In re the Claims of Maguire

Appeal from a decision of the Unemployment Insurance Appeal Board, filed February 20, 1979, which reversed, in part, the decision of an Administrative Law Judge and sustained the determination of the Industrial Commissioner disqualifying claimants from receiving benefits effective March 10,1976 because they were not totally unemployed; charging them with overpayments of benefits ruled to be recoverable; and holding that they had willfully made false statements to *978obtain benefits by reason of which a forfeiture of 80 effective days was imposed upon both claimants. Claimant Dennis Maguire filed for benefits on March 9, 1976 and received benefits until the statutory week ending August 22, 1976. Claimant John Gallagher filed for benefits on February 20,1976 and received benefits until the statutory week ending January 30,1977. The record reveals that on March 10, 1976 claimants became officers and one-third shareholders in a corporation they organized with a third person and incorporated on that date; that the corporation was formed for the purpose of operating a restaurant and bar; that both claimants signed checks on behalf of the corporation after a corporate checking account was opened on March 31, 1976; that a liquor license was obtained on May 14, 1976; that on May 21, 1976, a lease for the business premises was executed and rent paid thereafter, and that the business was opened to the public on August 19,1976. Claimant Maguire testified that he did no work for the corporation prior to the restaurant’s opening and that he went to work for the corporation on the day of the opening and stopped claiming benefits thereafter. Claimant Gallagher testified that he took no park in operating the business even after it opened except to sign some checks, look at the records and review the tax returns and that while receiving benefits he received no income from the corporation. Upon consideration of the record in its entirety, we are of the view that there is substantial evidence to support the board’s determination that during the periods in issue claimants were not totally unemployed (see Matter of St. Germain [Ross], 78 AD2d 565; Matter of De Vivo [Levine], 51 AD2d 619). Concerning the issue of willful misrepresentations, however, we conclude that there is insufficient evidence to support the board’s determination. Claimants both filed for benefits prior to the formation of the corporation. Their testimony indicates that no income was earned by them while receiving benefits and their activities during the periods in issue, as in Matter of Czarniak (Ross) (60 AD2d 745), do not appear to have been so time consuming as to generate awareness that their continuing certifications of total unemployment misrepresented reality. We find no positive evidence of willful misrepresentation in the present record and, therefore, the board’s finding on this issue cannot be sustained (see Matter of Duffy [Ross], 78 AD2d 735; Matter of Czarniak [Ross], 60 AD2d 745, supra). Decision modified, by annulling so much thereof as finds willful misrepresentations to obtain benefits ruled to be recoverable and imposes forfeitures of effective days, and, as so modified, affirmed, without costs. Sweeney, J. P., Main, Casey and Mikoll, JJ., concur.