18. Restitution, Waiver, Fraud

Miltgen v DSC Marywood Co – 18.14

Miltgen v DSC Marywood Co
Digest no. 18.14

Section 54(b)

Cite as: Miltgen v DSC Marywood Co, unpublished opinion of the Kent Circuit Court, issued March 23, 2001 (Docket No. 00-06060-AE).

Appeal pending: No
Claimant: Georgia Miltgen
Employer: DSC Marywood Company
Docket no.: B95-06582-RRR-145902W/FSC95-00107-RRR-145903W
Date of decision: March 23, 2001

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CIRCUIT COURT HOLDING: Being told by an Agency representative that monies received as “gifts” do not have to be reported as income is not a defense to fraud when claimant failed to disclose “significant particulars” as to the receipt of that money.

FACTS: While receiving unemployment benefits, claimant performed services and was being compensated. Claimant knew she was obligated to report income from work to the Agency, but failed to do so. Claimant spoke to a representative of the Agency about whether she had to report the monies. She asked whether personal monies from a friend had to be reported; she did not report the reasons for receiving the monies or why she received the monies. Claimant claimed the monies she received were “gifts,” although she acknowledged the payments were at an hourly rate for the service she performed.

DECISION: Claimant knowingly and willfully failed to report the income and is subject to the fraud provision.

RATIONALE: Even if the payor told claimant that the monies were gifts, it was unreasonable for her to believe that she was receiving gifts, and not being paid for services rendered. “A purely subjective belief is not legally significant; the belief must also be objectively reasonable. A gift which happens to be in an amount which is a certain rate for actual hours of effort performed for the payor is compensation for work, not a gift . . .. [L]abels are of ‘little importance.’” See Allied Market v Grocer’s Dairy, 391 Mich 729, 735 (1974)Abbey Homes v Wilcox, 89 Mich App 574, 581 (1979), lv app den 407 Mich 875 (1979). Had claimant disclosed the nature of the particulars of the monies, being told that the monies did not need to be reported would probably have entitled her to act as she did, Woods v State Employees Retirement System, 440 Mich 77, 81-82 (1992). Since claimant admitted she did not provide those particulars, the answer she said she got does not provide her with a defense. United States v King, 560 F2d 122 (1977), and United States v Smith, 523 F2d 771 (1975).

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

07. Eligibility - Able & Available

Postema v Grand Rapids Diecraft Inc – 7.30

Postema v Grand Rapids Diecraft Inc
Digest no. 7.30

Sections 28, 54(b)

Cite as: Postema v Grand Rapids Diecraft Inc, unpublished opinion of the Ottawa Circuit Court, issued September 19, 1996 (Docket No. 95-23141-AA).

Appeal pending: No
Claimant: James Postema
Employer: Grand Rapids Diecraft Inc.
Docket no.: B93-06258-127231W
Date of decision: September 19, 1996

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CIRCUIT COURT HOLDING: Where claimant was primarily engaged in establishing his own business, his mental attitude was not one of genuine attachment to the labor market. Where the claimant only sought work via networking with potential customers and other industry contacts, he was not “seeking work” and was not “available to work.”

FACTS: Claimant was laid off from an executive position in February, 1992. He received regular benefits then extended benefits until December 12, 1992. Claimant started his own tool and die business on August 15 as 51% owner. Corporate status was established week of August 9, 1992. During the first week the business grossed $24,000. After that, expenses exceeded profits. Claimant received no wages. For weeks ending August 29, 1992, and September 5, 1992, claimant failed to report self employment. Thereafter, he reported self employment but zero earnings. For week ending September 12, 1992, claimant reported 70+ hours at his business, but thereafter reported only 20 hours. Claimant sought work primarily through “networking” with contacts who were also potential customers. He never actually filled out any job applications.

DECISION: Claimant ineligible for benefits for period August 9, 1992, through December 12, 1992. Claimant must pay restitution and penalties only for some of the weeks in question as for the most part claimant disclosed his interest in self employment and the nature of his job seeking efforts.

RATIONALE: Claimant’s own testimony demonstrated that he was not diligently searching for employment or truly available for work. “His `mental attitude’ was not that of someone attached to the labor market; rather, it was that of an entrepreneur spending his time and energy trying to make his business successful.”

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