Bryan-Brooks v Securitas Security Services – 18.24

Bryan-Brooks v Securitas Security Services
Digest No. 18.24

Section 421.62(a)

Cite as: Bryan-Brooks v Securitas Security Services USA, Inc, unpublished opinion of the Wayne County Circuit Court, issued September 11, 2017 (Docket No. 17-005155).

Court: Circuit Court
Appeal pending: Yes
Claimant: Christina Bryan-Brooks
Employer: Securitas Security Services USA, Inc.
Date of decision: September 11, 2017

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HOLDING: Claimants that meet the statutory requirements to receive a hardship waiver aren’t disqualified from receiving the waiver if they fail to completely fill-out the waiver application on the first try.

FACTS: Claimant received unemployment benefits that were not actually due to her, through no fault of her own. The Agency requested restitution in the amount of the overpayment, but Claimant was unable to pay. She filed a hardship waiver application with the Agency to waive the restitution.

Section 62(a) requires the Agency to approve hardship waivers for claimants who prove they are below the federal poverty line. The Agency denied her hardship waiver because the application was incomplete. Specifically, the Agency said she failed to list her daughters’ social security numbers and attached pay stubs instead of listing her income on the application form.

Claimant appealed the Agency’s denial of her hardship waiver application. She presented evidence at a hearing in front of an ALJ that proved she was below the federal poverty line for a family of four. The ALJ nevertheless affirmed the denial because her failure to provide the requested information “deprived the UIA of the opportunity to analyze whether or not [Claimant’s] income fell below the poverty line guidelines.” The MCAC affirmed.

DECISION: Under § 62(a) the Agency is required to waive restitution if the claimant is below the poverty line. If a claimant proves he or she qualifies for the waiver, the claimant cannot be denied the waiver because they fail to correctly complete the application.

RATIONALE: The MESA is a remedial act designed to safeguard the general welfare through the dispensation of benefits to those that become involuntarily unemployed. If the court followed the reasoning of the Agency, ALJ, and MCAC, it would have to deny a hardship waiver to a claimant that proves he or she is eligible, simply because the claimant’s application is incomplete. “Such a finding does not give the [Agency] any incentive to offer guidance to offer guidance or follow up with waiver applicants with respect to adequate completion of paperwork, and is contrary to the act’s purpose.”

The Agency tried to introduce evidence for the first time on appeal that Claimant was, in fact, above the federal poverty line. The court rejected that argument because the Agency failed to raise the issue at the ALJ hearing. The court further noted that the hardship waiver application form is poorly written and did not inform claimants that they could amend their hardship waiver instead of appealing.

Digest author: Sarah Harper, Michigan Law, Class of 2017
Digest updated: December 5, 2017

 

Wickham v. Adecco CS, Inc. – 18.23

Wickham v. Adecco CS, Inc.
Digest No. 18.23

Section 421.32(a)

Cite as: Wickham v Adecco CS, Inc, unpublished opinion of the Michigan Administrative Hearing System, issued September 28, 2016 (Docket No. 16-021211).

Appeal pending: No
Claimant: Margaret M. Wickham
Employer: Adecco CS Inc.
Date of decision: September 28, 2016

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HOLDING: Under Michigan law, when pleading a cause of action involving fraud, the circumstances alleged to must be stated with particularity. In addition, in a fraud case, due process of law is violated when a claimant is not apprised of when, why, or how her actions constitute intentional misrepresentation of material fact.

FACTS: Claimant received a November 21, 2014 adjudication that concludes that Claimant’s “actions” indicate that she intentionally misled and/or concealed information to obtain benefits to which she was not otherwise entitled.

DECISION: The November 21, 2014 adjudication is facially defective as a matter of law, so it is void, set aside, vacated, and dismissed. Therefore the Agency’s denial of reconsideration concerns an invalid underlying adjudication, so it must also be set aside, vacated, and dismissed as a matter of law.

