Opinion
H041590
02-24-2017
ABHIJIT PRASAD, Plaintiff and Appellant, v. CALIFORNIA UNEMPLOYMENT INSURANCE APPEALS BOARD, Defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Santa Clara County Super. Ct. No. 113CV253945)
I. INTRODUCTION
By this appeal Abhijit Prasad ("Claimant") seeks to retain unemployment compensation benefits he received while serving as president of a corporation that provides temporary high-tech employees. Claimant collected benefits of $450 a week from California's Employment Development Department ("EDD") after claiming that he was unemployed and available to work for three different periods of time totaling 121 weeks between November 2, 2008 and March 2, 2013. When the EDD verified that, during these time periods, Claimant was serving as the president, chief executive officer, and sole shareholder of a corporation with about a dozen employees and gross revenues approaching $2 million annually, it asked Claimant to repay benefits totaling $54,450 plus 30 percent penalty assessments totaling $16,335 due to his fraud. After California's Unemployment Insurance Appeals Board ("CUIAB" or "Board") upheld this administrative determination, Claimant filed this action seeking a mandate that the Board reverse its affirmance of 28 separate decisions about Claimant by an administrative law judge (sometimes "ALJ").
Claimant now appeals from the trial court's denial of a writ of mandate, asserting that carefully selected undisputed facts establish that he was indeed unemployed all of this time and entitled to benefits. In response to the Board's finding that he did not disclose to the EDD the services he was performing as the president of his company, he argues that the EDD was aware he was a corporate president when he was unemployed. Claimant's credibility has been doubted by every fact-finder, from the EDD's denial of benefits to the ALJ to the Board to the trial court. Accordingly, we are not free to treat selected statements by him as undisputed. This credibility problem also undermines Claimant's alternative contention that he repeatedly made an honest mistake and so should not have to repay the benefits or pay penalty assessments. His circumstances are dissimilar to the decisions on which he relies that have authorized collection of unemployment benefits by other corporate presidents because his corporation was a going concern and it has been Claimant's decisions to not pay himself and to hire other people to perform some of his presidential duties. For the reasons stated below, we will affirm the order denying a writ of mandate.
II. ADMINISTRATIVE AND COURT PROCEEDINGS
A. THE ADMINISTRATIVE PROCEEDINGS
1. Initial Determinations
Following a March 15, 2013 telephone interview with Claimant, on March 21, 2013, an EDD employee issued ten Notices of Determination of Claimaint's ineligibility for benefits and eight Notices of Overpayment of benefits. The EDD requested that Claimaint repay benefits totaling $54,450, representing $450 weekly benefits for a little over eight weeks in 2008 (November 2 through December 31), a little over 43 weeks in 2009 (January 1 through October 31), no time in 2010, 12 weeks in 2011 (October 8 through December 31), a little over 51 weeks in 2012 (every week except the first, when Claimant visited India), and a little over eight weeks in 2013 (January 1 through March 2). The EDD also sought 30 percent penalty assessments totaling $16,335.
The Board describes benefit weeks by the last Saturday of the week. For example, the benefit week ending on Saturday, May 9, 2009 began on May 3. We have extrapolated time periods from their descriptions.
For reasons not apparent in the record, the continuous weeks charged as overpaid in 2009 were treated as three separate time periods, namely the benefit weeks ending November 8, 2008 through May 2, 2009, the weeks ending May 9 through September 19, 2009, and the weeks ending September 26 through October 31, 2009. Similarly, the continuous weeks charged as overpaid in 2012 were segregated into six separate time periods. For simplicity we organize these continuous time periods in chronological order.
This is the first of four footnotes noting apparent differences between the documents before the administrative law judge, the trial court, and this court. Claimant's mandate petition identified nine sets of exhibits as lodged with the trial court totaling 367 pages. The Board's opposition to the petition in the trial court indicated the administrative record is 831 pages. It appears that the Board might have provided the complete administrative record at the hearing before the trial court, but Claimant did not request its transmission to this court. Our review is necessarily limited by this omission.
In the record on appeal are two transcripts of the ALJ's telephonic hearing on May 30, 2013. The first unofficial transcript was a 109-page single-spaced exhibit attached to Claimant's petition. On November 2, 2015, this court granted Claimant's motion to augment the record with what counsel represented to be the "official" transcript of the ALJ's hearing, which was presented to the trial court but not previously included in the record on appeal. This transcript consists of 126 double-spaced pages presented four to a page. Claimant also attached selected excerpts of his testimony from the official transcript to his post-trial supplemental brief.
From these transcripts we know that, at the outset of the ALJ's hearing, she identified 17 sets of documentary exhibits, from A through Q, containing 199 pages. Eight sets of those exhibits (A, B, D, G, H, I, J, L, M) do not appear in the record on appeal.
The following findings are repeated in 20 different completed Record of Claim Status Interview forms dated March 20, 2013. Claimant was originally found "eligible for benefits under President of Company (TPU) issue." While he is still the president and chief executive officer of Maremarks (formally Marquee Emerging Markets, Inc.), he said the company has been losing money and he "is only working 8-10 hours a week trying to start up the company again and finding clients to make some money." Claimant's "statements are found not to be credible." "Clmt controls the payroll and all decisions of the company including hiring and firing. The company employed 30 people as of December 2010, with revenues of over 2 million annually. Clmt's statement of the business showing little profit or operating at a loss does not mean clmt is not occupied in the daily running of his own business." "Clmt made a total of 123 false statement [sic] to the Department when certifying for benefits on all claims, stating being available to work when in fact clmt is occupied running a profitable company." Claimaint had made deposits totaling $321,924 in the company's bank account between July and October, 2009. "Since clmt controls all aspects of company it is difficult to not conclude clmt is occupied full time and or more than 40 hours a week in his own company." We assume the Notices of Determination and Notices of Overpayment mailed on March 21, 2013 were predicated on these March 20, 2013 findings.
As the Board points out, one set of exhibits before the ALJ and the trial court but not in the record on appeal consisted of 37 pages including the ten Notices of Determination and eight Notices of Overpayment that the ALJ described orally at the hearing and in her 28 written decisions.
2. The Decisions of the Administrative Law Judge
Claimant's administrative appeal, filed on April 1, 2013, led to a telephone hearing involving an ALJ on May 30, 2013. Claimant was represented by current counsel during that hearing. Claimant was the sole witness who testified at the hearing. After hearing Claimant's testimony, on June 17, 2013, the ALJ mailed 28 separate decisions covering 103 pages, which included the following common factual findings.
