Od Lillian a Scott v. Enterprise Synergy LLC ( 2023 )

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.
STATE OF MICHIGAN
COURT OF APPEALS
LILLIAN A. SCOTT, UNPUBLISHED
May 25, 2023
Claimant-Appellant,
v No. 350690
Berrien Circuit Court
DEPARTMENT OF LABOR AND ECONOMIC LC No. 18-000266-AE
OPPORTUNITY/UNEMPLOYMENT
INSURANCE AGENCY,
Appellee.
ON REMAND
Before: SHAPIRO, P.J., and CAVANAGH and REDFORD, JJ.
REDFORD, J. (dissenting).
Our Supreme Court reversed Part III of the judgment of this Court1 and remanded for
consideration of the issues raised by claimant Lillian Scott but not addressed by this Court during
our initial review.2 Lillian Scott claims that the content of the Department of Licensing and
Regulatory Affairs/Unemployment Insurance Agency’s determinations in Cases 0-001-824-775
and 0-002-333-913 did not provide her adequate notice and thereby denied her due process, and
that good cause exists to reopen her cases and allow a late appeal. For the reasons stated herein, I
respectfully dissent from the majority’s opinion because I would affirm the lower court’s rulings
on these two issues.
1
Scott v Dep’t of Labor & Economic Opportunity/Unemployment Ins Agency, 341 Mich App 87;
___ NW2d ___ (2022).
2
See Scott v Dep’t of Labor & Economic Opportunity/Unemployment Ins Agency, ___ Mich ___;
983 NW2d 417, 417-418 (2023).
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I. BACKGROUND
The background facts stated in our previous opinion and the dissenting opinion, Scott, 341
Mich App at 92-96, and 105-108, respectively, are incorporated herein by reference. As previously
described, Scott seeks to challenge the Agency’s determinations requiring her to pay restitution
and penalties under the Michigan Employment Security Act (MESA), MCL 421.1 et seq.
After Scott’s former employer, Enterprise Synergy, LLC, notified the Agency that Scott
voluntarily stopped working on May 30, 2013, and it complained that it should not be held
responsible for paying her any unemployment benefits, the Agency investigated and mailed Scott
requests for information on April 24, 2014, and then mailed her determinations on May 9, 2014,
in Cases 775 and 913, informing her that her benefits were terminated, and also mailed her notices
that she must pay restitution of the amount she received plus penalties. In Case 775, the Agency’s
Notice of Determination stated in relevant part:
Issues and Sections of Michigan Employment Security Act involved:
Misrepresentation and 62(b).
Your actions indicate you intentionally misled and/or concealed information to
obtain benefits you were not entitled to receive.
Benefits will be terminated on any claims active on May 25, 2013.
You are disqualified for benefits under MES Act, Sec. 62(b). Restitution is due
under MES Act Sec. 62(a0.
In Case 913, the Agency’s Notice of Determination stated in relevant part:
Issues and Sections of Michigan Employment Security Act involved: Voluntary
Quit and 29(1)(a).
You quit your job with ENTERPRISE SYNERGY LLC on May 30, 2013 due to
other personal reasons.
Your leaving was voluntary and not attributable to the employer.
You are disqualified for benefits under MES Act, Sec. 29(1)(a).
Each notice also informed Scott of her right to protest or appeal the determinations within 30 days
and how to do so.
After the appeal period lapsed, the Agency began garnishing her wages and intercepting
her income tax refunds to satisfy the outstanding amounts she owed. Scott engaged attorneys and
ultimately in 2018 an attorney filed a protest and requested that her cases be reopened. Because
Scott had not appealed the determinations within one year of the May 9, 2014 determinations, as
required under MCL 421.32a(2), the Agency considered her requests time-barred. Scott appealed
the Agency’s decision and an ALJ conducted a hearing and affirmed the Agency’s decision and
denial to reopen Scott’s cases. Scott appealed the ALJ’s order to the Michigan Compensation
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Appellate Commission (MCAC), on the ground that good cause for a late appeal existed because
the Agency’s determinations did not provide reasonable and adequate notice. The MCAC affirmed
the ALJ’s decision. Scott then appealed to the circuit court which held that competent, material,
and substantial evidence in the record supported the findings of the ALJ and the MCAC. The
circuit court also concluded that the notices complied with MCL 421.32 and satisfied procedural
due process.
