Categories
18. Restitution, Waiver, Fraud

Pardon v MESC – 18.09

Pardon v MESC
Digest no. 18.09

Section 62(b)

Cite as: Pardon v MESC, unpublished opinion of the Wayne Circuit Court, issued November 8, 1984 (Docket No. 82-219 979 AE).

Appeal pending: No
Claimant: Larry A. Pardon
Employer: Imperial Cab
Docket no.: B79 16525 77987
Date of decision: November 8, 1984

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CIRCUIT COURT HOLDING: The claimant was not seeking work, was not available for work and wrongfully claimed his children as dependents for purposes of calculations. Consequently, he was subject to the fraud provision of the MES Act, Section 62(b).

FACTS: The claimant had owned a corporation which provided package transportation services. Ultimately the business went bankrupt. The assets of the claimant’s corporation were sold to another corporation owned by his wife which also provided package delivery services. Thereafter, the claimant spent anywhere between 20 and 40 hours per week providing uncompensated services for his wife’s corporation, and spent his free time at a health club.

During the period he was providing uncompensated services and spending a good deal of time at a health club the claimant was drawing unemployment benefits. For purposes of calculation of his benefit rate the claimant claimed his children as dependents. Although the claimant’s four children were all under the age of 13, the wife’s corporation paid them thousands of dollars per year for nominal services. Monies paid to the children were used for household purposes.

DECISION: The claimant was ineligible for benefits and subject to the penalty provision of MES Act Section 62(b) for intentional misrepresentation.

RATIONALE: Although he certified he was seeking work and available the claimant was not looking for a job but was providing uncompensated services to his wife and spending the bulk of his free time in athletic pursuits.

Digest Author: Board of Review (original digest here)
Digest Updated:
6/91

Categories
18. Restitution, Waiver, Fraud

Buxton v Chrysler Corp – 18.02

Buxton v Chrysler Corp
Digest no. 18.02

Section 62(a)

Cite as: Buxton v Chrysler Corp, unpublished opinion of the Court of Appeals of Michigan, issued June 1, 1984 (Docket No. B74 12158 49663).

Appeal pending: No
Claimant: Clark W. Buxton
Employer: Chrysler Corporation
Docket no.: B74 12158 49663
Date of decision: June 1, 1984

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COURT OF APPEALS HOLDING: The provision of finality in Section 32(b) “applies only to whether the employer is entitled to a credit to its rating account and not to benefits paid to the claimant.”

FACTS: The claimant was paid benefits as a result of the employer’s late response to the Commission’s request for information to determine the claimant’s entitlement to unemployment benefits. The claimant was ordered to make restitution pursuant to Section 62(a) for the benefits paid prior to the employer’s response.

DECISION: “The benefits paid claimant were properly subject to restitution pursuant to Section 62(a).”

RATIONALE: The Court affirmed the decision of the Circuit Court which held:

“The language of Section 32(b) is specifically limited to the ‘non-complying employer’. Had the legislature meant for this section to apply to benefits paid to a claimant, it would have so stated, as it has done in other sections of the act, i.e., Sections 62(a) and 32(d). The Court is of the opinion that Section 32(b) applies only to whether the employer is entitled to a credit to its rating account where benefits were paid as a result of its untimely submission of required information. Section 20(a) reinforces and compliments Section 32(b).”

“Accordingly, the decision of the MESC Appeal Board … is hereby AFFIRMED.”

Digest Author: Board of Review (original digest here)
Digest Updated:
11/90

Categories
18. Restitution, Waiver, Fraud

Knight v Holland Hitch Co – 18.04

Knight v Holland Hitch Co
Digest no. 18.04

Section 62(a)

Cite as: Knight v Holland Hitch Co, unpublished opinion of the Ottawa Circuit Court, issued November 4, 1983 (Docket No. B77 19822 68271).

Appeal pending: No
Claimant: Howard V. Knight
Employer: Holland Hitch Company
Docket no.: B77 19822 68271

Date of decision: November 4, 1983

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CIRCUIT COURT HOLDING: Where a claimant is awarded back pay by an arbitrator for a contested discharge and he is paid full back pay minus the unemployment insurance benefits he earlier received from the MESC, the employer is liable for restitution to the MESC.

FACTS: The claimant grieved his discharge. He received an arbitration award of full back pay for all lost time less unemployment compensation received.

DECISION: The employer is liable to MESC for the unemployment compensation deducted from the back pay awarded claimant.

