Williams v. ades/lamont

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE

KAYLA WILLIAMS, Appellant,

v.

ARIZONA DEPARTMENT OF ECONOMIC SECURITY, an Agency,

and

LAMONT MORTUARY, INCORPORATED, Appellees.

No. 1 CA-UB 23-0369
FILED 05-22-2025

Appeal from the A.D.E.S. Appeals Board
No. U-1900373-001-B

REVERSED AND REMANDED

COUNSEL

Nossaman LLP, Phoenix
By Ashley M. Mahoney, William Ellis Bassoff
Counsel for Appellant

Arizona Attorney General’s Office, Phoenix
By Amber E. Pershon
Counsel for Appellee Arizona Department of Economic Security
 WILLIAMS v. ADES/LAMONT
Opinion of the Court

OPINION

Presiding Judge Michael S. Catlett delivered the opinion of the Court, in
which Judge Jennifer M. Perkins and Vice Chief Judge Randall M. Howe
joined.

C A T L E T T, Judge:

¶1 After Lamont Mortuary (“the Mortuary”) terminated Kayla
Williams (“Williams”) as an employee, she requested unemployment
benefits. Eventually, the Arizona Department of Economic Security (“the
Department”) denied that request, concluding Williams had been
insubordinate. We granted Williams’ application for appeal and now
address three issues. One, whether Williams’ petition for review to the
appeals board (“the board”) was sufficient for us to have jurisdiction. Two,
whether the Department has standing to defend its decision in our court
when the prevailing party in the agency proceedings does not appear. And
three, whether Williams is disqualified from benefits for insubordination.
We conclude Williams’ petition for review was sufficient, the Department
lacks standing, and Williams is entitled to benefits.

FACTS AND PROCEDURAL HISTORY

¶2 Mr. and Ms. Lamont (“the Lamonts”) own and operate the
Mortuary. Williams worked as its office manager for two years before
being discharged. The Lamonts hired Williams knowing she had no office
experience. They did not train Williams themselves; they left that to the
outgoing office manager.

¶3 When Williams started, she was the only office employee
other than the outgoing office manager. The Lamonts provided little
oversight, preferring to let Williams handle the office and daily decisions
on her own. During Williams’ time with the Mortuary, her workload
spiked. At Williams’ request, the Lamonts hired two part-time employees
to help, but Williams remained overwhelmed.

¶4 After a year on the job, Williams told Ms. Lamont she enjoyed
billing and wanted to do only that. But Ms. Lamont decided she would do
billing herself, so Williams could focus on other tasks. In the end, though,

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Williams was reluctant to give up billing; Ms. Lamont relented and let
Williams continue with it.

¶5 Shortly before Williams’ discharge, Ms. Lamont took a more
active role in the office. And she did not like what she found. The Lamonts
felt Williams was not working quickly enough, but Williams thought she
was overloaded. The parties discussed the situation—that was not fruitful.
Things boiled over when Ms. Lamont learned Williams had not processed
billings for three months, resulting in a large backlog. She directed
Williams to begin working on billing that day. So Williams worked
overnight to reduce the backlog. Sometime later, Williams had completed
six months’ worth of billing but had not come completely current. The
Mortuary discharged Williams soon after. It did not give Williams any
written warnings or document its reasons for discharging her.

¶6 Williams sought unemployment benefits. A Department
deputy determined the Mortuary had not discharged Williams for willful
or negligent misconduct, so she was eligible for benefits. See A.R.S. § 23-
773(B).

¶7 The Mortuary challenged the deputy’s determination with an
appeal tribunal (“the tribunal”), consisting of an administrative law judge,
who held a hearing. See A.R.S. § 23-671(A). When the hearing began, the
tribunal said the issue was whether Williams was discharged for
insubordination. Mr. Lamont testified but mostly deferred to Ms. Lamont’s
upcoming testimony. For example, when asked why the Mortuary
discharged Williams, he mostly deferred to Ms. Lamont but observed that
Williams could not do the job and had a defiant attitude.

¶8 As for Ms. Lamont, she testified about discovering the
delinquent billing, her direction to Williams to “get to it today,” and her
dissatisfaction with the progress made afterward. Ms. Lamont testified
about “trying to get passwords” from Williams after she was discharged.
Ms. Lamont also mentioned other performance issues she was unhappy
about, including long lunches and mistreatment of other employees. But
she admitted Lamont Mortuary did not give Williams written warnings
because its “habit” was to discipline orally.

¶9 Williams testified the Lamonts said she was fired for not
getting work done on time and using vulgar language. She admitted she
was behind with billing but attributed that to her increased workload. The
tribunal then asked about the billing-backlog discussion that occurred
before her discharge:

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TRIBUNAL: When they asked you to complete the billing that
day, did you complete it that day?

WILLIAMS: I got half of it done, 6 months’ worth.

TRIBUNAL: Okay and when did you have that one-half done,
that day?

WILLIAMS: Yes.

TRIBUNAL: The employer states that it was 2 weeks, they
checked after 2 weeks, and you only had half of it done, is that correct?

WILLIAMS: No, it wasn’t 2 weeks. It took me a day or two.

TRIBUNAL: So it wasn’t completed that day, is that correct?

WILLIAMS: No.

No one clarified whether Williams’ last response meant “no, that is not
correct” or “no, it was not completed that day.”

