IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
RODNEY SQUARE BUILDING RESTORATIONS, INC.,
Appellant,
v. )
DUANE K. NOEL, )
Appellee, )
and )
UNEMPLOYMENT INSURANCE APPEAL BOARD, )
ON APPEAL FROM THE
UNEMPLOYMENT INSURANCE APPEAL BOARD
Submitted: June 5, 2008
Decided: July 22, 2008
ABLEMAN, JUDGE
I. Introduction
Employer Rodney Square Building Restorations, Inc. ("RSBR")
appeals a decision by the Unemployment Insurance Appeal Board (the
"Board") in favor of Claimant Duane K. Noel ("Noel"), holding, inter alia,
that RSBR is barred from contesting Noel’s eligibility for benefits because it
failed to timely return a separation notice pursuant to 19 Del. C. § 3317(b)
("Section 3317(b)"). The Board determined that the Department of Labor
("DOL") properly mailed RSBR the UC-119 separation notice (hereafter the
"notice" or a "UC-119"), thereby affording RSBR the opportunity to timely
respond, and it held that RSBR did not establish good cause for its untimely
response. After reviewing the record, the Court determines that the Board
mischaracterized the evidence upon which its good cause determination was
based. Furthermore, the Court finds that RSBR had good cause for its
delayed response and is therefore not barred from contesting Noel’s
eligibility to receive unemployment benefits. For reasons set forth hereafter,
the decision of the Board is REVERSED AND REMANDED.
II. Statement of Facts
Noel was employed as a full-time, salaried operations manager at
RSBR for roughly five years, until October 2006,1 when he was discharged
by RSBR because of his declining job performance as well as an argument
he had with RSBR’s owner, Gabriel Fieni ("Fieni"), in front of a client.2
Noel acknowledged his mistakes, and after asking Fieni to reinstate his job,
was given the opportunity to resume work part-time and on an hourly basis.3
Noel testified that he accepted Fieni’s new terms under the assumption that
he would be allowed to "bank his hours." When he learned that he would not be permitted to
bank his hours, Noel informed Fieni that this arrangement was unacceptable
to him. He then resigned on or about October 31, 2006.
----------------------
note 4:
Noel used the term "banking these hours" to mean that he would work for RSBR
but would not be paid until a court dispute with his ex-wife could be resolved. In an
apparent effort to defraud the Court, Noel stated in his testimony before the Appeals
Referee in January 2007, that "[i]t’s for future pay so that once I resolve the issue with
my wife’s alimony I won’t be paying her . . . ." Docket 11, at A71: 6-8.
----------------------
Noel filed a claim for unemployment benefits with the DOL on
November 12, 2006, claiming he was terminated without just cause.7 The
DOL followed its standard procedure, sending RSBR a UC-119 separation notice
on November 16, 2006. At a hearing before the Appeals Referee in May 2007,
the Claims Deputy stated twice in her sworn testimony that the DOL mailed the
separation information to RSBR on November 16, 2006.8 The notice, dated
November 16, 2006, indicates that a response was due by November 23, 2006,
and bears the correct address of RSBR, as confirmed by Fieni during the
hearing.9 Because of the Thanksgiving holiday, RSBR’s response to the notice
was due no later than Monday, November 27, 2006.10 Fieni testified at both
the May 2007 hearing before the Appeals Referee and the June 2007 hearing
before the Board that he did not receive the notice until around 5:30 PM on
November 28, 2006.11 Fieni also testified that the next day, November 29,
he delivered the notice to his administrative assistant, who works out of
her home in Maryland.12 The assistant completed the notice and faxed it to
the DOL at 11:35 AM on November 29, 2006. The notice was due back to the DOL
on Thursday, November 23, 2006. Because the owner did not retain the original
envelope, however, the only physical evidence introduced to support or refute
the testimony regarding timely mailing was the copy of the faxed response
from RSBR.
