                         STATE OF MICHIGAN

                          COURT OF APPEALS



SUZANNE LAWRENCE,                                                 FOR PUBLICATION
                                                                  July 11, 2017
              Claimant-Appellant,                                 9:25 a.m.

v                                                                 No. 332398
                                                                  Oakland Circuit Court
MICHIGAN UNEMPLOYMENT INSURANCE                                   LC No. 2015-150311-AE
AGENCY,

              Respondent-Appellee.


Before: O’BRIEN, P.J., and JANSEN and STEPHENS, JJ.

PER CURIAM.

        Claimant, Suzanne Lawrence, appeals by leave granted1 an opinion and order of the
Oakland Circuit Court affirming a judgment of the Michigan Compensation Appellate
Commission (MCAC) finding that Lawrence was paid unemployment benefits during a period of
ineligibility and was required to remit reimbursement to respondent, the Michigan
Unemployment Insurance Agency (MUIA). We reverse.

                         I. FACTS AND PROCEDURAL HISTORY

        This case arises from a dispute over $158, an amount the MUIA alleges it overpaid
Lawrence during a period for which Lawrence was ineligible to receive benefits. The underlying
facts of this case are undisputed. At all times relevant to this appeal, Lawrence was seasonally
employed by the Bloomfield Hills Country Club (BHCC). During the winter of 2013, like any
other winter, Lawrence was temporarily laid off from her position. Upon her lay off, BHCC
required Lawrence to use her vacation time. Lawrence’s last day of work was January 4, 2013,
and Lawrence received $820 in vacation pay for the weeks ending January 16, 2013, and
February 2, 2013. At some point in early 2013, Lawrence applied for and was deemed eligible to
receive unemployment benefits. According to Lawrence, she received her first unemployment
check on February 20, 2013, which provided payment for the previous two weeks.



1
  Lawrence v Mich Unemployment Ins Agency, unpublished order of the Court of Appeals,
entered October 20, 2016 (Docket No. 332398).


                                              -1-
       Two years later, on April 7, 2015, the MUIA mailed Lawrence a Notice of
Determination, indicating that because Lawrence received vacation pay during the benefit weeks
ending on January 26, 2013, and February 2, 2013, she had been ineligible to receive
unemployment benefits during that period. The Notice of Determination further indicated that
Lawrence had been paid $79 in unemployment benefits for each week, for a total overpayment of
$158. Lawrence was directed to “pay to the Agency in cash, by check, money order, EFT or
MiWAM or deduction from benefits, restitution in the amount of $158.00 under MES Act,
Section 62(a) as itemized above.” Lawrence disputed the determination:

                I protest the determination. It is May of 2015 and your determination
       concerns something that occurred in January of 2013, over two years ago. Under
       the doctrine of laches, waiver and estoppel, your determination is barred. A
       statute of limitations may also be applicable here. I have been prejudiced by the
       passage of time because I have been unable to find necessary records applicable
       to this time period, when I would have had access to those records years ago. My
       employer recently told me that I received vacation pay from 1/6/13 through 2/2/13
       and that I was first paid by the [MUIA] on 2/20/13, for the prior two weeks.
       Therefore, the available records do not support your conclusion.

The MUIA issued a redetermination on May 6, 2015, restating its previous findings and decision
without additional explanation. Lawrence disputed the redetermination and a telephone hearing
was scheduled.

