THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES. See Ariz. R. Supreme Court 111(c); ARCAP 28(c); Ariz. R. Crim. P. 31.24

MEMORANDUM DECISION

HALL, Judge.

¶1 Richard Scola appeals from the denial of his claim for unemployment insurance benefits. The Arizona Department of Economic Security (ADES) Unemployment Insurance Appeals Board (the Board) determined that Scola was disqualified from benefits because he was discharged for work-related misconduct. For the following reasons, we affirm.

FACTUAL AND PROCEDURAL BACKGROUND

¶2 In January 2009, Scola began working for Construction Security Services (the employer) as a security guard. The employer provides its clients with security guards to protect their construction or business sites. Scola was discharged from his employment on June 8, 2010 and applied for unemployment benefits, which were denied by an ADES department deputy.

¶3 Scola appealed the deputy's decision to the Appeal Tribunal and a hearing was held. At the hearing, the employer's sales marketing director, Diania Buchholt, whose duties also include scheduling and management of employees, testified that Scola was terminated because of misconduct. She explained that he had "display[ed] anger" toward his field supervisor on June 5, 2010 and on "six or seven" previous occasions. She further testified that Scola had left his designated worksite on June 5, 2010 and the client was unable to locate him or reach him by phone. Scola was scheduled to work the same shift at the same shopping center the following day, but Buchholt reassigned him to a posting at a hospice. When Buchholt informed Scola of the schedule change, he refused the reassignment. In response, Buchholt told Scola that she would either accept his resignation immediately or not place him on the work schedule until she received a "commitment to work" from him. On June 8, 2010, Buchholt discharged Scola for his "display of anger" on June 5, 2010.

¶4 Scola's field supervisor, Tom Barry, also testified regarding Scola's conduct. He stated that he was at Scola's designated worksite the morning of June 5, 2010 when Scola arrived. When Barry first saw Scola, he noticed that Scola was wearing a hat in violation of the dress code mandated by the Arizona Department of Public Safety (DPS) and asked that he remove it. Scola responded "F-you. I'm not taking this hat off." Barry again asked Scola to remove the hat and Scola again responded with "expletives" and threw his hat. Scola proceeded to engage in a "tirade" and stated he would not work unless he was permitted to wear the hat. Barry told Scola to "[g]row up" and Scola eventually put the hat away.

¶5 Barry further testified that this was "not the first incident" in which Scola had directed profanity toward other employees and stated that there were at least six prior incidents. Based on this repeated conduct, Barry recommended to Buchholt that Scola be terminated. Barry also testified that he recommended termination in part because he learned on June 6, 2010 that Scola had left the worksite on June 5, 2010 and could not be located or reached by cell phone.

¶6 During Scola's questioning, Barry acknowledged that he did not always "rigidly enforce" the dress code. He stated, however, that this particular worksite was "high profile" because it was a heavily frequented shopping center, so he wanted to ensure that all protocols were followed.

¶7 Scola then testified and denied using profanity toward Barry on June 5, 2010 or toward any other employee on any previous occasion. Scola also denied leaving the worksite on June 5, 2010 and stated that he was "patrolling the building" at the time the client could not locate him. He further testified that his cell phone was "on vibrate" so he could not hear it when the client repeatedly called him that morning.

¶8 After taking the matter under advisement, the Appeal Tribunal affirmed the deputy's determination that Scola was discharged for misconduct and therefore is ineligible for benefits. The Appeal Tribunal explained:

¶9 Scola petitioned for review of the Appeal Tribunal's decision. The Appeals Board affirmed, adopting the Appeal Tribunal's findings of fact, reasoning and conclusions of law. In rendering its decision, the Board noted that Scola had attached documents to his appeal that were not presented to the Appeal Tribunal and therefore they were not considered.

¶10 Scola then timely requested review by this court. We granted his application for appeal pursuant to Arizona Revised Statutes (A.R.S.) section 41-1993(B) (2011).

DISCUSSION

I. The Sufficiency of the Evidence

¶11 Scola contends that insufficient evidence supports the employer's claim that he was discharged for misconduct. Specifically, Scola asserts that the allegations against him were "not supported by any physical evidence or eye witness testimony."

