Wittkopf v. Idaho Dept of Labor

IN THE SUPREME COURT OF THE STATE OF IDAHO
Docket No. 44909
WILLIAM M. WITTKOPF, )
)
Claimant/Appellant, )
v. ) Boise, February 2018 Term
)
BON APPETIT MANAGEMENT CO., ) Filed: July 24, 2018
)
Employer/Respondent, ) Karel A. Lehrman, Clerk
)
IDAHO DEPARTMENT OF LABOR, )
)
Respondent. )
Appeal from the Industrial Commission, State of Idaho.
The order of the Industrial Commission is vacated. This case is remanded for
further proceedings consistent with this Opinion.
William M. Wittkopf, pro se, Caldwell, for Claimant/Appellant.
Hon. Lawrence G. Wasden, Idaho Attorney General, Boise, for Respondent.
_______________________________________________
BEVAN, Justice.
I. NATURE OF THE CASE
This is an appeal arising from an order of the Industrial Commission affirming the decision
of an Appeals Examiner. The Appeals Examiner found it did not have jurisdiction to hear
William Wittkopf’s (“Wittkopf”) protest of an eligibility determination for unemployment
benefits because it was untimely. We vacate the order of the Industrial Commission and remand
this case for further proceedings.
II. FACTS AND PROCEDURE
On July 11, 2013, the Idaho Department of Labor (“IDOL”) mailed an eligibility
determination for unemployment benefits (the “2013 determination”) to Wittkopf. This
determination found Wittkopf underreported his wages for several weeks, which resulted in an
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overpayment in unemployment benefits. As a result, Wittkopf was: (1) ordered to repay the
overpayment; (2) ineligible for any unemployment benefits for a fifty-two week period; and (3)
assessed a civil penalty. Additionally, Wittkopf was told that he would remain ineligible for
unemployment benefits until all amounts were repaid. Pursuant to Idaho Code section 72–
1368(3) the last day for Wittkopf to file a protest to the 2013 determination was July 25, 2013.
Wittkopf failed to file a protest.
IDOL attempted to collect on the 2013 determination over the next year without success.
Subsequently in early 2016, Wittkopf filed for Chapter 7 bankruptcy. The debt he owed to the
state of Idaho was included in his bankruptcy and was discharged by order of the Bankruptcy
Court.
In September 2016, Wittkopf began filing new claims for unemployment benefits with
IDOL because he worked a seasonal job and was not receiving any income in the winter months.
After not receiving benefits for several weeks, Wittkopf called IDOL on September 26, 2016.
IDOL informed Wittkopf that he was ineligible for unemployment benefits because he had failed
to pay back his overpayment, civil penalty, and interest he owed IDOL, even though those
amounts were discharged in bankruptcy. IDOL explained that it had stopped seeking to collect
this amount because of Wittkopf’s bankruptcy discharge; however, IDOL kept track of this
amount and refused to pay Wittkopf any unemployment benefits until it was paid. On September
27, 2016, Wittkopf mailed a letter to IDOL protesting the denial of his unemployment benefits.
Wittkopf claimed in this letter that he was eligible for unemployment benefits because his
bankruptcy discharged any amount he owed to IDOL.
On October 18, 2016, a telephonic hearing was held before an Appeals Examiner. The
Appeals Examiner construed Wittkopf’s September 27th letter as a protest of the 2013
determination. Two days later the Appeals Examiner issued a written decision finding there was
no jurisdiction to hear Wittkopf’s protest because it was not filed within fourteen days of when it
was issued on July 25, 2013, as required by Idaho Code section 72-1368. On November 3, 2016,
Wittkopf appealed the Appeals Examiner’s decision to the Industrial Commission. On January
27, 2017, the Industrial Commission affirmed the Appeals Examiner’s decision. On March 8,
2017, Wittkopf wrote a letter to the Industrial Commission stating he wanted to appeal its order
to this Court. The Industrial Commission filed a formal appeal on Wittkopf’s behalf, in
compliance with Idaho Appellate Rule 17.