        The hearing occurred before an administrative law judge (ALJ) of the Michigan
Administrative Hearing System (MAHS), without MUIA participation, on June 4, 2015. No
exhibits were submitted or received before or during the hearing, and only Lawrence and a
representative of BHCC, Cheryl Brennan, testified. The ALJ initially characterized the dispute
as an appeal from the May, 2015, redetermination “that [Lawrence] was ineligible for two weeks
under the remuneration provision of the Michigan Employment Security Act . . . for the benefit
weeks of January 26th, 2013 and February 2nd, 2013.” He therefore indicated that Lawrence
would bear the burden of proving eligibility during those weeks. However, Lawrence conceded
that she was ineligible to receive benefits during those two weeks—the two weeks she received
vacation pay from BHCC. In an attempt to clarify the issue, Lawrence again denied receiving
any unemployment payments until February 20, 2013. Lawrence offered to “fax” the ALJ her
bank statements, but the ALJ declined the offer, acknowledging that he had received her
testimony on the matter. Thereafter, Brennan testified to confirm that Lawrence was paid for
vacation time until February 2, 2013. Perhaps unconventionally, Brennan questioned the ALJ
regarding Lawrence’s alleged receipt of benefits during that same time period:

              [ALJ]: The -- the Agency has found that [Lawrence] was ineligible for the
       time period of January 20th, 2013 through February 2nd, 2013.

               [Brennan]: Okay, and -- and you show that [Lawrence] actually received
       pay for that time period?




                                              -2-
              ALJ: That she received vacation pay is what -- is what the Agency found.
       This is a hearing -- (multiple speakers) -- this is a hearing to just provide an
       answer as the claimant had -- has Ms. Lawrence has disputed that.

              Brennan: Okay, so she did receive vacation pay for that time period,
       what, did she receive benefits for that time period?

              ALJ: I -- I don’t know, Ma’am, I -- I -- this hearing is -- I work for --
       don’t work for the Agency. I work for the Michigan Administrative Hearing
       System.

               Brennan: I see.

              ALJ: Which -- which provides -- so if someone appeals a decision made
       by the Agency, they would appeal it to a separate body.

               Brennan: Mm-hmm.

              ALJ: I don’t [sic] information that the Agency has as to when she was
       paid her benefits.

        The ALJ issued a written determination on June 10, 2015, summarizing the facts and
issue presented as follows:

                The Claimant works for the Employer [BHCC], a country club, whose
       main work is seasonal in nature. Each winter the Claimant is temporarily laid off.
       In 2013, the Claimant was laid off for the winter, but received vacation pay in the
       amount of $820.00 for the weeks ending January 16, 2013 and February 2, 2013.
       The Claimant does not dispute that she received the vacation pay, but does not
       believe that she received any unemployment benefits for those weeks and that no
       restitution is owed.

However, the ALJ proceeded to consider the issue as one regarding Lawrence’s eligibility,
stating that “[t]he burden of proof is on the claimant to prove his/her eligibility for benefits.”
The ALJ affirmed the MUIA’s May, 2015 redetermination with the following explanation:

       If the Claimant receives vacation pay, it is considered income for the purposes of
       a benefit claim. Therefore, based on the Findings of Fact and in accordance with
       the relevant law . . . I find that the Claimant is ineligible for benefits for the period
       that she was laid off and received vacation pay.

The ALJ made no finding regarding whether Lawrence did, in fact, receive benefit payments
during the weeks she received vacation pay from her employer.

       Lawrence appealed the ALJ’s decision to the MCAC on July 6, 2015, in a letter
requesting oral argument and briefing and explaining:



                                                 -3-
       [T]he “issue presented” in the ALJ’s decision is far off the mark. The issue is not
       whether I was eligible for benefits, but rather whether I actually received benefits
       for the week in question. I challenged the Agency’s finding that I was overpaid.
       Conspicuously absent from the ALJ’s hearing was any proof that I received an
       overpayment. The burden certainly was not on me. No one appeared to contest
       my testimony.

The MCAC declined Lawrence’s request for an oral hearing, finding it “not necessary for us to
reach a decision.” On October 29, 2015, the MCAC issued a written order affirming the ALJ’s
decision with the following three-sentence explanation:

                After reviewing the record, we find the ALJ’s findings of fact accurately
       reflect the evidence introduced during the hearing. The ALJ properly applied the
       law to those facts. It is our opinion that the ALJ’s decision should be affirmed.

