Adams v. Department of Workforce Services , 285 P.3d 781 ( 2012 )

IN THE UTAH COURT OF APPEALS
‐‐‐‐ooOoo‐‐‐‐
David D. Adams, ) OPINION
)
Petitioner, ) Case No. 20110406‐CA
)
v. )
) FILED
Department of Workforce Services, ) (August 16, 2012)
Workforce Appeals Board, )
) 2012 UT App 226Respondent. )
‐‐‐‐‐
Original Proceeding in this Court
Attorneys: Joseph E. Hatch, Murray, for Petitioner
Amanda B. McPeck, Salt Lake City, for Respondent
‐‐‐‐‐
Before Judges McHugh, Davis, and Christiansen.
McHUGH, Presiding Judge:
¶1 David D. Adams petitions this court to review a decision of the Workforce
Appeals Board (the Board) that determined he was ineligible to receive unemployment
benefits, assessed an overpayment penalty, and treated his motion to reopen the
evidentiary hearing as an appeal to the Board. We decline to disturb the Board’s
decision.
BACKGROUND
¶2 Adams was employed as the chief technology officer at an early stage technology
company until he was laid off in April 2009. He filed claims for unemployment
insurance benefits beginning on April 26, 2009, and received weekly benefits until
October 16, 2010. When Adams first started receiving benefits, the Department of
Workforce Services (the Department) sent him the Claimant Guide: Unemployment
Insurance Benefits (the Claimant Guide), which provided instructions regarding a
claimant’s responsibility to conduct a job search while receiving unemployment
benefits. It states,
Work Search Requirements
Your obligation while receiving unemployment benefits is to
become reemployed, and you should develop a realistic plan
to achieve this objective. A primary component of your re‐
employment plan will be to contact employers. Unless a
Department representative instructs otherwise, you are
required to make a good faith effort to seek full‐time work
each week that you claim benefits, even if you are employed
part time.
Additional job‐development activities that will enhance your
prospects of finding work include: writing resumes, visiting
employers’ web sites, networking, contacting private or
church employment agencies or visiting a DWS Employment
Center. The phrase “good faith effort to seek work” means
that you will consistently make the types of personal efforts
to find work that are customary for persons in the same or
similar occupations. Your efforts must reflect a genuine
desire to obtain employment immediately.
You should make at least two contacts each week with
employers not previously contacted. If you do not make at
least two new contacts during a given week, you may be
denied benefits; however, the Department will evaluate your
20110406‐CA 2
overall work‐search efforts during the week before making
an eligibility determination.
You are required to keep a detailed record of your work
search activities. You may be selected at any time for an
audit or eligibility review during which you will be asked to
provide this information. Your record of employer contacts
should include the following: (1) date of contact, (2)
company name and phone number, (3) person contacted, (4)
type of work, (5) method of contact and (6) results. Failure
to provide this information upon request may result in a
denial of benefits and possible overpayments and
penalties.
As your period of unemployment continues, you must
expand your work search to include work at lower rates of
pay.
¶3 Adams testified that he read and understood the Claimant Guide and indicated
that he was aware of the requirement that “he should make at least two new job
contacts each week with employers not previously contacted” and that upon request he
was required “to provide a complete list of job contacts which include[d] company
name, contact, position applied for, phone number or method of contact, and that these
contacts must be [verifiable].” Each week that Adams applied for benefits, he was
required to answer the following question: “Did you contact employers for work as
you were instructed by the Department?” On each occasion, Adams responded, “Yes.”
Overall, Adams received unemployment benefits for seventy‐one weeks, for a total of
$33,467 in benefits.
¶4 In October 2010, the Department sent Adams a questionnaire to ensure that his
unemployment benefits received for prior weeks had been properly paid. As part of the
questionnaire, Adams was asked to attach his weekly job search contacts for the period
from April 25, 2010, to October 2, 2010. In response, Adams wrote a letter explaining
that “during the past couple of months, [he] only had one ‘official’ job‐seeking contact.”
