TONY A. STEFFES, Employer
STEFFES CONSTRUCTION
An administrative law judge (ALJ) for the Division of Unemployment Insurance of the Department of Workforce Development issued a decision in this matter. A timely petition for review was filed.
The commission has considered the petition and the positions of the parties, and it has reviewed the evidence submitted to the ALJ. Based on its review, the commission agrees with the decision of the ALJ, and it adopts the findings and conclusion in that decision as its own.
The decision of the administrative law judge is affirmed. Accordingly, the request for hearing is withdrawn. The department's initial determination remains in effect.
Dated and mailed February 12, 2007
steffto . ssd : 110 : 1 PC 718
PC 715 PC 712
/s/ James T. Flynn, Chairman
/s/ David B. Falstad, Commissioner
/s/ Robert Glaser, Commissioner
In November, 2003, the department issued initial determinations finding that Tony A. Steffes, doing business as Steffes Construction, was an employer subject to the Unemployment Compensation Act retroactive to the beginning of calendar year 2001, and that he was liable for contributions (as well as certain penalties and interest) based on payments made to a number of individuals who had performed services for him in 2001, 2002, and the first quarter of 2003. Steffes filed a timely appeal from these determinations.
A hearing on Steffes' appeal was initially scheduled to be held in August, 2005, but that hearing date was cancelled and the matter was postponed. Hearing was rescheduled for March, 2006, but that hearing date was also cancelled. (1) In August, 2006, a notice of hearing was issued setting the matter for hearing on September 19, 2006.
The notice of the September 19, 2006 hearing advised Steffes that his testimony would be taken by telephone. It also advised him that he should contact the hearing office "if the number listed is incorrect or missing." The hearing notice listed no telephone number for Steffes; thus, Steffes bore the responsibility to contact the department to provide a telephone number at which he could be reached for purposes of conducting the hearing.
On September 15, 2006, Steffes mailed a letter to the department. This letter made it clear that he had received the notice of hearing and was aware that it provided for him to participate by telephone. The letter expressed Steffes' objection to the hearing being conducted by telephone. The letter stated, among other things, "...your proposal to have testimony over the phone for an appellate hearing makes me wonder if the top officials in your organization even know what you are doing," and "I will not be attending an appellate hearing because I have been lied to and manipulated to be denied the original hearing." The letter closed with the statements, "I want a hearing, if you intend to pursue this, in court with a court reporter present. I have never heard of testimony being taken over the phone in any kind of legitimate operation. It is my suspicion that this is some kind of 'boiler room' scam. Please advise." The letter then listed a telephone number at which Steffes indicated he could be reached.
Steffes' letter of September 15, 2006 had not been mailed to the department's hearing office, but to the unit of the department which had conducted the initial investigation and issued the initial determination. As a result, it was delayed in reaching the hearing office. It was eventually routed there, however, and did in fact reach the administrative law judge who had been assigned to the matter on the morning of September 19, prior to the scheduled starting time for the hearing.
At the scheduled starting time for the hearing, which was 1:15 P.M. on September 19, the administrative law judge assigned to the matter placed a telephone call to the number which had been provided in Steffes' letter of September 15. The number was that of Steffes' business, Steffes Construction, and the call was answered by an individual who identified herself as Lou Steffes. She stated that Tony Steffes was not there but offered to provide his cell phone number. The administrative law judge took the cell phone number and placed a call to it. He reached a recording stating that it was the voice mail box of Tony Steffes. The administrative law judge left a message indicating that he would call back in 10 minutes. Approximately 10 minutes later, at around 1:30 P.M. the administrative law judge called the cell phone number again, and Tony Steffes answered.
