Teri Ellis, Relator v. Department of Employment and Economic Development

• Court: Court of Appeals of Minnesota
• Decided: July 20, 2015
• Docket: A14-1774
• Status: Unpublished

Opinion

This opinion will be unpublished and may not be cited except as provided by Minn.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 A14-1774 A14-1775

Teri Ellis, Relator,

vs.

Department of Employment and Economic Development, Respondent.

Filed July 20, 2015 Affirmed Peterson, Judge

Department of Employment and Economic Development File No. 32743454-3

Ronald R. Bradley, Minneapolis, Minnesota (for relator)

Lee B. Nelson, Department of Employment and Economic Development, St. Paul, Minnesota (for respondent)

Considered and decided by Peterson, Presiding Judge; Ross, Judge; and Johnson,

Judge.

UNPUBLISHED OPINION

PETERSON, Judge

Relator challenges an unemployment-law judge’s decision that she obtained

unemployment benefits by fraud when she failed to report hours worked and earnings from a part-time job. Relator asserts that the decision is arbitrary, capricious, and

unsupported by evidence. We affirm.

FACTS

Relator Teri Ellis was laid off from her employment with Accra Care on August

10, 2013, and applied for unemployment benefits on August 15, 2013. At the time she

was laid off from Accra Care, Ellis also worked part time for the Anoka-Hennepin

School District, earning $21.85 per hour as a crossing guard, and she continued to work

for the school district after applying for benefits. On September 4, 2013, Ellis began

working for Cross Media as a bookkeeper; this was also a part-time job and paid $33.00

per hour. Ellis underreported her earnings when filing for unemployment benefits. She

received unemployment benefits until April 26, 2014, when respondent Department of

Employment and Economic Development (DEED) terminated her benefits and began an

overpayment and fraud investigation.

At an appeal hearing on the overpayment and fraud allegations, Ellis maintained

that she was instructed by someone at DEED that she had to report her “new” hours with

Cross Media and did not have to report her employment with the school district because

it was not “new.” Ellis testified that after receiving this instruction, she reported only

income from Cross Media. But the amounts she reported did not always correspond with

her gross wages from Cross Media. Ellis asserted that she asked DEED several times

whether she needed to report income from both part-time jobs and was told that she only

had to report new income. Ellis did not specify when these conversations took place or

who had instructed her that she was not required to report some hours.

2 A person applying for unemployment benefits is given an “Information

Handbook,” which explains that an applicant “must report any hours worked and

earnings from all work.” Ellis admitted receiving the handbook and testified that she

may have “perused” it. Ellis was required to fill out weekly request forms for

unemployment benefits, which included the question, “For this reporting period, did you

or will you receive or apply for income, from any other source, that you have not

previously reported to us?” Ellis filled out these forms from September 1, 2013, to April

26, 2014, a total of 34 weeks. If Ellis had reported her income from the school district,

she would have been ineligible for benefits during 30 of the 34 weeks.

Besides Ellis, the unemployment-law judge (ULJ) heard testimony from Linda

Corey, a supervisor at the DEED call center. Corey explained that call-center

representatives work with the handbook and are specifically trained to tell applicants that

they “need to report all wages earned in that particular week.” She had never heard of a

call-center representative “mak[ing] a distinction between only reporting some hours

from a job or only reporting some jobs in a week instead of all jobs or all hours.” Corey

said that the call-center staff knew that people who worked several jobs had to report

earnings for every job they worked.

Ellis denied having any intent to defraud DEED and argued that she had been

misled. The ULJ determined that Ellis had been overpaid and that she had obtained

unemployment benefits by fraud, ordered Ellis to repay the overpayment, and assessed a

fraud penalty. Ellis asked for reconsideration, and the ULJ affirmed his decision. Ellis

appealed to this court by writ of certiorari.

3 DECISION

We may affirm the ULJ’s decision, or remand, reverse, or modify a decision if,

among other things, the relator’s substantial rights have been prejudiced because a

decision is not supported by substantial evidence or is arbitrary or capricious. Minn. Stat.

§ 268.105, subd. 7(d)(5)-(6) (2014). We review “the ULJ’s factual findings in the light

most favorable to the decision.” Bangston v. Allina Med. Grp., 766 N.W.2d 328, 332

(Minn. App. 2009). Questions of law are subject to de novo review. Builders

Commonweath, Inc. v. Dep’t of Emp’t & Econ. Dev., 814 N.W.2d 49, 56 (Minn. App.

2012). “When the credibility of a witness testifying in a hearing has a significant effect

on the outcome of a decision, the [ULJ] must set out the reason for crediting or

discrediting that testimony.” Minn. Stat. § 268.105, subd. 1a(a) (2014). This court defers

to the ULJ’s credibility determinations. Bangston, 766 N.W.2d at 332.

An applicant who receives unemployment benefits to which the applicant is not

entitled must repay the amount of the overpayment. Minn. Stat. § 268.18, subd. 1(a)

(2014). “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)

(2014). An applicant who obtains unemployment benefits through fraud must repay the

amount received and is subject to penalties. Id.

In Cash v. Comm’r of Econ. Sec., the relator was found to have committed fraud

and was disqualified from receiving benefits after he failed to report income for six

4 weeks when he filed for unemployment benefits. 352 N.W.2d 535, 536 (Minn. App.

1984). The relator claimed that he failed to report the income because of a

“misunderstanding . . . caused by comments of a department employee.” Id. A referee

rejected the relator’s claims, and the referee’s decision was affirmed by a commissioner’s

representative. Id. On appeal, this court affirmed, concluding that the relator had

committed fraud by knowingly and willfully1 failing to disclose income. Id. at 537. This

court stated that whether the relator intentionally misrepresented his earnings was a

question of credibility that lay within the fact-finder’s province. Id.; see also Burnevik v.

Dep’t of Econ. Sec., 367 N.W.2d 681, 683 (Minn. App. 1985) (stating that determination

whether claimant obtained benefits by fraud involves credibility of claimant’s testimony).

The ULJ found that Ellis was given two copies of the information handbook,

which contained specific instructions that a claimant must report “any hours worked and

earnings from all work every week you request benefits.” Based on Corey’s testimony,

the ULJ rejected relator’s assertion that a DEED employee told her that she was required

to report her wages from only one job. The ULJ found that “[t]he preponderance of the

evidence shows that Ellis did not have a good faith belief as to the correctness of her

answers when reporting her gross earnings.” The ULJ found it not credible that Ellis

could believe that she did not have to report all of her wages in light of the direct

questions she had to answer in each weekly application for benefits. The ULJ further

noted that Ellis failed to report any hours for two weeks that she worked at the employer

1 Under current law, a claimant must be found to have acted “knowingly.” Minn. Stat. § 268.18, subd. 2(a). This appears to be a less stringent standard than the former “knowingly and willfully.”

5 for whom she was reporting hours and that she had no reasonable explanation for that.

Finally, the ULJ found Corey’s “detailed and specific testimony” credible.

Based on these credibility findings, the ULJ’s conclusion that Ellis committed

fraud and is ineligible for unemployment benefits because she knowingly misstated her

income in order to obtain benefits is supported by substantial evidence and is not

arbitrary or capricious.

Affirmed.