The letter continued,
20110406‐CA 3
I decided months ago that my best option was not to look for
a job, but to make my own, and so I have been working
tirelessly meeting with Venture Capitalists and other
investors trying to raise money for a new enterprise that will
not only employ me, but at least a dozen other Utahns too.
In this letter, I will catalog all of the investors that I have met
with, and the various conferences I’ve attended in order to
expand my network. One of the reasons I was uncertain
about sending this letter, however, is that I understand that
as part of your audit, you’re going to want to verify my
work search contacts, but I feel very uneasy about the
Department of Workforce Services contacting these
investors. What I would ask is that if you need verification,
please contact me, and I’ll meet with you in person and we
can discuss ways that you can verify that I made these
contacts.
Adams then submitted a list of approximately thirty‐five investors and several
conferences he had attended. The list provided the names of the investors and their
companies but did not provide contact information, the positions Adams applied for,
the methods of contact, or the dates of contact.
¶5 On November 16, 2010, Adams met with a Department investigator assigned to
explore concerns raised by Adams’s letter. Adams told the investigator that he had
made only four actual job applications since January 2010 but provided a list of six more
investors he had contacted. Adams explained that his job search consisted primarily of
meeting with investors in the hope that they would fund a start‐up technology
company and then offer him a position as the founder or chief operations officer. In
particular, he indicated that since January 2010 his efforts were focused on getting
funding for one particular new venture and that he expected to have the project funded
in the next twelve months. The investigator’s report indicates that when she asked
Adams whether he had asked any of the investors for a job, Adams responded that “if
he did that it would show [a] lack of confidence in [the new venture].”
20110406‐CA 4
¶6 On November 19, 2010, Adams received a “Notice of Issue,” stating,
A QUESTION EXISTS CONCERNING YOUR
UNEMPLOYMENT BENEFITS
If it is determined that you knowingly withheld information
or willfully made a false statement to receive benefits, you
will be assessed an overpayment, civil penalty, and be
disqualified up to 49 weeks.
The potential overpayment and penalty are shown on the
following page.
A response is required from you by 6:00 p.m. November 29,
2010. If you fail to respond, a decision will be made based
on the available information.
The following pages indicated that the weeks at issue were from May 2, 2009, to
November 13, 2010—the entire period Adams filed for unemployment benefits. Adams
never responded to this notice. On December 1, 2010, the Department issued a decision
concluding that under Utah Code section 35A‐4‐403(1)(c), Adams had not been
“available for work” because he had “not been seeking work as instructed.” See Utah
Code Ann. § 35A‐4‐403(1)(c) (Supp. 2012).1 Thus, the Department concluded that
Adams was not eligible throughout the period he had received unemployment benefits.
¶7 Adams appealed, and the Department scheduled a telephonic hearing for
January 10, 2011, before an Administrative Law Judge. The Department sent Adams
notice of the hearing, which instructed him to “[p]rovide a copy of [his] complete list of
job search contacts, beginning with the effective date of the disqualification/allowance
under appeal, to the [ALJ] and other parties listed on th[e] notice prior to the hearing.”
There was also a provision in the notice indicating that if he wished to introduce any
additional documents he “MUST mail, fax, or hand‐deliver the documents to the [ALJ]
1
Because subsequent amendments to these statutes are not relevant to our
analysis, we cite the current version of the Utah Code for the convenience of the reader.
20110406‐CA 5
and all other parties at least three days before the hearing.” Adams did not provide a
detailed list of employment contacts prior to the hearing.
¶8 Adams appeared on his own behalf at the hearing and indicated that he had
prepared a more comprehensive list of contacts (the List). Although the ALJ would not
allow Adams to introduce the List because it was not provided prior to the hearing as
required, the ALJ told Adams, “[Y]ou can provide testimony about [the List] today
during the hearing, . . . you can certainly do that.” During the hearing, Adams testified
that while his initial job search was “traditional,” he later started focusing his efforts on
networking with investors, venture capitalists, and members of the boards of start‐up
companies. He explained that he did so because his prior position was with an early
stage technology company and meeting with these individuals was how he expected to
find a similar job.
