This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2014).
STATE OF MINNESOTA IN COURT OF APPEALS A15-1609
Joy Gerlovich, Relator,
vs.
Department of Employment and Economic Development, Respondent.
Filed June 13, 2016 Affirmed Smith, Tracy, Judge
Department of Employment and Economic Development File No. 33537244-5
Joy Gerlovich, Esko, Minnesota (pro se relator)
Lee B. Nelson, Department of Employment and Economic Development, St. Paul, Minnesota (for respondent)
Considered and decided by Worke, Presiding Judge; Halbrooks, Judge; and Smith,
Tracy, Judge.
UNPUBLISHED OPINION
SMITH, TRACY, Judge
Relator Joy Gerlovich challenges an unemployment-law judge’s (ULJ)
determination that Gerlovich committed fraud when seeking unemployment benefits,
arguing that she did not intend to defraud respondent Department of Employment and
Economic Development (DEED). Because the ULJ did not err by determining that Gerlovich lacked a good faith belief that her answers regarding work and earnings were
correct, we affirm the fraud determination.
FACTS
Gerlovich requested and received unemployment benefits in 2014. Each week
when requesting benefits, Gerlovich was asked: “Did you work or have a paid holiday
during the reporting period listed above?” Each time, Gerlovich answered, “No.” DEED
later determined that Gerlovich was ineligible for unemployment benefits for several of
the weeks for which she received benefits because she answered “no” even though she
had worked at least part time.
At issue in this appeal are Gerlovich’s unemployment benefits for the weeks of
July 27, August 3, and August 10, 2014.1 DEED determined that Gerlovich had earned
$311 the week of July 27, $356.50 the week of August 3, and $858 the week of
August 10, and that she therefore had been overpaid $933 in unemployment benefits.
DEED also determined that Gerlovich had committed fraud when requesting
unemployment benefits for these weeks because she “failed to accurately disclose
earnings and/or hours worked.” DEED imposed a mandatory fraud penalty of $373.20.
See Minn. Stat. § 268.18, subd. 2(a) (2014) (stating that DEED “must assess a penalty
equal to 40 percent of the amount fraudulently obtained”).
1 Gerlovich’s brief also discusses issues surrounding other weeks for which she was determined to be ineligible for unemployment benefits. But because an appeal must be filed within 30 days of the ULJ’s decision on reconsideration, Minn. Stat. § 268.105, subd. 7(a) (Supp. 2015), Gerlovich timely appealed only the three weeks of earnings discussed here.
2 Gerlovich challenged the fraud determination. At an evidentiary hearing,
Gerlovich conceded that she worked during the three weeks in question and that DEED’s
records regarding her earnings for those weeks were “[a]bout right.” She explained that
she did not retain her original records and could not confirm her exact earnings.
Gerlovich provided several explanations for her answer to DEED’s question about
whether she had worked during the weeks in question. First, Gerlovich stated that her
answer was “inaccurate” and that she did not remember why she answered “no.” Second,
she stated that she “probably” believed the question was asking if she had worked less
than 32 hours each week. When the ULJ questioned that belief, Gerlovich stated that
“this question is very self-explanatory and [she] obviously put the wrong answer.” Third,
Gerlovich asserted that a DEED representative told her to “continue to file” as she always
had and to answer “no.” In response to further questioning, Gerlovich clarified that the
DEED representative never told her how to answer the specific question or to answer
inaccurately. Finally, Gerlovich stated that she did not fully read the question and that
she had “no excuse.” Gerlovich asserted that she did not answer incorrectly “on
purpose.”
The ULJ determined that “Gerlovich did not have a good faith belief as to the
correctness of her answers when reporting whether she worked for each of the weeks in
question.” The ULJ therefore determined that “Gerlovich committed fraud and is
ineligible for unemployment benefits until she repays the [d]epartment all benefits
fraudulently paid to her as well as interest and penalties.”
3 Gerlovich timely requested reconsideration. In her request, Gerlovich explained
that, due to several incidents in her personal life, she had “a semi nervous breakdown,”
had trouble concentrating and holding down a job, and made mistakes on the questions.
The ULJ determined that Gerlovich failed to show that the evidence submitted at the
hearing was likely false and failed to show good cause for failing to provide this other
evidence at the hearing. The ULJ therefore affirmed his earlier order.
Gerlovich appeals.
DECISION
Gerlovich concedes that she was overpaid benefits, but challenges the ULJ’s
determination that she committed fraud. We may reverse or modify a ULJ’s decision if
the relator’s substantial rights have been prejudiced because the ULJ’s findings,
inferences, conclusion, or decision are unsupported by the record or affected by an error
of law. Minn. Stat. § 268.105, subd. 7(d) (Supp. 2015). We view the ULJ’s findings of
fact in the light most favorable to the decision and give deference to the ULJ’s credibility
determinations. Skarhus v. Davanni’s Inc., 721 N.W.2d 340, 344 (Minn. App. 2006).