        Lawrence appealed the decision of the MCAC to the Oakland Circuit Court on November
23, 2015, and the county clerk filed the certified record as received from the MCAC with the
circuit court on December 22, 2015. Without holding a hearing, the circuit court issued a written
opinion and order affirming the decision of the MCAC on February 29, 2016. The circuit court
acknowledged that, again, Lawrence insisted that her case was not about eligibility, specifically
agreeing that she was ineligible for benefit payments during the contested time period but
arguing that the center of the dispute was whether she actually received an overpayment during
the contested period. However, the circuit court concluded that the decisions of the ALJ and the
MCAC were supported by competent, material, and substantial evidence:

       Specifically, this Court finds that [Lawrence] had the burden of proof to establish
       that she was eligible for unemployment benefits at the time that the Agency paid
       her benefits.      At the ALJ Hearing, the record contained the Agency’s
       determination and redetermination letters, which clearly stated that it paid
       appellant $158 in unemployment benefits during a time period that her employer
       communicated that it paid her vacation pay. [Lawrence] testified that she did not
       receive payment; however, she failed to support her testimony with any
       documentation (e.g., bank records). The ALJ made a finding of fact that he
       believed the documentation contained in the record over [Lawrence’s] mere
       denial and admission that she was ineligible to receive unemployment benefits at
       the time in question. Accordingly, this Court finds that the ALJ’s and MCAC’s
       decisions are authorized by law and supported by competent, material, and
       substantial evidence.

        On appeal, Lawrence contends that the ALJ, MCAC, and circuit court misconstrued this
case as one pertaining to eligibility, rather than focusing on the actual dispute regarding whether
Lawrence received the payment of unemployment benefits from the MUIA during the period of
her admitted ineligibility. We agree.




                                                -4-
                                 II. STANDARD OF REVIEW

       “[T]he Michigan Employment Security Act [(MESA)], MCL 421.1 et seq., expressly
provides for the direct review of unemployment benefit claims.” Hodge v US Security Assoc,
Inc, 497 Mich 189, 193; 859 NW2d 683 (2015). In pertinent part, MCL 421.38(1) provides:

               The circuit court . . . may review questions of fact and law on the
            record made before the [ALJ] and the [MCAC] involved in a final order
            or decision of the [MCAC], and may make further orders in respect to
            that order or decision as justice may require, but the court may reverse an
            order or decision only if it finds that the order or decision is contrary to
            law or is not supported by competent, material, and substantial evidence
            on the whole record.

“Substantial evidence is that which a reasonable mind would accept as adequate to support a
decision, being more than a mere scintilla, but less than a preponderance of the evidence.”
Vanzandt v State Employees Retirement Sys, 266 Mich App 579, 584; 701 NW2d 214 (2005)
(quotation marks and citation omitted). “Evidence is competent, material, and substantial if a
reasoning mind would accept it as sufficient to support a conclusion.” City of Romulus v Mich
Dep’t of Environmental Quality, 260 Mich App 54, 63; 678 NW2d 444 (2003). The circuit court
may not substitute its own judgment for that of the MCAC when the MCAC’s decision is
properly supported. Hodge, 497 Mich at 193-194.

        “This Court reviews a lower court’s review of an administrative decision to determine
whether the lower court applied correct legal principles and whether it misapprehended or
misapplied the substantial evidence test to the agency’s factual findings, which is essentially a
clear-error standard of review.” Braska v Challenge Mfg Co, 307 Mich App 340, 351-352; 861
NW2d 289 (2014) (quotation marks and citation omitted). “A finding is clearly erroneous
where, after reviewing the record, this Court is left with the definite and firm conviction that a
mistake has been made.” Vanzandt, 266 Mich App at 585. “Great deference is accorded to the
circuit court’s review of the [administrative] agency’s factual findings; however, substantially
less deference, if any, is accorded to the circuit court’s determinations on matters of law.”
Mericka v Dep’t of Community Health, 283 Mich App 29, 36; 770 NW2d 24 (2009) (quotation
marks and citation omitted; alteration in original). “ ‘[A] decision of the [MCAC] is subject to
reversal if it is based on erroneous legal reasoning or the wrong legal framework.’ ” Omian v
Chrysler Group LLC, 309 Mich App 297, 306; 869 NW2d 625 (2015), quoting DiBenedetto v
West Shore Hosp, 461 Mich 394, 401; 605 NW2d 300 (2000).

