Liu v. R & E Automated Systems – 16.89

Liu v. R & E Automated Systems
Digest No. 16.89

Section 421.28(1)(c)

Cite as: Liu v R & E Automated Sys, unpublished order of Michigan Compensation Appellate Commission, entered October 28, 2015 (Docket No. 14-032454-244075W).

Appeal pending: Yes
Claimant: Shu Liu
Employer: R & E Automated Systems LLC
Docket no.: 14-032454-244075W
Date of decision: October 28, 2015

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HOLDING: The ALJ’s order should be set aside since the Agency’s initial determination set forth a completely theory of ineligibility than was set forth at the hearing.

FACTS: This case was brought before the Appellate Commission pursuant to the claimant’s appeal from an order denying reopening by an ALJ. The claimant requested a rehearing of the ALJ’s amended decision. The ALJ issued an order denying the reopening.

DECISION: The claimant is not ineligible for benefits. The portion of the ALJ’ s decision that found the claimant ineligible for benefits under Section 28(1)(c) of the Act is reversed.

RATIONALE: The ALJ should have allowed rehearing to at least correct the errors in the amended decision. These issues were the reason the Appellate Commission set the order aside. When the initial determination was made, the issue was framed as “Your non-citizen documentation confirming you are lawfully present in the United States expired on September 17, 2014.” At the hearing, the Agency admitted that the actual issue was that the claimant’s work visa had expired. Since this was a completely different issue than that which is set forth in the determination, the decision should be set aside. The Agency cannot set forth one explanation for ineligibility in a determination, then appear at a hearing on appeal of the determination and proceed on an alternate theory of ineligibility. A claimant cannot be expected to foresee and prepare for an issue other than that which the Agency set forth in its determination. This is contrary to basic due process. For these reasons, the Commission reversed the portion of the ALJ’s decision that found the claimant ineligible for benefits under Section 28(1)(c) of the Act. The claimant is not ineligible under Section 28(1)(c).

Digest Author: Cydney Warburton, Michigan Law, Class of 2017
Digest Updated: 1/6/2016

Wilcox v. Bay City American Legion 18 – 16.88

Wilcox v. Bay City American Legion 18
Digest No. 16.88

Section 421.33, Admin. Rules 792.11411(10), 792.11415(5), and 792.11431

Cite as: Wilcox v Bay City American Legion 18, 2015 Mich ACO 14-015959-244230W

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Appeal pending: Yes
Claimant: Deborah E. Wilcox
Employer: Bay City American Legion 18
Tribunal: Michigan Compensation Appellate Commission
Date of decision: August 31, 2015

HOLDING: An Administrative Law Judge’s (ALJ) encouragement to an unrepresented Claimant, who in good faith misunderstood the scope of the hearing, caused the claimant to withdraw her appeal. The ALJ did not explain to the Claimant the ramifications of withdrawing, which constitutes good cause to reopen the appeal.

FACTS: Claimant was employed by Dore and Associates but was laid off. During this period of unemployment, claimant accepted a part-time position as a bartender with American Legion, but broke her ankle outside of work shortly after accepting the position. On doctor’s orders, Claimant withdrew from her position and was disqualified under Section 29(1)(b) of the Michigan Employment Security Act for voluntarily leaving her position with American Legion. Claimant received a hearing on September 11, 2014 with Bay City American Legion 18 as the employer for the hearing. During the hearing, the unrepresented Claimant articulated that she did not understand why or how her employment with American Legion would affect her claim, which she believed was established based on income earned from Dore and Associates. The Administrative Law Judge (ALJ) suggested it was unnecessary for the claimant to pursue the matter and encouraged her to withdraw her appeal. The claimant followed the ALJ’s suggestion and withdrew her appeal. The ALJ never explained the ramifications of withdrawing an appeal. After obtaining representation, Claimant filed a request to the ALJ to reopen her appeal, arguing that a good faith misunderstanding of the scope of the hearing constituted good cause for reopening as ruled in Jaeger v. Sears, Roebuck and Co., Digest No. 1620. The ALJ denied the request, and the claimant appealed the denial.

DECISION: The ALJ erred in denying claimant’s request to reopen her appeal, and thus, the appeal has been reopened. The matter is remanded to the Michigan Administrative Hearings System for a new hearing with a different ALJ.

