#30306-r-PJD

2024 S.D. 31

IN THE SUPREME COURT

OF THE

STATE OF SOUTH DAKOTA

* * * *

MELISSA K. PALMER, Appellant,

v.

SOUTH DAKOTA DEPARTMENT

OF LABOR AND REGULATION,

REEMPLOYMENT ASSISTANCE

DIVISION, Appellee.

* * * *

APPEAL FROM THE CIRCUIT COURT OF

THE SECOND JUDICIAL CIRCUIT

MINNEHAHA COUNTY, SOUTH DAKOTA

* * * *

THE HONORABLE ROBIN J. HOUWMAN

Judge

* * * *

ERIC C. SCHULTE of

Davenport, Evans, Hurwitz

 & Smith, LLP

Sioux Falls, South Dakota Attorneys for appellant.

SETH A. LOPOUR

COURTNEY S. CHAPMAN of

Woods, Fuller, Schultz

 & Smith, P.C.

Sioux Falls, South Dakota Attorneys for appellee.

* * * *

CONSIDERED ON BRIEFS

NOVEMBER 7, 2023

OPINION FILED 06/05/24
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DEVANEY, Justice

[¶1.] An administrative law judge (ALJ) determined that Melissa Palmer 

willfully misrepresented facts to receive pandemic unemployment assistance 

benefits and ordered that she repay the benefits and be assessed a mandatory 

penalty under SDCL 61-6-39. The circuit court affirmed the ALJ’s decision, and on 

appeal to this Court, Palmer asserts that the ALJ erred in finding that she willfully 

misrepresented facts to obtain those benefits and in concluding that she was 

therefore subject to a penalty. We reverse and remand.

Factual and Procedural Background

[¶2.] When the COVID-19 pandemic began, Palmer was working two jobs—

one as a self-employed sign-language interpreter and another as a retail 

salesperson at Woofs and Waves. Although the pandemic did not affect Palmer’s 

employment or hours of work at Woofs and Waves, it caused her income as a signlanguage interpreter to disappear completely. On April 17, 2020, she completed an 

online application for Pandemic Unemployment Assistance (PUA) through the 

South Dakota Department of Labor and Regulation, Reemployment Assistance 

Division (Department). Under the section prompting her to include “Employer 

Information,” she listed Woofs and Waves as an employer. She answered, “Yes,” to 

the question, “Still Working for This Employer?” and listed her hourly wage and the 

hours she worked the previous week. Palmer also listed her self-employment as a 

sign-language interpreter under “Employer Information” and disclosed that she is 

no longer receiving income from that employment because the education settings 

where she had been providing those services closed.
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[¶3.] Under the “Eligibility” section, Palmer answered “On Call” in response 

to a question asking how much she worked in the last 18 months. Under the 

“Availability” section, she answered, “Yes,” to the question whether she is selfemployed. Thereafter, the application asked her multiple questions related to her 

self-employment, including questions about how many hours she worked and how 

many hours she would be willing to work each week. Within this same section, she 

answered, “Yes,” to the question, “Do you understand you need to report hours and 

any earnings each week that you apply for unemployment benefits the week in 

which the work was done regardless of when (if any) payment was received?”

[¶4.] In a separate section, Palmer reported her wages for 2019 as $5,800 

from being self-employed and $19,000 from Woofs and Waves. The application also 

contained a section specific to her eligibility for PUA and asked her to select the 

type of employment she lost, to which she responded that she “was a contract 

worker.” It then asked her to “[c]heck the COVID-19 reason(s) as listed . . . that 

best describes your situation.” Palmer selected the reason indicating a significant 

reduction in her customary and usual services related to her self-employment. She 

answered, “Yes,” in response to a question whether “[i]f not for the COVID 19 

pandemic, are you otherwise able to work and available for work?” Following this 

question, the application included the following statement:

Intentional misrepresentation is FRAUD. Attempting to claim 

or collect payments by entering false information could mean a 

loss of benefits, fines, imprisonment and the inability to receive 

future benefits. Please note the information you provide will be

verified through matching programs and will be further 

investigated.

