SCOTT v. DEPARTMENT OF LABOR AND ECONOMIC OPPORTUNITY UNEMPLOYMENT INSURANCE AGENCY (2022)

Claimant Lillian A. Scott appeals by leave granted ¹ the trial court's order affirming a judgment of the Michigan Compensation Appellate Commission (MCAC) finding that Scott is time-barred from challenging the Unemployment Insurance Agency's determinations and redeterminations requiring her to pay restitution and fraud penalties under the Michigan Employment Security Act (MESA), MCL 421.1 et seq. For the reasons discussed in this opinion, we reverse.

I. BACKGROUND

In October 2012, Scott successfully applied for unemployment benefits. Payment of the benefits commenced the week ending November 10, 2012 and ended on March 8, 2014.

Beginning in October 2013, the Agency began using a fraud detection software, Michigan Integrated Data Automated System (MiDAS). “MiDAS searched for discrepancies in the records of individuals who were receiving—or who, in the six years prior to the program's introduction, had received—unemployment insurance benefits.” Cahoo v. SAS Analytics Inc, 912 F.3d 887, 892 (C.A. 6, 2019). When MiDAS detected a discrepancy, “it initiated an automated process to determine whether the individual had engaged in fraudulent behavior,” which included sending the claimant a multiple-choice questionnaire with the questions, “Did you intentionally provide false information to obtain benefits you were not entitle[d] to receive,” and, “Why did you believe you were entitled to benefits?” Id. at 892-893. However, “MiDAS did not allow for a fact-based adjudication or give the claimant the opportunity to present evidence to prove that he or she did not engage in disqualifying conduct.” Id. at 893. And if the claimant answered either question affirmatively or did not respond to the questionnaire, a default determination of fraud was entered. Id.

The Agency claims to have sent the fraud questionnaire to Scott in April 2014.² On May 9, 2014, the Agency generated a series of four notices retroactively finding Scott disqualified from receiving unemployment benefits. For reasons that are not clear, the notices each carry their own case number, even when referring to the same matter. Specifically, in LARA case no. 0-002-333-913, the Agency generated a “Notice of Determination” informing Scott that she was disqualified from benefits because she voluntarily quit her employment on May 30, 2013. In case no. 0-001-824-775, the Agency issued an additional Notice of Determination informing Scott that her actions indicated that she intentionally misled or concealed information to obtain benefits she was not entitled to and that her benefits will be terminated on any claims active on May 25, 2013. The Agency also produced a separate document titled, “Restitution,” listing the amounts of overpayments and penalties that Scott was required to pay for benefits received from June 8, 2013, to March 8, 2014.

In addition to the Notices of Determination, the Agency issued two “Notice[s] of Redetermination.” In case no. 0-002-333-915, the Notice of Redetermination found that Scott was ineligible for benefits collected from November 04, 2012 through June 01, 2013, because she was working full-time during that time period. The second Notice of Redetermination, issued in case no. 0-002-333-916, asserted that Scott's actions indicated that she intentionally misled or concealed information to obtain benefits she was not entitled to and that her benefits will be terminated on any claims active on November 03, 2012. The Agency also produced a statement of restitution owed, totaling the amounts of overpayments and penalties assessed for November 10, 2012, through June 1, 2013.

Each notice informed Scott of how to protest a determination and how to appeal a redetermination. She claims, however, that she did not receive any of the May 9, 2014 notices.

At some point,³ the Agency began intercepting Scott's income tax refunds and garnishing her wages in satisfaction of the outstanding restitution and penalty amounts. In January 2016, Scott requested a financial hardship waiver from the Agency in order to reduce the financial burden imposed by the Agency's efforts to recoup overpayment of benefits and penalties. The Agency denied the request for the reason that overpayments generated by fraud are not subject to waiver.

The automatic fraud determinations issued pursuant to MiDAS have spawned multiple lawsuits by unemployment benefit claimants alleging, in part, inadequate predeprivation notice. See Bauserman v. Unemployment Ins. Agency, 330 Mich.App. 545, 950 N.W.2d 446 (2019); Cahoo, 912 F.3d 887; Zynda v. Arwood, 175 F.Supp. 3d 791 (E.D. Mich, 2016). According to the Agency, as part of the settlement in Zynda, it voluntarily reviewed misrepresentation determinations made between 2013 and 2015 and issued certain notices upon completion of the review. In June 2107, the Agency issued notices to Scott summarily concluding that after review of her case “there was no basis to reconsider the primary case associated with the intentional misrepresentation (re)determination.”

