Cox v. Hollow Leg Pub and Brewery
| Decision Date | 28 March 2007 |
| Docket Number | No. 33173.,33173. |
| Citation | 158 P.3d 930,144 Idaho 154 |
| Parties | Jennifer L. COX, Claimant-Appellant, v. The HOLLOW LEG PUB AND BREWERY and Nextel Partners Operating Corp., Employers-Respondents, and Idaho Department of Commerce and Labor, Respondent. |
| Court | Idaho Supreme Court |
Mimura, James & Mimura PLLC, Meridian, for appellant. Mark J. Mimura argued.
Hon. Lawrence G. Wasden, Attorney General, Boise, for respondent. Evelyn Thomas, Deputy Attorney General, argued.
This is an appeal from a decision and order determining that a recipient of unemployment benefits had willfully underreported her weekly income for eighteen of the twenty-one weeks she was receiving benefits. As a result, she was ruled ineligible for benefits for those eighteen weeks and for fifty-two weeks following that determination. We affirm the decision of the Industrial Commission.
Jennifer Cox (Cox) was employed as a server by the Hollow Leg Pub and Brewery (Pub) during the period from March 15, 2004, until July 2, 2005. She made $3.35 per hour plus tips. During that period she also received unemployment benefits of $325.00 per week. Cox was required to report her weekly earnings to the Department of Commerce and Labor (Department).
The Pub kept track of the hours Cox worked by an automated system that she clocked into and out of each shift. At the end of her shift, she also entered into that system the amount she had received in tips during her shift. That amount was to include both cash and credit card tips, and it was Cox's obligation to determine the amount of her tips each day.
After comparing the weekly earnings Cox reported to the Department with her earnings as reported by the Pub, a Department claims investigator determined that Cox was underreporting her earnings. On October 25, 2005, the investigator sent Cox a letter stating that her reported earnings differed from those reported by the Pub and asking Cox to explain the discrepancy. In the letter, the investigator listed the earnings reported by Cox and the earnings reported by the Pub for each of the eighteen weeks at issue. Cox did not respond to that letter. She later testified that she did not receive it.
On November 16, 2005, the claims investigator sent Cox another letter stating that Cox owed $5,850.00 in overpayments and a penalty of $1,462.50. Cox then appealed that determination. The appeal was heard by telephone before an appeals examiner, with Cox, the Pub's business manager, and the Department's claims investigator appearing. On January 9, 2006, the appeals examiner issued her decision, finding: (1) that Cox had willfully underreported her wages for the eighteen weeks; (2) that she was ineligible for benefits for those weeks; (3) that the benefits Cox received for the weeks she was ineligible constituted overpayments; (4) that Cox was required to repay the overpayments because she did not meet the statutory requirements for waiving them; and (5) that Cox was ineligible for benefits for fifty-two weeks.
Cox retained an attorney, and on January 23, 2006, appealed the decision of the appeals examiner. The Industrial Commission conducted a de novo review of the record, and on February 23, 2006, it affirmed the decision.
On March 15, 2006, Cox filed motions asking for reconsideration of the Commission's decision and requesting a new hearing. On May 2, 2006, the Industrial Commission denied both motions on the ground that there was no showing of any meritorious reason to grant them.
On May 22, 2006, Cox again filed motions for reconsideration and a new hearing. These motions were identical to the ones filed on March 15, 2006. On June 1, 2006, the Industrial Commission dismissed these motions on the ground that there was no statutory authority allowing a second reconsideration after denial of the initial request and that the order entered on May 2, 2006, was the final order in this proceeding. On June 13, 2006, Cox filed a notice of appeal to this Court.
1. Is the decision of the Industrial Commission supported by substantial and competent evidence?
2. Was Cox denied due process of law?
Pimley v. Best Values, Inc., 132 Idaho 432, 434, 974 P.2d 78, 80 (1999). Edwards v. Independence Services, Inc., 140 Idaho 912, 914, 104 P.3d 954, 956 (2004).