Palmer then affirmatively acknowledged the following statement:
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I acknowledge I have read and understand the questions asked 

above. I certify that I am otherwise able and available to work, 

except I am unemployed, partially unemployed, or unable or 

unavailable to work because of the listed COVID-19 reason(s) I 

choose above. I understand that I am subject to administrative 

penalties, including penalties for perjury, or legal action if it is 

determined that I withheld or provided false information to 

obtain assistance payments to which I am not entitled.

[¶5.] On April 30, 2020, the Department issued Palmer written notice that 

she is “monetarily eligible for a weekly benefit of $172” effective March 8, 2020. The 

Department also sent Palmer a handbook detailing information about her “rights 

and responsibilities while filing a claim for reemployment assistance benefits.” The 

information in the handbook included a statement that Palmer was required to 

“report all hours worked (to the nearest tenth of an hour) regardless of 

your employer’s work week or pay period, including self-employment (after 

expenses), even if you have not been paid.” (Bold in original.) In a section on a 

deduction of benefits when one works part of the week, the handbook contained two 

subsections: “Can I work part of the week and still be eligible for benefits?”; and 

“What if I am self-employed or working on a commission basis?” (Bold omitted; 

italics in original.) Under the first subsection, the handbook provided:

You may be eligible for benefits if you continue to work. In order 

to be eligible for partial benefits you must report your hours and 

earnings for the calendar week which you are filing for and 

make an active search for work. Earnings will reduce your 

benefits. Seventy-five percent of earnings over $25 will be 

deducted from your weekly amount.

• You will not be eligible for benefits if your gross 

earnings are equal to or more than your weekly benefit 

amount.

• You will not be eligible for benefits if you worked 40 

hours or more, regardless of the amount of earnings.
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(Bold in original.) The second subsection regarding those that are self-employed 

provided, in part, that: “You must accurately report any hours and earnings (after 

reasonable expenses) from self-employment.”

[¶6.] The handbook further provided: “Failure to correctly report your 

hours and earnings may result in an overpayment and a penalty. Your 

reported work and earnings are verified with your employer.” (Bold and 

italics in original.) It also contained a section titled, “PENALTIES FOR 

MISREPRESENTATION (Fraud)” and stated that “[i]f you committed fraud to 

secure or increase benefits, a penalty of 50 percent of the amount of benefits 

obtained by fraud is applied for the first offense and a 100 percent penalty is 

applied for each subsequent offense. A four week administrative penalty shall be 

imposed for each week that an individual willfully or fraudulently misrepresents a 

fact to secure or increase benefits.”

[¶7.] In early May, the Department received Woofs and Waves’ completed 

“EMPLOYER’S NOTICE OF BENEFIT CLAIM.” In the box requesting that the 

employer circle one of three reasons the employee is no longer working (laid off, 

quit, fired), a representative from Woofs and Waves handwrote “still working.” 

Also, in the section asking the employer to explain the reason the employee is no 

longer working, Woofs and Waves wrote that “Melissa is still working for us.” 

Woofs and Waves identified that Palmer earns $11.20 per hour and worked 27 

hours the previous week.

[¶8.] For Palmer to continue to receive PUA benefits, she was required to 

submit weekly requests and meet all eligibility requirements. From May 9, 2020 to 
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August 15, 2020, Palmer completed online, weekly requests for PUA benefits. In 

these online submissions, she answered “No,” to the question, “Did you work during 

[the] week?” She also reported zero hours worked and zero earnings in all but three 

weeks. During the weeks ending May 30, August 8, and August 15, 2020, Palmer 

reported earnings over her $172 benefit amount and did not, therefore, receive PUA 

benefits for those weeks. In regard to all other weekly requests, Palmer received 

$172 in PUA benefits and, for some weeks, an additional $600 in federal pandemic 

unemployment compensation. According to the Department, Palmer received the 

$600 supplemental payment based on her eligibility for PUA benefits.