RATIONALE: The November 21, 2014 adjudication includes no factual assertions in support of the vague generalized legal conclusion that Claimant’s “actions” indicate that she intentionally misled and/or concealed information to obtain benefits to which she was not otherwise entitled. The Agency’s omission of particularized factual assertions in support of its legal conclusions violates Michigan law concerning the pleading of causes of action including fraud. Kassab v Michigan Basic Property Insurance Association, 441 Mich 433 (1992) requires that, when pleading a cause of action involving fraud, the circumstances alleged to must be stated with particularity. Section 421.32(a) requires the Agency to examine claims and render determinations on the facts; the Unemployment Insurance Agency lacks jurisdiction to render adjudications containing summary legal conclusions unsupported by factual assertions. In addition, the November 21, 2014 adjudication violates the demands of due process of law by failing to apprise Claimant of when, why, and how her “actions” constitute intentional misrepresentation of material fact.

Digest author: Winne Chen, Michigan Law, Class of 2017
Digest updated: November 26, 2017

 

Proulx v. Horiba Subsidiary, Inc. – 18.21

Proulx v. Horiba Subsidiary, Inc.
Digest No. 18.21

Sections 421.27, 421.33(1), 421.54(b), and 421.62(a)

Cite as: Proulx v Horiba Subsidiary, Inc, unpublished opinion of the Michigan Compensation Appellate Commission, issued October 1, 2014 (Docket No. 14-00680-241108).

Appeal pending: No
Claimant: Brian D. Proulx
Employer: Horiba Subsidiary, Inc.
Docket no.: 14-00680-241108
Date of decision: October 1, 2014

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HOLDING: Redetermination by the UIA requires fact finding in support of the agency’s decision. When the Agency merely makes a conclusory statement in support of its ruling, such a decision is procedurally deficient and will not be upheld on appeal. Secondly, when a claimant fails to appear at an appeal by the Agency, the ALJ has jurisdiction both to dismiss the proceedings and to “take other action considered advisable”. Thus, the ALJ has “broad discretion to address the matter.” Finally, the notice for the hearing, delivered to the claimant, was required to include ”the issues and penalties involved”. (This requirement has been altered by Michigan Administrative Code (MAC) Rule 792.11407. This rule requires a “short and plain statement of the issues involved”, while related rules require a 20 notice, compared to the usual 7, and a witness list and copy of all documentary evidence related to fraud.)

FACTS: After being discharged by Horiba Subsidiary, Claimant applied for and received benefits under Section 27. A rehearing, on March 28, 2014, by the Unemployment Insurance Agency accused Claimant of fraud or misrepresentation, found him ineligible for Section 27 benefits, and subject to restitution under Section 62(a). A separate rehearing on the same day assessed penalties under Section 54(b). Claimant then failed to appear at an ALJ hearing of this matter on July 10, 2014. The notice of this hearing provided to Claimant read “SECTION 27(c) & 48 – WHETHER OR NOT CLAIMANT IS ELIGIBLE FOR BENEFITS UNDER THE REMUNERATION, EARNINGS OFFSET PROVISION. CLAIMANT MUST PAY RESTITUTION/DAMAGES TO AGENCY UNDER SECTION 54(b)-INTENTIONAL MISREPRESENTATION. SECTIONS THAT MAY APPLY ARE: 62(a), 62(b), 20(a).” This notice did not include the penalties involved as required by the Michigan Administrative Code (MAC) Rule 421.1110(1). (Note that this rule has since been superseded and altered by Rule 792.11407.)

Because of Claimant’s failure to appear, the ALJ dismissed Claimant’s appeal of the Section 27, and Section 62(a) rehearings, but remanded the Section 54(b) rehearing to the Agency because their accusations in that rehearing were merely conclusory and didn’t provide supporting fact-finding. The Unemployment Insurance Agency appealed this remand decision to the Michigan Compensation Appellate Commission, and the Commission reviewed both of the orders of the ALJ.

DECISION: The ALJ’s dismissal of Claimant’s appeal is set aside and remanded for a full hearing. The ALJ’s remand of the Agency’s 54(b) ruling is affirmed.