On Scott's behalf, in March 2018 the University of Michigan Law School's Unemployment Insurance Clinic filed a protest of the 2014 determinations and redeterminations with the Agency. This protest included a request to reopen Scott's cases. The Agency denied the request, concluding that it was time-barred because it had not been filed within one year of the mailing of the May 9, 2014 notices. See MCL 421.32a(2), as amended by 2011 PA 269. Scott then filed an appeal of the Agency's decision and requested an administrative hearing.

Scott testified before the Administrative Law Judge (ALJ) and denied receiving the determinations and redeterminations that bore the mail date of May 9, 2014, and her address. She explained that it was not until she called the Agency in 2016 that she became aware of the fraud allegations against her.

Laura Glynn, a claims examiner with the Agency, testified that Scott elected to receive any correspondence from the Agency via mail and that the address on the May 9, 2014 notices was the address that Scott provided. Glynn stated that this was the address to which the notices would have been sent. Glynn further testified that she had reviewed the Agency's file in this matter and found no evidence that the notices were ever returned to the Agency as undeliverable. Glynn also testified, however, that she had no personal knowledge whether or not the notices were mailed and that Scott's file contained no proofs of service or other record of mailing for any of the notices.

The ALJ affirmed the Agency's denial to reopen Scott's case because the ALJ found that Scott did not establish a timely protest or good cause for her late protest of the 2014 determinations and redeterminations. The MCAC then affirmed the decision of the ALJ, and Scott filed a timely appellate challenge in the circuit court. In an opinion and order, the trial court rejected Scott's challenges to the rulings of ALJ and the MCAC and dismissed her appeal. Scott now appeals in this Court. The Michigan League for Public Policy filed an amicus brief in support of Scott's positions on appeal.⁴

II. INVALID “REDETERMINATIONS”

After Scott's appeal to this Court, the Michigan Supreme Court decided Dep't of Licensing and Regulatory Affairs/Unemployment Ins. Agency v. Lucente, ––– Mich. ––––, ––– N.W.2d ––––, 2021 WL 3236344 (2021) (Docket Nos. 160843 and 160844). The underlying facts are substantially similar to the instant case. After the claimants-appellants in that case had received unemployment benefits, the Agency sent two “redeterminations” to each claimant. “One of the notices described the appellant's new employment and explained that it made the appellant ineligible to receive the already-paid benefits. The other notice alleged that the appellant had intentionally concealed their new employment from the Agency (on the basis of the answers provided while certifying).” Id. at ––––, ––– N.W.2d ––––, slip op. at 11. “The Agency also mailed each appellant a separate document that stated the appellants’ repayment obligations: restitution for the overpayment and financial penalties for the fraud.” Id. at ––––, ––– N.W.2d ––––, slip op. at 12.

The claimants argued that if the notices sent by the Agency were in fact “redeterminations” of the earlier benefit determinations, they were untimely under MCL 421.32a(2).⁵ The Supreme Court determined that MCL 421.62 authorizes the Agency “to make original determinations imposing restitution for an overpayment or penalties for fraud” that are not subject to the time requirements of MCL 421.32a. Id. at ––––, ––– N.W.2d ––––, slip op. at 18. However, the Agency must begin with a “determination” rather than a “redetermination” when it “seeks to established that a claimant received a ‘benefit to which [the claimant] is not entitled’ and imposes restitution pursuant to MCL 421.62(a).” Id. at ––––, ––– N.W.2d ––––, slip op. at 26. The Court then held that the Agency's failure to begin with “determinations” was grounds for setting aside the “redeterminations,” considering the different protest and appeal processes for determinations and redeterminations. See id. at ––––, ––– N.W.2d ––––, slip op. at 26-30. Accordingly, the Court invalidated the “redetermination[s] finding fraud and imposing associated fines and penalties.” Id. at ––––, ––– N.W.2d ––––, slip op. at 3.