[¶9.] It is undisputed that during each of the weeks Palmer requested PUA 

benefits, she had worked at Woofs and Waves and was paid her hourly rate. It is 

also undisputed that her earnings at Woofs and Waves during each of the reporting 

weeks exceeded her $172 benefit amount and thus made her ineligible for PUA 

benefits. After obtaining information from Woofs and Waves documenting Palmer’s 

hours worked and earnings, the Department spoke with Palmer about her 

nondisclosure of her hours worked and earnings received. On May 27, 2021, the 

Department issued Palmer a written notice of overpayment, indicating that she 

must repay $8,664 in benefits. The notice identified that Palmer “failed to report 

[her] work/earnings” and was “not without fault[.]”

[¶10.] Palmer appealed the Department’s decision by submitting a letter to 

the Appeal Section of the Reemployment Assistance Division. In her letter, she 

stated that “[w]hen she filled out [her] application, [she] was completely 

transparent with [her] income.” She indicated that in her application she had listed 
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what she was making from Woofs and Waves and was nevertheless “accepted to 

receive unemployment.” She explained that she reported zero income in her weekly 

requests for assistance because she “assumed [she] didn’t need to list [her] income 

from [her] retail position since [she had] listed that in the application” and she “was 

not receiving any other income during this time.”

[¶11.] An administrative telephonic hearing was held on May 16, 2022. 

Palmer represented herself and it does not appear that an attorney appeared for the 

Department. Palmer and Jane Husman, a representative from the Department, 

testified during the hearing. The ALJ questioned both Husman and Palmer. 

During her testimony, Husman explained the details pertaining to Palmer’s initial 

application for benefits, the Department’s determination that she was eligible, the 

information (e.g., the handbook) the Department provided to Palmer, the 

submissions by Woofs and Waves, and the reason the Department subsequently 

determined that Palmer had not been eligible to receive the benefits previously paid 

to her.

[¶12.] Palmer testified that she recalled receiving and reading the handbook. 

She agreed that she had worked for an employer during the weeks she requested 

assistance and did not report those hours or earnings. However, she noted that she 

had reported her hours from Woofs and Waves on her application and testified that 

she knew her boss returned the form indicating that she is still working there. 

According to Palmer, “due to that, [her] assumption every week when [she] was 

applying for the benefits” was that “if [she] was either getting more work under 

[her] self-employment or if [she] was receiving any other work outside of [her] 
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reported income from Woofs and Waves that [she] initially reported in [her] 

application” she was required to report it. When the ALJ asked if she had any 

additional testimony she would like to be considered, Palmer stated,

I was not trying to falsify any reporting. I was trying only to 

receive assistance due to my loss of work for my selfemployment. . . .

[¶13.] After the hearing, the ALJ issued a written decision. The ALJ noted 

that when Palmer applied for PUA benefits, she reported her employment with

Woofs and Waves and indicated that she was still working for that employer. The 

ALJ also noted that Palmer had received the handbook and had read the 

informational materials provided to her. In the findings of fact, the ALJ found that 

Palmer “thought that since her benefit claim was for her loss of self-employment 

that she only needed to report her work and earnings through self-employment.”

[¶14.] The ALJ noted the applicable law, including that one is liable for 

repayment of benefits if the individual received benefits to which the individual was 

not legally entitled or for the amount received in the event of misrepresentation,

and that the imposition of a penalty is authorized when benefits are obtained by 

willful or fraudulent misrepresentation. The ALJ then found that Palmer “failed to 

properly report work and earnings” during the reporting period. Based on her 

earnings, the ALJ determined she was not eligible for the benefits she received and 

was thus overpaid in the amount of $8,664.

[¶15.] The ALJ further found that Palmer was at fault, explaining that she 

“was aware that she worked for an employer during the weeks ending May 9, 2020 

through August 1, 2020” and “knowingly reported inaccurate information to the 
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[Department] when filing her weekly requests for benefits for these weeks.” In the 

ALJ’s view, Palmer’s “actions demonstrate that she willfully misrepresented facts 

for each of these weeks.” As a result, the ALJ held that Palmer “is subject to a 26-

week administrative penalty” and remanded the matter for the determination of the 

amount of the penalty.

