MAXIM BASCH VS. BOARD OF REVIEW (BOARD OF REVIEW, DEPARTMENT OF LABOR)

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court."
Although it is posted on the internet, this opinion is binding only on the
parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-3390-16T3
MAXIM BASCH,
Plaintiff-Appellant,
v.
BOARD OF REVIEW, DEPARTMENT OF
LABOR and MFB ENTERPRISES, INC.,
Defendants-Respondents.
Submitted May 9, 2018 – Decided June 6, 2018
Before Judges Koblitz and Manahan.
On appeal from the Board of Review Department
of Labor, Docket No. 096,030.
Maxim Basch, appellant pro se.
Gurbir S. Grewal, Attorney General, attorney
for respondent (Jason W. Rockwell, Assistant
Attorney General, of counsel; Peter H.
Jenkins, Deputy Attorney General on the
brief).
Respondent MFB Enterprises, Inc., has not
filed a brief.
PER CURIAM
Maxim Basch appeals from the March 28, 2017 decision of the
Board of Review, Department of Labor (Board) that he was not
eligible for unemployment compensation between May 6, 2016 and
July 8, 2016 because he did not have requalifying wages, nor was
he unemployed, because pursuant to statute, income from an S
corporation is not considered. Basch was directed to refund
$5,913.1 We affirm.
Basch separated from his Verizon Services Organization
(Verizon) employment in May 2015. He sued, alleging age
discrimination, and settled with Verizon for a sum of money that
did not constitute back wages. In October 2015 Basch formed a
consulting company. He is the sole owner and employee of the S
corporation, MFB Enterprises, Inc. and receives K-1 distributions.
He filed an initial claim for unemployment benefits effective
May 3, 2015 based on his separation from Verizon. Benefits were
paid. A year later, on May 8, 2016, Basch filed a transitional
claim. Benefits were paid on the transitional year, but in August
he was determined not to have requalifying income because the
settlement funds were not wages, and any other income he received
was through his S corporation.
1
Basch informs us that he has fully repaid this amount through
a tax refund intercept.
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On appeal, the Appeal Tribunal concluded that Basch did not
have requalifying wages, N.J.S.A. 43:21-4(e)(6), and was not
statutorily considered unemployed as the sole stockholder of a
viable corporation. N.J.S.A. 43:21-19(m)(1)(A). The Board
affirmed on the basis of the Appeal Tribunal opinion.
Our review of administrative agency decisions is limited in
scope. Brady v. Bd. of Review, 152 N.J. 197, 210 (1997). Due
regard is given to the agency's expertise, Ford v. Bd. of Review,
287 N.J. Super. 281, 283 (App. Div. 1996), and the agency's
determination will not be disturbed absent a finding that it was
"arbitrary, capricious, or unreasonable." Brady, 152 N.J. at 210.
"The burden of proof rests upon petitioner to establish his
right to unemployment compensation benefits." Rudbart v. Bd. of
Review, 339 N.J. Super. 118, 123 (App. Div. 2001). An "officer
of a corporation, or a person who has more than a 5% equitable or
debt interest in the corporation, whose claim for benefits is
based on wages with that corporation shall not be deemed to be
unemployed in any week during the individual’s term of office or
ownership in the corporation." N.J.S.A. 43:21-19(m)(1)(A);
Rudbart, 339 N.J. Super. at 124-25 (App. Div. 2001). With the
settlement funds not eligible wages, Basch's only remuneration
came from his corporation.
3 A-3390-16T3
Basch argues that he formed an S corporation "only for legal
and tax purposes," has no employees and sporadic income, which
qualify him for unemployment. He argues that under Federal tax
law he is treated as an employee. He therefore deems himself
entitled to unemployment compensation. He refers us to California
case law, which is not applicable.
N.J.S.A. 43:21-16(d) generally "requires the full repayment
of unemployment benefits received by an individual who, for any
reason, regardless of good faith, was not actually entitled to
those benefits." Bannan v. Bd. of Review, 299 N.J. Super. 671,
674 (App. Div. 1997). The decision by the Board is not "arbitrary,
capricious or unreasonable" and is based upon "sufficient credible
competent evidence in the record," and, therefore, we must uphold
that decision. See Sager v. O.A. Peterson Constr., Co., 182 N.J.
156, 164 (2004).
Affirmed.
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