Following the Supreme Court's decision, we ordered the parties to file supplemental briefs addressing the effect of that decision on this case.⁶ Having reviewed the supplemental briefs, we now conclude that Lucente requires invalidation of the “redeterminations” issued to Scott.⁷

As in Lucente, there were two redeterminations issued in this case: one explaining that Scott was ineligible for already-received benefits because she was not unemployed during the relevant time period, and one asserting that Scott had intentionally misrepresented or concealed information, i.e., that she had committed fraud. No original “determination” was issued with respect to this fraud determination. Because the Agency was required to “issue an original determination alleging fraud,” its “failure to do so is grounds for invalidating the ‘redeterminations’ in this case.” Id. at ––––, ––– N.W.2d ––––, slip op. at 31.⁸ Accordingly, the “redeterminations” issued to Scott in case nos. 0-002-333-915 and 0-002-333-916 and the associated fines and penalties are invalid. See id. at ––––, ––– N.W.2d ––––, slip op. at 3.

III. THE REMAINING “DETERMINATIONS”

While the Agency improperly issued “redeterminations” regarding its decision that Scott was not unemployed, it correctly issued original “determinations” in connection with its decision that Scott committed fraud by claiming benefits after voluntary quitting her job. Thus, Lucente does not resolve Scott's entire appeal, and we turn to her arguments for why she is not time-barred from challenging the determinations.

Scott contends that her opportunity to appeal the Agency's determinations was tolled because the administrative record is devoid of any evidence that the Agency mailed the May 9, 2014 determinations to her or that she ever received copies of those determinations. We agree.

MCL 421.62(c) provides that “[a]ny determination made by the unemployment agency under this section is final unless an application for a redetermination is filed in accordance with section 32a.” Under section 32a, an interested party has 30 days “after the mailing or personal service of a notice of determination” to file a request for a redetermination. MCL 421.32a(1), as amended by 2011 PA 269.⁹

In McBride v. Americana Mobile Home Park, Inc., 173 Mich.App. 275, 282, 433 N.W.2d 336 (1988),¹⁰ we held that there must be “some proof reflecting the fact that” an individual “was personally served with or sent a copy of the determination” as required by MCL 421.32a(1):

We believe that in order to reflect compliance with the statutory mandate relative to notice, the [Agency] file should contain some proof reflecting the fact that respondent was personally served with or sent a copy of the determination. [In the absence of such evidence, w]e are simply unable to conclude that there was compliance with the notice provisions of the statute ․ [Id.]

Accordingly, in McBride, we remanded to allow the employer 30 days to file an application for review of the determination on the merits when there was no evidence contradicting the employer's testimony that he did not receive a copy of the determination. Id. at 281-283, 433 N.W.2d 336.

We have also held, in a case concerning whether the claimant received unemployment benefits during a period of ineligibility, that the burden of proof lies with the Agency. Lawrence v. Mich. Unemployment Ins. Agency, 320 Mich.App. 422, 439-440, 906 N.W.2d 482 (2017). We reasoned that “[r]equiring [the claimant] to prove that she never received [unemployment benefit] payments would be requiring her to prove a negative—a near impossibility.” Id. at 440, 906 N.W.2d 482. Rather, it is the “party who has rendered payment that possesses the particularized knowledge and control of information necessary to prove that it undertook the affirmative action of issuing payments.” Id.¹¹ We conclude that this reasoning applies with equal force to the mailing of Agency determinations.

Turning to this case, we agree with Scott that the Agency failed to affirmatively establish that the determinations were ever mailed to her. The Agency's representative, Laura Glynn, testified that she reviewed the Agency's file and found no proofs of service or mailing for the May 9, 2014 determinations. Nor was there written or first-hand oral testimony that the determinations were in fact mailed. Glynn could not testify if the determinations were actually sent because she did not have personal knowledge on that matter; the ALJ also noted that he knew that Glynn was not the person who would have mailed the notices. And no computer records were admitted indicating that the determinations were sent. Glynn did testify that her review of Scott's record revealed no evidence that the May 9, 2014 determinations had been returned to the Agency as undeliverable. But the lack of returned mail in Scott's Agency file cannot support a reasonable inference that the determinations were received by Scott in the absence of affirmative evidence that the notices were mailed in the first instance.¹²

