                                                                                       November 3 2009




                                           DA 09-0065

                     IN THE SUPREME COURT OF THE STATE OF MONTANA

                                           2009 MT 364



KEITH A. CHRISTIE,

              Petitioner and Appellant,

         v.

DEPARTMENT OF ENVIRONMENTAL QUALITY,
STATE OF MONTANA,

              Respondent and Appellee.



APPEAL FROM:            District Court of the First Judicial District,
                        In and For the County of Lewis and Clark, Cause No. BDV-2008-035
                        Honorable Jeffrey M. Sherlock, Presiding Judge


COUNSEL OF RECORD:

                For Appellant:

                        Peter Michael Meloy, Meloy Law Firm, Helena, Montana

                For Appellee:

                        John F. Sullivan, Cherche Prezeau, Hughes, Kellner, Sullivan
                        & Alke, PLLP, Helena, Montana



                                                     Submitted on Briefs: September 30, 2009

                                                                Decided: November 3, 2009


Filed:

                        __________________________________________
                                          Clerk
Justice Patricia O. Cotter delivered the Opinion of the Court.

¶1        Keith Christie appeals from the order of the First Judicial District Court, Lewis

and Clark County, affirming the Director of the Department of Environmental Quality’s

December 11, 2007 Findings of Fact, Conclusions of Law, Order, and Notice of

Opportunity for Judicial Review, and denying Christie’s petition for judicial review. We

affirm.

                                            ISSUES

¶2        A restatement of the issues presented on appeal is:

¶3        Did the District Court and Director Opper err by substituting their judgment for

that of the Hearing Examiner’s as to the weight of the evidence?

¶4        Did the District Court err by referencing a warning letter that was not part of the

administrative record?

                    FACTUAL AND PROCEDURAL BACKGROUND

¶5        Christie was hired as a staff attorney for the Department of Environmental Quality

(DEQ) in the spring of 2002. He was employed as a staff attorney from May 2002 until

August 2007. John North, Chief Legal Counsel for DEQ, was Christie’s supervisor.

Because Christie was paid by the hour as a staff attorney, accurate time records were

required. North discussed with Christie the importance of keeping accurate time records

on numerous occasions.

¶6        During Christie’s employment, Christie occasionally struggled with time entry and

failed to work forty-hour workweeks. North issued a warning letter in 2004. As a result,

Christie was subject to additional time-reporting requirements. Christie was required to


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keep a daily log that showed when he arrived at work, when he went on break, when he

left for lunch, when he returned from lunch, and when he left for work at the end of the

day. Christie submitted this log to North at the end of each pay period.

¶7     On March 26, 2007, North became concerned that Christie was not submitting

accurate time records. On that day, another DEQ attorney needed help with a project and

North decided that Christie should assist the attorney. However, when North looked for

Christie, Christie could not be found in his office and his computer was turned off. North

looked for Christie all day but could not find him. North obtained Christie’s home

address from DEQ, drove to Christie’s apartment complex, and observed Christie’s car

parked at the complex. Computer records indicated that Christie logged off his computer

at 10:14 a.m. and did not log back in that day.

¶8     As a result of Christie’s unexplained absence on March 26, North began keeping

track of Christie’s time. North enlisted other DEQ attorneys and staff members to help

him with his investigation. North monitored Christie’s actual work hours between March

26 and May 14, 2007, and compared those hours with the time Christie reported having

worked. North noted a number of discrepancies between the time Christie was observed

at work and the time Christie reported having worked. North did not inform Christie that

he was conducting an investigation.

