Millar v. New Mexico Dep't of Workforce Solutions

• Citation: 304 P.3d 427
• Decision Date: 03 April 2013
• Docket Number: No. 31,581.,31,581.
• Parties: Frank MILLAR, Petitioner–Appellee, v. NEW MEXICO DEPARTMENT OF WORKFORCE SOLUTIONS and Western Refining Southwest, Inc., Respondents–Appellants.
• Court: Court of Appeals of New Mexico

304 P.3d 427

Frank MILLAR, Petitioner–Appellee,

v.NEW MEXICO DEPARTMENT OF WORKFORCE SOLUTIONS and Western Refining Southwest, Inc., Respondents–Appellants.

No. 31,581.

Court of Appeals of New Mexico.

Jan. 31, 2013.

Certiorari Denied, April 3, 2013, No. 34,045.

New Mexico Legal Aid, Inc., Timothy R. Hasson, Santa Fe, NM, for Appellee.

New Mexico Department of Workforce Solutions, Marshall J. Ray, Elizabeth A. Garcia, Albuquerque, NM, for Appellant.

OPINION

VANZI, Judge.

{1} The New Mexico Department of Workforce Solutions (DWS) appeals from a district court order reversing a decision of the DWS's Appeals Tribunal (Tribunal). The Tribunal determined that claimant Frank Millar was required to repay an overpayment of unemployment compensation benefits in the amount of $4,931. The district court held that the Tribunal's hearing, conducted five months after Millar started receiving benefits, violated the timeliness requirements for processing appeal claims under state and federal law. In the alternative, the district court found that the doctrine of equitable estoppel barred DWS from claiming and collecting an overpayment from Millar. We disagree with the district court's decision and reverse.

BACKGROUNDFactual Background

{2} Millar was discharged from his employment with Western Refining Southwest, Inc. (Western Refining) on November 20, 2009. He filed for unemployment benefits on December 6, 2009. After preliminary fact finding, the DWS claims examiner issued a notice of claims determination (NCD) in favor of Millar granting him benefits of $269 per week. The NCD stated that the determination was final “unless an appeal is filed within fifteen calendar days from [ ] 01/07/2010.” In addition, the NCD stated, “If your employer challenges a decision allowing benefits to you and the appeal decision is against you, you will be required to repay those benefits.” On January 21, 2010, Western Refining appealed the claims examiner's decision.

{3} It is undisputed that DWS did not immediately inform Millar that it had received the January 21, 2010 notice of appeal from Western Refining. The parties further agree that Millar did not learn of the appeal until the Tribunal sent out a notice of hearing on June 4, 2010, setting the hearing for June 16, 2010. However, he continued to receive benefits until April 17, 2010. At the June 16, 2010 hearing, the Tribunal found Millar to be disqualified from benefits due to misconduct connected with his employment. Millar subsequently received an overpayment notice for the unemployment payments that he had received from December 19, 2009, until his benefits were exhausted at the end of April 2010.

{4} Although he did not appeal the misconduct issue, Millar timely appealed the overpayment determination through the DWS's administrative process. The Tribunal affirmed the claims examiner's decision that Millar had been overpaid benefits in the amount of $4,931 and that the benefits must be refunded to DWS. In turn, the DWS's cabinet secretary (secretary) upheld the January 7, 2011 determination of the Tribunal. The secretary's affirmation was the final administrative decision in the matter. Having exhausted his administrative remedies, Millar appealed to the district court under Rule 1–077 NMRA and NMSA 1978, Section 51–1–8(M), (N) (2004). The district court granted Millar's writ of certiorari and, after a hearing, reversed the decision of the secretary, affirming the Tribunal. Specifically, the court found that DWS was out of compliance with federal and state timeliness standards for processing appeals and that the long delay in scheduling an appeal hearing “unfairly resulted in an onerous overpayment claim.” In the alternative, the district court ruled that DWS was equitably estopped from pursuing overpayments against Millar. This appeal timely followed.

DISCUSSION

{5} DWS raises two issues on appeal: (1) whether the district court exceeded its authority in holding that the Tribunal violated the timeliness requirements of 20 C.F.R. §§ 650.1 to 650.4 (2006, as amended through 2013) and Section 51–1–8(D); and (2) whether the district court erred in ruling that the doctrine of equitable estoppel barred DWS from recovering the overpayments to Millar. We begin with the standard of review and an overview of the law relating to the payment of unemployment benefits and the recovery of overpayments. We then turn to the issues raised by DWS.