Given the lack of affirmative evidence, the Agency essentially asks us to conclude that the determinations were sent pursuant to their practices and policies. However, even putting McBride aside, the Agency's track record regarding fraud adjudications made during this time strongly counsels against that conclusion. MiDAS “was deeply flawed; the Michigan Auditor General reviewed over 22,000 of MiDAS’ fraud determinations and found that 93% of them did not actually involve fraud. In other words, 93% of MiDAS’ fraud adjudications were false-positives.” Cahoo, 912 F.3d at 894. On top of this, the Auditor General found that numerous administrative practices of the Agency were deficient, including that the Agency did not process undeliverable mail in accordance with its written policy. During 2014, the Agency received about 451,000 undeliverable pieces of returned mail. Of 50 randomly selected returned mail items, the Auditor found that the Agency's mailroom personnel inappropriately discarded 28% of the items without processing them as required by the Agency's policy.¹³ Thus, we are not inclined to rely on the Agency's practices and policies as proof that the determinations were sent.

The Agency also relies on the ALJ's finding that Scott's testimony that she never received the May 9, 2014 notices was not credible. Scott consistently testified that she did not receive the notices, but as to other matters, e.g., when she learned of the fraud allegations against her, she provided somewhat inconsistent and vague testimony. On this basis, the ALJ found her testimony, as a whole, not credible. The Agency is correct that we generally refer to administrative findings based on credibility determinations. Dep't of Community Health v. Risch, 274 Mich.App. 365, 372, 733 N.W.2d 403 (2007). The Agency provides no authority, however, for the proposition that an adverse credibility determination may be used as competent affirmative evidence of a fact otherwise denied. As discussed, the Agency has the burden of proof to establish that the determinations were mailed. See Lawrence, 320 Mich.App. at 439-440, 906 N.W.2d 482; McBride, 173 Mich.App. at 282, 433 N.W.2d 336. Because there is no affirmative evidence in the record to support a finding of fact that the Agency sent the notices,¹⁴ the trial court misapplied the substantial-evidence test to the ALJ's findings that Scott received the 2014 determinations.¹⁵

We therefore reverse the trial court's order affirming the ALJ's and the MCAC's decisions and remand for further proceedings. Under McBride, the 30-day appeal period for Scott to contest the Agency's determinations in case nos. 0-002-333-913 and 0-001-824-775 will not set to run until the issuance of this opinion.¹⁶

Reversed and remanded for further proceedings consistent with this opinion. We do not retain jurisdiction.

For the reasons set forth below, I respectfully concur in part and dissent in part.

I concur with the majority in LARA Cases ¹ 915 and 916. Since LARA issued a redetermination before issuing a determination in those matters, under Dep't of Licensing and Regulatory Affairs/Unemployment Ins. Agency v. Lucente, ––– Mich. ––––, ––– N.W.2d ––––, 2021 WL 3236344 (2021) (Docket Nos. 160843 and 160844), reversal of the $39,620 judgment against Claimant Lillian A. Scott is appropriate.

I dissent from the majority in LARA Cases 913 and 775. I would affirm this portion of the circuit court decision because the Agency complied with the requirements of Michigan law and properly assessed the financial penalties at issue in those cases and correctly entered judgment in the amount of $50,060.

I. FACTUAL AND PROCEDURAL BACKGROUND

In this matter, Scott had four separate case numbers from LARA that were the subject of her administrative hearing, the decision of which she appealed to the Michigan Compensation Appellate Commission (MCAC), then its decision to the circuit court, and its decision she now appeals.

Scott previously worked for Enterprise Synergy, LLC. After her employment ended with the company, she received unemployment benefits before May 2014. On February 10, 2014, Scott's previous employer sent a 4-page document to the Agency advising in detail that Scott voluntarily left her employment with the company in May 2013.

On April 24, 2014, LARA sent a letter addressed to Scott at her 856 Ogden address titled “Request for Information Relative to Possible Ineligibility or Disqualification.” The letter advised:

A question of eligibility and/or qualification has been raised on this claim. Please respond to the questions on the reverse side of this form. You should keep a copy for your records. The completed form must be received by UIA within 10 calendar days of the mail date shown. Failure to respond to this request for information will result in issuance of a determination based on available information. [Emphasis in original.]

