Norath v. Division of Employment Security

490 S.W.3d 792, 2016 WL 3070028, 2016 Mo. App. LEXIS 562
CourtMissouri Court of Appeals
DecidedMay 31, 2016
DocketNo. ED103441
StatusPublished
Cited by4 cases

This text of 490 S.W.3d 792 (Norath v. Division of Employment Security) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Norath v. Division of Employment Security, 490 S.W.3d 792, 2016 WL 3070028, 2016 Mo. App. LEXIS 562 (Mo. Ct. App. 2016).

Opinion

OPINION

James M. Dowd, Judge

William Norath appeals from the Labor and Industrial Relations Commission’s (“Commission”) determination that he was overpaid unemployment benefits and that he willfully and fraudulently failed to report to the Division of Employment Security (“Division”) wages he had earned. Because we find that the Commission failed to address certain factual issues essential to our review, we reverse and remand for proceedings consistent with this opinion.

Factual and Procedural Background

In April 2009, Norath started working for Hackmann Lumber Company (“Hack-mann”). Norath worked directly with prospective customers of Hackmann and attempted to generate sales orders of Hackmann lumber and material. Norath was paid a commission by Hackmann in the event Hackmann made a profit from the sales generated by Norath. Hack-mann paid Norath as an employee and not as an independent contractor.

While Norath was working for Hack-mann, Norath was receiving unemployment benefits as a result of becoming unemployed from a prior job. The record is unclear when Norath began receiving those unemployment benefits and from which job Norath had become unemployed.

During the time that Norath worked for Hackmann, Norath continued to submit claims to the Division, and to collect unemployment benefits from time to time. On the weeks that he was paid by Hackmann, Norath reported to the Division that he was working and reported those wages. But on the weeks Norath did not receive any income from Hackmann, he reported that he was not working and that he had no wages, although he may have been performing tasks in connection with the prospective Hackmann customers to which he was attempting to generate sales.

[794]*794Norath received $320 of unemployment benefits each week he reported that he was not working. Norath did not receive any unemployment benefits the weeks he reported that he had been paid because his wages exceeded his weekly benefit amount plus twenty percent. See § 288.030.1.(28)(b)b.1

The Division conducted an audit and determined that Norath had been overpaid unemployment benefits because he was in fact working when he reported that he was not working. A deputy for the Division concluded that Norath had been overpaid benefits for thirty-eight weeks during 2013 and 2014 for a total overpayment of $10,029. Because the deputy found that Norath was overpaid due to fraud, Norath was also assessed a statutory penalty of $2,507.25, which represents twenty-five percent of the amount owed. Thus, the deputy determined that Norath owed the Division a total of $12,536.25.

Norath appealed these determinations. A telephonic appeal hearing was held. Norath appeared pro se and testified at the hearing and an employee for the Division appeared and testified based on business records. The business records consisted of the Division’s own records and those records it had obtained from Hack-mann and from Norath during its audit.

Norath testified that as part of his job with Hackmann he solicited lumber and materials orders for Hackmann, and if the customer ultimately bought and paid for the order, he was paid a percentage of the profits Hackmann earned. He testified he had no way of estimating what his pay would be for each order because he did not know what percentage Hackmann was marking up the prices or whether Hack-mann was going to give any discounts. Norath testified that he answered “no” to the question of whether he was working each week because he did not believe that he was doing any work for them until the day the order was délivered and Hack-mann was paid.

The Division witness testified that the deputy took the daily breakdown of wages provided by Hackmann to determine No-rath’s wages and any overpayment he had received. She testified that all wages earned, including commissions, had to be reported during the week in which the work was actually performed. She explained that when a claimant is unsure of the amount of his or her commission, the Division instructs the claimant to over-report the amount of wages so as to avoid an overpayment of unemployment benefits. She testified that if the wages turn out to be less than the claimant reports, then the Division will recalculate the amount owed and pay the claimant the additional benefits that are due. She did not explain how the deputy determined Norath’s daily wages from Hackmann’s records.

The appeals tribunal affirmed the deputy’s decisions. Norath appealed the appeals tribunal’s decisions to the Commission and the Commission affirmed the appeals tribunal. This appeal follows.

Standard of Review

We review the Commission’s decision to determine whether it is “supported by competent and substantial evidence upon the whole record.” Mo. Const, art. V, § 18. We must affirm the Commission’s decision unless (1) the Commission acted without or in excess of its powers; (2) the decision was procured by fraud; (3) the facts found by the Commission do not support the award; or (4) the record lacks sufficient competent evidence to support the award. § 288.210.

[795]*795Missouri Employment Security Law

The purpose of the employment security law is to provide benefits to persons unemployed through no fault of their own. Gen. Motors Corp. v. Buckner, 49 S.W.3d 753, 756 (Mo.App.E.D.2001). Section 288.020 requires us to liberally construe the law to promote employment security by providing for the payment of compensation to individuals in respect to their unemployment. To this end, the law is liberally construed in favor of compensation and disqualifying provisions are strictly construed. Anchor Sales & Serv. Co., Inc. v. Div. of Emp’t Security, 945 S.W.2d 66, 70 (Mo.App.W.D.1997). Nevertheless, it is the claimant’s burden to establish a right to unemployment benefits. Coday v. Div. of Emp’t Security, 423 S.W.3d 775, 781 (Mo.banc 2014).

The law applies to individuals who are totally unemployed and partially unemployed. § 288.060. An individual is “totally unemployed” in any week during which the individual performs no services and with respect to which no wages are payable to such individual. § 288.030.1.(28)(a). An individual is “partially unemployed” in any week of less than full-time work if the wages payable to such individual for such week do not equal or exceed the individual’s weekly benefit amount plus twenty dollars or twenty percent of his or weekly benefit amount, whichever is greater. § 288.030.1.(28)(b)b. An eligible insured worker who is partially unemployed in any week shall be paid for such a week a partial benefit. § 288.060.3. Such partial benefit shall be an amount equal to the difference between the weekly benefit amount and that part of his or her wages in such week in excess of twenty dollars or twenty percent of his or her weekly benefit amount, which is greater. § 288.060.3.

The purpose of these provisions is to provide minimal basic support to wage earners whose wages have been terminated or sharply reduced because of unemployment. Buckner, 49 S.W.3d at 756.

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490 S.W.3d 792, 2016 WL 3070028, 2016 Mo. App. LEXIS 562, Counsel Stack Legal Research, https://law.counselstack.com/opinion/norath-v-division-of-employment-security-moctapp-2016.