          III. SCOPE OF THE RECORD ON APPEAL TO THE CIRCUIT COURT

        “In reviewing whether an agency’s decision was supported by competent, material, and
substantial evidence on the whole record, a court must review the entire record.” Vanzandt, 266
Mich App at 588. In this case, the parties dispute the scope of the “entire record” before the
circuit court on review. At the outset, we must therefore address Lawrence’s assertion that the
circuit court, in reviewing the decision of the MCAC, improperly relied on an “overly-
expansive” record, which, contrary to MCR 7.116(F), included files of the MUIA that were not
presented to the ALJ. According to Lawrence, the record before the circuit court was properly

                                                -5-
limited to the transcript of the original hearing before the ALJ and the ALJ’s written order,
because neither Lawrence nor the MUIA submitted any documentary evidence for the ALJ’s
consideration.

        Although Lawrence did not object to the scope of the record presented to the circuit court
by the MCAC before the court’s consideration on the merits, we “may overlook preservation
requirements . . . if consideration [of an issue] is necessary for a proper determination of the
case, or if the issue involves a question of law and the facts necessary for its resolution have been
presented.” General Motors Corp v Dep’t of Treasury, 290 Mich App 355, 387; 803 NW2d 698
(2010). Both exceptions are applicable here. We review de novo questions concerning the
proper application of statutes and court rules. Donkers v Kovach, 277 Mich App 366, 369; 745
NW2d 154 (2007).

        The general definition of “record on appeal” from an agency decision to a circuit court is
found in MCR 7.109(2). That rule directs that the content of the “original record” on appeal to
the circuit court from an agency is “defined in MCR 7.210(A)(2),” which states:

       Appeal from Tribunal or Agency. In an appeal from an administrative tribunal or
       agency, the record includes all documents, files, pleadings, testimony, and
       opinions and orders of the tribunal, agency, or officer (or a certified copy), except
       those summarized or omitted in whole or in part by stipulation of the parties . . . .

However, MCR 7.116, regarding appeals under the MESA, specifically provides:

       (A) Scope. This rule governs appeals to the circuit court under the [MESA],
       MCL 421.1 et seq. Unless this rule provides otherwise, MCR 7.101 through
       7.115 apply.

                                              * * *

       (F) Record on Appeal. Within 42 days after the claim of appeal is served on the
       [MCAC], or within further time as the circuit court allows, the [MCAC] must
       transmit to the clerk of the circuit court a certified copy of the record of
       proceedings before the [ALJ] and the [MCAC]. The [MCAC] must notify the
       parties that the record was transmitted. [Emphasis added.]

Lawrence contends that MCR 7.116(F) limits the record on appeal to “the record of proceedings
before the [ALJ] and the [MCAC].” And because MCR 7.116(F) “provides otherwise,”
Lawrence argues, the general definition of “record on appeal” from an agency decision in MCR
7.109(2) does not apply.

        Lawrence’s proposed interpretation of MCR 7.116(F) is consistent with the relevant
provisions of the MESA. Notably, under MCL 421.34, the section of the MESA governing
appeals to the MCAC, review of an ALJ’s decision is expressly limited to “the case on the record
before the [ALJ].” MCL 421.34(4). Further, under MCL 421.38(1), on appeal from the MCAC,
the circuit court “may review questions of fact and law on the record made before the [ALJ] and
the [MCAC] involved in a final order or decision of the [MCAC] . . . .” (Emphasis added.)


