April 23, 2013 – Robert Narvaez v. New Mexico Department of Workforce Solutions and Southwest Tyre Ltd., No. 32,149 (consolidated with 32,256)

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IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO

Opinion Number:

Filing Date: _April 23, 2013
NO. 32,149 (consolidated with 32,256)

ROBERT NARVAEZ,
Petitioner Appellant,
V.

NEW MEXICO DEPARTMENT OF
WORKFORCE SOLUTIONS, and
SOUTHWEST TYRE LID.,

Respondents-A ppellees.

APPEAL FROM THE DISTRICT COURT OF GRANT COUNTY
Henry R. Quintero, District Judge

New Mexico Legal Aid
Alicia Clark
Albuquerque, NM

for Appellant

New Mexico Department of Workforce Solutions
Office of General Counsel

Marshall J. Ray

Rudolph P. Amold

Albuquerque, NM for Appellees

OPINION
WECHSLER, Judge.
{1} 	The Department of Workforce Solutions (the Department) granted Petitioner
Robert Narvaez unemployment benefits for thirteen months before disqualifying him
from benefits and requiring that he repay the benefits because his misconduct caused
his employment separation. 	We reverse the district court’s order upholding the
Department’s action because the Department did not proceed in accordance with the
Unemployment Compensation Law, NMSA 1978, §§ 51-1-1 to -59 (1982, as amended
through 2012) and the Department’s regulations.
BACKGROUND
{2} 	Petitioner was employed by Respondent Southwest Tyre Ltd. (Employer).
Employer terminated Petitioner and another worker for fighting. Petitioner filed a
claim with the Department for unemployment benefits on May 16, 2010, his last day
of work. 	Employer did not respond to the Department’s request for information
concerning the termination. 	The Department granted benefits for the benefit year
ending May 14, 2011, beginning the week ending May 29, 2010. Petitioner filed a
second claim for benefits for a new benefit year on May 15, 2011. Employer again
did not contest the claim.
{3} 	On June 28, 2011, the Department initiated telephone contact with Petitioner

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and Employer. 	A memorandum concerning the telephone contact with Employer
indicates that the telephone contact was the first time Employer responded to the
Department concerning the reason for Petitioner’s separation from employment.
Employer informed the Department, as did Petitioner at that time and in his original
claim, that Petitioner was fired for fighting with another employee.
{4} 	On the same day, June 28, 2011, the Department sent Petitioner a notice of
claim determination, informing him that he was disqualified from receiving benefits
because of his misconduct for fighting on the job. 	It also sent Petitioner an
overpayment notice, informing him that he was liable to repay the Department for
fifty-eight weeks of benefits in the amount of $27,902.
{5} 	Petitioner filed an administrative appeal. 	An administrative law judge
determined on behalf of the Department’s appeals tribunal that Petitioner was
disqualified from benefits but did not address overpayment. The Department’s board
of review affirmed the decision. 	The district court issued a writ of certiorari, and,
upon review of the administrative proceeding, upheld the decision of the board of
review. It concluded that Petitioner did not appeal the overpayment notice.
{6} 	Petitioner 	filed 	a 	notice 	of 	appeal 	in 	which 	he 	states 	that 	he 	is
contemporaneously filing a petition for writ of certiorari in order to ensure his
appellate rights. Without objection, we consider the appeal. Petitioner argues several

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issues 	relating 	to 	the 	Department’s 	failure 	to 	follow 	the 	time 	lines 	of 	the
Unemployment 	Compensation 	Law 	and 	the 	Department’s 	regulations, 	the
Department’s failure to accept Petitioner’s overpayment appeal, due process, and
estoppel. Because it is dispositive of the case, we address only Petitioner’s argument
concerning the Unemployment Compensation Law and the regulations.
STANDARD OF REVIEW
{7} 	When reviewing an administrative decision regarding unemployment benefits,
“[w]e independently employ a whole record standard of review and will affirm the
agency’s decision only if it is supported by the applicable law and substantial
evidence in the record as a whole.” Miss. Potash, Inc. v. Lemon, 2003-NMCA-014,
¶ 7, 133 N.M. 128, 61 P.3d 837. “The party challenging an agency decision bears the
burden on appeal of showing that agency action falls within one of the oft-mentioned
grounds for reversal including whether the decision is arbitrary and capricious;
whether it is supported by substantial evidence; and whether it represents an abuse of
the agency’s discretion by being outside the scope of the agency’s authority, clear
error, or violative of due process.” 	Id. ¶ 8 (internal quotation marks and citation
omitted). When engaging in whole record review, we review legal questions de novo,
including 	whether 	the 	agency 	misinterpreted 	or 	misapplied 	its 	statutory 	or
administrative governing provisions. 	See AMREP Sw. Inc. v. Sandoval Cnty.