¶10 Addressing passwords, Williams admitted setting up
accounts in her name because she was responsible for billing. But she
“didn’t know that the password thing was an issue, when [she] got fired,
until afterwards [she] found out.” She denied that she delayed providing
passwords; instead, “[a]s soon as [Ms. Lamont] asked . . . [Williams] got it
fixed that day.”

¶11 The tribunal reversed the deputy’s determination. The
tribunal relied on Ms. Lamont’s testimony, finding it was “more credible
because it was specific as to the final incident and the reason [Williams] was
insubordinate.” The tribunal also found Ms. Lamont’s testimony “was
corroborated by another employee witness and [Williams] actually
confirmed that she was insubordinate.” Because the tribunal found the
Mortuary discharged Williams for insubordination, it denied benefits.

¶12 Williams petitioned for review by the appeals board. See
A.R.S. § 23-672; Arizona Administrative Code (“A.A.C.”) R6-3-1504(A).
The board affirmed the tribunal, adopting its findings and conclusions. The
board also concluded Williams was insubordinate because she did not
provide the Mortuary with passwords when requested.

¶13 Williams applied to appeal to this court. See A.R.S. § 41-
1993(B). We granted her application and appointed pro bono counsel.

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Williams filed an opening brief. The Mortuary neither appeared nor filed
an answering brief. But the Department did both, contending the board’s
decision was correct. Williams filed a reply brief arguing not only that the
board’s decision was wrong, but also that the Department lacks standing
and its answering brief violates the Gift Clause (Ariz. Const. art 9 § 7). The
Department moved to strike those arguments because they were new. We
deferred ruling on that motion and instead allowed the Department to file
a sur-reply.

DISCUSSION

I.

¶14 Before addressing the merits, we resolve two jurisdictional
issues.

A.

¶15 In unemployment benefits appeals, our jurisdiction is
circumscribed. See A.R.S. § 41-1993(B). Section 41-1993(B) says that “[a]n
issue may not be raised on appeal that has not been raised in the petition
for review before the appeals board,” and we have said that provision limits
our jurisdiction. See Dynometrics Inc. v. Ariz. Dep’t of Econ. Sec., 257 Ariz.
283, 289 ¶ 23 (App. 2024) (“[T]his Court lacks jurisdiction to consider an
issue . . . that was not raised in the petition for review to the Appeals
Board.”). Although no one suggests Williams did not include all issues in
her petition for review that she raises on appeal, we must confirm she did.
See State v. Limon, 229 Ariz. 22, 23 ¶ 3 (App. 2011) (“We have an
independent duty to determine whether we have jurisdiction.”).

¶16 Our supreme court has explained that, by limiting appellate
review to issues raised in the petition for review filed with the appeals
board, rather than issues the board later decides, § 41-1993(B) “implicates
due process.” Barriga v. Ariz. Dep’t of Econ. Sec., 256 Ariz. 543, 550 ¶ 27
(2024). Consider an employee who prevails in the tribunal in overcoming
her employer’s sole defense. The employer then includes only that defense
in its petition for review to the board. In its decision, the board agrees with
the employee on the defense the tribunal resolved. But, on its own, the
board relies on a different reason to deny benefits. See A.R.S. § 23-672(C)
(allowing the board to “affirm, reverse, modify or set aside the decision of
the appeal tribunal or hearing officer”). Under § 41-1993(B), the employee
could not appeal the board’s adverse decision because the employer did not
include the winning issue in the petition for review. In that situation, the
employee would lack notice that the different reason was at play and an

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opportunity for judicial review—depriving them of due process. See
Solorzano v. Jensen, 250 Ariz. 348, 350 ¶ 9 (App. 2020) (“[D]ue process entitles
a party to notice and an opportunity to be heard.”); see also Gallarzo v. Ariz.
Dep’t of Econ. Sec., 245 Ariz. 318, 321 ¶ 9 (App. 2018) (concluding that “those
who apply for an appeal under A.R.S. § 41-1993(B) have an interest that
implicates due process”).

¶17 In Barriga, our supreme court urged the legislature “to act to
ensure that § 41-1993(B)’s scope of review does not run afoul of the
fundamental requirements of due process.” 256 Ariz. at 550 ¶ 27. The
legislature has not done so. So, for now, we are left with three avenues.
First, we can disregard § 41-1993(B) as unconstitutional. But doing so is the
most drastic option available to avoid the due process problems, and one
we disfavor. See State ex rel. Brnovich v. City of Tucson, 242 Ariz. 588, 597
¶ 35 (2017) (we generally seek to avoid constitutional issues when
interpreting and applying statutes). Second, we can narrowly interpret the
board’s authority to “modify” the tribunal’s decision. See A.R.S. § 23-
672(C). In other words, we can say that, although the board can sometimes
modify a decision on appeal, it cannot do so based on an issue not raised in
the petition for review. Or, third, we can take an expansive view of the term
“issue” in § 41-1993(B) and charitably interpret petitions for review.

¶18 That third route is the narrowest available here. It avoids the
constitutional issue and keeps the board’s authority intact. And taking a
broad view of the issues included in the petition for review is consistent
with our preference for substance over form on procedural matters. See
Dynometrics, 257 Ariz. at 289 ¶ 23 (taking a broad view of the petition for
review); Shea v. Maricopa County, 255 Ariz. 116, 121 ¶ 20 (2023) (noting
courts’ “preference to ‘look to substance rather than to form’ when
interpreting procedural devices”). So the third route is the one we take.