                                                -6-
        However, we cannot agree that the language of MCR 7.116(F) is intended to limit the
scope of the record on appeal to the circuit court. Instead, we agree with the MUIA’s assertion
that MCR 7.116(F) does not define the content of the record, but simply requires that the record
be sent to the circuit court. Because MCR 7.116 does not otherwise limit the scope of the record
on appeal, the general definition of “record on appeal” from an agency decision in MCR
7.109(2) applies. While this expansive definition seemingly conflicts with the limited scope of
the record described in MCL 421.34 and MCL 421.38, “[t]he authority to promulgate rules
governing practice and procedure in Michigan courts rests exclusively with our Supreme Court.
Donkers, 277 Mich App at 373. Thus, “[w]hen resolving a conflict between a statute and a court
rule, the court rule prevails if it governs purely procedural matters.” Id. Under the court rules,
the record before the circuit court properly included “all documents, files, pleadings, testimony,
and opinions and orders” of the tribunal and the agency. The circuit court therefore did not err
when it considered the certified record presented by the MCAC in its entirety.

             IV. COMPETENT, MATERIAL, AND SUBSTANTIAL EVIDENCE

       Even though we find that the circuit court did not err when it considered the certified
record of the MCAC in its entirety, we hold that the circuit court clearly erred in its factual
determinations and misapplied the substantial evidence test when it affirmed the decision of the
MCAC.

        The circuit court was tasked with determining whether the decision of the MCAC—that
“the ALJ’s findings of fact accurately reflect the evidence introduced at the hearing” and “[t]he
ALJ properly applied the law to those facts”—was supported by “competent, material, and
substantial evidence on the whole record,” MCL 421.38(1), and whether the MCAC operated
within the correct legal framework, DiBenedetto, 461 Mich at 401. As previously discussed, our
consideration is limited to the question of whether the circuit court applied the correct legal
principles and properly applied the substantial evidence test to the findings and conclusions of
the MCAC. Braska, 307 Mich App at 351-352. We will not reverse a circuit court’s decision
unless we are left with a definite and firm conviction that a mistake has been made. Vanzandt,
266 Mich App at 585. On the record before us, we are left with no doubt that the circuit court
clearly erred in affirming the decision of the MCAC.

       As noted in the MCAC’s opinion, the ALJ’s written findings of fact accurately reflect the
evidence presented at the June 4, 2015 hearing. Such evidence consisted only of testimony from
Lawrence and Brennan, a representative of BHCC. Both witnesses testified that Lawrence
received vacation pay during the weeks ending in January 16, 2013, and February 2, 2013.
Lawrence testified that she did not receive any benefit payments until February 20, 2013, when
she received a check covering the preceding two-week period.

        If the issue were one of eligibility, the MCAC’s conclusion that the ALJ properly applied
the law would be without question. Indeed, Lawrence has consistently admitted that she was not
eligible to receive employment benefits during the two weeks she admits she received vacation
pay. However, as the ALJ acknowledged, both orally and in his written opinion, Lawrence
disputed only her actual, physical receipt of benefit payments during the two weeks she received
vacation pay. Bewilderingly, the ALJ nevertheless limited his consideration to the issue of
Lawrence’s eligibility during the two weeks she conceded she was ineligible, ultimately

                                               -7-
affirming the MUIA’s redetermination because: “Claimant is ineligible for benefits for the period
that she was laid off and received vacation pay.”

         The ALJ’s decision to affirm the MUIA’s redetermination and order Lawrence to
reimburse the MUIA for overpayment lacked legal ground2 because the question of Lawrence’s
eligibility for payments was not at issue, either during the hearing before the ALJ or on appeal to
the MCAC. The MCAC was aware that on appeal, the issue before it was whether the ALJ
addressed the appropriate issue. In her request for review, Lawrence clearly argued that the ALJ
failed to consider the question of payment and inexplicably focused on Lawrence’s uncontested
ineligibility. Like the ALJ, the MCAC completely missed the mark. The circuit court, in its
course, followed suit, acknowledging that Lawrence disputed only her actual receipt of payments
but, consistent with the lower tribunals, addressing only the issue of eligibility. The MCAC
failed to operate within the correct legal framework, and the circuit court clearly erred when it
concluded that the MCAC’s decision should be affirmed.

