L. Harris v. UCBR ( 2021 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Laithe Harris, :
Petitioner :
:
v. : No. 402 C.D. 2020
: Argued: December 7, 2020
Unemployment Compensation :
Board of Review, :
Respondent :
BEFORE: HONORABLE P. KEVIN BROBSON, Judge1
HONORABLE J. ANDREW CROMPTON, Judge
HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge
OPINION BY JUDGE BROBSON FILED: March 17, 2021
Laithe Harris (Claimant) petitions for review of an order of the
Unemployment Compensation Board of Review (Board), dated April 1, 2020.
The Board vacated a decision of an Unemployment Compensation Referee (Referee)
and dismissed Claimant’s appeal as untimely pursuant to Section 501(e) of the
Unemployment Compensation Law (Law).2 For the reasons set forth below,
we vacate the decision of the Board and remand for further proceedings consistent
with this opinion.
I. BACKGROUND
The matter before us involves one of four appeals filed by Claimant from a
series of determinations issued by the Duquesne UC Service Center
1
This case was assigned to the opinion writer before January 4, 2021, when Judge Brobson
became President Judge.
2
Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P.S.
§ 821(e).
(Service Center). The determinations primarily concerned earnings that Claimant
failed to report in unemployment applications for claim weeks ending
between 2012 and 2016. (Certified Record (C.R.), Item No. 8 at 3-4, 16.) Claimant
filed a consolidated appeal of the determinations on October 3, 2019. (Id. at 13.)
Claimant’s appeal was separated into four subparts corresponding to the claim
weeks at issue: No. B-19-09-H-4801 (H-4801); No. B-19-09-H-4803 (H-4803);
No. B-19-09-H-4807 (H-4807); and No. B-19-09-H-4818 (H-4818). All of the
appeals involve the same set of operative facts. The instant appeal is from H-4818,
involving claim weeks ending January 2, 2016, through July 2, 2016.
(C.R., Item No. 2 at 1-2.) The notices concerning H-4818 were mailed to
Claimant in August 2016, while the other notices were mailed in April 2018.
(C.R., Item Nos. 4, 8 at 3-7.) Section 501(e) of the Law provides that an appeal is
timely if filed within fifteen days of the date the notice of determination was mailed.
Claimant’s filing in 2019, therefore, was untimely, and the Referee scheduled a
hearing to determine in the first instance whether the appeals could proceed on the
merits. (C.R., Item No. 8.) Claimant and his wife attended the hearing, but
Claimant’s employer did not appear. (Id. at 2.)
Claimant testified that he never received any of the notices.
(C.R., Item No. 8 at 8-10.) Claimant stated that he was the victim of identity theft
by his daughter, and, therefore, he believed the determinations were sent to his
daughter’s address. (Id.) At the time of the hearing, Claimant’s address for the
previous eleven years was a residence in Manchester, Pennsylvania, while his
daughter resided in Carlisle, Pennsylvania. (Id. at 8.) The Referee confirmed that
the Carlisle address was the address on file for Claimant at the time all of the notices
were mailed. (Id. at 14.) The claim record states that Claimant’s address was
2
changed on January 8, 2016. (C.R., Item No. 1 at 4.) Claimant testified that he never
resided at the Carlisle address. (C.R., Item No. 8 at 11.) Claimant learned of the
identity theft and potential fraud in late 2016 or 2017, and, thereafter, Claimant
became engaged in investigations with the police, the Pennsylvania Department of
Labor and Industry (Department), and the Federal Trade Commission (FTC).
(Id. at 8-13.) Despite having worked with a Department investigator on the identity
theft beginning in 2018, Claimant’s address was not corrected in the unemployment
system until August 20, 2019. (Id. at 11.) Claimant could not recall being asked to
verify his mailing address by a Department representative at any point after learning
of the identity theft. (Id. at 13-14.) On September 27, 2019, Claimant spoke with a
Service Center representative who informed Claimant to file a late appeal of the
determinations. (Id. at 13.) Claimant faxed his appeal on October 3, 2019. (Id.)
The Referee issued a decision as to appeal H-4818, concluding that
Claimant’s appeal could proceed nunc pro tunc under Section 501(e) of the Law
because a breakdown in the administrative process caused the untimeliness of
Claimant’s appeal. (C.R., Item No. 12 at 3.) The Referee further concluded that
Claimant was ineligible for benefits under Sections 401,3 401(c),4 4(u),5 and 404(d)6
of the Law, and that Claimant was responsible for a fault overpayment under
Section 804(a) of the Law for the weeks ending January 9, 2016, through
July 2, 2016, an amount totaling $14,071. (Id. at 4.)