¶9     North and Jim Madden, DEQ Deputy Chief Legal Counsel, met with Christie on

May 16, 2007, to discuss Christie’s absences during the seven weeks that North had

monitored Christie’s time. By monitoring Christie’s computer usage, the time Christie

was observed at work, and the time during which Christie’s vehicle was observed at his


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apartment and not at work, DEQ determined that during the seven weeks he was

monitored, Christie claimed to have worked approximately twenty-three hours that he did

not actually work. During the meeting, North discussed with Christie the seriousness of

falsification of time records, and Christie indicated that he understood the serious nature

of the situation. North also asked Christie to account for his whereabouts two days

earlier between the hours of 10:00 a.m. and 3:00 p.m. Christie had been signed out to

Public Water Supply. Christie explained that he had met with Gino Pizzini during that

time. North checked with Pizzini, who stated that he had not met with Christie and that

he had in fact been looking for Christie that day but could not find him.

¶10    North and Madden met with Christie again on June 1, 2007. At this meeting, after

being informed that North had checked with Pizzini, Christie changed his accounting of

his whereabouts on May 14. Christie claimed instead to have been home sick and

acknowledged that he had not met with Pizzini. North gave Christie a memo detailing

the discrepancies between Christie’s time records and observations of Christie’s absences

from work. North asked that Christie provide a response by June 5, 2007.

¶11    Christie provided his response on June 4, 2007, and suggested that some of his

absences from work might have been due to Christie’s working in other buildings,

conducting research at the law library, or walking to and from work. North reviewed

Christie’s responses and did not find them credible.           Significantly, Christie had

previously stated that he drove to work, and North and Madden had observed Christie’s

car at his apartment on numerous occasions that he claimed to have been working at




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DEQ. North subsequently made a recommendation of termination to Richard Opper,

Director of DEQ.

¶12    Director Opper scheduled a pretermination meeting after receiving North’s

recommendation and notified Christie so that he could provide a response to North’s

recommendation for termination.         In response, Christie stated that he had already

addressed North’s findings in the response he provided on June 4, 2007, and that he had

nothing more to add. On August 13, 2007, DEQ notified Christie of his discharge from

employment. In his termination letter to Christie, Director Opper stated: “You were told

by your supervisor that false reporting of time is not to occur because it violates the

public trust. It is a manifestation of dishonesty and it is a theft of state resources.”

¶13    Christie subsequently grieved his termination.            Pursuant to the grievance

procedures, a hearing was conducted before Hearing Examiner John Melcher. During the

grievance hearing, Christie argued that DEQ had violated its personnel policies by taking

into consideration the warning letter issued to him in February 2004 by North regarding

keeping accurate time records. According to the terms of the letter, it should have been

removed from his personnel file in August 2005, but DEQ failed to remove it. Christie

also maintained that DEQ had violated its internal policies by failing to account for the

lack of negative job evaluations since February 2004. For these reasons, Christie argued

he was entitled to be reinstated as a staff attorney for DEQ. For its part, DEQ introduced

testimony from North and Madden concerning Christie’s absences from work during

times Christie claimed to have been working.




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¶14    The Hearing Examiner issued his recommendation in November 2007. Although

DEQ terminated Christie because it determined that Christie had filed false time records,

the Hearing Examiner stated that the issue presented was “whether the time

exaggerations, without more, justify Christie’s immediate discharge.”        The Hearing

Examiner observed that “Christie’s log in times showed late arrival or early departure, or

Christie’s use of the internet coincided with late arrival or early departure, inconsistent

with time records submitted by Christie.” He also found that “with respect to this

proceeding, it is the finding of the Hearing Examiner that Christie exaggerated his hours

on at least some, if not most, of the occasions.” Despite these findings, the Hearing

Examiner failed to make a finding concerning whether Christie had intentionally falsified

his records.

¶15    Instead, the Hearing Examiner referred to the State Discipline Handling Guide and

determined that just cause did not exist for DEQ to terminate Christie because DEQ had

failed to prove that Christie’s work record with DEQ was deficient.          The Hearing

Examiner stated that “Christie should be given an opportunity to correct his deficient

performance” and that DEQ did not have good cause to terminate Christie. Ultimately,

the Hearing Examiner recommended that Christie be reinstated as a DEQ staff attorney.