The letter went on to explain possible sanctions including fines and costs. There is no indication of a response from her.

On April 24, 2014, LARA also generated a similarly titled document which contained other questions regarding information she provided and asked whether she had voluntarily left employment because of “quit/personal reasons.” There is no indication of a response from her.

On April 24, 2014, LARA also generated a letter to Enterprise Synergy, LLC titled “Request for Information Relative to Possible Ineligibility or Disqualification.” On April 25, 2014, Synergy responded to the Agency by filling out the form it received. After more than 10 days elapsed, on May 9, 2014, LARA issued a Notice of Determination in Cases 913 and 775 and Notices of Redetermination in Cases 915 and 916. On May 9, 2014, LARA also issued letters to Scott to her home address listing the unemployment benefits overpayments made in relation to her claims and identifying the amount Scott owed plus penalties to be paid in restitution.

Scott testified during the ALJ hearing, “Well, this is been going on since 2014 when I contacted Legal Aid,” and that she engaged legal counsel to assist her in her dispute with the Agency and worked with him through 2016 regarding approximately $80,000 to $100,000 that the Agency said she owed and because the Agency garnished Scott's wages and intercepted her federal income tax refunds. Scott testified that she had numerous phone conversations with Agency representatives during 2015 and 2016, and otherwise contested the actions it had taken.

Eventually, an administrative hearing was conducted on August 2, 2018, presided over by an administrative law judge. The ALJ's opinions in all four cases included among others the following findings of fact:

The claimant's address at the time of filing was 856 Ogden Ave Benton Harbor, MI 49022-5135. She has maintained the same address through the time of hearing.

On May 9, 2014, multiple Agency Determinations/Redeterminations were mailed to the claimant at 856 Ogden Ave Benton Harbor, MI 49022-5135 that held the claimant disqualified for benefits under Section 29(1)(a) of the Act [18-008614], ineligible for benefits under Section 48 of the Act [18-008763], and that the claimant committed fraud [18-008735 and 18-009016]. Attached Restitution and fraud penalties totaled $89,680.00

The ALJ's opinion's Reasoning and Conclusions Of Law in relevant part stated:

I did not find the claimants testimony credible. The claimant rarely answered the actual question posed to her regardless of who posed it. The claimant's testimony was all over the board as to what she received in the mail from the Agency, what she didn't receive from the Agency, and what she might have received in the mail from the Agency․

While I understand there is no proof of service on the May 9, 2014 Determinations, I did not find the claimant's testimony credible that she did not receive them. Further, I did not find the claimant's testimony credible that she was unaware of any issue with her 2012 and 2013 claims for benefits until the end of 2015․

Scott appealed the ALJ's decision to the MCAC which affirmed the ALJ's decision, and then she appealed that decision to the circuit court. On June 11, 2019, the circuit court affirmed the decisions of the ALJ and MCAC. From the circuit court's decision, Scott has appealed by leave granted.²

II. STANDARDS OF REVIEW

We review de novo the circuit court's application of legal principles in reviewing an administrative decision, including matters of statutory interpretation. Mericka v. Dep't of Community Health, 283 Mich.App. 29, 36, 770 N.W.2d 24 (2009). We review the circuit “court's review of an administrative decision to determine whether the lower court applied correct legal principles and whether it misapprehended or misapplied the substantial evidence test to the agency's factual findings, which is essentially a clear-error standard of review.” Braska v. Challenge Mfg Co., 307 Mich.App. 340, 351-352, 861 N.W.2d 289 (2014) (quotation marks and citation omitted). “A finding is clearly erroneous where, after reviewing the record, this Court is left with the definite and firm conviction that a mistake has been made.” VanZandt v. State Employees' Retirement Sys., 266 Mich.App. 579, 585, 701 N.W.2d 214 (2005).

