Case Title: Wyoming Dept. of Employment, Div. of Unemployment Ins. v. Banks,

Citation: 

Docket Number: 92-260

State: wyoming

Court: Wyoming Supreme Court

Date: 1993-06-22T00:00:00Z

Document:
Wyoming Dept. of Employment, Div. of Unemployment Ins. v. Banks,1993 WY 87854 P.2d 709Case Number: 92-260Decided: 06/22/1993Supreme Court of Wyoming
WYOMING 
DEPARTMENT OF EMPLOYMENT, DIVISION OF UNEMPLOYMENT INSURANCE, 

Appellant 
(Respondent),

v. 

Bernice 
M. BANKS,

 Appellee (Petitioner).

 

Karen 
A. Byrne, Cheyenne, for appellant.

Mark 
W. Harris of Harris, Morton and Cown, P.C., Evanston, for 
appellee.

Before 
MACY, C.J., and THOMAS, CARDINE, GOLDEN and TAYLOR, 
JJ.

Thomas, 
J., 
filed dissenting opinion.

GOLDEN, 
Justice.

[¶1]      The Wyoming 
Department of Employment, Division of Unemployment Insurance (agency) appeals 
the district court's decision which reversed the decision of the Unemployment 
Insurance Commission (UIC) denying the request of Bernice M. Banks (claimant) 
for waiver of repayment of unemployment benefits which the agency had determined 
it had overpaid the claimant.

[¶2]      We reverse the 
district court's decision and remand with directions that the district court 
reinstate UIC's decision.

[¶3]      The agency 
presented this issue:

1. 
Whether the Wyoming Department of Employment, Division of Unemployment Insurance 
properly determined that recovery of benefits overpaid to Claimant Bernice M. 
Banks should not be waived pursuant to W.S. 27-3-409(b).

[¶4]      The claimant 
rephrased the issue in this way:

I. 
Did the Wyoming Department of Employment, Division of Unemployment Insurance 
properly determine that claimant Bernice M. Banks was not entitled to a waiver 
of alleged overpayment of unemployment benefits? 

A. 
Was the action of the Department in denying claimant a prompt hearing concerning 
her request to waive the alleged overpayment unlawful and unreasonable or 
without observance of procedure required by laws of the State of 
Wyoming?

B. 
Was the action of the Department contrary to claimant's rights under the Wyoming 
Employment Security law?

C. 
Was the action of the Department arbitrary and capricious and/or supported by 
substantial evidence?

FACTS

[¶5]      Southwestern 
Wyoming Alcohol Rehabilitation Association (SWARA) in Rock Springs, Wyoming, 
employed claimant full-time as a prevention specialist. The dates of her 
employment were January, 1987, until March 18, 1988. On March 7, 1988, while 
employed by SWARA, claimant took a part-time job with Lynpaj, d/b/a the Kasbah. 
According to claimant, she quit her SWARA employment "to return to school and * 
* * [due to] the emotional turmoil that was in that office." She filed a claim 
for unemployment compensation benefits. On her claim form she described the 
primary reason for her quitting SWARA as: "Reached point I could not handle 
related pressure of this position." She was awarded and began receiving 
benefits. She quit her part-time job with Lynpaj on April 30, 1988.

[¶6]      In the summer of 
1988, the agency conducted a quality control audit during which it randomly 
selected the claimant for an interview to determine whether her benefits met all 
legal requirements. From the audit, the agency determined that claimant was 
disqualified from receiving benefits because she had quit her SWARA job for 
personal reasons. On September 13, 1988, the agency mailed a notice of 
disqualification to claimant informing her that she had ten days in which to 
file a protest of the disqualification decision. She did not file a protest to 
that decision.

[¶7]      On September 16, 
1988, the agency mailed an overpayment determination to claimant informing her 
that she had received an overpayment of unemployment insurance benefits; that 
the agency could waive recovery of this overpayment if she could establish that 
recovery was against equity and good conscience; and that she must within ten 
days provide the agency with her written reason that recovery was unwarranted. 
Apparently, the agency did not mail the overpayment determination to claimant's 
correct address until September 26, 1988. On October 6, 1988, claimant mailed a 
letter to the agency in which she requested a hearing to seek the agency's 
waiver of the overpayment recovery.

[¶8]      Over the next 
several years, the agency held several proceedings in which it was determined 
that claimant's request for a waiver hearing was untimely made. Ultimately, the 
agency reversed this determination and conducted the hearing from which this 
appeal arises. In the meantime, however, the agency had filed suit against the 
claimant for the recovery of the overpayment in the sum of $2,754 and obtained a 
default judgment against the claimant in that amount. She did not appeal that 
judgment.

