Morris v. Job Service North Dakota

• Decision Date: 26 March 2003
• Docket Number: No. 20020258.,20020258.
• Citation: 658 N.W.2d 345,2003 ND 45
• Parties: Douglas B. MORRIS, Petitioner and Appellee v. JOB SERVICE NORTH DAKOTA, Respondent and Appellant.
• Court: North Dakota Supreme Court

658 N.W.2d 345

2003 ND 45

Douglas B. MORRIS, Petitioner and Appellee v. JOB SERVICE NORTH DAKOTA, Respondent and Appellant.

No. 20020258.

Supreme Court of North Dakota.

March 26, 2003.

Constance N. Hofland (argued) and Patrick J. Ward (on brief), Zuger Kirmis & Smith, Bismarck, ND, for petitioner and appellee.

Kevin McCabe (argued), Assistant Attorney General, and Douglas A. Bahr (appeared), Solicitor General, Attorney General's Office, for respondent and appellant.

SANDSTROM, Justice.

[¶ 1] Job Service North Dakota appealed from a district court order reversing its decision disqualifying Douglas B. Morris from unemployment benefits. We conclude Job Service correctly ruled that Morris's past employers contributed to his pension, thus disqualifying him from unemployment benefits under the circumstances. We reverse the district court order and reinstate Job Service's decision.

I

[¶ 2] Morris, a member of Ironworkers Local Union No. 793, retired effective January 1, 2002, and began receiving $479 per week from the Ironworkers Union pension fund. On January 10, 2002, Morris filed a claim with Job Service and began receiving unemployment benefits in the amount of $290 per week. Job Service later found that the money in Morris's pension was derived from direct contributions from his past employers, and, under N.D.C.C. § 52-06-02(15), deducted the amount of Morris's pension from his job insurance benefits. Because the $479 weekly pension amount exceeded Morris's $290 weekly unemployment benefits, Job Service ruled Morris was ineligible for any benefits.

[¶ 3] Morris requested reconsideration, and the matter was heard by an appeals referee. The appeals referee rejected Morris's claim that the payments made to the pension fund were his contributions rather than his employers' contributions, and affirmed Job Service's initial determination. After Morris requested review, Job Service affirmed the appeals referee's decision. Morris appealed, and the district court reversed Job Service's decision disqualifying Morris from unemployment benefits, concluding the pension account was funded by employees' money rather than by contributions from Morris's employers.

[¶ 4] Morris's appeal from Job Service's decision to the district court was timely under N.D.C.C. § 52-06-27. The district court had jurisdiction under N.D. Const. art. VI, § 8, and N.D.C.C. § 52-06-27. Job Service's appeal to this Court from the district court order, which was followed by a subsequently entered consistent judgment, see DeCoteau v. Nodak Mut. Ins. Co., 2001 ND 182, ¶ 1 n. 1, 636 N.W.2d 432,

was timely under N.D.C.C. § 52-06-27 and N.D.R.App.P. 4(a). This Court has jurisdiction under N.D. Const. art. VI, § 6, and N.D.C.C. § 52-06-27.

II

[¶ 5] Under N.D.C.C. § 28-32-46, the district court must affirm an order of an administrative agency unless it finds any of the following are present:

1. The order is not in accordance with the law.

2. The order is in violation of the constitutional rights of the appellant.

3. The provisions of this chapter have not been complied with in the proceedings before the agency.

4. The rules or procedure of the agency have not afforded the appellant a fair hearing.

5. The findings of fact made by the agency are not supported by a preponderance of the evidence.

6. The conclusions of law and order of the agency are not supported by its findings of fact.

7. The findings of fact made by the agency do not sufficiently address the evidence presented to the agency by the appellant.

8. The conclusions of law and order of the agency do not sufficiently explain the agency's rationale for not adopting any contrary recommendations by a hearing officer or an administrative law judge.

On appeal from a district court ruling on an administrative decision, this Court reviews the agency order in the same manner. See N.D.C.C. § 28-32-49. Questions of law, including the interpretation of a statute, are fully reviewable on appeal from an administrative decision. Grand Forks Prof'l Baseball, Inc. v. North Dakota Workers Comp. Bureau, 2002 ND 204, ¶ 8, 654 N.W.2d 426.