When an ALJ serves as the trier of fact in an administrative proceeding, it is the ALJ who “heard testimony ․, reviewed all the evidence in the record and made findings of fact based on the credibility of witnesses and weight of the evidence.” Hodge v. US Security Assoc., Inc., 497 Mich. 189, 195, 859 N.W.2d 683 (2015). The ALJ's role requires that it, and not a circuit court on review, make determinations of credibility and resolve evidentiary conflicts. Id. at 194-195, 859 N.W.2d 683. The circuit court “must affirm a decision of the ALJ and the MCAC ․ if competent, material, and substantial evidence supports it. A reviewing court is not at liberty to substitute its own judgment for a decision of the MCAC that is supported with substantial evidence.” Id. at 194, 859 N.W.2d 683. “Substantial evidence is that which a reasonable mind would accept as adequate to support a decision, being more than a mere scintilla, but less than a preponderance of the evidence.” VanZandt, 266 Mich.App. at 584, 701 N.W.2d 214 (quotation marks and citation omitted). Although the MCAC's factual findings are entitled to great deference, they are only conclusive if “any competent evidence” supports those findings. Brackett v. Focus Hope, Inc., 482 Mich. 269, 275, 753 N.W.2d 207 (2008). “Evidence is competent, material, and substantial if a reasoning mind would accept it as sufficient to support a conclusion.” City of Romulus v. Mich. Dep't of Environmental Quality, 260 Mich.App. 54, 63, 678 N.W.2d 444 (2003). Under the clear error standard, this Court will affirm if the lower court's determination “is plausible in light of the record viewed in its entirety.” Beason v. Beason, 435 Mich. 791, 803, 460 N.W.2d 207 (1990).

III. ANALYSIS

The Legislature intended that the Michigan Employment Security Act (MESA), MCL 421.1 et seq., be “for the benefit of persons unemployed through no fault of their own ․ for the public good, and the general welfare of the people of this state.” MCL 421.2(1). Courts should interpret MESA and its provisions liberally to give effect to this remedial legislation. Laya v. Cebar Constr. Co., 101 Mich.App. 26, 34, 300 N.W.2d 439 (1980). A decision that benefits are owed to an individual, or that an individual is disqualified from receiving benefits, is called a determination. MCL 421.27(a)(1). If a claimant disagrees with a determination, a person may request a redetermination. MCL 421.32a(1). A redetermination request must be made within 30 days after the mailing of the determination notice. Id.

In its decision, the ALJ considered the testimony adduced during the hearing and the admissible documentary evidence submitted for its review. The ALJ performed its function as the trier of fact and ultimately determined that Scott lacked credibility regarding her assertion that she had not received the notices mailed to her home address on May 9, 2014, respecting LARA Cases 913 and 775, and her claim that she lacked awareness of any issue with her 2012 and 2013 claims for benefits until 2015 or perhaps 2016. The MCAC reviewed the ALJ's decision as well as all of the documentary evidence and testimony and concluded that the ALJ had correctly ruled. The circuit court found that a preponderance of the evidence supported the ALJ's and MCAC's decisions. This Court is not to substitute its judgment for that of the circuit court because it believed the evidence warranted a different result. VanZandt, 266 Mich.App. at 584, 701 N.W.2d 214.

The record indicates that Scott admitted in her testimony that she received numerous mailings by the Agency. The lack of returned mail in Scott's Agency file permits a reasonable inference that the May 9, 2014 determination letters and the restitution letters regarding her claims were received by Scott. Although Scott asserted that she never received the determinations and only learned of the fraud and misrepresentation issue until sometime in or after 2016, Scott's testimony that she engaged legal counsel in 2014 permits a reasonable inference that the determination notices and restitution letters were mailed to her and received by her informing her that she had been disqualified from receiving unemployment benefits and had to repay the overpayments. The fact that she engaged legal counsel already in 2014 calls into question her contention that she knew nothing until her wages were garnished and her income tax refunds were intercepted.

