Nykaza v. Department of Employment Security

No. 3--05--0014
Filed April 6, 2006.
_________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
THIRD DISTRICT
A.D., 2006
LARRY E. NYKAZA, )Appeal from the Circuit Court
) of the 21st Judicial Circuit,
Plaintiff-Appellant, ) Iroquois County, Illinois,
)
)
v. )
)
THE DEPARTMENT OF EMPLOYMENT )
SECURITY, an administrative )
agency of the State of ) No. 04--MR--33
Illinois; DIRECTOR OF THE )
DEPARTMENT OF EMPLOYMENT )
SECURITY BOARD OF REVIEW, an )
administrative agency in the )
State of Illinois; & ASPLUNDH )
TREE EXPERT CORPORATION, )
employer; ) Honorable
) Gordon L. Lustfeldt,
Defendants-Appellees. ) Judge, Presiding.
_________________________________________________________________
JUSTICE LYTTON delivered the opinion of the court:
_________________________________________________________________
The plaintiff, Larry E. Nykaza, applied to the Illinois Department of Employment Security
(IDES) to recover unemployment insurance benefits. The claims adjudicator denied the claim
pursuant to section 601(A) of the Unemployment Insurance Act (Act) (820 ILCS 405/601(A) (West
2002)). Section 601(A) generally states that one is ineligible for unemployment benefits when one
leaves work voluntarily and without good cause attributable to the employer. The plaintiff's appeal
of that decision to the referee was also unsuccessful.
In his appeal to the IDES Board of Review (Board), the plaintiff attempted to raise a
new argument, namely, that he was entitled to benefits under section 601(B)(2) of the Act
(820 ILCS 405/601(B)(2) (West 2002)). Section 601(B)(2) provides that section 601(A)
does not apply to someone who leaves work voluntarily to accept other bona fide work.
The Board affirmed the denial of benefits without making reference to plaintiff's section
601(B)(2) argument. The plaintiff sought administrative review in the circuit court, which
affirmed the Board's decision.
We reverse and remand with directions to order the Board to consider the plaintiff's
section 601(B)(2) argument.
FACTS
The plaintiff worked as a tree trimmer for Asplundh Tree Expert Corporation
(Asplundh) for approximately 22 years when he quit his job on February 11, 2003. He
applied for unemployment insurance benefits on December 11, 2003, claiming that
increased transportation distances and their associated costs caused him to quit his job.
Asplundh filed a protest to the plaintiff's claim, claiming that the plaintiff voluntarily quit to
start his own business.
An IDES claims adjudicator interviewed the plaintiff on December 23, 2003. The
plaintiff told the claims adjudicator that he quit his job to start his own business due to
increased transportation distances and their associated costs. He also said that he was
self-employed from around March or April of 2003 to November 28, 2003, but that the work
was seasonal and he would not be resuming it until March or April of 2004. Basing her
decision on section 601(A), the claims adjudicator found that (1) the plaintiff voluntarily quit
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to start his own business; (2) his leaving was not attributable to Asplundh; and (3) his
leaving did not constitute "good cause" under section 601(A). Accordingly, the claims
adjudicator denied the plaintiff's claim.
The plaintiff timely filed an appeal to a referee, stating that he was forced to quit "to
try my own tree business." The referee held a telephonic hearing on January 27, 2004.
The referee stated that the issue at the hearing was whether the plaintiff left his job for
good cause attributable to the employer under section 601(A). The plaintiff did not raise his
section 601(B)(2) claim during the hearing, and the only comment the plaintiff made that
could relate to such a claim was, "I was spendin [sic] ahh like a third of my paycheck for
transportation and that's why I tried my own business." In his written decision, the referee
found that the plaintiff yielded to the increased transportation distances by remaining in the
position for two more years. The referee affirmed the claims adjudicator's decision, stating
that the plaintiff was ineligible for benefits under section 601(A).
On February 5, 2004, the plaintiff mailed a letter to the Board in which the plaintiff
requested to enter evidence into his file for further appeal. The plaintiff stated that his self-
employment was not discussed before the referee and that he might be eligible for benefits
under section 601(B)(2). The Board received the letter on February 9, 2004.
On February 26, 2004, the plaintiff mailed a second letter to the Board in which he
stated his intent to appeal the referee's decision. He also requested a transcript of the
telephonic hearing. The plaintiff claimed that the increased transportation distances did
constitute good cause attributable to Asplundh and that he remained in the position for two
more years to save money to start his own business. Once he had enough money, he quit
to start his own business. The Board received the letter on February 27, 2004.
