MAXIM BASCH VS. BOARD OF REVIEW (BOARD OF REVIEW, DEPARTMENT OF LABOR)

• Court: New Jersey Superior Court Appellate Division
• Decided: June 6, 2018
• Docket: A-3390-16T3
• Status: Unpublished

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-3390-16T3

MAXIM BASCH,

Plaintiff-Appellant,

v.

BOARD OF REVIEW, DEPARTMENT OF LABOR and MFB ENTERPRISES, INC.,

Defendants-Respondents.

Submitted May 9, 2018 – Decided June 6, 2018

Before Judges Koblitz and Manahan.

On appeal from the Board of Review Department of Labor, Docket No. 096,030.

Maxim Basch, appellant pro se.

Gurbir S. Grewal, Attorney General, attorney for respondent (Jason W. Rockwell, Assistant Attorney General, of counsel; Peter H. Jenkins, Deputy Attorney General on the brief).

Respondent MFB Enterprises, Inc., has not filed a brief.

PER CURIAM Maxim Basch appeals from the March 28, 2017 decision of the

Board of Review, Department of Labor (Board) that he was not

eligible for unemployment compensation between May 6, 2016 and

July 8, 2016 because he did not have requalifying wages, nor was

he unemployed, because pursuant to statute, income from an S

corporation is not considered. Basch was directed to refund

$5,913.1 We affirm.

Basch separated from his Verizon Services Organization

(Verizon) employment in May 2015. He sued, alleging age

discrimination, and settled with Verizon for a sum of money that

did not constitute back wages. In October 2015 Basch formed a

consulting company. He is the sole owner and employee of the S

corporation, MFB Enterprises, Inc. and receives K-1 distributions.

He filed an initial claim for unemployment benefits effective

May 3, 2015 based on his separation from Verizon. Benefits were

paid. A year later, on May 8, 2016, Basch filed a transitional

claim. Benefits were paid on the transitional year, but in August

he was determined not to have requalifying income because the

settlement funds were not wages, and any other income he received

was through his S corporation.

1 Basch informs us that he has fully repaid this amount through a tax refund intercept. 2 A-3390-16T3 On appeal, the Appeal Tribunal concluded that Basch did not

have requalifying wages, N.J.S.A. 43:21-4(e)(6), and was not

statutorily considered unemployed as the sole stockholder of a

viable corporation. N.J.S.A. 43:21-19(m)(1)(A). The Board

affirmed on the basis of the Appeal Tribunal opinion.

Our review of administrative agency decisions is limited in

scope. Brady v. Bd. of Review, 152 N.J. 197, 210 (1997). Due

regard is given to the agency's expertise, Ford v. Bd. of Review,

287 N.J. Super. 281, 283 (App. Div. 1996), and the agency's

determination will not be disturbed absent a finding that it was

"arbitrary, capricious, or unreasonable." Brady, 152 N.J. at 210.

"The burden of proof rests upon petitioner to establish his

right to unemployment compensation benefits." Rudbart v. Bd. of

Review, 339 N.J. Super. 118, 123 (App. Div. 2001). An "officer

of a corporation, or a person who has more than a 5% equitable or

debt interest in the corporation, whose claim for benefits is

based on wages with that corporation shall not be deemed to be

unemployed in any week during the individual’s term of office or

ownership in the corporation." N.J.S.A. 43:21-19(m)(1)(A);

Rudbart, 339 N.J. Super. at 124-25 (App. Div. 2001). With the

settlement funds not eligible wages, Basch's only remuneration

came from his corporation.

3 A-3390-16T3 Basch argues that he formed an S corporation "only for legal

and tax purposes," has no employees and sporadic income, which

qualify him for unemployment. He argues that under Federal tax

law he is treated as an employee. He therefore deems himself

entitled to unemployment compensation. He refers us to California

case law, which is not applicable.

N.J.S.A. 43:21-16(d) generally "requires the full repayment

of unemployment benefits received by an individual who, for any

reason, regardless of good faith, was not actually entitled to

those benefits." Bannan v. Bd. of Review, 299 N.J. Super. 671,

674 (App. Div. 1997). The decision by the Board is not "arbitrary,

capricious or unreasonable" and is based upon "sufficient credible

competent evidence in the record," and, therefore, we must uphold

that decision. See Sager v. O.A. Peterson Constr., Co., 182 N.J.

156, 164 (2004).

Affirmed.

4 A-3390-16T3