        Although our conclusion that the decisions of the circuit court, the MCAC, and the ALJ
were legally unsound is sufficient to order reversal, we proceed with our examination of the
record and further conclude that the circuit court clearly erred when it determined that the
MCAC’s decision was supported by competent, material, and substantial evidence on the whole
record.

         Even considering the entire record before the circuit court, rather than the limited
evidence before the ALJ, we are puzzled by the circuit court’s decision to affirm the MCAC.
The circuit court clearly indicated its awareness that the issue before the ALJ was not one of
eligibility, but one of actual receipt of benefits. Although the circuit court ultimately decided
that Lawrence failed to “meet her burden of proof to establish that she was eligible for
unemployment benefits,” it articulated some limited findings regarding Lawrence’s receipt of
payments in its written order and opinion. Taken together, these findings, several of which are
unsupported by the record, do not establish by competent, material, and substantial evidence that
Lawrence received payments during the weeks of her conceded ineligibility.

       First, the circuit court noted that “[a]t the ALJ Hearing, the record contained the
Agency’s determination and redetermination letters, which clearly stated that it paid appellant
$158 in unemployment benefits during a time period that her employer communicated that it
paid her vacation pay.” This statement is not supported by the record because neither the
determination nor the redetermination letter was before the ALJ at the June hearing. In fact, the
ALJ, who was unaffiliated with the MUIA and received no exhibits prior to the telephone
hearing, clearly indicated that he had no information regarding whether the MUIA actually made



2
  We note that the ALJ’s conclusion that “[t]he burden of proof is on the claimant to prove
his/her eligibility for benefits,” while legally accurate, is completely irrelevant in this case. It
makes no sense that Lawrence, who conceded her ineligibility and raised a completely different
issue, is now required to prove her eligibility for benefits in order to obtain relief on an unrelated
ground.


                                                 -8-
benefit payments to Lawrence during the weeks ending in January 16, 2013, and February 2,
2013.

       Further, although the letters were before the circuit court and properly considered on
review of the MCAC’s decision, the circuit court clearly erred in relying on these letters as
“competent, material, and substantial” proof that the MUIA actually paid Lawrence $158 in
unemployment benefits during the period of Lawrence’s ineligibility. The Notice of
Determination reads as follows:

       You received vacation pay for the week(s) and amount(s) shown.

       Your vacation pay is greater than or equal to 1.6 times your weekly benefit
       amount of $362.00.

       You are ineligible for benefits . . . beginning January 20, 2013 through February
       02, 2013. You will not receive benefit payments during this period.

Attached is a separate document labeled “Restitution (List of Overpayments),” ordering
Lawrence to pay $158 in restitution—$79 for each week. The Notice of Redetermination
restates the same information. These two notices represent nothing more than requests for
payment. They are not proof that the MUIA issued an overpayment, in any amount, to
Lawrence, and to accept them as such would defy common sense. See RG Moeller Co v Van
Kampen Const Co, 57 Mich App 308, 311-312; 225 NW2d 742 (1975) (declining to consider the
plaintiff’s billing and accounts receivable ledger as “proof” of the defendant’s liability on an
account).

        There is simply no evidence in the record to prove that the MUIA issued two benefit
payments of $79, or any other amount, to Lawrence for the weeks of her conceded ineligibility.
Such evidence might consist of a cancelled check, a check stub, a notice of electronic funds
transfer, or a bank statement. The MUIA has failed to admit even an agency accounting
indicating that it issued the contested payment(s) to Lawrence. Without even a scintilla of
evidence on the record to support the payment of benefits, the trial court clearly erred when it
determined that the MCAC’s decision was supported by competent, material and substantial
evidence.