¶9 After the hearing, the ALJ issued two decisions. First, the ALJ determined that
Adams was not available for full‐time work during the entire period of unemployment
because he did not satisfy the Department’s requirements for making two new contacts
with employers per week. The ALJ also noted that “[Adams] did not provide detailed
records of specific contacts to the Department when requested in his initial meeting, nor
did he provide specific contacts for the hearing.” In the second decision, the ALJ
concluded that Adams should be assessed a fraud penalty. Specifically, the ALJ held
that Adams inaccurately reported that he had been searching for work when he had
not, that he knew or should have known the Department’s requirements for making job
inquiries because it was explained in the Claimant Guide, and that Adams filed weekly
claims based on inaccurate information. As a result, the ALJ found Adams was
overpaid and required to repay $33,467 and was also liable for a civil fraud penalty of
$33,467. The ALJ also determined that Adams would be ineligible for unemployment
benefits for forty‐nine weeks.
¶10 After this ruling, Adams obtained counsel and filed a motion to reopen the
hearing to introduce the List for the ALJ’s consideration. The Department treated this
request as an appeal to the Board. The Board affirmed both of the ALJ’s decisions. In
doing so, the Board considered Adams’s testimony regarding the contents of the List,
despite the failure to enter the document into the record. Adams filed a motion for
reconsideration, which the Board denied. He now petitions for our review of the
Board’s decisions.
20110406‐CA 6
ISSUES AND STANDARDS OF REVIEW
¶11 Adams first challenges the sufficiency of the evidence supporting the Board’s
determination that he was not available or was unable to work under Utah Code section
35A‐4‐403(1)(c). See Utah Code Ann. § 35A‐4‐403(1)(c) (Supp. 2012). He next challenges
the sufficiency of the evidence justifying the Board’s finding of fraud and its imposition
of a 100% penalty under Utah Code section 35A‐4‐405(5)(c). See id. § 35A‐4‐405(5)(c).
Both of these claims present a mixed question of law and fact. See Smith v. Department of
Workforce Servs., 2010 UT App 382, ¶ 6, 245 P.3d 758 (reviewing the Board’s findings of
fact and conclusions of law when the sufficiency of the evidence supporting its
conclusion was challenged). “We will disturb the Board’s findings of fact only if, when
viewed in light of the record as a whole, they are not supported by substantial
evidence.” Record v. Workforce Appeals Bd., 2011 UT App 340, ¶ 19, 263 P.3d 1210.
“Substantial evidence is ‘such relevant evidence as a reasonable mind might accept as
adequate to support a conclusion.’” Id. (quoting EAGALA, Inc. v. Department of
Workforce Servs., 2007 UT App 43, ¶ 8, 157 P.3d 334). When reviewing “the Board’s
application of the law to its findings of fact, ‘we will uphold the [Board’s] decision so
long as it is within the realm of reasonableness and rationality.’” Id. (alteration in
original) (quoting EAGALA, Inc., 2007 UT App 43, ¶ 9).
¶12 Next, Adams challenges the treatment of his motion to reopen the evidentiary
hearing as an appeal to the Board. He also argues that the Board abused its discretion
when it refused to reopen the administrative hearing to permit Adams to submit
additional evidence. “We afford the Board some deference in the application of its
administrative rules.” Id. ¶ 18.
ANALYSIS
¶13 In considering Adams’s claims, we distinguish between the Board’s
interpretation of the relevant statute (the Employment Security Act or the Act) and the
rules promulgated thereunder, and the information available to Adams when he filed
his claims for benefits. See generally Utah Code Ann. §§ 35A‐4‐101 to ‐508 (2011 & Supp.
2012). Adams was privy to only the information provided in the Claimant Guide, but the
prerequisites for the receipt of unemployment benefits are set forth in the Act and the
regulations. Thus, the resolution of whether a claimant was qualified to receive
20110406‐CA 7
benefits, may be different than whether the claimant knew or reasonably should have
known of that ineligibility. Accordingly, we consider whether Adams was eligible for
unemployment benefits separately from whether his acceptance of such benefits was
fraudulent.
