Luis Padilla, Relator,

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2018).

STATE OF MINNESOTA
IN COURT OF APPEALS
A19-1941

Luis Padilla,
Relator,

vs.

Department of Employment and Economic Development,
Respondent.

Filed July 27, 2020
Affirmed
Johnson, Judge

Department of Employment and Economic Development
File No. 37574611

Luis F. Padilla, Savage, Minnesota (pro se relator)

Anne B. Froelich, Keri A. Phillips, St. Paul, Minnesota (for respondent Department of
Employment and Economic Development)

Considered and decided by Cochran, Presiding Judge; Johnson, Judge; and Bryan,
Judge.
U N P U B L I S H E D O P I N I O N
JOHNSON, Judge
Luis Padilla was terminated from his employment and was offered severance pay.
In his application for unemployment benefits , he stated that he did not expect to receive
severance pay. Shortly thereafter, he signed a written separation agreement that entitled
him to a lump-sum severance payment equal to 14 weeks of his base salary. Meanwhile,

2
he also began receiving unemploym ent benefits. After the issue came to light, an
unemployment-law judge (ULJ) determined that Padilla was ineligible for unemployment
benefits during the 14-week period after his termination and that he improperly received
benefits during that period because he had made a misrepresentation. The ULJ ordered
Padilla to repay 14 weeks of unemployment benefits and to pay a 40-percent penalty. We
conclude that the ULJ did not err by determining that Padilla made a misrepresentation
because he did not have a go od-faith belief as to the correctness of his statement that he
did not expect to receive severance pay. Therefore, we affirm.
FACTS
Padilla was employed by MOM Brands Company, which makes breakfast cereal,
as director of customer development and sales com munication, with a base salary of
$131,500. His employment was terminated on March 1, 2019. On that date, the company
gave him a draft of a written agreement that, if signed, would allow Padilla to receive a
lump-sum payment equal to 14 weeks of base salary in exchange for releasing the company
from liability related to the termination of his employment . Padilla did not immediately
sign the agreement but asked an attorney to review it.
Shortly after his termination, Padilla applied to the department of employment and
economic development for unemployment benefits . Under the heading “Eligibility
Information,” the application asked, “Have you received, or do you expect to receive, any
of the following upon separation from employment: . . . Severance or any other separation
payments?” The application provided three possible answers: “YES,” “NO,” or “NOT

3
SURE.” Padilla answered “NO.” An unemployment-benefit account was established, and
Padilla began receiving a weekly benefit payment of $717.
In late March 2019, Padilla signed the written agreement that his former employer
had given him on the day of his termination. On March 29, 2019, he received a lump-sum
payment of $35,276.
In August 2019, the department reviewed Padilla’s unemployment-benefits account
after receiving information from MOM Brands that it had given him severance pay. During
an investigation , Padilla admitted that he had received severance pay following the
termination of his employment by MOM Brands . On September 3, 2019, the department
determined that Padilla had been ineligible to receive unemployment benefits between
March 3, 2019, and June 1, 2019. Thus, the department determined that he was overpaid
$9,321 in benefits. Separately, the department determined that Padilla had received the
overpayment of benefits due to a misrepresentation because he stated in his application that
he did not expect to receive severance pay and did not disclose the severance pay after he
received it. Thus, the department ordered Padilla to pay an overpayment penalty equal to
40 percent of the overpayment, i.e., $3,728.
Padilla administratively appealed both of the department’s determinations. In
September 2019, a ULJ issued two decisions affirming the determinations. Padilla
requested reconsideration of each decision. The ULJ affirmed its earlier decision with
respect to each determination.
Padilla petitioned this court for a writ of certiorari with respect to both
administrative appeals. We issued the writ but later determined that Padilla did not timely

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serve his petition on his former employer. Thus, we determined that jurisdiction was
lacking with respect to the first administrative appeal, which concerns the overpayment,
but that Padilla could proceed with respect to the second administrative appeal, which
concerns the misrepresentation issue and the penalty.
D E C I S I O N
Padilla argues that the ULJ erred by determining that he received an overpayment
of unemployment benefits due to a misrepresentation.
An applicant for unempl oyment benefits makes a “misrepresentation” if he or she
“is overpaid unemployment benefits by making a false statement or representation without
a good faith belief as to the correctness of the statement or representation.” Minn. Stat.
§ 268.18, subd. 2(a) (20 18). If the department discovers “facts indicatin g
misrepresentation,” the department “must issue a determination of overpayment penalty
assessing a penalty equal to 40 percent of the amount overpaid.” Id. A determination that
an applicant “knowingly and willfully misrepresented or misstated material facts to obtain
benefits” depends on an assessment of the credibility of the applicant’s testimony, a matter
that “lies within the province” of the ULJ. Burnevik v. Dep artment of Econ. Sec. ,
367 N.W.2d 681, 683 (Minn. App. 1985). This court reviews a ULJ’ s findings of fact “in
a light most favorable to the decision, and will not disturb the findings so long as there is
evidence in the record that substantially supports them.” Gonzalez Diaz v. Three Rivers
Cmty. Action, Inc., 917 N.W.2d 813, 815-16 (Minn. App. 2018).
In this case, the ULJ first determined that Padilla received an overpayment. In that
determination, the ULJ found that Padilla falsely represented his severance -pay