A

[¶ 6] The unemployment compensation program is a joint federal-state system in which each state receives federal funds and administers the program. See 26 U.S.C. §§ 3301 through 3311; N.D.C.C. chs. 52-02 through 52-08.1; Teledyne Columbia-Summerill Carnegie v. Unemployment Comp. Bd. of Review, 160 Pa. Cmwlth. 17, 634 A.2d 665, 669 (1993). Because some states allowed retired individuals who received social security or public or private pensions to receive unemployment insurance benefits even though they actually had withdrawn from the labor force, Congress in 1976 enacted the Federal Unemployment Tax Act, 26 U.S.C. § 3304(a)(15), to require all states to offset an individual's unemployment insurance compensation by the amount of any public or private pension or other similar periodic retirement payment based on the individual's previous employment. See Watkins v. Cantrell, 736 F.2d 933, 937 (4th Cir.1984)

. The pension offset requirements of the federal statute apply only if "such pension, retirement or retired pay, annuity, or similar payment is under a plan maintained (or contributed to) by a base period employer or chargeable employer (as determined under applicable law)." 26 U.S.C. § 3304(a)(15)(A)(i). The Act allows states to "provide for limitations on the amount of any such a reduction to take into account contributions made by the individual for the pension, retirement or retired pay, annuity, or other similar periodic payment." 26 U.S.C. § 3304(a)(15)(B).

[¶ 7] In accordance with the federal requirements, the Legislature enacted N.D.C.C. § 52-06-02(15), which disqualifies an individual from receiving unemployment benefits "[f]or any week with respect to which an individual is receiving a pension... under a plan maintained or contributed to by a base-period or chargeable employer, as determined under applicable law...." Under N.D.C.C. § 52-06-02(15)(c), an individual's weekly benefit amount will be reduced "by no part of the pension if the entire contributions to the plan were provided by such individual, or by the individual and an employer, or any other person or organization, who is not a base-period or chargeable employer, as determined under applicable law...."

[¶ 8] Job Service does not contend Morris's former employers "maintained" the Ironworkers Union pension fund. Morris does not contend his former employers were not "base-period or chargeable" employers under the law. Therefore, the issue in this case is whether Morris's employers "contributed to" the pension fund, or whether Morris himself made the "entire contributions to the plan." We agree with the court in Edinger v. State Employment Sec. Dep't, 58 Wash.App. 525, 793 P.2d 1004, 1006 (1990), that this inquiry presents a mixed question of fact and law. Our review of a mixed question of fact and law involves a determination of whether the evidence supports the agency's findings of fact and, in turn, whether those findings of fact sustain the agency's conclusion. Hulse v. Job Service North Dakota, 492 N.W.2d 604, 606 (N.D. 1992). In reviewing the agency's findings of fact, we determine only whether a reasoning mind could have reasonably decided the findings of fact were proved by the weight of the evidence. Hjelden v. Job Service North Dakota, 1999 ND 234, ¶ 6, 603 N.W.2d 500.

B

[¶ 9] Although N.D.C.C. § 52-06-02(15) is silent on who has the burden of proof on the issue, we conclude the burden of establishing that a pension should not be used to offset unemployment benefits properly rests with the claimant. In Lambott v. Job Service North Dakota, 498 N.W.2d 157, 159 (N.D.1993), this Court held that a claimant has the burden of establishing good cause for failing to apply for or accept suitable work under N.D.C.C. § 52-06-02(3). We reasoned that "[t]his interpretation places the burden on the party with particular knowledge of the claimed underlying facts." Lambott, 498 N.W.2d at 159. We said a contrary interpretation would lead to an absurd result because it "would place on Job Service the burden of proving the negative—the existence or non-existence of unknown facts." Id. Likewise, in this case, the claimant is the party with the knowledge of whether the claimant or the claimant's employer contributed to the claimant's pension. See also Edinger, 793 P.2d at 1006

(noting Washington administrative rule creates presumption of no employee contribution unless claimant provides satisfactory evidence that such a contribution was made). Consequently, to avoid the offset provisions of N.D.C.C. § 52-06-02(15), Morris has the burden of establishing that he, rather than his employers, contributed to the pension.

C

[¶ 10] Morris presented evidence that the Ironworkers Union and Associated General Contractors of North Dakota signed an agreement on April 4, 2000, as the result of negotiations over increased wages for a three-year period. The negotiations involved only a total dollar amount, and the members of the Ironworkers Union annually decided how much of the negotiated wage increase would be distributed to their pension, annuity, union health and welfare fund, ironworkers trade association, apprenticeship fund, and union dues. Article X of the agreement provides in part:

The Employer agrees to contribute and forward every month, not later than the 15th day of the following month, hereinafter called the "due date", such sums for pension, health and welfare, apprentice and I.I.I. funds, plus the deductions from the Basic Wage for working assessment contributions, for each hour worked by all employees covered by this Agreement. The Funds shall be known separately as the Iron Workers Local 793 Supplemental Pension Fund (Annuity Fund), Duluth Building Trades Welfare Fund, Iron Workers Local 793 Apprentice Fund, I.I.I. Fund, Working Assessment Fund and Iron Workers Local 793 Trust Funds under separate

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