After brief introductions, the administrative law judge suggested to Steffes and to Attorney Jorge L. Fuentes, who was present in the hearing room with the administrative law judge as the representative of the department, that they take a few moments to talk outside of the presence of the administrative law judge about the possibility of entering into a stipulation or agreement concerning the case. Steffes and Fuentes both agreed to this suggestion, and the administrative law judge turned off the recording device being used to record the hearing. (Presumably, at this point the administrative law judge left the hearing room and Attorney Fuentes remained present and talked over the telephone with Steffes).
The administrative law judge resumed the recording of the proceedings approximately 15 minutes later. At that time, Steffes was stating a variety of objections to the department's audit, its determination, and the processes and procedures that had been followed. There then followed approximately 15 minutes of discussion by and between Steffes and the administrative law judge concerning the case and the processes and procedures that would be followed in the hearing. In this discussion, Steffes repeatedly expressed his dissatisfaction with the proceedings being conducted over the telephone. He also repeatedly expressed an understanding that he was being provided what he termed an "appellate hearing," to which he objected because he understood that at an "appellate hearing" he was not allowed to call witnesses and offer evidence and he wanted a hearing he could "attend" and at which he could present evidence. The administrative law judge repeatedly advised Steffes that the hearing he was being provided was in fact his opportunity to call witnesses and present evidence. During this discussion, however, it became evident that Steffes was in no position to present any witnesses (apart from himself), when he indicated to the administrative law judge that he was at that time "on a backhoe at a job."
After this discussion had continued for approximately 15 minutes, the administrative law judge indicated that he was going to take a break and go consult with someone about the situation. The administrative law judge then left the hearing room. In a brief exchange between Steffes and Attorney Fuentes which followed, in which Fuentes advised Steffes that he should stay where he was and not hang up, Steffes indicated that he would "hold as long as my battery does."
Approximately 7 minutes later the administrative law judge returned to the hearing room. He indicated that he had consulted with the senior administrative law judge in the office about what he could or should do and what his options were, and that it had been concluded that the situation should be viewed as one in which Steffes was requesting a postponement. The administrative law judge then went through the formal hearing introduction process, reciting the case numbers, brief procedural history, circumstances of the hearing, and the appearances. At this point, it was approximately 2:15 P.M., and Steffes had been on the phone for approximately 45 minutes. There then occurred the following:
ALJ: And Mr. Steffes, you're not expecting anybody else to appear?
Steffes: So you're going forward with this hearing without the opportunity to have witnesses? I told you I didn't understand, I thought this was an appellate -- a decision on the appeal process and I couldn't bring witnesses -- I've been denied the opportunity to have a hearing on this thing -- I want to have a hearing on it.
ALJ: This is your opportunity for a hearing, and you received the notice, along with the information that's on the back of it.
Steffes: It's so convoluted, you can't understand the double-talk in the thing, what's involved in it.
ALJ: This is your third opportunity to participate in a hearing --
Steffes: Why did this go for two years with nothing going on with it?
ALJ: Well --
Steffes: That's not due process. You think the thing is over with and done and then all of a sudden you pull it out of the hat again and start working on it -- this is inappropriate, the entire procedure. I don't even know if you're not in some boiler room somewhere and this is just a shakedown.
ALJ: The employee (sic) is represented by Attorney Jorge Fuentes --
Steffes: The employer (sic) is?
ALJ: No, not the employer. The department is represented by Attorney Jorge Fuentes.
Steffes: My phone battery is getting hot here. I'd like to see a hearing where I can bring witnesses in.
ALJ: You had plenty of opportunity to do that.
Steffes: My phone is gonna -- probably disconnect.
ALJ: Well, you've had plenty of opportunity -- am I -- let me understand what you're telling me. You're basically telling me that you're not prepared to proceed, is that correct?
Steffes: That's correct.
ALJ: Well I'm gonna treat your, treat that, what I've learned from talking to you and going through the file, I'm going to treat that as a request for postponement.
Steffes: That's correct.
ALJ: And unfortunately Mr. Steffes I'm going to have to deny your request, and I'm going to dismiss your appeal.
