Smith v. Unemployment Insurance Appeal Board

• Court: Superior Court of Delaware
• Decided: October 6, 2021
• Docket: S21A-05-001 & S21A-05-002
• Status: Published

Opinion

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

KATHLEEN L. SMITH, : C.A. No. S21A-05-001 : C.A. No. S21A-05-002 Appellant, : : v. : : : UNEMPLOYMENT INSURANCE : APPEAL BOARD, : : Appellee. :

Submitted: September 24, 2021 Decided: October 6, 2021

On Appeal from the Unemployment Insurance Appeal Board

AFFIRMED

MEMORANDUM DECISION AND ORDER

Kathleen L. Smith, pro se, Apt. 9, 32985 Shoppes at Long Neck, Millsboro DE 19966, Appellant.

Victoria W. Counihan, Esquire and Victoria E. Groff, Esquire, Delaware Department of Justice, 820 North French Street, Wilmington, DE, 18901, Attorneys for Appellee.

KARSNITZ, J.

1 This case involves two separate determinations by two different Claims

Deputies which were both adverse to Kathleen L. Smith (“Appellant”). The first

determination was that Appellant was disqualified from receiving

unemployment insurance benefits. The second determination was that

Appellant was liable for the repayment of an overpayment of unemployment

insurance benefits. The heart of the question before me is: does Appellant’s

failure to timely appeal the first disqualification determination foreclose her

ability to raise disqualification issues in her timely appeal of the second

overpayment determination?

I. INTRODUCTION

I will consider these two cases together, as they rest on the same

underlying facts and parallel decisions below. Appellant appeals the decisions

of the Unemployment Insurance Appeal Board (the “Board”) that she was

disqualified from receiving unemployment benefits under Delaware law, which

resulted in her being overpaid benefits in the amount of $400.00 per week under

Delaware law (C.A. No. S21A-05-002) and $600.00 per week under the Federal

Pandemic Unemployment Compensation (“PUC”) program under the CARES Act

(C.A. No. S21A-05-001).1 This resulted in Appellant’s liability for an overpayment

1 If Appellant was not eligible for any amount of Delaware unemployment insurance benefits, she

2 to her by the State in the amounts of $1,200.00 and $1,800.00 for the weeks ending

May 9, May 16, and May 23, 2020, for Delaware and Federal benefits, respectively.

The Board’s decision is affirmed for the reasons stated below.

II. FACTUAL AND PROCEDURAL HISTORY

During the summer season, Appellant was employed as the full-time

General Manager of the Sea Esta Motel 1 in Dewey Beach, Delaware. When

the motel closed for the off-season, she worked part time at McDonald’s. Then

the COVID pandemic hit, and in the winter of 2020, Claimant lost the

McDonald’s position. On February 16, 2020, she filed for both Delaware and

PUC unemployment benefits. On March 16, 2020, she returned to her full-time

job at the motel, but just five days later -- on March 21, 2020 -- the owner of the

motel closed it down due to COVID. Appellant again applied for unemployment

benefits. In April 2020, McDonald’s asked her to resume part-time work there,

but she declined due to COVID on the advice of her doctor since she was 60

years old and had severe allergies.2 On May 25, 2020, Appellant returned to her

full-time job at the motel and worked there until October 16, 2020, when the

was not eligible for any Federal benefits. If Appellant was eligible for even $1.00 of Delaware unemployment insurance benefits, she was eligible for the full amount of Federal benefits. There is no “sliding scale” correlating Delaware and Federal benefits. 2 The benefits in question are for the weeks ending May 9, May 16, and May 23, 2020, which occurred during the time she declined to return to the part-time McDonald’s job.

3 motel closed for the season. She applied for unemployment benefits again.

On September 17, 2020, a Claims Deputy determined that Appellant was

ineligible for unemployment benefits for the weeks ending May 9, May 16, and

May 23, 2020, because she

refused a suitable offer by [McDonald’s] to return to work and was deemed to have voluntarily quit. In a voluntary leaving situation, Claimant must provide evidence of good cause for leaving one’s employment in connection with the employment. Claimant must also exhaust all internal administrative remedies to rectify asserted issues. Because Claimant could not establish these two elements, she is disqualified from the receipt of benefits.

