BEFORE THE
STATE OF WISCONSIN
LABOR AND INDUSTRY REVIEW COMMISSION

In the matter of the
unemployment benefit claim of

LYLE A. SCHURICHT, Employee

Involving the account of

HALUSKA COMPANY, Employer

UNEMPLOYMENT INSURANCE DECISION
Hearing No. 89-401239AP


A Department Deputy's Initial Determination held that the employe did not have sufficient weeks in covered employment during his base period to qualify for benefits. The employe filed a timely request for hearing, and hearing was convened pursuant to notice on April 3, 1989, in Manitowoc, but the employe failed to appear, and an Administrative Law Judge, acting as an Appeal Tribunal of the Department of Industry, Labor and Human Relations, subsequently ordered the appeal dismissed.

Within 21 days of the date of the dismissal order, the employe submitted a written excuse for his failure to appear, and the Administrative Law Judge set aside her order of dismissal and ordered that hearing be held on the issue of whether the employe had good cause for failing to appear at the April 3, 1989 hearing and, provisionally, on the merits of his appeal. However, on the day on which this hearing was scheduled to be heard, the Department received a Request to Withdraw from Appeal and Hearing form, signed by the employe, and on June 1, 1989, an Administrative Law Judge ordered the appeal dismissed on that basis.

In January 1990, the employe submitted a letter to the Department indicating a desire to retract his withdrawal of request for hearing, which was treated as an untimely petition for Commission review. By an order dated February 12, 1990, the Commission, in the exercise of its jurisdiction under section 108.09 (6)(c), Stats., set aside the Administrative Law Judge's June 1, 1989 order and directed that further testimony be taken before an Administrative Law Judge, acting as a deputy for the Commission, with respect to the reasons the employe withdrew his request for hearing, whether the employe wrote a letter to the Department in August 1989 attempting to retract the withdrawal of his request for hearing, and, provisionally, on the merits of his appeal. Hearing was held on those issues before Administrative Law Judge Laura Nick on March 13, 1990 and April 16, 1990.

On June 7, 1990, the Commission issued a decision concluding that the employe would be allowed to retract his withdrawal of request for hearing. However, since the question of whether the employe had good cause for failing to appear at the hearing scheduled for April 3, 1989, had not been the subject of any hearing to that point, the Commission also ordered that further testimony be taken before Judge Nick with respect to that question. Hearing was held on that issue before Judge Nick on July 9, 1990 and September 5, 1990.

All issues have now been the subject of hearing, and the matter is before the Commission for review. Based on the evidence and applicable law, and after having consulted with Administrative Law Judge Nick concerning her impressions as to the credibility of the witnesses at the hearings on March 13 and April 16, 1990, the Commission makes the following:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

Good Cause For Nonappearance - The employe failed to appear at the April 3, 1989 hearing because, after he arrived at the courthouse shortly before the hearing was to begin, notified the Administrative Law Judge of his presence, and sat down in the hallway outside the hearing room to wait for the hearing to begin, he was arrested and jailed.

An inability to attend a hearing because of incarceration may or may not constitute good cause, depending on a number of circumstances. Generally, if a person is physically unable to attend a hearing, good cause for nonappearance can be found. However, the result may be otherwise if the person bears responsibility for the circumstances that make them unable to attend the hearing. Thus, if a person knowingly engages in conduct which could result in their arrest and incarceration, such that they would be unable to attend a hearing, and if this then occurs, the fact that attendance at the hearing is beyond the person's control at the time of the hearing because of their incarceration, will not necessarily result in a finding of good cause. While in a practical sense, the employe's ability to get out of jail and go to a hearing may be beyond his control after he is arrested, the critical time when the employe is in full control of the situation is before he makes the choices which result in his arrest.

Here, the arrest arose out of a lawsuit which the employer had brought against the employe in connection with a partnership between them. The employer had sought production of certain partnership assets through discovery. The employe apparently resisted, and the court in which the matter was pending eventually ordered that the assets be produced. Despite the order, production of the assets apparently still did not occur. The arrest of the employe occurred on the basis of a bench warrant issued by the court after its finding that the employe was in contempt of court because of his continued refusal to comply with the court's order to produce the assets.

The hearing at which the employe was found in contempt (which he did not attend) was held on March 1, 1989. In a prior hearing, in February 1989, the employe had been warned by the court that continued failure to comply with the production order could result in contempt sanctions, including incarceration. The employe knew, through his attorney, that the March 1, 1989 hearing would be held to determine whether the employe would be found in contempt. The employe was told after the hearing that the court had found him in contempt, and the Commission specifically finds that, within a fairly short time after that hearing, the employe not only knew that he had been found in contempt of court but also suspected that he was subject to arrest. He must have appreciated that his being arrested would pose a problem for his ability to attend a hearing on his unemployment compensation claim. If the employe, having somehow brought a contempt finding on himself, then failed to take steps to resolve the potential conflict this presented to his ability to attend an unemployment compensation hearing (as for example, by either curing his contempt or by notifying the Department of his potential inability to attend the hearing, and seeking a postponement), it would be difficult to find that he had good cause for his eventual failure to attend the hearing due to his arrest.