I. Adams Was Not Entitled to Unemployment Benefits
¶14 Utah Code section 35a‐4‐403(1) provides that “an unemployed individual is
eligible to receive benefits for any week if . . . (c) the individual is able to work and is
available for work during each and every week for which the individual made a claim
for benefits under this chapter.” Utah Code Ann. § 35a‐4‐403(1) (Supp. 2012). The
Department has promulgated regulations specifying that an individual is unemployed
and eligible for benefits if he is “available for and actively seeking full‐time suitable
work for another employer” and meets other requirements not at issue here. See Utah
Admin. Code R994‐207‐102(1)(c).2 These regulations further explain that “[t]he efforts
of a claimant to seek work should be distinguished from those directed towards
obtaining work for himself as an individual and those directed toward obtaining work
or customers for his corporation or business.” Id. In turn, “[e]fforts to find work must
be judged by the standards of the occupation and the community.” Id. R994‐403‐
113c(1). In order to be eligible for weekly benefits to the extent relevant here, the
claimant
(1) has the burden of proving that he or she is able, available,
and actively seeking full‐time work[;] (2) must report any
information that might affect eligibility; (3) must provide
any information requested by the Department which is
required to establish eligibility; [and] (4) must keep a
detailed record of the employers contacted, as well as other
activities that are likely to result in employment for each
week benefits are claimed.
Id. R994‐403‐114c. The regulations explain that to constitute an active work search a
claimant must generally “contact a minimum of two employers not previously
2
Because of changes to the Utah Administrative Code since the Board issued its
decision, we cite the 2011 version of all regulations.
20110406‐CA 8
contacted unless . . . otherwise directed by the department.” See id. R994‐403‐113c(2).
These two weekly contacts “should be made with employers that hire people in the
claimant’s occupation.” Id.
¶15 Here, Adams received unemployment benefits for seventy‐one weeks. At two
contacts per week, Adams should have made 142 contacts with employers and kept a
detailed record of those activities. Adams admits that investors are not “traditional
employer contact[s]” and that even considering the List information, he has not
identified the requisite number of new contacts each week. Nevertheless, he claims that
for those weeks for which he provided documentation, his “networking” contacts
should satisfy the Department’s rules. The Department disagrees, arguing that
expanding one’s personal network may be an invaluable aspect of an individual’s job
search but is categorically different from the job search required to be eligible for
unemployment benefits.
¶16 We agree with the Department that, under the relevant rules, Adams’s meetings
with investors who might fund a business which at some future time might hire him, do
not satisfy the requirement that he contact “two employers” per week. See Utah Admin.
Code R994‐403‐113c(2) (providing that “contacts should be made with employers that
hire people in the claimant’s occupation or occupations for which the claimant has work
experience or would otherwise be qualified and willing to accept employment”); id.
R994‐207‐102(1)(c) (providing that the claimant should be seeking “work for another
employer” in one’s individual capacity, rather than primarily seeking to benefit one’s
company). However, this conclusion does not end our inquiry because while
“generally” the claimant must contact two new employers per week, strict compliance
is not always required. See id. R994‐403‐113c(2).
¶17 The failure to contact two new employers per week “creates a rebuttable
presumption” that the claimant has not made an “active” effort to find work. See id.
“The claimant may overcome this presumption by showing that he or she has pursued a
job development plan likely to result in employment.” Id. In determining whether the
claimant has met the burden of overcoming that presumption, the Department
considers the “claimant’s job development activities for a specific week . . . in relation to
the claimant’s overall work search efforts and the length of the claimant’s
unemployment.” Id.
20110406‐CA 9
¶18 Adams’s failure to contact two employers, as opposed to investors, per week
created a rebuttable presumption that he was not engaged in active efforts to become
reemployed. However, Adams argued to the Department, the Board, and now to this
court, that finding a job in his occupation as an officer of an early stage technology
company is not amenable to the traditional method of submitting an application to
existing companies. According to Adams, his goal of becoming reemployed in his
traditional occupation would more likely be achieved by concentrating his efforts on
persons likely to invest in, and select the management of, new technology companies.
