NELSON P. BALBOA v. BOARD OF REVIEW DEPARTMENT OF LABOR

Annotate this Case

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

NELSON P. BALBOA,

Appellant,

v.

BOARD OF REVIEW, DEPARTMENT

OF LABOR and GROCERY WAREHOUSE

COMPANY,

Respondents.

___________________________________

October 20, 2014

 

Submitted April 29, 2014 Decided

Before Judges Ostrer and Carroll.

On appeal from the Board of Review, Department of Labor, Docket No. 382,355.

Northeast New Jersey Legal Services, attorneys for appellant (Karen Jones, on the brief).

John J. Hoffman, Acting Attorney General, attorney for respondent Board of Review (Lewis A. Scheindlin, Assistant Attorney General, of counsel; Nicole M. DeMuro, Deputy Attorney General, on the brief).

Respondent Grocery Warehouse Company has not filed a brief.

The opinion of the court was delivered by

OSTRER, J.A.D.

This appeal involves an order requiring the refund of over $26,000 in unemployment benefits. Claimant, Nelson P. Balboa, sought to appeal the Appeal Tribunal's August 2012 decision affirming the refund demand. The Board of Review dismissed Balboa's appeal as untimely because it was filed two days late; and then declined to reopen its dismissal. Balboa appeals, and also seeks review of the Board's underlying decision in June 2011 disqualifying him from benefits. Having considered Balboa's arguments in light of the factual record and applicable legal principles, we reverse and remand.

I.

We discern the following facts from the record.1 Balboa, a non-citizen, worked for Grocery Warehouse Company (GWC) pursuant to an employment authorization issued by the United States Department of Homeland Security. The authorization expired February 8, 2010. Because of unspecified administrative difficulties, Balboa was unable to secure a timely extension of his authorization. Nonetheless, GWC continued to employ him until April 25, 2010. Balboa maintained that GWC discharged him because he lacked authorization to work. GWC apparently maintained that it placed Balboa on a leave of absence until he secured his authorization renewal.

Plaintiff applied for unemployment benefits in late July 2010. The Department of Labor initially denied benefits, determining that plaintiff voluntarily left work without good cause attributable to the work. Balboa appealed in September 2010. After a hearing the transcript of which was not provided to us the Appeal Tribunal reversed.

The Tribunal found GWC discharged Balboa "because he did not have a valid employment authorization card." The Tribunal added, "While the employer was within its rights in discharging the claimant, this right does not necessarily establish, however, that the discharge was due to misconduct . . . ." The Tribunal noted that Balboa tried in good faith to obtain a timely renewal of his authorization. The Tribunal also rejected the employer's contention that Balboa "voluntarily resigned . . . by abandoning his job after failing to return from a scheduled leave of absence." Noting that Balboa obtained a new employment authorization card, effective August 30, 2010, the Tribunal held that he was unavailable for work until then. Therefore, his benefits commenced September 5, 2010, the first full week of eligibility. See N.J.S.A. 43:21-4(c).

GWC appealed to the Board of Review. Balboa does not contest that he received notification of the appeal, which apparently was mailed to him on October 22, 2010. The Board's notice did not alert Balboa that if the Tribunal's decision were reversed, he might be held liable for a refund of any benefits he had received. The record does not reflect that Balboa filed any opposition to the GWC's appeal. Balboa continued to receive benefits pending GWC's appeal.

In a June 9, 2011 decision, the Board adopted the Appeal Tribunal's findings of fact as "substantially correct," but nonetheless held that GWC did not discharge Balboa; rather, Balboa left work voluntarily. The Board noted testimony before the Tribunal that through June 2010, GWC representatives continued to inquire about Balboa's authorization status. "This would indicate that . . . the claimant was not discharged, and the claimant's failure to contact the employer after receiving his authorization to work, would indicate an intent to leave the work voluntarily."

The Board found that GWC would have allowed Balboa to return to work. "[T]he claimant did not contact the employer after receiving a valid authorization card on August 30, 2010 because he had already filed for unemployment. Had he done so, he would have been allowed to return to work, pending passing a physical exam." The Board stated that the matter of Balboa's potential liability to refund benefits would "be determined by the Director in accordance with N.J.S.A. 43:21-16(d)."

Balboa denies he received notice of the Board's reversal of the Tribunal (although the Board's decision included Balboa as the recipient of a "cc"). Notwithstanding the Board's decision, no immediate steps were taken to terminate Balboa's benefits or determine his refund liability. Consequently, he continued to receive benefits after the Board's June 2011 decision.

