Bell-Brook Dairies, Inc. v. Bryant

California Supreme Court May 11, 1950 No. S. F. 17893Published

Before: Gibson

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Holding. The court held that an employer may recover unemployment insurance contributions when the commission fails to provide required notice of benefit applications, as such failure deprives the employer of the opportunity to contest claims or prevent benefit payments.

Issues

Whether an employer followed the proper statutory procedure to recover overpayments of unemployment insurance contributions.
Whether the evidence was sufficient to support the trial court's finding that the commission failed to provide required notices to the employer.
Whether an employer must prove that claimants were ineligible for benefits to recover contributions paid due to the commission's failure to provide notice.

Disposition. affirmed

Quotations verified verbatim against the opinion

“Plaintiff here, in seeking to recover overpayments of contributions and have charges removed from its account, has followed the procedure provided by statute.”

“In our opinion the evidence, while not entirely satisfactory, is sufficient to support the finding that the required notices were not sent to plaintiff.”

“It is clear that plaintiff was prejudiced by the failure of defendant to give the required notice.”

GIBSON, C. J.

Plaintiff brought this action to recover contributions paid under the Unemployment Insurance Act (Stats. 1935, p. 1226; Deering’s Gen. Laws [1937], Act

[406]

8780d) claiming that it was not given notice of the filing of applications for unemployment benefits and that as a result its reserve account was erroneously charged with payments made to certain applicants. Judgment was rendered for plaintiff, and defendant has appealed.

A preliminary question has arisen as to whether plaintiff has chosen the proper remedy. Under section 41.1 of the act an employer may protest any charge made against his reserve account, and if the protest is denied, an action may be brought to recover any overpayment. (Stats. 1941, p. 2535.) This action was brought in conformity with that section as it read in 1944 when the suit was filed, but defendant claims that actions thereunder were restricted to the correction of mathematical errors in the reserve account. Not only is there no such restriction in the section, but it specifically provides that an employer can bring an action “in the event that the determination in any protest proceeding is rendered against the employer.” The case of

Matson Terminals, Inc.

California Emp. Com.,

24 Cal.2d 695 [151 P.2d 202], relied on by defendant, does not support the claim that plaintiff has not followed the proper procedure. There mandate was sought to prevent enforcement of an order awarding benefits to claimants, and, in considering the remedies available to petitioners, it was pointed out that, although section 41.1 affords a means for contesting charges against an employer’s account and recovering overpayments, it is distinct from the remedy provided by section 67 of the act for testing the propriety of benefit payments. (24 Cal.2d at pp. 700-702.) Plaintiff here, in seeking to recover overpayments of contributions and have charges removed from its account, has followed the procedure provided by statute.

It is not disputed that plaintiff was entitled to notice that its former employees had applied for unemployment benefits. (Unemployment Insurance Act, §§ 66, 67, as the sections existed from 1937 to 1939, Stats. 1937, p.

Bell-Brook Dairies, Inc. v. Bryant

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GIBSON, C. J.

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