Opinion
No. A06-789.
Filed February 27, 2007.
Department of Employment and Economic Development, File No. 1349 06.
Reversed and remanded, Stoneburner, Judge.
Michelle E. Jorgensen, (pro se relator).
Linda A. Holmes, Lee B. Nelson, Minnesota Department of Employment and Economic Development, (for respondent).
Considered and decided by Stoneburner, Presiding Judge; Toussaint, Chief Judge; and Wright, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2006).
UNPUBLISHED OPINION
Relator challenges the method used by respondent Department of Employment and Economic Development (DEED) to allocate income she received for coaching and for substitute teaching, which she asserts resulted in an overstatement of unemployment benefits that she was overpaid during the time she was coaching and substitute teaching. Because the record does not support DEED's determination that relator earned the coaching income in equal weekly amounts during the coaching season, we reverse and remand for recalculation of her benefits and overpayment.
FACTS
Relator Michelle Jorgensen established a benefit account with DEED, effective August 1, 2004. That same week, she began working as a volleyball coach at the Marshall School. The volleyball season ran through the end of October 2004, and Jorgensen was paid a total of $900 for the season. She received $450 midway through the season and $450 at the end of the season after uniforms and equipment were turned in.
Immediately after the volleyball season ended, Jorgensen began coaching basketball under the same payment agreement. The basketball season ran from the end of October 2004 to the end of January 2005. During the same period that she was coaching, Jorgensen worked for the school sporadically as a substitute teacher and held a part-time position as a development-fund coordinator for an assisted-living facility.
For the weeks ending August 14, 2004, through March 26, 2005, Jorgensen called in biweekly requests for unemployment benefits by telephone. When reporting her weekly earnings, she did not report her earnings from Marshall. DEED later notified Jorgensen that she had been overpaid unemployment benefits in the amount of $2,574 because she had misreported her earnings. Jorgensen appealed, and after an evidentiary hearing, an unemployment law judge (ULJ) determined the amount of overpayment was $3,286. The increase resulted primarily from the ULJ's allocation of Jorgensen's coaching salary. The ULJ prorated the salary over all of the weeks of coaching, which reduced the amount of benefits Jorgensen was entitled to receive each week and increased the amount of overpayment. Jorgensen requested reconsideration, and the ULJ affirmed the initial decision. This certiorari appeal followed.
DEED, without explanation, originally allocated Jorgensen's coaching stipends over four weeks in each season.
DECISION
Jorgensen concedes that she was overpaid benefits, but she challenges the method used by DEED to allocate her payments from Marshall for the purpose of determining the amount of overpayment.
The Minnesota Court of Appeals may affirm the decision of the unemployment law judge or remand the case for further proceedings; or it may reverse or modify the decision if the substantial rights of the petitioner may have been prejudiced because the findings, inferences, conclusion, or decision are:
(1) in violation of constitutional provisions;
(2) in excess of the statutory authority or jurisdiction of the department;
(3) made upon unlawful procedure;
(4) affected by other error of law;
(5) unsupported by substantial evidence in view of the entire record as submitted; or
(6) arbitrary and capricious.
Minn. Stat. § 268.105, subd. 7(d) (2006). Factual findings of the ULJ must be viewed in the light most favorable to the decision. White v. Metro. Med. Ctr., 332 N.W.2d 25, 26 (Minn. 1983). But appellate courts exercise independent judgment with respect to questions of law. Ress v. Abbott Nw. Hosp., Inc., 448 N.W.2d 519, 523 (Minn. 1989).
An applicant is ineligible for unemployment benefits for any week in which the applicant has earnings equal to or in excess of the applicant's weekly unemployment benefit amount. Minn. Stat. § 268.085, subd. 5(a) (2004). Earnings less than the applicant's weekly unemployment-benefit amount are deducted from the benefit according to a formula set out in the statute. See id., subd. 5(b) (2004) (providing in part that the deduction is "25 percent of earnings or $50, whichever is higher . . .").
When reporting earnings to DEED, Jorgensen was asked to "[e]nter the combined amounts of your gross earnings, before any deductions, even if you have not been paid." DEED asserts that it has consistently interpreted the statute to require reporting of income when it is earned, regardless of when it is paid. DEED cites Minn. Stat. § 268.085, subd. 5(e) (2004), which provides that earnings (with some exclusions not relevant here) "shall include all other money considered wages and any other money considered earned income under state and federal law for income tax purposes."
Jorgensen argues that her teaching and coaching income from Marshall should be deducted from her benefits only in the weeks the income was actually paid. Under this method of calculation, Jorgensen contends that the correct amount of overpayment is $936.63. DEED argues that the teaching income should be deducted in the weeks when the teaching occurred, and the coaching income, allocated in equal weekly amounts, should be deducted from each week of the coaching season. DEED's method of calculation results in an overpayment amount of $3,286.
It is undisputed that Jorgensen earned $45 for each half-day of substitute teaching and $90 for each full day of substitute teaching on the days she taught, and we find no merit in Jorgensen's argument that her teaching income was not deductible until it was actually paid. Consistent with DEED's requirement that applicants report earnings in the week they were earned, Jorgensen should have reported her income from substitute teaching as it was earned, not when it was paid. The ULJ properly assigned Jorgensen's teaching income to the weeks in which it was earned.
But unlike the teaching income, the record does not establish that Jorgensen's coaching wages were "earned" before they were paid. Jorgensen testified that Marshall does not pay the coaching stipend all at once, in part, to hold coaches accountable for turning in all uniforms and equipment at the end of the season. Confirmation letters from Marshall to Jorgensen corroborate this testimony, stating that half of her salary would be paid "on the 25th of the month closest to mid-season" and the remainder paid "when all of the uniforms and equipment are accounted for at the end of the season."
There is also evidence in the record that Jorgensen was not entitled to specific amounts of income from coaching simply because she performed coaching services in any given week. Jorgensen testified that she did not finish the softball season because she found other employment, and she therefore did not get paid anything for the time she had put into coaching softball.
There is no evidence supporting DEED's assumption that Jorgensen worked the same number of hours each week or that she performed coaching duties every week. In fact, Jorgensen's testimony is that coaching hours varied and that if the coaching salary were divided by the number of hours actually spent coaching, the wage would be approximately $3 per hour. As Jorgensen noted, because the salary was not stated in an hourly amount, it was not possible for her to report income for each week. Also, because there is no evidence that Jorgensen earned the coaching salary on an hourly, daily, or weekly basis, there is no support in the record for a finding that coaching income was "earned" in equal amounts during each week of the coaching season, or earned in any amount before the actual payment dates.
DEED presents policy arguments for prorating the coaching stipend over the weeks of the coaching season and suggests that employers and employees will collude to maximize unemployment benefits if we adopt Jorgensen's method of reporting this income. But the circumstances of this case appear to be unique, and we decline to address speculative policy issues in the context of this case.
DEED also implies that we should adopt its calculations because it refrained from charging Jorgensen with fraud, despite its assertion that Jorgensen's underreporting of her income could have constituted fraud. We find this argument not relevant to the issue presented on appeal. We conclude that the evidence in this record does not support the ULJ's prorating of the coaching stipend over the length of the coaching seasons. We reverse and remand for calculation of Jorgensen's overpayment of benefits consistent with the record and this opinion.