The fact that Scott consistently testified that she did not receive the notices does not vitiate the deference that this Court must give to administrative findings based on credibility determinations. Dep't of Community Health v. Risch, 274 Mich.App. 365, 372, 733 N.W.2d 403 (2007). I disagree with the majority's conclusion that there is no affirmative evidence in the record to support a finding of fact that the Agency sent the notices. Notably, the record lacks evidence of any disruption of the mail service to Scott. She testified she received numerous documents from the Agency over the years. In fact, the only delivery issue Scott raises is in reference to the documents sent on May 9, 2014. Laura Glynn, the Agency's representative at the hearing, testified that all written communications were sent to Scott's mailing address and that no notices were returned as undeliverable. She explained that, if the mailings had been returned, they would have been in Scott's claim files. Although she acknowledged that no proofs of service were in the claims files, the record does not reflect that the Agency had a policy, rule, or regulation that required it to file proofs of service. Further, no statutory requirement appears to exist requiring the filing of proof of service documentation for mailings to claimants.³ The record reflects that the Agency mailed numerous documents to Scott related to her claims and had copies in Scott's claims files of the documents sent on May 9, 2014, in the ordinary course of the Agency's business.

I conclude from the record that the circuit court did not misapply the substantial evidence test to the ALJ's factual findings that Scott received the 2014 determinations. Accordingly, I would affirm the circuit court's affirmance of the ALJ's and MCAC's decisions respecting LARA Cases 913 and 775.

FOOTNOTES

1.   Scott v Enterprise Synergy LLC, unpublished order of the Court of Appeals, entered February 11, 2020 (Docket No. 350690).

2.   Scott was not asked at the administrative hearing whether she received the fraud questionnaire.

3.   Scott believed that her tax refunds were intercepted in 2014 and 2015. She estimated that the garnishments began in late 2015 or early 2016.

4.   A circuit court conducting a direct review of an administrative decision must decide whether the action was authorized by law and whether the decision was supported by competent, material, and substantial evidence on the record. Const. 1963, art. 6, § 28; Motycka v. General Motors Corp., 257 Mich.App. 578, 580-581, 669 N.W.2d 292 (2003). “This Court reviews a lower court's review of an administrative decision to determine whether the lower court applied correct legal principles and whether it misapprehended or misapplied the substantial evidence test to the agency's factual findings, which is essentially a clearly erroneous standard of review.” Vanzandt v. State Employees' Retirement Sys., 266 Mich.App. 579, 585, 701 N.W.2d 214 (2005). “Substantial evidence is evidence that reasonable persons would accept as sufficient proof to support a decision.” Motycka, 257 Mich.App. at 581, 669 N.W.2d 292. “The circuit court's legal conclusions are reviewed de novo and its findings of fact are reviewed for clear error.” Mericka v. Dep't of Community Health, 283 Mich.App. 29, 36, 770 N.W.2d 24 (2009).

5.   Scott similarly argues on appeal that under MCL 421.32a(2), the Agency had 30 days or one year with good cause to make any redeterminations concerning her eligibility for unemployment benefits. However, as explained in Lucente, the Agency was acting pursuant to the authority conferred by MCL 421.62 and therefore was not constrained by the time limits in MCL 421.32a(2).

6.   Scott v Enterprise Synergy LLC, unpublished order of the Court of Appeals, entered August 23, 2021 (Docket No. 350690).

7.   Scott raised this issue before the ALJ, arguing that “there needs to have been a determination before there was redetermination,” and the ALJ deemed that it, among other arguments, was “without merit.” Although Scott did not raise this issue on appeal, we have discretion to address an issue “if the failure to consider the issue would result in manifest injustice, if consideration is necessary for a proper determination of the case, or if the issue involves a question of law and the facts necessary for its resolution have been presented.” Smith v. Foerster-Bolser Constr, Inc., 269 Mich.App. 424, 427, 711 N.W.2d 421 (2006) (citation omitted). And certainly, the Supreme Court's decision in Lucente must guide our review.

8.   A showing of discernable prejudice suffered by the claimant is not required. See Scott, ––– Mich at ––––; slip op. at 29. For the reasons discussed by the Supreme Court, a ruling to the contrary would effectively allow the Agency to “always begin at the ‘redetermination’ step, without consequence.” Id.