RATIONALE: Pursuant to Administrative Rule 792.11415(5), the Michigan Compensation Appellate Commission (MCAC) will only review an ALJ’s denial of a request for reopening if it decides there is good cause for reopening. Administrative Rule 792.11402(v) defines “good cause” as reliance on incorrect information from the agency, ALJs, the hearing system, or the MCAC. The ALJs failure to explain the ramifications of withdrawing an appeal to the claimant constitutes good cause under this rule, and thus, the appeal is reopened. If the MCAC grants a request for reopening, Administrative Rule 792.11431 requires the decision on the appeal to be decided according to the “record already made” at the initial hearing. Because the hearing featured no testimony or evidence, the claimant’s appeal must be remanded for a new hearing.

Digest Author: Sean Higgins, Michigan Law, Class of 2017
Digest Updated: 1/6/2016

Proulx v. Horiba – 18.21

Proulx v. Horiba Subsidiary Inc.

Digest no. 18.21

Sections 54(b), 62(b)

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Cite as: Proulx v. Horiba Subsidiary, unpublished decision of the Michigan Compensation Appellate Commission, issued Oct. 01, 2014 (Appeal Docket no. 14-006880-241108).

Appeal Pending: No

Claimants: Brian Proulx

Employer: Horiba Subsidiary Inc.

MCAC Docket no. 14-006880-241108

Date of decision: Oct. 1, 2014


Holding: An Agency fraud redetermination is insufficient  when it merely provides a conclusory statement with no fact finding to support it. In addition a notice of hearing in a fraud case is insufficient when it does not include written notice of the penalties involved as required by MCAC Rule 421.1110(1).

Facts:

Decision:

Rationale:

Digest author: Steve Gray

Digest updated: 5/15

McPhee v. Robert Gittleman Law Firm, PC – 16.87

McPhee v. Robert Gittleman Law Firm, PC

Digest no. 16.87

Sections 38(1)34(2) and 29(1)(a)

Cite as: McPhee v. Robert Gittleman Law Firm, PC, Unpublished Opinion of the Court of Appeals of Michigan, Issued Sept. 14, 2014 (Docket No. 314452).

Appeal Pending: No

Claimant: John S. McPhee (Appellant)

Employer: Robert Gittleman Law Firm, PC (Appellee, along with Department of Licensing & Regulatory Affairs Growth/Unemployment Insurance Agency)

Tribunal: Court of Appeals of Michigan

Date of decision: Sept. 14, 2014

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Holding: Because the circuit court failed to apply the proper standard of review to the MCAC’s findings, the Court of Appeals found that claimant was entitled to unemployment compensation.

Facts: In 2008, claimant worked in Robert Gittleman’s law firm. In 2010, claimant announced his candidacy for district judge. Claimant informed Gittleman of his intentions and, indicated that he would be leaving the firm if he won the election. Claimant eventually lost the election, but, in the interim, Gittleman had placed an advertisement and hired a new associate, ultimately leaving claimant without employment. The underlying dispute arising from these facts is whether claimant voluntarily left his employment at the law firm or whether he was fired.

On November 2010, the agency approved benefits. The employer protested, and the ALJ determined that claimant was ineligible for unemployment benefits because he had left without good cause attributable to his employer. The MCAC reversed the ALJ, explaining that, “If the Claimant had told the Employer he would be leaving regardless of the outcome of the election…we would agree [that claimant had resigned]. However, the Claimant merely informed the Employer of his candidacy and advised that it make contingency plans in the event he won.”

The circuit court reversed because it determined that the MCAC “improperly substituted its judgment for that of [the] ALJ and in doing so committed an abuse of discretion.” On appeal, the Court of Appeals reversed.

Decision: The Agency issued a determination that claimant was eligible for unemployment. The ALJ reversed. The MCAC reversed. The circuit court reversed. The Court of Appeals reversed the circuit court.

Rationale: The statutory language [MCL 421.34(2) plainly permits the MCAC, “on the basis of evidence previously submitted,” to reverse the ALJ in regard to both the ALJ’s ultimate decision and its “findings of fact.” In contrast, MCL 421.38(1) requires that the [circuit] court may reverse an order or decision only if it finds that the order or decision is contrary to law or is not supported by competent, material, and substantial evidence on the whole record.  By focusing instead on whether the MCAC abused its discretion by departing from the ALJ’s factual findings, the circuit court applied an improper standard of review

Digest author: James C. Robinson

Digest updated: 3/15

Jenkins v. UIA – 16.83

Jenkins v. UIA
Digest No. 16.83

Section 421.38

Cite as: Jenkins v UIA, unpublished opinion per curiam of the Court of Appeals, issued March, 7, 2013 (Docket Nos. 309625 & 309644).

