This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2002).
STATE OF MINNESOTA
IN COURT OF APPEALS
Kathryn L. Koch,
Commissioner of Employment and Economic Development,
Filed August 19, 2004
Department of Employment and Economic Development
File No. 10403 03
Ronald L. Moersch, Mary L. Hahn, Hvistendahl, Moersch & Dorsey, P.A., 311 South Water Street, P.O. Box 651, Northfield, MN 55057-0651 (for relator)
Sheldahl, Northfield Acquisition Company, 1150 Sheldahl Road, Northfield, MN 55057-9444 (respondent)
Lee B. Nelson, Linda A. Holmes, Department of Employment and Economic Development, 390 Robert Street North, St. Paul, MN 55101 (for respondent Commissioner)
Considered and decided by Willis, Presiding Judge; Lansing, Judge; and Hudson, Judge.
U N P U B L I S H E D O P I N I O N
On certiorari appeal from a decision of the commissioner’s representative that relator was discharged for aggravated employment misconduct and is required to repay benefits she received, relator argues that (1) her conduct did not constitute aggravated employment misconduct, (2) the statutory provisions requiring a claimant who is ultimately determined to be disqualified to repay benefits are unconstitutional, and (3) the notice she received regarding her obligation to repay benefits was defective and violated her due-process rights. We affirm.
Relator Kathryn Koch began working for respondent Sheldahl, a flexible-circuitry manufacturer, in November 1976. Sheldahl paid its employees weekly on Fridays and normally mailed paychecks to employees on Tuesday or Wednesday so that they were received by Friday.
On Monday, April 14, 2003, Koch informed Sheldahl’s human-resources department that she had not received her paycheck in the mail on the previous Friday, April 11. The human-resources department manually issued Koch a replacement paycheck in the amount of $346; the check showed a pay date of April 11. A human-resources employee told Koch that a stop-payment notice would be issued for the missing check and that if the check arrived at Koch’s home, she should not cash it and instead should bring it to Sheldahl’s payroll department immediately. Koch cashed the replacement paycheck that day.
On Thursday, April 17, Koch received the missing paycheck in the mail; like the replacement check, the paycheck was in the amount of $346 and showed a pay date of April 11. Koch cashed the check that day. On Friday, April 18, Koch received another paycheck in the mail; this check was in the amount of $321.75 and showed a pay date of April 18. Koch cashed the check that day.
On April 21 or 22, Koch’s bank notified her that Sheldahl had stopped payment on the $346 paycheck that she had cashed on April 17. Koch went to the bank and returned $346. Later that week, the bank informed Sheldahl that Koch had cashed the check; Koch had not informed Sheldahl of the situation.
On May 2, after questioning Koch regarding the matter, Sheldahl terminated her employment for attempted theft of company funds. Koch applied for unemployment benefits, and the Department of Employment and Economic Development issued a determination of disqualification. Koch appealed, and, after a telephone hearing, an unemployment law judge reversed the determination of disqualification. Sheldahl appealed, and the commissioner’s representative reversed the unemployment law judge’s decision, concluding that Koch was disqualified from benefits because her conduct constituted aggravated employment misconduct. This appeal follows.
Koch argues that the commissioner’s representative erred by determining that she committed aggravated employment misconduct. Aggravated employment misconduct is defined as the “commission of any act, on the job or off the job, that would amount to a gross misdemeanor or felony if the act interfered with or adversely affected the employment.” Minn. Stat. § 268.095, subd. 6a(1) (2002). An employee who is discharged for aggravated employment misconduct is disqualified from receiving unemployment benefits. Minn. Stat. § 268.095, subd. 4(2) (2002).
Whether an employee committed disqualifying misconduct is a mixed question of fact and law. Colburn v. Pine Portage Madden Bros., Inc., 346 N.W.2d 159, 161 (Minn. 1984). Whether the employee committed a particular act is a question of fact that we review for clear error. Scheunemann v. Radisson S. Hotel, 562 N.W.2d 32, 34 (Minn. App. 1997). Whether the act constitutes misconduct is a question of law reviewed de novo. Ress v. Abbott Northwestern Hosp., Inc., 448 N.W.2d 519, 523 (Minn. 1989). Koch does not dispute the findings of fact. Thus, our review is limited to whether Koch’s acts constitute aggravated employment misconduct.
Koch testified that (1) she cashed the paycheck that she received in the mail on Thursday, April 17, because she thought that it was the paycheck for the next pay period and did not realize that it was the missing paycheck, (2) when she received another paycheck the next day, Friday, April 18, she realized that she had received too many paychecks and that she had received and cashed the missing check the previous day, (3) she cashed the paycheck that she received on April 18 so that she “would have cash in hand so when the bank called [she would] go out there and take care of it,” and (4) she did not contact Sheldahl regarding the paycheck situation because she believed that it was an issue between her and her bank.
While Koch admits to cashing the three paychecks, she asserts that this conduct does not constitute aggravated employment misconduct because “any error on her part was a good faith error in judgment, at most.” Koch cites the 2003 version of Minn. Stat. § 268.095, subd. 6(a), for the proposition that “good faith errors in judgment if judgment was required . . . are not employment misconduct.” But the provision of Minn. Stat. § 268.095, subd. 6(a), cited by Koch is inapplicable here because it applies only to “employment misconduct,” as defined in that subdivision. Here, the commissioner’s representative determined that Koch was not entitled to benefits because her conduct constituted “aggravated employment misconduct,” as defined in Minn. Stat. § 268.095, subd. 6a. Further, Minn. Stat. § 268.095, subd. 6(a), was amended to include the “good faith errors in judgment” provision effective August 1, 2003. Because Sheldahl terminated Koch’s employment on May 2, 2003, the 2002 statute, which does not contain such a provision, would apply even if this were an employment-misconduct case.
