                  COURT OF APPEALS OF VIRGINIA


Present: Judges Coleman, Elder and Bumgardner
Argued at Alexandria, Virginia


CALVARY MEMORIAL PARK, INC.,
 T/A FAIRFAX MEMORIAL PARK
                                         MEMORANDUM OPINION * BY
v.   Record No. 1730-98-4               JUDGE SAM W. COLEMAN III
                                              JUNE 29, 1999
VIRGINIA EMPLOYMENT COMMISSION and
 CHRISANTHE FRANCONE


             FROM THE CIRCUIT COURT OF FAIRFAX COUNTY
                    J. Howe Brown, Jr., Judge

          Michael H. Doherty (Holmes, Rosenberg &
          Doherty, P.C., on briefs), for appellant.

          Gaye Lynn Taxey, Assistant Attorney General;
          Andrew B. Golkow (Mark L. Earley, Attorney
          General; William A. Diamond, Assistant
          Attorney General; Rees, Broome & Diaz, P.C.,
          on briefs), for appellees.


     Calvary Memorial Park, Inc. (Calvary) appeals the circuit

court order affirming the Virginia Employment Commission's (VEC)

award of unemployment benefits to Chrisanthe Francone.   Calvary

asserts that Francone was disqualified by virtue of Code

§ 60.2-618(2) from receiving unemployment benefits because she was

discharged from her employment for misconduct.   Calvary argues

that the evidence did not support the VEC's findings of fact and




    *Pursuant to Code § 17.1-413, recodifying Code § 17-116.010,
this opinion is not designated for publication.
that the VEC's decision was contrary to the law.    Finding no

error, we affirm.

                             BACKGROUND

     On appeal, we consider the evidence in the light most

favorable to the finding of the commission.    See Wells Fargo Alarm

Services, Inc. v. Virginia Employment Comm'n, 24 Va. App. 377,

383, 482 S.E.2d 841, 844 (1997).

     So viewed, the evidence established that Francone worked as a

family services counselor selling burial plots for Calvary.

Calvary paid Francone by commissions earned from "pre-need" burial

plot sales.   A "pre-need" sale refers to the sale of a plot to a

customer for future use.   On "pre-need" sales, the customer

received a 10 percent discount on the cost of the plot and the

family service counselor earned an 18 percent commission.    An

"at-need" sale refers to the sale of a plot to a customer for

immediate interment.   On "at-need" sales, the customer received no

discount and the family service counselor earned no commission.

Francone had frequently expressed disagreement with Calvary over

its refusal to pay commissions on "at-need" sales.

     Houng Ly spoke with Francone about buying a plot from Calvary

to bury his recently-deceased sister.     Francone referred Ly to




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family service counselor Patricia Farmer.1   Ly already owned two

adjacent plots at Calvary but wanted to reserve those plots for

burial of his parents.    There were no available plots adjacent to

Ly's pre-owned plots.

     The contract of sale expressly permitted Ly to exchange and

receive credit for the value of the two pre-owned plots against

any plots of equal or greater value.    However, rather than

exchange a plot, Ly wanted to retain the plots he owned.

Therefore, Ly purchased a non-adjacent plot in which to bury his

sister.   Farmer drafted the contract as an "at-need" sale.

     Later that day, Francone saw the Ly contract and suggested to

Farmer that the transaction should have been treated as a

"pre-need" sale by allowing Ly to exchange one of his existing

plots for a plot for his sister and then allowing Ly to repurchase

the original plot.    This would entitle Ly to a discount on his

purchase and would entitle Francone to a commission on her sale.

Farmer replied that Francone's proposal was not the correct way to

structure the sale.    Francone discussed the matter with another

family services counselor.   They concluded that the sale could be

treated as "pre-need."




     1
      The family service counselors work on a rotating schedule.
Each day one counselor receives all the commissions from the
business transacted that day. Thus, although Farmer completed
Ly’s paperwork, any commission from that sale belonged to
Francone.


                                - 3 -
     Francone contacted Ly and had him return to Calvary to revise

the contract.    With Ly's approval, Francone restructured the

agreement so that Ly exchanged one of his existing burial plots

for his sister's new plot.    Francone then resold to Ly the burial

plot that he had exchanged, which resulted in a discount for Ly

and a commission for Francone.

     Francone submitted the revised contract to Calvary.    When

Calvary's president discovered the Ly contract, he discharged

Francone for violating a company rule and for defrauding the

company.   Calvary asserts that the rule is stated in the

employment contract which expressly provides that commissions and

discounts are paid only on "pre-need" sales and not on "at-need"

sales.

