K.T. Quigley v. UCBR ( 2016 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Kevin T. Quigley, :
Petitioner :
:
v. : Nos. 1927 and 1928 C.D. 2015
: Submitted: April 8, 2016
Unemployment Compensation :
Board of Review, :
Respondent :
BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge
HONORABLE PATRICIA A. McCULLOUGH, Judge
HONORABLE DAN PELLEGRINI, Senior Judge
OPINION NOT REPORTED
MEMORANDUM OPINION BY
SENIOR JUDGE PELLEGRINI FILED: May 2, 2016
Kevin T. Quigley (Claimant) petitions for review of an order of the
Unemployment Compensation Board of Review (Board) imposing a fault
overpayment under Section 804(a) of the Unemployment Compensation Law
(Law)1 because Claimant failed to report a severance agreement while receiving
1
Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P.S.
§874 (a). Section 804(a) provides, in pertinent part:
Any person who by reason of his fault has received any sum as
compensation under this act to which he was not entitled, shall be
liable to repay to the Unemployment Compensation Fund to the
credit of the Compensation Account a sum equal to the amount so
received by him and interest at the rate determined by the
Secretary of Revenue….
unemployment compensation (UC) benefits. Finding no error in the Board’s
decision, we affirm.
I.
In January 2014, as a result of his termination by the City of
Pittsburgh (Employer) from his position as an Assistant Director of Public Works,
Claimant applied for unemployment compensation online. When applying for
benefits, Claimant was asked in a UC Service Center (Service Center)’s online
questionnaire whether he was receiving a severance payment from Employer to
which he answered in the negative. Severance payments are considered income.2
For each week ending January 25, 2014, through March 1, 2014, Claimant
received unemployment compensation benefits.
On March 13, 2014, Claimant signed a severance agreement with
Employer under which he was to receive a total of $77,699.44 to be paid in
monthly payments of $3,237.48 beginning on April 15, 2014. The severance
agreement was dated April 30, 2014. From March 16, 2014, through July 19,
2014, Claimant continued to file online bi-weekly unemployment claims in which
he would affirm that he was not receiving any earnings.
In February 2015, the Service Center sent Claimant a letter asking him
to complete an enclosed questionnaire regarding his severance pay. Claimant did
2
In Hock v. Unemployment Compensation Board of Review, 413 A.2d 444, 447 (Pa.
Cmwlth. 1980), this Court reasoned that severance payments are in recognition of past services
to an employer and are deemed remuneration.
2
not respond. The Service Center then left a voicemail message for Claimant
requesting information to determine his eligibility for UC benefits. Again,
Claimant did not respond.
Subsequently, the Service Center issued three determinations: 1)
revising Claimant’s weekly benefit allowance for the weeks ending January 11,
2014, through October 11, 2014, as $0.00 because he received severance
payments; 2) imposing a nonfault overpayment of $3,378.00 for the weeks ending
January 25, 2014, through March 1, 2014, under Section 804(b) of the Law;3 and
3) establishing an $11,260.00 fault overpayment as required by Section 804(a) of
the Law for the weeks ending March 8, 2014, through July 19, 2014. Claimant
then filed an appeal.
II.
A.
Before the Referee, Claimant testified that he had not worked since
his separation from Employer and when he applied for unemployment benefits, he
was not receiving any severance payments from Employer, nor was there an
3
See 43 P.S. §874(b). Section 804(b) states, in pertinent part:
(1) Any person who other than by reason of his fault has received
with respect to a benefit year any sum as compensation under this
act to which he was not entitled shall not be liable to repay such
sum but shall be liable to have such sum deducted from any future
compensation payable to him with respect to such benefit year, or
the three-year period immediately following such benefit year, in
accordance with the provisions of this paragraph.
3
agreement that he would receive a severance. He acknowledged, however, that he
began receiving monthly severance payments from Employer in the amount of
$3,267.48 beginning on April 15, 2014.
While acknowledging that when he initially applied for benefits the
online questionnaire asked whether or not he had received or was receiving
severance pay, Claimant testified that he was not asked at any time after his initial
application, including when he made his online bi-weekly claim, any question
related to severance pay. Claimant stated that when filing his bi-weekly claim, he
was asked whether he received any earnings. He did not know that he was
required to report severance pay as income or that it would have an effect on his
unemployment benefits.
