DOUGLAS E. LONERGAN v. BOARD OF REVIEW DEPARTMENT OF LABOR

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

DOUGLAS E. LONERGAN,

Appellant,

v.

BOARD OF REVIEW,

DEPARTMENT OF LABOR

and PTS CONSULTING INC.,

Respondent.

_______________________________

2014 Decided May 27, 2014

Before Judges Fuentes, Simonelli and Haas.

On appeal from the Board of Review, Department of Labor, Docket No. 274,480.

Douglas E. Lonergan, appellant pro se.

John J. Hoffman, Acting Attorney General, attorney for respondent Board of Review, Department of Labor (Lewis A. Scheindlin, Assistant Attorney General, of counsel; Kelly Lichtenstein, Deputy Attorney General, on the brief).

Respondent PTS Consulting Inc. has not filed a brief.

PER CURIAM

Appellant Douglas E. Lonergan appeals from the August 30, 2012 final decision of the Board of Review (Board), which affirmed the decision of the Appeal Tribunal that he is liable for a refund of $17,695 pursuant to N.J.S.A. 43:21-16(d) and N.J.A.C. 12:17-14.2. We affirm.

Appellant was employed by PTS Consulting, Inc. in New York from January 2008 to February 2009. On February 8, 2009, he filed an initial claim for unemployment benefits. After exhausting his claim for regular benefits, he filed a claim and was found eligible for extended benefits and received extended emergency unemployment compensation (EUC) benefits pursuant to the Emergency Unemployment Compensation Act of 2008 (the Act), Pub. L. No. 110-252, 4001-07, Title IV, 122 Stat. 2323, 2353-57 (2008). He received EUC benefits of $17,695 for the week ending July 11, 2009 through the week ending February 6, 2010.

Appellant was eligible for regular unemployment benefits from New York, effective July 5, 2009. He filed a claim in New York and received $405 in weekly benefits from July 2009 through late March or early April 2011. Appellant received these benefits at the same time he was receiving EUC benefits.

In order to be eligible for EUC benefits, an individual may not have any rights to regular or extended compensation under any state or federal law. Pub. L. No. 110-252, 4001(b)(2), Title IV, 122 Stat. 2353. The Director of the Division of Unemployment Insurance mailed a request for a refund holding appellant liable to refund the sum of $17,695 as required by N.J.S.A. 43:21-16(d).

Appellant requested a waiver pursuant to N.J.A.C. 12:17-14.2, arguing the Division's error caused the overpayment. The Director denied the waiver, finding that recovery of the amount overpaid was not patently contrary to the principles of equity as required by N.J.A.C. 12:17-14.2. However, the Director determined that because the Division's error caused the overpayment, the recovery action would be limited to a fifty percent recoupment of any future unemployment benefits in accordance with N.J.A.C. 12:17-14.3.

Appellant appealed to the Appeal Tribunal. Following an April 13, 2012 hearing, the Appeal Tribunal affirmed the Director's decision. The Appeal Tribunal determined that appellant was not entitled to a waiver pursuant to N.J.A.C. 12:17-14.2 because he was not disabled and repayment would not be contrary to equitable principles. The record revealed that appellant earned $31,250 in the past year from self-employment and interest income; his wife received approximately $13,008 in social security benefits; he did not mention he had children or other dependents; he and his wife owned a home valued at $500,000, with a $2726 monthly mortgage and $12,500 in annual property taxes; and he had $22,400 in his checking accounts, $1200 cash on hand, $5500 in stocks, and insurance policies, annuities, and IRAs with a cash value of $310,000. Appellant appealed to the Board, which affirmed the Appeal Tribunal's decision.

On appeal, appellant contends he is entitled to a waiver of the refund because the Division's error caused the overpayment, and the principles of equity apply. We disagree.

Our review of administrative agency decisions is limited. Brady v. Bd. of Review, 152 N.J. 197, 210 (1997). "Moreover, '[i]n reviewing the factual findings made in an unemployment compensation proceeding, the test is not whether [we] would come to the same conclusion if the original determination was [ours] to make, but rather whether the factfinder could reasonably so conclude upon the proofs.'" Ibid. (first alteration in original) (quoting Charatan v. Bd. of Review, 200 N.J. Super. 74, 79 (App. Div. 1985)). "If the Board's factual findings are supported 'by sufficient credible evidence, [we] are obliged to accept them.'" Ibid. (citations omitted). We also give due regard to the agency's credibility findings. Logan v. Bd. of Review, 299 N.J. Super. 346, 348 (App. Div. 1997). Unless "the agency's action was arbitrary, capricious, or unreasonable, the agency's ruling should not be disturbed." Brady, supra, 152 N.J. at 210.