The Claims Deputy initially ruled in favor of Noel, finding that he
was discharged without cause.14 RSBR timely appealed. After a hearing
before the Appeals Referee on January 18, 2007,15 the Referee reversed the
decision of the Claims Deputy and determined that Noel voluntarily quit his
job without good cause and was therefore disqualified from receiving
benefits.16 Noel then appealed that decision. The Board, noticing for the
first time that RSBR returned the separation information late, concluded that
a determination on the issue of whether RSBR had good cause for the late
filing needed to be made before addressing Noel’s eligibility for benefits.
The Board remanded the matter to the Claims Deputy to determine whether
there was good cause for RSBR’s untimely response.17
On remand, the Claims Deputy determined that RSBR did not have
good cause for returning the notice late because it could not substantiate its
claim of delay by the Postal Service.18 The Claims Deputy therefore
concluded that Noel should receive benefits if otherwise eligible.19 RSBR
timely appealed, and a hearing was held before the Appeals Referee on May
3, 2007.20 The Referee reversed the decision of the Claims Deputy and
concluded that RSBR "returned the form UC 119 within the required seven-
day time period," and was therefore not barred from contesting Noel’s
claim.21 In reaching that conclusion, the Referee took official notice of the
fact that all state offices were closed for the Thanksgiving holiday on
November 23 and 24, 2006.22
Noel timely appealed and a second hearing was held before the Board
on June 6, 2007.23 The Board reversed the decision of the Appeals Referee,
barring RSBR from contesting Noel’s eligibility to receive benefits. The
Board first noted that RSBR’s failure to retain the envelope bearing a
postmark left the Board with "no choice but to assume that the mailing was
timely."24 It then stated that RSBR’s response was still not within the
seven-day period required by statute, even if a four-day grace period is
considered.25 Finally, the Board concluded that "[t]he employer, by his own
admission, received the form on November 24th and did nothing with it for
four days. He has shown no good cause for his total lack of action."26 The
Board therefore held that RSBR did not have good cause for its late filing.
III. Arguments of the Parties
RSBR argues that the decision of the Board is not supported by
substantial evidence and is erroneous as a matter of law. First, RSBR
contends that the Board’s conclusion that it did not demonstrate good cause
was premised upon facts not in the record. In support of this argument,
RSBR points to the discrepancy between the sworn testimony of Fieni, who
stated on multiple occasions that he received the notice on November 28,
2006 and the Board’s June 2007 decision, wherein it finds that Fieni
admitted receiving the notice on November 24, 2006.28
Second, RSBR argues that the Board misapplied the decision in Lively
v. Dover Wipes Co.29 because the Lively Court addressed only the
presumption that a mailing was received, rather than the question of when it
was received. Thus, RSBR argues that the Board inappropriately cited
Lively to establish that RSBR timely received the notice.30
Third, RSBR disputes the Board’s conclusion that it failed to
demonstrate good cause. RSBR argues that the notice was returned to the
DOL within eighteen hours of receipt and that its prompt filing after
receiving notice fulfills the spirit of the statutory requirement.31 Further,
RSBR has offered evidence that the DOL has postmarked two litigation
documents for this appeal after the dates contained on the documents.32
RSBR argues that, under Delaware Rule of Evidence 201(b),33 this Court
should take judicial notice of these delayed mailings as proof of a pattern of
late mailing by the DOL.34
In response, Noel argues that Fieni’s repeated testimony that he
received the notice on November 28, 2006 is not sufficient to prove actual
receipt on that date without any supporting physical evidence, such as the
original envelope.35 Noel further submits that the Board correctly applied
Lively to support the premise that a correctly addressed and posted mailing
was timely received.36 Noel also suggests that under Lively good cause
requires a showing of "verifiable ‘UIAB error.’"37 With respect to the
construction of Section 3317(b), Noel contends that RSBR’s interpretation is
a misstatement of the law and that the statute specifically grants the DOL the
authority to determine good cause.38 Finally, Noel argues that the date