¶19 The statute does not define the term “issue.” See A.R.S. § 41-
1993(B). But when the legislature added that term to § 41-1993(B) in 19811,
“issue” was commonly defined as “a matter that is in dispute between two
or more parties[.]”2 As Black’s Law Dictionary explained, “an ‘issue’ is a
disputed point or question to which parties to [an] action have narrowed
their several allegations and upon which they are desirous of obtaining

1 See 1981 Ariz. Sess. Laws, ch. 65, § 2 (1st Reg. Sess.) (S.B. 1012).
2 Issue, Webster’s Third New International Dictionary of the English
Language (Unabridged) 1201 (1981); Windhurst v. Ariz. Dep’t of Corr., 256
Ariz. 186, 193 ¶ 19 (2023).

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either [a] decision of [the] court on [a] question of law or of [a] court or jury
on [a] question of fact.” Issue, Black’s Law Dictionary (5th ed. 1979).

¶20 When recounting the hearing testimony, the tribunal
mentioned that Ms. Lamont said Williams “was defiant in
providing . . . information, including passwords for accounts, to the
owners.” But the tribunal did not again mention passwords. In her pro per
petition for review, Williams wrote, “I do not feel it is fair to have to pay
unemployment money back” and mentioned nothing about passwords.
But then the board found that Williams “failed immediately to give the
[Mortuary] the passwords that [Williams] had established so that the
[Mortuary] could access its billing program[,]” which the board thought
was also insubordination.

¶21 Taking a narrow view of Williams’ petition for review, one
could argue she failed to mention the password issue, so we lack
jurisdiction over it and must affirm on that ground. But that would hardly
be fair—or consistent with due process—because the board first put the
password issue front and center. See Barriga, 256 Ariz. at 543 ¶ 27. Instead,
we conclude that Williams’ petition—by saying she should not have to pay
money back—adequately raised an “issue” about whether she had been
insubordinate. In other words, insubordination was the “disputed point or
question to which” the parties here had “narrowed their several
allegations.”3 And because the password issue was embedded in the
insubordination issue, Williams’ petition sufficiently preserved the
password issue for appeal, and we have jurisdiction.

B.

¶22 Next, we address the Department’s standing. The only party
defending the tribunal’s decision is the Department—the Mortuary has not
appeared. Williams argues the Department “lacks standing to advocate for
the substantive merits of its own decision in this case.” The Department
responds that § 41-1993(B), which says the Department “and all parties
before the board shall be given . . . an opportunity to appear,” gives the
Department standing on all contested issues. In the Department’s view, it
has standing to defend all aspects of the board’s decision even when the
prevailing party does not do so. We review the Department’s standing de
novo. Mills v. Ariz. Bd. of Tech. Registration, 253 Ariz. 415, 420 ¶ 10 (2022).

3 Issue, Webster’s Third New International Dictionary of the English
Language (Unabridged) 1201 (1981).

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1.

¶23 “[A] litigant seeking relief in the Arizona courts must first
establish standing[.]” Bennett v. Napolitano, 206 Ariz. 520, 525 ¶ 19 (2003).
To have standing to appeal a judgment, a party must be aggrieved by it. See
In re Gubser, 126 Ariz. 303, 306 (1980). “For appellant to qualify as an
aggrieved party, the judgment must operate to deny her some personal or
property right or to impose a substantial burden upon her.” Id.; see also
A.R.S. § 41-1993(B) (stating that “[a]ny party aggrieved by a decision of the
appeals board” may apply to appeal).

¶24 But even when aggrieved, a party “may nevertheless lack
standing to assert particular arguments in attempting to secure a reversal
of a judgment.” Kerr v. Killian, 197 Ariz. 213, 216 ¶ 11 (App. 2000). For
example, an “[a]ppellant can appeal from only that part of the judgment by
which she is aggrieved.” Gubser, 126 Ariz. at 306. And “[w]hen an error
applies to only one party who does not appeal, another party cannot make
that argument on its own behalf.” Miller v. Ariz. Corp. Comm’n, 227 Ariz.
21, 27 ¶ 22 (App. 2011).

¶25 Standing is not a one-sided requirement. Not only must a
party appealing a judgment have standing, but at least one party defending
a judgment must too. As this court has explained, “‘[s]tanding’ focuses on
the parties and requires that each party possess an interest in the outcome of
the litigation.” Chambers v. United Farm Workers Org. Comm., AFL-CIO, 25
Ariz. App. 104, 106 (1975) (emphasis added); Armory Park Neighborhood
Ass’n v. Episcopal Cmty. Servs. in Ariz., 148 Ariz. 1, 6 (1985) (“Our court of
appeals has explained that these considerations require at a minimum that
each party possess an interest in the outcome”). For example, we have
analyzed whether an intervenor had standing to defend against a cross-
appeal. See Ayres v. Red Cloud Mills, Ltd., 167 Ariz. 474, 477 (App. 1990) In
Ayres, the plaintiffs asserted an intervenor “lack[ed] standing to defend
th[e] appeal” because it would not directly affect her. Id. We reiterated that
standing “requires that each party possess an interest in the outcome of the
litigation” and applied that standard to assess standing to defend an
appeal. Id. (quoting Chambers, 25 Ariz. App. at 106). Because the intervenor
would have been “substantially aggrieved if plaintiffs prevail[ed] in their
argument,” she had “standing to defend.” Id.