Neither Claimant's appeal form nor his letter brief to the ALJ appears in the record on appeal, though both were before the ALJ.
To avoid repetition, we will summarize relevant parts of Claimant's testimony in our analysis of his appellate contentions in parts VI.A and VI.C infra.
"The claimant had 25 years of experience as an information technology analyst. The claimant had seven years of experience as an information technology business analyst. The claimant also had seven years of experience as a president of a corporation.
"In January 2008 the claimant created a corporation known as Maremark[s]. The claimant is the sole owner and officer of Maremark[s]. The claimant has two functions as the owner. The first function is to operate as president. As president, the claimant spends 40 hours a week looking for business for the corporation. The claimant spends approximately 15 hours a week doing administrative work. The claimant also handles matters he refers to as 'escalation' which are matters that come to the president's attention such as debt collection and personnel matters as well as other issues. As president, the claimant must be available to accept work for the corporation 24 hours a day seven days a week.
"When the claimant was working for employers before he was president of his corporation, his customary days and hours of work were Monday through Friday from 8:00 a.m. to 5:00 p.m. As the president of a corporation, the claimant usually starts his work day at 7:00 a.m. looking for business for his corporation.
"The claimant is actively involved in obtaining business for the corporation in his role as president. The corporation has always had a steady stream of business and has never been without a contract. From November 1, 2008 through March 2, 2013 the claimant had six contracts. The business has been successful because the claimant had to hire employees and/or independent contractors to carry out the terms of the contracts the claimant negotiated. In the beginning the claimant had one contract and one employee and/or independent contractor. In June 2009 the claimant employed three employees and/or independent contractors. From September 2009 until June 2010 the claimant employed between five and eleven employees and/or independent contractors. From December 2010 and [sic] September 2012, the claimant employed between five and ten employees and/or independent contractors. As of March 2013 the claimant has nine employees. The employees and/or independent contractors are paid between $64,000 a year and $130,000 a year.
"From November 2009 until September 2011 the claimant was able to perform work as an employee under one of his contracts. His job title was information technology business analyst. The claimant was paid $80,000 a year under the terms of the contract. As president, the claimant negotiated the contracts with clients for a specific dollar amount which was paid to the corporation. From that contract amount, amounts were paid for expenses which included compensation to employees, independent contractors and the only officer, the claimant. Until recently, the claimant was compensated for his services as president. In 2011, the claimant was paid $60,000 as an officer. In 2012, the claimant did not report any compensation as an officer on his income tax report."
"The claimant admitted that when he completed his continued claim forms he reported that he was available for full time work each and every day of the work week. The claimant believed that this was a true statement because he reported his efforts to look for work outside the corporation on the back of his claim form."
"The claimant admitted that he did not report on his claim forms that he was performing services as a president for the corporation." "[H]e misled the department into believing he was unemployed by failing to report he performed services as a president on his claim forms."
"The claimant admitted that he reported that he was available for work even though he was performing services as the president 40 hours a week."
Based on these findings, in eight separate decisions the ALJ upheld determinations that Claimant is liable to repay the benefits as stated in this table.
| Benefits | Time periods | CUIAB case number |
| $11,700 | 11/2/2008 through 5/2/2009 | 4826008 |
| $9,000 | 5/3/2009 through 9/19/2009 | 4826011 |
| $5,850 | 9/20/2009 through 10/30/2009 and5/6/2012 through 6/23/2013 | 4826014 |
| $11,700 | 10/9/2011 through 12/31/2011 and1/8/2012 through 5/5/2012 | 4826019 |
| $450 | 6/24/2012 through 6/30/2012 | 4826022 |
| $5,850 | 7/1/2012 through 9/29/2012 | 4826025 |
| $4,500 | 9/30/2012 through 12/8/2012 | 4827456 |
| $5,400 | 12/9/2012 through 3/2/2013 | 4827459 |
The ALJ also affirmed other findings in 20 other companion decisions. Eight decisions affirmed that Claimant was ineligible for benefits during the time periods in question because he was actually performing services as an officer of his corporation. (CUIAB case nos. 4821505, 4826009, 4826012, 4826017, 4826020, 4826023, 4826026, 4827457.) Eight decisions imposed five-week disqualifications for benefits because Claimant made willfully false statements about his availability for work during the time periods in question. (CUIAB case nos. 4821506, 4826010, 4826013, 4826018, 4826021, 4826024, 4826027, 4827458.)
Two more decisions determined that Claimant was not available for work beginning on October 19, 2008 (CUIAB case no. 4821503) and beginning on October 9, 2011 (case no. 4826015). Two more decisions concluded that Claimant had made willfully false statements about his availability for work during those time periods. (Case nos. 4811504, 4826016 respectively.)
In connection with finding willful misrepresentations, the ALJ explained, "Knowledge of a falsity may be established by a showing that the declarant had actual knowledge of the falsity, or lacked an honest belief in its truth, or made the statement carelessly or recklessly in a manner not warranted by information available to the declarant. (Wishnick v. Frye (1952) 111 Cal.App.2d 926; Precedent Decision P-B-436.)"
3. The Board's Decision
After receiving these ALJ decisions, Claimant filed an appeal of all 28 decisions to the CUIAB. In a decision mailed August 23, 2013, the Board made some corrections to the ALJ's decisions and stated in part: "We have carefully and independently reviewed the records in these cases, and have considered the contentions raised on appeal. We find no material errors in the issue statements as corrected below, or in the findings of fact as they relate to the issues before us. The reasons for decision, as amplified below, properly apply the law to the facts as they relate to the issues before us. Therefore, we adopt the appealed portions of the corrected issue statements, the findings of fact and the reasons for decision as our own."
"The evidence indicates the claimant was involved in a long standing business. He was engaged in activities in self employment which were incompatible with availability as an employee. [¶] We cannot say, after carefully studying the record in these cases, that the findings of the administrative law judge are against the weight of the evidence. Therefore, the findings will not be disturbed on appeal."
"The claimant is ineligible for benefits under code sections 1252 and 1253(c). The claimant is disqualified for benefits under code section 1257(a). Benefits are denied as provided above. The claimant was overpaid benefits and is liable for repayment of the overpayment under code section 1375 and for payment of the penalty assessment under code section 1375.1."
B. LEGAL PROCEEDINGS
On October 1, 2013, Claimant filed this action seeking a writ of mandate overturning all 28 decisions and reinstating his unemployment compensation benefits. The Board filed opposition. After a hearing on July 11, 2014, the parties submitted supplemental briefs as the court had requested.