Appeal pending: No
Claimant: Gary Jenkins
Employer: Unemployment Insurance Agency
Date of decision: March 7, 2013

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HOLDING: The courts only have subject matter jurisdiction with respect to Unemployment Insurance matters once all administrative proceedings are complete.

FACTS: On November 8, 2011, the ALJ mailed a decision holding that claimant was entitled to benefits under MCL 421.1 et seq. conditioned on Claimant’s being “otherwise eligible and qualified.” Claimant submitted the ALJ’s decision to the UIA, but the UIA refused to pay. Instead, the UIA initiated an investigation in order to determine whether MWJ Construction (Claimant’s employer) was an “employer” within the meaning of the MESA.  Claimant then filed a complaint requesting the circuit court to issue a writ of mandamus ordering the director of the agency to pay Claimant benefits. On January 27, 2012, the circuit court ordered the UIA to pay Claimant benefits. The UIA did not pay and on February 20, 2012, Claimant filed an ex parte motion for an order to show cause regarding why the UIA should be held in civil contempt for failure to comply with the court’s order. Two days before the show-cause hearing, the UIA tendered a check to the court in the full amount due to Claimant. The check was payable to the court and Claimant. At the show-cause hearing, the court found that the tendered check did not comply with the court order because it was payable to the court and Claimant instead of being payable solely to Claimant. The court found the UIA in contempt of court, ordered the UIA to pay Claimant in accordance with the January 27 order, and ordered the UIA to pay attorney fees and costs in connection with the contempt proceedings. The UIA appealed as of right from the order granting Claimant’s request for a writ of mandamus. Additionally, the UIA appeals by leave granted from an order finding the UIA in civil contempt.

DECISION: The court vacated both orders because the circuit court did not have subject matter jurisdiction in these matters.

RATIONALE: Direct review by the courts is only available when all administrative remedies available within the agency have already been exhausted by the parties. MCL 24.301. This is required because: (1) an untimely resort to the courts may result in delay and disruption of an otherwise cohesive administrative scheme; (2) judicial review is best made upon a full factual record developed before the agency; (3) resolution of the issues may require the accumulated technical competence of the agency or may have been entrusted by the Legislature to the agency’s discretion; and (4) a successful agency settlement of the dispute may render a judicial resolution unnecessary. Int’l Business Machines Corp v Dep’t of Treasury, 75 Mich App 604, 610; 255 NW2d 702 (1977).

Here, the standard procedures under MCL 421.33 were not followed with respect to the questions of whether MWJ Construction was an “employer” and whether plaintiff’s claim was valid. The ALJ did not explicitly decide whether MWJ Construction was an employer in the order, and the order was conditioned on Claimant’s being “otherwise eligible and qualified.”  As a result, the UIA was in the process of determining whether MWJ Construction was an employer, at the time the circuit court took jurisdiction. Since the administrative process was ongoing, the circuit court’s assumption of jurisdiction was in error.

Digest author: Cydney Warburton, Michigan Law, Class of 2017
Digest updated: 3/30/2016

Barbee v. J.C. Penney – 16.73

Barbee v. J.C. Penney
Digest No. 16.73

Section 421.29(b), 421.33, 421.34, 421.38

Cite as: Barbee v. J.C. Penney Corp., Inc., Unpublished Opinion of the Circuit Court for the County of Oakland, Issued January 26, 2006 (Docket No. 177083W).

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Appeal Pending: No
Claimant: Della M. Barbee
Employer: J.C. Penney Corporation, Inc.
Tribunal: Circuit Court for the County of Oakland
Date of Decision: January 26, 2006

HOLDING: The State of Michigan Employment Security Board of Review’s (“Board”) lacks jurisdiction to review untimely appeals.

FACTS: Claimant was employed by J.C. Penney as a Customer Service Associate until she was discharged for misconduct. Her alleged misconduct included obtaining fraudulent refunds, discount abuse, and unauthorized price adjustments. The Administrative Law Judge (“ALJ”) disqualified the claimant from benefits due to her misconduct under MCL 421.29(b).

