Gourley v. Department of Workforce Services, Workforce Appeals Board , 2014 Utah App. LEXIS 284 ( 2014 )

2014 UT App 278_________________________________________________________
THE UTAH COURT OF APPEALS
JANENE GOURLEY,
Petitioner,
v.
DEPARTMENT OF WORKFORCE SERVICES, WORKFORCE
APPEALS BOARD,
Respondent.
Memorandum Decision
No. 20130145-CA
Filed November 28, 2014
Original Proceeding in this Court
Jeremy G. Knight, Attorney for Petitioner
Amanda B. McPeck, Attorney for Respondent
JUDGE JAMES Z. DAVIS authored this Memorandum Decision, in
which JUDGES STEPHEN L. ROTH and MICHELE M. CHRISTIANSEN
concurred.
DAVIS, Judge:
¶1 Claimant Janene Gourley seeks review of the Workforce
Appeals Board’s (the Board) decision that she had committed fraud
in the receipt of unemployment benefits and its order that she pay
a total of $3,216 for receiving an overpayment of benefits and as a
civil penalty. We decline to disturb the Board’s decision.
¶2 Gourley began receiving unemployment benefits on
November 27, 2011, after being laid off from her job. She collected
unemployment checks through May 12, 2012. While she was
unemployed, Gourley’s family and her then-boyfriend, Jim Cross,
gave her money to help with her medical bills and living expenses.
Cross’s checks, which Gourley considered gifts, were issued from
Gourley v. Department of Workforce Services
the business account for his company, Cross Marine Projects. As a
memo on the checks, Cross would often write “marketing,”
“contract work,” or “consulting,” even though Gourley did not
perform any such work for Cross Marine Projects until her
business, Liberty Belle Public Relations, was licensed in April 2012.
In October 2012, the Department of Workforce Services (the
Department) began investigating Gourley’s case file and concluded
that Gourley had committed fraud on the Department by receiving
$2,235 of unemployment payments to which she was not entitled.
The Department also imposed a civil penalty of $2,235, resulting in
a total ordered payment of $4,470. Gourley appealed the
Department’s decision to an Administrative Law Judge (ALJ). The
ALJ also found that Gourley had committed fraud but reduced the
amount of overpayment to $1,608 based on his finding that the
checks Gourley received from Cross between November 2011 and
early March 2012 were gifts and incorrectly included in the
Department’s calculations. The ALJ found credible Cross’s and
Gourley’s testimonies that the checks Cross issued during that
period were for personal reasons even though Cross issued the
checks from the Cross Marine business account and indicated in the
check memos that “the payments were for business purposes.” The
ALJ also reduced the civil penalty imposed by the Department to
$1,608, for a total ordered payment of $3,216. The Board affirmed
the ALJ’s decision.
¶3 Gourley argues that the Board’s decision is not supported by
substantial evidence.1 The Board’s determination that Gourley
committed fraud is “a mixed question of law and fact” that is more
1. Gourley also argues that the “Board modified its adopted
findings from the ALJ,” rendering its findings unsupported by the
record. This argument is without merit. The first of the two
findings that Gourley identifies as “modified” relates to the Board’s
ruling on her request to submit additional evidence, not its review
of the ALJ’s ruling. See infra ¶ 7. The second challenged
finding—that Gourley became self-employed on April 10, 2012—is
in accordance with Gourley’s testimony before the ALJ and is
otherwise only semantically different from the ALJ’s finding.
20130145-CA 2 2014 UT App 278Gourley v. Department of Workforce Services
fact-like than law-like “because the trial court [or agency] is in a
superior position to decide it” and because the case “does not lend
itself to consistent resolution by a uniform body of appellate
precedent.” Carbon County v. Workforce Appeals Bd., 2013 UT 41, ¶ 7,
308 P.3d 477 (alteration in original) (citation and internal quotation
marks omitted) (reviewing the Board’s decision regarding a request
for unemployment benefits). Accordingly, “[w]e grant more
deference” to the Board’s decision. Id.¶4 “Fraud requires a willful misrepresentation or concealment
of information for the purpose of obtaining unemployment
benefits.” Utah Admin. Code R994-406-401(2). To establish fraud,
the Department must demonstrate by clear and convincing
evidence the elements of materiality, knowledge, and willfulness.