[¶16.] Palmer then obtained counsel and appealed the ALJ’s decision to the 

circuit court. After considering the parties’ submissions and hearing counsel’s 

arguments, the circuit court noted the ALJ’s finding that Palmer thought that she 

needed to report only her self-employment work and earnings. However, the court 

determined that “[t]his finding is not inconsistent with the end result” because “it is 

simply a finding based upon what Palmer believed.” The court affirmed the ALJ’s 

decision, concluding that “Palmer has not shown that [the ALJ’s] findings are 

clearly erroneous.”

[¶17.] Palmer appeals, asserting that the ALJ erred in finding that she 

willfully misrepresented facts to obtain PUA benefits and that she was at fault in 

causing the overpayment.

Standard of Review

[¶18.] SDCL 1-26-36 sets forth the applicable standard of review. Bracken v. 

S.D. Dep’t of Lab. and Reg., Reemployment Assistance Div., 2023 S.D. 22, ¶ 14, 991 

N.W.2d 89, 92. Under that statute, “[w]e examine agency findings in the same 

manner as the circuit court to decide whether they were clearly erroneous in light of 

all the evidence.” Pirmantgen v. Roberts Cnty., 2021 S.D. 5, ¶ 20, 954 N.W.2d 718, 

724 (alteration in original) (citation omitted). However, “[w]hen the issue is a 
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question of law, the decisions of the administrative agency and the circuit court are 

fully reviewable.” Id. (citation omitted).

Analysis and Decision

[¶19.] Palmer argues that a finding of willful or fraudulent misrepresentation 

under SDCL 61-6-39 requires evidence of an intent to deceive or other intentional 

conduct. Relying on this, she further argues that the ALJ erred in finding that she 

willfully misrepresented facts to obtain PUA benefits because, in her view, the 

evidence and ALJ’s findings establish that she “simply made a mistake” when she 

did not report her earnings from Woofs and Waves in her weekly requests for 

benefits. She notes that the Department approved her application for benefits even 

with her reported employment at Woofs and Waves and that the ALJ specifically 

found that she “thought that since her benefit claim was for her loss of selfemployment that she only needed to report her work and earnings through selfemployment.” She therefore requests reversal of the ALJ’s imposition of a penalty 

under SDCL 61-6-39.

[¶20.] The Department contends that “[t]he focus on appeal should be 

whether the record supports a finding that [Palmer] willfully misrepresented facts 

to secure benefits” because “willfully” and “fraudulently” are separated by the 

disjunctive “or” and the ALJ did “not utilize the fraud standard or even find that 

[Palmer] committed fraud.” (Emphasis added.) The Department notes that 

“willful” is not defined in Title 61. However, in the Department’s view, the 

language in SDCL 61-6-38—that “[i]t is unlawful for any person to make a false 

statement or representation knowing it to be false or knowingly fail to disclose a 
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material fact to obtain or increase any benefits or other payments under this title”—

gives “definitional structure” to the meaning of “willfully” in SDCL 61-6-39. 

(Emphasis added.) Then, using the language from SDCL 61-6-38, the Department 

argues that because Palmer was informed by the handbook that she needed to 

report all earnings and knew that she had income from Woofs and Waves during the 

reporting weeks but did not report it, the evidence supports the ALJ’s 

determination that Palmer willfully misrepresented facts.

What constitutes willful or fraudulent misrepresentation

[¶21.] Relevant here, SDCL 61-6-39 provides:

Any individual who has willfully or fraudulently misrepresented 

any fact to secure or increase benefits under this title shall be 

denied benefits for weeks of otherwise compensable 

unemployment, as defined in this chapter from and after the 

date such misrepresentation or fraudulent act is discovered in 

accordance with rules promulgated by the department pursuant 

to chapter 1-26.

(Emphasis added.)