According to Balboa, he visited an unemployment office in March 2012 to seek extended benefits. A customer service representative accessed Balboa's records, discovered the Board's decision, and informed Balboa. Balboa asserted that he was stunned and asked why he continued to receive benefits if the Board had found him disqualified. He claimed the customer service representative told him, "The right hand doesn't always work with the left hand." On April 11, 2012, the Department mailed to Balboa a request for the refund of $26,386 in benefits. The request informed Balboa, "You were not eligible for the unemployment benefits listed . . . because YOU QUIT YOUR JOB WITHOUT GOOD CAUSE."

Represented by counsel, Balboa timely appealed the refund request to the Appeal Tribunal. In her April 16, 2012, letter of appeal, counsel challenged the refund request on the grounds that Balboa did not voluntarily quit his job. In other words, Balboa challenged the refund on the grounds that the underlying disqualification was erroneous. During the Appeal Tribunal's telephone hearing on the refund appeal on August 10, 2012, the appeals examiner advised counsel that he could not rule on the underlying disqualification decision. Balboa has not provided us with the transcript of that hearing.

The Appeal Tribunal held that Balboa was liable to refund $26,386 in benefits received contrary to the Board's June 2011 disqualification decision. The Tribunal found that there was no question that Balboa received the benefits, to which he was not entitled according to the Board's prior decision. The Tribunal relied on N.J.S.A. 43:21-16(d), and N.J.A.C. 12:17-14.2. Citing Fischer v. Bd. of Review, 123 N.J. Super. 263, 266 (App. Div. 1973), the Tribunal held that "[a] refund is recoverable even if the claimant receives unentitled benefits in good faith." The Tribunal mailed its decision on August 13, 2012, and his counsel reportedly received it on August 15, 2012.

Balboa filed an appeal of the Tribunal's refund decision with the Board of Review on September 6, 2012. Counsel acknowledged the appeal was two days late. The appeal was due within twenty days after the "date of notification or mailing." N.J.S.A. 43:21-6(c); see also N.J.A.C. 12:20-4.1(c) (stating that the date of filing of an appeal is the date of postmark, or if one is absent, then the date of receipt). The twenty-day period expired on September 4, 2012. Balboa's counsel asked the Board to accept the late filing because of a "perfect storm of the weekend, vacation and holiday."

In an October 5, 2012 decision, the Board dismissed the appeal as untimely. The Board found that no good cause was shown for the late filing. See N.J.A.C. 12:20-4.1(h) (defining good cause for late filing).

Balboa then sought relief on three fronts. First, he sought the Board's reconsideration of its October 5, 2012 dismissal. However, he did not do so until November 15, 2012. For the first time, counsel argued that her late appeal was due to a death in her family, as well as other personal reasons beyond her control. She also reviewed the procedural history of Balboa's claim. Given Balboa's financial circumstances, she argued it would be inequitable to require Balboa to refund the benefits, particularly those received after the Board's June 2011 decision, because the Board failed to notify Balboa of its decision or to terminate benefits. Counsel again attempted to revisit the merits of the Board's June 2011 decision.

Second, also in November 2012, Balboa sought leave to file an appeal out of time from the Board's June 2011 decision. Balboa claimed he did not learn of the June 2011 decision until March 2012. He argued that his counsel did not immediately seek review of the June 2011 decision, preferring instead "to exhaust all of the avenues for relief at the administrative level." GWC opposed the motion, arguing that it was untimely under Rule 2:4-4. GWC asserted that even if Balboa did not receive prompt notice of the June 2011 decision, his notice of appeal to our court was filed seven months after the refund request, and ninety-nine days after the Appeal Tribunal's August 2012 decision.

Third, Balboa separately sought a waiver of the overpayment of unemployment benefits. In doing so, Balboa highlighted the Board's alleged failure to notify him of the June 2011 decision.

Balboa was unsuccessful in all three efforts. On January 8, 2013, the Board denied Balboa's request for opening the order of dismissal. The Board held, "Even if timely, the claimant would be liable for refund." Later that month, a separate panel of our court dismissed Balboa's appeal from the June 2011 Board decision, and denied Balboa's motion to appeal out of time. Lastly, in a November 26, 2012 decision, the director denied the waiver request, finding that recovery of the payment was "not patently contrary to principles of equity" under N.J.A.C. 12:17-14.2. The director noted that Balboa's appeal was pending, stating, "Please wait for the appeal process to end. If it is found you owe the debt, please send payment as your financial situation allows."