Id. R994-406-401(1); id. R994-406-402. Gourley specifically
challenges the Board’s findings of materiality and knowledge.
Because the Board indicated that it “adopt[ed] in full the factual
findings of the [ALJ],” we address the ALJ’s findings directly.
¶5 “Materiality is established when a claimant makes false
statements or fails to provide accurate information for the purpose
of obtaining[] (A) any benefit payment to which the claimant is not
entitled, or (B) waiting week credit which results in a benefit
payment to which the claimant is not entitled.” Id. R994-406-
401(1)(a)(i). The ALJ found that Gourley failed to inform the
Department that she had received $200 from Cross Marine on
March 14, 2012, that was intended “specifically to get her business
started and begin her contract work with Cross Marine Projects.”
The ALJ also found that Gourley licensed her business in April
2012 and began contract work with Cross Marine on April 10, 2012,
but failed to report either development to the Department in the
weekly claims she filed in April and May 2012. The ALJ considered
Gourley’s testimony that someone else filed the weekly claims in
April and May 2012 without her knowledge or authorization as
“self-serving” and “not credible,” noting that “[t]he weekly filing
process requires a personal identification number that only
[Gourley] would have” and that Gourley “could not offer any
20130145-CA 3 2014 UT App 278Gourley v. Department of Workforce Services
reasonable explanation for how the weekly claims could be filed
without her knowledge.”
¶6 Gourley contends that the March 14 check for $200 was not
material information that she was required to report to the
Department because the check was not related to her business
venture—the check was addressed to her personally, not Liberty
Belle Public Relations and, at that time, she had not yet filed for a
business license. Likewise, she argues that “[a]lthough in April
checks paid by Mr. Cross were made out to Liberty Belle, these
checks were not for employment wages or related subcontractor
services” but were intended as gifts to help her pay off bills related
to a car accident she had in early April 2012. These arguments are
unavailing and contrary to Gourley’s testimony before the ALJ.
During that hearing, Gourley testified that the check she received
around “[t]he end of March” was “a retainer type” and intended to
help her “with getting a business started.” And she indicated that
she had actually used that check “for starting the company.” She
also testified that she obtained her business license in April 2012,
that she “started [her] business April 10th,”and that she “started
getting paychecks [from Cross Marine] in April.” She testified that
she received a $300 check in early May 2012 to help her pay
expenses related to setting up her business. Regardless of whether
any of the payments Gourley received in April and May 2012 were
considered by any of the parties as gifts, they do not mitigate the
effects of her own testimony indicating that she was also receiving
payments for work performed and to cover business expenses
during that same period.
¶7 Last, there is no evidence in the record of a car accident to
support Gourley’s explanation for the checks Cross gave her in
April. She raised a similar argument in her appeal to the Board. The
Board declined to consider this “new evidence on appeal” because
the evidence “was available at the time of the hearing [before the
ALJ]” and because Gourley had “not presented any evidence of
extenuating circumstances which would warrant accepting this
new evidence [on appeal to the Board].” See Utah Admin. Code
R994-508-305(2) (“Absent a showing of unusual or extraordinary
20130145-CA 4 2014 UT App 278Gourley v. Department of Workforce Services
circumstances, the Board will not consider new evidence on appeal
if the evidence was reasonably available and accessible at the time
of the hearing before the ALJ.”). We agree with the Board; surely
evidence that Gourley was injured in a car accident in April 2012
was “reasonably available” at the time of the hearing before the
ALJ in December 2012.2 Accordingly, because there is no evidence
properly before this court to substantiate Gourley’s arguments
related to a car accident, we do not consider those arguments. See
Salt Lake Donated Dental Servs., Inc. v. Department of Workforce Servs.,
2011 UT App 7, ¶ 12, 246 P.3d 1206 (holding that the court of
appeals will not consider untimely filed “affidavits in determining
whether the Board’s decision was supported by substantial
evidence”). The Board’s finding of materiality is supported by
substantial evidence. See Record v. Workforce Appeals Bd., 2011 UT
App 340, ¶ 19, 263 P.3d 1210 (defining “substantial evidence”).