RATIONALE: “A review of the language of the Michigan Employment Security Act makes it clear that the legislative purposes giving rise to the act did not include permitting double recovery by a claimant-employee (later determined to have been wrongfully discharged and entitled to back pay) by permitting him to retain unemployment benefits and full back pay for the same period. Neither do such legislative purposes support the enrichment of an employer who wrongfully discharges an employee, at the expense of the state fund and other employers, by permitting the employer to retain unemployment benefits deducted from back wages paid to the employee after reinstatement.

Digest Author: Board of Review (original digest here)
Digest Updated:
6/91

Categories
18. Restitution, Waiver, Fraud

MESC v Miller – 18.03

MESC v Miller
Digest no. 18.03

Section 62(a)

Authors Note: The holding in this case relies heavily on the discretionary nature of waivers in place at the time of the decision. The legislature made waivers mandatory in October of 2013.  This case should not apply to waivers adjudicated after October 26, 2013.

Cite as: MESC v Miller, unpublished opinion of the Tuscola Circuit Court, issued June 13, 1983(Docket No. 82-004889 AE).

Appeal pending: No
Claimant: James Miller
Employer: Maiers Motor Freight
Docket no.: B81 97417 80745
Date of decision: June 13, 1983

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CIRCUIT COURT HOLDING: The Board of Review has no statutory authority to waiver restitution under Section 62(a).

FACTS: The claimant was paid benefits pursuant to a Referee’s decision which held the claimant not disqualified under the labor dispute provisions of the Act. The Board of Review reversed the Referee’s decision, but waived the repayment of benefits under Section 62(a).

DECISION: The case is remanded to the MESC to exercise its discretion concerning the waiver of restitution.

RATIONALE: “The Court having carefully reviewed the record and heard oral argument, is of the opinion that neither the Michigan Employment Security Act nor case law gives the Board of Review the right to waive restitution sua sponte and that therefore the decision of the Board of Review waiving restitution on its own initiative is contrary to law.”

Digest Author: Board of Review (original digest here)
Digest Updated:
 10/2013

Categories
18. Restitution, Waiver, Fraud

Drayton v Showcase – 18.01

Drayton v Showcase
Digest no. 18.01

Section 62(a)

Cite as: Drayton v Showcase, unpublished opinion of the Court of Appeals of Michigan, issued April 6, 1983 (Docket No. B78 15173 67544).

Appeal pending: No
Claimant: Denise Drayton
Employer: Showcase
Docket no.: B78 15173 67544
Date of decision: April 6, 1983

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COURT OF APPEALS HOLDING: The 1980 amendment to Section 62(a) is to be given retroactive effect.

FACTS: The claimant was determined eligible for unemployment benefits and received $268.00. On November 7, 1978, “The MESC determined that claimant was, in fact, ineligible for such benefits and ordered her to repay the $268.00.”

By virtue of the 1980 amendment in Section 62(a) effective January 1, 1981, the MESC was given discretion to waive restitution.

DECISION: The MESC must exercise “its discretion on the restitution issue …”

RATIONALE: “The Michigan Employment Security Act is remedial. It’s primary purpose is to relieve the stress of economic insecurity. Godsol v Unemployment Compensation Comm, 302 Mich 652 (1942)Michigan Employment Security Comm v Wayne State University, 66 Mich App 26 (1975), lv den 396 Mich 857 (1976). Where an amendment is designed to correct an existing law, it is generally remedial and will be given retroactive effect. Lahti v Fosterling, 357 Mich 578 (1959).

“Because the amendment is to be construed retroactively, the MESC had the discretion to waive restitution. However, it has not exercised its discretion.

“We are remanding this case to the MESC to exercise its discretion and to reevaluate its decision in the light of the amendment and this opinion. The MESC must consider [claimant’s] indigence in this case in exercising its discretion.”

Digest Author: Board of Review (original digest here)
Digest Updated:
11/90

Categories
18. Restitution, Waiver, Fraud

Garza v Hilltop Orchards & Nurseries, Inc – 18.05

Garza v Hilltop Orchards & Nurseries, Inc
Digest no. 18.05

Section 62(a)

Cite as: Garza v Hilltop Orchards & Nurseries Inc, unpublished opinion of the Van Buren Circuit Court, issued December 17, 1981 (Docket No. B79 13459 70571).

Appeal pending: No
Claimant: Silvestra J. Garza
Employer: Hilltop Orchards & Nurseries, Inc.
Docket no.: B79 13459 70571
Date of decision: December 17, 1981

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CIRCUIT COURT HOLDING: An administrative clerical error is good cause for a reconsideration of a determination no longer subject to review due to expiration of the protest period.

