                                No. 89-284
                IN THE SUPREME COURT OF THE STATE OF MONTANA




PIERRE A. LAVE,
                 Petitioner and Appellant,
         -vs-
MONTANA STATE DEPARTMENT OF LABOR
AND INDUSTRY, BOARD OF LABOR APPEALS;
and SUBARU OF BILLINGS,
                 Respondents and Respondents.


                                                                      --.

APPEAL FROM:     District Court of the Thirteenth ~udicial~istrict,
                 In and for the County of Yellowstone,               C-CI
                 The Honorable ~ i l l i a mSpeare, Judge presid$ng. t?
                                                                     ---3
                                                               -a
COUNSEL OF RECORD:

         For Appellant:
                 Michael G. ~iselein;Lynaugh, ~itzgerald& ~iselein,
                 ~illings, Montana
         For Respondent:
                 Charles K.   ail, Dept. of Labor & Industry, Helena,
                 Montana
                 Laura Mitchell; Crowley, Haughey, Hanson, Toole &
                 ~ietrich,~illings,   Montana


                                    submitted on ~riefs: Aug. 17, 1989
                                      Decided:      September 28, 1989

Filed:


                                   - Clerk       ....5
Justice William E. Hunt, Sr., delivered the Opinion of the
Court.


     Pierre LaVe, petitioner, appeals from an order of the
District Court of the ~hirteenth Judicial District,
Yellowstone County, affirming the Board of Labor Appeals
decision denying his unemployment compensation benefits,
pursuant to § 39-51-2410(5), MCA. We reverse.
     The issue raised on appeal is whether the District Court
erred in finding that a negligent failure to replace oil in
the crankcase of a customer's automobile constituted
"misconduct" within the meaning of the Montana Unemployment
Compensation   Insurance   statutes and, based      on   that
conclusion, erred in affirming the Board of Labor Appeals
denial of unemployment benefits.
     LaVe was employed by Subaru of ~illingsas an automobile
mechanic for approximately two years.     On March 11, 1988,
LaVe was assigned to service a customer's vehicle which
included changing the oil and filter. LaVe drained the oil
and changed the filter. The next step in the process would
have been to replace the oil but Lave's attention was
diverted from the task when his supervisor directed him to
work on another vehicle belonging to a "rush customer." LaVe
drove the car he was servicing outside and proceeded to work
on the rush order.    The original customer returned for his
vehicle and drove it a short distance when the engine seized
due to lack of oil.     Approximately $2,300 worth of damage
resulted. LaVe offered to pay for the damage.
     On March 12, 1988, LaVe was terminated for "misconduct"
by Subaru of ~illingsas a consequence of the incident. LaVe
applied for unemployment benefits but the local Job Service
representative and     redetermination deputy denied      the
application on the grounds that LaVe was terminated for
"misconduct."
     On May 12, 1988, a telephone hearing was held before an
appeals referee who upheld the decision of the Job Service
representative. On June 17, 1988, a hearing was held before
the Board of Labor Appeals. The Board affirmed the decision
of the appeals referee and adopted, as its own, the referee's
findings of fact.   LaVe then petitioned the District Court
for review of the Board's decision. On March 27, 1989, the
District Court entered its order affirming the decision of
the Board and dismissing the petition for review based on the
conclusion that LaVe was terminated for "misconduct." From
this order LaVe appeals.
     The issue raised on appeal is whether the District Court
erred in finding that a negligent failure to replace oil in
the crankcase of a customer's automobile constituted
"misconduct" within the meaning of the Montana Unemployment
Compensation    Insurance   statutes  and,  based   on   that
conclusion, erred in affirming the Board of Labor Appeal's
denial of unemployment benefits.
     The standard of review utilized in Department of Labor
and Industry disputes is set forth in part under §
39-51-2410 (5), MCA, as follows:
     In any judicial proceeding under 39-51-2406 through
     39-51-2410, the findinss of the board as to the
     facts, if supported b~ evidence and in the absence
     of fraud, shall be conclusive and the jurisdiction
     of said court shall be confined to questions of
     law. (Emphasis ours. )
     In Zimmer-Jackson Associates, Inc., v. Department of
Labor and Industry (Mont. 1988), 752 P.2d 1095, 1097, 45
St.Rep. 679, 681, we stated that, upon review of a decision
of the Department of Labor and Industry, the ~istrictCourt,
as well as this Court, must "treat the findings of the Board
as conclusive if they are supported & substantial evidence
and are absent fraud. "        (Emphasis ours. )   Also, in
Zimmer-Jackson, 752 P.2d at 1097, we stated that it is for
this Court to determine whether the District Court committed
an abuse of discretion.
     In the present case, the District Court found that,
"Petitioner here did not have a bad purpose in not replacing
the oil nor did he desire the injury sustained."    However,
the court still found that Lave's inadvertent failure to
