Jacobs v. District Unemploy. Comp. Bd., 12028.

• Citation: 382 A.2d 282
• Decision Date: 19 January 1978
• Docket Number: No. 12028.,12028.
• Parties: Richard JACOBS, Petitioner, v. DISTRICT UNEMPLOYMENT COMPENSATION BOARD, Respondent.
• Court: Court of Appeals of Columbia District

382 A.2d 282

Richard JACOBS, Petitioner, v. DISTRICT UNEMPLOYMENT COMPENSATION BOARD, Respondent.

No. 12028.

District of Columbia Court of Appeals.

Submitted September 29, 1977.

Decided January 19, 1978.

Richard Jacobs, pro se.

Robert J. Hallock, Washington, D. C., was on the brief for respondent.

Before KERN, HARRIS and FERREN, Associate Judges.

FERREN, Associate Judge:

Mr. Richard Jacobs has petitioned this court for review of an order by the District Unemployment Compensation Board (the "Board") disqualifying him from receiving benefits for a period of seven months pursuant to § 19(e) of the District Unemployment Compensation Act (the "Act"), D.C. Code 1973, § 46-319(e).¹ The Board adopted the Appeals Examiner's conclusion that petitioner had "knowingly made false statements for the purpose of obtaining benefits for the compensable weeks ending 9/25/76 and 10/2/76 within the meaning of Section 19(e) of the Act."

Because of the Board's failure to apply the proper standard for judging whether a claimant had the requisite knowledge of the false statement under § 19(e), we remand the case for further proceedings.

I.

Petitioner Jacobs acknowledges that the Board received interstate claim forms bearing his signature for the weeks ending September 25, 1976, and October 2, 1976, despite the fact that he was employed by a chemical firm as a consultant for part of the first week and all of the second week. On the basis of these two forms, Mr. Jacobs received Treasury checks of $287.88 and $431.82. After approximately three weeks with the chemical firm, Mr. Jacobs' employment was terminated, so he reapplied for unemployment benefits. He asserts that during the process of reapplication, he learned for the first time that he had not been entitled to the two most recent benefit checks he had received. It is uncontested that promptly thereafter he refunded the amounts received to the government.

The Board proceeded against Mr. Jacobs, seeking to disqualify him from receiving benefits for an appropriate period pursuant to § 19(e) of the Act. On December 20, 1976, the Claims Deputy issued a determination to Mr. Jacobs, ruling "that you have knowingly and willfully withheld or misrepresented material facts in order to obtain benefits not due you." In support of this conclusion, the Deputy told Mr. Jacobs: "You were in fact employed by Sigma Chemical Co. and earned over your benefit amount each week" ending September 25, 1976, and October 2, 1976. "Your certification for those two weeks that you were not employed is deemed a willful misrepresentation of the facts." [Emphasis added.] The Deputy accordingly disqualified Mr. Jacobs from receiving benefits for a period of seven months, October 3, 1976, through April 30, 1977.

Mr. Jacobs appealed this determination. On February 8, 1977, a hearing took place under the interstate claims system, D.C. Code 1973, § 46-316, before an Appeals Examiner in St. Louis, Missouri. At that time Mr. Jacobs testified that for convenience he had filled out several weekly claim forms in advance (except for the names and dates of employers contacted); that in answering question 10 — "did you work or earn wages of any kind?" — he had checked in advance the box "No" on each form; that he had earned wages from the chemical company for three days of the week ending September 25, 1976, but was not paid during that week; that he had completed and mailed the form for the week ending September 25, 1976, under the mistaken impression that he could apply for unemployment compensation for any week in which he had not received income from an employer; that he had placed on his dresser a completed claim form, in a stamped envelope, for the week ending October 2, 1976, to be mailed in case (but only in case) he had not yet received wages during that week; that he did receive wages on September 30, 1976, for his first week of work (ending September 25, 1976) at the chemical company, but that unknown Mr. Jacobs to him his wife mailed the envelope on his dresser containing the completed form for the week ending October 2; that she had done so despite the fact that he had not put the envelope on the spot where outgoing mail was normally placed on his dresser; that his wife had not told him about mailing the claim; and that as soon as he learned about the mistake, he reimbursed the government in full for the two checks he had received. Mr. Jacobs accordingly urged a finding that he had not knowingly made the two false statements, as alleged.