Appellant claims that, due to pandemic-related delays by the Post Office, she never

received notice of this determination. She also claims that she was verbally informed

by the Georgetown unemployment office that her part-time compensation ($9.25 per

hour for 8–12 hours per week) was not enough to adversely affect her unemployment

compensation. In any event, the determination was not appealed by Appellant within

the requisite ten (10) day period and thus became final on September 27, 2020.

On January 21, 2021, another Claims Deputy determined that Appellant, due

to non-fraudulent actions (i.e., a mistake by Appellant), had been overpaid benefits

for the weeks ending May 9, May 16, and May 23, 2020, and was liable for the

repayment of that overpayment to the Delaware Department of Labor. Appellant

timely appealed this determination to an Appeals Referee on January 25, 2021. This

is the appeal that has worked its way up to me for determination today.

4 The Referee’s hearing was held on February 11, 2021. Neither party called

witnesses. The Division of Unemployment Insurance Appeals introduced five

documents. Appellant sought to introduce documents (pay stubs from both

McDonald’s and the motel), but the Referee declined to admit them and informed

Appellant she could attach them to her subsequent appeal to the Board. In her

Findings of Fact, the Referee found that there was no evidence that the determination

of ineligibility was returned as undeliverable by the Post Office, and there was no

evidence of an appeal. The Referee did not consider Appellant’s arguments as to

why she failed to return to the part-time McDonald’s job, stating that because

Appellant had failed to timely appeal that determination, the determination had

become final and legally binding and was non-reviewable. Thus, the Referee limited

herself to considering whether Appellant was liable for the repayment of the

overpayment. She found that Appellant was so liable and affirmed the determination

of the Claims Deputy below.

Appellant timely appealed the overpayment determination to the Board,

which held a telephonic hearing based solely on the record on March 31, 2021, and

mailed its decision to Appellant on April 19, 2021. It is unclear whether the Board

considered the documents proffered by Appellant (pay stubs). The Board stated:

Under Delaware law, the only issue to be considered during an appeal of an overpayment decision are: (1) whether Claimant received the overpayment notice; (2) whether the amount of the overpayment is accurate; and (3) whether the overpayment is directed toward the proper

5 individual.3 Here, it appears that Claimant is disputing the underlying decision finding her disqualified to receive unemployment benefits. Delaware law, which the Board must follow, does not permit the Board to address whether Claimant was or was not qualified to receive unemployment benefits in the appeal of an overpayment decision. [Emphasis supplied]

The Board found that all three factors were correctly decided below and affirmed

the decision of the Referee.

Appellant timely appealed the Board’s decision to this Court. This is my

decision on her appeal.

III. STANDARD OF REVIEW

On review, pursuant to 19 Del. C. § 3323, “the findings of [the Board] as to

the facts, if supported by evidence and in the absence of fraud, shall be conclusive,

and the jurisdiction of the Court shall be confined to questions of law.”4 Therefore,

my role upon appeal is to determine whether the Board's findings are “supported by

substantial evidence and free from legal error.”5 Substantial evidence is “such

relevant evidence as a reasonable mind might accept as adequate to support a

conclusion.”6 Moreover, I may only consider the record before me.7 In reviewing

3 Citing Starcks v. Unemployment Insurance Appeal Board, 2013 WL 4848101 (Del. Super. July 30, 2013). 4 19 Del. C. § 3323 (2012); Coleman v. Dep't of Labor, 288 A.2d 285, 287 (Del.Super.1972) (“[T]he credibility of the witnesses, the weight of their testimony, and the reasonable inferences to be drawn therefrom are for the Board to determine.”). 5 Ridings v. Unemployment Ins. Appeal Bd., 407 A.2d 238, 239 (Del.Super.1979); Crews v. Sears Roebuck & Co., 2011 WL 2083880, at *2 (Del. Super. May 11, 2011). 6 Oceanport Indus. v. Wilmington Stevedores, 636 A.2d 892, 899 (Del.1994). 7 Hubbard v. Unemployment Ins. Appeal Bd., 352 A.2d 761, 763 (Del.1976).

