Natkin v. California Unemployment Insurance Appeals Board
162 Cal. Rptr. 3d 367
Cal. Ct. App.2013Background
- This is a California unemployment benefits case where Natkin sought a writ directing UIAB to vacate its denial and EDD to pay benefits for the week ended May 8, 2010.
- UIAB and the superior court denied benefits on the basis that Natkin earned wages during that week.
- Natkin, an attorney, left private practice for a law clerk job and later pursued independent contractor work; he reported 22 hours worked but reported no wages for the week.
- EDD denied benefits because Natkin’s earnings for the week exceeded his $450 weekly benefit after deductions, rendering him not unemployed per §1252 and §1279.
- Natkin challenged the determination via a petition for writ of mandate; UIAB’s answer was filed unverified and late objections were raised; the trial court denied the petition and judgment was entered in 2012.
- The appellate court affirmed, holding that the trial court did not err in applying the statute and that the perceived issues about verification and late briefs did not warrant reversal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Meaning of wages for self-employed/independent contractor | Natkin argued wages should be net income | UIAB/EDD argued wages are gross in the week | Wages include any and all compensation; gross vs net not deducted per week |
| Net income deduction for start-up expenses | Net income could deduct business setup costs | Deductions for start-up costs not allowed in the week | Start-up expenses cannot be deducted from weekly wages; not allowed as net income for the week |
| Attorney General opinion as controlling authority | AG opinion supports net-income deduction | AG opinion not controlling; inappropriate extension | AG opinion not binding but can guide; court declined to adopt net-income deduction per AG opinion to the extent argued |
| Verification of pleadings and late filed briefs | Respondent's unverified answer and late brief prejudiced Natkin | Trial court could consider late pleadings under discretion; objection forfeited | Trial court did not abuse discretion; Natkin forfeited objection and late filing was considered |
Key Cases Cited
- Lozano v. Unemployment Ins. Appeals Bd., 130 Cal.App.3d 749 (Cal. Ct. App. 1982) (standard of review for UIAB findings; weight of evidence)
- Worthington v. Unemployment Ins. Appeals Bd., 64 Cal.App.3d 384 (Cal. Ct. App. 1976) (definition of wages for self-employed; court referencing AG opinion)
- Taiheiyo Cement U.S.A., Inc. v. Franchise Tax Bd., 204 Cal.App.4th 254 (Cal. Ct. App. 2012) (net income concept; accounting principles guidance)
- Fishman v. Commissioner, 837 F.2d 309 (7th Cir. 1988) (start-up costs not deductible in determining annual net income in tax context)
- JRS Products, Inc. v. Matsushita Electric Corp. of America, 115 Cal.App.4th 168 (Cal. Ct. App. 2004) (implied findings and discretion in trial court)