Friendly Vill. Nursing & Rehab, LLC v. Wis. Dep't of Workforce Dev.
| Decision Date | 15 December 2020 |
| Docket Number | Appeal No. 2020AP520 |
| Citation | 954 N.W.2d 392,2021 WI App 9,395 Wis.2d 701 |
| Parties | FRIENDLY VILLAGE NURSING AND REHAB, LLC and Friendly Village Healthcare Center, Plaintiffs-Appellants, v. State of Wisconsin DEPARTMENT OF WORKFORCE DEVELOPMENT and State of Wisconsin Labor and Industry Review Commission, Defendants-Respondents, v. Rhinelander Healthcare Operator 150, LLC, Defendant. |
| Court | Wisconsin Court of Appeals |
On behalf of the plaintiffs-appellants, the cause was submitted on the briefs of Alon Stein of Stein Law Offices, Milwaukee.
On behalf of the defendant-respondent, the cause was submitted on the brief of Ryan X. Farrell of Department of Workforce Development.
Before Stark, P.J., Hruz and Seidl, JJ.
¶1 Friendly Village Nursing and Rehab, LLC, and Friendly Village Healthcare Center (collectively, "Friendly Village") appeal an order affirming a decision of the Labor and Industry Review Commission ("the Commission"). After purchasing a nursing home in Rhinelander, Friendly Village filed an application with the Department of Workforce Development ("the Department") to succeed to the seller's unemployment account experience. The Department denied the application because it was not timely filed. The Commission later determined that Friendly Village's failure to timely file the application was not the result of excusable neglect, and the circuit court affirmed that determination.
¶2 On appeal, Friendly Village argues the Commission erred by failing to consider the interests of justice in its excusable neglect analysis. We disagree. The relevant statute— WIS. STAT. § 108.16(8)(b)4. (2017-18)1 —requires a transferee to satisfy the Department that its application was late as a result of excusable neglect. Nothing in the plain language of the statute requires the Department—or, on review, the Commission—to consider the interests of justice when analyzing excusable neglect. Although Friendly Village argues Casper v. American International South Insurance Co. , 2011 WI 81, 336 Wis. 2d 267, 800 N.W.2d 880, requires a decision maker to consider the interests of justice in its excusable neglect analysis, Casper is inapplicable here because it did not address excusable neglect under § 108.16(8)(b)4.
¶3 Accordingly, we reject Friendly Village's argument that the Commission erred by failing to consider the interests of justice. We further conclude that, on the record before it, the Commission properly determined Friendly Village had failed to establish excusable neglect. We therefore affirm.
¶4 The following facts are undisputed. Eden Senior Care ("Eden") is an Illinois company that purchases and rehabilitates distressed nursing homes. Prior to 2017, Eden had purchased and operated nursing homes solely in Minnesota. However, on September 1, 2017, Eden purchased its first two nursing homes in Wisconsin: Friendly Village in Rhinelander, and Northpoint Nursing and Rehab in Oshkosh.
¶5 At the time of those purchases, Eden had recently hired as a senior business analyst a twenty-two-year-old college graduate with degrees in communications and biology, who was also a family member of Eden's corporate manager. Eden directed the analyst to complete online employer registration reports in order to register Friendly Village and Northpoint with the Department. The employer registration report contains the question: "Did you acquire this activity from a previous employer?" The analyst incorrectly answered that question "No" on the employer registration reports for both Friendly Village and Northpoint.
¶6 Whether Eden acquired Friendly Village and Northpoint from a previous employer matters because, pursuant to WIS. STAT. § 108.16(8)(b), "[i]f the business of any employer is transferred, the transferee is deemed a successor for purposes of" WIS. STAT. ch. 108, provided certain statutory conditions are met. A successor succeeds to the transferor's unemployment account experience. See WIS. STAT. §§ 108.02(14), 108.16(8)(f). On appeal, the Department explains that unemployment account experience includes: (1) the transferor's positive or negative unemployment insurance reserve fund balance; (2) unemployment benefit liability based on the transferor's employment; (3) the transferor's reported payrolls for the purposes of meeting the taxable wage base in the transfer year; and (4) all other aspects of the transferor's account. The Department further explains that an employer with negative account experience will generally pay unemployment contributions at a higher rate, while an employer with positive account experience will generally pay contributions at a lower rate. See WIS. STAT. § 108.01(1).