        Contrary to the MUIA’s assertion on appeal, the burden was not on Lawrence to establish
that she did not receive benefit payments as alleged.3 The MUIA suggests that Lawrence “is the
one who possessed the particularized knowledge and control of information she claimed
established she was not paid for the weeks in question.” However, we find that the opposite is


3
  The MUIA insists that Lawrence could simply have turned over her bank statements as proof
that she did not receive payment. However, we note that Lawrence did, in fact, attempt to admit
copies of her bank statements at the June 4, 2015 hearing before the ALJ. The ALJ declined to
accept the statements, assuring Lawrence that they were unnecessary in light of her undisputed
testimony on the matter.


                                              -9-
true. Requiring Lawrence to prove that she never received payments would be requiring her to
prove a negative—a near impossibility. It is the party who has rendered payment that possesses
the particularized knowledge and control of information necessary to prove that it undertook the
affirmative action of issuing a payment. Although, depending on the method of payment,
Lawrence may have been required to prove that she did not receive payments after the MUIA
proved that it issued payments, the MUIA offered no such proof here and Lawrence could not
reasonably be expected to prove that the MUIA issued benefit payments. “[I]t is an elementary
principle of law . . . that the burden of proving payment rests upon the party who claims to have
made it.” Taylor v Taylor’s Estate, 138 Mich 658, 662-663; 101 NW 832 (1904).

        Finally, the circuit court clearly erred when it based its decision, even in part, on its
conclusion that: “The ALJ made a finding of fact that he believed the documentation contained
in the record over [Lawrence’s] mere denial and admission that she was ineligible to receive
unemployment benefits at the time in question.” This conclusion is directly contradicted by the
record. The ALJ addressed the issue of eligibility only and made no findings of fact regarding
the issue at hand. At no point during the hearing or in his written order did the ALJ state or
imply that he made a credibility determination. As previously mentioned, the ALJ had no
documentary evidence before it on which to base such a determination.

         On appeal, the MUIA adopts the circuit court’s erroneous conclusion as fact, and argues
that “[t]he ALJ properly chose the documentary evidence over Lawrence’s unsupported denial.”
The MUIA relies on our Supreme Court’s decision in Hodge, 497 Mich at 194-195, for the
proposition that this Court may not contradict the ALJ’s findings or credibility determinations,
and must therefore affirm its ultimate conclusion regarding payment of benefits. Even if the
MUIA’s argument was factually supported—and it clearly is not—the MUIA’s argument would
fail on its merits.

        In White v Revere Copper & Brass, Inc, 383 Mich 457, 461-463; 175 NW2d 774 (1970),
a case factually similar to the one before us, our Supreme Court stated:

               A careful review of the record reveals that the only evidence relating to
       the question of notice was that positively averred and testified to by plaintiff. Not
       an iota of evidence is presented in this record denying or rebutting plaintiff’s
       proofs.

              Although the Appeal Board could have expressly rejected plaintiff’s
       testimony going to the question of notice, it could not properly deduce from the
       only evidence in the record that no notice was given. The Appeal Board cannot
       draw inferences contrary to undisputed evidence.

              We conclude that there is no competent evidence to support the Appeal
       Board’s finding of fact that notice was not given. [Citations omitted.]

       Although the appeal board in White was the Worker’s Compensation Appellate
Commission (WCAC) and the issue was lack of notice, rather than lack of payment, we find the
White Court’s reasoning equally applicable under the circumstances presented. The ALJ
unquestionably possessed the authority and the position to make credibility determinations on the

                                               -10-
evidence before it. However, the ALJ had no documents before it, and clearly stated on the
record that he possessed no information regarding payments issued by the MUIA. As was the
case in White, the only evidence before the ALJ regarding the subject at issue was Lawrence’s
undisputed testimony that she had not received any benefit payments for the contested period.
Had the ALJ possessed contradictory evidence, the ALJ could have rejected Lawrence’s
statements outright. However, on the evidence before it, the ALJ could not have inferred that the
MUIA issued benefit payments, or that Lawrence received them, during the contested period.