[¶9]      On March 2, 1992, 
the agency's chief appeals examiner held a hearing of claimant's appeal of the 
deputy appeals examiner's earlier decision denying her request for waiver of 
overpayment recovery. The chief appeals examiner affirmed the waiver denial. As 
of that date, the agency had recovered $1,900 of the $2,754 judgment through 
garnishment of claimant's wages.

[¶10]   On April 21, 1992, UIC considered 
claimant's appeal of the chief appeals examiner's decision. UIC affirmed that 
decision and made additional findings and conclusions. In particular, UIC held 
that claimant's presentation had failed to meet the criteria for waiver of 
overpayment set forth in the agency's regulations adopted to implement Wyo. 
Stat. § 27-3-409(b) (1991) relating to waiver.

[¶11]   Claimant filed her petition for 
review of UIC's decision to the district court; the court reversed UIC's 
decision. The agency lodged this appeal. We are informed by the parties that to 
date only $100 of the $2,754 overpayment remains unpaid. 

DISCUSSION

[¶12]   We proceed with our review of UIC's 
action as if the agency's petition for review had come directly from UIC, giving 
no special deference to the district court's appellate decision. Union Pacific 
R.R. Co. v. Wyoming State Bd. of Equalization, 802 P.2d 856 (Wyo. 1990); 
Southeast Wyoming Rehabilitation Center v. Employment Sec. Comm'n, 781 P.2d 918 
(Wyo. 1989). Our standard of review is as follows:

(c) 
To the extent necessary to make a decision and when presented, the reviewing 
court shall decide all relevant questions of law, interpret constitutional and 
statutory provisions, and determine the meaning or applicability of the terms of 
an agency action. In making the following determinations, the court shall review 
the whole record or those parts of it cited by a party and due account shall be 
taken of the rule of prejudicial error. The reviewing court shall:

(i) 
Compel agency action unlawfully withheld or unreasonably delayed; 
and

(ii) 
Hold unlawful and set aside agency action, findings and conclusions found to 
be:

(A) 
Arbitrary, capricious, an abuse of discretion or otherwise not in accordance 
with law;

(B) 
Contrary to constitutional right, power, privilege or immunity;

(C) 
In excess of statutory jurisdiction, authority or limitations or lacking 
statutory right;

(D) 
Without observance of procedure required by law; or

(E) 
Unsupported by substantial evidence in a case reviewed on the record of an 
agency hearing provided by statute.

WYO. 
STAT. § 16-3-114(c) (1990).

[¶13]   With respect to the agency's waiver 
of recovery of overpayment of benefits, the legislature has 
provided:

(b) 
An individual receiving benefits under this act to which he is not entitled 
shall be liable for and repay any such benefit. Repayment of the benefits shall 
be had either by recoupment, recovery by civil action or both:

(i) 
The department in its discretion, may recoup the benefit amount liable to be 
repaid by offsetting, without civil action, against future benefits payable to 
the individual under this act within three (3) years from the date of an 
overpayment determination. There shall be no recoupment if an individual is 
without fault in receiving the benefits and it defeats the purpose of this act 
or is against equity and good conscience as considered by the department in 
accordance with regulations of the commission;

(ii) 
The department may also recover overpaid benefits from an individual by civil 
action brought in the name of the department.

WYO. 
STAT. § 27-3-409(b)(i), (ii) (1991).

[¶14]   To implement these statutory 
provisions relating to the agency's waiver decision, the agency has adopted 
regulations which read as follows:

Section 
1. Fault Criteria. In determining whether a claimant is without fault for 
purposes of deciding whether to waive recovery of overpaid benefits under W.S. § 
27-3-409, the Division shall consider the following criteria:

(a) 
Whether the claimant made an incorrect statement of facts of a material nature 
in order to collect benefits; or

(b) 
Whether the claimant knew or should have known that the statement he gave the 
Division was incorrect; or

(c) 
Whether the claimant failed to disclose or caused another person to fail to 
disclose a material fact in connection with a claim for benefits; or

(d) 
Whether the claimant knew or should have known the fact not disclosed was 
material; or

(e) 
Whether the claimant knew or should have known he was not entitled to benefits; 
or

(f) 
Whether the overpayment resulted directly or indirectly, in whole or part, from 
some other erroneous act or omission of the claimant, which he knew or should 
have known was wrong; or

(g) 
Any other relevant factor. 