¶16    Director Opper reviewed the Hearing Examiner’s recommendation, allowed

Christie and DEQ to file exceptions, and scheduled oral argument. Christie did not

appear at oral argument. He did, however, file exceptions after argument. Christie

objected to the oral argument on procedural grounds.




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¶17    After reviewing the recommendation and the administrative record, Director

Opper concluded that the Hearing Examiner had erred when he found that Christie had

exaggerated his hours on some, if not most, occasions, but nonetheless found that there

was no need to ascertain whether Christie’s actions were intentional. Director Opper

found that the State Discipline Handling Guide provides that theft of state or employee

property, including falsification of records, are offenses that “are so serious that they

warrant discharge on the first occurrence,” without requiring a review of the employee’s

work record.

¶18    Director Opper also concluded that “[f]indings as to whether Christie intentionally

falsified his time records were necessary to address the reasons expressed by the

Department for the discharge.” Noting that the Hearing Examiner had failed to make

findings with respect to an essential issue, Director Opper reviewed the record and

concluded that “Christie intentionally falsified his time records, in order to receive pay

for time not worked.” Director Opper also observed that because Christie was warned

about filing false time records in February 2004, he could not claim that his problems

represented a “first occurrence” suitable for progressive discipline.        Accordingly,

Director Opper concluded that DEQ had just cause to terminate Christie.

¶19    Christie filed a petition for review of Director Opper’s order pursuant to

§ 2-4-702, MCA (2007). Christie maintained that Director Opper had substituted his

judgment “as to the weight of the evidence on the question of good cause to discharge

Mr. Christie and failed to properly apply the progressive discipline policy.” Specifically,

Christie argued that Director Opper had improperly substituted his judgment as to the


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weight of the evidence in determining that Christie had intentionally falsified his time

records, and that Director Opper had failed to apply the State’s progressive discipline

policy by ignoring Christie’s prior work record.

¶20    In response, DEQ maintained that Director Opper had not substituted his judgment

for that of the Hearing Examiner’s on the issue of whether Christie had intentionally

falsified his time records. Because the Hearing Examiner had failed to make a finding

with respect to whether Christie had acted intentionally, in order to address the express

basis for DEQ’s discharge of Christie, Director Opper was required to make such a

finding. DEQ argued that Director Opper had reviewed the entire record and made

specific findings that led to his conclusion that “Christie intentionally falsified his time

records, in order to receive pay for time not worked.” With respect to Christie’s second

contention, DEQ noted that certain serious infractions warrant discharge on the first

occurrence. The State Discipline Handling Guide provides that theft of state property and

falsification of records constitute such serious infractions; thus, DEQ argued, the

progressive discipline policy was immaterial.

¶21    Upon review, the District Court affirmed Director Opper’s decision and stated that

it viewed Christie’s behavior as a breach of public trust, a violation of his position as a

member of the DEQ legal team, a violation of the rules of ethics for state employees, and

a violation of § 2-2-121(2)(a), MCA (2007), which states that a public officer may not

use public time or funds for the officer or employee’s private business purposes. The

court noted that “it is clear that Christie exaggerated his hours worked and spent




                                             8
substantial portions of his workweek at home,” and that Christie’s “behavior evidences a

pattern of deception that no employer, public or private, is required to endure.”

¶22    The court also stated that Christie had never provided any reasonable explanation

for the hours he claimed to have worked but was not available to his employer. No

witnesses ever testified on Christie’s behalf. Instead, “Christie attempted to cover his

tracks on one of the many days he cut hours by falsely claiming he was meeting with

Pizzini.” According to the court, the Hearing Examiner’s determination that DEQ lacked

just cause to terminate Christie without reviewing his service record was clearly

erroneous “in light of the substantial evidence in the record and the State’s Discipline

Handling Guide which specifically provides that ‘theft of state or employee property’ and

‘falsification of records’ are infractions which ‘are so serious that they warrant discharge

on the first occurrence.’ ”

¶23    With respect to Christie’s claim that he was entitled to progressive discipline

based on his work record, the court noted that there was substantial evidence upon which

Director Opper could determine as a matter of law that Christie’s dishonesty required

immediate termination. “While twenty-three hours over seven weeks may have seemed

insignificant to the hearing examiner, this Court agrees with Director Opper that when

taken over the course of a year, the amount is substantial—about one month’s time which

is more vacation time than Christie was allowed.”

