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Michael Manuel v. Toner Plus

June 13, 2012

MICHAEL MANUEL,
CLAIMANT AND APPELLANT,
v.
TONER PLUS, INC.,
EMPLOYER, AND SOUTH DAKOTA DEPARTMENT OF LABOR, UNEMPLOYMENT INSURANCE DIVISION,
APPELLEE.



APPEAL FROM THE CIRCUIT COURT OF THE SECOND JUDICIAL CIRCUIT MINNEHAHA COUNTY, SOUTH DAKOTA THE HONORABLE WILLIAM J. SRSTKA, JR. Judge

The opinion of the court was delivered by: Severson, Justice

#25851-a-GAS

ARGUED MARCH 19, 2012

[¶1.] Michael Manuel, the sole owner of Toner Plus, Inc., closed his business on May 30, 2009. Manuel then filed a personal claim for unemployment compensation benefits. The South Dakota Department of Labor (Department) determined Manuel was ineligible to receive unemployment compensation benefits because he "voluntarily" dissolved his business and did not have "good cause" for doing so under SDCL 61-6-13 to -13.1. The circuit court affirmed the Department's decision. Manuel appeals. We affirm.

BACKGROUND

[¶2.] Toner Plus was primarily in the business of selling toner and ink cartridges for printers to local businesses. Manuel was the president and sole stockholder of Toner Plus. He was also an employee of the company. Toner Plus made payments to the South Dakota unemployment compensation fund based on Manuel's status as a covered employee.

[¶3.] Manuel decided to close Toner Plus on May 30, 2009. He then filed a claim for unemployment compensation benefits with the Department. After an administrative law judge dismissed his claim in July of 2009, Manuel appealed the decision to the Secretary of Labor (Secretary). The Secretary adopted the administrative law judge's order of dismissal.

[¶4.] Manual appealed the Secretary's decision to the circuit court. The circuit court remanded the case back to the Department for a hearing on the merits, which was held in May of 2010. During this hearing, Manuel testified that he decided to close his business because sales for ink cartridges had declined over the years due to technological advances. He explained that many new products such as printers, fax machines, and copiers are connected to the internet when they are installed. When the machine is low on ink or toner, a notification is sent to the supplier. The supplier then automatically sends replacement ink or toner. Manuel testified that this technological advancement made it difficult for Toner Plus to compete with national suppliers and caused the company's profits to steadily decline.

[¶5.] Manuel testified that the company doubled its advertising in an attempt to generate new business. Steps were also taken to reduce expenses. In 2007, Manuel put $35,000 into the business. Despite these efforts, Toner Plus continued to struggle financially. Manuel considered other means of generating profit. For example, he considered opening a center to service machines. However, after considering the costs associated with opening a service center and training new technicians, Manuel determined this was not a feasible option. He ultimately decided to close Toner Plus to avoid incurring further losses.

[¶6.] In his findings of fact, the administrative law judge acknowledged that Manuel decided to close Toner Plus because of "industry trends," but ultimately found that Manuel was ineligible to receive unemployment compensation benefits. In making this finding, the administrative law judge noted that unemployed individuals who are otherwise eligible for unemployment compensation benefits may be disqualified from receiving benefits under SDCL 61- 6-13 if they "voluntarily" leave their employment and do not have "good cause" for doing so.

[¶7.] The administrative law judge determined that Manuel "voluntarily" closed Toner Plus and that his reasons for doing so did not constitute "good cause," as the term is defined under SDCL 61-6-13.1. The circuit court affirmed the ruling of the administrative law judge.

STANDARD OF REVIEW

[¶8.] SDCL 1-26-36 sets forth the standard of review for administrative appeals. The statute "requir[es] us to give great weight to the findings of the agency and reverse only when those findings are clearly erroneous in light of the entire record." Williams v. S.D. Dept. of Agric., 2010 S.D. 19, ¶ 5, 779 N.W.2d 397, 400. However, questions of law are reviewed de novo. Id. (citing Vollmer v. WalMart Store, Inc., 2007 S.D. 25, ¶ 12, 729 N.W.2d 377, 382). "Mixed questions of law and fact require further analysis." Darling v. W. River Masonry, Inc., 2010 S.D. 4, ¶ 10, 777 N.W.2d 363, 366 (quoting McNeil v. Superior Siding, Inc., 2009 S.D. 68, ¶ 6, 771 N.W.2d 345, 347). We have explained,

If application of the rule of law to the facts requires an inquiry that is "essentially factual"-one that is founded "on the application of the fact-finding tribunal's experience with the mainsprings of human conduct"-the concerns of judicial administration will favor the [circuit] court, and the [circuit] court's determination should be classified as one of fact reviewable under the clearly erroneous standard. If, on the other hand, the question requires us to consider legal concepts in the mix of fact and law and to exercise judgment about the values that animate legal principles, ...


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