3
43 P.S. § 801.
4
43 P.S. § 801(c).
5
43 P.S. § 753(u).
6
43 P.S. § 804(d).
3
Claimant appealed the Referee’s decision to the Board as it related to the fault
overpayment. (C.R., Item Nos. 13, 16.) The Board vacated the Referee’s decision
and dismissed Claimant’s appeal as untimely. (C.R., Item No. 17.) In so doing, the
Board issued its own findings of fact:
1. Effective December 20, 2015, the claimant applied for
unemployment compensation benefits.
2. The claimant gave his personal identification number to his daughter,
who lived with him, to file claims on his behalf.
3. On January 8, 2016, the claimant’s address was changed to his
daughter’s new address in Carlisle, Pennsylvania.
4. On August 19, 2016, the Department . . . mailed to the claimant’s last
known address—in Carlisle—three determinations: (1) denying
benefits to him; (2) establishing a $14,071.00 fault overpayment; and
(3) imposing a $2[,]110.65 penalty.
5. The determinations notified the claimant that September 6, 2016,
was the final day to file a valid appeal to a referee.
6. On February 27, 2017, the Internal Revenue Service mailed to the
claimant a notice of tax deficiency for underreporting his receipt of
benefits as income.
7. By March 24, 2017, the claimant had received at least the
determination denying benefits to him.
8. On March 24, 2017, the claimant reported to police that his daughter
was fraudulently filing claims for benefits using his application.
9. In January and February 2018, the claimant participated in the
Department’s investigation into his allegation against his daughter.
10. The claimant’s appeal was filed on October 3, 2019.
(Id. at 1-2.)
The Board concluded there was no administrative breakdown because the
determinations were mailed to Claimant’s last known address. (Id. at 2.)
Furthermore, while conceding that non-negligent circumstances caused Claimant
not to receive the determinations, the Board noted that Claimant’s time to appeal
was not indefinite, and Claimant must have filed his appeal soon after learning of
4
the determinations or learning of facts that would cause him to inquire into their
existence. (Id.) The Board went on to explain:
The [Internal Revenue Service’s (IRS)] February 27, 2017[] notice that
the claimant received more benefits than reported triggered the
claimant’s duty. Further, the March 24, 2017[] police report notes the
claimant had in his possession a determination denying benefits to him.
On January 31, 2018, the claimant advised a Department audit and
investigation specialist that he had received the overpayment
determination. On February 5, 2018, the claimant further
acknowledged that he received the overpayment determination. When
he filed his appeal, the claimant stated, “This appeal is being filed late
due to the fact that I was unaware of these incidents until late 2018.”
Despite the claimant’s knowledge of some issue with his benefits on or
about February 27, 2017, and his actual receipt of an adverse
determination no later than March 24, 2017, the claimant did not file an
appeal until October 3, 2019. This unexplained nearly three-year delay
negates any justification the claimant would have had for filing a late
appeal.
(Id. at 2-3.) Claimant now petitions this Court for review.
II. ISSUES
On appeal,7 Claimant argues: (1) substantial evidence does not exist to
support the Board’s findings of fact because the Board erroneously relied on
evidence that is not a part of the record; (2) the Board erred as a matter of law in
denying Claimant’s appeal nunc pro tunc; and (3) equitable principles require that
Claimant’s appeal should proceed on the merits.
7
This Court’s standard of review is limited to determining whether constitutional rights
were violated, whether an error of law was committed, or whether necessary findings of fact are
supported by substantial evidence. 2 Pa. C.S. § 704.
5
III. DISCUSSION
A. Substantial Evidence
The Board’s findings of fact are binding on appeal if, after a comprehensive
review of the record, the findings are supported by substantial evidence.
Brandt v. Unemployment Comp. Bd. of Rev., 643 A.2d 78, 79 (Pa. 1994).
Substantial evidence has been defined by this Court as “relevant evidence upon
which a reasonable mind could base a conclusion.” Johnson v. Unemployment
Comp. Bd. of Rev., 502 A.2d 738, 740 (Pa. Cmwlth. 1986). We examine the
evidence and testimony in the light most favorable to the prevailing party, giving
that party the benefit of any inferences that can logically and reasonably be drawn.
Id. In determining whether the Board erred in issuing its findings, this Court is
bound by the record below, and we cannot accept allegations of fact that are not
supported by record evidence. Hollingsworth v. Unemployment Comp. Bd. of Rev.,
189 A.3d 1109, 1112-13 (Pa. Cmwlth. 2018).
Claimant argues that the Board improperly relied upon evidence that is not
part of the certified record in this matter, and, therefore, the Board’s decision is
invalid on its face. Specifically, Claimant points to the Board’s reliance upon an
IRS notice dated February 27, 2017, and a police report from March 24, 2017.