In a six-page statement of decision filed October 20, 2014, the trial court denied Claimant's request for mandate. The trial court wrote: "[Claimant] founded Maremarks in January 2008. From that date to present, he has been the president and sole shareholder of the [sic] Maremarks. Maremarks provides temporary employees to high-tech and other companies. Since January of 2008, Maremarks has grown from [Claimant] alone to six to twelve employees and contractors. Maremarks paid its employees and contractors between $64,000.00 and $130,000.00 per year each. [Claimant] looked for work for the company and also for himself. [Claimant] was paid for work he performed for other companies from November 2009 through September 2011. He did not claim unemployment benefits for this period of time."
In otherwise quoting the trial court, we have corrected its use of "MareMark" to "Maremarks."
During the three periods of time when Claimant received unemployment benefits, "he continued to look for work for his company, and through his company, but did not find work for himself. In 2008 and 2009, while he was receiving unemployment benefits, [Claimant] 'was putting in 40 hours a week trying to get business for the company.' [] [Claimant] testified that he had to be available 24/7. [] He testified he had to work from 7 a.m. until 9 p.m., and he worked 50 hours a week. [] In 2011, he was 'looking for work for the corporation 40 hours a week.' [] In addition, he worked fifteen hours a week on administrative duties for Maremarks. He testified '[a]dministrative jobs would include escalations, looking into other people's contracts, trying to get more business for the company. Because if I did (unclear) some business for the company I can probably get paid without getting into a contract.' [] That adds up to 55 hours per week for the business. In contrast he also testified that in his job as president 'most of my hours were looking for a job.'
The trial court's record citations, which we have omitted, were to the complete "official" transcript, not the unofficial transcript or excerpts from the official transcript. (See fn. 2 above.)
"Throughout the period of time he received unemployment benefits [Claimant] answered 'No,' to the Employment Development Department question six, 'Did you work or earn any money, WHETHER YOU WERE PAID OR NOT?' (Emphasis in original)." We quote more from the statement of decision below where relevant.
On October 29, 2014, Claimant filed a notice of appeal from the October 20, 2014 denial of a writ of administrative mandamus. Claimant's notice designating the record on appeal filed November 10, 2014 did not check the form box stating, "I request that the clerk transmit to the reviewing court under rule 8.123 the record of the following administrative proceeding that was admitted into evidence, refused, or lodged in the superior court . . . ."
III. APPEALABILITY
Claimant's opening brief asserted, "The court's Judgment denying the Writ of Mandamus is a final judgment appealable under Code of Civil Proc. Section 904.1." The Board's brief accurately points out there is no judgment in the record on appeal. The notice of appeal was filed from the court's statement of decision. The Board asks that we dismiss this appeal from a nonappealable order. Claimant's reply brief did not respond to this contention.
This court has recognized, " 'Reviewing courts have discretion to treat statements of decision as appealable when they must, as when a statement of decision is signed and filed and does, in fact, constitute the court's final decision on the merits.' (Alan v. American Honda Motor Co., Inc. (2007) 40 Cal.4th 894, 901.)" (Pangilinan v. Palisoc (2014) 227 Cal.App.4th 765, 769.) Those circumstances exist here.
Moreover, on June 1, 2016, this court granted the Board's request to take judicial notice of several documents, including the Santa Clara County Superior Court's public docket in this case, which reveals that a judgment was entered in this case on December 2, 2014.
IV. THE STATUTORY SCHEME
A California worker may be entitled to unemployment compensation benefits for any week the worker is unemployed, which includes "[a]ny week during which he or she performs no services and with respect to which no wages are payable to him or her." (Unempl. Ins. Code, § 1252, subd. (a).) During "that week," the worker must also be "able to work and available for work." (§ 1253, subd. (c).) Willfully misrepresenting or withholding a material fact in order to obtain benefits disqualifies a person from obtaining benefits. (§ 1257.) A worker who has received an overpayment of benefits as a result of the worker's misrepresentation or willful nondisclosure of a material fact may be liable to repay the overpayment (§ 1375, subd. (a)(1)) and may also be subjected to a penalty assessment of 30 percent of the overpayment by the Director of the EDD (§ 1375.1).
Unspecified section references are to the Unemployment Insurance Code.
We quote section 1375, subdivision (a)(1) in part VI.C infra on pages 24-25.
A claimant may appeal from a determination of ineligibility for benefits to an administrative law judge. (§ 1328.) A claimant may also appeal from an ALJ's determination to the Board. (§ 1334.) "The appeals board may order the taking of additional evidence and may affirm, reverse, modify, or set aside the decision of the administrative law judge." (§ 1336.) "The appeals board, acting as a whole, may designate certain of its decisions as precedents. . . . The director and the appeals board administrative law judges shall be controlled by those precedents except as modified by judicial review." (§ 409.) While the Board's decision in this case is not a precedent decision, we discuss below a precedent decision on which the ALJ and the trial court relied (in part VI.B infra).
V. STANDARDS OF REVIEW
The right to unemployment benefits is sufficiently fundamental and vested such that the agency's denial of benefits is subject to independent review by trial courts in mandate proceedings. (Cooperman v. Unemployment Ins. Appeals Bd. (1975) 49 Cal.App.3d 1, 7; cf. Thomas v. California Emp. Stab. Com. (1952) 39 Cal.2d 501, 504.) "Where it is claimed that the [administrative] findings are not supported by the evidence, in cases in which the court is authorized by law to exercise its independent judgment on the evidence, abuse of discretion is established if the court determines that the findings are not supported by the weight of the evidence." (Code Civ. Proc., § 1094.5, subd. c).) The burden is on the complaining party to establish that an agency's decision is contrary to the weight of the evidence. (Fukuda v. City of Angels (1999) 20 Cal.4th 805, 820 (Fukuda).) In evaluating the weight of the evidence, trial courts are entitled to reweigh the evidence in the administrative record and to reassess witness credibility. (Deegan v. City of Mountain View (1999) 72 Cal.App.4th 37, 45; cf. Macgregor v. Unemployment Ins. Appeals Bd. (1984) 37 Cal.3d 205, 211-212.)