Section 
2. Equity and Good Conscience and Defeats the Purpose of the Act 
Criteria. In determining whether recovery of an overpayment defeats the 
purpose of the Employment Security Law or is against equity and good conscience 
for the purpose of deciding whether the overpayment of benefits shall be waived, 
the Division shall consider the following criteria:

(a) 
The extent to which recovery of the overpayment would create an extreme 
financial hardship on the claimant. Extreme financial hardship as used herein 
means the claimant would be unable to provide himself or his immediate family 
with minimal necessities of food, clothing, medicine, and shelter as a result of 
the Division recovering the overpayment. Extreme and lasting financial hardship 
shall be extreme as described above and lasting means that the financial 
hardship may be expected to endure for more than 120 days.

(b) 
The extent to which an agent of the Division made an error which contributed to 
causing the overpayment of benefits. However, such an error shall not include 
making a decision to pay benefits which was reversed through the appeals 
process.

(c) 
Any other relevant factor, provided the claimant is without fault.

Div. 
Unemploy. Ins., Dep't of Employ., Rules and Regulations, ch. XXXII, §§ 1, 2 
(1990).

[¶15]   The claimant bears the burden of 
proof in establishing grounds for a waiver. See Casper Iron & Metal Inc. v. 
Unemployment Ins. Comm'n, 845 P.2d 387 (Wyo. 1993) and In re Application of 
Chicago & North Western Ry., 79 Wyo. 343, 334 P.2d 519 (1959). At the 
hearing claimant stated that she wished the agency would waive recovery of the 
overpayment

because 
I don't believe that I in any way defaulted or frauded the Unemployment Security 
Commission. I answered all the questions. I played the game. I gave you all the 
information you asked for, and I think you are denying me my benefit from SWARA 
based on part-time work at the Casbah.

[¶16]   Claimant introduced no evidence as 
to whether the agency's recovery of the overpayment would create an extreme 
financial hardship on her. She introduced no evidence of the type referred to in 
the agency's regulations concerning waiver criteria. Instead of addressing these 
criteria, claimant presented argument related to the agency's disqualification 
decision and the subsequent overpayment determination. It must be remembered, 
however, that she had failed to protest timely that disqualification decision. 
She had failed to answer the agency's civil action seeking recovery of the 
overpayment. She had allowed a default judgment to be entered against her. She 
had appealed neither the disqualification decision nor the default judgment. 
Those matters were not properly the subject of the hearing; waiver of the 
recovery of the overpayment was.

[¶17]   Having carefully reviewed UIC's 
decision according to our standard of review, and finding no error in that 
decision, we affirm. We reverse the district court's decision and order 
reinstatement of UIC's decision.

THOMAS, 
J., filed a dissenting opinion.

THOMAS, 
Justice, dissenting.

[¶18]   If the case is to be decided on its 
merits, I am satisfied the majority correctly determined to reverse the decision 
of the trial court and order reinstatement of the decision of the Unemployment 
Insurance Commission (UIC). As to the merits, however, I am satisfied the court 
has overlooked action in excess of the jurisdiction of the district court. The 
findings of the court incorporated in the order, review of which was sought, 
together with its conclusions of law, admittedly accomplished by counsel for the 
petitioner, focused upon procedural errors in the proceedings before the 
commission. The ruling, however, affords substantive relief in the form of 
granting a request for waiver of an overpayment, a matter committed by statute 
to the discretion of the commission. 

[¶19]   The scope of judicial review is set 
forth in WYO. STAT. § 16-3-114(c) (1990), as follows:

(c) 
To the extent necessary to make a decision and when presented, the reviewing 
court shall decide all relevant questions of law, interpret constitutional and 
statutory provisions, and determine the meaning or applicability of the terms of 
an agency action. In making the following determinations, the court shall review 
the whole record or those parts of it cited by a party and due account shall be 
taken of the rule of prejudicial error. The reviewing court shall:

(i) 
Compel agency action unlawfully withheld or unreasonably delayed; 
and

(ii) 
Hold unlawful and set aside agency action, findings and conclusions found to 
be:

(A) 
Arbitrary, capricious, an abuse of discretion or otherwise not in accordance 
with law;

(B) 
Contrary to constitutional right, power, privilege or immunity;

(C) 
In excess of statutory jurisdiction, authority or limitations or lacking 
statutory right;

(D) 
Without observance of procedure required by law; or

(E) 
Unsupported by substantial evidence in a case reviewed on the record of an 
agency hearing provided by statute.

In 
State ex rel. Wyoming Workers' Compensation Div. v. Hollister, 794 P.2d 886, 889 
(Wyo. 1990), we said:

The 
inhibition upon substitution of the court's judgment for that of the agency has 
to extend to the affirmative relief afforded by the district court in this 
instance. It follows that the order of the district court awarding total 
disability benefits must be reversed, and the district court appropriately 
should remand the case to the office of hearing examiners after setting aside 
its determination on the ground that it is not in accordance with 
law.

