UI Court decision summary -- Harley-Davidson Motor Co. v. DILHR and Donald Simmerman (Wis. Cir. Ct., Dane Co., November 13, 1978) - MC 630.14- Dishonesty - Stealing; PC 714.11 Evidence, Weight and sufficiency PC 740 LIRC Review, set-aside for mistake/newly discovered evidence - evidence of employees conviction for theft from employer is not to treated as mere rebuttable presumption, of no effect when employee denies guilt and states that an appeal is pending, but is instead to be given such weight as it is worth under the circumstances

Wisconsin Labor and Industry Review Commission --
Summary of Wisconsin Court Decision relating to Unemployment Insurance

Subject: Harley-Davidson Motor Company v. DILHR and Donald E. Simmerman, Case No. 161-226 (Wis. Cir. Ct., Dane Co., Nov. 13, 1978)

Digest Codes: MC 630.14 PC 714.11 PC 740

On September 7, 1976, the employee was convicted, on a jury verdict, of having stolen property of his employer. The employee was suspended by the employer and was then discharged on September 16, 1976. He applied for UC benefits, and the department issued a determination that he was eligible. The employer appealed. Evidence presented at the hearing established that the criminal prosecution in which the employee was convicted charged the employee with theft of the employer's property. After hearing, the Appeal Tribunal affirmed the determination, finding that misconduct had not been established. The employer filed a petition for review, but it was untimely and the commission dismissed it on that basis on January 7, 1977.

In August, 1977, the employer wrote the commission a letter including a copy of the judgment roll showing the employee's conviction. The commission then issued an order, exercising its authority to set aside decisions on its own motion on grounds of mistake or newly-discovered evidence, which set aside the commission's dismissal of the petition for review and which remanded the matter to the department for further hearing.

At the further hearing the employer presented proof of the employee's conviction of the offense involving theft from his employer. The employee admitted that he had been convicted but denied that he had been guilty of any such theft and stated that an appeal of his conviction was pending. Based on the further hearing, the commission then issued a decision on January 27, 1978, in which it concluded that the employer had not met its burden of proving misconduct. The employer then appealed to circuit court.

Held: The commission's decision is set aside.

Discussing at length the question of what weight was to be given to evidence of a criminal conviction in a subsequent civil proceeding, the court notes that there are three possible approaches which have been taken by the authorities: that a former judgment is conclusive under res judicata, or that it is admissible in evidence for what it is worth, or that it may be of no effect at all. The court notes that the commission's holding in its decision was that the instant judgment of conviction created but a rebuttable presumption that the employee had stolen the employer's property which presumption disappeared when the employee testified to his innocence. The court further notes that this "rebuttable presumption" analysis, is not among these possible approaches which have been recognized by the authorities.

"While the statutory rules of evidence are not directly applicable to administrative agencies, this court cannot approve the commission's application of the old 'bursting bubble' theory of presumptions which has been rejected by [the Wisconsin Rules of Civil Procedure]. Even without this rejection of such theory . . . it would be the type of presumption which would not disappear upon the introduction of evidence of innocence because it is the kind of presumption where the facts upon which it is based reasonably give rise to the ultimate conclusion embodied in the presumption. . . . The inference of guilt to be drawn from the judgment of conviction would remain to be weighed against the countervailing evidence."

The court notes a lack of guidance from the Supreme Court whether it will adopt the principle that a judgment of conviction is to be received in a civil action or proceeding for what it is worth on the issue of whether the defendant committed the act of which he was convicted, or as conclusive evidence thereof under the doctrine of collateral estoppel or res judicata, and the court also notes that some courts have made the fact that the criminal defendant is seeking to profit from his own wrong for which he had been convicted the test for holding the judgment of conviction to be conclusive civil actions. The court also notes a division of authority on the effect of a criminal defendant's appeal of a conviction. Weighing all of the legal authorities discussed, the court concludes that where an appeal is pending the judgment of conviction should be received for what it is worth. The commission's decision must be reversed and the matter remanded, because the commission did not properly consider the conviction for what it was worth but instead treated is as a mere rebuttable presumption that was rebutted by the employee's assertion that he was not guilty.

On remand, the commission in evaluating the weight of the conviction should consider that twelve jurors heard the testimony presented and viewed the exhibits introduced, and found the defendant guilty of stealing the employer's property. Before the commission may determine this might be out-weighed by the employee's testimony of innocence it must request a credibility memorandum from the examiner who heard the employee testify. Also on the remand the commission should accord the parties an opportunity to present evidence of the outcome of the criminal appeal.

Please note that this is a summary prepared by staff of the commission, not a verbatim reproduction of the court decision.

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