¶12 We give substantial deference to the Board's decision and will affirm if, viewing the evidence in the light most favorable to upholding the decision, it is supported by any reasonable interpretation of the evidence. Prebula v. Ariz. Dep't of Econ. Sec., 138 Ariz. 26, 30, 672 P.2d 978, 982 (App. 1983). We review de novo, however, the Board's legal conclusions. Rice v. Ariz. Dep't of Econ. Sec., 183 Ariz. 199, 201, 901 P.2d 1242, 1244 (App. 1995). When there is a "conflict of testimony," we "affirm the appeals tribunal's decision because the credibility of witnesses is a matter peculiarly within the province of the trier of fact." Anamax Mining Co. v. Ariz. Dep't of Econ. Sec., 147 Ariz. 482, 486, 711 P.2d 621, 625 (App. 1985). Finally, even if the Board misstates the law, we will nonetheless affirm if it reaches the correct result. Baca v. Ariz. Dep't of Econ. Sec., 191 Ariz. 43, 46, 951 P.2d 1235, 1238 (App. 1997).

¶13 The employer bears the burden of proving that an employee's discharge was for a disqualifying reason. Ross v. Ariz. Dep't of Econ. Sec., 171 Ariz. 128, 129, 829 P.2d 318, 319 (App. 1991); see also Ariz. Admin. Code (A.A.C.) R6-3-51190(B)(2). Pursuant to A.R.S. § 23-775(2) (2012), an individual is disqualified from receiving benefits if his discharge was due to "wilful or negligent misconduct connected with the employment."

¶14 As set forth in A.A.C. R6-3-51255, outlining insubordination:

¶15 At the hearing, Scola denied using any profanity toward Barry on June 5, 2010 or any previous occasion. Instead, he testified that, in response to Barry's request that he remove his hat, he simply inquired as to why the dress code was being enforced at that worksite. Barry, on the other hand, testified that Scola responded to his request with a profanity-laced tirade and the threat that he would refuse to work rather than comply. Thus, contrary to Scola's argument, eye-witness testimony was presented to support the employer's allegations of misconduct, and it was the province of the Appeal Tribunal, as fact-finder, to determine the credibility of the witnesses and resolve the conflict in testimony. See Anamax Mining Co., 147 Ariz. at 486, 711 P.2d at 625. Accepting Barry's account of the June 5, 2010 incident, as did the Appeal Tribunal and the Board, Scola's conduct qualified as insubordination under A.A.C. R6-3-51255(A)(1)(a) and (b). Likewise, based on the facts as found by the Appeal Tribunal and adopted by the Board, Scola's insistence on "discussing the [dress code] situation" with Barry was not in "good faith" as it was accompanied by "hot-tempered remarks" and a threat to refuse to work. See A.A.C. R6-3-51255(2). Therefore, sufficient evidence supports the Board's finding that Scola's actions, and his language, were insubordinate and therefore his discharge was for misconduct in connection with the work.

II. The DPS Letters

¶16 Scola next contends that the Appeals Board erred by failing to properly consider evidence he submitted that DPS is investigating the employer for fraud. Scola failed to identify the significance of this evidence until his reply brief, in which he expressly claims that he was terminated because the employer "became aware" that he intended to report his knowledge of the employer's illegal activities to DPS.

¶17 As set forth in A.A.C. R6-3-51190(B), "the individual who makes a statement" bears the burden of proof. "When the evidence, in its entirety, is evenly balanced, or weighs in favor of the claimant, misconduct has not been established and no disqualification is in order." A.A.C. R6-3-51190(C)(3). "When there is conflicting evidence, but the adjudicator concludes that the weight of evidence supports the employer's allegations, he should hold that the claimant was discharged for misconduct." Id.

¶18 Here, Scola asserted that the employer engaged in licensing fraud and implicitly suggested to the Appeal Tribunal and the Board that this alleged conduct undermines the credibility of the employer's witnesses. At the Appeal Tribunal hearing, Scola submitted Exhibit 11, which is a letter from DPS Detective Rahsaan Diaz stating that DPS is currently investigating the employer "for falsifying training and employee performance documents." The exhibit was admitted into evidence without objection. Scola did not raise any issue regarding the exhibit at the hearing, however, and the Appeal Tribunal did not reference the letter in its decision.