Consequently, Adams testified that he adopted that approach as his reemployment plan
and focused on contacting investors rather than employers.
¶19 While the Board did not expressly refer to Adams’s burden to rebut the
presumption created by his failure to contact two employers each week, it carefully
considered the evidence presented by Adams. In affirming the decision of the ALJ, the
Board first concluded that Adams had failed to provide sufficient detail of his contacts
and that most of the contacts listed were not individuals who might hire Adams. Next,
the Board ruled that “even considering all the ‘contacts’ listed as credible, there were 26
weeks for which [Adams] provided no evidence of making a job contact, and 22 weeks
for which [Adams] has provided evidence of only one job contact.” Because Adams
received benefits for seventy‐one weeks, we can extrapolate that the Board identified
twenty‐three weeks in which Adams identified two or more investor contacts.
¶20 With respect to the weeks that he did not contact two or more investors, Adams
does not challenge the Board’s determination that he was not entitled to benefits.
However, he contends that he was eligible for unemployment benefits during the weeks
that he did so. We agree with the Board that Adams was not eligible for benefits for
any of the weeks he received them because even if the contacts with investors could be
considered employers, he did not provide sufficient documentation regarding those
contacts as required by the Claimant Guide and Department rules.
¶21 Ultimately, it was Adams’s burden to establish that his networking activities
constituted an active job search and to provide detailed documentation of contacts
when requested by the Department. See generally Utah Admin. Code R994‐403‐114c; see
also id. R994‐403‐116e(1) (“Claimants and employers therefore have a continuing
obligation to provide any and all information and verification which may affect
eligibility.”). Although Adams provided an explanation for his decision to contact
20110406‐CA 10
investors rather than employers, he admits that his “records of contacts are not of the
quality requested by the Department.” Based on our review of the record, we cannot
conclude that Adams met his burden of providing the detail necessary to overcome the
presumption that he did not engage in active efforts to find work. Accordingly, the
Board’s ruling that Adams was ineligible for unemployment benefits does not exceed
the bounds of “reasonableness and rationality.” See Record v. Workforce Appeals Bd., 2011
UT App 340, ¶ 19, 263 P.3d 1210 (internal quotation marks omitted).
II. The Evidence Is Sufficient to Support the Overpayment Penalty
¶22 Next, Adams contends that he acted in good faith in reporting his networking
contacts and should therefore not be subject to a civil fraud penalty. A claimant is
subject to fraud penalties for “willfully ma[king] a false statement or representation or
knowingly fail[ing] to report a material fact to obtain any benefit.” Utah Code Ann.
§ 35A‐4‐405(5)(a) (Supp. 2012); see also id. § 35A‐4‐405(5)(c) (providing that the claimant
will be liable for paying a civil fraud penalty in the amount of the overpayment
received “by direct reason of [the claimant’s] fraud”). To establish fraud, the
Department must prove materiality, knowledge, and willfulness. See Utah Admin.
Code R994‐406‐401(1).
¶23 Here, Adams does not challenge the materiality of his representation that he
contacted employers as instructed by the Department each week he received benefits.
Instead, Adams contends that the Board was required to make a specific finding of an
intent to defraud before it could conclude that he acted willfully. As support, Adams
relies on the supreme court’s decision in Green v. Turner, 2000 UT 54, 4 P.3d 789.
¶24 In Green, the Morgan County Commission reduced the county auditor’s salary to
offset the cost of hiring an independent accountant to perform some of the auditor’s
duties. See id. ¶ 3. The auditor filed a successful petition for a writ of mandamus that
resulted in the reinstatement of her salary. See id. ¶ 1. In addition, the trial court
imposed penalties against two of the commissioners under Utah Code section 17‐5‐207,
which provides for the assessment of monetary penalties against a county
commissioner who “‘willfully, fraudulently, or corruptly attempts to perform an act
unauthorized by law.’” See Green, 2000 UT 54, ¶ 12 (emphasis omitted) (quoting Utah
Code Ann. § 17‐5‐207 (1999) (current version at id. § 17‐53‐227 (2009))). On appeal, the
issue was the proof required to establish willfulness under the penalty statute. See id.