“Any applicant who receives unemployment benefits by knowingly
misrepresenting, misstating, or failing to disclose any material fact, or who makes a false
statement or representation without a good faith belief as to the correctness of the
statement or representation, has committed fraud.” Minn. Stat. § 268.18, subd. 2(a).
Upon a ULJ’s determination that the applicant has committed fraud, the applicant must
repay the unemployment benefits and pay “a penalty equal to 40 percent of the amount
fraudulently obtained.” Id. A determination of whether an applicant fraudulently
4 obtained unemployment benefits depends on the credibility of the applicant’s testimony.
Burnevik v. Dep’t of Econ. Sec., 367 N.W.2d 681, 683 (Minn. App. 1985).
When challenging the ULJ’s fraud determination, Gerlovich argues that she did
not “knowingly” answer DEED’s question incorrectly. But fraud can be established if
the ULJ determines that an applicant “makes a false statement or representation without a
good faith belief as to the correctness of the statement or representation.” See Minn. Stat.
§ 268.18, subd. 2(a). The ULJ made such a determination here, explaining that Gerlovich
did not have a good faith belief because “Gerlovich knew or should have known the
wages she was earning and hours she was working” and “a simple reading of the question
would prompt a person to answer ‘yes.’” The issue on appeal is whether the ULJ erred
by finding that Gerlovich did not have “a good faith belief as to the correctness” of her
answers when requesting benefits, not whether Gerlovich “knowingly” answered
incorrectly. See id.
At the hearing, Gerlovich provided several explanations for her answers, including
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This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2014).
STATE OF MINNESOTA IN COURT OF APPEALS A15-1609
Joy Gerlovich, Relator,
vs.
Department of Employment and Economic Development, Respondent.
Filed June 13, 2016 Affirmed Smith, Tracy, Judge
Department of Employment and Economic Development File No. 33537244-5
Joy Gerlovich, Esko, Minnesota (pro se relator)
Lee B. Nelson, Department of Employment and Economic Development, St. Paul, Minnesota (for respondent)
Considered and decided by Worke, Presiding Judge; Halbrooks, Judge; and Smith,
Tracy, Judge.
UNPUBLISHED OPINION
SMITH, TRACY, Judge
Relator Joy Gerlovich challenges an unemployment-law judge’s (ULJ)
determination that Gerlovich committed fraud when seeking unemployment benefits,
arguing that she did not intend to defraud respondent Department of Employment and
Economic Development (DEED). Because the ULJ did not err by determining that Gerlovich lacked a good faith belief that her answers regarding work and earnings were
correct, we affirm the fraud determination.
FACTS
Gerlovich requested and received unemployment benefits in 2014. Each week
when requesting benefits, Gerlovich was asked: “Did you work or have a paid holiday
during the reporting period listed above?” Each time, Gerlovich answered, “No.” DEED
later determined that Gerlovich was ineligible for unemployment benefits for several of
the weeks for which she received benefits because she answered “no” even though she
had worked at least part time.
At issue in this appeal are Gerlovich’s unemployment benefits for the weeks of
July 27, August 3, and August 10, 2014.1 DEED determined that Gerlovich had earned
$311 the week of July 27, $356.50 the week of August 3, and $858 the week of
August 10, and that she therefore had been overpaid $933 in unemployment benefits.
DEED also determined that Gerlovich had committed fraud when requesting
unemployment benefits for these weeks because she “failed to accurately disclose
earnings and/or hours worked.” DEED imposed a mandatory fraud penalty of $373.20.
See Minn. Stat. § 268.18, subd. 2(a) (2014) (stating that DEED “must assess a penalty
equal to 40 percent of the amount fraudulently obtained”).
1 Gerlovich’s brief also discusses issues surrounding other weeks for which she was determined to be ineligible for unemployment benefits. But because an appeal must be filed within 30 days of the ULJ’s decision on reconsideration, Minn. Stat. § 268.105, subd. 7(a) (Supp. 2015), Gerlovich timely appealed only the three weeks of earnings discussed here.
2 Gerlovich challenged the fraud determination. At an evidentiary hearing,
Gerlovich conceded that she worked during the three weeks in question and that DEED’s
records regarding her earnings for those weeks were “[a]bout right.” She explained that
she did not retain her original records and could not confirm her exact earnings.
Gerlovich provided several explanations for her answer to DEED’s question about
whether she had worked during the weeks in question. First, Gerlovich stated that her
answer was “inaccurate” and that she did not remember why she answered “no.” Second,
she stated that she “probably” believed the question was asking if she had worked less
than 32 hours each week. When the ULJ questioned that belief, Gerlovich stated that
“this question is very self-explanatory and [she] obviously put the wrong answer.” Third,
Gerlovich asserted that a DEED representative told her to “continue to file” as she always
had and to answer “no.” In response to further questioning, Gerlovich clarified that the
DEED representative never told her how to answer the specific question or to answer
inaccurately. Finally, Gerlovich stated that she did not fully read the question and that
she had “no excuse.” Gerlovich asserted that she did not answer incorrectly “on
purpose.”