Steffes: I don't know if you're in a courtroom. I don't know if this is a legitimate operation here. I can't believe the state would be shaking down people for this kind of money, when none of the individuals are going to be entitled to any of it. I want to have a hearing on this thing and I want to be able to be present for it and I want to have witnesses.
ALJ: You had several oppor--
Steffes: The people that were involved in this thing. Like I said, my battery's getting hot on here, it's gonna, we've been on the phone for an hour.
ALJ: Why don't you give Mr. Fuentes a chance to respond to what you said and then I'm going to close the hearing. Go ahead.
Fuentes: Well, Judge, the only way I feel about it is, if his battery runs out it's his problem -- we called him at the number that we were, uh, [click] that we [click] had for him, and he wasn't there, if he wants to have a --
Recorded voice: ...[inaudible] Please hang up and try again. If you need help, hang up and then dial your operator.
ALJ: Alright. We'll note for the record that Mr. Steffes [recorded voice repeats its message]
Fuentes: The only thing I can think of is that we can try to call him.
ALJ: Well, he's -- [phone-off-hook alarm sounds] -- Let's try it [dial tone, phone dialing, rings] The time is 2:19 P.M.
[Recorded voice stating that Steffes' voice mail mailbox has been reached, inviting caller to leave a message]
ALJ: Mr. Steffes, this is ALJ William Witter. I'm sorry that you decided to hang up in the middle of what we were trying to do -- uh, the hearing that was scheduled for today. I wanted to tell you that because you hung up the proceeding is at an end, I'm going to close the hearing. You'll receive a written decision in the mail concerning your appeals. With that decision there will be instructions on what you need to do in order to appeal my decision. Have a nice day.
[end of hearing]
Subsequently, on September 22, 2006, the administrative law judge issued an "Appeal Tribunal Decision - Withdrawal," which described the procedural history of the case and the events of the hearing and concluded that Steffes had chosen not to continue to participate in the hearing within the meaning of Wis. Admin. Code § DWD 140.05(1) and had thereby withdrawn his appeal of the department's determinations, with the result that the determinations remained in effect.
Steffes has filed a timely petition for commission review of the administrative law judge's decision. (2)
Under Glasschroeder v. A1A Plus (LIRC, Mar. 4, 2004), when an appeal tribunal decision dismissing an appeal on the basis of withdrawal is appealed to the commission, the issues presented to the commission are:
1) whether there was fact a withdrawal,
2) if so, whether there was a request to retract that withdrawal which met the requirements of the department's rule, and
3) if so, whether there was "good cause" to retract the withdrawal.
With respect to the first of these questions, it is undisputed that there was no express, written request to withdraw the appeal. The administrative law judge decided that there had been a "constructive" withdrawal based on conduct, under the department's rule concerning withdrawal of appeals, Wis. Admin. Code DWD § 140.05, which provides, in relevant part:
DWD 140.05 Withdrawal of appeal and retraction. (1) An appellant may withdraw its appeal at any time before the issuance of a decision on the merits by notifying the hearing office or by choosing not to continue to participate in a hearing. The administrative law judge shall issue a withdrawal decision after determining that an appeal has been withdrawn.
(emphasis added). The question here is whether the appellant's statements and actions at this hearing fell within the intended meaning of the phrase in the rule, "choosing not to continue to participate in a hearing."
Although it has been almost 10 years since the "choosing not to continue to participate in a hearing" language was added to the department's rule on withdrawal of appeal, (3) situations involving non-cooperation in or abandonment of hearings have continued, in a number of cases, to be analyzed as failures to appear at hearing under Wis. Stat. § 108.09(4)(d). Keegan v. Remedy Intelligent Staffing (LIRC, Sep. 11, 2000), Stephen E. Lee (LIRC, August 16, 2001), reversed, sub nom. Stephen Lee v. LIRC, Div. of UI of DWD, and Building One Commercial, f/k/a Crest International (No. 01-CV-8406, Milw. Co. Cir. Ct., Apr. 5, 2002), Judith Landerman (LIRC, Jan. 21, 2004), Johnstone v. Wal Mart Associates (LIRC, Dec. 23, 2005). Whatever may have led to such results, the situation in this case is so clearly one involving "not continu[ing] to participate in a hearing" that DWD § 140.05 is plainly applicable and there is no reason to consider the applicability of Wis. Stat. § 108.09(4)(d).
