Kirstin Arneson, Relator v. St Cloud Auto Sales.Com LLC, Department of Employment and Economic ...

This opinion is nonprecedential except as provided by
Minn. R. Civ. App. P. 136.01, subd. 1(c).

STATE OF MINNESOTA
IN COURT OF APPEALS
A25-0928

Kirstin Arneson,
Relator,

vs.

St Cloud Auto Sales.Com LLC,
Respondent,

Department of Employment and Economic Development,
Respondent.

Filed March 16, 2026
Affirmed
Bratvold, Judge

Department of Employment and Economic Development
File No. 51081777-4

Richard Dahl, Dahl Law Firm PA, Brainerd, Minnesota (for relator)

St. Cloud Auto Sales.Com LLC, St. Cloud, Minnesota (respondent employer)

Rebecca Wittmer, Melannie M. Markham, Department of Employment and Economic
Development, St. Paul, Minnesota (for respondent department)

Considered and decided by Bentley, Presiding Judge; Bratvold, Judge; and Schmidt,

Judge.

NONPRECEDENTIAL OPINION

BRATVOLD, Judge

On certiorari review, relator challenges the decision of an unemployment-law judge

(ULJ) that relator is ineligible for unemployment benefits because she was discharged for
employment misconduct. Relator argues that the ULJ’s decision must be reversed for four

reasons: (1) the decision was not supported by substantial evidence; (2) relator’s conduct

falls under certain statutory exceptions to employment misconduct; (3) the ULJ based its

determination on a single incident of misconduct; and (4) relator’s employer discharged

her as a pretext for age discrimination. We conclude that substantial evidence supports the

ULJ’s misconduct determination, relator’s conduct does not fall under any of the statutory

exceptions relator cites, relator’s conduct was a serious violation of her employer’s

reasonable expectations, and relator failed to raise a claim of age discrimination in

proceedings before the ULJ and therefore forfeited the issue. Thus, we affirm.

FACTS

The following summarizes the ULJ’s factual findings and decision issued after an

evidentiary hearing and a motion for reconsideration, along with other evidence relevant

to the issues on appeal.

Relator Kirstin Arneson worked as a finance manager for respondent St. Cloud Auto

Sales.com LLC from January 9 to September 18, 2024. Arneson worked full-time at the

Brainerd branch. Before working at St. Cloud Auto, Arneson worked as a finance manager

for a recreational-vehicle dealership.

On July 26, 2024, a customer told a salesperson he wanted to buy a pickup truck

and “paid a $5,000 deposit in cash, which was given to Arneson.” Arneson then “counted

the cash in front of the [pickup] customer and the salesperson, put it in an envelope, wrote

identifying information . . . on the envelope, taped the envelope shut, and signed over the

tape.” Arneson testified that she asked the pickup customer if he wanted a receipt and he

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said “it was fine.” Arneson admitted that she did not provide the pickup customer with a

receipt. The ULJ also found that Arneson did not “create any other written record of the

deposit payment other than what was written on the envelope.”

At the Brainerd branch, “[c]ash deposits were to be placed in a bank envelope that

was locked, and the bank envelope was to be kept in Arneson’s office, where the key to

the bank envelope was kept.” Based on testimony from the branch’s general manager, the

ULJ found that “Arneson was to keep her office locked when she was not in it” and that

only Arneson, the general manager, and the service manager had keys to the office.

Arneson testified that the Brainerd branch did not have a “receipt book” or a safe and that

she thought there should have been a safe for storing deposits. Arneson admitted, as

discussed in more detail below, that she did not keep her office locked during the workday.

Delivery drivers transported bank envelopes from the Brainerd branch to the

St. Cloud office five days a week. Employees at the St. Cloud office then “unlocked and

handled [bank envelopes] within view of security cameras.” Delivery drivers “did not have

keys to the bank envelopes.”

The week after the pickup customer left the cash deposit, the St. Cloud office

received a bank envelope from the Brainerd branch “that should have had the $5,000 cash

deposit in it, and other deposits were in the bank envelope, but the $5,000 cash deposit was

missing.” The ULJ found that the fact the deposit was missing “was not discovered for

weeks,” in part because the pickup customer “did not come back right away.” The general

manager of the Brainerd branch testified that it was impossible to review security-camera

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footage from around the time the St. Cloud office received the bank envelope because the

footage is “only kept for a certain period of time.”

On September 18, 2024, St. Cloud Auto discharged Arneson. The next day, Arneson

applied for unemployment benefits. Respondent Minnesota Department of Employment

and Economic Development (DEED) determined that Arneson was ineligible for benefits

because St. Cloud Auto discharged her for employment misconduct. Arneson

administratively appealed.