The ULJ determined that “Gerlovich did not have a good faith belief as to the
correctness of her answers when reporting whether she worked for each of the weeks in
question.” The ULJ therefore determined that “Gerlovich committed fraud and is
ineligible for unemployment benefits until she repays the [d]epartment all benefits
fraudulently paid to her as well as interest and penalties.”
3 Gerlovich timely requested reconsideration. In her request, Gerlovich explained
that, due to several incidents in her personal life, she had “a semi nervous breakdown,”
had trouble concentrating and holding down a job, and made mistakes on the questions.
The ULJ determined that Gerlovich failed to show that the evidence submitted at the
hearing was likely false and failed to show good cause for failing to provide this other
evidence at the hearing. The ULJ therefore affirmed his earlier order.
Gerlovich appeals.
DECISION
Gerlovich concedes that she was overpaid benefits, but challenges the ULJ’s
determination that she committed fraud. We may reverse or modify a ULJ’s decision if
the relator’s substantial rights have been prejudiced because the ULJ’s findings,
inferences, conclusion, or decision are unsupported by the record or affected by an error
of law. Minn. Stat. § 268.105, subd. 7(d) (Supp. 2015). We view the ULJ’s findings of
fact in the light most favorable to the decision and give deference to the ULJ’s credibility
determinations. Skarhus v. Davanni’s Inc., 721 N.W.2d 340, 344 (Minn. App. 2006).
“Any applicant who receives unemployment benefits by knowingly
misrepresenting, misstating, or failing to disclose any material fact, or who makes a false
statement or representation without a good faith belief as to the correctness of the
statement or representation, has committed fraud.” Minn. Stat. § 268.18, subd. 2(a).
Upon a ULJ’s determination that the applicant has committed fraud, the applicant must
repay the unemployment benefits and pay “a penalty equal to 40 percent of the amount
fraudulently obtained.” Id. A determination of whether an applicant fraudulently
4 obtained unemployment benefits depends on the credibility of the applicant’s testimony.
Burnevik v. Dep’t of Econ. Sec., 367 N.W.2d 681, 683 (Minn. App. 1985).
When challenging the ULJ’s fraud determination, Gerlovich argues that she did
not “knowingly” answer DEED’s question incorrectly. But fraud can be established if
the ULJ determines that an applicant “makes a false statement or representation without a
good faith belief as to the correctness of the statement or representation.” See Minn. Stat.
§ 268.18, subd. 2(a). The ULJ made such a determination here, explaining that Gerlovich
did not have a good faith belief because “Gerlovich knew or should have known the
wages she was earning and hours she was working” and “a simple reading of the question
would prompt a person to answer ‘yes.’” The issue on appeal is whether the ULJ erred
by finding that Gerlovich did not have “a good faith belief as to the correctness” of her
answers when requesting benefits, not whether Gerlovich “knowingly” answered
incorrectly. See id.
At the hearing, Gerlovich provided several explanations for her answers, including
that (1) she did not remember why she answered “no”; (2) she “probably” believed the
question was asking if she had worked less than 32 hours each week; (3) a DEED
representative told her to “continue to file” for benefits as she always had; and (4) she
had “no excuse” and did not answer incorrectly “on purpose.” Gerlovich conceded that
the DEED representative did not tell her how to answer the questions or to answer the
questions inaccurately. The ULJ did not believe Gerlovich’s other explanations, and we
defer to the ULJ’s credibility determinations. See Skarhus, 721 N.W.2d at 344.
5 In her brief, Gerlovich asserts that she answered DEED’s question incorrectly due
to stress caused by several tragic episodes in her personal life. Gerlovich provided a
similar explanation on reconsideration below, but the ULJ determined that Gerlovich had
failed to show good cause for failing to provide this evidence at the evidentiary hearing.
Even if Gerlovich had timely provided this explanation to the ULJ, the stress Gerlovich
was understandably suffering does not support a finding that Gerlovich had a good faith
belief that her answers were correct.
Gerlovich does not dispute that she worked during the three weeks in question.
She requested unemployment benefits two days after she worked each week, based on the
work records she had at that time. Gerlovich agreed at the hearing that the question is
“very self-explanatory” and that she had “no excuse” for answering it incorrectly. The
record supports the ULJ’s finding that Gerlovich lacked a good faith belief that
answering “no” was correct. The ULJ therefore did not err by determining that Gerlovich
committed fraud. See Minn. Stat. § 268.18, subd. 2(a).
Affirmed.