        Our conclusion in this regard is consistent with the rule announced in Hodge, 497 Mich at
196, as it does not require this Court to substitute any factual findings with clear factual findings
of the ALJ. Unlike the ALJ mentioned in Hodge, who considered an actual conflict in evidence
and made a clear factual finding on the issue of credibility, id. at 194-195, the ALJ here simply
did not make a factual finding. We are not required to defer to a farcical or unsupported
credibility determination.

             V. CIRCUIT COURT’S DENIAL OF LAWRENCE’S REPLY BRIEF

        Lawrence also contends that the circuit court violated MCR 7.111(A)(3) when it entered
a scheduling order stating that Lawrence “is not entitled to a reply brief.” We agree, but hold
that the error does not entitle Lawrence to additional relief.

        Lawrence did not challenge the circuit court’s denial of Lawrence’s right to file a reply
brief until she filed a motion for reconsideration after the contested order. Issues first presented
in a motion for reconsideration are not properly preserved. Vushaj v Farm Bureau General Ins
Co of Mich, 284 Mich App 513, 519; 773 NW2d 758 (2009). We review the unpreserved error
for plain error affecting substantial rights. Nat’l Wildlife Fed v Dep’t of Environmental Quality
(No. 2), 306 Mich App 369, 373; 856 NW2d 394 (2014). “[A]n error affects substantial rights if
it caused prejudice, i.e., it affected the outcome of the proceedings.” In re Utrera, 281 Mich App
1, 9; 761 NW2d 253 (2008). Again, the proper interpretation of a court rule is an issue we
review de novo. AFP Specialties, Inc v Vereyken, 303 Mich App 497, 504; 844 NW2d 470
(2014).

        MCR 7.111(A)(3) governs briefs on appeal to the circuit court and provides, in relevant
part: “Within 14 days after the appellee’s brief is served on appellant, the appellant may file a
reply brief.” However, the circuit court’s January 7, 2016 scheduling order indicates that
“[a]ppellant is not entitled to a reply brief.” A circuit court has the authority to control its own
docket. See Maldonado v Ford Motor Co, 476 Mich 372, 376; 719 NW2d 809 (2006)
(explaining that trial courts possess the inherent authority to “manage their own affairs so as to
achieve the orderly and expeditious disposition of cases.”). However, a circuit court must follow
the court rules. The circuit court’s scheduling order clearly violated Lawrence’s right to file a
reply brief under the plain and unambiguous language of MCR 7.111(A)(3).

        However, Lawrence is not entitled to relief in this matter because she has not shown that
the circuit court’s violation of MCR 7.111(A)(3) affected the outcome of the proceedings.
Lawrence suggests that the violation was not harmless error because “the points made in her
timely filed Motion for Reconsideration” were subjected to a heightened “palpable error”
standard of review under MCR 2.119(F)(3). But Lawrence fails to indicate what arguments or

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additional information she would have submitted in her reply brief, or how submission of a reply
brief would have affected her subsequent motion for reconsideration. “Reply briefs must be
confined to rebuttal, and a party may not raise new or additional arguments in its reply brief.”
Kinder Morgan Mich, LLC v City of Jackson, 277 Mich App 159, 174; 744 NW2d 184 (2007),
citing MCR 7.212(G). Therefore, even if Lawrence had been permitted to file a reply brief, she
could not have raised the issues she later raised in her motion for reconsideration, and MCR
2.119(F)(3) would still have applied. Without a demonstration of prejudice, Lawrence is not
entitled to relief on this ground.

                                      VI. CONCLUSION

       We reverse the order of the circuit court and remand with instructions to the circuit court
to enter an order reversing the decision of the MCAC. Lawrence, as the prevailing party, is
awarded taxable costs under MCR 7.219. We do not retain jurisdiction.


                                                            /s/ Colleen A. O’Brien
                                                            /s/ Kathleen Jansen
                                                            /s/ Cynthia Diane Stephens




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