replace oil in a customer's automobile constituted statutory
"misconduct," which precluded unemployment benefits under S
39-51-2303(l), MCA.   We disagree with the District Court's
finding.
     Section 39-51-2303(1), MCA, provides in part:
     An individual shall be disqualified for benefits
     after being discharged:
     ...   for    misconduct    connected    with    the
     individual's work or affecting the individual's
     employment until the individual has performed
     services, other than self-employment, for which
     remuneration is received equal to or in excess of
     eight times the individual's weekly benefit amount
     subsequent to the week in which the act causing the
     disqualification occurred.
     While the definition of "misconduct" is not set forth in
the above statute, it is provided for under S 24.11.418,
A.R.M., in part as follows:
    (1        This   rule   defines    and  interprets
    disqualification for discharge due to a claimant's
    misconduct or misconduct affecting his employment
    as set forth in M.C.A. 39-51-2303.
     (2)  "Misconduct" defined: Conduct on the part of
     the employee evincing such wilful or wanton
                       - -
     disreqard of an employer's interest as isfound in
     deliberate violations or disregard of standards of
     behavior which the employer has the right to expect
                          -  -
     of his employee, or in carelessness - neslisence
                                           or
     of such degree or recurrence - - manifest equal
     --                            as to
     culpability, wrongful intent - -
                                  or evil design, or to
     show an intentional or substantial disregard of the
                            or
     employer-'s interest
     obligations to his employer.         -
                                   of the employee's duties and
                                            -   -
                                             Mere inefficiency,
     unsatisfactory conduct, failure - good performance
                                            ~n
     -
     as     the      result     of inabilit     or    incapacity,
     ~ n a d v x e n c e s or ordinary negl?igen~e .in isolated
                                                    -
     instances, or good faith errors in judgment, or
     discretion - - -to be deemed "mi~onduct"
                     are not -                             within
     the meaning - - statute.
                       of the
     (6) The statutory term misconduct shall not be
     literally applied so as to operate as a forfeiture
     except in clear instances of wilful or wanton
     misconduct by the claimant which affects the
     employer's interest. (Emphasis ours.)
     Further, this Court has had the opportunity to define
"misconduct" on several occasions. See Ashland oil, Inc., v.
Department of Labor and Industry (Mont. 1988), 765 ~ . 2 d727,
45 St.Rep. 2169 (misconduct found where employee wrote
several non-sufficient fund checks to employer); Connolly v.
Montana Board of Labor Appeals (Mont. 1987), 734 ~ . 2 d 1211,
44 St.Rep. 587 (misconduct found where employee refused to
follow his supervisor's instructions, falsified records,
refused to assist a patient in distress, and harassed and
played games with his subordinates); Gaunce v. Board of Labor
Appeals (1974), 164 Mont. 445, 524 P.2d 1108 (misconduct
found where employee refused to work overtime and train new
employees). In each of these cases, an intentional disregard
of the employer's expectation was committed by the employee.
In the present case, however, Lave was discharged for a
negligent, not an intentional, act.
     In Gaunce, 524 P.2d at 1110, this Court specifically
defined misconduct as:
     [A] deliberate, wilful, or wanton disregard of an
     employer's interest or of the standards of behavior
     which he has a right to expect of his employee, or
       .
     . . carelessness or negligence of such a degree
     or recurrence as to manifest equal culpability,
     wrongful intent, or evil design.
Citing Boynton Cab Co. v. Neubeck (1941), 237 Wis. 249, 296
N.W. 636, as summarized in the Annot., 26 A.L.R.3d 1356,
1359.
     Here, a single incident of negligence was the basis for
Lave's discharge.   The evidence supports the fact that his
inadvertence to replace oil in a customer's automobile was
nothing more than an incident of negligence. The act was not
wilful, wanton, deliberate, intentional, done with wrongful
intent, evil design, nor was it a deliberate disregard of the
employer's interest as required to support a finding of
"misconduct."   In fact, LaVe offered to pay for the damage
that resulted from his inadvertence.
      In light of the evidence, Lave's conduct did not
constitute "misconduct" as statutorily defined.        Lave ' s
unemployment compensation benefits were improperly denied and
the District Court abused its discretion in affirming the
decision of the Board of Labor Appeals.
     The ~istrictCourt's order is reversed and remanded for
a reconsideration of Lave's petition consistent with this
                         CORRECTION
                                    Date         /D     /a ~ / 8 9
                                                        I




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