A party asserting that an administrative finding is against the weight of the evidence should produce all the relevant evidence in the trial court, namely the complete administrative record. (Hothem v. City and County of San Francisco (1986) 186 Cal.App.3d 702, 705; cf. Fukuda, supra, 20 Cal.4th at p. 821, fn. 14 ["To satisfy his or her burden of production at the administrative mandamus hearing under section 1094.5, the employee need only produce a complete record of the administrative hearing"].) This burden may be discharged by the party properly requesting the agency that made the challenged decision to prepare the administrative record. (Frase v. Gourley (2000) 85 Cal.App.4th 762, 765; cf. Code Civ. Proc., § 1094.6, subd. (c).) "[T]he cost of preparing the record shall be borne by the petitioner" unless otherwise provided by statute. (Code Civ. Proc., § 1094.5, subd. (a); cf. § 1094.6, subd. (c).)
" 'If an appellant intends to raise any issue that requires consideration of the record of an administrative proceeding that was admitted in evidence, refused, or lodged in the superior court,' the record on appeal must contain the administrative record, which appellant must request be transmitted to the reviewing court. (Cal. Rules of Court, rules 8.120(a)(2), 8.121(b)(2).)" (Advanced Choices, Inc. v. State Dept. of Health Services (2010) 182 Cal.App.4th 1661, 1670.)
After a trial court exercises its independent judgment on the evidence, "[o]n review of that decision, an appellate court determines whether the independent 'findings and judgment of the [superior] court are supported by substantial, credible and competent evidence' in the administrative record. [Citations.] '[A]ll conflicts must be resolved in favor of the respondent and all legitimate and reasonable inferences made to uphold the superior court's findings; moreover, when two or more inferences can be reasonably deduced from the facts, the appellate court may not substitute its deductions for those of the superior court.' [Citation.] However, the appellate court may disregard the superior court's conclusions when the probative facts are undisputed and clearly require different conclusions. [Citations.]" (Paratransit, Inc. v. Unemployment Ins. Appeals Bd. (2014) 59 Cal.4th 551, 562; cf. Santa Cruz Transportation, Inc. v. Unemployment Ins. Appeals Bd. (1991) 235 Cal.App.3d 1363, 1366-1367.)
VI. WAS CLAIMANT UNEMPLOYED AS A CORPORATE PRESIDENT?
A. CLAIMANT'S STATEMENTS WERE NOT "UNDISPUTED"
On appeal, Claimant acknowledges that his "testimony was not always clear . . . ." Nevertheless, he asserts that the ALJ "disregarded the undisputed testimony and evidence . . . ," "the Board clearly misunderstood the clear and undisputed testimony . . . ." and the trial court "thoroughly disregarded the undisputed evidence and testimony . . . ."
Claimant contends on appeal that this court is free to disregard the trial court's factual conclusions because the probative facts are undisputed and require different conclusions. Specifically, "[t]he undisputed evidence was that [Claimant] was available and able to work during the years he received unemployment benefits. The undisputed evidence is he worked under two contracts while still being 'president' of Maremarks. He worked full-time for those companies while still being 'president' of Maremarks. Clearly, he was able to work while still being president. Being president did not prevent him from looking for work."
"[Claimant] demonstrated he was ready, able, and available for work. He used his company's name and goodwill to find work for himself - not his company. He looked for work on his own and through his company - not for his company."
"Being president did not prevent him from looking for work all day every day and on weekends."
Claimant also asserts, "Based on the weight of the evidence this court may disregard the Superior Court's conclusion and reverse the lower court's decision based upon the independent judgment rule."
On appeal, we are not required to accept as undisputed selected excerpts of Claimant's testimony when his credibility was questioned by every fact-finder, from the initial EDD employee who denied benefits to the ALJ to the Board to the trial court. As this court stated in South Bay Transportation Co. v. Gordon Sand Co. (1988) 206 Cal.App.3d 650, "Uncontradicted testimony should not be arbitrarily rejected by the fact-finder, but it may be self-impeaching and warrant disbelief for a number of reasons, such as inherent improbability, obvious bias, vagueness, or inappropriate certainty." (Id. at p. 657 and cases there cited; cf. Rivcom Corp. v. Agricultural Labor Relations Bd. (1983) 34 Cal.3d 743, 758-759, 762.)
When a witness exhibits a propensity for vagueness, evasiveness, and self-contradiction, a fact-finder is not required to accept the witness's statements. It is the function of the trial court and not the appellate court to assess the credibility of every witness and to resolve any conflicts in the testimony of a single witness. On appeal we should not disregard the trial court's credibility determinations.
As the trial court found, "[Claimant's] argument that he was looking for work for himself through the company, instead of simply looking for work was unclear. He seemed to want it both ways. He was looking for work as required by the CUIAB, but he would continue to work 'through' his company. He refused to [sic] as to the amount of time, if any, he was looking for work outside of his company."
In support of this trial court finding, we note a passage in which the ALJ asked Claimant how he spent his time after October 2011. "Were you still doing the same things as you stated for the previous case? That you were performing administrative work as needed, maybe 15 hours a week. That you were looking for work for the corporation 40 hours a week from 7 a.m. until whatever. And that you were handling matters that had been escalated to you such as debt collection[, o]ther issues and some possible personnel issues." Claimant answered, "Yeah." The ALJ then asked, "And so - and so would you also be looking for work outside of the corporation for yourself personally?" Claimant answered, "Yes, definitely." Three answers later, when his attorney asked, "starting in October of 2011 were you still actively looking for work through the corporation for yourself in the same way that you were looking for work for yourself during the 2008 to 2009 period when you did not have a job?" Claimant answered, "Yes." This inconsistency alone undermines Claimant's assertion that "[t]he Department never demonstrated a lack of credibility" on his part. Claimant seeks to excuse this inconsistency as demonstrating that he "clearly misunderstood the questions being asked of him in the ALJ hearing."
We realize that Claimant could have spent, say, 20 hours a week looking for work through his corporation and another 20 hours the same week looking for work outside his corporation, but he could not have done both full-time as he testified.
We will examine some of Claimant's testimony more closely. He explained to the ALJ that the principal office of Maremarks is his residence. As Maremarks' president, he had administrative jobs such as participating in the company's operations. Among the administrative jobs were "escalations, looking into other people's contracts" and other "escalations" to the president, such as following up on unpaid bills, handling employee complaints about medical benefits other personnel matters, and filing tax forms during the first three months of the year. He could not say exactly how much time he spent on administrative work, but it was around 10 to 15 hours a week. He promoted his company in several forums including job portals. He was "trying to get more business for the company. Because if I did (unclear) some business for the company I can probably get paid without getting into a contract." This last statement by Claimant contradicts his claim on appeal that he "spent no time looking for work for his company."