¶26 Our supreme court and this court have both required
standing for judicial and quasi-judicial parties who wish to defend the
correctness of their decisions on appeal. In Evertsen v. Industrial Commission,
this court considered “[t]he standing of the Industrial Commission to file

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briefs before this court for unrepresented claimants[.]” 117 Ariz. 378, 379
(App. 1977). We concluded the Industrial Commission “should only
appear before this court as an advocate in those cases where it has a
legitimate interest to defend.” Id. at 382 (emphasis added). Our supreme court
later adopted this court’s opinion in Evertsen as its own. See Evertsen v.
Indus. Comm’n, 117 Ariz. 342, 342 (1977) (“The opinion of the Court of
Appeals . . . is approved and adopted as the opinion of this court.”).

¶27 In Hurles v. Superior Court, this court considered whether a
trial judge may respond to a petition for special action, which this court
characterized as “a significant threshold question of standing.” 174 Ariz.
331, 331–32 (App. 1993). We concluded that trial judges have “no personal
stake—and surely no justiciable stake—in whether they are ultimately
affirmed or reversed” on appeal. Id. at 334. Without standing to make “I-
ruled-correctly” arguments on appeal, trial judges also lack standing to
make such arguments in response to a special action petition. Id. And that
is true even when the trial judge is nominally a respondent. Id.

2.

¶28 We now turn to whether the Department has standing to
make the arguments it does here.

a.

¶29 We first summarize the Department’s arguments. Those
arguments focus on the facts in this case and why they support the board’s
conclusion that Williams was insubordinate. And many of them go well
beyond what the board said in denying benefits.

¶30 For example, the Department argues the Mortuary “gave
Williams numerous express and implied instructions in the months leading
up to her termination—all of which she refused to perform or willfully
disregarded without good cause[.]” The Department then accuses Williams
of disregarding her work schedule and “not notifying [the Mortuary]
directly when she was not going to work her scheduled hours.” The
Department says that “Williams refused to remain within her express job
duties and exerted improper influence over other employees to gain their
personal information.” Williams, too, “would bully other employees” and
“because of her insolence,” created a hostile-work environment. And
Williams “repeatedly failed” to complete assigned tasks “in any of the
myriad job duties” assigned to her. The board’s decision relied on few, if
any, of these facts.

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¶31 The Department eventually defends the actual reasons for the
board’s decision, but those arguments too focus only on this case. The
Department asserts that “substantial evidence supports the Board’s finding
that the reason that Williams did not complete the full assignment was
because she willfully disregarded it.” The Department claims the Mortuary
“clearly communicated the expectation that Williams catch up on the billing
backlog, and [it] ultimately gave her two weeks to finish the assignment.”
The Department argues “ample evidence” showed that the Mortuary was
reasonable in expecting “Williams to complete the assignment within two
weeks” and that she “willfully disregarded” the Mortuary’s “instruction (as
was her pattern in many areas of her employment).” And the Department
contends “Williams first defied and then refused to comply with” the
Mortuary’s “instruction to restore access to at least two of its business
accounts.”

b.

¶32 Now that the Department’s arguments are on the table, we
determine whether it has standing to make them. To be sure, this appeal
names the Department as a party. But that does not necessarily give it a
justiciable interest in defending its decision.

¶33 This is not the first time this court has analyzed whether an
agency performing only an adjudicatory function may become an advocate
on appeal. Much like the Department adjudicates unemployment benefits,
the Industrial Commission (the “Commission”) adjudicates workers’
compensation claims. In the 1970’s, the legislature removed the
Commission “from the role of both defending against an applicant’s claim
as keeper of the insurance fund and being an arbiter of the validity of that
claim.” Evertsen, 117 Ariz. at 381. After the legislature did so, the
Commission “truly became an impartial agency for” determining workers’
compensation claims. Id. Despite that status, the Commission, like the
Department here, argued “it has an absolute right, being an administrative
agency, to defend” its decisions “whenever they come under attack in a
judicial proceeding.” Id.

¶34 We disagreed. Instead, “the defense of a hearing officer’s
decisions, findings and award, insofar as the Commission is concerned, lies
in the reasoning of the award itself.” Id. at 382. And the Commission had
no legitimate interest in avoiding confessions of error. Id. at 382–83. If
accepted, the Commission’s “position would encourage prevailing parties
to allow the Commission to carry the burden and expense of the appeal.”
Id. at 383. What is more, the Commission’s appearance would “destroy[]

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the impartial character of the Commission as a tribunal where justice to
both claimants and carriers should be meted out on an even-handed basis.”
Id. And doing so would be problematic because “like Caesar’s wife, an
adjudicating tribunal must avoid even the appearance of impropriety in
dealing with adverse interests appearing before it.” Id. “This is no less true
of . . . an executive body than it is of a superior court as a judicial body.”
Id.; see also Evertsen, 117 Ariz. at 342 (adopting our Evertsen opinion in full);
cf. Cortaro Water Users’ Ass’n v. Steiner, 148 Ariz. 314, 318 (1986) (“[T]he vast
majority of the time the agency need not take an advocate’s position in the
appeal.”).

¶35 Our reference in Evertsen to a judicial body was prophetic.
Fifteen years later, we analyzed whether a superior court judge has
standing to object to special action relief. See Hurles, 174 Ariz. at 332. We
identified two categories of potential responses. One, those asserting “the
general validity of an underlying administrative practice, policy, or local
rule,” which we called “defense-of-policy” responses. Id. And two, those
asserting “the validity of a trial judge’s resolution of a particular issue in a
single case,” which we called “I-ruled-correctly” responses. Id. We
concluded superior court judges have standing to file “defense-of-policy”
responses but not “I-ruled-correctly” responses. Id. at 333–34.