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expectations when he answered “NO” to the severance -pay question on the applic ation,
that his receipt of severance pay made him ineligible for unemployment benefits, and that
he would not have received unemployment benefits if he had not falsely represented his
expectations with respect to severance pay. Because Padilla’s appeal of that determination
has been dismissed as untimely, we accept the ULJ’s findings in the first determination as
final and conclusive. Consequently, t he only question to be resolved in this appeal is
whether Padilla ma de the misrepresentation “without a goo d faith belief as to the
correctness of the statement or representation.” See Minn. Stat. § 268.18, subd. 2(a).
In the second determination, which concerned the issue of misrepresentation, the
ULJ found that Padilla’s employer “offered him a severance payment equal to 14 weeks
salary” if Padilla signed a separation agreement. The ULJ found that Padilla asked an
attorney to review the separation agreement and that when Padilla answered the severance-
pay question on the unemployment -benefits application, “he was unsure if he would
receive separation pay because his attorney was still reviewing [the] separation
agreement.” The ULJ found that Padilla later received a severance payment but did not
report the payment to the department. The ULJ found that Padilla disclosed the severance
payment only after the department began auditing his benefits account.
Based on these facts, th e ULJ determined that it was “more likely than not that
Padilla’s application report that he would not receive severance pay was made without a
good faith belief as to the correctness of the response.” The ULJ reasoned that “Padilla
offered no reasonable explanation for reporting that he would not receive severance when
he was actually unsure if he would receive [it] and he had an option to report that he was

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unsure.” The ULJ further reasoned that “Padilla offered no reasonable explanation for
failing to report his severance pay at the time he received it when he knew, or should have
known, that [the department] wanted to know about potential severance pay after he filled
out his application for unemployment benefits.”
The evidence in the agency record supports the ULJ’s findings. Padilla testified that
he received the separation agreement on March 1, 2019, that he signed and returned the
agreement during the third week of March, and that he received the severance payment on
March 29, 2019. He also testified that he applied for unemployment benefits during the
first week of March and explained that he answered “NO” to the severance -pay question
because “I was having the separation agreement reviewed by a lawyer so I wasn’t sure if I
was gonna receive payment or not.” When asked by the ULJ why he did not instead select
“NOT SURE,” Padilla answered, “Yeah, I guess I could have.” This evidence supports the
ULJ’s finding that Padilla “knowingly and willfully misrepresented or misstated material
facts to obtain benefits.” See Burnevik, 367 N.W.2d at 683.
Padilla challenges th e ULJ’s finding that he made a misrepresentation by arguing
that he “was not informed that certain types of separation payments can cause ineligibility
for unemployment benefits until mont hs after applying for and receiving benefit
payments.” He argues further that, as a general matter, “applicants should be advised to
meet in person with a [department -employed] counselor to review” issues such as how
severance pay can affect eligibility.
Padilla provides no legal authority for the proposition that the department had a duty
to inform him of the reasons for the questions on the application and the potential

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consequences of his responses to those questions. We note, however, that the key question
was in a section of the application with the heading “Eligibility Information,” which should
have allowed Padilla to understand that the information sought would be used to determine
his eligibility for benefits. Furthermore, the question used plain language in asking, “Have
you received, or do you expect to receive, any of the following upon separation from
employment: Severance or any other separation payments?” The application provided a
choice among three possible answers: “YES,” “NO,” or “NOT SURE.” The meaning of
each of those potential answers is clear. Even if an applicant does not have a full
understanding of the department’s reasons for asking the question, the applicant should
know how to answer the question truthfully. Padilla was not entitled to any additional
information concerning the consequences of receiving severance payments. With respect
to Padilla’s suggestion that the department should advise applicants to meet with a
department employee for an individualized consultation, we are aware of no legal authority
requiring such action by the agency.
Thus, the ULJ did not err by finding that Padilla did not have a good-faith belief in
the accuracy of his statement that he did not expect to receive severance pay. Therefore,
the ULJ did not err by determining that Padilla made a misrepresentation and that he is
subject to a mandatory penalty.
Affirmed.