DAVID T MUMM, Claimant
An administrative law judge (ALJ) for the Division of Unemployment Insurance of the Department of Workforce Development issued an appeal tribunal decision in this matter. A timely petition for review was filed.
The commission has considered the petition, and it has reviewed the evidence submitted to the ALJ. Based on its review, the commission makes the following:
The claimant was discharged from full-time employment as a counter salesman for an auto parts store on September 22, 2013. Subsequent to his discharge, the claimant initiated a claim for unemployment benefits. When he filed his weekly benefit claim for week 39 of 2013, the week ending September 28, 2013, the claimant reported that he had been fired, had worked four hours, and had earned wages of $50. He responded "No" when asked if he was self-employed.
The claimant owns nine or ten vehicles. He used his employee discount at the auto parts store to purchase parts for those vehicles and for his family's vehicles until the employer clarified that the employee discount was limited. The claimant has a shop near his residence where he works on his vehicles, keeps his tools, and stores some things. He has room to work on one vehicle at a time in his shop. The claimant had a cell phone voicemail greeting that said, "You've reached Todd at TJS Truck Parts and Fabrication. Leave your name and number, and I will call you back." The claimant denied having a business and explained that the voicemail greeting was a joke between a couple of friends and his family because he works so much on his vehicles. The claimant also works on family members' vehicles, but he does not take any money to work on anything. The claimant's cell phone number was not available to the general public.
The claimant's former employer contested the claimant's eligibility for unemployment insurance benefits. It was alleged that the claimant sold vehicles for profit, sold used parts for profit, and ran a business with business cards and informal advertising. Members of the public reportedly sought out the claimant at the auto parts store concerning used parts. The claimant denied engaging in the selling of used parts or advertising TJS Truck Parts and Fabrication. The claimant frequently took time off of work to attend swap meets, where he would buy truck parts, but he did not sell parts at those meets. The claimant has never filed an income tax return for self-employment regarding TJS Truck Parts and Fabrication. Prior to his discharge in week 39 of 2013, the claimant worked full-time since at least March 2008. A couple of years before his discharge, the claimant fabricated a customized part for the fire department at the request of his former employer for which the claimant was paid.
Claimants who file for unemployment insurance benefits are responsible for correctly and completely reporting information for each week they claim benefits, because benefits are initially paid based on the information claimants provide. Claimants who conceal information from the department when filing for benefits may be subject to overpayments and penalties. For unemployment insurance purposes, conceal means "to intentionally mislead or defraud the department by withholding or hiding information or making a false statement or misrepresentation."(1)
A claimant who conceals work performed, wages earned, or another material fact concerning benefits eligibility when filing a weekly claim certification is ineligible for benefits in an amount equivalent to two, four, or eight times the claimant's weekly benefit rate for each act of concealment.(2) This ineligibility is applied against benefits and weeks of eligibility for which the claimant would otherwise be eligible after the week of concealment.(3)
On October 16, 2013, the department issued a determination finding that the claimant was self-employed and that he concealed his self-employment when filing for benefits for week 39 of 2013. His self-employment was deemed a material fact relating to his eligibility for benefits. As a result of the determination, the claimant's benefit amount was reduced by $1,052. This reduction was in effect for benefits and weeks that become payable during the six-year period that ends October 12, 2019.
The claimant appealed the department's determination. Following a hearing, an ALJ affirmed the determination, finding that the claimant intended to conceal material information from the department during the issue week in question.
The claimant petitioned for commission review. The issue to be decided is whether the claimant concealed a material fact relating to his eligibility for benefits when he failed to report that he was self-employed when filing his weekly claim certification for week 39 of 2013.
The burden to establish that a claimant concealed information is on the department.(4) As a form of fraud, concealment must be proven by clear, satisfactory, and convincing evidence.(5) Concealment will not be found where a claimant makes an honest mistake or misinterprets information received from the department.(6) Concealment requires an intent or design to receive benefits to which the claimant knows he or she is not entitled.(7)
The commission is not satisfied that concealment was established in this case. The evidence in the record did not establish that TJS Truck Parts and Fabrication existed as an actual, ongoing business from which the claimant received income. It was not established that the claimant engaged in activities as a for-profit venture as opposed to engaging in activities as a hobby. The only income about which there was testimony the claimant had received years prior to week 39 of 2013. Furthermore, while the department determined that the claimant was self-employed in week 39 of 2013, department records show that the self-employment issue was "washed out" and not investigated. The commission notes that the department did not find that the claimant was self-employed in any week other than in week 39 of 2013.
Finally, the evidence presented was not sufficient to show that the claimant acted with an intent to receive benefits to which he knew he was not entitled, a necessary element of concealment. The ALJ found that the claimant intended to conceal material information, but there was no finding that the claimant intentionally responded "No" to the self-employment question in order to receive benefits to which he knew he was not entitled. The claimant properly raised issues relating to his eligibility for benefits in week 39 of 2013 when he reported that he had been discharged and that he had worked and earned wages.
The commission therefore finds that, when filing his weekly claim certification for weeks 39 of 2013, the claimant did not conceal a material fact relating to his eligibility for benefits from the department.
The appeal tribunal decision is reversed. Accordingly, the claimant's benefit amount shall not be reduced by $1,052 for benefits and weeks that become payable during the six-year period that ends October 12, 2019.
Dated and mailed February 28, 2014
mummda_urr . doc : 152 : BR 330
BY THE COMMISSION:
/s/ Laurie R. McCallum, Chairperson
/s/ C. William Jordahl, Commissioner
/s/ David B. Falstad, Commissioner
NOTE: The commission consulted with the ALJ who held the hearing in this matter to obtain the ALJ's impressions as to the credibility of the witnesses, based on their demeanor, which were a factor in the ALJ's decision. In response, the ALJ indicated that she did not have any demeanor impressions but her credibility impressions were conveyed in her decision.
The commission considered the ALJ's response and her credibility impressions. Upon review, the commission has reversed the appeal tribunal decision because it disagrees with the ALJ's conclusion that the claimant provided false information to the department. As noted in the commission's decision,
supra, it was not established by clear, satisfactory, and convincing evidence that that the claimant was self-employed in week 39 of 2013 or that he intentionally concealed the material fact of self-employment from the department in order to receive benefits to which he knew he was not entitled.
THOMAS J KIEFFER
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(1)( Back ) Wis. Stat. § 108.04(11)(g).
(2)( Back ) Wis. Stat. § 108.04(11)(a), (b) and (be).
(3)( Back ) Wis. Stat. § 108.04(11)(bm).
(4)( Back ) Scott G. Lynch, UI Dec. Hearing No. 10404406AP (LIRC Mar. 11, 2011); Holloway v. Mahler Enter., Inc., UI Dec. Hearing No. 11606291MW (LIRC Nov. 4, 2011).
(5)( Back ) Kamuchey v. Trzesniewski, 8 Wis. 2d 94, 98, 98 N.W.2d 403 (1959); Schroeder v. Drees, 1 Wis. 2d 106, 112, 83 N.W.2d 707 (1957).
(6)( Back ) Joseph W. Hein, Jr., UI Dec. Hearing No. 00605374MW (LIRC Dec. 13, 2001); Scott G. Lynch, supra.
(7)( Back ) Karandjeff v. Cmty. Living Alliance Inc., UI Dec. Hearing No. 11611430MW (LIRC June 20, 2012); Nestor Gutierrez, UI Dec. Hearing No. 00005766MD (LIRC July 19, 2002).