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Assessor, 2012-NMCA-082, ¶ 7, 284 P.3d 1118.
REQUIREMENTS OF THE UNEMPLOYMENT COMPENSATION LAW
AND DEPARTMENT REGULATIONS
{8} 	Under 	the 	Unemployment 	Compensation 	Law, 	persons 	who 	become
unemployed “through no fault of their own” may receive benefits from the
unemployment compensation fund. Sections 51-1-3, 51-1-4(A). They must make a
claim for benefits in accordance with regulations prescribed by the secretary of the
Department. 	Section 51-1-8(A). 	A Department claims examiner must promptly
review the application to make determinations that include a claimant’s eligibility and
disqualification. 	Section 	51-1-8(B). 	A 	person 	is 	disqualified 	under 	the
Unemployment Compensation Law and not eligible to receive benefits if the person
either left employment voluntarily without good cause or was discharged for
misconduct. Section 51-1-7(A)(1), (2).
{9} 	The Unemployment Compensation Law further provides procedure for the
processing and appeal of claims. 	The claims examiner must “promptly notify the
claimant and any other interested party of the determination [of the claim] and the
reasons therefor.” 	Section 51-1-8(B). 	The claimant’s most recent employer is an
interested party. 	Section 51-1-8(C)(1). 	The claimant and interested parties have
fifteen days from the date of the “notification or mailing of the determination” to

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appeal to an appeals tribunal hearing officer. Section 51-1-8(B). If no appeal is filed,
the determination of the claims examiner is final, subject to a redetermination by the
claims 	examiner 	of 	a 	nonmonetary 	determination 	made 	based 	on 	additional
information not previously available within twenty days of the original nonmonetary
determination. 	Id. 	Further appeals are to the secretary and the board of review.
Section 51-1-8(F), (H).
{10} 	The Department’s regulations effective at the time of this case address the
filing, determination, and redetermination of claims. 	11.3.300.301, 308 NMAC
(1/1/03) (amended 11/15/12). The regulations require that, after a claim is filed, the
Department notify the employer, which is then obligated to “provide the [D]epartment
with full and complete information in response to the inquiry.” 	11.3.300.308(A)
NMAC. If the employer does not provide a timely response and the application does
not raise a nonmonetary issue, the Department may immediately commence benefits
without additional notice. 11.3.300.308(C) NMAC. The regulations further provide
that an employer’s failure to provide a “substantive response” within ten days “shall
be an irrevocable waiver of the employer’s right to be heard before a determination
is made[.]” 	11.3.300.308(C)(2) NMAC. 	The Department is then obligated to
“immediately transmit to the parties the determination and the reason for it” and
“advise the parties of the right to appeal.” 11.3.300.308(C)(3) NMAC. However, if

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“a separation issue is timely raised,” the Department must adjudicate the claim before
sending the determination. 	11.3.300.308(C)(4) NMAC. 	The regulations permit a
redetermination of a nonmonetary determination only if specific criteria that we will
later discuss in this opinion are met. 11.3.300.308(D) NMAC.
APPLICATION OF UNEMPLOYMENT COMPENSATION LAW AND
REGULATIONS TO THIS CASE
May 16, 2010 Claim
{11} 	The principal difficulty in this case arises from the Department’s failure to
provide a specified notice of determination with respect to Petitioner’s May 16, 2010
claim. The Department admits that “[a]s a result of an administrative error, a claim
determination was not issued in May 2010.” It states that the “first and only” notice
of claim determination in the administrative record concerning the separation issue is
the one dated June 28, 2011. It appears to argue that, as a result, all time frames set
forth in the regulations run from June 28, 2011.
{12} 	However, upon receiving the May 16, 2010 application, the Department did
transmit to Employer the required notification and request for separation information.
It began providing benefits to Petitioner effective May 29, 2010, the conclusion of the
ten-day period for Employer to respond. 	Although it failed to provide a notice of
claim determination, it did send Petitioner a reemployment services program notice