At one point, Claimant testified that, as president, "most of my hours were looking for a job. As I said, like, if I would get 15 hours as an administrative job, 40 minus 15, that amount. So most of my time was taken finding a job either through Maremarks or outside Maremarks." When asked by his attorney to clarify, he stated, "So when I said 40 hours that was - I was looking for work for myself through Maremarks or outside Maremarks[, t]his 40 hours does not include, this 40 hours does include administrative jobs, as I said 10 to 15 hours."
Footnote 2 above has explained that the record contains two transcripts of the ALJ hearing. The unofficial transcript started this last sentence as, "Because if I get handsome business for the company . . . ."
We will rely on the unofficial transcript when it makes more sense. For example, the official transcript consistently gave "Miramarx" as the name of Claimant's company. We will correct that error without using brackets when quoting the official transcript. A more serious example of poor transcription in the official transcript is the passage quoting Claimant as stating, "The second ting I would looks for myself to save my own company. That is a part of the job. If you consider looking for a job (unclear) a job, that is something I was doing through Maremarks because Maremarks I had plans." The Board quotes part of this deficient transcription in its factual summary.
The unofficial transcript rendered this quote more intelligibly as, "The second thing, I would look for a job myself through a, say my own company. That is a part of the job. If you consider looking for a job is a job, that is something that I was doing through Maremarks, again, because Maremarks had clients."
Claimant testified that as his company grew, he employed various individuals to handle administrative details, including an immigration attorney, two paralegals, a business development manager, a client account manager, various CPAs, and a payroll person, thereby enabling Claimant to work 40 hours a week and still do his job as president. As president, he and his client manager negotiated contracts with clients who wanted temporary help from one of his contractors. In response to questions by the Department's representative, Claimant agreed that he had to be available to answer emergency questions from clients around the world 24 hours a day seven days a week.
Claimant's reply brief contends that a reading of all his testimony on this point establishes that his client account manager was the individual who decided the prices of their contracts with clients. This contention is unsupported by Claimant's record quotations.
When the ALJ asked, "were you involved in the negotiations concerning compensation?" Claimant answered, "Yes, I was." When asked later, "So do you have any involvement in setting that [contract] price?" Claimant answered, "Yes." Claimant asks us to believe that it was the client account manager who decided the price based on his later testimony, "So those negotiations my client account manager who decides, who actually sits at the client's place, he most does, but I also - I have complete visibility to do that. If it gets back to me we work together and I'm completely informed about it. Yeah, so I do take part in the negotiating and contract value."
Claimant said he was also looking for a job for himself through his company. He spent "eight hours a day looking for a job within and outside [Maremarks] because that is the biggest priority." When he looked for work through the company, he would do it during normal business hours, but he would start at 7 in the morning because that is when managers on the East Coast get active. He also said he was looking for outside work that did not involve Maremarks. However, it was advantageous to look for work through his company because of its clients. He was able to find work for other Maremarks contractors and employees but not much for himself because some clients needed special skills outside his competence. Sometimes a client interviewed Claimant and another of his contractors and selected the other contractor.
For 23 months from November 2009 through September 2011, Claimant was employed through his company by Broadcom as an information technology business analyst. Of Broadcom's total payment to the company, as company president, Claimant decided to pay himself the equivalent of an $80,000 annual salary and use the balance for corporate expenses. He admitted that he received dividends from Maremarks at the ends of the years 2009 and 2010 in addition to this salary. The dividends were $30,000 when he was fully employed in 2010 and less in 2009. Claimant submitted unsigned, partial S corporation tax returns for Maremarks reflecting $60,000 as "Compensation of officers" in 2011 and no officer compensation in 2012. He testified that he was compensated as an employee of Maremarks, but not as the president. His company's business model is that "the employees and contractors have to get business to get paid. If you do not get business . . . the corporation will not be paying you."
When the ALJ asked Claimant "who made that decision to pay you $80,000 a year?" Claimant's first answer was, "That decision is made by what - what kind of money we get from the client. And like so we do our mathematics on how that decision comes to." After some discussion about the client, when the ALJ asked, "did the corporation make a decision to pay you the $80,000?" Claimant answered "Yes." When the ALJ asked, "did you as president decide how much to pay you?" Claimant answered, "Yes, that is what I'm telling you."
In response to questions by his counsel, Claimant told the ALJ that, as he worked for Broadcom only nine months in 2011 (through September), he was not paid a full $80,000 for 2011, just the $60,000 reflected as compensation of officers on the corporation's 2011 return. Claimant's counsel later argued to the trial court that one year his Broadcom salary generated income of $60,000. "He was not paid as president, he was paid as an employee just like" Maremarks' other contractors.
The partial tax returns show "other deductions" in 2011 of $1,014,082 and $486,100 in 2012 as explained on statements that were not introduced in evidence. Claimant did not supply his personal tax returns.
In the last couple of years before 2013 his company has been losing money because it operated on a thin margin, but he has continued to pay his employees between $64,000 and $130,000 annually. His house is paid off. He was paying family support of $2,600 monthly as ordered in 2010. At the time of the May 2013 hearing he had a pending motion to reduce support based on his unemployment. He has had annual attorney fees since 2007 of $20,000 to $25,000 due to many false allegations by his wife in dissolution proceedings.
At oral argument, counsel for the Board asked this court to take judicial notice of statements Claimaint allegedly made about his income in a child support action that is pending in the First District Court of Appeal. Counsel admitted these statements do not appear in the record of this case. As this court has explained, " 'It has long been the general rule and understanding that "an appeal reviews the correctness of a judgment as of the time of its rendition, upon a record of matters which were before the trial court for its consideration." [Citation.] This rule reflects an "essential distinction between the trial and the appellate court . . . ." ' " (Hill v. San Jose Family Housing Partners, LLC (2011) 198 Cal.App.4th 764, 770.) We perceive no exceptional circumstances requiring this court to exercise its power under Code of Civil Procedure section 909 to look outside the record for new evidence of Claimaint's credibility. The Board's request is denied.
A review of Claimant's testimony confirms that he was elusive, if not self-contradictory, on many details of his role in his corporation's development, as though he was not sure what to say that would best keep his unemployment compensation benefits. Those details included how much average time he spent per week as corporate president on administrative details and on looking for work for his company's employees and contractors, for himself through the company, and for himself outside of the company. Claimant's position on appeal is essentially that if we overlook his damaging admissions, inconsistent statements, and evasive answers, the remaining undisputed testimony supports his claims. To do so would exceed our role as a court of review, though we are able to rely on those statements the trial court found credible.