RATIONALE: An ALJ does not lack jurisdiction over an appealed UIA hearing simply because the appellant failed to appear at the appeal. Section 33(1) provides that “If the appellant fails to appear or prosecute the appeal, the administrative law judge may dismiss the proceedings or take other action considered advisable.” Since the ALJ may “take other action considered advisable”, a dismissal based on the appellant’s failure to appear is an error of law. A second reason for setting aside the ALJ’s dismissal of the appeal is the insufficiency of the notice provided to Claimant. Michigan Administrative Code (MAC) Rule 431.1110(1) required the notice to include a description of the penalties involved. Since the notice form provided to Claimant lacked this information, it was not sufficient and his failure to appear can’t be held against him.

Secondly, and Agency determination of fraud or misrepresentation on the part of a claimant can’t be sustained without fact-finding on the record to back up that determination. Merely supplying conclusory statements as to Claimant’s alleged fraud does not meet this burden. Therefore, when the Agency fails to provide appropriate factual backing for its findings, it must reconsider its determination.

Digest author: James Fahringer, Michigan Law, Class of 2018
Digest updated: 3/30/2016

 

Olivarez v Unemployment Insurance Agency – 18.16

Olivarez v Unemployment Insurance Agency
Digest No. 18.16

Section 62 & Section 54

Cite as: Olivarez v Unemployment Insurance Agency, unpublished opinion of the Saginaw County Circuit Court, issued November 17, 2008 (Docket No. 08-000366-AE-3).

Appeal pending: No
Claimant: William Olivarez
Employer: Michigan Unemployment Insurance Agency
Date of decision: November 17, 2008

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HOLDING: The court reversed the fraud decision because there was not competent, material, and substantial evidence to support it.

FACTS: Claimant  worked for the Agency and applied for benefits while on long term disability. The Agency ordered restitution and Claimant won at the ALJ hearing but lost at MCAC.

MCAC held that there was fraud because Claimant collected while on long term disability; he knew there was an issue about whether he could do so; an employee of the disability insurance company told him this was alright; and Claimant should have known to go to Agency with questions about eligibility.

DECISION: Claimant is ineligible for benefits. The Agency did not provide sufficient evidence for fraud.

RATIONALE: On eligibility, there was a doctor’s note that said Claimant could not do any work at all. This was competent, material, and substantial evidence and the court affirmed this decision.

Regarding fraud, there was not sufficient evidence to “support a finding of wrongful, quasi-criminal behavior.” The court went on to say: “Fraud, while easily claimed, is not lightly proven.” Citing Mallery v Van Hoeven, 332 Mich 561, 568; (1952). Fraud must be established by evidence. This was a “skimpy record” and does not “support a finding of serious wrongdoing, even under the relatively light standard of substantial evidence.”

Digest author: Benjamin Tigay, Michigan Law, Class of 2018
Digest updated: December 1, 2017

 

Elliott’s Amusements, LLC v. Garrison – 17.23

Elliott’s Amusements, LLC v. Garrison
Digest No. 17.23

Section 421.44

Cite as: Elliott’s Amusements, LLC v Garrison, unpublished opinion of the Ingham County Circuit Court, issued October 1, 2007 (Docket No. 07-251-AE).

Appeal pending: No
Claimant: Ronald L. Garrison
Employer: Elliott’s Amusements, LLC
Date of decision: October 1, 2007

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HOLDING: Certain per diem payments made by the employer to the claimant were remuneration when not for the “convenience of the employer” and the claimant had the ability to choose how to spend the money.

FACTS: The ALJ decided that per diem amounts the employer paid to the claimant were remuneration under Section 44(1). The Board of Review affirmed and incorporated the ALJ’s decision. As the Board explained, the claimant worked six months per year for the employer, while also living in the employer’s trailer and paying rent and food money. The claimant received a per diem payment from the employer, plus reimbursements for some expenses. Citing Seligman v MESC, 164 Mich App 507 (1988) as controlling, the Board endorsed the ALJ’s view that the per diem payments amounted to wages because the employer did not require the claimant to live at the work site, the lodging was not free, and the claimant’s use of the per diem payments were not controlled by the employer.  The claimant choice to use the employer-provided lodging was based on his own convenience, distinguishing his situation from the mandatory on-site lodging provided for the “convenience of the employer” in Seligman.

DECISION: The court upheld the determination that certain per diem payments made by the employer to the claimant were remuneration.