Idaho Code § 72-1366 provides, "A claimant shall not be entitled to [unemployment] benefits for a period of fifty-two (52) weeks if it is determined that he has willfully made a false statement or willfully failed to report a material fact in order to obtain benefits." "[A] fact is material if it is relevant to the determination of a claimant's right to benefits; it need not actually affect the outcome of that determination." Meyer v. Skyline Mobile Homes, 99 Idaho 754, 760, 589 P.2d 89, 95 (1979). The term "willfully" refers to those claimants who "purposely, intentionally, consciously, or knowingly fail to report a material fact [or make a false statement], not those whose omission [or false statement] is accidental because of negligence, misunderstanding or other cause." Id. at 761, 589 P.2d at 96.
The Industrial Commission found as follows:
In her Decision, the Appeals Examiner noted the discrepancy between what Claimant reported and what Employer reported was not simply a minor portion of her earnings. Claimant reported $1,849.96 less than the $3,200.96 her Employer reported. Each week, Claimant reported less than half her weekly benefit amount of $325.00. The Handbook Claimant acknowledged reading told her, "You can earn up to one-half your weekly benefit amount and still receive the full weekly benefit amount for that week." (Handbook, p. 15)
Finally, each time Claimant called to report, the process began with the following message:
By using this system you agree to have your answers become part of your claim record. You are certifying that your answers are true and accurate to the best of your knowledge. Under Idaho Law, you could be penalized for giving false answers [or] for withholding information.
(Unemployment Insurance Handbook, p. 10 (emphasis original)). Although she was reminded each time that her answers had to be accurate and truthful, she opted not to take any steps to insure her answers were accurate.
Under the circumstances, we find Claimant knew or should have known she needed to insure she reported her earnings accurately, but nevertheless deliberately chose not to do so. A finding that a claimant knew what information IDCL solicited, but nevertheless deliberately chose to respond without pursuing clarification ordinarily supports a conclusion of willful falsehood or concealment. Meyer, 99 Idaho at 762, 589 P.2d at 97. As a result, we find Claimant willfully chose to conceal the true extent of her earnings during the period at issue.
Cox contends that the Commission's findings are not supported by substantial and competent evidence in several respects. First, she argues that she denied wrongdoing and there was no testimony controverting her denial. She contends that there must be expert testimony establishing that Cox's false reporting of her wages was willful. A claimant's mental state need not be established by expert testimony; it can be inferred from the claimant's conduct and from the circumstances. Doe I v. Doe, 138 Idaho 893, 900, 71 P.3d 1040, 1047 (2003) (). Cox underreported her wages for eighteen of the twenty-one weeks she was receiving benefits. The Commission could infer from the facts in the case that her underreporting was willful and not accidental. It was not required to accept her assertion that she tried to keep track of her income in her head and reported it to the best of her knowledge. It was an issue of credibility. "The factfinder may consider the claimant's explanation unworthy of belief." Meyer v. Skyline Mobile Homes, 99 Idaho 754, 762, 589 P.2d 89, 97 (1979).
Next, Cox contends that the Pub's business manager "was never asked, and never testified, that the wages reported for the Claimant in Exhibit 6 were accurate." Exhibit 6 was a form listing Cox's wages and tips for each of the weeks at issue. The business manager testified that she filled out Exhibit 6 and that she obtained the information from two sources. One source was the time cards prepared by the Pub's automated system that recorded when Cox checked in and out each work day. The other source was the entries in that automated system made by Cox at the end of each shift stating the amount she had received in tips. The Pub's general manager could alter the hours worked if, for example, an employee failed to clock in or clock out. The general manager could not alter the amount the employee entered in tips. The business manager signed Exhibit 6, and just above her signature was the statement, "The information provided by me is true and accurate to the best of my knowledge." Cox was provided with a copy of Exhibit 6 prior to the hearing, and she did not object to it being admitted into evidence. She also did not ask any questions of the Pub's office manager. The Commission's finding as to the wages and tips Cox received during the weeks at issue is supported by substantial and competent evidence.
Finally, Cox argues facts...
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