B. PRECEDENT
Claimant points out that courts have recognized the entitlement of some corporate presidents to unemployment compensation benefits. Claimant asserts that the similarities between his situation and Carlsen v. Unemployment Ins. Appeals Bd. (1976) 64 Cal.App.3d 577 (Carlsen) "are uncanny." In that case the worker, who was a carpenter and general contractor, formed a corporation and became its president. He and his wife were the sole shareholders. The corporate officers, namely the plaintiff, his wife, and their accountant, decided they could not afford to pay themselves salaries as corporate officers due to lack of income. (Id. at pp. 580-581.) As president of the corporation, he spent his weekends and evenings bidding on and negotiating contracts for the corporation. At times the corporation employed five or six carpenters, the plaintiff being one of them. (Id. at p. 581.) After nine and a half-years, he was hospitalized due to an illness. When he was released from the hospital, he was unable to find jobs for the corporation and for himself through the union hall, as "all sources of construction work seemed to have dried up. According to plaintiff, he devoted two hours a week, at the most, to his efforts to obtain work for the corporation." (Id. at p. 581.)
The trial court in Carlsen agreed with the referee's conclusion that the plaintiff was not unemployed. "The trial court concluded as a matter of law that 'An individual who devotes his services to a corporation-employer, who must be prepared at all times to take appropriate action when the affairs of the corporation so require, and to whom wages are payable, if the individual permitted the corporation to make such payments to him, is not unemployed within the meaning of section 1252 of the Unemployment Insurance Code'; that 'The preponderance of the evidence shows that when [plaintiff] was laid off by Carlsen, Inc., that he continued to devote his full time to the corporation and rendered his services as corporate president for which wages would have been payable had he permitted Carlsen, Inc., to compensate him for such services.' " (Id. at p. 582.)
The First District Court of Appeal (Div. 2) disagreed with the trial court's analysis, starting from the premise, "the Unemployment Insurance Act is a remedial statute and the provisions as to benefits must be liberally construed for the purpose of accomplishing its objects." (Id. at p. 584.) The court first determined that the plaintiff was not performing services for his corporation when he was looking for jobs. The court relied heavily on the reasoning of People v. Nest (1942) 53 Cal.App.2d Supp. 856 (Nest). (Carlsen, at pp. 584-585.) While the claimaint in Nest was seeking employment, he opened a clothing store staffed by his wife and one employee. "While continuing at all times to seek work elsewhere, the claimant supervised the clothing store and spent from one to five hours each day and most evenings helping out at the store. After approximately three months, the business proved unsuccessful and the claimant closed it at a financial loss." (Carlsen, at p. 584.) He testified that his presence at the clothing store was unnecessary and did not interfere with him seeking or accepting other employment. (Ibid.)
The defendant in Nest, supra, 53 Cal.App.2d Supp. 856, was convicted of willfully misrepresenting his unemployment status for the purpose of obtaining benefits. (Id. at p. 858.) At the time, the Unemployment Insurance Act defined " 'Employment' as service . . . performed for wages or under any contract of hire . . . .' " (Nest, at p. 860.) The superior court appellate department analyzed "service" as meaning labor at another's command, and concluded that the defendant was not under a "contract of hire" or performing services at the clothing store for wages. (Ibid.) The court also concluded that "performs no services" in a predecessor of section 1252 had the same meaning as "service" and did "not include defendant's activities as so self-employed." (Nest, at p. 861.)
Carlsen quoted parts of Nest's statutory construction with approval. (Carlsen, supra, 64 Cal.App.3d at pp. 584-585.) "Like the claimant in the Nest case, plaintiff was not acting as the servant or helper of another or pursuant to any contract of hire. He received no wages of any kind for his efforts on behalf of the corporation, and this had been the case for some nine and one-half years. At no time did plaintiff cease to look for other employment." (Id. at p. 585.)
Carlsen also determined "that no wages were 'payable' to plaintiff, within the meaning of section 1252, after he was laid off as a carpenter" (ibid.), as "there had never been any obligation on the part of Carlsen, Inc., to pay plaintiff for his services as president and such had been the case for nine and one-half years." (Id. at p. 586.)
Carlsen factually distinguished out-of-state cases holding "that an individual who is a corporate officer and holds a controlling interest in the corporation is not unemployed, within the meaning of the unemployment insurance laws, merely because he elects during a particular period of time to receive no compensation." (Ibid.)
"There appears to be only one California case dealing with the question of whether a corporate officer with control over the corporation may qualify for unemployment compensation benefits . . . Cooperman v. Unemployment Ins. Appeals Bd. (1975) 49 Cal.App.3d 1 [Cooperman] . . . ." (Carlsen, supra, 64 Cal.App.3d at p. 587.) Cooperman was a cameraman-director who formed an alter ego corporation to market his personal expertise. His job as corporate president, for which he was not compensated, was finding work for himself. (Ibid.) "Since the film industry's job market was an erratic one, there were periods when the plaintiff was unemployed and spent his time seeking work on behalf of himself and the corporation." (Ibid.) "The Cooperman court concluded that the plaintiff was eligible for [unemployment compensation] benefits, reasoning that the plaintiff and the corporation were in reality one and the same and that the only services which he performed for the corporation between jobs consisted of looking for work, a service performed for himself as well as for the corporation. The court noted that the plaintiff had never been compensated for his services as president and that he lacked the power to pay himself because the corporation had no assets." (Carlsen, at pp. 587-588.) Carlsen did note "[t]he Cooperman case is distinguishable from the instant case in certain respects, since Carlsen, Inc., did possess an existence separate and apart from plaintiff and, during happier periods in the past, had employed as many as five or six carpenters." (Carlsen, at p. 588.) Carlsen did not consider those factors determinative in light of the evidence that the worker had not contrived his own unemployment. (Ibid.)
Carlsen rejected an argument that the plaintiff had the ability as corporate president to choose to compensate himself, explaining that "when the original decision with regard to the compensation of the corporate officers was made, shortly after the corporation was formed, all three corporate officers participated in that decision; also, that it was the other two officers, rather than plaintiff, who were strongly of the opinion that he should not be compensated for his services as president." (Id. at p. 589; fn. omitted.) The court also stated, "It is obvious that the corporation possessed limited assets when it was formed, and for all that can be gleaned from the record, it seems likely that it was in no better financial position when plaintiff applied for unemployment compensation benefits." (Id. at p. 590.)
Carlsen finally rejected a trial court finding "that plaintiff's duties 'fully occupied [his] time inasmuch as he had to be prepared at all times to take appropriate action when the affairs of the corporation so required.' " (Id. at p. 590.) "[S]uch finding is devoid of evidentiary support. Plaintiff testified that he was devoting two hours a week at the most to his duties as a corporate president. He further testified that, in the past, when he had been working fulltime as a carpenter, he had fulfilled his duties as corporate president during the evenings and on weekends. There was no conflicting evidence on this issue." (Id. at pp. 590-591.)