¶24    The District Court observed that the Hearing Examiner had failed “to

appropriately weigh the level of disciplinary action which was necessary under the

circumstances,” and that he had ignored the State’s Discipline Handling Guide, which


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recognizes that falsification of time records justifies immediate termination so long as the

employee had prior knowledge of the rules or policies prohibiting the offense.

“Christie’s abilities as an attorney for DEQ, no matter how good, cannot overcome the

direct proof of falsification, theft, and dishonesty presented in this case, absent a showing

of some sort of disability or a reasonable explanation from Christie.”            The court

concluded that DEQ was not required to consider Christie’s work record prior to

terminating him for a serious infraction because state management has the authority to

determine whether progressive discipline is appropriate on a case-by-case basis.

Accordingly, the District Court affirmed Director Opper’s December 11, 2007 Findings

of Fact, Conclusions of Law, Order, and Notice of Opportunity for Judicial Review, and

denied Christie’s petition for judicial review. Christie appeals.

                               STANDARD OF REVIEW

¶25    This Court reviews a district court’s decision on judicial review of an agency

decision to determine whether the findings are clearly erroneous and whether the

conclusions of law are correct. See e.g. O’Neill v. Department of Revenue, 2002 MT 130,

¶ 10, 310 Mont. 148, 49 P.3d 43.

                                      DISCUSSION

¶26    Did the District Court and Director Opper err by substituting their judgment for
       that of the Hearing Examiner’s as to the weight of the evidence?

¶27    On appeal, Christie reiterates the arguments he presented to the District Court.

Namely, Christie maintains that Director Opper improperly substituted his judgment as to

the weight of the evidence. Christie argues that DEQ “offered no evidence that Mr.



                                             10
Christie intentionally falsified his time records,” and that “[t]he best that can be said

about the totality of evidence on the issue of intent was that it was conflicting and

equivocal.” He contends that under § 2-4-621(3), MCA (2007), because Director Opper

did not actually hear or observe witnesses, he could not weigh inconsistent evidence and

arrive at a finding contrary to that of the Hearing Examiner.      In addition, Christie

maintains that the Hearing Examiner “found that Mr. Christie’s time keeping records

were not dishonest,” and thus, DEQ was required to consider Christie’s work record and

use a form of progressive discipline instead of termination. For these reasons, Christie

contends that Director Opper and DEQ rendered a decision that was clearly erroneous.

¶28    We disagree. Although DEQ terminated Christie for submitting false records, as

discussed above, the Hearing Examiner failed to make a finding on the issue of whether

Christie had intentionally falsified his time records.   Yet, even Christie admits that

whether he intentionally falsified records was an issue central to DEQ’s reasoning to

terminate Christie’s employment.        Christie’s opening brief on appeal states that

“resolution of the appropriateness of the termination rose and fell on the question of

honesty.” Because the Hearing Examiner failed to address the basis for Christie’s

discharge, that task fell to Director Opper.

¶29    The District Court observed that substantial evidence existed in the record “upon

which Director Opper could determine as a matter of law that Christie’s dishonesty

required immediate termination.” We agree. The Hearing Examiner found that Christie

had exaggerated his work hours on some, if not most, occasions. Christie failed to

provide any reasonable explanation for the twenty-three hours he claimed to have worked


                                               11
that DEQ determined he did not work during the seven-week monitoring period. When

asked to account for his whereabouts during work hours only two days before, Christie

falsely claimed he had been meeting with Pizzini. When it became apparent that North

had spoken to Pizzini and learned that Pizzini had not met with Christie all day, Christie

changed his story and then claimed he had gone home to nap. Substantial evidence exists

in the record that Christie persistently and intentionally falsified his time records and

claimed to have worked hours that he did not work.