¶19 Detective Diaz transmitted two additional letters to ADES following the Appeal Tribunal's decision. Those letters again state that the employer is under investigation and the third letter states that "[d]ue to information provided to [DPS] by [Scola], and from [DPS'] own experience with [the employer], [DPS] ha[s] reason to believe that training improprieties may exist."

¶20 In affirming its decision upon review, the Appeals Board stated:

¶21 Seizing upon this language, Scola asserts that the Board failed to adequately consider all of the evidence relevant to his case. In response, ADES contends that, read in context, the Board's statement simply reflects that the Board refused to consider the second and third letters because those letters were not before the Appeal Tribunal, not that the Board failed to consider the first letter submitted as an exhibit at the Appeal Tribunal hearing.

¶22 Assuming, without deciding, that the Board failed to consider any of the letters, we find no prejudice. The undisputed evidence reflects that Scola filed a report with DPS after his termination that led DPS to open an investigation to determine whether the employer is falsifying training and employee performance documents. Evidence of the open investigation was presented to the Appeal Tribunal. Although Scola claims in his appellate briefing that he confronted Buchholt on June 6, 2010 and told her that he had evidence the employer was committing "licensing fraud," nothing in the record substantiates his assertion that he discussed the alleged DPS violations with the employer before his termination. Instead, the only evidence on this issue is that Scola contacted DPS after his discharge. We conclude that Scola's post-discharge report to DPS alleging that the employer was participating in licensing fraud did not establish that the employer's witnesses' testimony regarding his misconduct was untruthful. To the extent the evidence may have called the witnesses' veracity into question, it was for the Appeal Tribunal, as the fact-finder, to assess the credibility of the witnesses and determine the weight that should be accorded all of the evidence. See Anamax Mining Co., 147 Ariz. at 486, 711 P.2d at 625.

¶23 Likewise, we conclude that no evidence, or argument, was presented to the Appeal Tribunal or Board to suggest that the basis for Scola's discharge was retaliation rather than misconduct, and we do not consider an issue raised for the first time in a reply brief. See Romero v. Sw. Ambulance, 211 Ariz. 200, 204 n.3, 119 P.3d 467, 471 n.3 (App. 2005) (holding arguments raised for the first time in a reply brief on appeal are waived).

III. Alleged "Irregularities" at the Appeal Tribunal Hearing

¶24 First, Scola contends that the Appeal Tribunal erroneously permitted the employer's witnesses to raise new allegations at the hearing, which forced him to defend against charges for which he received no notice. Specifically, Scola asserts that he received no notice regarding the allegations that he had left his designated worksite on June 5, 2010.

¶25 "Arizona's statutes and regulations relating to administrative procedures require that parties be afforded reasonable notice to provide an opportunity to prepare for a hearing." Henricks v. Ariz. Dep't of Econ. Sec., 229 Ariz. 47, 49, ¶ 12, 270 P.3d 874, 876 (App. 2012) (citing A.R.S. § 41-1061(C) (2004) ("Opportunity shall be afforded all parties to respond and present evidence and argument on all issues involved."); see also A.R.S. § 23-674(A) ("If a party's legal or factual basis of contention is substantially changed at the hearing, causing surprise to the opposing party, the hearing shall be rescheduled with timely notice of the nature of the new contention unless a waiver on the record is obtained from the party claiming surprise or the surprise could have been avoided with due diligence.").

¶26 ADES concedes that the allegations that Scola left his worksite the morning of June 5, 2010 were presented for the first time at the hearing, but contends that Scola waived the issue by failing to object at the hearing, testifying about the incident and questioning the employer's witnesses regarding the incident, and failing to identify any evidence he would have presented had he known about the allegations in advance of the hearing.