Like the trial court in Carlsen, the trial court in our case noted that Claimant had to be available around the clock to answer emergency calls from clients. On appeal the Board emphasizes that Claimant said he was "24/7 on-call." Unlike the Board, we do not equate mere readiness to answer emergency telephone calls with being employed absent any evidence of how much time Claimant actually spent answering such calls.
This last passage in Carlsen is revealing. Without quite pronouncing the evidence before the trial court undisputed, the appellate court essentially accepted the plaintiff's testimony as sufficiently undisputed that no conflicting inferences could be reasonably drawn and it conducted an independent review of the evidence. That is one of the key differences between this case and Carlsen. As noted above, we are required to defer to the trial court's credibility determinations, as Claimant in our case made vague and conflicting statements about how much time he spent as corporate president on administrative duties and how much time he spent on finding contracts for his corporation instead of for himself.
As the Board points out, the corporate president in Carlsen said his presidential duties consumed no more than two hours a week. Claimant estimated that, as president, he spent 10 to 15 hours a week on administrative duties and 25 to 30 more hours a week looking for jobs for his company. Substantial evidence supports the trial court's conclusion that Claimant "worked more than forty hours a week on behalf of his growing corporation." We note the ALJ distinguished Carlsen for the same reason.
As the Board also points out, unlike the corporation in Carlsen, Maremarks was a growing and going concern throughout Claimant's claimed unemployment. And in further distinction from Carlsen, it appears that no one other than Claimant was responsible for making the corporate decisions (a) whether to hire other people to perform some of his presidential functions, (b) whether to pay himself dividends, (c) how much to pay himself when he was working for a client, and (d) how much to pay himself as the sole corporate officer. In other words, Claimant exercised control over the company's cash flow, while Mr. Carlsen did not pay a corporate staff to take over duties he could perform as president.
As the Board points out, Cooperman is completely distinguishable. The corporation in Cooperman was nothing more than the individual's alter ego. It had no other employees and no income except for work the president could find for himself, while "Maremarks was an active business enterprise with significant, ongoing business and substantial revenues that employed anywhere from three to eleven employees or independent contractors at any time."
The ALJ and the trial court relied on the Board's 1972 precedent benefit Marcus decision (P-B-140) and this court has granted the Board's request to take judicial notice of that decision. The claimants in that case, a married couple, incorporated their seasonal business, which involved operating food trucks and trailers at fairs and carnivals. They were the sole stockholders and officers of the corporation. During the off-season, the wife handled minimal correspondence and answered questions from the corporation's accountant. The husband arranged for repairs of their equipment. They drew salaries only when the food concessions were in operation, and did not work at other occupations during the off-season.
On our own motion, we also take judicial notice that the Board's precedent decisions are available on their website. (Evid, Code, §§ 452, subds. (c), (h); 459, subd. (a).) (<http://www.cuiab.ca.gov/Board/precedentDecisions/precDecNumerical.asp> [as of February 24, 2017].)
The Board concluded they were employed year-round, reasoning in part, "the claimants control their employment. It is their decision to stop their salaries as corporate officers during the off-season. They alone determine when they will or will not work; how much they will be paid for such work; and, when and for what periods the payments will be made."
Claimant seeks to distinguish this precedent because he "had no control over his employment. [His] skill set was antiquated and he was having more and more difficulty finding a position utilizing his experience." Claimant "was only paid a salary when he was working under a contract . . . ." We agree that there are factual differences, but what Claimant fails to mention is that it was his decision not to pay himself a salary or dividends except when he was working under a contract. Deciding to draw no income while performing services for his corporation is not the same thing as the corporation lacking income to pay him.
C. CLAIMANT'S LIABILITY FOR OVERPAYMENTS
Above we have addressed Claimant's contention that he was entitled to the benefits he was paid because he was truly unemployed for 121 weeks. He also contends, essentially, that, even if he was employed, he is not liable to repay benefits under section 1375, which states in part: "Any person who is overpaid any amount of benefits under this part is liable for the amount overpaid unless any of the following is applicable: [¶] (a)(1) The overpayment was not due to fraud, misrepresentation or willful nondisclosure on the part of the recipient, and (2) the overpayment was received without fault on the part of the recipient, and its recovery would be against equity and good conscience."
1. Were Overpayments Due to Claimant's Misrepresentation or Nondisclosure?
On appeal, Claimant contends that his "undisputed testimony was that he filled out all unemployment claim forms honestly, truthfully, and to the best of his knowledge and understanding." He "demonstrated he never withheld information from the Department. He informed the Department during each interview about his position as president of Maremarks. The claim notes confirm the Department's knowledge."
Claimant's reference to claim notes prompts us to observe that the ALJ admitted 10 pages of claim information and notes as exhibit H and 19 more pages of claim information and notes as exhibit K. Only exhibit K appears in the appellate record.
We have several problems with these assertions. First, as the Board points out, Claimant's "opening brief is replete with factual assertions not supported by citation to the record." Claimant's opening brief does include a five-page statement of facts with record citations, but we see no record citation to testimony that Claimant "filled out all unemployment claim forms honestly, truthfully, and to the best of his knowledge and understanding." This court has explained that "[i]t is not the duty of a reviewing court to search the record for evidence on a point raised by a party whose brief makes no reference to the pages where the evidence can be found." (City of Watsonville v. Corrigan (2007) 149 Cal.App.4th 1542, 1545, fn. 1.)
In fact, the Board has brought to our attention a passage where Claimant testified that he had "truthfully and honestly" answered "no" to the EDD form question whether he had worked and earned wages whether he was paid or not. In response to the ALJ's next question about why he gave that answer, Claimant said, "Because I really did not have any income from any source during that time." Even though Claimant vouched for his own honesty in completing the forms, the fact-finder was not required to believe him in view of his evasive, vague, and contradictory answers to other questions by the ALJ.
It is worth noting that Claimant's benefit application forms themselves do not appear to be part of the administrative record. They were not identified as such by the ALJ and they have not been cited by either side in the trial court or on appeal.