However, the record establishes that on march 16, 1989, a Manitowoc County deputy sheriff visited the employe's residence on another matter. The employe asked the deputy to check whether there were any outstanding arrest warrants for the employe, and the deputy, upon doing so, determined and informed the employe that there were none. How this occurred, given that the bench warrant issued by the court had been entered into the county's computer system on March 7, 1989, is unclear, but its effect is not: it led the employe to believe that, whatever had been the case up until that point, he was no longer subject to arrest. Thus, the employe's failure to take steps prior to the April 3, 1989 hearing to ensure his continuing freedom is understandable. The employe made reasonable efforts to attend the April 3, 1989 hearing, reporting to the hearing location on time and notifying the Administrative Law Judge of his presence. He was thereafter rendered physically unable to attend the hearing by his arrest and incarceration.

The Commission therefore concludes that the employe had good cause for his failure to attend the April 3, 1989 hearing. 
 

Weeks of Covered Employment - At all times material herein, Dan Haluska ("Haluska" , operated as a sole proprietor of an unincorporated business, known as the Haluska Company, engaged in building and remodeling of buildings.

At various times in 1986 and 1987, the employe performed wage-earning services for Haluska. The employe and Haluska disagree over when and how much the employe worked for Haluska, and whether the employe was paid all wages due for that work. The issue for decision in this proceeding is whether, in his base period of February 1, 1987 through January 30, 1988, the employe had 17 weeks of employment, such that he was eligible to begin a benefit year.

Interpreting the arrangements between Schuricht as employe and Haluska as employer is complicated by the fact that they had financial dealings in another capacity.

Prior to the events at issue in this case, Haluska and the employe were good friends. The employe had done some automobile racing. In the fall of 1986, Haluska and the employe became interested in a car owned by another person. In January 1987, Haluska and the employe entered into a written commercial partnership agreement, forming a partnership to be known as the Haluska Racing Company, the business of which was to be the purchase, ownership and operation of that car as a drag racer. The initial capitalization of the partnership was to be in the amount of $24,000, with Haluska contributing 51 percent thereof and the employe contributing 49 percent thereof, in cash or property at agreed valuation. Haluska did in fact contribute his share in cash. The employe contributed approximately $5,000 in cash, as well as a spare racing engine and a spare racing transmission which he valued to the partnership at least $7,000. The employe also contributed a significant amount of his own labor to the partnership, working on the car. Much of the work on the car took place during the time period at issue in this case.

Haluska and the employe are no longer friends. Their partnership fell apart, and litigation ensued, during the course of which the employe spent approximately two months in jail for contempt of court, as described above in this decision. The lawsuit was eventually resolved by a settlement in which the employe agreed to pay Haluska and his attorneys $12,500 and to drop a wage claim he had brought against Haluska, and in which Haluska agreed to turn over to the employe the remaining parts from the racing car. There is still a dispute between the employe and Haluska as to whether that settlement agreement was fully complied with.

The employe contends that he worked as a general laborer for Haluska Company from sometime in 1986 through August 1987. Although (as will be discussed below) he has also provided contrary testimony, the employe asserted that he worked for the Haluska Company on an average of 40 to 60 hours a week, performing at least some work in every week in the period from September 1986 to August 1987. He has asserted having performed over 600 hours of work for Haluska in 26 different calendar weeks, from February 2, 1987 through August 1987.

Haluska claims that the employe worked for him only during seven weeks. Specifically, it was Haluska's contention that the employe performed 21 hours of work from February 2 through February 6, 1987 (week 6), and four hours of work on April 20, 1987 (week 17), and that he worked for him from July 23, 1987 to August 21, 1987 (weeks 30-34). Haluska denied the employe's assertion as to other work, contending that the employe simply did not do some of the work he claims he did, did some of the work not as services for the Haluska Company but rather as a contribution toward their separate business partnership, the Haluska Racing Company, and performed other services, such as raking leaves at Haluska's cottage, outside of any employment relationship and merely as a "neighborly" favor.

There is thus a sharp contrast between the testimony of the employe and the testimony of Haluska, on the central issue in this case, which is the number of weeks of employment performed by the employe for Haluska. Resolution of the issue thus presented requires the making of a judgment as to the credibility of the employe and Haluska as witnesses. Considering that the employe bore the burden of establishing the necessary threshold conditions for qualification for benefits, including having at least 17 weeks of employment in his base period, the Commission looks particularly at the question of whether the employe's testimony as to the amount of work he did for the Haluska Company was credible.

The Commission has consulted with Judge Nick concerning her impressions as to the credibility of witnesses in this matter. Judge Nick indicated that she found the employe to be credible in his testimony concerning the circumstances surrounding his attempt to retract his withdrawal of request for hearing. With respect to the testimony of the parties on the merits of the appeal, Judge Nick also indicated that she found Haluska's testimony to be evasive on occasion. However, Judge Nick provided no other strong impressions as to the relative credibility of the employe and Haluska, with respect to their testimony concerning the merits of the employe's appeal. Having consulted with Judge Nick, the Commission considered it appropriate to also look to the content of the parties' testimony in some detail in order to make a judgment as to credibility. In so doing, the Commission found such a significant number of materially inconsistent and contradictory assertions in the evidence offered by the employe, that it has concluded that his testimony as to the number of weeks in which he worked is not credible.