While Balboa sought reconsideration of the Board's October 5, 2012 dismissal order, he filed a notice of appeal with our court on November 20, 2012. Although he did not amend his notice of appeal, his later-filed case information statement made it clear Balboa also sought review of the Board's January 8, 2013 decision denying reconsideration. Balboa does not seek our review of the waiver denial. He filed an administrative appeal of that determination on December 5, 2012. We were informed that the administrative review of that decision was still pending as of August 20, 2014, as the Appeal Tribunal remanded the matter to the Director.

Balboa presents the following points for our review

I. The Department of Labor Requested a Refund of Overpayment From the Claimant without Promptly Notifying Him, Thus Committing Agency Error and Violating Claimant's Due Process Rights.

II. The Department of Labor's Request for Refund of $26,386 from The Claimant is Contrary to the Principles of Equity as Defined by N.J.A.C. 12:17-14.

III. Claimant Was Eligible for Unemployment Benefits on the Merits of His Case.

IV. The Board of Review Failed to Make Adequate Findings of Fact and Conclusions of Law When Denying a Good Cause Request for a Reopening of the Order of Dismissal.

II.

Our scope of review is limited. We are bound to affirm the Board's determination if reasonably based on the proofs. Brady v. Bd. of Review, 152 N.J. 197, 210 (1997). "'[T]he test is not whether an appellate court would come to the same conclusion if the original determination was its to make, but rather whether the factfinder could reasonably so conclude upon the proofs.'" Ibid. (quoting Charatan v. Bd. of Review, 200 N.J. Super. 74, 79 (App. Div. 1985)). However, we may intervene if the agency's action was arbitrary, capricious or unreasonable, or it was "'clearly inconsistent with its statutory mission or with other State policy.'" Ibid. (quoting George Harms Constr. Co. v. N.J. Tpk. Auth., 137 N.J. 8, 27 (1994)). Thus, judicial review is confined to determining: first, whether the agency decision offends the State or Federal Constitutions; second, whether it violates legislative policies; third, whether the record contains substantial evidence to support the agency decision; and lastly, whether the agency, in applying legislative policies to the facts, clearly erred in reaching a conclusion that could not reasonably have been made. Id. at 211.

The Division is entitled to a refund when an employee receives benefits to which he or she was not entitled, regardless of whether the employee was aware of his non-entitlement, expended benefits in reliance on the initial determination, or would face difficulty repaying the benefits. Bannan v. Bd. of Review, 299 N.J. Super. 671, 674-76 (App. Div. 1997); N.J.S.A. 43:21-16(d)(1). However, the issue before us is whether Balboa should have been able in the context of his 2012 appeal of the refund demand to challenge the correctness of the decision to disqualify him for benefits in June 2011. We conclude that he should have been able to do so, not as a means of affirmatively establishing the right to the benefits, but rather as a means of defending against the refund claim.

We addressed a similar case in Agresta v. Board of Review, 232 N.J. Super. 56 (App. Div. 1989). Agresta was qualified to receive unemployment benefits after his employer closed the plant where Agresta worked as an engineer. Id. at 57. Unable to find full-time work as an engineer, he ultimately accepted a part-time position as a real estate salesman in December 1986, on a commission-only basis. Id. at 58. He dutifully disclosed this fact, and was advised to submit a new claim for benefits, which he did in April 1987. Ibid. Then, in July 1987, his claim was rejected on the grounds that he was unavailable for work because of his real estate employment. Ibid.

Agresta did not immediately appeal. Ibid. He reasoned that he had only a couple weeks of remaining eligibility. He apparently did not focus on a smudged notice, which was included in the unfavorable determination, that he would be liable to repay benefits received during his period of ineligibility. Ibid.

Agresta thereafter received a request for a refund of the benefits received between December 1986 and April 1987. Id. at 59. He timely appealed from the refund request and, simultaneously, attempted to appeal from the July 1987 determination. Ibid. Agresta argued that had he known he would be liable for a refund, he would have challenged the ineligibility determination, which he asserted was erroneous as he had earned nothing in real estate. Ibid. The Appeal Tribunal concluded it lacked jurisdiction to review the July 1987 determination, which had become final in the absence of Agresta's appeal. Id. at 59-60. Agresta's liability for the refund was therefore established pursuant to N.J.S.A. 43:21-16(d). Id. at 60. The Board affirmed. Ibid.

We reversed and remanded for a new hearing on the refund demand. Ibid. We held that at the new hearing, Agresta would be entitled to challenge the underlying determination of ineligibility as a defense to the refund request, although not as a means of reviewing the benefits decision. Id. at 63-64.