Third, Claimant's position appears to be that he made full disclosure about his employment status by identifying himself as a corporate president. However, that was not the misrepresentation or nondisclosure the ALJ found. The ALJ found, "The claimant admitted that he did not report on his claim forms that he was performing services as a president for the corporation." "[H]e misled the department into believing he was unemployed by failing to report he performed services as a president on his claim forms." The Board adopted the ALJ's factual findings as its own. The trial court found that Claimant repeatedly answered on benefit applications that he did not work or earn any money whether he was paid or not, when in fact he was working 55 hours a week for his company, including 15 hours of administrative duties and 40 hours of looking for work for the corporation. As the Board contends, "his disclosure . . . of his title as president was not sufficient to put EDD on notice that [Claimant] was working and unavailable for other employment." Each fact-finder looked beyond Claimant's title before declaring him ineligible for benefits.
Claimant's counsel argued to the trial court that, during EDD interviews, "he specifically told them, [']I'm president of Maremark[s], does that count[?] And they said [']it is fine, you're not doing any work.[']" The trial court asked if such a statement by the EDD was documented in the administrative record. Counsel cited several pages of the record. After examining those pages, the trial court specifically asked, "Is there any evidence in the administrative record indicating that someone at the EDD told [Claimant] that he could answer question 6 no, even when he was performing administrative work?" Counsel acknowledged, "I don't recall ever saying [seeing?] that, unfortunately."
We assume that the ALJ's finding of an omission on the claim forms was based at least partly on the following testimony elicited by an EDD representative during the ALJ hearing. In asking Claimant about making false statements, he said, "So when people ask you, you know, 'Are you working? Are you retired?[] You're not working[.' A]lways on your mind you're thinking, 'Of course, I own a company. I have employees.' Okay? And the function, are you functioning as a president of the company it means, 'I perform services to my company,' regardless if you take money or not. So when we asked you the question, 'were you employed,' it means also including did you perform any services during that week. So do you understand [fully] that question?"
The EDD representative is called Mr. "Hon" in the official transcript and Claimant's opening brief, and Mr. "Hahn" in the unofficial transcript and Claimant's points and authorities in the trial court.
During the hearing, Mr. Hon explained in response to questions by Claimant's counsel that the EDD initially accepted Claimant's statements about looking for work and being available for work. But after being tipped off by Claimant's ex-wife, "then we have to go into the investigation. And then we[,] based on the investigation and we determine that actually the person has an active corporation . . . ." On appeal Claimant cites these answers as establishing the opposite of what was said, that "the Department took no action to confirm the veracity of the ex-wife's note." And yet Claimant's reply brief accuses the Board of "[c]ontorting the evidence" and "taking quotes out of context."
Claimant answered, "So, maybe sometimes, uh, I do not know the total impact of that question. . . . [¶] Uh, but I just try remain as truthful as I am."
Our version of this question and answer is a composite of both transcripts, as the unofficial transcript filled in areas the official transcript labeled "unclear."
In challenging the ALJ's findings of willful misrepresentations, Claimant shifts position by arguing, "No evidence exists to support a finding that [Claimant] willfully made a false statement or withheld a material fact from the Department with the specific purpose of obtaining benefits. Nothing in the record supports a finding that [Claimant] had actual knowledge of the falsity of any statements he made to the Department. [Claimant]'s uncontroverted testimony proves his honest belief in the truth of his representations to the Department and he took care to be as open as possible with the Department. [fn. omitted] [¶] [Claimant]'s testimony proves any statements to the Department concerning his eligibility were made in good faith. No evidence exists that [Claimant] made a conscious decision to misrepresent his position with Maremarks to the Department. Any misunderstanding that occurred was the result of an honest mistake in communication. Under P-R-338, [Claimant] cannot be disqualified under section 1257(a) for failing to reveal complete information because of a simple error."
This new claim of having made an honest mistake instead of fully disclosing material facts is unavailing for two reasons. "The general rule that a legal theory may not be raised for the first time on appeal is to be stringently applied when the new theory depends on controverted factual questions whose relevance thereto was not made to appear at trial." (Bogacki v. Board of Supervisors (1971) 5 Cal.3d 771, 780.) We cannot identify where Claimant argued to the trial court that he innocently misunderstood what the EDD considers to be "work" or "services." All we find is the assertion in his mandate petition and supporting points and authorities, "[Claimant] testified that he whole-heartedly believed he was truthful with the Department when he responded to claim forms that he had not performed any services during the benefit weeks at issue. The minor tasks he performed for Maremarks were not compensated and did not involve significant amounts of time, and therefore he did not report them." Whether Claimant innocently misunderstood the EDD application form is a new factual issue that he cannot present first to this court.
In any event, we have repeatedly noted the evasive and contradictory nature of his statements. As the Board points out, Claimant explained that he repeatedly answered "no" when asked if he worked or earned any money, whether paid or not, because he had no source of income. Relying on the test of knowledge of falsity stated in Wishnick v. Frye, supra, 111 Cal.App.2d at page 930, the Board accurately asserts that Claimant's "testimony that he failed to disclose his work for Maremarks because he was not paid demonstrates that he was at least careless, if not willfully misleading, in failing to report that he worked more than 40 hours per week on behalf of Maremarks, and that his responses were not a 'simple error' or mistake in communication."
In upholding the Board's decision, the trial court implicitly found that Claimant had willfully misrepresented or withheld from the EDD the extent of the services he was performing for Maremarks. We conclude there was substantial evidence supporting this finding.
2. Would Repayment be a Hardship for Claimant?
Repayment is not required under section 1375, subdivision (a)(2) when "overpayment was received without fault on the part of the recipient, and its recovery would be against equity and good conscience." We have already rejected Claimant's contention that "[i]f a mistake occurred in evaluating [his] case, the Department bears the burden of that mistake."
Claimant's final contention is that he "is in no position to pay back the tens of thousands the Department alleges he received in benefit overpayments." "At the May 30, 2013 hearing before ALJ Tays, [Claimant] testified to his inability to repay any alleged overpayments received. [¶] . . . [He] testified he was $28,000 in debt at that time. His debt obligations have increased in the two years since the hearing due to his inability to secure steady employment." Once again, there is no record citation for the change in Claimant's circumstances after the administrative hearing.
As the Board points out, financial hardship alone does not excuse repayment unless receipt of the overpayment was not the recipient's fault. This claim of hardship is defeated by our conclusion above that substantial evidence supports an implicit finding of willful misrepresentation or concealment by Claimant.
VII. DISPOSITION
The order denying the mandate petition is affirmed. Respondent is entitled to costs on appeal.
/s/_________
WALSH, J. WE CONCUR: /s/_________
RUSHING, P.J. /s/_________
PREMO, J.
Judge of the Santa Clara County Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.