At the resulting evidentiary hearing, the ULJ heard testimony from Arneson and

St. Cloud Auto employees, including a human-resources assistant and a general manager

at the Brainerd branch. The ULJ also received exhibits, including emails and text messages.

The ULJ issued their decision, including written findings of fact, and determined that

Arneson was ineligible for unemployment benefits because she was discharged for

employment misconduct. The ULJ made credibility determinations, noting that the

“findings of fact are based primarily on the employer’s witnesses’ testimony and the

portions of Arneson’s testimony that were credible because they were candid and

consistent with the other evidence.”

The ULJ first found that there was insufficient evidence to determine “who took the

$5,000 cash deposit, given that more people than just Arneson reasonably could have

accessed the bank envelope.” But the ULJ also found that “Arneson knew that if a deposit

was paid by a customer, there should be documentation of receipt of the deposit for both

the customer and the business,” yet Arneson did not give the pickup customer a receipt or

otherwise document the deposit. The ULJ also found that, despite St. Cloud Auto’s policy

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that she lock her office when she was absent, “Arneson locked her office at the end of her

workday, but she did not typically lock it when, for example, she took breaks during the

workday.” The ULJ concluded that Arneson’s failure to document receipt of the missing

$5,000 deposit and to lock her office where the deposits were kept “was at least negligent

and was a serious violation of reasonable expectations” of St. Cloud Auto. The ULJ

concluded that St. Cloud Auto discharged Arneson “because of the missing $5,000 deposit

issue and a previous incident in which Arneson had signed a customer’s name to a

document” when she was not authorized to do so.

Arneson filed a request for reconsideration without offering new evidence. She

argued, among other things, that her conduct falls under statutory exceptions to

employment misconduct and that she was discharged for a single incident. In a written

decision, the ULJ affirmed its ineligibility decision, concluding that it was “factually and

legally correct.” The ULJ considered and rejected each of Arneson’s arguments, reasoning,

in part, that her failure to issue a receipt for the missing $5,000 cash deposit and to lock the

office “was intentional.” The ULJ also concluded that the record evidence showed that

St. Cloud Auto discharged Arneson for two instances of misconduct—the missing $5,000

deposit and the “prior incident” involving an unauthorized signature.

This appeal follows.

DECISION

When reviewing a ULJ’s decision regarding eligibility for unemployment benefits,

this court may affirm or remand for further proceedings. Minn. Stat. § 268.105, subd. 7(d)

(2024). Alternatively, this court may reverse or modify a ULJ’s decision if, among other

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things, the eligibility determination is “unsupported by substantial evidence.” Id.,

subd. 7(d)(5). Substantial evidence is “(1) such relevant evidence as a reasonable mind

might accept as adequate to support a conclusion; (2) more than a scintilla of evidence;

(3) more than some evidence; (4) more than any evidence; or (5) the evidence considered

in its entirety.” Dourney v. CMAK Corp., 796 N.W.2d 537, 539 (Minn. App. 2011)

(quotation omitted).

An individual who is discharged for employment misconduct is not eligible to

receive unemployment benefits. Minn. Stat. § 268.095, subd. 4(1) (2024); see also

Wichmann v. Travalia & U.S. Directives, Inc., 729 N.W.2d 23, 27 (Minn. App. 2007).

Whether an individual committed employment misconduct is a mixed question of law and

fact. Stagg v. Vintage Place Inc., 796 N.W.2d 312, 315 (Minn. 2011). We view “the ULJ’s

factual findings in the light most favorable to the decision, giving deference to the

credibility determinations made by the ULJ,” and “we will not disturb the ULJ’s factual

findings when the evidence substantially sustains them.” Ward v. Delta Airlines,

973 N.W.2d 649, 651 (Minn. App. 2022) (quotation omitted), rev. denied (Minn. June 21,

2022). “Determining whether a particular act constitutes disqualifying misconduct is a

question of law that we review de novo.” Stagg, 796 N.W.2d at 315.

Arneson argues that the ULJ’s decision was (A) not supported by substantial

evidence and that, (B) even if it was, her conduct related to the missing $5,000 deposit falls

under statutory exceptions and (C) was only a single incident. Arneson also contends that

(D) St. Cloud Auto discharged her as a pretext for age discrimination. We address each

argument in turn.

