Carroll v. Maine Employment Security Commission

DUFRESNE, Active Retired Justice

(further concurring in separate opinion).

Disregarding for the time being the propriety of the penalty or disqualification portion of the agency decision as approved by the Superior Court, we cannot sustain the agency finding that the claimant knowingly and fraudulently failed to disclose material facts in his application for the purpose of obtaining unemployment compensation benefits. First, we note that the application *474form does not request the disclosure of other facts, material or otherwise, not called for by the several questions listed on the form itself and that all the claimant’s answers were true and correct in the light of the partial consent decree of the parties. Assuming, however, as the Commission and the hearing examiner did, that the claimant’s summer activity as disclosed by this record was a material fact that should have been disclosed when applying for benefits, the evidence is wholly insufficient to support a finding that Crocker knew or should have known that he was withholding material facts from the unemployment compensation authorities fraudulently, i.e. with intent to deceive them.

The remedial nature of the unemployment compensation statute dictates a liberal construction of the Act in favor of the employee and, where the punitive features of the legislation are called into play, any adjudication of disqualification or ineligibility for benefits must be strictly reviewed. See Tobin v. Maine Employment Security Commission, Me., 420 A.2d 222, 225-26 (1980).

The punitive sanctions provided in the Act for falsifying or failing to disclose a material fact in an application to obtain benefits, 26 M.R.S.A. §§ 1193(6) and 1051(4), cannot be invoked except upon proof that the claimant knew or ought to have known that the misrepresentation or nondisclosure was a fraudulent misrepresentation or nondisclosure of a material fact.

The record does support the Commission’s finding that the plaintiff claimant knew he could not “work” while receiving unemployment compensation; indeed, he stopped tending the store and keeping the books at the bait and tackle shop, when his employment ceased at the bus company. But the plaintiff in his testimony and by his actions fully demonstrated that he understood “work” to mean activities other than chauf-fering his nephew from one waterhole to another for which he did not receive, nor did he expect, any pay or wage. Thus, there was no competent evidence to support the Commission’s finding that Crocker subjectively knew that he was fraudulently answering falsely the question: did you work or earn wages this week? It was error of law to find a violation of either of the reference sections on the basis of any knowing fraudulent misrepresentation or nondisclosure of a material fact on the part of the plaintiff claimant.

The Commission, however, argues that the evidence does support a finding that Crocker ought to have known that the nondisclosure of the facts, assumed by the Commission to be material, was fraudulent, subjecting him to the penalties imposed. We disagree. The basis for the Commission’s conclusion in this respect is the fact that the plaintiff claimant was provided an information booklet which defined the term “work” when he applied for unemployment benefits. Although Crocker testified that he did not read the contents of the booklet, the hearing examiner with the approval of the Commission held as a matter of law that

“[w]hen the information concerning the law [on] filing claims for unemployment benefits is provided to [a claimant], he bears the responsibility for that knowledge.”

It is upon this conclusive presumption (an applicant for unemployment benefits is chargeable with knowledge of the information supplied to him) that the Commission reached its finding that the plaintiff claimant ought to have known that his nondisclosure of his summer activity was a fraudulent nondisclosure of material facts subjecting him to the penalties incurred. We cannot agree.

The booklet itself states that it has no legal effect and had not been promulgated under the agency’s rule-making authority. The language upon which the Commission directs our attention reads as follows:

You must report any services you performed during the week claimed. This means any and all work, including self-employment, whether or not you received any pay.

*475We need not give any consideration to the quoted paragraph with respect to its applicability vel non to the facts of this case, for the Commission’s use thereof in support of a finding of constructive knowledge on the part of Crocker that his nondisclosure of his summer activity was knowingly fraudulent was error as a matter of law. See Seymour v. Vermont Department of Employment Security, 133 Vt. 397, 340 A.2d 96, 98 (1975). Administrative guidelines, which the Commission conceded were not adopted officially as rules and regulations as provided by 26 M.R.S.A. § 1082 and the Maine Administrative Procedure Act, 5 M.R.S.A. §§ 8051-8057 are of no legal effect as such. Id. at 8057. They cannot serve as a proper basis in support of a conclusive presumption of fraudulent misrepresentation or nondisclosure of a material fact as was done in the instant case. See Ainoa v. Unemployment Compensation Appeals Division, 62 Haw. 268, 614 P.2d 380, 385 (1980).

When there is no dispute regarding the facts and no possibility of any upon consideration of all the evidence, the issue becomes one of law. Paige v. Maine Employment Security Commission, Me., 391 A.2d 321, 324 (1978).

The instant case presents a factual scenario substantially identical with the situation that confronted the Oregon Court in Shaffer v. Employment Division, 33 Or.App. 537, 577 P.2d 85 (1978), where the unemployment compensation claimant, who occasionally assisted his wife in her farm work and spent 5 to 12 hours per week assisting his replacement at his former place of employment and who received no remuneration from his activity, was held not to have made a false statement of material fact when, in filling out his weekly compensation claim forms, he stated he had done no work during the previous week. We conclude that, as in Shaffer, Crocker’s assistance to his wife in connection with the transportation of his nephew for the purpose of bait gathering for the shop, even though licensed in both names, was very minimal, indeed. His limited activity, as conceded by the Commission, did not financially benefit the claimant, nor unduly restrict his time. The Commission’s finding of fraudulent misrepresentation or nondisclosure of a material fact subjecting the claimant to the penalties of disqualification and reimbursement of the benefits received is wholly unsupported by the record and constitutes reversible error as a matter of law. See also Springer v. State, 120 N.H. 520, 418 A.2d 1277, 1279 (1980).

The Commission had the duty to determine all of the issues which were properly and adequately raised by the evidence in order that one judicial review may effectively terminate the case. Lawrence v. State Employment Security Commission, Me., 432 A.2d 790, 792 (1981). Given the undisputed facts of this case, our conclusion becomes inescapable that Crocker was entitled to benefits.

NICHOLS, J., joins in this separate concurring opinion.