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III. STANDARD OF REVIEW
When this Court reviews a decision from the Industrial Commission, we exercise free
review over questions of law. Uhl v. Ballard Med. Prod., Inc., 138 Idaho 653, 657, 67 P.3d 1265,
1269 (2003).
IV. ANALYSIS
A. The Industrial Commission erred when it affirmed the Appeals Examiner’s decision to
dismiss Wittkopf’s protest as untimely.
To understand our decision today it is important to recognize that there were two benefit
determinations made by IDOL: (1) the 2013 determination, and (2) the September 2016
determination that Wittkopf was ineligible for current benefits because the 2013 debt remains
unpaid. The Appeals Examiner’s decision improperly assumed that Wittkopf was protesting the
2013 determination and failed to address the substance of his claim. We conclude that
Wittkopf’s September 27th letter did not challenge the 2013 determination; rather, he argued that
his 2016 bankruptcy discharged the 2013 debt and that he was wrongly denied current benefits.
Following the filing of a claim, there is a two-step statutory review process IDOL must
follow. First, IDOL must verify the claimant’s monetary eligibility pursuant to Idaho Code
section 72-1367 and issue a determination. I.C. § 72-1368(3)(a)(i). Second, IDOL must verify
whether the week claimed is a “compensable week” as defined by Idaho Code section 72-1312.
I.C. § 72-1368(3)(a)(ii). “In the event the week claimed is not a compensable week, the
department shall issue a determination denying benefits and shall include the reasons for the
ineligibility.” Id. (Emphasis added). “Determinations” must be made in writing and include
notice of appeal rights. I.C. § 72-1318B.
IDOL did not follow the statutory review process. One of Wittkopf’s complaints in his
September 27th protest letter is that IDOL did not respond to his claim for benefits. IDOL had an
obligation to send Wittkopf a written denial of his claim for current benefits with an explanation
and a notice of appeal rights when it determined that he did not have a “compensable week”
because of the 2013 debt. That was never done. Instead, IDOL, the Appeals Examiner and the
Industrial Commission treated Wittkopf’s September 27th protest letter as an appeal of the 2013
determination when, in fact, it was an appeal of the denial of his claim for current benefits.
When a protest to a determination is timely filed, a hearing will be held before an
Appeals Examiner. I.C. § 72-1368(4). “[T]he [A]ppeals [E]xaminer shall affirm, modify, set
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aside or reverse the determination . . . after affording the interested parties reasonable
opportunity for a fair hearing, or may refer a matter back to the department for further action.”
I.C. § 72-1368(6) (emphasis added). An interested party can appeal a decision of the Appeals
Examiner to the Industrial Commission within fourteen days after being served with notice. Id.
“On the basis of the record of proceedings before the [A]ppeals [E]xaminer . . . the [C]omission
shall affirm, reverse, modify, set aside or revise the decision of the [A]ppeals [E]xaminer or may
refer the matter back to the [A]ppeals [E]xaminer for further proceedings.” I.C. § 72-1368(7).
Thereafter, “[a]n appeal may be made to the Supreme Court from decisions and orders of the
[C]omission within the times and in the manner prescribed by the rules of the Supreme Court.”
I.C. § 72-1368(9).
We hold that the Industrial Commission erred by affirming the decision of the Appeals
Examiner because Wittkopf was not appealing the 2013 determination, but rather he was
appealing the determination made on September 26, 2016 as to his new claim for benefits.
Specifically, he argued that his 2016 bankruptcy discharged the 2013 debt and that he was
wrongly denied current benefits. The 2013 determination became final on July 25, 2013.
Thereafter, Wittkopf was prohibited from protesting that determination. Over three years later, in
September 2016, Wittkopf sought new unemployment benefits from IDOL. On September 26,
2016, when Wittkopf called IDOL, he was determined to be ineligible for unemployment
benefits over the phone. On September 27, 2016, he sent a letter to IDOL to protest this
determination. Therefore, Wittkopf’s protest was timely made within fourteen days after IDOL
made its determination. After filing the protest to this determination, the Appeals Examiner
erroneously determined Wittkopf was protesting the 2013 determination—not the September 26,
2016 determination. Therefore, the Appeals Examiner did not reach the merits of Wittkopf’s
protest—whether he was eligible for unemployment benefits because his bankruptcy discharged
the amount he owed IDOL. Instead, the Appeals Examiner incorrectly found it did not have
jurisdiction to hear his protest.
