Source: http://mn.gov/law-library-stat/archive/ctapun/0612/opa060366-1212.htm
Timestamp: 2018-10-15 15:04:33
Document Index: 307062450

Matched Legal Cases: ['§ 268', '§ 268', '§ 268', '§ 268', '§ 268', '§ 268', '§ 268', '§ 29']

Becky A. Cole, Relator, vs. Department of Employment & Economic Development, Respondent. A06-366, Court of Appeals Unpublished, December 12, 2006.
A06-366
File No. 16461 05
Becky A. Cole, 3447 Central Avenue N.E., Apt. 101, Minneapolis, MN 55418-1243 (pro se relator)
Linda A. Holmes, Lee B. Nelson, Minnesota Department of Employment and Economic Development, First National Bank Building, 332 Minnesota Street, Suite E200, St. Paul, MN 55101-1351 (for respondent)
Relator challenges a decision that she was overpaid unemployment benefits, arguing that the unemployment law judge (ULJ) was incorrect in the amount that was due and that she should not have been penalized for fraud. Because substantial evidence in the record as a whole supports the ULJ’s determination on the amount of her underreported earnings, we affirm on that issue. But we reverse the ULJ’s determination of fraud and the assessed penalty because the ULJ did not follow the prescribed procedure for giving notice of intent to consider an issue not raised by relator on appeal.
Relator Becky Cole established a benefits account with the Department of Employment and Economic Development in February 2004, with a weekly benefit amount of $90. Over the 20-week period in which she claimed benefits, Cole followed the required process of reporting her weekly earnings to the department from two different employers, HousingLink and Lutheran Social Services, in order for the department to determine whether the amount of her earnings was sufficient to require a deduction from her benefit amount. See Minn. Stat. § 268.085, subd. 5 (2004) (requiring deduction from benefit amount of “25 percent of earnings or $50, whichever is higher”).
For the weeks ending February 21, 2004 – May 15, 2005, Cole reported weekly earnings within $2 of the $50 threshold for deduction of benefits and received close to her full benefit amount. During those weeks, the record show her actual earnings varied from $56 to $429. For the week ending May 22, she reported earnings of $720 and received no benefits; she actually earned $435.50. During the weeks ending June 12 and June 19, she reported $65 per week in earnings; she actually earned $156 and $0. Although the record shows that in some weeks Cole overreported her earnings, the record as a whole shows a pattern of underreporting. For instance, during the week ending February 21, she reported earnings of $50.23 but actually earned $112.58; during the week ending February 28, 2004, she reported earnings of $50.23, but actually earned $194.11; during the weeks ending April 10 and April 17, she reported earnings of $50.48, but actually earned $133.65 and $147.98; during the weeks ending April 24 and May 1, she reported earnings of $52 for each week, but actually earned $156 and $429; during the weeks ending May 29 and June 5, 2005, she reported $52 per week in earnings; her actual earnings were $286 and $58.50.
The department investigated Cole’s benefits claim for underreporting of earnings. During the investigation, Cole spoke to a department representative, acknowledged that some of the earnings reports were incorrect, and agreed to submit further information. She then submitted a spreadsheet prepared by a representative to show corrected weekly earnings amounts from each employer and corresponding asserted benefit reductions. The department issued an initial determination of benefits overpayment of $1,139 and an amended determination of benefits overpayment of $1,123. No penalties were assessed.
Cole appealed the determination to an unemployment law judge, maintaining that the department failed accurately to reflect the information on the submitted spreadsheet that specified her earnings per benefit week. She also asserted that her pay periods did not fit exactly into the unemployment-benefit weeks. At the hearing, Cole acknowledged that she had underreported her earnings but denied intentional underreporting.
The ULJ issued a decision determining that, based on the evidence received, including the spreadsheet submitted by Cole, the proper amount of benefits overpayment due to improperly reported earnings should be $940. But the ULJ found that Cole had reported earnings that bore “no apparent relationship to either the amount she earned during the weeks in question or to the wage payment she received [for those weeks].” Additionally, the ULJ found that Cole’s explanation of why her earnings were consistently underreported was not convincing. The ULJ determined that Cole was overpaid benefits and also that she had intentionally underreported her earnings. The ULJ assessed a statutory penalty of $235. The ULJ denied Cole’s claim on reconsideration, and this certiorari appeal followed.
This court on review may affirm an unemployment law judge’s decision, remand it for further proceedings, or reverse or modify it
if the substantial rights of the petitioner[s] may have been prejudiced because the findings, inferences, conclusion or decision are:
(5) unsupported by substantial evidence in the entire record as submitted; or
Minn. Stat. § 268.105, subd. 7(d) (Supp. 2005). Findings of the ULJ must be viewed in the light most favorable to the decision. White v. Metro. Med. Ctr., 332 N.W.2d 25, 26 (Minn. 1983).