RSBR actually received the notice could have been earlier than the date
Fieni became aware of the notice.39 In support of this argument, Noel relies
on his testimony about the slow and indirect process of mail sorting at
RSBR.40
In its reply brief, RSBR suggests that a strict interpretation of Section
3317(b) imposes too harsh a penalty on employers who receive the
separation notice after the response date because it deprives them of any
opportunity to contest a former employee’s claim.41 RSBR argues that such
an unjust result is magnified in this instance where the Appeals Referee
initially determined that Noel should be ineligible for benefits because he
voluntarily left his employment without good cause.42 Lastly, RSBR asserts
that Noel’s argument regarding the procedure for mail processing at RSBR
does not support an inference that RSBR may have received the notice
before November 28, 2006, because Fieni expressly testified that the notice
was received on November 28, 2006.43
IV. Standard of Review
In reviewing the decision of the Board, this Court is limited to a
consideration of the record.44 The Court must determine only whether the
ruling is supported by substantial evidence and free from error of law.45
Substantial evidence is "such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion."46 Substantial evidence is "more
than a scintilla but less than preponderance . . . ."47 This Court will not
make its own determination of credibility, nor will it make factual
Determinations of good cause are questions of law within the
discretion of the DOL and are therefore subject to review.49 A discretionary
decision of the Board will be upheld absent an abuse of that discretion.50
Where the agency’s determination is supported by substantial evidence,
however, the Court will affirm the ruling.52 The Court reviews questions of
law de novo to determine "whether the Board erred in formulating or
applying legal precepts."5354
Where the issue presented is a question of law or
the application of law to undisputed facts, the Court’s review is plenary.
V. Analysis
Section 3317(b) requires the DOL to send a UC-119 separation notice
to a former employer when a former employee files a claim for
unemployment benefits.55 Section 3317(b) gives the employer seven days
from the "date contained on the separation notice" in which to respond to the
notice, indicating the reasons for the employee’s separation and his last date
of employment.56 Failure to respond within seven days bars the employer
from challenging the claimant’s eligibility for benefits, unless the Board
finds good cause for the default.57
1. The Notice was Properly Mailed to RSBR
Generally, for any notice to be effective, it must be received.58 In
Delaware, notice that is correctly addressed, stamped and mailed is
presumed to have been received by the party to whom it was addressed.59
This presumption may be rebutted, however, by evidence that notice was
never received.60 If notice is properly addressed by the agency and not
received because of some fault of the party to whom it was addressed, the
notice may still be deemed sufficient even if the party did not receive it.61 In
Reagan National Advertising, Inc. v. Unemployment Insurance Appeal
Board,62 this Court held that direct testimony from a Claims Deputy that
notice was mailed is sufficient, despite any documentary evidence of
mailing, to establish that notice was properly sent to a party.63 Furthermore,
record copy of the notice, absent any evidence of mistake on the part of the
DOL, is legally adequate proof of mailing.64
Here, the Board’s decision that notice was mailed to RSBR on
November 16, 2006 is supported by substantial evidence. In her direct
testimony, the Claims Deputy indicated twice that the notice was mailed on
November 16, 2006.65 RSBR’s faxed copy of the UC-119 form, bearing the
November 16, 2006 date and the correct address, was introduced as evidence
that the DOL followed the standard procedure of printing and mailing the
notice. The testimony of the Claims Deputy and the record copy of the
notice bearing the date are sufficient evidence to establish that the notice
was properly mailed to RSBR on November 16, 2006.
Contrary to RSBR’s argument, the Board’s reliance on Lively was
simply to show that the DOL does not bear the burden of establishing
precisely when and how it mailed the notice. Rather, the employer must
carry the burden of proving that a mistake was made.66 The Court also
agrees that the Board correctly applied Lively to support the conclusion that
the notice was properly mailed. In Integrity Staffing Solutions, Inc. v. Div.
