley argues there was insufficient evidence to support the finding that Mr. Gilley
was involved in “several” accidents because the evidence only showed that Mr. Gilley was at
fault in two of the accidents. Mr. Gilley’s arguments are without merit. Regardless of whether
he was at fault, he was involved in three accidents.

                                                 5
certainly affects the merits of this case. To explain, the Board relied on the
administrative finding at issue to conclude Mr. Gilley breached a duty owed to
Forklifts. Because Mr. Gilley breached his duty to Forklifts, the Board held he was
guilty of misconduct connected with work and denied him benefits pursuant to
Tennessee Code Annotated section 50-7-303(a)(2).


       The notice of in-person hearing sent to Mr. Gilley from the Department
contained a statement of the issues in the case. This statement included the issues of
whether Tennessee Code Annotated section 5-7-303(a)(1)4 or (2) exempted Mr.
Gilley from the receipt of benefits. None of the decisions filed in this case addressed
the issue of whether Tenn. Code Ann. § 50-7-303(a)(1) applied to the facts presented
here. Thus, it is the opinion of this court that the case should be remanded for
consideration of the unaddressed issue and for any further necessary proceedings.


       Therefore, it follows that the decision of the chancery court is reversed, and the
case is remanded to the Department for consideration of whether Tennessee Code
Annotated section 50-7-303(a)(1) applies to Mr. Gilley’s case and for any further
necessary proceedings. Costs on appeal are taxed to respondents/appellees, Margaret
Culpepper, as Commissioner of the Tennessee Department of Employment Security,
and Forklifts Unlimited, Inc.




                                                   _____________________________
                                                   SAMUEL L. LEWIS, JUDGE

CONCUR:

_______________________________
BEN H. CANTRELL, JUDGE

WILLIAM C. KOCH, JR, JUDGE,
CONCURRING IN SEPARATE OPINION



       4
         “(a) DISQUALIFYING EVENTS. A claimant shall be disqualified for benefits: (1) If the
commissioner finds that the claimant has left such claimant's most recent work voluntarily
without good cause connected with such claimant's work.” Tenn. Code Ann. § 50-7-303(a)(1)
(Supp. 1996).


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