20110406‐CA 11
¶¶ 12‐16. The supreme court explained that where a statute does not “expressly
indicate whether the term ‘willfully’ includes an implied scienter component,” the
inclusion or exclusion of such a requirement “depends largely on the context and
purposes of the statute or rule at issue.” Id. ¶ 16. It then concluded that based on the
context of the penalty statute, willfulness included a requirement that the commissioner
“knew or should have known” that his conduct was not authorized by law. See id. ¶ 18.
¶25 Unlike the statute at issue in Green, the rules implementing the Employment
Security Act expressly require that the Department prove knowledge. See Utah Admin.
Code R994‐406‐401(1) (requiring the Department to prove materiality, knowledge, and
willfulness to establish fraud). Thus, there is no need to undertake the analysis applied
in Green to determine whether scienter is required to establish fraud under the Act.
¶26 The regulations establish that willfulness occurs “when a claimant files claims or
other documents containing false statements, responses or deliberate omissions.” Utah
Admin. Code R994‐406‐401(1)(c). The Utah Supreme Court has held that the willfulness
requirement under the Act is shown by a claim “which contain[s] false statements and
fail[s] to set forth material facts required by statute.” Mineer v. Board of Review, 572 P.2d
1364, 1366 (Utah 1977) (applying a prior version of the statute); see also Frislie v.
Department of Workforce Servs., 2011 UT App 114, ¶ 8, 256 P.3d 229 (per curiam)
(“Willfulness was established by the filing of the claims containing false information.”);
Smith v. Department of Workforce Servs., 2010 UT App 382, ¶ 22, 245 P.3d 758 (citing
Mineer, 572 P.2d at 1366). “The filing of [a] claim evidences a purpose or willingness to
present a false claim in order to obtain unlawful benefits and is in and of itself a
manifestation of intent to defraud.” Martinez v. Industrial Comm’n, 576 P.2d 1295, 1296
(Utah 1978). According to Adams, these decisions are distinguishable because they
involve the claimant’s failure to report known facts, such as wages earned or the ability
to work. See Frislie, 2011 UT App 114, ¶ 8 (failing to report inability to work); see also
Mineer, 572 P.2d at 1365 (failing to report work and earnings); Baker v. Department of
Emp’t Sec., 564 P.2d 1126, 1127 (Utah 1977) (failing to report earnings and previously
received unemployment compensation). In contrast, he argues that “there is no
evidence that [he] knew when he filed his weekly claims that networking was not a job
contact and, therefore, a false report.” Because Adams does not dispute that he
represented that he had contacted employers as instructed by the Department, his
argument seems more appropriately characterized as a challenge to the knowledge
component of fraud rather than willfulness.
20110406‐CA 12
¶27 We agree with Adams that every inaccuracy in a request for unemployment
benefits is not, “per se, evidence of fraud.” To hold otherwise would render the
Department’s burden to prove knowledge meaningless. Instead, knowledge is
established where the claimant knew or should have known that he provided
inaccurate information, or recklessly made representations knowing that he did not
have sufficient information to do so. See Utah Admin. Code R994‐406‐401(1)(b).
¶28 Where facts are within the claimant’s experience, he is charged with knowledge
of them. For example, a claimant is presumed to know that he was in the hospital and
therefore not available for work as required to receive unemployment benefits. See
Martinez, 576 P.2d at 1296; see also Christensen v. Board of Review, 579 P.2d 335, 336 (Utah
1978) (injury and hospitalization during an unreported hunting trip). A claimant is also
deemed to know the amount of and when he received his wages. See Millett v. Industrial
Comm’n, 609 P.2d 946, 947 (Utah 1980) (failing to report wages); see also Kearl v.
Department of Emp’t Sec., 676 P.2d 385, 386 (Utah 1983) (failing to report tips and self‐
employment); Taylor v. Department of Emp’t Sec., 647 P.2d 1, 2 (Utah 1982) (failing to
report commissions), superseded by statute on other grounds as stated in Grace Drilling Co. v.