Under the Act, EUC benefits will be paid to individuals who have exhausted all rights to regular unemployment benefits under federal or state law in any benefit year that commenced after May 1, 2007, and who "have no rights to regular compensation or extended compensation . . . under . . . any other State . . . or . . . Federal law . . . ." Pub. L. No. 110-252, 4001(b)(1)-(2), Title IV, 122 Stat. 2323, 2353. Appellant did not qualify for EUC benefits because he was eligible for and received regular unemployment benefits from New York.

Federal law requires an individual who receives EUC benefits to which he or she was not entitled to repay the amounts of such benefits to the State agency. Id. 4005(b). Similarly, the New Jersey Unemployment Compensation Law mandates a full refund when the Division determines

that any person, whether (i) by reason of the nondisclosure or misrepresentation by him or by another of a material fact . . . or (ii) for any other reason, has received any sum as benefits . . . while he was disqualified from receiving benefits, or while otherwise not entitled to receive such sum as benefits[.]

[N.J.S.A. 43:21-16(d)(1).]

In Bannan v. Bd. of Review, 299 N.J. Super. 671, 674 (App. Div. 1997), we affirmed the proposition that full repayment of benefits is required from anyone "who, for any reason, regardless of good faith, was not actually entitled to those benefits." Recovery of such benefits "furthers the purpose of the unemployment compensation laws[,]" and we emphasized that the Unemployment Trust Fund must be preserved "for the payment of benefits to those individuals entitled to receive them." Ibid. We stressed that "[t]he public interest clearly is not served when the Unemployment Trust Fund is depleted by the failure to recoup benefits erroneously paid to an unentitled recipient, however blameless he or she may have been." Ibid.

We acknowledged that any resulting hardship suffered by some claimants who are required to repay benefits is unfortunate, but nevertheless found recoupment to be crucial to the preservation of "the ongoing integrity of the unemployment compensation system." Id. at 675. We also observed that "federal law requires that a state recover improperly paid unemployment compensation benefits." Ibid. For example, federal law requires the Secretary of Labor to certify that all federal money given to each State is "necessary for the proper and efficient administration of" the State's unemployment compensation law. 42 U.S.C.A. 502(a); see also Bannan, supra, 299 N.J. Super. at 675. Federal law also requires that benefits be paid "when due." 42 U.S.C.A. 503(a)(1); see also Bannan, supra, 299 N.J. Super. at 675. "This latter provision usually results in payments being made upon an initial determination of eligibility," which "may subsequently be overturned." Bannan, supra, 299 N.J. Super. at 675. Such overpayments "are not "unemployment compensation," and the money is not being used for the administration of the unemployment compensation laws and must be recouped. Id. at 675 (citation and internal quotation marks omitted). Thus, appellant is liable to refund the EUC benefits he improperly received regardless of whether he acted in good faith or whether the agency was at fault for the overpayment.

The only question is whether appellant is entitled to a waiver pursuant to N.J.A.C. 12:17-14.2. The Director may waive repayment of an overpayment of unemployment benefits under the limited circumstances in N.J.A.C. 12:17-14.2. For example, the Director may grant a waiver where the recovery of the overpayment "would be patently contrary to the principles of equity." N.J.A.C. 12:14-2(a)3. In order to determine whether recovery or overpayment would be "patently contrary to the principles of equity," the "Director . . . shall consider whether the terms of a reasonable repayment schedule would result in economic hardship to the claimant." N.J.A.C. 12:17-14.2(d).

Where a waiver is denied, the overpayment "must be repaid in full." N.J.A.C. 12:17-14.3. However, where the overpayment was due to the Division's error, such as here, the recovery "shall be limited to [fifty] percent of the claimant's weekly benefit rate for each week of benefits subsequently claimed." N.J.A.C. 12:17-14.3. Appellant has failed to demonstrate that this repayment schedule would result in economic hardship to him or is otherwise contrary to the principles of equity.

Affirmed.