Division of Employment and Training, Petitioner,
v.
Industrial Commission of
the State of Colorado, and
Clifford Chacon, Respondents
No. 84CA1402
706 P.2d 433
Colorado
Court of Appeals
Div. I.
August 8, 1985
Duane Woodard, Attorney General, Charles B. Howe, Chief
Deputy Attorney General, Richard H. Forman, Solicitor General,
Christa D. Taylor, Assistant Attorney General, Denver, Colorado,
Attorneys for Petitioner.
Duane Woodard, Attorney General, Charles B. Howe, Chief Deputy
Attorney General, Richard H. Forman, Solicitor General, James R.
Riley, Jr., Assistant Attorney General, Denver, Colorado, Attorneys
for Respondent Industrial Commission.
No appearance for Respondent Clifford Chacon.
PIERCE, Judge.
The Division of Employment and Training (Division) seeks review
of a final order of the Industrial Commission determining that the
Division may not impose penalties upon a claimant under the
circumstances of this case. The Division also seeks review of the
Commission's determination that the Division could collect the
unemployment compensation overpayment in this case only by
offsetting future benefits. We set aside the order and remand for
further proceedings.
The factual background is undisputed. Clifford Chacon (claimant)
made a claim for unemployment compensation benefits on December 13,
1982 after his employment had been terminated. While receiving
unemployment benefits he failed to report 18.46 hours of employment.
He testified that he filled out the unemployment compensation form
on a Thursday and mailed it on the following Sunday. During the
intervening period claimant worked on a temporary basis for his
former employer. When the overpayment was discovered the Division
assessed claimant the amount of the overpayment of unemployment
benefits, a monetary penalty, and disqualified him from receiving
future benefits for four weeks.
Claimant sought review of this order on the grounds that the four
week disqualification was "too harsh." The Industrial Commission
disallowed the penalties and limited the Division's collection of
the overpayment.
I.
The Division first contends that the Commission erred in
determining that the Division must prove a claimant's specific
intent in order to assess penalties. The Division's position is that
it need only establish the fact of a false representation or failure
to disclose a material fact. We do not agree with this contention.
The applicable statutory provisions then in effect, currently
codified in § 8-81-101(4)(a)(II), C.R.S. (1984 Cum. Supp.), allowed
for imposition of penalties upon any person who received benefits to
which he was not entitled. It did not contain an explicit statement
of the culpable mental state required for imposition of these
penalties. In such instances of legislative silence, the requisite
mental state may be implied from the statute. People v. Moore,
674 P.2d 354 (Colo. 1984).
The Division's contention that intent need not be established is
contrary to the holding in Industrial Commission v. Emerson
Western Co., 149 Colo. 529, 369 P.2d 791 (1962), which
established that in order for the Division to impose penalties upon
an employer, pursuant to similar statutory provisions, the
employer's intent to falsify must be shown. Further, the use of the
word "willful" in the statute indicates that a failure to disclose a
material fact must be accompanied by a culpable mental state.
Section 18-1-501, C.R.S. (1978 Repl. Vol. 8).
Equally erroneous is the Commission's contention that the
requisite culpable mental state is one of "specific intent." This is
the highest degree of mental culpability, and proof thereof is
normally necessitated only when a statute requires that the
proscribed conduct be performed "intentionally" or "with intent."
Unlike § 8-81-101(1)(a), C.R.S. (1984 Cum. Supp.) which provides for
criminal sanctions where the proscribed conduct is made "with intent
to defraud," no indication exists in § 8-81-101(4)(a)(II) that the
legislature intended that administrative penalties be imposed only
upon proof of the claimant's specific intent.
Receiving benefits by reason of "false representation or willful
failure to disclose a material fact," may be analogized to making a
"false representation." The case law interpreting the making of a
"false representation" requires that the representation be made
knowing it to be false or with an awareness that the maker did not
know whether it was true or false. Sodal v. French, 35 Colo.
App. 16, 531 P.2d 972 (1974), aff'd sub nom. Slack v. Sodal,
190 Colo. 411, 547 P.2d 923 (1976); CJI-Civ 2d 19:1 (1980).
Based on these authorities, the above reasoning, and the
applicable statutory language, we conclude that the culpable mental
state which must be established by the Division pursuant to §
8-81-101(4)(a)(II) is "knowingly." A person acts "knowingly" with
respect to the proscribed conduct "when he is aware that his conduct
is of such nature," and a person acts "knowingly" with respect to a
result of his conduct when he is aware that his conduct is
practically certain to cause the result. Section 18-1-501, C.R.S.
(1978 Repl. Vol. 8).
Although we agree with the Division that the Commission required
proof of an inappropriate culpable mental state, we do not agree
with its further contention that the requisite culpable mental state
may be presumed from proof of the act itself. Where, as here,
proscribed conduct consists of an act combined with a culpable
mental state, the culpable mental state is just as much an element
of the proscribed conduct as is the act. Although a culpable mental
state may ordinarily be inferred from circumstantial evidence, proof
of the commission of the act does not create a presumption that the
requisite mental state existed. People v. Braly, 187 Colo.
324, 532 P.2d 325 (1975); Industrial Commission v. Emerson
Western Co., supra.
II.
The Division also contends that the Commission erred in
determining that the Division could collect the unemployment
compensation overpayment in this case only by offsetting future
benefits because the Division had not made a determination whether
direct repayment would not be inequitable. We agree with the
Division.
The statutory provisions then in effect, Colo. Sess. Laws 1979,
ch. 67, § 8-81-101(4)(a)(I) and (II) at 355, provided that, where a
claimant received benefits to which he was not entitled "other than
by reason of his false representation or willful failure to disclose
a material fact," he was liable to repay the overpayment to the
Division "if such repayment would not be inequitable."
Thus, when the Commission overruled the Division's determination
and concluded that the overpayments were not received through the
fault of the claimant, the Commission should have made a
determination regarding inequitability or remanded the case to the
Division for such a determination. See Schmidt v. Industrial
Commission, 42 Colo. App. 253, 600 P.2d 76 (1979).
The order is set aside and the cause is remanded to the
Industrial Commission for such other proceedings as it may deem
appropriate and entry of an order in accordance with the views
expressed herein.
Judge Van Cise and Judge Sternberg, concur.
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