¶36 In reaching that decision, we acknowledged that judges
“generally hope their rulings are affirmed.” Id. at 333. Yet trial judges do
not appear to defend their rulings, and this court’s judges do not “seek
standing to urge the supreme court to uphold” our decisions. Id. at 334.
“Rather, at every level of the judiciary, judges are presumed to recognize
that they must do the best they can, ruling by ruling, with no personal
stake—and surely no justiciable stake—in whether they are ultimately
affirmed or reversed.” Id. And that principle “is essential to impartial
adjudication.” Id. Because the response at issue in Hurles argued only “that
the respondent judge ruled properly on the evidence before her,” the judge
lacked standing. Id.; see also Riley, Hoggatt & Suagee, P.C. v. English, 177 Ariz.
10, 13–14 (1993) (applying the Hurles framework).

¶37 Other states agree that agencies serving only an adjudicatory
function prior to appeal generally lack standing to later participate when
their decisions are appealed. For example, the Washington Supreme Court
explained that “[q]uasi-judicial agencies, as opposed to enforcement or
‘front-line’ agencies, are generally not permitted to bring appeals of adverse
court decisions” because allowing them “to enter proceedings as a partisan
may compromise the impartiality of that body in rendering its decisions.”
Kaiser Aluminum & Chem. Corp. v. Dep’t of Lab. & Indus., 854 P.2d 611, 614

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(Wash. 1993). And the Commonwealth Court of Pennsylvania said that
“[n]ormally, when an agency performs only an adjudicatory function, the
agency lacks standing to participate in the appeal because an independent
adjudicator’s only function is to decide and it has no interest in the
underlying matter.” E. Stroudsburg Univ. Found. v. Off. of Open Recs., 995
A.2d 496, 507 (Pa. Commw. 2010).

¶38 We conclude the Department has not identified a justiciable
stake here. Before this appeal, the Department’s sole role was to adjudicate
Williams’ claim; it did not appear as a party before the tribunal or the board.
As detailed, the Department argues the record had sufficient evidence for
the board to conclude that Williams was insubordinate. The Department
does not assert that the validity of its administrative policies or practices is
at issue, and it has not identified some other justiciable interest in defending
against William’s individual claim. Instead, the Department contends only
that the board ruled properly on the evidence—it responds only that “I-
ruled-correctly.”

¶39 Allowing the Department to participate in this way would
allow it to do so in all unemployment benefits appeals. But doing so would
“encourage prevailing parties to allow [it] to carry the burden and expense
of the appeal”—which is what the Mortuary has done here. See Evertsen,
117 Ariz. at 383. And it would also “destroy[] the impartial character of the
[Department] as a tribunal where justice to” employees and employers
“should be meted out on an even-handed basis.” See id.; see also Hurles, 174
Ariz. at 334.

¶40 Given the arguments the Department makes, this case
demonstrates why allowing it to make all arguments would harm its
impartiality. The Department’s arguments go well beyond the grounds the
board relied on to deny benefits—the Department accuses Williams of
many other misdeeds. If we were to remand to the board for further
proceedings, one could hardly blame Williams for doubting that she would
get a fair shake on remand.

¶41 At bottom, the Department has no justiciable interest in
whether the board correctly resolved this individual dispute between the
Mortuary and Williams.

c.

¶42 The Department makes four primary arguments why we
should allow it to step into the Mortuary’s shoes. None are persuasive.

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¶43 First, § 41-1993(B) says, “The department and all parties
before the appeals board shall be given notice of the appeal and an
opportunity to appear.” And it provides that “[t]he cost of providing the
record is a taxable cost if the department prevails.” A.R.S. § 41-1993(B). The
Department argues its “opportunity to appear” allows it to make whatever
arguments it desires in any appeal. But that stretches the language too far.

¶44 Practically speaking, the Department must be a party to all
unemployment appeals because when one side prevails, the Department
must carry out our mandate, and we can only order it to do so if it is a party.
See, e.g., Dynometrics, 257 Ariz. at 293 ¶ 45 (remanding “for further
proceedings to determine Enriquez’s eligibility for benefits and whether
such benefits are chargeable against Comfort Keepers’ account”). But
appearing as a party is not tantamount to having standing to make
whatever arguments one wants. See Kerr, 197 Ariz. at 216 ¶ 11; Miller, 227
Ariz. at 27 ¶ 22. And a statute merely giving an agency an opportunity to
appear does not—by itself—confer standing on the agency to argue “I-
ruled-correctly” in individual cases. See Hurles, 174 Ariz. at 332.

¶45 Consider the Commission. It appears in all workers’
compensation appeals, and yet it lacks standing to make certain arguments
on appeal. See Evertsen, 117 Ariz. at 382. The same goes for the Department.
In some appeals, the Department can appear only as a nominal party, and
in others it can appear as an advocate and make a “defense-of-policy”
argument when “it has a legitimate interest to defend.” Evertsen, 117 Ariz.
at 382. In both situations, the Department has been “given . . . an
opportunity to appear,” which is all § 41-1993(B) commands. See Int’l Bhd.
of Elec. Workers, Local Union 640 v. Kayetan, 119 Ariz. 508, 510 (App. 1978)
(explaining that, although the statute at issue made the agency a party to
all review proceedings, “the role of the agency-defendant in the superior
court proceedings may be a passive one”).