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 A. Substantial Evidence of Employment Misconduct

“Employment misconduct means any intentional, negligent, or indifferent conduct,

on the job or off the job, that is a serious violation of the standards of behavior the employer

has the right to reasonably expect of the employee.” Minn. Stat. § 268.095, subd. 6(a)

(2024).

Here, the ULJ concluded that St. Cloud Auto “has the right to reasonably expect

that a finance manager will appropriately handle funds.” The ULJ found that “the credible

evidence” shows that Arneson “failed to create [an] appropriate record of ever having

received the [missing $5,000] cash deposit” and that Arneson “admittedly knew that it was

standard practice to give the customer some sort of receipt whenever a deposit was made.”

The ULJ also found that, based on Arneson’s testimony that the Brainerd branch should

have had a safe for storing customer deposits in her office, Arneson “should have known

that she should keep her office locked whenever she wasn’t in it.” The ULJ found:

Arneson’s conduct in failing to document receipt of the deposit
other than what she put on the bank envelope contributed to the
disappearance of the deposit not being discovered for weeks,
and her conduct in . . . failing to keep the bank envelope secure
by keeping her office locked likely either directly caused, or
created opportunity for, the loss of the deposit. 1

1
The ULJ briefly referred in this passage to Arneson “stealing the deposit herself.” Because
the ULJ concluded, based on substantial evidence, that there was insufficient evidence to
determine who took the missing $5,000 deposit, we omit the ULJ’s brief reference and do
not consider it further.

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The ULJ concluded that “Arneson’s conduct in handling the $5,000 cash deposit was at

least negligent and was a serious violation of [St. Cloud Auto’s] reasonable expectations.”2

We first consider whether there was substantial evidence that Arneson negligently

violated St. Cloud Auto’s expectations, then we consider whether those expectations were

reasonable under Minnesota caselaw.

The Evidence of Arneson’s Conduct

“Negligence is the failure to use the care that a reasonable person would use in the

same or similar circumstances.” Dourney, 796 N.W.2d at 540. Generally, an employee who

refuses “to abide by an employer’s reasonable policies and requests” has engaged in

“disqualifying misconduct.” Schmidgall v. FilmTec Corp., 644 N.W.2d 801, 804 (Minn.

2002).

Arneson contends that substantial evidence does not support the ULJ’s

determination that her conduct was at least negligent and a serious violation of St. Cloud

Auto’s expectations. Arneson maintains that she “did create her own receipt” for the $5,000

cash deposit, “but she could not shove the receipt in the customer’s ear if they refused

repeatedly.” DEED counters that Arneson “intentionally failed to issue a receipt, or provide

any documentation, for a cash deposit” and “did not always keep her office locked.”

We reject Arneson’s argument that substantial evidence does not support the ULJ’s

negligence determination. First, Arneson acknowledged in her testimony that St. Cloud

2
Because the statutory standard for employment misconduct is satisfied with negligent
conduct, we need not consider whether substantial evidence supports the ULJ’s finding of
intentional conduct in their reconsideration decision.

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Auto usually documents receipt of cash deposits on “an actual purchase agreement that was

signed” by a customer, but no purchase agreement was prepared for the missing $5,000.

Second, the ULJ implicitly rejected Arneson’s testimony that she “did write out” a receipt

for the missing $5,000 as not credible and found that Arneson did not document receipt of

the missing $5,000. We defer to the ULJ’s credibility determination. Ward, 973 N.W.2d

at 651. Third, Arneson testified that she kept deposits received—including the missing

$5,000—in her office and knew that St. Cloud Auto expected her to keep her office locked

when she was not in it. Yet Arneson admitted that she only locked her office at the end of

the workday and not when she “was at the store” or “just ran to the gas station or

something.” Because Arneson’s testimony shows that she failed “to use the care that a

reasonable person would use in the same or similar circumstances,” we conclude that

substantial evidence supports the ULJ’s determination that Arneson’s conduct was at least

negligent and a serious violation of St. Cloud Auto’s expectations. Dourney, 796 N.W.2d

at 540.

The Reasonableness of St. Cloud Auto’s Expectations

“An employer has a right to expect that its employees will abide by reasonable

instructions and directions.” Vargas v. Nw. Area Found., 673 N.W.2d 200, 206 (Minn.

App. 2004), rev. denied (Minn. Mar. 30, 2004). What qualifies as a “reasonable” policy or

request “will vary according to the circumstances of each case.” Id. (quotation omitted).