¶27 Assuming, without deciding, that this issue is properly before us and not waived, we find no reversible error. Neither the Appeal Tribunal nor the Board accorded these allegations any merit in their decisions. Instead, both the Appeal Tribunal and the Board based their decisions strictly on the evidence of insubordination, that is, that Scola engaged in a profane tirade against his supervisor, refused a reasonable request to comply with the dress code, and refused a work assignment. Indeed, the allegations that Scola left his worksite were not mentioned in any decision in this case. Therefore, although Scola did not receive proper notice of the allegations, they did not provide the basis for the Board's decision and he therefore was not prejudiced by the testimony regarding the allegations. Compare Carlson v. Ariz. State Personnel Bd., 214 Ariz. 426, 433, ¶ 23, 153 P.3d 1055, 1062 (App. 2007) (finding denial of due process based on "variance between [the employee's] dismissal notice . . . and the facts upon which the Board upheld dismissal").

¶28 Second, Scola contends that the Appeal Tribunal repeatedly thwarted his attempts to elicit evidence at the hearing by not requiring the employer's witnesses to answer his questions, interrupting his questions, and encouraging him to "move on" during questioning.

¶29 We have reviewed the entire hearing transcript and find no error, reversible or otherwise. The Appeal Tribunal repeatedly encouraged the employer's witnesses to answer Scola's questions to the extent they were able to understand them. The Appeal Tribunal also suggested that a question posed to Buchholt may more appropriately be directed to Barry, and Scola agreed. Scola correctly notes that the Appeal Tribunal repeatedly stopped his questioning, but it was to remind Scola to refrain from arguing with the witnesses. Finally, after repeatedly admonishing Scola not to argue while questioning the witnesses, the Appeal Tribunal suggested that the court "might be better served if [Scola] just [gave his] version of what happened." We do not perceive that the Appeal Tribunal made any attempt to thwart Scola's ability to present evidence. Instead, the Appeal Tribunal attempted to maintain order and promote efficiency. We find no error.

IV. Alleged Bias

¶30 Scola contends that Gary R. Blanton, a member of the Appeals Board, was biased against him. Scola's allegation of bias arises out of a telephone conversation he had with Blanton after the Appeals Board's final decision became final. Scola repeatedly contacted the Appeals Board for information on filing an application for appeal with this court, and Blanton returned his call. Scola claims that Blanton accused him of lying, dismissed the evidence of the DPS investigation as irrelevant, and ended the call with the personal insult "at least I have a job."

¶31 "Every person is entitled to receive a fair administrative hearing and have a decision rendered by an impartial decisionmaker." Pavlik v. Chinle Unified Sch. Dist. No. 24, 195 Ariz. 148, 152, ¶ 12, 985 P.2d 633, 637 (App. 1999). "[A]djudicators are presumed to be fair and may be disqualified only upon a showing of actual bias; mere speculation regarding bias will not suffice." Id. at 152, ¶ 11, 985 at 637. "The party asserting bias bears the burden of rebutting the presumption of fairness and establishing a disqualifying interest." Id. Furthermore, that an adjudicator may, after completion of the proceeding, "be exceedingly ill-disposed" towards a party does not thereby make the adjudicator "recusable for bias or prejudice, since his knowledge and the opinion it produced were properly and necessarily acquired in the course of the proceedings, and indeed sometimes necessary . . . to completion of the [adjudicator's] task." Liteky v. United States, 510 U.S. 540, 550 (1994).

¶32 However ill-advised Blanton's telephone conversation with Scola may have been, we do not conclude that it demonstrates that Blanton was prejudiced against Scola when his appeal was considered by the Board. First, the Board's decision was final and not subject to any further review by the Board when the telephone conversation occurred. Second, to the extent that Blanton explained to Scola that the Board deemed the employer's witnesses more credible and the DPS investigation irrelevant, he was simply commenting on his opinion of the case. See Liteky, 510 U.S. at 551. If, as Scola claims, Blanton also gratuitously remarked "at least I have a job," such a remark suggests at least some level of frustration on Blanton's part resulting from his conversation with Scola, but does not support a finding that Blanton possessed any deep-seated antagonism at the time of the Board's decision that requires a new hearing.2 See Liteky, 510 U.S. at 555. On this record, we conclude that Scola has failed to carry his burden of demonstrating that Blanton was actually biased against him.

CONCLUSION

¶33 For the foregoing reasons, we affirm the denial of benefits.

PATRICIA A. OROZCO, Presiding Judge, JOHN C. GEMMILL, Judge, concurring.