¶46 That § 41-1993(B) allows the Department to obtain a taxable
cost when it prevails also does not alter the calculus. That provision is an
artifact from the days when an aggrieved party had to “take an appeal
against the [D]epartment[.]” 1979 Ariz. Sess. Laws, ch. 179, § 29 (1st Reg.
Sess.). We could not locate any recent instance when a court used § 41-
1993(B) to award the Department costs. But, in any event, allowing the
Department to recoup a cost when it prevails does not answer the
antecedent question whether it has standing to argue “I-ruled-correctly.”

¶47 Second, the Department argues it “has been appearing as a
party in appeals to this Court from Appeals Board decisions under [§ 43-

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1993] since 1981” and thus the legislature has acquiesced in its ability to
appear. Again, we do not question the Department’s ability to appear. The
question we answer is different: whether the Department has standing to
step into the shoes of the prevailing party in board proceedings and defend
how the board resolved individual issues in individual cases. Before today,
no court has addressed that question either way. So there has been nothing
for the legislature to acquiesce in. See Sw. Paint & Varnish Co. v. Ariz. Dep’t
of Env’t Quality, 194 Ariz. 22, 26 ¶ 21 (1999) (“We have squarely rejected the
idea that silence is an expression of legislative intent.”).

¶48 Third, the Department argues that Hurles does not apply here
because there the “respondent judge [had] no personal or justiciable stake
in the proceedings.” But that is a question-begging argument—the
pertinent question is whether the Department has a justiciable stake in
whether Williams receives benefits. The Department says it has a sufficient
stake because it administers the Unemployment Insurance Trust Fund. Of
course, the same could be said about the Commission—it administers the
workers’ compensation system—and yet this court in Evertsen rejected the
notion that the Commission has a justiciable interest in every workers’
compensation appeal. See 117 Ariz. at 381–83; see also Evertsen, 117 Ariz. at
342. Applying Evertsen, the Department’s role in administering the Trust
Fund does not, without something more, give it a justiciable stake in
arguing individual issues in individual cases.

¶49 The Department also argues it has an adequate stake because
the legislative policy underlying unemployment benefits is to address the
“serious menace to the health, morals and welfare” stemming from
“[e]conomic insecurity due to unemployment.” A.R.S. § 23-601. That
policy instead cuts against the Department. When an individual suffers
unemployment, she should not be deprived of benefits because, although
her employer does not appear on appeal, the Department insists on arguing
“I-ruled-correctly.” We think the legislative policy underlying
unemployment benefits is better served by requiring those who prevail in
Department proceedings to defend on appeal—thereby preserving the
Department’s impartiality in the mine run of cases—but allowing the
Department to provide a “defense-of-policy” response when appropriate.
See Sw. Lumber Mills, Inc. v. Emp. Sec. Comm’n, 66 Ariz. 1, 5 (1947) (discussing
the Employment Security Act’s remedial purpose and stating “that devices
of every kind to defeat it are to be frowned upon and stricken down”). On
the other hand, the legislative policy is ill-served by having government
lawyers parachute in for employers to argue that individual issues in
individual cases do not justify benefits.

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¶50 Fourth (and last), the Department warns that if we conclude
it lacks standing in less than all appeals, that will negatively affect other
agencies. The Department thinks so because, in some cases, there will “be
no party on the other side and no adversarial process.” The Department
identifies the State Bar, the Motor Vehicle Department, and the Arizona
Department of Corrections as agencies that could be impacted.

¶51 The Department’s slippery-slope argument does not move us.
If that argument sounds familiar, it should. It is basically the confession of
error argument the Commission made in Evertsen, which we rejected. See
117 Ariz. at 382–83. And, if it remains unclear by now, we again emphasize
that our standing analysis would differ if the agency had some role in prior
proceedings other than neutral adjudicator. As the Washington Supreme
Court explained, the analysis would be different with “enforcement or
‘front-line’ agencies[.]” Kaiser Aluminum & Chem. Corp., 854 P.2d at 614. We
need not stake out a standing test for those types of agencies here because
the Department’s role vis-à-vis Williams was solely adjudicatory. We
conclude only that the Department lacks standing to argue “I-ruled-
correctly” when its only role has been adjudication and the prevailing party
before the Board does not appear on appeal. Because the Department lacks
standing, we do not consider the merits arguments in its briefs in deciding
Williams’ appeal.

II.

¶52 Williams argues we should strike the Department’s
Answering Brief because it violates the Gift Clause in the Arizona
Constitution. That clause says, “Neither the state . . . or other subdivision
of the state shall ever give or loan its credit in the aid
of . . . any . . . corporation[.]” Ariz. Const. art. 9 § 7. Williams argues the
Department conferred benefits on the Mortuary in the form of free
“counsel” and “legal representation.”

¶53 We will not decide Williams’ Gift Clause argument in the
context of an unemployment benefits appeal. See City of Flagstaff v. Ariz.
Dep’t of Admin., 255 Ariz. 7, 14 ¶ 26 (App. 2023) (“[A] court of appeals sits
as a court of review, not of first view.”). In any event, by refusing to
consider the Department’s arguments because it lacks standing, we have
rendered moot Williams’ Gift Clause argument and her request to strike the
Department’s answering brief.

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III.

¶54 We turn to whether Williams is entitled to benefits.

A.

¶55 The Mortuary had notice of this appeal and an opportunity to
appear. See A.R.S. § 41-1993(B). But the Mortuary did not file an answering
brief. We must decide whether that was a confession of error. That decision
turns on two considerations.