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On March 26, 2004, the Board mailed a letter to the plaintiff in which the Board
acknowledged the plaintiff's transcript request. On April 5, 2004, the Board sent a second
letter to the plaintiff saying, among other things, that any written arguments that the plaintiff
wanted the Board to consider must be postmarked by April 26, 2004.
The Board mailed its written decision on May 19, 2004. In full, the Board's
decision stated the following:
"This is an appeal by the claimant from a Referee's decision dated January
28, 2004. We have reviewed the entire record, including the claimant's application
for benefits and the transcript of the Referee's hearing. We find it adequate and the
further taking of evidence unnecessary. We also find, after due consideration, that
the Referee's decision is supported by the record and the law. We, therefore,
incorporate it as part of our decision and affirm the denial of benefits as stated
therein. The employer is a party to these proceedings."
The plaintiff filed a complaint for administrative review with the circuit court. At the
hearing on the complaint, plaintiff argued that he was entitled to benefits under section
601(B)(2). The court denied the plaintiff's claim.
ANALYSIS
Plaintiff argues that the agency erred when it failed to grant him benefits under the
"bona fide work" exception listed in section 601(B)(2). 1
The defendants' sole response to the plaintiff's section 601(B)(2) argument is that he
waived the issue because he failed to raise it before the administrative agency.
1
On appeal, the plaintiff has abandoned his section 601(A) "good cause" claim.
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It is well-settled that if an argument is not presented in an administrative hearing, the
argument is waived and may not be raised for the first time on appeal. Hafele & Associates
v. Department of Employment Security, 308 Ill. App. 3d 983, 721 N.E.2d 782 (1999). The
question that arises in this case is whether the plaintiff in fact raised his section 601(B)(2)
argument before the administrative agency when his first request to present the argument
was in his appeal to the Board. We are unaware of any Illinois precedent that establishes a
standard for adequately raising an issue before the administrative agency.
The United States Court of Appeals for the Federal Circuit has held that the
"standard for assessing whether an issue was adequately raised before the administrative
agency is that 'the issue must be raised with sufficient specificity and clarity that the tribunal
is aware that it must decide the issue, and in sufficient time that the agency can do so.'
[Citation.]" Conant v. Office of Personnel Management, 255 F.3d 1371, 1375 (Fed. cir.,
2001); see also Wells v. Portland Yacht Club, 771 A.2d 371, 373 (2001) ("An issue is
considered raised and preserved for appeal 'if there is sufficient basis in the record to alert
the court and any opposing party to the existence of that issue.' [Citation.]"); Citizens for
Mount Vernon v. City of Mount Vernon, 133 Wash. 2d 861, 869, 947 P.2d 1208, 1213
(1997) ("In order for an issue to be properly raised before an administrative agency, there
must be more than simply a hint or a slight reference to the issue in the record.").
In this case, the record shows that the plaintiff quit his position with Asplundh to start
his own business. Asplundh's protest stated that the plaintiff voluntarily quit to start his own
business. When interviewed by the claims adjudicator, the plaintiff said that he was self-
employed from around March or April of 2003 to November 28, 2003, but that the work was
seasonal and he would not be resuming it until March or April of 2004. The claims
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adjudicator's determination indicated that the plaintiff quit to start his own business. While
the plaintiff did not raise his section 601(B)(2) argument at the telephonic hearing, the
plaintiff did subsequently send two letters to the Board stating that he wanted the Board to
consider a section 601(B)(2) claim. These letters were sent long before the Board's cut-off
date for the plaintiff to file written arguments. Based on these facts, we find that the plaintiff
raised the issue with sufficient specificity and clarity that the Board was aware that it must
decide the plaintiff's section 601(B)(2) argument. See Conant, 255 F.3d 1371. Because
the Board is the agency's trier of fact (Horton v. Department of Employment Security, 335
Ill. App. 3d 537, 781 N.E.2d 545 (2002)), we find that the plaintiff raised the issue in
sufficient time for the agency to decide it.
Finally, we note the mandatory language of section 601(B) (820 ILCS 405/601(B)
(West 2002)), which states that "[t]he provisions of [section 601(A)] shall not apply to an
individual who has left work voluntarily" under some excused situation, such as the "bona
fide work" exception in section 601(B)(2). Under these circumstances, we decline to hold
that the plaintiff waived his 601(B)(2) argument.
The judgment of the circuit court of Iroquois County is reversed, and the case is
remanded with directions to order the IDES Board of Review to consider the plaintiff's
section 601(B)(2) argument.
Reversed and remanded with directions.
BARRY and O'BRIEN, JJ., concurring.
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