[¶22.] We have not before examined what is required to prove “willful” or 

“fraudulent” misrepresentation under SDCL 61-6-39, and neither term is defined in 

Title 61. However, in an insurance case, we considered whether the insured’s 

misrepresentation was fraudulent. In examining this question, the Court noted 

that “to find fraud or false swearing . . . there must be ‘[a]n intent . . . and the 

general rule seems to be that the statement must be a willfully false one concerning 

some material matter, and made with the intent to deceive[.]’” Auto-Owners Ins. 

Co. v. Hansen Hous., Inc., 2000 S.D. 13, ¶ 36, 604 N.W.2d 504, 514 (first alteration 

in original) (second omission in original) (citation omitted). While this language 
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suggests that fraud, as it relates to misrepresentations, requires both a willful 

misrepresentation and the intent to deceive, we did not, in Auto-Owners, specifically 

define what constitutes a willfully false statement. However, we did clarify what is 

not willful. In particular, we noted that there could “be an honest misstatement of 

some fact, and while, as a general rule, fraud and false swearing will avoid the 

policy, mere mistakes in stating facts which do not in themselves annul its 

conditions and do not appear to be wilful misrepresentations will not defeat the 

action.” Id. (emphasis added) (citation omitted).

[¶23.] In a different context, more specifically directed at conduct that is 

considered willful, we stated that evidence of willful misconduct “entails a mental 

element.” Fischer v. City of Sioux Falls, 2018 S.D. 71, ¶ 9, 919 N.W.2d 211, 215 

(citation omitted) (addressing what constitutes reckless, willful, or wanton 

misconduct as opposed to merely negligent conduct). We further noted that “while 

‘[w]illful and wanton misconduct is not identical to intentional conduct,’ willful and 

wanton misconduct does ‘partake[ ] to some appreciable extent . . . of the nature of a 

deliberate and intentional wrong.’” Id. (alterations and omission in original) 

(emphasis added) (internal citation omitted).

[¶24.] This Court has further defined what constitutes willful misconduct in 

the context of punitive damages and workers’ compensation cases. We said that

willful or wanton conduct are acts “conceived in the spirit of mischief or criminal 

indifference to civil obligations.” Fluth v. Schoenfelder Const., Inc., 2018 S.D. 65, 

¶ 32, 917 N.W.2d 524, 534. And in workers’ compensation cases, we described 
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willful misconduct as “serious, deliberate, and intentional[.]” Holsher v. Valley 

Queen Cheese Factory, 2006 S.D. 35, ¶ 48, 713 N.W.2d 555, 567–68.

[¶25.] Notably, Black’s Law Dictionary similarly defines “willfulness” as: 

“[t]he quality, state, or condition of acting purposely or by design” and “[t]he 

voluntary, intentional violation or disregard of a known legal duty.” Black’s Law 

Dictionary (11th ed. 2019). It further notes that willfulness “involves more than 

just knowledge.” Id. Therefore, contrary to the Department’s suggestion, the 

knowing language in SDCL 61-6-38—a statute that imposes criminal penalties—

does not provide “definitional structure” to the meaning of willfully as used in 

SDCL 61-6-39. In fact, the Legislature did not incorporate SDCL 61-6-38 into 

SDCL 61-6-39, and these two statutes use different terminology, presumably by 

design.∗

[¶26.] Because the term “willful” is consistently regarded as requiring 

evidence of something done deliberately, we conclude that for a misrepresentation 

to be willful under SDCL 61-6-39, there must be evidence that the claimant 

intentionally misrepresented facts to obtain benefits and not simply that the 

claimant had knowledge or constructive knowledge of the falsity of the 

representation.

∗ In the criminal code, “knowingly” is defined as “knowledge that the facts exist 

which bring the act or omission within the provisions of any statute” but 

“[k]nowledge of the unlawfulness of such act or omission is not required[.]” 