¶56 First, does the appeal raise debatable issues? We have no
definitive test to identify a debatable issue. But our supreme court has
found a debatable issue when there was “at least grave doubt” about a
superior court’s order. See Adkins v. Adkins, 39 Ariz. 530, 531–32 (1932). On
the other hand, we have found an issue not debatable when the record
“clearly” resolves the question raised. See, e.g., Air E., Inc. v. Wheatley, 14
Ariz. App. 290, 294 (App. 1971); Honsey v. Honsey, 126 Ariz. 336, 337 (App.
1980).

¶57 Second, if an issue is debatable, can we still waive a confession
of error? In Evertsen, this court said that “the confession of error rule is not
absolute and can be waived in the discretion of this court.” 117 Ariz. at 383.
As support, we cited two prior opinions where we treated the confession of
error rule as permissive, not mandatory. Id. (citing Ariz. Corp. Comm’m v.
Constr. Trucking Serv., 13 Ariz. App. 22, 24 (1970) and Ghyselinck v. Buchanan, 13 Ariz. App. 125, 126 (1970)). We exercised discretion to “deem such a
waiver appropriate here.” Id. Then, the Arizona Supreme Court adopted
our opinion in Evertsen as its own. Evertsen, 117 Ariz. at 342. In that
unconventional way, our supreme court recognized that we may waive a
confession of error when an agency files briefs making arguments for which
it lacks standing. Because that is the situation here, we need not address
whether we may waive a confession of error in other contexts. See Mayberry
v. Stambaugh, 2024 WL 1282653 *1 ¶ 5 (Ariz. App. Mar. 26, 2024) (Morse, J.,
specially concurring) (mem. decision); Luna v. Peinado, 2024 WL 2207309 *3
¶ 17 (Ariz. App. May 16, 2024) (mem. decision).

¶58 Williams’ appeal raises debatable issues. Although we
seriously doubt the board’s decision correctly considered the evidence, the
record is not sufficiently clear that Williams’ victory is certain. Despite the
existence of debatable issues, we exercise our discretion to reach the merits
because it was unclear until now that the Department cannot step in for the
Mortuary on appeal.

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B.

¶59 Williams argues the board erred because the Mortuary did
not show she was insubordinate. We defer to the board’s factual findings
unless they are arbitrary, capricious, or an abuse of discretion. Johnson v.
Ariz. Dep’t of Econ. Sec., 247 Ariz. 351, 355 ¶ 12 (App. 2019). Whether an
employer met its burden is a question of law. Weller v. Ariz. Dep’t of Econ.
Sec., 176 Ariz. 220, 223 (App. 1993). The board’s legal analysis is “not
binding” and “we are free to draw our own legal conclusions” about how
the law applies to the facts. Munguia v. Dep’t of Econ. Sec., 159 Ariz. 157, 159
(App. 1988).

¶60 Being “discharged for wilful or negligent misconduct”
disqualifies an individual from unemployment benefits. A.R.S. § 23-775(2).
“Misconduct justifying an employer in terminating an employee and
misconduct disqualifying an employee from benefits are two distinct
concepts.” Weller, 176 Ariz. at 223. Misconduct includes insubordination.
A.R.S. § 23-619.01(B)(5). “Insubordination imports a willful disregard of
. . . directions of the employer and a refusal to obey reasonable orders[.]”
Sch. Dist. No. 8, Pinal Cnty. v. Super. Ct., 102 Ariz. 478, 480 (1967).

¶61 The Department has promulgated regulations governing
misconduct. Under those regulations, an employee is expected to follow
“reasonable orders, given in a civil manner[.]” A.A.C. R6-3-51255(A)(1).
But “[t]here is no precise rule by which to judge when a dispute with a
supervisor constitutes insubordination if insolence, profanity, or threats are
not involved.” A.A.C. R6-3-51255(A)(1). The regulations list three
examples of insubordination: “[r]efusal to follow reasonable and proper
instructions,” “[i]nsolence in actions or language, profanity, or threats
toward a supervisor without due provocation,” and “[r]efusal to accept
assignment to suitable work.” A.A.C. R6-3-51255(A)(1)(a)–(c). The “overall
consideration is whether the worker acted reasonably” under “the
circumstances.” A.A.C. R6-3-51255(A)(1).

¶62 An employer must demonstrate it discharged an employee
“for disqualifying reasons.” A.A.C. R6-3-51190(B)(2)(b). “[M]ere
allegations of misconduct are not sufficient to sustain such a charge.”
A.A.C. R6-3-51190(B)(2)(c). “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).

¶63 The deputy determined Williams should receive benefits.
The Mortuary challenged that determination, so it had the burden of proof.

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A.A.C. R6-3-51190(B)(2)(b). On appeal, the board adopted the tribunal’s
conclusion that Williams was insubordinate for not completing all
delinquent billing. The board also concluded Williams was insubordinate
for not providing passwords. Contrary to these conclusions, the Mortuary
did not meet its burden to show Williams was insubordinate.

1.

¶64 We start with the billing issue. It is unclear whether the
Mortuary terminated Williams for insubordination relating to billing. Mr.
Lamont testified she was discharged because she was “not capable of
doing” the job the Mortuary “hired her to do.” Likewise, Ms. Lamont
thought Williams was terminated because she “really did not have the
working knowledge of the system that she led us to believe she did[.]”
Neither incapability nor lack of knowledge is insubordination. See A.R.S.
§ 23-619.01(B)(5); A.A.C. R6-3-51255.

¶65 But assume the Mortuary terminated Williams for
insubordination. Because everyone agrees Williams tried to catch up on
delinquent billing, something more is needed to demonstrate refusal,
insolence, or unreasonable behavior on Williams’ part. See A.A.C. R6-3-
51255(A)(1).