of Unemployment Ins.,67 this Court stated, "[o]nce the Division established
that it probably sent the UC-119 form correctly, the burden shifted to [the
employer]."68 Because the Board had substantial evidence to find that the
notice was timely and correctly mailed to RSBR, the notice had to be
returned at the latest, by November 27, 2006.69
2. The Board’s Good Cause Determination was Not Supported by
Substantial Evidence and was an Abuse of Discretion
Without citing either law or evidence on the record, the Board
summarily concluded that there was no good cause for RSBR’s untimely
response to the UC-119 notice. The Board’s decision states, "[t]he
employer, by his own admission, received the form on November 24th and
did nothing with it for four days. He has shown no good cause for his total
lack of action."70 The Court has not been able to locate any evidence in the
record where Fieni indicates that he received the notice on any day other
than November 28, 2006. It appears that the Board’s good cause
determination was based solely on this factual inaccuracy. Because the
Board’s conclusion that RSBR received the notice on November 24, 2006 is
not supported by any evidence, the Board abused its discretion when it
summarily concluded that RSBR did not have good cause for its untimely
response.
3. RSBR Had Good Cause for its Untimely Response, and is Not
Barred from Contesting Noel’s Eligibility for Benefits
Delaware’s system of unemployment compensation was enacted in an
effort to protect the health, morals, and general welfare of its citizens from
the effects of involuntary unemployment.71 If this purpose is to be realized,
the provisions of Delaware’s unemployment compensation scheme must be
liberally construed.72 The Legislature did not intend its language to be
applied strictly to all cases "without reference to the facts of a particular
situation and without consideration of the basic aims and objectives of the
[statute]."73 In Johnston v. Chrysler Corp.,74 the Delaware Supreme Court
stated that the Court should not apply the unemployment compensation laws
"by adhering slavishly to a technical . . . construction of the Law’s
provisions."75 The unemployment compensation laws were drafted for "the
benefit of persons unemployed through no fault of their own, who also are
sincerely co-operating to end their unemployment," and should be
interpreted and applied to that end.76
The good cause exception written into Section 3317(b) indicates that
the Legislature recognized there will be circumstances when preventing an
employer from contesting an employee’s claim due only to a delay in
response will produce injustice. The intent of the section was obviously not
to bar untimely responses in all cases. Furthermore, the lack of clarity as to
how the DOL computes the seven-day response period, and the DOL’s
willingness to extend RSBR a four-day grace period, are indicative of the
flexibility with which the rule is, and should be, applied. The denial of
RSBR’s right to challenge Noel’s eligibility for benefits because of a mere
two-day delay in response does not serve the ends contemplated by the
statute.
Determinations of good cause are questions of law within the
jurisdiction of this Court on appeal.77 Furthermore, the essential facts in this
matter are not in dispute: (1) Noel resigned from his part-time employment
because RSBR would not permit him to bank his hours illegally, in an effort
to defraud the Court in his alimony dispute with his ex-wife; (2) notice was
sent on November 16, 2006 and was due November 27, 2006 at the latest;
(3) the Thanksgiving holiday fell during this window of time in 2006; (4) the
Court accepts, and the record reflects, that RSBR received the notice on
November 28, 2006;78 and (5) RSBR returned the notice less than one day
after receipt and a mere two days after the effective due date.79 RSBR has
also offered two postmarked documents from the DOL showing a gap in
time between the date on the documents and the date of the postmark.80
While Noel testified at the June 2007 hearing about RSBR’s inefficient and
disorganized mail practices,81 this testimony alone is insufficient to rebut the
undisputed evidence on the record that RSBR received the notice on
November 28, 2006.
Based on the facts outlined supra, the pattern of late mailing indicated
by the DOL mailings in the record, and the intent of the statute, this Court is
satisfied that RSBR has shown good cause for its untimely response to the
UC-119 notice. RSBR is therefore not prevented from contesting Noel’s
eligibility to receive unemployment benefits.
VI. Conclusion
For the foregoing reasons, the decision of the Unemployment
Insurance Appeal Board finding that RSBR did not have good cause for its
untimely response, thereby precluding it from contesting Noel’s eligibility to
receive unemployment benefits, is REVERSED, and the cause is
REMANDED to the Board for consideration of Noel’s eligibility to receive
unemployment benefits.
IT IS SO ORDERED.
__________________________
Peggy L. Ableman, Judge