Standard of Review

{6} Generally, we apply the same standard of review as the district court, and we review an administrative order to determine whether DWS acted fraudulently, arbitrarily, or capriciously, or whether, based on the whole record, the decision is not supported by substantial evidence. SeeRule 1–077(J); San Pedro Neighborhood Ass'n v. Bd. of Cnty. Comm'rs of Santa Fe Cnty., 2009–NMCA–045, ¶¶ 10–11, 146 N.M. 106, 206 P.3d 1011. “This Court ... will conduct the same [standard of] review of an administrative order as the district court sitting in its appellate capacity[.]” Rio Grande Chapter of Sierra Club v. N.M. Mining Comm'n, 2003–NMSC–005, ¶ 16, 133 N.M. 97, 61 P.3d 806. Under the whole record standard of review, “we look not only at the evidence that is favorable, but also evidence that is unfavorable to the agency's determination.” Fitzhugh v. N.M. Dep't of Labor, 1996–NMSC–044, ¶ 23, 122 N.M. 173, 922 P.2d 555. Questions of substantial compliance with a statute depend on statutory construction, and we review those questions de novo. See Stennis v. City of Santa Fe, 2008–NMSC–008, ¶ 13, 143 N.M. 320, 176 P.3d 309 (“Interpretation of ... statutes is a question of law that we review de novo.”).

Administrative Procedures in the Payment of Unemployment Benefits and the Recovery of Overpayments

{7} In order to frame the factual setting and legal issues raised in this appeal, we summarize the relevant statutes and administrative proceedings relating to the payment of unemployment benefits in New Mexico and the recovery of over-payments. Unemployment compensation is an insurance program “to be used for the benefit of persons unemployed through no fault of their own” and is designed to “lighten [the] burden which now so often falls with crushing force upon the unemployed worker and his family.” NMSA 1978, § 51–1–3 (1953). Benefits run for twenty-six weeks, NMSA 1978, § 51–1–4(E) (2011), but may be continued for an additional twenty-six weeks during times of high employment. NMSA 1978, § 51–1–48(E) (2011). An unemployed worker is not eligible for benefits if he has left work without good cause or has been discharged for misconduct connected with the employment. NMSA 1978, § 51–1–7(A)(1), (2) (2011).

{8} The initial determination of whether a claimant is eligible for unemployment benefits is made by a claims examiner who conducts preliminary fact finding, including obtaining statements from the claimant and employer. See11.3.300.308(A) NMAC (11/15/2012). Once the claim has been evaluated, the claims examiner issues a NCD. 11.3.300.308(C) NMAC. A party dissatisfied with the determination of the claims examiner may appeal the initial determination. If an initial determination is made in favor of the claimant and payment of benefits is begun, payments shall not be stopped without prior notice and an opportunity to be heard. 11.3.300.308(E) NMAC. This provision necessarily results in some payments being made upon an initial determination of eligibility that are subsequently overturned. As a result, the NCD advises the claimant that if the appeal decision is against him, he will be required to repay the benefits received. Following a hearing before an Administrative Law Judge (ALJ) within DWS's appeals tribunal at which parties may be represented by counsel and may present testimonial and documentary evidence, the ALJ issues a decision of the appeals tribunal. See11.3.500.10 NMAC (11/15/2012). The parties may further appeal the decision of the ALJ first to the secretary, who may enter a decision, refer the decision to the board of review directly, or if the secretary does not take action within fifteen days, the decision will be automatically scheduled to be heard before the board. 11.3.500.12(B), (C) NMAC (11/15/2012). Once the secretary or board of review issues a decision, the appellant has exhausted administrative review. 11.3.500.13 NMAC (11/15/2012). Finally, an aggrieved party may appeal that decision as of right to the district court. Rule 1–077(A).

{9} DWS's authority to recover overpayments of unemployment benefits is governed by Section 51–1–8(J) and NMSA 1978, Section 51–1–38(F) (1993). In “double affirmation” cases—those in which a decision in favor of the claimant is then affirmed by either the tribunal, board of review, or judicial action only to be ultimately reversed—Section 51–1–8(J) provides that the claimant is not liable for overpayments. This case, however, involves “single affirmation” in which the Tribunal and secretary disagreed with the decision of the claims examiner. In such cases, the overpayments are not “unemployment compensation,” and the monies are not being used for the administration of unemployment compensation laws and must be recouped. Section 51–1–38(F) states that a claimant

who has received benefits as a result of a determination or decision of the department ... that he was eligible and not disqualified for such benefits and such determination or decision is subsequently modified or reversed by a final decision ... irrespective of whether such overpayment of benefits was due to any fault of the person claiming benefits, shall, as determined by the secretary or his authorized delegate, either be liable to have such sum deducted from any future benefits payable to him ... or be liable to repay to the department ... a sum equal to the amount of benefits received by him for which he was not eligible or for which he was disqualified or that was otherwise overpaid to him[.]

(Emphasis added.) Thus, DWS is...