Suzanne Lawrence v. Michigan Unemployment Insurance Agency, 906 NW2d 482

Background

Suzanne Lawrence, a seasonal employee, received $820 in vacation pay covering weeks ending Jan 16 and Feb 2, 2013, and conceded she was ineligible for unemployment benefits for those weeks.
MUIA issued a Notice of Determination and Redetermination in April–May 2015 asserting an overpayment of $158 ($79/week) and demanding restitution.
At the June 4, 2015 telephone hearing, no documentary exhibits were received; only Lawrence (who testified she did not receive benefit payments until Feb 20, 2013) and her employer’s rep testified.
The ALJ nonetheless decided the case on the issue of eligibility (concluding Lawrence was ineligible) and made no finding that MUIA actually paid benefits during the contested weeks.
The MCAC affirmed the ALJ; the Oakland Circuit Court affirmed the MCAC after considering the certified agency record (which included MUIA letters).
The Court of Appeals reversed, holding the agencies and circuit court erred by deciding eligibility rather than whether MUIA actually issued payments and by affirming without competent evidence that payments were made.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Scope of record on appeal to circuit court	MCR 7.116(F) limits record to proceedings before ALJ and MCAC only	MCR 7.109(2) governs; court rule permits transmission of all agency documents	Court: MCR 7.109(2) applies; circuit court properly considered certified agency record in full
Burden to prove payment/overpayment	Lawrence: MUIA must prove it actually issued benefit payments; burden of proving payment rests with payor	MUIA: Lawrence had better access to bank records and bore burden to disprove receipt	Court: MUIA bears burden to prove it issued payments; claimant need not prove a negative absent proof MUIA issued payments
Proper issue to decide (eligibility vs. actual payment)	Lawrence: hearing issue was whether she actually received payments during ineligibility period, not eligibility (which she conceded)	MUIA/ALJ: treated case as eligibility determination and applied eligibility law	Court: ALJ, MCAC, and circuit court erred by focusing on eligibility; proper issue was whether MUIA issued payments and overpayment was proven
Denial of right to file reply brief on appeal	Lawrence: circuit court scheduling order violated MCR 7.111(A)(3) by barring reply brief	MUIA: procedural, harmless	Court: Scheduling order violated MCR 7.111(A)(3) but error was harmless (no shown prejudice)

Key Cases Cited

Hodge v. U.S. Security Assoc., 497 Mich. 189 (Michigan 2015) (MESA provides for direct judicial review and deference framework for agency factual findings)
Vanzandt v. State Employees Retirement Sys., 266 Mich. App. 579 (Mich. Ct. App. 2005) (definition of substantial evidence)
City of Romulus v. Mich. Dep’t of Environmental Quality, 260 Mich. App. 54 (Mich. Ct. App. 2003) (competent, material, and substantial evidence standard)
Braska v. Challenge Mfg. Co., 307 Mich. App. 340 (Mich. Ct. App. 2014) (standard of review for appellate review of administrative decisions)
Mericka v. Dep’t of Community Health, 283 Mich. App. 29 (Mich. Ct. App. 2009) (deference levels to trial court and agency on facts vs law)
Omian v. Chrysler Group LLC, 309 Mich. App. 297 (Mich. Ct. App. 2015) (MCAC decision reversible for erroneous legal framework)
DiBenedetto v. West Shore Hosp., 461 Mich. 394 (Michigan 1999) (agency decisions subject to reversal for erroneous legal reasoning)
Donkers v. Kovach, 277 Mich. App. 366 (Mich. Ct. App. 2007) (court rules prevail over statutes on procedural matters)
R.G. Moeller Co. v. Van Kampen Const. Co., 57 Mich. App. 308 (Mich. Ct. App. 1975) (billing statements/accounts receivable not proof of payment)
White v. Revere Copper & Brass, Inc., 383 Mich. 457 (Michigan 1970) (agency cannot infer facts contrary to undisputed evidence when no contrary proof exists)
Taylor v. Taylor’s Estate, 138 Mich. 658 (Michigan 1904) (burden of proving payment rests on party claiming to have made it)