Opinion
No. 11–P–1498.
2012-08-6
Stanley SHUMAN v. DIRECTOR OF THE DIVISION OF UNEMPLOYMENT ASSISTANCE.
By the Court (COHEN, MILLS & AGNES, JJ.).
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
After prolonged administrative and judicial proceedings, the board of review of the division of unemployment assistance (board) determined that the claimant, Stanley Shuman, left work voluntarily and was thus disqualified from receiving unemployment benefits under G.L. c. 151A, § 25( e )(1). Applying the highly deferential standard of review and giving “due weight to the experience, technical competence, and specialized knowledge of the agency, as well as to the discretionary authority conferred upon it,” G.L. c. 30A, § 14(7), as appearing in St.1973, c. 1114, § 3, we conclude that this final agency decision is supported by substantial evidence and free from error of law. See Lincoln Pharmacy of Milford, Inc. v. Commissioner of the Div. of Unemployment Assistance, 74 Mass.App.Ct. 428, 431 (2009).
Shuman, the sole officer, shareholder, and manager of Public Premium Acceptance Corporation (PPAC), an insurance premium finance company, stopped taking new business on August 4, 2006, and after a wind-down period, dissolved the corporation. The case turned on whether Shuman was compelled to cease operations due to economic forces beyond his control. See Jahn v. Director of the Div. of Employment Sec., 397 Mass. 61, 63–64 (1986) ( Jahn ). Substantial evidence supported the board's finding that PPAC “remained both profitable and a source of significant personal compensation to [Shuman] ... up to the time when he ended it.”
Shuman admitted that PPAC was profitable each year it was operational. Moreover, although Shuman presented evidence of adverse market conditions eroding his profit margin and a bleak future, he failed to show that his business had reached a level of unprofitability that rendered his shut-down decision involuntary.
Crediting the numbers in PPAC's corporate tax returns, the board found that PPAC had gross profits of $870,289 in 2003, $897,779 in 2004, $1,045,282 in 2005, and $702,418 in 2008; taxable income of $128,398 in 2003, $136,172 in 2004, $165,217 in 2005, and $114,727 in 2006; and that as an officer, Shuman earned $123,000 in 2003, $26,000 in 2004, $204,000 in 2005, and $122,828 in 2006.
No evidence in the record compelled a contrary result. Although health insurance costs increased yearly, the board was unable to determine from the evidence before it by how much. Shuman admitted that the increase in mailing expenses, standing alone, may have been trifling to his multi-million dollar company. Shuman failed to substantiate his contention that PPAC's 2006 profits were skewed due to the “massive” reduction of his overhead and expenses. In fact, PPAC's tax returns did not show any significant changes in wages or interest from previous years. The board was not required to place any great weight on the projections concerning new business if PPAC had remained open for all of 2006, a matter, Shuman candidly admitted at one point, of conjecture. Even if business had declined by around twenty-five percent in 2006, that evidence tended to show, in light of PPAC's overall substantial gross profits earned through two-thirds of 2006, at most that PPAC was becoming less profitable. Low profitability was not a compelling reason for leaving employment. Although Shuman now argues that the pending entry of national companies into the marketplace in 2006 would have further diluted his market share, at the hearing he admitted that this projection was conjectural. At the time he closed PPAC, Shuman was still drawing a healthy salary and PPAC had yet to show a loss. There was no evidence at all that PPAC was having a difficult time paying its bills.
As the board noted, PPAC appeared to be more profitable than the catering business in Jahn, supra, found to have been sold voluntarily. We are unconvinced by the distinction that Shuman attempts to draw between Jahn, which involved a sale for profit, and the dissolution in this case. The board properly ruled that the case was governed by Jahn rather than Faria v. Director of the Div. of Employment Security, 350 Mass. 397 (1966), which involved the interpretation of a different statutory section on dissimilar facts.
Whatever the time Shuman was required to keep PPAC open, the board could properly have concluded that he did not wait long enough here.
The judgment of the District Court affirming the denial of benefits to Shuman is affirmed.
Many of the exhibits introduced at the original evidentiary hearing before the review examiner on August 28, 2007 (which are technically part of the administrative record) were not reproduced in the record appendices. Since neither side has objected, we have not called for any of the missing documents. In these cases, the employer objecting to benefits cross-examines the former employee and presents countervailing evidence. This case presented the unusual factual situation of Shuman signing in at the hearings as both the employee and the employer. The agency has expressed concern about the potential for the abuse of the system in this type of situation. See Faria v. Director of the Div. of Employment Sec ., supra at 399.
So ordered.