“Procedural due process requires that there must be some process to ensure that the
individual is not arbitrarily deprived of his rights in violation of the state or federal
constitutions.” Aberdeen–Springfield Canal Co. v. Peiper, 133 Idaho 82, 91, 982 P.2d 917, 926
(1999) (quotation marks omitted). “The fundamental requirement of due process is the
opportunity to be heard at a meaningful time and in a meaningful manner.” Mathews v. Eldridge,
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424 U.S. 319, 333 (1976) (quotation marks omitted). Wittkopf was entitled to have a fair hearing
before the Appeals Examiner to assess the merits of his protest. I.C. § 72-1368(6). Instead, the
Appeals Examiner failed to reach the merits of his protest because it erroneously determined it
lacked jurisdiction. Accordingly, the Industrial Commission erred when it affirmed the decision
of the Appeals Examiner.
On remand, Wittkopf will be entitled to a fair hearing before the Appeals Examiner to
assess the merits of his protest of the September 26, 2016 determination. This does not
necessarily mean Wittkopf will be entitled to unemployment benefits. As explained above, the
real issue to be decided in this case is whether Wittkopf has claimed a “compensable week.”
Specifically, section 72-1366(12) states in relevant part: “The claimant shall also be ineligible for
waiting week credit or benefits for any week in which he owes the department an overpayment,
civil penalty, or interest resulting from a determination that he willfully made a false statement or
willfully failed to report a material fact.” I.C. § 72-1366(12). Said plainly, does Wittkopf owe the
Department an overpayment or civil penalty or interest? To answer this question, the Industrial
Commission must decide what effect the bankruptcy discharge had on the 2013 debt. Answering
this question is squarely within the confines of the issue presented on appeal and within the
scope of the Industrial Commission’s appellate authority. While Wittkopf certainly could have
litigated this issue in bankruptcy court, he is not required to do so, and we agree with him that
the issue must be addressed before the Industrial Commission.
We are mindful of the fact that we are now coming up on the two-year anniversary of the
denial of Wittkopf’s claim for benefits. While there is a temptation to answer the question
presented since it appears to be a question of law, we are mindful that there could be a need for
additional evidence and the Industrial Commission should be given the opportunity to rule on the
issue since, as we recently explained, appeals involve a “formalized analysis of alleged legal
error.” Ekic v. Geico Indem. Co., --- Idaho --- , --- P.3d --- (2018). We typically do not
pronounce error where an issue has not yet been addressed by a reviewing court. There is,
however, a starting point for the Industrial Commission’s inquiry. It must begin with section 524
of the Bankruptcy Code which explains the effect of a discharge. It states:
(a) A discharge in a case under this title--
(1) voids any judgment at any time obtained, to the extent that such judgment is a
determination of the personal liability of the debtor with respect to any debt
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discharged under section 727, 944, 1141, 1228, or 1328 of this title, whether or
not discharge of such debt is waived;
(2) operates as an injunction against the commencement or continuation of an
action, the employment of process, or an act, to collect, recover or offset any such
debt as a personal liability of the debtor, whether or not discharge of such debt is
waived.
11 USC § 524 (a)(1)-(2). Did the bankruptcy discharge void IDOL’s 2013 determination? Does
the discharge operate as an injunction against any effort to collect, recover, or offset the 2013
debt? If yes, why isn’t the Department’s denial of current benefits on the basis of the 2013 debt
a violation of the injunction? These are questions the Industrial Commission must answer on
remand.
V. CONCLUSION
We vacate the order of the Industrial Commission and remand this case to the Industrial
Commission for further proceedings consistent with this Opinion.
Chief Justice BURDICK and Justice BRODY CONCUR..
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