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Rudbart v. Board of Review

A-3236-99T1, A-2715-01T1 and A-2570-01TI (N.J. Super. App. Div. 2003) (Unpublished)

UNEMPLOYMENT INSURANCE—An unemployment case may be reopened after a final determination upon discovery of new evidence which may be discovery that other similar applicants received a contrary determination.

Three brothers were employed by a corporation of which each was a twenty-five percent shareholder. When the business’s lease was terminated they decided to close down the business, but did not formally dissolve the corporation to avoid potential environmental liability for conduct attributable to a prior owner of the real property the corporation was leasing. Each of the brothers attempted to collect unemployment benefits. Two of the brothers were denied benefits outright. The third brother was initially granted unemployment benefits but, when the Board of Review discovered the other brothers’ claims, it reversed the third brother’s award. It also ordered the third brother to return the money he had already received. In New Jersey, a corporate officer owning five percent or more of a corporation that is not dissolved or in bankruptcy is not entitled to unemployment benefits. The third brother claimed that his case was improperly reopened. In order to reopen a case there must be newly discovered evidence that was not available at the time of the initial determination by the exercise of reasonable diligence. Further, that newly discovered evidence must be of such a nature that is would probably alter the determination. In this case, the discovery that the other shareholders applied for, and were denied, unemployment benefits was newly discovered evidence.

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