SDCL 22-1-2(1)(c). In contrast, the terms “willfully” and “fraudulently” in 

SDCL 61-6-39 require a higher mens rea before civil penalties may be 

imposed.
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Whether the ALJ erred in finding Palmer willfully misrepresented facts

[¶27.] To determine whether the ALJ erred in concluding that there was a 

willful misrepresentation here, we must address the import of the ALJ’s finding 

that Palmer “read the informational materials but thought that since her benefit 

claim was for her loss of self-employment that she only needed to report her work 

and earnings through self-employment.” Palmer contends this finding is critical to 

this Court’s appellate review because a finding that Palmer believed she needed to 

report only her self-employment income equates to a finding that she did not act 

willfully when she did not disclose her wages from Woofs and Waves. The 

Department, in contrast, argues that it was not an actual finding by the ALJ on 

Palmer’s credibility or intent. Rather, in the Department’s view, the ALJ’s finding 

was “nothing more than” the ALJ “reciting [Palmer’s] testimony.” The Department 

further contends that to conclude otherwise would mean any claimant “need only 

testify that he or she believed something else and that is sufficient to escape the 

statutorily required administrative penalty under SDCL § 61-6-39.”

[¶28.] On the contrary, the mere fact a claimant testifies to a mistaken belief 

does not mean that the ALJ must accept the claimant’s testimony as true or 

credible. As this Court has explained, “[t]he reviewing agency ‘is not required to 

accept the testimony of the claimant and is free to choose between conflicting 

testimony.’” Johnson v. Albertson’s, 2000 S.D. 47, ¶ 26, 610 N.W.2d 449, 455 

(citation omitted). Moreover, although the ALJ could have written its findings as 

merely reciting the testimony presented, the ALJ did not use language in this 

finding that would suggest it was merely restating Palmer’s testimony or claims 
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(e.g., “Palmer testified . . .”; or “Palmer claims . . .”). And, importantly, the ALJ did 

not issue a correlating finding that Palmer’s statement as to her belief was not 

credible or that it was rejecting her testimony in any regard. Thus, the ALJ’s 

finding reflects its determination as to what Palmer believed.

[¶29.] Because the ALJ found that Palmer believed she only needed to report 

her income from self-employment, it was inconsistent and irreconcilable to 

thereafter conclude that Palmer willfully misrepresented facts to obtain PUA 

benefits. The ALJ in essence found that Palmer was operating under a mistaken 

view of her reporting requirements, and as the Court in Auto-Owners indicated, an 

honest misstatement of fact is not a willful misrepresentation. See 2000 S.D. 13, 

¶ 36, 604 N.W.2d at 514. Further, although the ALJ determined that Palmer 

“knowingly reported inaccurate information to the [Department] when filing her 

weekly requests for benefits for these weeks[,]” the ALJ based this statement on 

Palmer being “aware that she worked” for Woofs and Waves during the reporting 

period. (Emphasis added.) Yet, Palmer’s failure to report this income despite her 

knowledge that she worked during this timeframe does not evince that she acted 

willfully because the ALJ specifically found that Palmer thought that she only 

needed to report what she earned from self-employment.

[¶30.] Similarly, the ALJ’s finding that Palmer was informed via the 

Department’s handbook that her benefits would be reduced for a given week if she 

has earnings for working part of that week and she would not be eligible for benefits 

for weeks in which her gross earnings exceed her weekly benefit amount goes more 

to what type of constructive knowledge she may have had. It does not lead to a 
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determination that Palmer willfully misrepresented facts when, as the ALJ’s 

findings establish, she was operating on an honest mistake regarding what she 

needed to report.

[¶31.] While not controlling, an Arkansas court of appeals, in an analogous 

case, reversed a decision finding that the claimant willfully made a false statement 

or misrepresentation of material fact when filing her claim for benefits. McPherson 

v. Div. of Workforce Servs., 640 S.W.3d 653 (Ark. Ct. App. 2022). McPherson, a 

single mother who worked at a deli, told her manager that she would be unable to 

work her shift because her child’s school had closed due to the COVID-19 pandemic 

and there was no one else who could care for her child. McPherson testified that 

her manager told her, “Do not worry about it, don’t come back.” Id. at 655. Because 

he did not tell her that she was fired and she did not quit, she thought there might 

be a possibility that she could eventually go back to work. However, she did not 

ultimately return to work, and as a result applied for unemployment benefits. In 

her application, she checked the box stating that she had been “Laid Off/Lack of 

Work.” Id. A review board determined that she willfully made a false statement or 

misrepresentation of material fact to obtain benefits. Id.