¶8 Next, the knowledge element of fraud involves a showing
that the claimant knew or should have known that “the
information submitted to the Department was incorrect or that he
or she failed to provide information required by the Department.”
Utah Admin. Code R994-406-401(1)(b). This element “can also be
established when a claimant recklessly makes representations
knowing he or she has insufficient information upon which to base
such representations.” Id. A claimant’s failure “to read material
provided by the Department and to ask a Department
representative if he or she has a question about what information
to report” is not a defense against this element. Id. The ALJ
established knowledge based on its finding that Gourley “knew or
2. The Board also noted that “even if [it] were to consider
[Gourley’s] new evidence it would not alter the decision of the
[ALJ].” In Gourley’s own words, the injuries she sustained in the
car accident “prevented [her] from working.” Yet, she submitted
weekly claims through April and May 2012 certifying that she was
“able and available for full-time work.” Thus, the Board indicated
that the car accident evidence could also support a finding of fraud
in that it suggests Gourley “incorrectly reported information when
filing weekly claims.”
20130145-CA 5 2014 UT App 278Gourley v. Department of Workforce Services
should have known to report her gross weekly earnings, as
instructed when she filed her claims for unemployment benefits”
and as indicated in the “Claimant Guide,” and that she “knew or
should have known to contact the Department for assistance,
especially once she began her business venture in April 2012.”
¶9 Gourley asserts that she did not knowingly withhold
material information “because there was no employment or
subcontractor agreement and [she] was not actively growing or
managing a business to collect profit [due to her car accident].”
This argument does not excuse Gourley’s failure to report the
creation of her business in April 2012 or her receipt of the March 14
retainer check. See id. R994-207-101(1) (“It is not the intent of the
[unemployment] fund to subsidize a claimant who is devoting
substantially all his time and efforts to starting up a new business
or expanding an existing business even though he receives no
income.”). Likewise, Gourley’s argument that she does not recall
reading through the Claimant Guide is of no effect. See id. R994-
406-401(1)(b). As the ALJ recounted, the web-based form Gourley
completed each week she submitted a claim for benefits stated, in
bold text,
“You must report any work performed, including
self employment while filing for unemployment
benefits. All gross wages must be reported for the
week the work is performed, regardless of when it
was paid. Not reporting wages or self employment
constitutes fraud and the law provides severe
penalties for receiving unemployment benefits
fraudulently.”
The Claimant Guide indicated the same. Accordingly, the Board’s
finding of knowledge is also supported by substantial evidence.3
3. Because we conclude that the Board’s findings are supported by
substantial evidence, we do not address Gourley’s argument that
the Board erred by not giving more weight to certain evidence that
(continued...)
20130145-CA 6 2014 UT App 278Gourley v. Department of Workforce Services
¶10 The Board based its findings of materiality and knowledge
on substantial evidence. Gourley did not challenge the Board’s
findings supporting the willfulness element of fraud. In turn, all
three elements of fraud are established and supported by
substantial evidence, and we decline to disturb the Board’s
conclusion that Gourley committed fraud or its calculation of the
overpayment and civil penalty amounts.
3. (...continued)
supported her arguments. For the same reason, we reject Gourley’s
argument that the Board erroneously included the March 14, 2012
check and April 2012 payments in its overpayment and penalty
calculations.
20130145-CA 7 2014 UT App 278