RATIONALE: Per diem payments for on-site lodging and food are considered remuneration if the employer did not control the claimant’s use of the per diem monies and the claimant could have spent the money in other ways.

Digest author: Austin L. Webbert, Michigan Law, Class of 2017
Digest updated: 10/25/2017

 

DLEG Unemployment Insurance Agency v Darden – 18.15

DLEG Unemployment Insurance Agency v Darden
Digest no. 18.15

Section 62(a)

Cite as: DLEG Unemployment Ins Agency v Darden, unpublished opinion of the Oakland County Court, issued October 22, 2004 (Docket No. 04-059568-AE).

Appeal pending: No
Claimant: Yvonne Darden
Employer: Mastanuono & Assoc., Inc.
Docket no.: FSC2004-00036-173164W
Date of decision: October 22, 2004

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CIRCUIT COURT HOLDING: When adjudicating whether the Agency has jurisdiction to issue a determination or redetermination requiring restitution, the 3-year limitation provision of Section 62(a) is applicable, not the 1-year period contained in Section 32a(2).

FACTS: The Agency issued a redetermination November 25, 2003 requiring restitution for benefits improperly paid for 5 weeks ending in November 2002. The Board of Review held that under Section 32a(2) the Agency did not have jurisdiction to issue the redetermination on November 25, 2003 because more than one year had passed since the unemployment checks had been issued and there was no finding of fraud on claimant’s part.

DECISION: The Agency may pursue the recovery of restitution.

RATIONALE: When two statutes cover the same general subject matter, the more specific statute must prevail over the more general statute. MESC v Westphal, 214 Mich App 261 (1995). The 3-year provision of Section 62(a) takes precedence over the 1-year provision of Section 32a(2) because Section 62(a) is more specific.

Digest Author: Board of Review (original digest here)
Digest Updated: 11/04

Miltgen v DSC Marywood Co – 18.14

Miltgen v DSC Marywood Co
Digest no. 18.14

Section 54(b)

Cite as: Miltgen v DSC Marywood Co, unpublished opinion of the Kent Circuit Court, issued March 23, 2001 (Docket No. 00-06060-AE).

Appeal pending: No
Claimant: Georgia Miltgen
Employer: DSC Marywood Company
Docket no.: B95-06582-RRR-145902W/FSC95-00107-RRR-145903W
Date of decision: March 23, 2001

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CIRCUIT COURT HOLDING: Being told by an Agency representative that monies received as “gifts” do not have to be reported as income is not a defense to fraud when claimant failed to disclose “significant particulars” as to the receipt of that money.

FACTS: While receiving unemployment benefits, claimant performed services and was being compensated. Claimant knew she was obligated to report income from work to the Agency, but failed to do so. Claimant spoke to a representative of the Agency about whether she had to report the monies. She asked whether personal monies from a friend had to be reported; she did not report the reasons for receiving the monies or why she received the monies. Claimant claimed the monies she received were “gifts,” although she acknowledged the payments were at an hourly rate for the service she performed.

DECISION: Claimant knowingly and willfully failed to report the income and is subject to the fraud provision.

RATIONALE: Even if the payor told claimant that the monies were gifts, it was unreasonable for her to believe that she was receiving gifts, and not being paid for services rendered. “A purely subjective belief is not legally significant; the belief must also be objectively reasonable. A gift which happens to be in an amount which is a certain rate for actual hours of effort performed for the payor is compensation for work, not a gift . . .. [L]abels are of ‘little importance.’” See Allied Market v Grocer’s Dairy, 391 Mich 729, 735 (1974)Abbey Homes v Wilcox, 89 Mich App 574, 581 (1979), lv app den 407 Mich 875 (1979). Had claimant disclosed the nature of the particulars of the monies, being told that the monies did not need to be reported would probably have entitled her to act as she did, Woods v State Employees Retirement System, 440 Mich 77, 81-82 (1992). Since claimant admitted she did not provide those particulars, the answer she said she got does not provide her with a defense. United States v King, 560 F2d 122 (1977), and United States v Smith, 523 F2d 771 (1975).

Digest Author: Board of Review (original digest here)
Digest Updated:
11/04