Thus, the employe asserts in Exhibit 6, a document purporting to set forth the hours he worked, that he spent 150 hours working on Haluska's cottage from February 25 through March 27 in 1987, but he also asserts in Exhibit 8-A, another document purporting to set forth information concerning his hours of work, that he spent 152 hours working on the partnership race car during the exact same period, February 25 to March 27, 1987. The near coincidence in number of hours and the exact coincidence in dates, suggests that the same work may be being referred to twice here. Upon being confronted with this, the employe's explanation was that both assertions were true, that he worked on the cottage by day and on the car by night. This, however, was inconsistent with his testimony that during this time he was working full-time at night at the bar he and his wife owned. His explanation, when confronted with this inconsistency, was that he did not in fact work at his bar but had other people tend bar for him, but this was in direct contradiction to his claim that he did work at his bar at night.

Another suggestion that the employe is referring to the same work twice is found in comparison of Exhibit 11, where 38 hours is claimed for work on the car at "Mark's Garage," and Exhibit 8-B, where the same claim is made, with Exhibit 6, where a coincidentally similar claim for 38 hours is made for work between February 9 and February 21, 1987, for Dan Haluska on the "company car and truck."

There is an inconsistency between the employe's claim of 152 hours worked on the car between February 25 and March 27, 1987, made in Exhibit 8-A, and 150 hours worked on the car in the same period, reflected on page 2 of Exhibit 11. This latter claim of 150 hours worked on the car is also completely in accord with the 150 hours claimed to have been worked between the same dates, but on Haluska's cottage, according to Exhibit 6.

Other inconsistencies are found throughout the employe's evidence. In Exhibit 6, 21 hours of work are claimed on the job of remodeling the Knab Law Offices, but in Exhibit 13, reference is made to that work having involved 26 hours. On page 2 of Exhibit 11, 34 hours are claimed with respect to working on the car at the "B & B" Body Shop, but on Exhibit 8-A, 15 hours are reflected for this work.

There are contradictions in testimony as well. In a deposition taken in the court proceedings, and received into the record in this matter as Exhibit 12, the employe testified (at page 5) that he began working for Haluska

in November or December 1986, but at the hearing, he testified that he worked for Haluska from September 1986 on. Also in his deposition, on page 5, the employe testified that he worked part-time for Haluska until the end of June 1987, but in his testimony at the hearing, he asserted that when he worked for Haluska, he worked for him from 40 to 60 hours per week, that he had no periods of layoff, and that, while he did not work on some days because of weather, he did work in each week.

Finally, the Commission has doubts as to the information provided by the employe in his exhibits because of his failure to produce underlying documents. He asserted that Exhibit 6, a summary of the hours he claimed he worked, was prepared from a calendar he kept on which he made entries of the actual work he was doing, but he failed to produce that calendar at the hearing. Similarly, while he claimed that Exhibit 8-A was a summary of notes on other pieces of paper which he had kept, he failed to produce those.

Considering all of these contradictions, inconsistencies, and coincidences, and also considering the potential for bias created by the present animosity between the employe and Haluska, the Commission was left with the definite conviction that the employe's assertions as to the amount of work he performed for the Haluska Company simply could not be credited.

Haluska's assertions as to the amount of work the employe performed for him are supported by the copies of checks to the employe from the Haluska Company, as well as the copy of the W-2 form reflecting the wages paid to the employe by the Haluska Company in 1987. The employe himself testified that Haluska Company always paid him by check, an assertion the Commission accepts. It seems unlikely that Haluska would have risked criminal liability by misreporting to the Internal Revenue Service the amount of wages paid to the employe, when he had paid those wages by way of checks that would leave a "paper trail".

On this basis it is concluded that the employe was employed by the employer in "covered employment" within only seven different calendar weeks during the base period, February 1, 1987 through January 30, 1988. The Commission therefore finds that the employe does not have sufficient weeks in covered employment during the base period, February 1, 1987 through January 30, 1988, to meet the qualifying requirements of section 108.04 (4), Stats.

DECISION

The employe had good cause for his failure to appear at the hearing scheduled for April 3, 1989, and the merits of his appeal will therefore be decided. The employe does not have sufficient weeks in covered employment during the base period, February 1, 1987 through January 30, 1988, to meet the qualifying requirements of section 108.04 (4), Stats. Accordingly, no benefits are payable.

Dated and mailed October 16, 1990
110 : CD7726     PC 712.6 BR 338

/s/ Kevin C. Potter, Chairman

Carl W. Thompson, Commissioner

/s/ Pamela I. Anderson, Commissioner


cc: Jerome L. Fox, Attorney


[ Search UC Decisions ] - [ UC Digest - Main Index ] - [ UC Legal Resources ] - [ LIRC Home Page ]


uploaded 2005/07/13