The Missouri Appeals Examiner sent a transcript of the hearing to the Board. The District of Columbia Appeals Examiner reviewed the transcript and, on February 23, 1977, affirmed the Claims Deputy's determination. On the question whether Mr. Jacobs had knowingly made false statements to obtain benefits, the Examiner concluded:

It should be remembered that the claimant is a lawyer and not a person of marginal educational background; and his contention that he automatically and mistakenly pre-checked all the pertinent questions on the forms, would therefore be dismissed as being without merit. In addition, a reasonably prudent person receiving the sums of $287.00 and $431.00 for successive weeks of employment, would certainly give serious thought to the question whether he was `unemployed' at all during this period. In summary, the Examiner finds that the claimant knowingly made false statements for the purpose of obtaining benefits for the compensable weeks ending 9/25/76 and 10/2/76, within the meaning of Section 19(e) of the Act.

On April 7, 1977, the Board issued its "final decision" affirming the Appeals Examiner's decision and adopting his findings. Mr. Jacobs has petitioned this court for review pursuant to D.C.Code 1977 Supp., § 46-312.²

II.

We are presented for the first time with the question of the standard the Board should apply in determining whether a person has violated § 19(e). Petitioner advocates the subjective standard announced by the Supreme Judicial Court of Maine in Hebert v. State, 323 A.2d 1 (Me.1974). There, in response to a question on the claim form about his most recent employer, the claimant failed to list the employer where he had worked most recently for two and one-half months; instead, he answered all questions by reference to his previous employer where he had worked for almost four years. Under language virtually identical to our § 19(e), the State of Maine's Employment Security Commission concluded that the claimant had knowingly made false statements to obtain benefits. The claimant had protested that he mistakenly had understood the claim form question to refer to "his most recent substantial employment, the last employment at which he had worked `for any substantial time.'" Id. at 6 (emphasis in original). The Commission, however, "objectively evaluated" the matter; "i. e., as the average reasonable person would understand the words used." Id. at 5 (emphasis in original). The Supreme Judicial Court reversed, holding that each case must be decided by reference to what "the particular claimant in fact subjectively understood to be the meaning" of the language used in the claim form. Id. at 6 (emphasis in original).

Petitioner Jacobs accordingly claims that his mistaken understanding that benefits were payable for weeks when income from employment was earned, but not yet received, coupled with his ignorance of his wife's mailing the claim for the second week, should exonerate him here.

The Board sidesteps this argument by simply saying that it is "strictly a question of fact" as to "whether Mr. Jacobs knowingly made false statements to obtain benefits," and that the court should not substitute its judgment for that of the Board, given the substantial evidence in the record against Mr. Jacobs.

As elaborated below, we agree with Mr. Jacobs that the standard to be applied is a subjective one.

III.

Our analysis begins with the language of § 19(e). We conclude that the standard of knowledge by which the Board is to judge a claimant is the knowledge required for a finding of civil fraud. The very word "fraud," in fact, is used in the second sentence of § 19(e) itself to modify the actionable language. See note 1, supra.³ The elements of a § 19(e) violation, moreover, essentially track the common law requirements for proving fraud:⁴

1. A false representation of a material fact (i. e., "has made a false statement or representation," or "fails to disclose a material fact");

2. Knowledge of the falsity (i. e., "knowing it to be false" or "knowingly fails to disclose. . .");

3. An intention to induce reliance (i. e., "to obtain or increase any benefit. . ."); and

4. Action taken in reliance on the representation.⁵

Accordingly, the Board, in making a § 19(e) determination, must articulate the evidence with respect to each element of fraud, make a finding as to each, and state a conclusion as to the fraud alleged. Findings and conclusions that do less are essentially standardless, and thus do not meet the established criteria for administrative determinations. Hill v. District Unemployment Compensation Board, D.C.App., 279 A.2d 501, 502-03 (1971); National Geographic Soc. v. District Unemployment Compensation Board, 141 U.S.App.D.C. 313, 438 F.2d 154 (1970). See Miller v. District of Columbia Comm'n on Human Rights, D.C.App., 339 A.2d 715 (1975); A.L.W., Inc. v. District of Columbia Bd. of Zoning Adjustment, D.C.App., 338 A.2d 428 (1975); Citizens Ass'n v. District of Columbia Alc. Bev. C. Bd., D.C.App., 316 A.2d 865, 866-67; Brewington v. District of Columbia Bd. of App. & Rev., D.C.App., 299 A.2d 145 (1973); Dietrich v. District of Columbia Board of Zoning Adjustment, D.C.App., 293 A.2d 470, 473 (1972).

From the record it is clear that the Board made findings which satisfied requirements 1, 3, and 4. It found the required false representation (i. e., the boxes were checked "No" in response to the question whether Mr. Jacobs...