Board of Review, 776 P.2d 63, 67 (Utah Ct. App. 1989). Furthermore, claimants are
expected to know the information provided to them by the Department, including the
contents of the Claimant Guide. See Utah Admin. Code R994‐406‐401(b) (“A claimant has
an obligation to read material provided by the Department and to ask a Department
representative if he or she has a question about what information to report.”); Frislie,
2011 UT App 114, ¶ 7 (noting that the claimant should have known what the
Department required from reviewing the Claimant Guide). Adams admits that he
received and read the Claimant Guide. Thus, the issue before us is whether the Board
reasonably and rationally concluded that the contents of the Claimant Guide provide
substantial evidence that Adams knew or should have known that his affirmative
answer to the question, “Did you contact two new employers each week as you were
instructed by the Department?,” was false.
¶29 The Board concluded that “[t]he Claimant Guide is written in clear language” and
that it instructed Adams “to contact ‘employers not previously contacted’ each week,
not potential investors, wives of potential employers or friends.” The Board further
determined that the guide “clearly describes networking as an ‘additional job‐
20110406‐CA 13
development’ activity, not as evidence of making job contacts.” Adams disagrees,
claiming that the Claimant Guide “does not restrict job contacts” to employers only and
“in fact, the [guide] encourages ‘networking.’” According to Adams, the investors that
he contacted were “potential employers,” and he had no reason to know that his weekly
representations to the Department that he had contacted employers was not accurate.
¶30 However, Adams freely admitted during the Department’s October 2010
investigation and at the hearing, that many of the contacts he made while receiving
benefits were not potential employers but were investors who might provide funding to
help him start a new company. Indeed, during the investigation, he stated that “during
the past couple of months, [he] only had one ‘official’ job‐seeking contact,” and that
“[he] decided months ago that [his] best option was not to look for a job, but to make
[his] own.” Additionally, when Adams provided a list of thirty‐five investors to the
investigator, he specifically indicated that he did not seek employment from those
individuals themselves because that would make it seem as if he did not have
confidence in the start‐up company he was seeking to fund.
¶31 Furthermore, the ALJ asked if his contacts were with “employers or individuals
in companies that would have had the ability to hire [him] and had an actual position
open.” Adams responded, “Well, some of them were prospective in that I knew that
they were involved in companies and I was, you know, basically trying to put myself in
position for executive openings in those companies.” The ALJ further questioned, “But
did they actually have an opening for that position?,” to which Adams responded,
“Well, in some cases I found out that there were, and in other cases there weren’t.”
Additional testimony from Adams indicated that while his job search when he first
started receiving unemployment benefits may have satisfied the Department’s criteria,
beginning in mid‐2009 he realized this was not fruitful and “put[] more efforts into
meeting with venture capitalist[s] and angel investors and other people who are in that
world.”
¶32 From these responses, there is substantial evidence to support the Board’s
determination that Adams knew that he was not contacting employers. Thus, we are
also convinced that there is substantial evidence that Adams knew or should have
known that he was providing inaccurate information when he stated that he
“contact[ed] employers for work as [he was] instructed by the Department.”
20110406‐CA 14
III. The Board Acted Within Its Discretion in Refusing to Reopen the Evidence
¶33 Adams also argues that the Board erred in refusing to permit the ALJ to consider
reopening the hearing under rules R994‐508‐117 and R994‐508‐118 of the Utah
Administrative Code, and by treating his motion to do so as an appeal to the Board. See
Utah Admin. Code R994‐508‐117 to ‐118. He first contends that subsection (5) of rule
R994‐508‐117 allowed him to file a motion for rehearing. That rule states, “The ALJ may
reopen a hearing on his or her own motion if it appears necessary to take continuing
jurisdiction or if the failure to reopen would be an affront to fairness.” Utah Admin.
Code R994‐508‐117(5). However, this subsection does not address the circumstances for
reopening a hearing upon the motion of either of the parties. See id. And while the
remaining portions of rule 994‐508‐117 do address that issue, the right to request a
rehearing is limited to a party that failed to appear or participate at a hearing. See id.R994‐508‐117. Because Adams appeared and participated at the hearing, rule R994‐508‐
117 is inapplicable.