Because Koch testified that (1) she knew that she had received three paychecks within a time period in which she was entitled to only two paychecks, and (2) she did not take any action to remedy the situation until the bank notified her that Sheldahl had stopped payment on one of the cashed checks, the record reasonably supports the commissioner’s representative’s finding that Koch’s acts would amount to the crime of theft and that, therefore, Koch committed aggravated employment misconduct. The theft would be a gross misdemeanor and, therefore, was sufficient to provide a basis for denial of unemployment benefits. See Minn. Stat. § 609.52, subd. 2(1) (2002) (defining theft as the intentional taking of another’s property without consent or claim of right); subd. 3(4) (providing that theft of property valued at more than $250 but not more than $500 is punishable by payment of a fine of not more than $3,000); Minn. Stat. § 609.02, subd. 4 (2002) (providing that the maximum fine that may be imposed for a gross misdemeanor is $3,000). Koch’s claim that she did not inform Sheldahl of the situation because she believed that it was “an issue that needed to be resolved through her bank” is not persuasive; when Sheldahl issued the replacement paycheck to Koch, she was told that payment was being stopped on the missing paycheck and that, if she received the check, she should not cash it but rather return it to Sheldahl immediately.
A determination that an applicant is disqualified from receiving unemployment benefits during a period when the applicant was paid benefits also serves as a determination that the unemployment benefits were overpaid. See Minn. Stat. § 268.101, subd. 6 (2002). Koch argues that Minn. Stat. § 268.18, subd. 1(a) (2002), which provides that an applicant who receives benefits to which he or she is not entitled must promptly repay the benefits, and Minn. Stat. § 268.18, subd. 6 (2002), which provides for the collection of overpayments, are unconstitutional because they violate “her constitutional right to procedural due process.” “Evaluating a statute’s constitutionality is a question of law.” Hamilton v. Comm’r of Pub. Safety, 600 N.W.2d 720, 722 (Minn. 1999). Minnesota statutes are presumed to be constitutional, and we exercise our power to declare a statute unconstitutional “with extreme caution and only when absolutely necessary.” In re Haggerty, 448 N.W.2d 363, 364 (Minn. 1989).
In support of her argument, Koch cites the dissent in Lindsay v. White Earth Land Recovery Project, No. A03-01, 2003 WL 22290406, at *3 (Minn. App. Oct. 7, 2003), which opined that the repayment requirement is “unfair,” “a penalty contrary to the beneficent public purpose of the Minnesota Unemployment Insurance Program,” and an “anomaly.” But the dissenting opinion does not suggest that the requirement of repayment of overpaid benefits is unconstitutional. Koch does not explain how the repayment procedure violates constitutional due-process rights and, aside from the Lindsay dissent, offers no support for the proposition.
Koch argues, alternatively, that the notice that she received regarding her obligation to repay overpaid benefits was “defective in that it was too late, and constituted denial of due process.” In support of her argument, Koch cites Schulte v. Transp. Unlimited, Inc., 354 N.W.2d 830 (Minn. 1984). In Schulte, an employer appealed the initial determination that a former employee was eligible for unemployment benefits. Id. at 831. After receiving notice of the appeal, the former employeedid not participate in any proceedings regarding his unemployment compensation because he had found another job, was no longer receiving benefits, and, thus, did not deem it necessary to attend the proceedings. Id. The issue in Schulte was whether the discharged employee was denied due process because the notice of appeal and subsequent notice of the reversal of his benefits failed to inform him that, in the event of reversal, he would be liable for repayment of the benefits previously paid to him. Id. at 832. The Schulte court recognized that “[u]nless [a] person knows the consequences of the reversal of an initial decision,” there is little motivation for a person to attend a hearing that the person believes is moot. Id. at 834. The court held that in order to be constitutionally sufficient, notice must communicate the interest at stake. The court then concluded that because the employee was not informed that he could be liable for benefits previously paid, the notice that the employee received was “affirmatively misleading” and resulted in a denial of due process. Id. at 834-35.
Koch argues that she did not receive adequate notice and was, therefore, denied due process because the decision of the unemployment law judge, which reversed the initial determination of disqualification, did not inform her that if Sheldahl appealed and was successful, she would be required to repay benefits that she had received. Koch asserts that if she had known that she would be required to repay the benefits if she did not prevail on Sheldahl’s appeal, she might have decided to hire an attorney or seek other guidance in preparing for the appeal.
We find no violation of Koch’s due-process rights. Because the decision of the unemployment law judge was in Koch’s favor and Koch was not yet faced with the choice of whether to participate in a pending appeal, the unemployment law judge’s decision was not required to provide Koch with notice of the consequences of losing an appeal. Koch was not entitled to receive notice of the consequences of losing an appeal until she received notice that Sheldahl had, in fact, appealed. The notice that Koch received after Sheldahl filed its appeal provides:
If the decision reverses an award of benefits, you could be overpaid any benefits you received. Overpaid benefits must be repaid to this Department. If you do not repay the benefits, this Department can recover the overpayment by legal action, including seizing your state tax refunds, making deductions from future unemployment benefits, garnishing your wages, or turning the matter over to a collection agency.
It is undisputed that the notice of appeal that Koch received alerted her to the fact that she would be required to repay any overpayment in the event that the appeal reversed her award of benefits. Thus, because, when Koch was faced with the choice of whether to participate in the appeal, she also had notice of the consequences of losing the appeal, we conclude that her due-process rights were not violated.
 In August 2002, Sheldahl filed for bankruptcy, and Northfield Acquisition Company took over Sheldahl’s assets. Koch continued working for the company.