Accordingly, the matter is remanded to the Appeal Tribunal for a fair hearing, pursuant to N.J.S.A. 43:21-6(d), from the demand for refund. We recognize such a hearing may entail ultimate review of the deputy's original determination of claimant's disqualification, as that relates to his liability to refund moneys received, in view of claimant's contention that he reported his part-time employment as a real estate salesman and received no income from that employment. He claims he was not disqualified. However, we do not perceive this as in any way permitting review of the deputy's decision after the time for appeal has expired.

[Id. at 63.]

We held that the remand hearing would address the refund order but "may peripherally require a redetermination of the deputy's original decision of disqualification."

The Appeal Tribunal in this case should have, likewise, considered Balboa's challenge to the disqualification decision in the context of his appeal from the refund order. As in Agresta's case, it was too late for Balboa to directly appeal the denial of benefits. Even if he did not receive timely notice of the Board's June 2011 decision, he became aware of it informally in March 2012, when he visited the unemployment offices. He received a formal confirmation in April 2012. He failed to seek an appeal with our court until November 2012. We found his appeal to be untimely. However, Balboa's failure to seek timely review of the benefits determination should not preclude him from interposing the correctness of the decision in the context of the refund appeal.

The Board argues that Agresta is distinguishable from this case, because the Board in Agresta never considered the correctness of the benefits determination prior to the refund order; but the Board in Balboa's case did. We are unpersuaded. Like Agresta, Balboa was initially determined eligible for benefits, albeit after his very first appeal to the Tribunal. Like Agresta, Balboa received benefits. Agresta waived his right to appeal the subsequent unfavorable determination. Similarly, Balboa apparently waived his right to participate in the appeal by GWC, which resulted in the Board's June 2011 decision disqualifying him. Balboa's claim for benefits was finally determined against him, just as Agresta's claim was finally determined against him.2

The Board's unfavorable determination of the issue of Balboa's eligibility was reached in a proceeding in which Balboa apparently did not participate. Consistent with Agresta, the Board's eligibility determination should not be given preclusive effect, so as to bar its consideration in the refund appeal. SeeSlowinski v. Valley Nat'l Bank, 264 N.J. Super.172, 182-85 (App. Div. 1993) (finding collateral estoppel does not bind party against whom default judgment was entered); Allesandra v. Gross, 187 N.J. Super. 96, 106 (App. Div. 1982) (citing Restatement (Second) of Judgments 27 comment e (1982) and stating that judgment entered by default does not constitute an issue actually litigated and therefore subject to collateral estoppel effect).

Having concluded that Balboa was entitled to raise the issue of his eligibility for benefits before the Tribunal, we briefly address whether the Board erred in dismissing Balboa's appeal filed in September 2012, and denying Balboa's subsequent application for reconsideration. Our Supreme Court recognized that modern notions of due process should temper rigid application of time limitations that may impact a claimant's property interests in unemployment benefits. Rivera v. Bd. of Review, 127 N.J. 578, 585-86 (1992).

The Board's power to grant good-cause exceptions is set forth at N.J.A.C. 12:20-4.1. "Good cause exists in circumstances where it is shown that: 1. The delay in filing the appeal was due to circumstances beyond the control of the appellant; or 2. The appellant delayed filing the appeal for circumstances which could not have been reasonably foreseen or prevented." N.J.A.C. 12:20-4.1(h). Balboa's appeal was filed a mere two days late, on September 6, instead of September 4, 2012. Represented by counsel, Balboa himself bore no responsibility for the late filing. His counsel initially blamed both her intervening vacation time, and the holiday. She later added that she also had to cope with a death in the family. Balancing the claimant's interest against the minor deviation from the deadline, we view the Board's refusal to consider the appeal to be a mistaken exercise of discretion.

We therefore reverse the Board's (1) October 5, 2012 order dismissing Balboa's appeal of the August 13, 2012, Appeal Tribunal decision affirming the refund order; and (2) January 8, 2013 order denying Balboa's application for reconsideration. We remand to the Board, for further remand to Tribunal, for a hearing on the refund demand, at which Balboa may challenge the eligibility determination as it impacts his potential refund liability.

Given our disposition, we do not reach Balboa's remaining points, including his argument that the refund demand is contrary to principles of equity under N.J.A.C. 12:17-14. Moreover, the Board may choose to withhold the remand hearing we have ordered until a final decision is reached on Balboa's pending administrative waiver appeal.

Reversed and remanded. We do not retain jurisdiction.


1 We also rely on the record of a motion Balboa filed in November 2012, seeking permission to file, out of time, an appeal from the Board's disqualification decision.

2 Whereas in Agresta, the Board unsuccessfully argued that an illegible stamp served as notice, id. at 62-63, the notification of appeal of the Tribunal's decision here did not indicate that Balboa may be liable for a refund should the Board reverse.