6 the record for substantial evidence, I consider the record in “the light most favorable

to the party prevailing below.”8

I will not disturb the Board's determination absent an abuse of discretion by

the Board.9 The Court will find an abuse of discretion only if “the Board ‘acts

arbitrarily or capriciously’ or ‘exceeds the bounds of reason in view of the

circumstances and has ignored recognized rules of law or practice so as to produce

injustice.’ ”10

IV. ANALYSIS

This case is quite similar to Starcks v. Unemployment Insurance Appeal

Board, 2013 WL 4848101 (Del. Super. July 30, 2013). In Starcks, the Board's

decision affirmed findings by a Referee that Claimant received and was liable for an

overpayment of unemployment benefits. The Board based its determination on the

record, including (1) a prior determination by a Claims Deputy disqualifying

Claimant from payment of unemployment benefits; (2) the appeal of the Claims

Deputy's disqualification determination to a Referee; (3) the Referee’s subsequent

decision upholding the Claims Deputy's determination; (4) Claimant’s failure to

8 Steppi v. Conti Elec., 2010 WL 718012, at *3, 991 A.2d 19 (Table) (Del. Mar. 16, 2010); Gen. Motors Corp. v. Guy, 1991 WL 190491, at *3 (Del. Super. Aug. 16, 1991). 9 Crews, 2011 WL 2083880, at *2; see also Funk v. Unemployment Ins. Appeal Bd., 591 A.2d 222, 225 (Del.1991) (“The scope of review for any court considering an action of the Board is whether the Board abused its discretion.”). 10 Straley v. Advanced Staffing, Inc., 2009 WL 1228572, at *2 (Del.Super.2009) (citations omitted).

7 timely or untimely appeal the Referee’s disqualification decision; (5) the transcript

of a subsequent hearing before a different Referee who found that Claimant had been

overpaid benefits; and, (6) the Referee's decision regarding the overpayment of

benefits. On appeal to this Court, Claimant contended that she never received notice

of the decision disqualifying her from receiving unemployment benefits, and that

she would have appealed that disqualification decision had she received notice.

Claimant also contended that the calculation of the overpayment that she owed was

incorrect.

A. I cannot consider Appellant’s arguments regarding the disqualification decision.

The Starcks Court held:

A court cannot invoke its appellate jurisdiction unless an appeal is submitted within the time frame required by law. The Court concludes that the record demonstrates that [Appellant] was disqualified from the receipt of unemployment benefits. [Appellant] has never appealed the disqualification decision and it is now a final non-appealable decision.

A decision of an appeals tribunal (the Referee) becomes final unless within 10 days after the date of notification or mailing of that decision further appeal is initiated under 19 Del. C. § 3320.35 The record here is that [Appellant] failed to appeal the disqualification decision. [Appellant] has argued that she would have appealed the disqualification decision if she had known about it but, clearly, she has never formally appealed the disqualification decision— either a timely appeal or an untimely appeal supported by an argument of excusable neglect. Therefore, the disqualification decision became final and binding.

On appeal, the Court reviews the case on the record and does not hear new evidence. Where a claimant has received adequate notice of the

8 effect of a disqualification decision and of the right to appeal it, the claimant cannot appeal the basis, or merits, of the disqualification through a subsequent appeal of an overpayment determination. As such, the Court will not overturn the overpayment decision based on arguments that [Appellant] may have been improperly disqualified or that she would have, upon notice, appealed the disqualification decision.11

In the case before me, Appellant never appealed the decision disqualifying her

from unemployment benefits, either timely or untimely. In that appeal she could

have raised issues related to her failure to receive the notice of disqualification, her

medical condition and its relationship to the COVID pandemic, and information

provided to her by the Georgetown unemployment office. However, she did not do

so and is estopped from doing so now.

B. The Board's decision to affirm the overpayment decision is supported by substantial evidence and free from legal error.