Cole acknowledges that she was overpaid unemployment benefits. But she argues that the unemployment law judge’s findings on the amount of overpayment and the determination of fraud were unsupported by substantial evidence. She also maintains that the commissioner is estopped from applying a penalty because she was previously told by a department representative that no penalty would be applied.
Cole contends that, in determining the amount of her overpayment, the ULJ improperly failed to consider that pay periods from both of her employers crossed over three unemployment weeks and that the correct amount of overpayment was $838, rather than $940. But Cole has failed to provide specific earnings figures to support her assertion. The ULJ made findings, for each week of appellant’s unemployment, on (1) her earnings from each of two employers, and Lutheran Social Services, and (2) the amount of benefits she was paid. With the exception of two weeks, these findings match the amounts in the exhibit of calculations she submitted as supporting her claim. And for those two weeks, as discussed below, the record supports the ULJ’s determination of no eligibility for benefits.
For the first week, that ending March 13, 2004, Cole’s exhibit shows no earnings from Lutheran Social Services. But Cole’s pay stub shows that she earned $32.50 from Lutheran Social Services in the pay period ending March 16, and she reported no earnings from that employer to the department until April. During this period, she also earned over $50 from HousingLink. Thus, her total earnings for the week ending March 16 exceeded the amount that would entitle her to claim benefits for that week. Thus, her total earnings exceeded the amount (“25 percent of earnings or $50, whichever is higher”) that would entitle her to claim weekly benefits. See Minn. Stat. § 268.085, subd. 5 (2004). For the second week, that ending May 8, 2004, Cole submitted that she earned a smaller amount from ($58.50) than that found by the ULJ ($162.50). The record reflects that the ULJ made a clerical error by substituting the amount of Lutheran Social Services pay for that week as the amount of pay. But the amount of Lutheran Social Services pay alone establishes that she was ineligible for benefits that week. When benefit ineligibility for these two weeks is considered, Cole would have been overpaid for that time in the amount of $177, not just $16, as she claims. This difference of $161 is more than the difference between Cole’s claimed amount of overpayment ($838) and the amount found by the ULJ ($940). Therefore, substantial evidence in the record as a whole supports the ULJ’s finding of an amount of underreported earnings exceeding that claimed by Cole, and we affirm on that issue.
Cole maintains, however, that Cole maintains that the ULJ improperly considered the additional issue of whether she intentionally underreported her earnings, which she did not allege on appeal. We agree. The issue of whether a claimant has committed fraud by knowingly misstating, misrepresenting, or failing to disclose earnings is separate from the issue of non-fraud underreporting of those earnings. Compare Minn. Stat. § 268.18, subd. 2 (2004) (dealing with unemployment fraud) with Minn. Stat. § 268.18, subd.1 (2004) (dealing with nonfraud overpayment of benefits). The department is directed to assess a penalty only after a factual determination that benefits were obtained by fraud. See Minn. Stat. § 268.18, subd. 2(a). The department did not notify Cole that her earnings reports were being investigated for fraud, but only for non-fraud underreporting.
The department cites this court’s decision in Nelson v. Bemidji Reg’l Interdistrict Council, 359 N.W.2d 38, 40 (Minn. App. 1984), for the proposition that the ULJ may decide issues not raised by the appealing party. But Nelson was based on the interpretation of Minn. Stat. § 268.10, subd. 5 (Supp. 1983), which was repealed in 1995. See 1995 Minn. laws. ch. 54, § 29, at 126. The current statutes relating to unemployment-benefits law contain no similar provision. Rather, Minn. R. 3310.2910 (2005) governs the procedure to be followed for raising a new issue in the unemployment-benefits hearing. That rule states that the notice of hearing must include issues to be considered on appeal, but that on motion of the ULJ or a party the ULJ “may take testimony and render a decision on issues not listed on the notice of hearing if each party is so notified on the record at the hearing and does not object on appeal.” Id.
The notice of hearing contained in the record does not list the issues to be addressed at the hearing. And the transcript shows that the ULJ did not state on the record that the issue of fraud would be addressed, but stated the only issue was whether the department’s determination of overpayment was correct. We conclude that the ULJ erred by considering the issue of whether Cole committed fraud without complying with the notice requirements for raising that issue. We therefore reverse that portion of the ULJ’s decision determining that Cole committed fraud and the assessment of the $235 penalty.