¶7 In order to qualify as a successor under WIS. STAT. § 108.16(8)(b), a transferee must, among other things, submit a written application to the Department "requesting that it be deemed a successor." Sec. 108.16(8)(b)4. The Department must receive the application "on or before the contribution payment due date for the first full quarter following the date of transfer," unless the transferee "satisfies the department that the application was late as a result of excusable neglect." Id. In any event, the Department "shall not accept a late application ... more than 90 days after its due date." Id.
¶8 If Eden's business analyst had correctly indicated on Friendly Village's and Northpoint's employer registration reports that Eden had acquired those activities from previous employers, the Department would have directed Eden to complete report of business transfer ("ROBT") forms for Friendly Village and Northpoint. A transferee applies to succeed to the unemployment account experience of its predecessor by checking a box on the ROBT form labeled "This is my application to acquire the account experience of the former owner." The deadline for Eden to complete the ROBT forms and thereby apply to succeed to its predecessors’ unemployment account experience was January 31, 2018. Eden failed to meet that deadline.
¶9 In late February 2018, Eden's human resources director learned that it is possible in Wisconsin for a transferee to acquire the unemployment account experience of its predecessor. Eden then immediately contacted the Department and asked whether it could acquire its predecessor's account experience for the Northpoint facility. There is no evidence in the record that Eden also inquired, at that point, about succeeding to its predecessor's account experience for Friendly Village. On March 6, 2018, the Department determined that Eden's late filing of the ROBT for Northpoint was the result of excusable neglect. Eden was therefore allowed to succeed to the transferor's unemployment account experience for Northpoint.
¶10 Several days later, Eden contacted the Department and asked if it could also succeed to the transferor's unemployment account experience for Friendly Village. Eden submitted an ROBT for Friendly Village on March 13, 2018. Friendly Village's ROBT was not handled by the same Department employee who had handled Northpoint's late filing. The employee who processed Friendly Village's ROBT determined the delay in filing that report was not the result of excusable neglect and, as a result, the Department would not accept the late filing.
¶11 Friendly Village appealed the Department's determination that its late filing was not the result of excusable neglect. Following an evidentiary hearing, an administrative law judge (ALJ) reversed the Department's decision. The ALJ concluded the business analyst's neglect in incorrectly answering the relevant question on Friendly Village's employer registration report was excusable, and Friendly Village had acted promptly to cure the problem. Because the Department had conceded that Friendly Village met all of the other statutory requirements to qualify as a successor, the ALJ determined Friendly Village "is the successor to the Wisconsin unemployment reserve account of [the facility's previous owner] within the meaning of section 108.16 of the Wisconsin Statutes."
¶12 The Department sought Commission review of the ALJ's decision, and the Commission reversed. The Commission explained that excusable neglect "is the neglect which might have been the act of a reasonably prudent person under the same circumstances" and is "not synon[y]mous with neglect, carelessness, or inattentiveness."
¶13 The Commission then determined that Friendly Village had failed to meet its burden of proving excusable neglect. It noted that the business analyst who incorrectly answered the relevant question on Friendly Village's employer registration report did not testify at the administrative hearing. The Commission therefore stated there was "no competent evidence establishing the nature of [the analyst's] error, such that a finder of fact could conclude that the error was excusable." The Commission further stated the question that the analyst answered incorrectly was "straightforward and requires no expertise, business, legal, or otherwise, to answer correctly." The Commission also reasoned that "purchasing distressed entities and getting them back ‘on their feet’ is part of [Eden's] business model," which was "something the analyst ... had to know, which makes his failure less excusable than it otherwise might be."
¶14 The Commission acknowledged that the Department had determined Northpoint's late successorship application was the result of excusable neglect. The Commission stated, however, that it was "unclear" whether the circumstances in the two cases were the same. The Commission also asserted that the Department's decision regarding Northpoint was an "informal decision ... based upon the circumstances of that case alone, and it is not binding even upon the department in other cases, much less upon the commission."
¶15 The Commission also acknowledged Friendly Village's argument that it had "promptly remedied its failure" to apply for successorship status....
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