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dated June 16, 2010 that informed Petitioner that the Department had “determined that
[he is] eligible for unemployment insurance benefits.” An unemployed person is only
entitled to receive benefits if the person participates in reemployment services based
on certain findings by the Department. 	11.3.300.321 NMAC (1/1/03) (amended
11/15/12).
{13} 	The Unemployment Compensation Law and the regulations emphasize the
prompt handling of claims. Section 51-1-8(B) requires the Department to promptly
examine claims and promptly provide notification of a determination and the reasons
for the determination. 	The regulations require the Department to “immediately”
provide such notification. When an employer fails to respond to the Department’s
notice of claim within ten days, a determination shall be made based on the
information in the application. 11.3.300.308(C)(3) NMAC. Only if a separation issue
is “timely raised” may the Department delay such notification of a determination until
after the Department has adjudicated the claim. 11.3.300.308(C)(4) NMAC.
{14} 	As to Petitioner’s claim, Employer did not respond to the notice of claim and
no separation issue had been timely raised. The Department did not request additional
information from Employer, Petitioner, or witnesses. 	See 11.3.300.308(B) NMAC
(“Prior to issuance of a determination . . ., the [D]epartment may request additional
information from the employer, the claimant or witnesses . . . relative to the separation

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of the claimant from employment.”). 	The Department was obligated to make a
determination and provide Petitioner and Employer notice of its determination. 	It
concedes that it failed to “issue” its determination. It does not say that it did not make
the determination. 	Notwithstanding its failure to provide a notice of claim
determination, the Department did inform Petitioner that he was determined to be
eligible for benefits and provided benefits commencing May 29, 2010 continuously
for thirteen months. The Department’s administrative error in failing to follow its
required procedures and issue a claim determination does not negate the circumstances
that indicate that it had made the determination that Petitioner was entitled to benefits.
{15} 	An administrative agency is bound by its own regulations. 	See Atlixco
Coalition v. Cnty. of Bernalillo, 1999-NMCA-088, ¶ 16, 127 N.M. 549, 984 P.2d
796; see also Hillman v. Health & Soc. Servs. Dep’t, 92 N.M. 480, 481, 590 P.2d 179,
180 (Ct. App. 1979). The circumstances of this case demonstrate the rationale for the
requirement of promptness and the time frame of the regulations. If the Department
could fail to follow the time frame for notice, a claim could continue indefinitely
without being resolved. 	By requiring specific action by the Department within a
specific time frame, the regulations avoid the uncertainty that could result from the
lack of prompt action by the Department. An administrative error does not alter the

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failure to follow the regulations that require the Department to act promptly on claims.
It certainly does not extend the time limits of the regulations.
{16} 	This case is different from Millar v. New Mexico Department Of Workforce
Solutions, 2013-NMCA-__, __ P.3d __ (No. 31,581, Jan. 31, 2013). In Millar, the
department did not provide immediate notice that the employer had appealed a claim
determination, and the claimant did not receive notice of the appeal until more than
five months later when the department sent notice of hearing. Id. ¶ 3. The claimant
appealed the department’s overpayment determination. Id. ¶ 4. This Court addressed
the issue of whether the hearing conducted more than five months after the claimant
had been awarded benefits violated state and federal law. Id. ¶ 10. We concluded that
the Unemployment Compensation Law merely incorporated the federal regulation at
issue by reference and that the federal regulation that required hearings to be
commenced and decided “with the greatest promptness that is administratively
feasible” merely established nonmandatory guidelines. 	Id. ¶¶ 13-14 (internal
quotation marks and citation omitted). In this case, to the contrary, we address the
Department’s regulations that provide specific mandatory time frames.
{17} 	The result of the administrative process in this case was that Petitioner’s May
16, 2010 claim was determined in his favor. There was no appeal. While we agree
with the Department that Employer did not waive its right to be heard in an appeal

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because it did not respond to the Department’s notice within ten days, we assume that
the Department also did not transmit notice of its determination to Employer. 	It
thereby 	essentially 	foreclosed 	Employer’s 	opportunity 	to 	be 	heard 	by 	its
administrative error.
Connection of the May 15, 2011 Claim to the May 16, 2010 Claim
{18} 	The Department assigned Petitioner’s May 16, 2010 claim a benefit year ending
May 14, 2011. See § 51-1-42(P) (2007) (amended 2010) (defining “benefit year” in
part as “the one-year period beginning with the first day of the first week of
unemployment with respect to which the individual first files a claim for benefits . .
. and thereafter the one-year period beginning with the first day of the first week of
unemployment with respect to which the individual next files such a claim for benefits
after the termination of the individual’s last preceding benefit year[.]”). On May 15,
2011, Petitioner filed a new claim for the next benefit year.
{19} 	The Department followed its procedures and provided notice of the claim and
a request for separation information to Employer. 	The form in the record titled
“Employer’s Statement” is not completed in any way. It is not clear from the record
that the Department’s form intended to elicit information from Petitioner was sent to
him. Although it reflects that it was sent May 23, 2011, it states “do not send” in three
places on the form in connection with questions concerning Petitioner’s separation