¶66 The significant point of disagreement in the tribunal was the
timeframe Ms. Lamont gave Williams to complete the stale billing. The
tribunal found Williams insubordinate because she did not complete the
billing assignment the same day it was given. But no evidence shows that
Ms. Lamont directed Williams to finish in one day. Rather, Ms. Lamont
directed her to “get to it today,” which Williams complied with by staying
overnight to catch up. No evidence showed that Ms. Lamont instructed
Williams to have the backlog cleared by any date certain, which undercuts
the tribunal’s insubordination conclusion. See Sch. Dist. No. 8, Pinal Cnty.,
102 Ariz. at 480 (defining insubordination).

¶67 What is more, the record is murky about the amount of time
that passed between Ms. Lamont’s directive and Williams’ termination.
Ms. Lamont claimed two weeks spanned the two events; Williams claimed
one business day passed. In the end, it is Ms. Lamont’s word against
Williams’ word.

¶68 The tribunal thought Ms. Lamont’s testimony was
“corroborated by another employee witness, and [Williams] actually
confirmed that she was insubordinate.” But neither happened. Mr.
Lamont—the Mortuary’s only other witness—did not testify about any

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timeframe between the directive and termination. And the tribunal’s
comment about Williams’ confirmation was based on her admission that
she did not complete the billing assignment in one day. As noted, however,
Ms. Lamont’s directive was to begin the assignment that day, not to
complete it. Because the Mortuary did not corroborate Ms. Lamont’s two-
week timeframe, it did not meet its burden of proof. At best for the
Mortuary, the evidence was “evenly balanced,” so “misconduct [was] not
. . . established[.]” A.A.C. R6-3-51190(C)(3).

2.

¶69 We finish the merits with the password issue. Again, whether
the Mortuary terminated Williams for not providing passwords is
unclear—the Lamonts did not testify that was the reason. Even so, Williams
argues the Mortuary did not prove it requested passwords before her
discharge. Ms. Lamont testified she had issues obtaining passwords from
Williams “at the end of the day, when she was terminated” and that
Williams was “defiant.” Williams testified she “didn’t know that the
password thing was an issue, when [she] got fired, until afterwards [she]
found out.” Neither party testified that any of this happened before the
Mortuary terminated Williams. Without such evidence, the board erred in
finding insubordination. See A.A.C. R6-3-51190(C)(3).

ATTORNEY FEES

¶70 Williams requests her costs on appeal under A.R.S. § 12-341
and her attorney fees on appeal under A.R.S. § 12-348. The latter statute
allows a fee award when a party prevails in a court proceeding to review a
state agency decision. A.R.S. § 12-348(A)(2). But another subsection says
that statute does not apply when the state’s role “was to determine the
eligibility or entitlement of an individual to a monetary benefit.” A.R.S.
§ 12-348(H)(1). The Department argues this appeal fits that exception.
Williams claims the Department no longer qualifies for that exception
because “it filed an adversarial brief advocating for a particular position.”

¶71 In support of fees, Williams cites Cortaro Water Users’ Ass’n v.
Steiner, 148 Ariz. 314 (1986). Cortaro addressed two exceptions in § 12-348—
the monetary-benefit exception in § 12-348(H)(1) and the nominal-party
exception in § 12-348(H)(4). Cortaro concluded the monetary-benefit
exception did not apply for two reasons. First, that case involved a
“governmental action which tends to limit or regulate the right to use
groundwater,” which did not qualify as a “monetary benefit.” Id. at 319.

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The court said the monetary-benefit exception only applies when “an
applicant is seeking welfare payments or a disability pension payment.” Id.
That conclusion supports the Department’s position here. And if the court
had ended there, we would deny Williams fees.

¶72 But the court continued and discussed a second reason why
the monetary-benefit exception did not apply—the Department of Water
Resources took an active role in litigating against the prevailing party. Id.
at 320. The court explained that, although the Department of Water
Resources merely adjudicated a private dispute at the administrative level,
“due to the Department’s active role in the case it lost this exemption in the
subsequent proceedings.” Id. at 319. As the court explained, “since the
Department actively participated all the way up to this Court, it cannot be
said that it is exempt under this provision.” Id. at 319-20.

¶73 Here, the Department’s only role at the administrative level
was to determine Williams’ eligibility for unemployment benefits. Had the
Department merely appeared in this court as a nominal appellee, its role
would have remained unchanged. But the Department assumed a different
role once the case arrived here. The Department became an advocate
actively defending against Williams’ eligibility for benefits, even when
Williams’ former employer did not. Although we have concluded the
Department lacks standing, that does not alter the role it played—the
Department’s active participation went well beyond determining Williams’
eligibility and forced Williams to brief additional issues. Because the
Department “actively participated” in this court, “it cannot be said that it is
exempt under” § 12-348(H)(1). Id. at 320.

¶74 We therefore grant Williams’ request for attorney fees on
appeal under § 12-348(A)(2) and her costs on appeal under § 12-341, subject
to compliance with Arizona Rule of Civil Appellate Procedure 21.

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CONCLUSION

¶75 We reverse the board’s decision about unemployment
benefits and remand to the board to determine the amount of benefits to
award. We deny as moot Williams’ request to strike the Department’s
answering brief and the Department’s motion to strike certain sections of
Williams’ reply brief.

MATTHEW J. MARTIN • Clerk of the Court
FILED: JR

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