The commission notes that while the administrative law judge's comments at the close of the hearing seem to indicate that, at least at that moment, he believed that Steffes had intentionally disconnected his phone, his subsequent description of the facts in his decision omits any explicit finding on the question of whether the disconnection was or was not intentional. The commission does not find it necessary to resolve this question. Even if Steffes' cell phone disconnected because its battery died, Steffes' statements and conduct prior to that time had already made it quite clear that he had no intention of participating in the hearing. Before the disconnection, Steffes had complained about and resisted participation in the hearing for over half an hour, and he had finally expressly told the administrative law judge that he was "not prepared to proceed." It is on this basis, rather than on the basis of any finding that after this he intentionally disconnected his phone, that the administrative law judge could find -- and the commission does find -- that Steffes chose not to continue to participate in the hearing within the meaning of DWD § 140.05(1). He thus withdrew his request for a hearing.
The next question presented under the Glasschroeder analysis is whether there was a request to retract that withdrawal which met the procedural requirements of the department's rule. Here, there was, in that Steffes sent the department a letter, which it received within 21 days of the withdrawal ATD, in which Steffes clearly objected to having his appeal dismissed and asserted inter alia that he "did not withdraw the hearing request."
The final question to be addressed in evaluating an appeal of a withdrawal ATD is whether there was "good cause" to retract the withdrawal. The best light which may be put on Steffes' behavior (in effectively withdrawing his request for a hearing by refusing to participate in the hearing) is that he refused to participate in the hearing because he had a misunderstanding about the procedures under which it would be conducted. The only "good cause" which the commission can conceive of for retracting such a withdrawal, would be a demonstration that the appellant's misunderstanding about what the hearing entailed was one that he arrived at in good faith and had good cause for mistakenly arriving at.
Steffes objected to the hearing being conducted by telephone. However, telephone hearings are expressly permitted by the department's rules, Wis. Admin. Code § DWD 140.11. Reviewing courts have repeatedly rejected challenges to the permissibility of telephone hearings, see, Margaret Mathews v. LIRC, DILHR, and Best Oil Co. (Douglas Co. Cir. Ct., Aug. 29, 1996), Jirak v. LIRC and Sydejko (Chippewa Co. Cir. Ct., Feb. 19, 1993), Sonnenberg v. LIRC and Federated Realty Group (Dane Co. Cir. Ct., Dec. 3, 1991). The Wisconsin Supreme Court has held that there is nothing intrinsically wrong with the use of telephone testimony in civil proceedings. Town of Geneva v. Tills, 129 Wis.2d 167, 182, 384 N.W.2d 701 (1986). Steffes had no reasonable basis for believing that there was anything illegal or improper about the hearing being conducted by telephone. Steffes also objected that he was being provided only an "appellate hearing" at which he would not have an opportunity to present evidence through witnesses. That was simply not true, and Steffes had no reasonable basis for believing it to be true. The hearing notice which Steffes had been provided included informational material on the back explaining the hearing process. Steffes' complaint that the information on the back of the hearing notice was "convoluted" "double-talk" that he could not understand, is completely without merit. The information makes it clear, in plain language, that sworn testimony and evidence may be presented at such a hearing. It is difficult to believe that anyone who read and considered that information could have arrived in good faith at the idea that they were not permitted to present sworn testimony and evidence at such a hearing.
For the foregoing reasons, the decision of the administrative law judge is affirmed.
cc: Attorney Jorge L. Fuentes
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