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from employment.
{20} 	On May 25, 2011, the Department provided Petitioner with a notice of claim
determination, informing him that it denied his new claim because he had not returned
to work and earned five times his new weekly benefit amount as required by Section
51-1-5(B). The Department nevertheless determined that it would continue to provide
Petitioner emergency unemployment compensation on his old claim if he was
otherwise eligible.
{21} 	On June 28, 2011, a representative of the Department made telephone calls to
both Petitioner and Employer concerning Petitioner’s separation from employment.
The Department on the same day sent its notice of claim determination, advising
Petitioner that because he was discharged from employment for fighting on the job,
which was misconduct, he was disqualified from benefits effective the calendar week
ending May 22, 2010.
{22} 	Because it disqualified Petitioner from benefits effective the calendar week
ending May 22, 2010, the June 28, 2011 notice of claim determination acted on
Petitioner’s May 16, 2010 claim, not the May 15, 2011 claim. Petitioner does not
argue that the Department erred in its determination of the May 15, 2011 claim, and
we do not address that claim determination in this opinion. The two claims become
intertwined, however, because the Department took action on the May 16, 2010 claim

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only after Petitioner filed the May 15, 2011 claim.
{23} 	But the regulations do not authorize the Department’s June 28, 2011 action in
connection with the May 16, 2010 claim. As we have discussed, the Department had
determined the May 16, 2010 claim and provided benefits. This is not a claim based
on 	false 	statements 	or 	misrepresentations, 	which, 	under 	the 	Unemployment
Compensation 	Law 	and 	the 	regulations, 	are 	void. 	Section 	51-1-38(D);
11.3.300.314(A) NMAC (1/1/03) (amended 11/15/12). 	The law and regulations
permit the Department’s action re-opening Petitioner’s May 16, 2010 claim only upon
redetermination. The criteria for redetermination include:
(1) 	The adjudicator perceives the need for reconsideration
either as a result of a protest by an interested party or on the
adjudicator’s own initiative due to new or additional information
received. 	Examples of the type of errors which may prompt a
redetermination are . . . an additional fact not available to the adjudicator
at the time of the determination excluding those facts the employer and
claimant 	had 	the 	opportunity 	to 	provide 	prior 	to 	the 	initial
determination[.]
. . . .
(4) 	A redetermination can be issued no later than the twentieth
calendar day from the original determination date or twenty days from
the date of the first payment deriving from the original determination,
whichever event occurs latest.
11.3.300.308(D) NMAC.
{24} 	First, we do not consider the information obtained in the June 28, 2011

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telephone calls to be the type of new or additional information contemplated in the
regulations. Information that Petitioner or Employer could have provided prior to the
initial determination is not sufficient. The information the Department received in the
telephone calls was information it could have received in the initial process had
Employer timely responded or if the Department had conducted a timely investigation.
Second, 	a 	redetermination 	was 	not 	timely. 	The 	Department 	may 	issue 	a
redetermination only within the later of twenty calendar days from the original
determination or twenty days from the date of the first payment made under the
original determination. 11.3.300.308(D)(4) NMAC. We do not know the precise date
of the original determination because of the Department’s administrative error in
failing to provide notice of it. The first payment was made on the week ending May
29, 2010. A determination made approximately thirteen months after either triggering
event does not fall within the time limits of the regulations.
CONCLUSION
{25} 	The Department’s regulations provide specific time frames for the Department
to act on claims. They provide a window for the Department to make a determination
about entitlement to benefits. The Department did not act in accordance with the time
frames of its regulations in its determination that Petitioner was not entitled to
benefits. We reverse the decision of the board of review.

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{26} 	IT IS SO ORDERED.
________________________________
JAMES J. WECHSLER, Judge
WE CONCUR:
__________________________________
MICHAEL D. BUSTAMANTE, Judge
__________________________________
M. MONICA ZAMORA, Judge