Valvo v. Ross

• Decision Date: 04 December 1981
• Citation: 83 A.D.2d 344,445 N.Y.S.2d 292
• Parties: In the Matter of the Claim of Grace VALVO, Appellant. v. Philip ROSS, as Industrial Commissioner, Respondent.
• Court: New York Supreme Court — Appellate Division

Page 292

445 N.Y.S.2d 292

83 A.D.2d 344

In the Matter of the Claim of Grace VALVO, Appellant. v. Philip ROSS, as Industrial Commissioner, Respondent.

Supreme Court, Appellate Division, Third Department.

Dec. 4, 1981.

Chikovsky & Snyder, Rochester (Stephen S. Joy, Rochester, of counsel), for appellant.

Robert Abrams, Atty. Gen., New York City (Iris A. Steel and Paul S. Shemin, Asst. Attys. Gen., New York City, of counsel), for respondent.

Before MAHONEY, P. J., and MAIN, MIKOLL and YESAWICH, JJ.

CASEY, Justice.

We hold that where a primary issue before the board is whether claimant's minimal activities technically constitute employment within the meaning of the Labor Law, claimant's weekly certification of total unemployment cannot, as a matter of law, be considered a false statement under section 597 (subd. 4) of the Labor Law. The board's interpretation of the statute to the contrary is irrational.

The facts are not in dispute. Claimant, a close friend of the employer's daughter-in-law, offered to help the employer when, in the home of the daughter-in-law, and in the presence of claimant, he expressed a problem with writing checks for his business. The business, a small fuel oil company that delivers heating oil to families, operated on a seasonal basis, usually from November to April. From October 12, 1976 to July 17, 1977, claimant wrote more than half of the checks for the business. On the checks she wrote the name of the payee and the amount, filed out the check stubs and did the arithmetic. The employer signed and mailed the checks. Claimant was not paid for these services during this time. She commenced paid employment with the company in November, 1977 and worked during that season until May, 1978. When working, she was on the employment premises five days a week and, in addition to writing checks, she answered the phone, handled the accounts receivable, and filled in journal ledgers. During the off-season from May 9, 1978 to November 5, 1978, claimant was not on the payroll and did not report to work but continued to write checks as she had during 1976 and 1977. From June 19, 1979 to November 4, 1979, when the office was again shut down, claimant performed no duties other than the writing of checks, and again she received no payment.

The board has determined that claimant's uncompensated check writing activities during the off-season periods constituted employment within the meaning of the Labor Law, rendering her ineligible for benefits. Since 'construction and application given to the term 'total unemployment's by the board must be upheld unless it can 'be said to lack rational basis or to be arbitrary or capricious'' (Matter of Reitman 27 A.D.2d 678, 275 N.Y.S.2d 912), we see no reason for disturbing this portion of the board's decision.

Having concluded that claimant's activities constituted employment, the board further determined that claimant's weekly certifications of total unemployment were false and known by her to be false when made. The board ruled that such wilful misrepresentations justified the imposition of a forfeiture of effective days and that benefits paid as a result of such wilful misrepresentations are recoverable (Labor Law, § 594). The board also ruled that, irrespective of wilfulness, claimant's weekly certifications were 'false in fact', rendering a portion of the benefits recoverable under section 597 (subd. 4) of the Labor Law.

Initially, with respect to wilfulness, we find nothing in the record to support the board's determination. Wilfulness does not imply a criminal intent to defraud, but rather requires that claimant acted knowingly, intentionally or deliberately (Matter of Vick 12 A.D.2d 120, 208 N.Y.S.2d 788). While the board's authority with respect to the assessment of the credibility of witnesses and the inferences to be drawn from the evidence is well established, its decision still must be supported by substantial evidence in the record (Matter of Di Maria 52 N.Y.2d 771, 436 N.Y.S.2d 616, 417 N.E.2d 1004)--that is, there must be a rational basis for the findings of fact supporting the board's decision (300 Gramatan Ave. Assoc. v. State Div. of Human Rights, 45 N.Y.2d 176, 182, 408 N.Y.S.2d 54, 379 N.E.2d 1183). Here, there is nothing in the record to suggest other than that claimant drew an incorrect conclusion concerning the highly technical interpretation and application of a provision of the Labor Law. The record does not support the Board's finding that claimant knew she had drawn the wrong conclusion. Under such circumstances, there is no rational basis for finding that claimant acted wilfully (compare Matter of Smith 78 A.D.2d 961, 433 N.Y.S.2d 285; Matter of Staheli 60 A.D.2d 670, 400 N.Y.S.2d 203 with Matter of Maguire 54 N.Y.2d 965, 446 N.Y.S.2d 38, 430 N.E.2d 914 [1981]).

Turning to the question of whether recoverability of a portion of the benefits pursuant to section 597 (subd. 4) of the Labor Law is authorized under these circumstances, ¹ we are of the view that the term 'false statement' in the statute refers to a false factual statement. While the question of whether a claimant is totally unemployed has often been characterized as a factual issue (see, e.g., Matter of Brandau 52 A.D.2d 696, 382 N.Y.S.2d 389), where, as here, the facts are not in dispute, the board's decision requires a purely legal conclusion involving the construction and application of a technical term in the Labor Law (see Matter of Reitman supra; Matter of Newman 24 A.D.2d 1042, 265 N.Y.S.2d 326). Similarly, under the circumstances of this case, the requirement that claimant weekly 'report and certify to his unemployment' (12 NYCRR 473.2obligated claimant to draw a legal conclusion--whether her uncompensated check-writing activities constituted employment within the meaning of the Labor Law--rather than provide factual data. ²

As this court noted in Matter of Grandy (Phillips-Ross), 64 A.D.2d 796, 408 N.Y.S.2d 155, 'benefits are payable only to those who are 'totally unemployed' (Labor Law, § 591, subd. 1) and even those who are arguably employed in only a technical sense are ineligible to receive them * * * Under circumstances similar to those present here, we have previously expressed the notion that ...