Arneson appears to argue that St. Cloud Auto unreasonably expected her to

document deposits and to lock her office when she was absent. Arneson maintains that

St. Cloud Auto held her “to the highest standard of care for taking care of the money

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without even providing a safe or receipt book or the like.” DEED counters that St. Cloud

Auto “had the right to reasonably expect Arneson to follow its cash-handling procedures”

and that “[c]reating documentation for cash received by a car dealership is essential to the

employer’s accounting.” 3

In McDonald v. PDQ, McDonald was discharged “for violating a company policy

requiring cashiers to ring up purchases immediately.” 341 N.W.2d 892, 893 (Minn. App.

1984). When McDonald disputed his ineligibility for unemployment benefits, he was found

“guilty of misconduct disqualifying him from benefits.” Id. On review, this court noted that

McDonald “knew about the policy” because it was included in his orientation materials

and emphasized by management at an employee meeting less than a month before

McDonald’s violation. Id. This court affirmed the employment-misconduct determination,

concluding that McDonald’s conduct showed a “substantial disregard” for the employer’s

interest because an “employer has the right to expect scrupulous adherence to procedure

by employees handling the employer’s money.” Id.

Here, the general manager testified that the Brainerd branch’s procedure for

handling cash deposits was to “collect the cash” from the customer, count it, place it “in a

sealed envelope,” “sign over the seal,” and send it “to the St. Cloud office in a locked bag.”

And the branch “[u]sually” gave the customer “a receipt of cash received.” The locked

bank envelope and its key were kept in the finance manager’s office, and the general

manager agreed that the office was “supposed to be kept locked when the finance manager

3
DEED does not address whether it was reasonable for St. Cloud Auto to expect Arneson
to lock her office when she was absent.

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[was] not in it.” The general manager explained that it was “common practice” to prepare

a receipt for a cash deposit and to give it to the customer. Similarly to our reasoning in

McDonald, we conclude that St. Cloud Auto had reasonable policies on preparing written

receipts and locking Arneson’s office. St. Cloud Auto “has the right to expect scrupulous

adherence to a procedure by employees handling” its money. See id.

Arneson makes four other arguments challenging the reasonableness of St. Cloud

Auto’s expectations. First, Arneson argues that St. Cloud Auto’s receipt policy was

unreasonable because she was a finance manager—not a formal “controller”—and “had no

college degree” or “accounting license.” But Arneson was the finance manager for the

Brainerd branch and her responsibilities included properly handling cash deposits. Arneson

also testified that, when she was previously employed as a finance manager at another

dealership, she would write a receipt for “every single deposit by hand” in a receipt book

and “would give the customer a copy.” Thus, St. Cloud Auto’s expectation that Arneson

would prepare receipts for deposits was not unreasonable given her role and experience.

Second, Arneson argues that there was “no foundation laid in the recorded

record . . . for a formal policy regarding receipts” for cash deposits. But a “formal” or

written policy is not necessary to establish an employer’s reasonable expectations. Brown

v. Nat’l Am. Univ., 686 N.W.2d 329, 333 (Minn. App. 2004), rev. denied (Minn. Nov. 16,

2004). Here, the testimony was undisputed about St. Cloud Auto’s policies for

documenting receipt of deposits and locking Arneson’s office.

Third, Arneson contends that, if “she continued to demand that proper paperwork

be completed” for the pickup customer, then “a valuable sale would be lost, and the

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customer would take his money and leave.” Arneson points to no evidence or authority to

support this contention and does not explain how her drafting a receipt would require the

pickup customer to do any paperwork. Therefore, we reject this argument. See State Dep’t

of Labor & Indus. by Special Comp. Fund v. Wintz Parcel Drivers, Inc., 558 N.W.2d 480,

480 (Minn. 1997) (stating that appellate courts may decline to reach issues that are

inadequately briefed).

Fourth, Arneson maintains that her “failure to provide a receipt to the customer did

not contribute to the disappearance of the deposit (or the fact it was not timely discovered).”

The record shows, however, that St. Cloud Auto did not discharge Arneson because the

cash deposit was missing. Rather, she was discharged for not documenting the deposit and

for leaving her office unlocked and unattended.

In sum, we conclude that substantial evidence supports the ULJ’s determination that

Arneson’s negligent conduct was a serious violation of the standard of behavior St. Cloud

Auto reasonably expected.

B. Statutory Exceptions

There are ten statutory exceptions to the definition of employment misconduct.

Minn. Stat. § 268.095, subd. 6(b) (2024). In her request for reconsideration, Arneson

asserted four exceptions and argued that she was eligible for unemployment benefits

notwithstanding her alleged violations of St. Cloud Auto’s reasonable expectations.