The Referee found Claimant’s statements that he did not know that his
severance pay could impact his unemployment benefits meritless. However, the
Referee agreed that Claimant did not know that he would be receiving a severance
payment until he signed the agreement, thereby reasoning that the payment for the
week ending March 8, 2014, was not Claimant’s fault. The Referee explained that
Claimant should have notified the Service Center that he signed a severance
agreement, thus changing the payments from March 15, 2014 onward. As a result,
the Referee found that Claimant’s severance pay was income that was reportable
under Section 404(d)(1) of the Law and, as such, his revised weekly benefit
allowance was $0 for claim weeks ending January 11, 2014, through October 11,
4
2014. The Referee levied a fault overpayment under Section 404(d)(1) of the Law
of $58,718.384 for 26 weeks5 of the claim.6
B.
Claimant then appealed to the Board contending that the Referee erred
in finding a fault overpayment because he was not asked whether he was receiving
severance payments after his initial application.7 Claimant argued that the word
“fault” as used in Section 804(a) of the Law requires conduct that intentionally
misleads whereas Claimant’s failure to report his severance pay two-and-a-half
months after his initial application for UC benefits did not qualify as culpable
conduct, especially given that Claimant had no special knowledge that he had to
report after the fact.
4
This value is calculated by “subtracting 40% of the average annual state wage from the
total amount of severance paid or payable to the claimant.” (R.R. at 18a.)
5
The Referee explained that “[t]he number of attributable weeks immediately following
the claimant’s separation is determined by dividing the deductible severance pay by the regular
full-time weekly wage of the claimant.” (R.R. at 18a.)
6
The Referee determined that pursuant to Section 804(b), a non-fault overpayment must
be imposed in the amount of $3,941 for the seven weeks ending January 25, 2014, through
March 8, 2014, and a fault overpayment must be imposed in the amount of $10,697 for the 19
weeks ending March 15, 2014, through July 19, 2014.
7
Specifically, Claimant alleged that the Referee’s Finding of Fact was incomplete
because he was not asked whether he was receiving severance payments after his initial
application. The Referee’s Finding of Fact Number 13 states: “The [C]laimant did not inform
the Service Center that he would be receiving severance after signing the agreement on March
13, 2014 or after receiving the first of the payments.” (R.R. at 18a.)
5
Finding that the Service Center and Referee did not consider in their
calculations the fact that Claimant’s last day of work was a Tuesday, which meant
that he would have worked another three days and earned $904.36 for the week
ending January 11, 2014, the Board modified and affirmed the Referee’s eligibility
determination. After recalculating Claimant’s attributable severance as
$57,814.46, the Board found that Claimant’s revised weekly benefit allowance was
$0 for claim weeks ending January 18, 2014, through October 4, 2014, and a
revised weekly benefit allowance of $34.43 for the week ending October 11, 2014.
Likewise, with regard to the Referee’s overpayment determinations,
the Board modified and affirmed. In making its determination, the Board
specifically discredited Claimant’s assertion that he was unaware that he was
required to report his later receipt of severance because he also admitted that he
answered a question about severance when applying for benefits. However, the
Board noted that it did not conclude that Claimant intentionally misled the Service
Center, but rather that it was Claimant’s fault and not a Service Center error that
resulted in his overpayment. The Board reasoned that Claimant was not at fault for
receiving benefits through the week ending March 1, 2014, because he did not yet
know that he would be receiving a severance package and, therefore, was unable to
notify the Service Center. Unlike the Referee, the Board found Claimant to be at
fault for the March 8, 2014 overpayment because he filed a claim for that week on
March 16, 2014, after having already signed the severance agreement and having
had the opportunity to notify the Service Center.
6
Claimant requested reconsideration, arguing again that he was not at
fault because his intention was never to mislead, and that the Board never made
findings specific to Claimant’s state of mind and, thus, cannot support a finding of
fault overpayment. The Board granted reconsideration to consider Claimant’s
argument.
The Board then issued a nearly identical determination as above,
notably adding information about Claimant’s state of mind through Findings of
Fact Numbers 68 and 8.9 The Board also struck its previous conclusion that
Claimant did not intentionally mislead, and replaced it with, “[Claimant] knew he
needed to report his severance, but continued to file claims for benefits even after
receiving monthly severance payments without notifying the [Service Center.]”