Claimant appealed the ALJ’s decision to the State of Michigan Employment Security Board of Review (“Board”). The deadline to appeal was September 24, 2004, but claimant did not file her appeal until October 6, 2004. Pursuant to MCL 421.33, the Board dismissed the late appeal due to lack of jurisdiction.

Claimant did not seek rehearing or to reopen the case with the Board for good cause but instead, appealed to the Circuit Court (“Court”) for de novo review of the Board’s (1) arbitrary Appeal deadline and (2) the underlying determination in finding the Plaintiff guilty of misconduct.

DECISION: The Board’s deadlines cannot be challenged as arbitrary because they were set by the legislature and codified as MCL 421.33(2) and MCL 421.34. Additionally, the Circuit Court cannot de novo review claimant’s underlying determination because she appealed the Board’s decision. Finally, the Board’s order dismissing claimant’s appeal for lack of jurisdiction was proper.

RATIONALE: The Circuit Court ruled that the appeal deadlines were not arbitrary because they were established by the legislature through MCL 421.33(2) and MCL 421.34.

The Court also denied claimant’s appeal for de novo review of her underlying determination as guilty of misconduct. The Court noted that a claimant can appeal a referee’s (ALJ’s) decision to the Circuit Court directly under MCL 421.38(2). However, because the claimant appealed the Board’s decision and said decision did not include a review of claimant’s determination as guilty of misconduct, the Circuit Court lacks authority to de novo review the claimant’s guilty determination.

The Circuit Court reviewed the whole record to determine if claimant’s appeal was untimely. Pursuant to MCL 421.38(1), the standard for finding an appeal untimely is support by competent, material, and substantial evidence. After finding that the appeal was untimely under the standard, the Court affirmed the Board’s decision dismissing claimant’s untimely appeal for lack of jurisdiction under MCL 421.33.

Digest Author: Sean Higgins, Michigan Law, Class of 2017
Digest Updated: 3/27/2016

Lewis v Oakwood Healthcare Corp – 16.68

Lewis v Oakwood Healthcare Corp
Digest no. 16.68

Section 38

Cite as: Lewis v Oakwood Healthcare Corp, Wayne Circuit Court, No. 02-243366-AE (April 29, 2003).

Appeal pending: No
Claimant: Donna M. Lewis
Employer: Oakwood Healthcare Corporation
Docket no.: B2002-10089-RO1-165903W
Date of decision: April 29, 2003

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CIRCUIT COURT HOLDING: An appeal to circuit court must be filed within 30 days of the mailing date of the Board’s decision or order. Attempts to re-litigate an issue from an earlier appeal are barred under the doctrine of res judicata.

FACTS: Claimant appealed a November 15, 2002 Board decision to circuit court. The Board decision held claimant owed restitution under Section 62(a) of the MES Act. The claimant previously appealed the Board’s June 2, 2000 decision holding her disqualified under Section 29(1)(a) to circuit court, and the court affirmed the Board in an order issued March 2, 2001. The claimant did not file a further appeal from that 29(1)(a) decision.

DECISION: The Board’s November 15, 2002 decision is affirmed.

RATIONALE: The claimant’s circuit court brief attempted to re-litigate the issue of her disqualification under 29(1)(a) and did not address the issue of restitution. The court lacked jurisdiction over the 29(1)(a) issue since the claimant had not filed her appeal within 30 days of the mailing date of the decision on that issue pursuant to Section 38(1). The court further noted that claimant’s appeal was barred by the doctrine of res judicata since the issues were identical to her appeal to that court in 2000 and ruled on by the court in an order issued March 2, 2001. Res judicata applies where 1) the former suit was decided on the merits, 2) the issues in the second action were or could have been resolved in the former one, and 3) both actions involve the same parties. In Michigan res judicata is applied broadly. See Energy Reserves v Consumers Power Co, 221 Mich App 210, (1997); Pierson Sand and Gravel, Inc v Keeler Brass Co, 460 Mich 372 (1999); Sewell v Clean Cut Mgmt, Inc, 463 Mich 569 (2001); Dart v Dart, 460 Mich 573 (1999).

Digest Author: Board of Review
Digest Updated:
11/04