FACTS: The Commission held that claimant was disqualified and must serve a 13 week requalification period. Claimant’s benefit entitlement was shown reduced from 16 to 3 weeks. After claimant completed requalification requirements, a determination was issued which erroneously showed that claimant was entitled to 16 weeks of benefits rather than 3 weeks. Claimant thus received 16 benefit checks. Upon receipt of information from the employer that an error had been made in claimant’s entitlement, the Commission issued a reconsideration holding that claimant must repay the excess benefits.

DECISION: The claimant must repay the excess benefits.

RATIONALE: “The evidence shows a reduction was contemplated by the Commission but was not consummated. There is no doubt that the Commission determined that [claimant] must wait 13 weeks for her benefits. When [claimant] became entitled to her benefits, the very document which granted 16 weeks of benefits recognized that she had requalified after 13 weeks, but failed to make the required reduction. That the benefits were not reduced according to MCLA 421.29(4); MSA 17.531 (4), can only be attributed to an administrative clerical error, since no new determination or redetermination was made that [claimant] should not have had to fulfill the 13 week requalification period, and it was, therefore, clear that the statutory formula should have been applied. Further, at the point at which the formula should have been applied to reduce the benefit entitlement, the act of reduction is a statutory requirement, not a discretionary decision.”

Digest Author: Board of Review (original digest here)
Digest Updated:
6/91

Categories
18. Restitution, Waiver, Fraud

Heckaman v H & R Block – 18.06

Heckaman v H & R Block
Digest no. 18.06

Section 62(a), 32(a)

Cite as: Heckaman v H&R Block, unpublished opinion of the Michigan Employment Security Board of Review, issued September 24, 1979 (Docket No. O/P B78 50339 RO1 61223).

Appeal pending: No
Claimant: Helen A. Heckaman
Employer: H & R Block
Docket no.: O/P B78 50339 RO1 61223
Date of decision: September 24, 1979

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BOARD OF REVIEW HOLDING: Where the employer submits new information concerning credit weeks after the monetary determination has become final and after the claimant has received benefits based on the prior information submitted by the employer, the claimant is not required to repay the benefits improperly paid.

FACTS: The employer submitted wage and credit week information to the Commission in early May, 1977. On May 12, 1977, the Commission issued determinations which established claimant’s benefit year and listed weeks of benefit entitlement chargeable to each base period employer. In subsequent weeks, claimant was paid the full amount of benefit entitlement. On August 8, 1977, the employer submitted information indicating claimant had two fewer credit weeks than had been reported originally in May. A redetermination issued November 15, 1977 held the claimant was required to repay benefits received for the period from July 3, 1977 through July 16, 1977.

DECISION: Pursuant to Section 32a(3) of the Act, the claimant is not required to pay restitution.

RATIONALE: “The Commission issued a determination on May 12, 1977 granting the claimant fifteen credit weeks with the employer. The employer did not protest the determination within the twenty-day protest period.

“Under these circumstances, the Board is of the opinion that restitution is not required pursuant to Section 32a(3) of the Act. Claimant did not receive the benefits as a result of non-disclosure of a material fact or administrative clerical error.”

Digest Author: Board of Review (original digest here)
Digest Updated:
11/90

Categories
16. Procedures/Appeals 18. Restitution, Waiver, Fraud

Sanders v MESC – 18.12

Sanders v MESC
Digest no. 18.12

Section 62(b)

Cite as: Sanders v MESC, unpublished opinion of the Wayne Circuit Court, issued April 30, 1957 (Docket No. 287-132).

Appeal pending: No
Claimant: Early Sanders
Employer: Chrysler Corporation
Docket no.: B56-769-18197
Date of decision: April 30, 1957

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CIRCUIT COURT HOLDING: The burden of establishing fraud by competent evidence rests with the MESC.

FACTS: The claimant received a telegram on Thursday to return to work that same day. Also that day he reported to an office of the Commission and obtained a benefit check for the previous week. The following week he again reported to the Commission and certified for benefits for the prior week despite having returned to work for part of that week.

DECISION: The finding of claimant fraud was upheld.

RATIONALE: The Commission’s agent testified the claimant was asked about his earnings in the week in question. She said she did not require the claimant to fill in the day of the week and it is conceivable that had she so required, the claimant would have changed his entries. But that is conjecture. The fact remains that the dates the claimant entered were wrong and that he had returned to work on the day he had received his previous benefit check.

The burden should be upon the Commission to establish that fraud was committed, and fraud should not be presumed but established by competent proof that persuades one that a proper inference may be drawn. For it must be conceded that the Commission could not be expected to secure an admission by a claimant that he had committed a fraud. So, to prove an intent to defraud an inference must be drawn from the facts themselves.

Digest Author: Board of Review (original digest here)
Digest Updated:
7/99