(R.R. at 14a.) Claimant appealed.
III.
In this appeal,10 Claimant argues that the Board’s Finding of Fact
Number 6 is erroneous insofar that it concludes that he knew his severance pay
8
In the Board’s earlier decision, Finding of Fact Number 6 stated, “[Claimant] did not
notify the [Service Center] that he signed a severance agreement.” (R. Item No. 14.) On
reconsideration, the Board altered that finding of fact to state, “[Claimant] did not notify the
[Service Center] that he signed a severance agreement even though he knew it could affect his
claim for benefits.” (R.R. at 12a) (emphasis added).
9
Finding of Fact Number 8 states, “When filing his biweekly claim for benefits after
starting to receive severance payments, [Claimant] affirmatively stated he was not receiving any
earnings.” (R.R. at 12a.)
10
Our scope of review of the Board’s decision is limited to determining whether an error
of law was committed, constitutional rights were violated, or whether the necessary findings of
(Footnote continued on next page…)
7
could affect his claim for benefits. Specifically, Claimant again argues that his
failure to report his severance pay does not support the Board’s conclusion that he
was at fault for the overpayment because he had no knowledge of his duty to
disclose his severance pay and, thus, his failure to report was not intentional.
Section 804(a) of the Law provides that if a person receives
unemployment compensation benefits by reason of his fault, that person will be
responsible for repaying the amount received in error plus interest. 43 P.S.
§874(a). “The word ‘fault’ within the meaning of Section 804(a) of the Law
connotes an act to which blame, censure, impropriety, shortcoming or culpability
attaches.” Amspacher v. Unemployment Compensation Board of Review, 479 A.2d
688, 691 (Pa. Cmwlth. 1984). Conduct that is designed to improperly and
intentionally mislead the unemployment compensation authorities is sufficient to
establish a fault overpayment. Greenawalt v. Unemployment Compensation Board
of Review, 543 A.2d 209, 211 (Pa. Cmwlth. 1988). For example, an intentional
misstatement on an application for benefits can support a finding of fault under
Section 804(a). Matvey v. Unemployment Compensation Board of Review, 531
A.2d 840, 844 (Pa. Cmwlth. 1987). In order to find fault, the Referee or Board
must make some findings with regard to a claimant's state of mind. Greenawalt,
543 A.2d at 211.
(continued…)
fact are supported by substantial evidence. Rock v. Unemployment Compensation Board of
Review, 6 A.3d 646, 648 n.5 (Pa. Cmwlth. 2010).
8
It is undisputed that Claimant entered into a severance agreement with
Employer on March 13, 2014, and started receiving monthly payments of
$3,237.48 starting on April 15, 2014. Claimant admits that when he initially
applied for UC benefits, the Service Center asked whether he was receiving a
severance payment from Employer. At the time, he truthfully answered “no”
because he had not yet entered into his severance agreement. However, Claimant
continued to file bi-weekly claims for benefits, for which he was asked each time
whether he was receiving any earnings, and each time he answered in the negative
even after entering into the severance agreement and starting to receive payments.
Nevertheless, Claimant argues that because he was unaware that his
severance payments would have any impact on his UC benefits, he did not think to
report the payments to the Service Center. Even if we ignore the Board’s finding
that he did not know that receiving a severance agreement could affect his benefits,
Claimant continuously misstated on his bi-weekly claim applications that he was
not receiving any income despite receiving severance payments. Given Claimant’s
inaccurate representations on his bi-weekly claims, to which he admitted, we agree
with the Board that Claimant’s overpayment for the weeks ending March 8, 2014,
through July 19, 2014, were a result of his own fault and that he is subject to a fault
overpayment for those weeks under Section 804(a) of the Law.
Accordingly, because Claimant failed to inform the Service Center of
his severance payments, the orders of the Board are affirmed.
____________________________________
DAN PELLEGRINI, Senior Judge
9
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Kevin T. Quigley, :
Petitioner :
:
v. : Nos. 1927 and 1928 C.D. 2015
:
Unemployment Compensation :
Board of Review, :
Respondent :
ORDER
AND NOW, this 2nd day of May, 2016, the orders of the
Unemployment Compensation Board of Review, dated September 16, 2015, at
Nos. B-579531-A and B-579532-A, are affirmed.
____________________________________
DAN PELLEGRINI, Senior Judge