On appeal, Scott asserts that the Agency’s determinations deprived her of due process by
failing to adequately provide her notice, and she claims that good cause exists to allow her to file
a late appeal under Mich Admin Code R 421.270(1).
II. STANDARDS OF REVIEW
We review de novo the circuit court’s application of legal principles in reviewing an
administrative decision, including matters of statutory interpretation. Mericka v Dep’t of
Community Health, 283 Mich App 29, 36; 770 N.W.2d 24 (2009). We review the circuit “court’s
review of an administrative decision to determine whether the lower court applied correct legal
principles and whether it misapprehended or misapplied the substantial evidence test to the
agency’s factual findings, which is essentially a clear-error standard of review.” Braska v
Challenge Mfg Co, 307 Mich App 340, 351-352; 861 NW2d 289 (2014) (quotation marks and
citation omitted). “A finding is clearly erroneous where, after reviewing the record, this Court is
left with the definite and firm conviction that a mistake has been made.” VanZandt v State
Employees’ Retirement Sys, 266 Mich App 579, 585; 701 NW2d 214 (2005).
When an ALJ serves as the trier of fact in an administrative proceeding, it is the ALJ who
“heard testimony . . . , reviewed all the evidence in the record and made findings of fact based on
the credibility of witnesses and weight of the evidence.” Hodge v US Security Assoc, Inc, 497
Mich 189, 195; 859 NW2d 683 (2015). The ALJ’s role requires that it, and not a circuit court on
review, make determinations of credibility and resolve evidentiary conflicts. Id. at 194-195. The
circuit court “must affirm a decision of the ALJ and the MCAC . . . if competent, material, and
substantial evidence supports it. A reviewing court is not at liberty to substitute its own judgment
for a decision of the MCAC that is supported with substantial evidence.” Id. at 194. “Substantial
evidence is that which a reasonable mind would accept as adequate to support a decision, being
more than a mere scintilla, but less than a preponderance of the evidence.” VanZandt, 266 Mich
App at 584 (quotation marks and citation omitted). Although the MCAC’s factual findings are
entitled to great deference, they are only conclusive if “any competent evidence” supports those
findings. Brackett v Focus Hope, Inc, 482 Mich 269, 275; 753 NW2d 207 (2008). “Evidence is
competent, material, and substantial if a reasoning mind would accept it as sufficient to support a
conclusion.” City of Romulus v Dep’t of Environmental Quality, 260 Mich App 54, 63; 678 NW2d
444 (2003). Under the clear-error standard, this Court will affirm if the lower court’s
determination “is plausible in light of the record viewed in its entirety.” Beason v Beason, 435
Mich 791, 803; 460 NW2d 207 (1990).
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III. ANALYSIS
Scott argues that the notices of determinations failed to provide her reasonably sufficient
information regarding the bases for the Agency’s determinations and deprived her of adequate due
process in violation of state and federal law. I disagree.
MCL 421.29(1)(a) provides that an individual is disqualified from receiving benefits if she
left work voluntarily. MCL 421.32(a) requires the Agency to promptly notify the claimant and
other interested parties of the determination and “the reasons for the determination.” MCL
421.62(a) requires the Agency to issue a restitution determination requiring restitution if it
determines that an individual was not entitled because the individual made an intentional false
statement, misrepresentation, or concealed material information to obtain benefits. MCL
421.62(b) requires termination of benefits of persons who made an intentional false statement,
misrepresentation, or concealed material information to obtain benefits.
