Opinion ID: 2592641
Heading Depth: 1
Heading Rank: 1

Heading: valvo case

Text: Claimant, Grace Valvo, is employed by Tambe Oil, which delivers heating oil to homes and a few businesses during the winter months. From late spring to early fall it is dormant. The corporation is owned and operated by Anthony Tambe, the father-in-law of one of the claimant's close friends. Mr. Tambe was formerly employed as a truck driver. He went into business for himself in September, 1976. The business presently consists of a truck and a garage with a small office in the garage. The owner personally delivers the oil, and in the beginning also attended to the clerical matters. However, he had so much difficulty balancing his checking account that his credit rating was soon impaired and he was on the verge of going out of business. When he mentioned this to his daughter in claimant's presence, claimant volunteered to help. From October, 1976 to November, 1977 claimant wrote his checks and balanced the checkbook as a favor, without compensation. During this period she was receiving unemployment benefits. In November, 1977 Mr. Tambe hired claimant as a secretary to write checks, send out the bills, record all financial transactions and answer the phone at the office. In this capacity she worked 40 hours a week at the office. During the summer months in 1978 and 1979 she was officially laid off and collected unemployment benefits. However, if a bill had to be paid for monthly utilities or outstanding loans Mr. Tambe would call claimant and ask her to write a check. He would then pick it up at her home, sign it and mail it. Claimant received no compensation for these services. In June, 1980 the agency informed claimant that her uncompensated check-writing activities constituted employment under the Labor Law, [2] that she had therefore made false statements when she claimed to be unemployed during the off-season, and also during the period she wrote the company's checks on a volunteer basis before she was hired in November, 1977. It further concluded that the statement had been wilfully made and that claimant should therefore be penalized by forfeiting 664 days of future eligibility and must also repay all benefits received in the amount of $6,019. Claimant requested a hearing which was held in July, 1980. After the hearing the administrative law judge concluded that the initial determination assessing a penalty and requiring repayment of benefits should be set aside primarily because there was no evidence of fraud or wilful misrepresentation on claimant's part. He stated: While claimant did perform check writing functions for this employer during the period prior to the time when she went on the payroll in November of 1977 and also during the off season of 1978, claimant could reasonably have believed that there was no employer employee relationship since she was not reporting to the employer's establishment during the periods when she was writing such checks and she was performing no other services. This is especially the case in the period prior to her going on the payroll in November of 1977. With respect to the off season of 1978, claimant's activities were so substantially different from her regular work assignments that even here she could reasonably have believed that she was not performing as an employee    In addition, she was clearly not self employed and since the amount of time required to write the checks was minimal the activity of writing the checks as such did not establish a lack of total unemployment. The appeal board reversed the decision of the administrative law judge and reinstated the initial determination. The board summarily concluded that claimant's weekly certifications of unemployment were false and known by her to be false when made and therefore constituted wilful misrepresentations. The board also found that claimant's statements were false in fact because claimant performed substantial services for her employer of a similar nature to those she performed when concededly in employment. Claimant appealed to the Appellate Division to have the board's determination set aside. In support of its determination the agency claimed that there was substantial evidence of wilfulness and that it was therefore authorized to impose the penalty and require repayment pursuant to section 594 of the Labor Law. [3] In the alternative the agency urged that pursuant to subdivisions 3 and 4 of section 597 of the Labor Law, it could recover a portion of the benefits (i.e., those paid during the year preceding discovery of the overpayment) whenever the claimant has made a false statement of unemployment even unintentionally. [4] The Appellate Division unanimously modified by reversing that portion of the determination which imposed the penalty and ordered repayment of benefits. The court accepted the board's determination that claimant's check-writing activities constituted employment but found nothing in the record to support the board's determination of wilfulness. With respect to the board's right to recover a portion of the benefits pursuant to subdivisions 3 and 4 of section 597 of the Labor Law on the theory that she had made a false statement the court held that the term `false statement' in the statute refers to a false factual statement and not to an erroneous conclusion of law. (83 AD2d, at p 346.) In this case the court found that the requirement that claimant weekly `report and certify as to his unemployment' (12 NYCRR 473.2 [a]) obligated claimant to draw a legal conclusion  whether her uncompensated check-writing activities constituted employment within the meaning of the Labor Law  rather than provide factual data. (83 AD2d, at p 347.) The court distinguished our recent decision in Matter of Maguire (Ross) (54 N.Y.2d 965) on the ground that the petitioner's activities in that case obviously constituted employment.