This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2002).







George E. Hovey,





Commissioner of Economic Security,




Filed ­­­April 22, 2003

Reversed; motion granted

Harten, Judge



Department of Economic Security

File No. 385902



Donaldson V. Lawhead, Brandon V. Lawhead, Lawhead Law Offices, 301 South Main Street, Austin, MN 55912 (for relator)


Lee B. Nelson, M. Kate Chaffee, Department of Economic Security, 390 North Robert Street, St. Paul, MN 55101 (for respondent)


            Considered and decided by Peterson, Presiding Judge, Harten, Judge, and Poritsky, Judge.*


U N P U B L I S H E D   O P I N I O N




            Relator challenges the commissioner’s representative’s imposition of a penalty for fraudulently obtaining unemployment benefits.  Because we conclude that the evidence does not support the commissioner’s representative’s findings, we reverse.


In September 2000, relator George Hovey filed a workers’ compensation claim petition for permanent partial disability benefits.  On 15 November 2000, relator was discharged from employment.  Relator began receiving unemployment benefits that same month.  On 28 February 2001, relator filed an amended workers’ compensation claim petition for lost wages from 14 November 2000 to “present and continuing.”

From November 2000 through May 2001, relator received $8,606 in unemployment benefits.  Relator requested continuing unemployment benefits by calling the Department of Economic Security’s (the department’s) Teleclaim system.  Teleclaim determined relator’s ongoing eligibility for unemployment benefits through a series of yes-or-no questions, including: “Did you receive or have you applied for income from any other source that you have not already told us about?”  Relator always answered “no” to that question, even after filing the amended workers’ compensation claim petition.

            The department determined that relator was ineligible for the $3,200 in unemployment benefits he received after filing the amended workers’ compensation claim petition on 28 February 2001.  The department intervened in relator’s workers’ compensation action, and all parties to the action signed a settlement agreement.  Pursuant to the agreement, relator’s workers’ compensation insurer paid $3,200 to the department to settle all claims against relator and the insurer “for reimbursement of unemployment benefits.”

The department issued a determination of overpayment, finding that relator was overpaid $3,200 in unemployment benefits but acknowledging that the benefits had been repaid.  The department also found, however, that relator had fraudulently failed to disclose his workers’ compensation claim by answering “no” when asked if he had “applied for income from any other source.”  As a penalty, the department denied relator four weeks of future unemployment benefits.

Relator appealed the determination of overpayment.  The unemployment law judge agreed that relator had committed fraud by failing to disclose his workers’ compensation claim, but the judge assessed an $800 penalty against relator instead of denying future unemployment benefits.  On review, the commissioner’s representative affirmed the decision of the unemployment law judge.  Relator challenges the commissioner’s representative’s decision.


            “When reviewing a decision of the commissioner’s representative, we consider whether there is reasonable support in the evidence to sustain the decision.”  Madsen v. Adam Corp., 647 N.W.2d 35, 37 (Minn. App. 2002) (citing Tuff v. Knitcraft Corp., 526 N.W.2d 50, 51 (Minn. 1995)).  We review the commissioner’s representative’s findings of fact in the light most favorable to the decision and determine whether evidence in the record reasonably tends to sustain them.  Lolling v. Midwest Patrol, 545 N.W.2d 372, 377 (Minn. 1996).

            Any applicant who receives unemployment benefits by intentionally misrepresenting, misstating, or failing to disclose any material fact has committed fraud. * * * [T]he commissioner shall assess a penalty equal to 25 percent of the amount fraudulently obtained.


Minn. Stat. § 268.18, subd. 2(a) (2002).

            Relator argues that the commissioner’s representative erred in assessing an $800 penalty against him after determining that he had fraudulently received $3,200 in unemployment benefits.  We agree.

The commissioner’s representative determined that relator intentionally failed to disclose that he was receiving both workers’ compensation benefits and unemployment benefits at the same time.  The parties agree that this determination was based on the erroneous commissioner’s representative’s finding that relator received, simultaneous benefits.  The record indicates that relator stopped receiving unemployment benefits in May 2001 and that he began receiving workers’ compensation benefits in July 2001.

Because the commissioner’s representative’s determination that relator received benefits by fraud was based on a finding that has no support in the record, we reverse.

Respondent moved to strike parts of relator’s reply brief, arguing that relator raised arguments not raised in respondent’s brief.  Minn. R. Civ. App. P. 128.02, subd. 3, provides that a “reply brief must be confined to new matter raised in the brief of the respondent.”  Therefore, respondent’s motion is granted.

Reversed; motion granted.

* Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const. art. VI, § 10.