Arneson argued that her conduct was (1) “a consequence of [her] inefficiency or

inadvertence”; (2) “simple unsatisfactory conduct”; (3) “conduct an average reasonable

12
employee would have engaged in under the circumstances”; and (4) the result of “good

faith errors in judgment if judgment was required.” Id., subd. 6(b)(2)-(4), (6).

On reconsideration, the ULJ rejected the statutory exceptions Arneson asserted, for

three reasons. The ULJ found that (1) “Arneson did not forget to document the deposit” so

there was no inefficiency or inadvertence; (2) “[n]o judgment is needed for an experienced

finance manager to know” that documentation was needed for the deposit; and (3) an

“average, reasonable finance manager at a car dealership would have documented receipt

of the deposit.” As discussed above, substantial evidence supports each of the ULJ’s

findings.

Arneson reasserts the same four exceptions on appeal. DEED responds that, among

other things, Arneson did not make a good-faith error in judgment because she “did not

have a choice to make in whether or not to issue receipts for payments made.”

In her brief to this court, Arneson offers no analysis or authority to support her

claims that these exceptions apply to her situation. An appellant waives an assignment of

error in a brief based on “mere assertion” and not supported by argument or authority unless

prejudicial error is obvious on mere inspection. Schoepke v. Alexander Smith & Sons

Carpet Co., 187 N.W.2d 133, 135 (Minn. 1971). Because prejudicial error is not obvious

upon mere inspection and substantial evidence supports the ULJ’s findings on these

exceptions, Arneson is not entitled to relief based on these alleged errors.

C. Single Incident

A single incident may be sufficient to establish misconduct. Wilson v. Mortg. Res.

Ctr., Inc., 888 N.W.2d 452, 463 (Minn. 2016). But when an applicant is discharged for

13
conduct that “involved only a single incident, that is an important fact that must be

considered in deciding whether the conduct rises to the level of employment misconduct.”

Minn. Stat. § 268.095, subd. 6(d) (2024).

On reconsideration, the ULJ recognized that “even a single incident can amount to

employment misconduct if it is a serious violation of a reasonable expectation” and

concluded that “[m]ishandling a $5,000 cash deposit is serious.” And in its initial order,

the ULJ found that the record evidence supported a finding that, in a separate prior incident,

Arneson signed a customer’s name to a document without authority to do so. The ULJ,

therefore, found a second incident. 4

We need not consider the ULJ’s findings on the second incident. Even if we assume,

without deciding, that Arneson’s discharge was based solely on her conduct related to the

missing $5,000 cash deposit and that this was a single incident—notwithstanding that

Arneson regularly violated her employer’s policy that she keep her office door locked when

she was not present—we nonetheless conclude that she engaged in employment

misconduct. The ULJ concluded that the single incident involving the missing $5,000 cash

deposit was sufficient. We agree that Arneson’s misconduct related to the missing $5,000

4
The ULJ determined that Arneson was not discharged for a single incident because “the
employer’s witnesses testified about a prior incident that was also part of the reason for the
discharge.” Arneson “had signed a customer’s name to a document that could not be signed
by anyone other than the customer and without a notarized power of attorney form on file.”
On appeal, Arneson argues that the unauthorized-signature incident was “frivolous” and
should not be “considered a second incident” because it was “forgotten by the employer”
before she was discharged. DEED counters that “Arneson was not discharged for the cash
handling incident alone, but also because she forged a customer’s signature on a
document.” For the reasons stated below, we need not resolve this dispute.

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cash deposit was a serious violation and amounted to employment misconduct. See Wilson,

888 N.W.2d at 463 (concluding that a single incident of misrepresentation was

employment misconduct because it was a “serious violation”).

D. Age Discrimination

On appeal, Arneson argues for the first time that the evidence shows that the pickup

customer and salesman “set up [Arneson] for an alleged theft of the money to take her job.”

She contends that St. Cloud Auto identified two incidents as “a pretext” to discharge

Arneson and replace her with “a much younger salesman.” Arneson cites, among other

things, a text message from the general manager explaining that Arneson was discharged

because he “was told we are moving [in] a different direction and to find a replacement.”

DEED argues that Arneson “forfeited this argument” because she did not raise it in

proceedings before the ULJ.

Appellate courts generally decline to consider issues not argued to and considered

by a ULJ. Peterson v. Ne. Bank-Minneapolis, 805 N.W.2d 878, 883 (Minn. App. 2011)

(citing Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988)). Because Arneson did not assert

age discrimination at the hearing or in her request for reconsideration, we decline to

consider the issue on appeal.

Affirmed.

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