“Procedural due process serves as a limitation on government action and requires
government to institute safeguards in proceedings that affect those rights protected by due process,
including life, liberty, or property.” Thomas v Pogats, 249 Mich App 718, 724; 644 NW2d 59(2002). “Due process in civil cases generally requires notice of the nature of the proceedings, an
opportunity to be heard in a meaningful time and manner, and an impartial decisionmaker.”
Cummings v Wayne Co, 210 Mich App 249, 253; 533 NW2d 13 (1995). “Due process is a flexible
concept, the essence of which requires fundamental fairness.” Al-Maliki v LaGrant, 286 Mich
App 483, 485; 781 NW2d 853 (2009). Notice must be “reasonably calculated, under all the
circumstances, to apprise interested parties of the pendency of the action and afford them an
opportunity to present their objections.” Elba Twp v Gratiot Co Drain Comm’r, 493 Mich 265,
287-288; 831 NW2d 204 (2013) (quotation marks and citation omitted).
In this case, the Agency’s determinations in Cases 775 and 913 respectively, informed
Scott that she “intentionally misled and/or concealed information to obtain benefits” and that she
voluntarily left her position with her former employer and that her leaving was not attributable to
the employer. The notices of determination, along with the restitution orders, provided Scott
adequate notice of the time period of ineligibility (after she voluntarily quit), the reason for
ineligibility (she voluntarily left employment), the amount she owed including additional penalties
for fraud, and her appellate rights. The circuit court correctly understood that MCL 421.32
required the Agency to notify Scott of the reasons for the determinations but that the statute does
not require detailed particularized factual explanations of the reasons.3 The record indicates that
the determinations informed Scott of the grounds for termination of her benefits. The notices of
determinations adequately provided the information necessary to inform Scott of her ineligibility
and her rights, and satisfied the minimum requirements of procedural due process by stating the
decisions and the Agency’s grounds for them, as well as providing her an opportunity to be heard
3
Contrary to Scott’s argument, MCR 2.112’s pleading requirements in civil actions do not apply
to Agency notices. Had the Legislature so intended it would have specified such. Further, no
cases have held that the MESA requires such. In my opinion, this Court should not import such
pleading requirements into the MESA’s notice provisions, particularly in this case where the
notices sent to Scott comported with procedural due process.
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in a meaningful time and manner by an impartial decision-maker. The notices informed Scott of
the grounds for the determinations and appropriately informed her that she had opportunity to
respond and explain her position, and present evidence in her support to rebut the Agency’s
determinations within the statutorily defined period. She simply failed to timely do so. I find
nothing fundamentally unfair about the notices given Scott, and her arguments to the contrary lack
merit. The circuit court correctly concluded that Scott had not been denied procedural due process
and ruled that the ALJ’s and MCAC’s decisions were not contrary to law and supported by
competent and material evidence. I disagree with the majority’s conclusion that the Agency must
meet a heightened notice standard that the Legislature has not imposed by statute to satisfy due
process.
Scott also argues that good cause exists to reopen her case and allow a late appeal. I
disagree.
In May 2014, when the Agency issued the determinations at issue, MCL 421.32a(2)
provided in relevant part:
The unemployment agency may, for good cause, including any
administrative clerical error, reconsider a prior determination . . . after the 30-day
period has expired and after reconsideration issue a redetermination affirming,
modifying, or reversing the prior determination . . . . A reconsideration shall not
be made unless the request is filed with the unemployment agency, . . . within 1
year from the date of mailing or personal service of the original determination on
the disputed issue. [MCL 421.32a(2), as amended by 2011 PA 269.]
The statute’s good-cause exception plainly permitted the Agency to consider requests for
redetermination only in instances where the claimant sought such action within one year of the
mailing of the original determination. In this case, Scott did not timely seek reconsideration within
one year of the original May 9, 2014 mailing of the notices of determinations to her. Accordingly,
she is not eligible for reopening of her cases to raise late appeal under MCL 421.32a(2).
For these reasons, I would affirm the circuit court’s decision.
/s/ James Robert Redford
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