The recoupment of overpaid benefits is governed by 19 Del. C. § 3325. This

statute states that any person who receives benefits of which they are deemed not to

be entitled shall be required to repay the amount of overpayment in cash, “regardless

of whether such sum was received through fraud or mistake, or whether he was

legally awarded the payments of benefits at the time but on appeal was subsequently

found not to be entitled thereto.”12 Before initiating the collection of the

overpayment amount, the Department of Labor must issue a notice of overpayment

11 Starcks, 2013 WL 4848101, at *4 (Del. Super. July 30, 2013) (citations omitted). 12 19 Del. C. § 3325.

9 and an order for recoupment to defendant.13 “Unless the person files an appeal to an

Unemployment Insurance Appeals referee within 10 days after such order was

mailed to the person at their last known address, the order shall be final and

recoupment shall be made in accordance with the order.”14

This Court held, in Smith v. Unemployment Ins. Appeal Bd., that an individual

who fails to report wages, and subsequently is disqualified from receiving benefits,

is required to repay all of the benefits that were received while being ineligible to

receive them.15 The Court stated that “it was [Claimant’s] failure to report [his]

earnings that disqualified [him] from receiving unemployment benefits; thus the

issue before the court is whether [he] received an overpayment of benefits, not

whether he was eligible for unemployment benefits.”16 The decision in Smith is not

controversial as it tracks the plain language of the statute which provides that:

Any person who has received any sum of benefits under [Chapter 33] to which it is finally determined that the person was not entitled shall be liable to repay in cash said overpayment, to the Department for the Unemployment Compensation Fund, or to have such sum deducted from future benefits payable to the person under [Chapter 33]. The person shall be so liable regardless of whether such sum was received through fraud or mistake, or whether that person was legally awarded the payment of benefits at the time but on appeal was subsequently found not to be entitled thereto.17

13 Id. 14 Id. 15 Smith v. Unemployment Ins. Appeal Bd., 2013 WL 1718059, at * 1 (Del. Super. Apr. 22, 2013). 16 Id. 17 19 Del. C. § 3325.

10 Smith makes it clear that, once the disqualification decision is final, then the only

matter before me is whether any benefits were received during the disqualification

period. Under Smith, the issue is not whether Appellant was entitled to

unemployment benefits; rather, it is whether she received the payment of benefits at

a time when she was not so entitled. The Claims Deputy determined that Appellant

was ineligible to receive benefits for the weeks ending May 9, May 16, and May

23, 2020. The Referee upheld, in the disqualification decision, the Deputy's

eligibility determination. The disqualification decision became final when Appellant

failed to appeal – either timely or untimely -- that decision. Subsequently, another

Claims Deputy determined that Appellant received benefits in the amount of

$1,200.00 and $1,800.00 during the period of ineligibility. The Referee upheld, in

the overpayment decision, the Claim Deputy's eligibility determination. Appellant’s

appeal of the overpayment decision is now before me. She acknowledges receipt of

the overpayment decision and that she is the proper individual to receive that notice.

Thus, the only issue on appeal is whether the amount of overpayment is accurate.18

I find that the Board's decision is supported by substantial evidence in the

record and free from legal error. The Board may affirm a decision “on the basis of

the evidence previously submitted to the appeal tribunal.”19 Here, the Board

18 Murray v. Unemployment Ins. Appeal Bd., Dep't of Labor, 1994 WL 637088 at *2 (Del. Super. Apr. 22, 1994). 19 19 Del. C. § 3320(a).

11 considered evidence from the hearing that was held before the Referee. The

Department of Labor submitted evidence, including a payment history, which

showed that Appellant was overpaid benefits, of which she was not entitled, in the

amount of $1,200.00 and $1,800.00 during the period of ineligibility – the three

weeks ending May 9, May 16, and May 23, 2020. The overpayment amount is

accurate. The Board correctly affirmed the Referee's decision to uphold the Deputy's

determination that Appellant is liable for an overpayment of benefits in the

aforementioned amounts.

V. CONCLUSION

The facts of this case, taken together with the Board's binding credibility

determination, lead me to conclude the Board's decision was supported by

substantial evidence and free from legal error. Therefore, the Board's decision

finding that Appellant is liable for the repayment of an overpayment of unemployment

insurance benefits is AFFIRMED.

IT IS SO ORDERED.

/s/ Craig A. Karsnitz

cc: Prothonotary Kathleen L. Smith Unemployment Insurance Appeal Board