¶30    Under Admin. R. M. 2.21.6507 (2007), “failure to satisfactorily perform job

duties” constitutes just cause for termination. Just cause also includes “actual violation of

an established agency standard,” “failure to meet applicable professional standards,” and

“unprofessional or inappropriate behavior.” DEQ terminated Christie for falsification of

records and determined that his actions were a “manifestation of dishonesty” and a “theft

of state resources.” Intentional falsification of time records falls within the ambit of “just

cause” as defined in Admin. R. M. 2.21.6507.

¶31    Christie’s assertions that DEQ was required to consider his service record prior to

termination are without merit. As set forth in the State Discipline Handling Guide,

certain serious infractions do not require consideration of an employee’s overall service

record prior to termination. The Guide permits discharge upon the first occurrence for

serious infractions such as falsification of records and theft of state property. DEQ was

therefore not required to consult Christie’s service record prior to termination.

¶32    Even though the Hearing Examiner concluded that Christie had “exaggerated” his

work hours on numerous occasions, he stated that Christie’s behavior was “not so severe


                                             12
a breach of the public trust that discharge should be automatic.” This conclusion of

law—improperly characterized as a finding of fact—is in direct conflict with the State

Discipline Handling Guide, which provides for termination upon first occurrence of

falsification of records or theft of state property. Because this conclusion of law was

incorrect, Director Opper and the District Court did not err in contravening it.

¶33    Even if DEQ was required to consider Christie’s record, Christie would not

necessarily be entitled to a lesser form of discipline under a progressive discipline policy.

Agency managers are given discretion to determine whether progressive discipline is

appropriate. See Admin. R. M. 2.21.6509(2) (2007) (“Management may determine the

appropriateness of using progressive discipline on a case-by-case basis.”).

¶34    The Hearing Examiner failed to make findings regarding whether Christie had

intentionally falsified his work records. Because such falsification formed the basis for

DEQ’s termination of Christie, Director Opper was required to make a finding

concerning Christie’s intent. In so doing, Director Opper did not substitute his judgment

for that of the Hearing Examiner’s. The District Court concluded upon review that

substantial evidence existed “upon which Director Opper could determine as a matter of

law that Christie’s dishonesty required immediate termination.” Neither Director Opper

nor the District Court erred by substituting their judgment for that of the Hearing

Examiner. DEQ was not required to review Christie’s service record prior to termination.

¶35    Did the District Court err by referencing a warning letter that was not part of the
       administrative record?




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¶36    Christie argues that the District Court erred by making the 2004 warning letter the

“crux” of its order affirming Director Opper’s decision. In particular, Christie points to

several passages of the District Court’s order. He objects to the court’s statement that

“[b]ecause Christie had been disciplined in the past for the same offense, he was uniquely

on notice that further time-skimming would lead to his termination from employment,

and DEQ had no duty to determine whether Christie was a valuable employee before

terminating that employment.” Christie contends that because the letter was not part of

the administrative record and should have been removed from his personnel file in 2005,

the District Court’s “reliance on that evidence is clearly erroneous.”

¶37    Substantial evidence exists in the record to support Director Opper’s finding that

Christie had intentionally falsified his time records. Christie’s actions constituted just

cause for termination by DEQ without regard to the 2004 warning letter. Given our

analysis above, we conclude that even if the District Court’s references to the warning

letter were in error, any such error was harmless.

                                     CONCLUSION

¶38    The District Court and Director Opper did not err by substituting their judgment

for the Hearing Examiner’s as to the weight of the evidence. Moreover, DEQ was not

required to consider Christie’s work record prior to termination. Lastly, even if the

District Court erred by referring to the 2004 warning letter, any such error was harmless.

¶39    Affirmed.


                                                  /S/ PATRICIA O. COTTER



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We concur:

/S/ MIKE McGRATH
/S/ JIM RICE
/S/ JOHN WARNER
/S/ JAMES C. NELSON




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