A 
failure to limit the review authority appropriately as required in Hollister 
amounts to action in excess of the statutory jurisdiction of the court. 
Furthermore, the invasion of the prerogatives of the executive branch of 
government potentially violates WYO.CONST. Art. 2, § 1.1 Such an invasion could only be 
accomplished in violation of a constitutional inhibition upon the jurisdiction 
of the judicial department of government.

[¶20]   I do not agree that the case should 
have been decided on its merits. I would hold that the appeal should be 
dismissed because the issue is moot. The effect of the decision of the trial 
court was to reverse the decision of the UIC that recovery of the benefits paid 
to Banks had not been waived. In the meantime, it appears that the UIC had 
recovered a default judgment against Banks, and the vast majority of the 
overpayment already had been collected by garnisheeing her wages in her new job. 
We have a long history of steadfastly refusing to review a case in which the 
issue is moot. Davidson v. Sherman, 848 P.2d 1341 (Wyo. 1993); Mari v. Rawlins 
Nat'l Bank, 794 P.2d 85 (Wyo. 1990); Foster v. Wicklund, 778 P.2d 118 (Wyo. 
1989); Oukrop v. Wyoming Bd. of Dental Examiners, 767 P.2d 1390 (Wyo. 1989); 
Graham v. Wyoming Peace Officer Standards and Training Comm'n, 737 P.2d 1060 
(Wyo. 1987); In Interest of AJ, 736 P.2d 721 (Wyo. 1987); Gulf Oil Corp. v. 
Wyoming Oil and Gas Conservation Comm'n, 693 P.2d 227 (Wyo. 1985); Walker v. Bd. 
of County Comm'rs, Albany County, 644 P.2d 772 (Wyo. 1982); Northern Utilities, 
Inc. v. Pub. Serv. Comm'n of Wyoming, 620 P.2d 139 (Wyo. 1980); Northern 
Utilities, Inc. v. Pub. Serv. Comm'n of Wyoming, 617 P.2d 1079 (Wyo. 1980); 
Miller v. Wallace, 430 P.2d 335 (Wyo. 1967); Belonden v. State ex rel. Leimback, 
379 P.2d 828 (Wyo. 1963); Cheever v. Warren, 70 Wyo. 296, 249 P.2d 163 (1952); 
House v. Wyoming Highway Dep't, 66 Wyo. 1, 203 P.2d 962 (1949); In re Welch, 64 
Wyo. 49, 184 P.2d 593 (1947). In light of the fact of a judgment, which has 
become final and has been substantially collected, it makes little sense to 
issue an advisory opinion with respect to the propriety of the determination 
that the right to recover the benefits should not be waived.

[¶21]   I appreciate a concern on the part 
of the majority that dismissal leaves the decision of the district court in 
effect, and there would follow an effort to set aside the default judgment and 
recover from the State the amounts of overpayment successfully collected 
pursuant to that judgment. That effort would have to be pursued under the 
provisions of WYO.R.CIV.P. 60(b). WYO.R.CIV.P. 55(c). A motion pursued under the 
first three reasons set forth in WYO.R.CIV.P. 60(b) must be made within a year 
after the judgment is entered and, in all other instances, the motion must be 
made within a reasonable time. Surely, a motion for relief from a judgment that 
is not made before it is substantially collected by garnishment pursuant to the 
judgment is not made within a reasonable time. Furthermore, in contemplating the 
exercise of discretion by the trial court, the provisions of WYO. STAT. § 
1-16-401 (1988) must be taken into account. An interesting debate could be 
structured as to whether that statute is substantive or procedural. If the 
latter, it would perforce yield to the court rule. If it is perceived as 
substantive, however, then it would limit the subject matter jurisdiction of the 
trial court, and none of the statutory grounds for vacation or modification of 
the judgment beyond the term at which it was made apply to this case except for 
those that are limited to motions made within a year by Rule 60(b). Under the 
circumstances, any action to vacate the default judgment or afford other relief 
with respect to it would have to be an abuse of discretion.

[¶22]   This appeal should have been 
dismissed as moot.

FOOTNOTES

1 
WYO.CONST. Art. 2, § 1 provides:

The 
powers of the government of this state are divided into three distinct 
departments: The legislative, executive and judicial, and no person or 
collection of persons charged with the exercise of powers properly belonging to 
one of these departments shall exercise any powers properly belonging to either 
of the others, except as in this constitution expressly directed or 
permitted.