     Although its policies allowed customers credit for the value

of pre-owned burial plots exchanged for plots of the same or

greater value, the policies necessarily did not allow the type of

transaction in which Francone engaged.    Calvary had neither a

progressive disciplinary process nor an employee handbook that

expressly proscribed such procedures.

                               ANALYSIS

     Code § 60.2-618(2) disqualifies a claimant from receiving

unemployment benefits when discharged for misconduct connected

with work.

             [A]n employee is guilty of "misconduct
             connected with his work" when he
             deliberately violates a company rule

                                 - 4 -
           reasonably designed to protect the
           legitimate business interests of his
           employer, or when his acts or omissions are
           of such a nature or so recurrent as to
           manifest a willful disregard of those
           interests and the duties and obligations he
           owes his employer.

Branch v. Virginia Employment Comm'n, 219 Va. 609, 611, 249 S.E.2d

180, 182 (1978).

           The statutory term "misconduct" should not
           be so literally construed so as to effect a
           forfeiture of benefits by an employee except
           in clear instances; rather the term should
           be construed in a manner least favorable to
           working a forfeiture so as to minimize the
           penal character of the provision by
           excluding cases not clearly intended to be
           within the exception.

Kennedy's Piggly Wiggly Stores, Inc. v. Cooper, 14 Va. App. 701,

707-08, 419 S.E.2d 278, 282 (1992) (quoting 76 Am. Jur. 2d

Unemployment Compensation § 77 (1992)).

     "[T]he findings of the Commission as to the facts, if

supported by the evidence and in the absence of fraud, shall be

conclusive, and the jurisdiction of the court shall be confined

to questions of law."   Code § 60.2-625; see Lee v. Virginia

Employment Comm'n, 1 Va. App. 82, 85, 335 S.E.2d 104, 106

(1985).   However, whether an employee's conduct constitutes

misconduct is a mixed question of law and fact.   See Israel v.

Virginia Employment Comm'n, 7 Va. App. 169, 172, 372 S.E.2d 207,

209 (1988).




                               - 5 -
        The evidence supports the VEC's finding that Calvary had

no rule prohibiting the transaction that Francone structured for

Ly.   Although Calvary's administrator and Farmer testified that

Francone's transaction violated the sales staff's professional

standards, neither identified a rule that prohibited Francone's

action or would have put Francone on notice that the Ly contract

was prohibited by the cemetery's policy.    Although Francone's

employment contract provided that she would not receive a

commission for "at-need" sales, the employment contract did not

explicitly proscribe or prohibit the transaction.    In fact, by

providing for a customer discount and sales commission for

"pre-need" sales, the contract encouraged sales persons to

structure sales, if possible, as "pre-need" sales.

        Additionally, Calvary acknowledged that Ly could have

purchased a third plot as a "pre-need" sale if he had buried his

sister in one of the pre-owned plots, even though the purchase

was being made to accommodate an immediate need for a burial

plot.    Calvary also conceded that had the exchange taken place

on one day and the repurchase have taken place on the next day,

it would not have considered the transaction a violation of its

policy.    For the foregoing reasons, we find that the VEC did not

err in ruling that Francone did not "deliberately violate[] a

company rule."     See Branch, 219 Va. at 611, 249 S.E.2d at 182.




                                 - 6 -
      Having determined that Francone did not deliberately violate

Calvary's rule, our consideration turns to whether Francone's

actions manifested a willful disregard of Calvary's best interests

and the duties that Francone owed Calvary.   See Kennedy's Piggly

Wiggly, 14 Va. App. at 705, 419 S.E.2d at 281.   By awarding

commissions on "pre-need" sales, and by making "pre-need" sales

advantageous to customers, Calvary created incentives for

counselors to make "pre-need" sales which would benefit both the

customer and family service counselors.   In this situation, the

type of transaction Francone executed was reasonably foreseeable.

Calvary adopted no rule and had made no express effort to forbid

it.   Ly had already purchased two plots from Calvary and approved

of Francone's revision of the contract governing his acquisition

of a third plot.   Although Francone restructured the sale to

maximize her own benefit, the restructuring also benefited a

valued client.   Under these circumstances, we cannot say as a

matter of law, that Francone willfully disregarded her employer's

interests.

      Accordingly, we uphold the VEC's ruling that Francone was

not terminated for misconduct, and we affirm the judgment of the

trial court.


                                                            Affirmed.




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