¶34 Adams alternatively argues that he was entitled to a rehearing under rule R994‐
508‐118 of the Utah Administrative Code. That rule permits a rehearing under certain
identified circumstances, even where the party was able to appear at the first hearing.
See id. R994‐508‐118. The Department asserts that Adams does not meet any of the
criteria for rehearing provided by the rule, and Adams has not argued that he does.
Even on review to this court, Adams has not indicated which subsection of rule R994‐
508‐118 he contends would provide grounds for reopening the hearing. Furthermore,
Adams is not entitled to a rehearing simply to allow him to admit the List into the
record. As discussed, Adams was notified of his responsibility to present his evidence
prior to the hearing before the ALJ and, despite his failure to present that evidence, he
was allowed to testify to the contents of the List. And the Board considered this
testimony in making its decision. Where Adams had notice of the deadline for
exchanging exhibits, was allowed to present evidence of the List’s contents, and the
Board considered that testimony, we cannot conclude that the Department’s decision to
treat his motion to reopen the hearing as an appeal to the Board was an abuse of
discretion. Cf. Grace Drilling Co. v. Board of Review, 776 P.2d 63, 70 (Utah Ct. App. 1989)
(holding that the Board did not abuse its discretion in refusing to reopen the record to
consider evidence where the party had “ample opportunity to present its case”); Record
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v. Workforce Appeals Bd., 2011 UT App 340, ¶ 25, 263 P.3d 1210 (concluding that the
Board’s refusal to supplement the record with photographic evidence taken after the
evidentiary hearing “comport[ed] with elementary fairness” where “no extraordinary
circumstances” existed).
¶35 In addition, Adams has not explained how the admission of this evidence would
alter the outcome of the case. Thus, even if the Board did err in treating his motion to
reopen the evidence as an appeal, any error was harmless.3 See Smith v. Department of
Workforce Servs., 2010 UT App 382, ¶ 23, 245 P.3d 758 (“[E]ven resolving any doubt in
[claimant’s] favor, she has not demonstrated a reasonable likelihood that the error
affected the outcome of the hearing.” (internal quotation marks omitted)).
CONCLUSION
¶36 The Board did not exceed its discretion in determining that Adams was
unavailable for work during the period he received unemployment benefits.
Furthermore, the Board’s imposition of fraud penalties is supported by substantial
3
Adams also argues that the hearing should be reopened because he proceeded
pro se at the hearing and was confused as to the process. Although parties proceeding
without counsel are entitled to “due process of law, including the opportunity for a fair
hearing, . . . the hearing officer is not required to assume the duties of counsel for that
party during the administrative hearing.” Wright v. Workforce Appeals Bd., 2011 UT App
137, ¶ 2, 254 P.3d 767. It is the responsibility of the claimant “to be diligent in reading
the instructions contained in the hearing notices.” See Naylor v. Department of Workforce
Servs., 2010 UT App 395U, para. 4 (per curiam) (citing Utah Admin. Code
R994‐406‐401(1)(b)). The Department instructed Adams to “[p]rovide a copy of [his]
complete list of job search contacts” for the entire period of benefits and notified him
that all evidence must be exchanged at least three days before the hearing. Under these
circumstances, we cannot conclude that Adams was denied due process. See Chen v.
Stewart, 2004 UT 82, ¶ 68, 100 P.3d 1177 (“Although the exact requirements of due
process may vary from situation to situation, the minimum requirements of due process
include adequate notice and an opportunity to be heard in a meaningful manner.”).
20110406‐CA 16
evidence. Finally, the Board did not err in treating Adams’s request to reopen the
evidence as an appeal, and any presumed error was harmless. Accordingly, we do not
disturb the Board’s decisions.
____________________________________
Carolyn B. McHugh,
Presiding Judge
‐‐‐‐‐
¶37 WE CONCUR:
____________________________________
James Z. Davis, Judge
____________________________________
Michele M. Christiansen, Judge
20110406‐CA 17