9.   MCL 421.32a has been revised by 2017 PA 232, effective July 1, 2018, to allow an aggrieved claimant to request a redetermination of an Agency finding of fraud “within 3 years after the date of mailing or personal service of the original determination.” MCL 421.32a(2). Additionally, MCL 421.32a, as revised, now requires the Agency to provide notice of a fraud determination to an interested party by mailing the notice to the “interested party's address of record” as well as to the most recent address of the interested party as ascertained from the department of state, the department of the treasury and the United States Postal Service. MCL 421.32a(5). The trial court found that the revised version of MCL 421.32a had no retroactive application in this matter. The court noted, however, that even if the revised version of the statute applied in this matter, the evidence still established that Scott's redetermination request was time-barred as it was filed 10 months after the expiration of the 3-year limitation period.

10.   Opinions from this Court issued before November 1, 1990, are not binding upon this Court but may be considered for their persuasive value. Jackson v. Dir. of Dep't of Corrections, 329 Mich.App. 422, 429 n.5, 942 N.W.2d 635 (2019).

11.   In that case, the Agency failed to offer any evidence that the claimant received benefit payments during a period of ineligibility such as “a cancelled check, a check stub, a notice of electronic funds transfer, or a bank statement.” Lawrence, 320 Mich.App. at 439, 906 N.W.2d 482.

12.   The partial dissent asserts that Scott testified that she engaged legal counsel in 2014 to assist in her dispute with the Agency and reasons that this support the inference that she received the May 9, 2014 notices. When asked when she first contacted an attorney, Scott answered, “I'm not sure. I think it was around in 2016.” After additional questioning about the two different attorneys that have represented her with respect to this dispute, Scott agreed with the Agency's attorney that she had counsel beginning in 2016. At one point, however, Scott testified that “this [has] been going since 2014 when I contacted Legal Aid.” Regardless, the point is that Scott's testimony indicates that she obtained counsel in response to the Agency either garnishing her wages or intercepting her tax refunds. Accordingly, even if Scott obtained counsel in 2014, this is weak circumstantial evidence that she did so in response to receiving the May 9, 2014 notices.

13.   See Performance Audit Report, Office of the Auditor General (accessed February 25, 2022). “This Court may take judicial notice of a public record.” Burton-Harris v. Wayne Co. Clerk, ––– Mich.App. ––––, ––––, ––– N.W.2d ––––, 2021 WL 1845800 (2021) (Docket No. 353999), slip op. at 3 n.3.

14.   The partial dissent opines that we are creating a requirement that the Agency “must file proofs of service.” We are not certain precisely what the dissent believes must be filed and where. Our holding is that the Agency needs to be prepared to present affirmative proof of mailing in the event receipt is contested. Such proof may be offered through internal records of mailing or testimony from someone with knowledge of the mailing and is fully consistent with the holding in McBride.

15.   We are particularly hesitant to conclude that the Agency's lack of affirmative evidence of mailing should be overlooked in light of the Supreme Court's decision in Lucente, which made clear that even the most technical requirements imposed on the Agency will be strictly enforced. The substantial civil (and possible criminal) penalties that accompany fraud determinations, see MCL 421.54, also support requiring affirmative proof of mailing.

16.   Given our ruling that the Agency was obligated to offer affirmative evidence that the determinations were mailed and failed to do so, we need not address Scott's alternative argument that the content of the determinations did not provide adequate notice and so denied her due process. We also need not address Scott's argument that there is good cause to reopen her case and allow a late appeal. See MCL 421.32a(2); MI ADC R 421.270(1).

1.   For ease of reference, the cases will be referred to by the last three numbers of the LARA case numbers hereinafter, i.e., 913, 775, 915 and 916.

2.   Lillian A. Scott v Enterprise Synergy LLC, order of the Court of Appeals entered February 11, 2020 (Docket No. 350690).

3.   The majority's opinion intimates that the Agency must establish procedures that will enable it to establish unequivocally that a determination has been mailed and received by a claimant, such as file proofs of service or by having a person appear and testify to personal knowledge in every instance that such determination was deposited in the mail. In essence, the majority imposes a heightened burden on the Agency and establishes an evidentiary standard that restrains ALJs and the MCAC from considering and being able to rely upon record evidence such as in this case from which a reasonable inference may be drawn that the Agency actually mailed the claimant determinations. Had the Legislature deemed what the majority describes a necessary requirement, surely it would have directed that the Agency do so in the MESC in relation to the statutory notice mandate.

Shapiro, P.J.