[¶32.] On appeal, the court noted that the word “willful” is not defined in 

Arkansas’s unemployment compensation statutes and then concluded that “there 

must be an element of intent” and “an intentional or deliberate violation[.]” Id. at 

656. The court found that while McPherson’s representation in her application may 

not have been accurate, the circumstances surrounding her “separation are not 

altogether clear.” Id. The court also considered McPherson’s explanation that she 
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checked the “Laid Off/Lack of Work” box because “‘[she] wasn’t sure if [she] was 

technically fired or if there was a possibility of [her going] back to work.’” Id.

(alterations in original). Because the evidence did not support the reviewing board’s 

finding that McPherson willfully made a false statement or misrepresentation of 

material fact on her application, the court reversed the matter. Id.

[¶33.] So too here, although Palmer did not report her earnings at Woofs and 

Waves, the ALJ’s findings reflect that her failure to do so was a result of her belief

that the questions in the weekly requests for benefits pertained only to any selfemployment income she had earned. Notably, the Department does not assert that 

the ALJ’s finding as to Palmer’s belief is clearly erroneous. Even if it had, a review 

of the record and the ALJ’s additional findings support that Palmer reasonably 

believed that she did not need to report her earnings from Woofs and Waves. As the 

ALJ found, Palmer identified Woofs and Waves as a current employer in her 

application for PUA benefits. She also indicated that she was still working for 

Woofs and Waves; identified her weekly hours worked and wage; and stated that 

her hours there had not been reduced. Further, Palmer was aware that Woofs and 

Waves would be reporting her hours and wages to the Department. Finally, she 

requested PUA benefits only for her loss of income as a sign-language interpreter

and ultimately received notification from the Department that she was entitled to 

PUA benefits despite her reported earnings from Woofs and Waves.

[¶34.] Based on the record before the ALJ and the specific finding that 

Palmer thought she needed only to report her self-employment income, the ALJ 

clearly erred by finding that Palmer willfully misrepresented facts to obtain PUA 
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benefits and ordering her to pay a mandatory penalty under SDCL 61-6-39. We 

therefore reverse the circuit court’s rulings to the contrary.

Whether Palmer was at fault for the overpayment

[¶35.] Separate from her request that this Court find she need not pay a 

penalty to the Department, Palmer also requests, in her concluding paragraph, that 

we reverse the ALJ’s determination that she was “at fault” for causing the 

overpayment and remand the matter back to the ALJ “for a determination as to 

whether she is eligible for a waiver.” The Department’s brief on appeal contains one 

sentence in reply: “Because Claimant misrepresented facts to secure benefits, she is 

ineligible for a waiver and a remand for such would be improper.”

[¶36.] Although the ALJ issued a specific ruling that Palmer was at fault in 

receiving the overpayment of PUA benefits, we cannot ascertain whether this ruling 

was based solely on the ALJ’s determination that Palmer’s inaccurate reporting was 

done willfully. Having concluded that the ALJ erred in its determination that 

Palmer willfully misrepresented facts to obtain PUA benefits, we remand for the 

ALJ to either clarify or reconsider the “at fault” determination and whether Palmer 

is eligible for a waiver under the governing rules. See SDCL 61-6-42 (providing that 

the Department may waive the right of recovery of benefits under certain 

conditions, including that the claimant was not at fault, according to rules 

promulgated pursuant to chapter 1-26); ARSD 47:06:04:22 (setting forth the 

conditions that must exist before the department may waive overpayment).

[¶37.] Reversed and remanded.
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[¶38.] JENSEN, Chief Justice, and KERN, SALTER, and MYREN, Justices, 

concur.