When the Board considers multiple appeals filed by the same individual, the Board’s
regulations permit it to consider evidence from the related records in the companion
appeals. The Board’s regulations provide:
When the same or substantially similar evidence is relevant and
material to the matters at issue in the petition for appeal concerning
claims filed by more than one individual or, in multiple appeals, filed
by single individuals or their authorized representatives, the same time
and place for considering each appeal and claim may be fixed; hearings
thereon jointly conducted; a single record of the proceedings made; and
evidence introduced with respect to an appeal or claim considered as
6
introduced with respect to appeals or claims if, in the judgment of the
Board or referee having jurisdiction of the proceeding, such
consideration will not be prejudicial to any party.
34 Pa. Code § 101.22 (emphasis added).
Here, the IRS notice, the Northeastern Regional Police Department police
report, and the Department’s investigative report were introduced as evidence in
Claimant’s companion appeal, H-4801.8 (C.R., Item No. 11 at 5-6.) As noted above,
the four appeals filed by Claimant all concerned a common set of facts, and,
therefore, the appeals were considered in a consolidated fashion at two referee
hearings; one hearing considering the timeliness of the appeals and the other hearing
considering the merits. At the outset of the two hearings, the Referee discussed the
separate appeals and noted the documents being introduced that were relevant to
each. (C.R., Item No. 8 at 3-8; C.R., Item No. 11 at 1-9.) Claimant did not object
to the introduction of the documents. (C.R., Item No. 11 at 5-6, 9.) Accordingly, we
conclude that the documents fall squarely within the ambit of 34 Pa. Code § 101.22,
and we hold that the Board made no error in considering them on that basis for
resolution of the instant appeal in H-4818. We further reject any argument Claimant
makes regarding access to these documents. Claimant and his counsel have had
access—at all times—to the records in all four appeals to the Board and to the record
in the instant case and the case being heard seriately and docketed with this Court as
Harris v. Unemployment Compensation Board of Review, No. 401 C.D. 2020.
B. Nunc Pro Tunc Appeal
Claimant next argues that the Board erred as a matter of law in denying his
appeal nunc pro tunc. Under Section 501(e) of the Law, an appeal must be filed
8
The investigative report may have been introduced with regard to H-4803 as well as
H-4801, but the transcript is somewhat unclear on this point. (See C.R., Item No. 11 at 7.)
7
within fifteen days from the date a determination is mailed to the claimant’s last
known address. At the conclusion of the fifteen-day period, the determination
becomes final, and the Board no longer has jurisdiction to consider the matter.
Hessou v. Unemployment Comp. Bd. of Rev., 942 A.2d 194, 197-98 (Pa.
Cmwlth. 2008). In limited circumstances, however, the limitations period can be
waived, and the appeal will be considered timely as nunc pro tunc, or “now for then.”
Id. at 198. An appeal nunc pro tunc is only warranted, however, in extraordinary
circumstances “involving fraud or some breakdown in the court’s operation,” or
where the delay is caused by non-negligent circumstances either by the claimant or
a third party. Cook v. Unemployment Comp. Bd. of Rev., 671 A.2d 1130, 1131
(Pa. 1996) (internal quotations omitted) (quoting Bass v. Cmwlth., 401 A.2d 1133,
1135 (Pa. 1979)). The Pennsylvania Supreme Court characterized administrative
breakdown as occurring when “an administrative body acts negligently, improperly
or in a misleading way.” Union Elec. Corp. v. Bd. of Prop. Assessment, Appeals &
Rev., 746 A.2d 581, 584 (Pa. 2000). Where non-negligent circumstances cause the
untimeliness of an appeal, the appeal must be filed within a short period of time after
learning of the untimeliness. Cook, 671 A.2d at 1131. It is well-settled that the
burden of demonstrating the necessity of nunc pro tunc relief is on the party seeking
to file the appeal, and the burden is a heavy one. Blast Intermediate Unit No. 17 v.
Unemployment Comp. Bd. of Rev., 645 A.2d 447, 449 (Pa. Cmwlth. 1994).
Claimant challenges the Board’s denial of his appeal nunc pro tunc on several
grounds. He first argues that the fraud his daughter inflicted upon him excuses the
untimeliness. Alternatively, Claimant alleges an administrative breakdown occurred
because the determinations were all mailed to his daughter’s address, and the
Department failed to correct his address in its system until late 2019. In his final
8
allegation, Claimant challenges the Board’s conclusion that, even if non-negligent
circumstances caused the determinations to be mailed to the wrong address,
Claimant had inquiry notice long before he filed his appeal, and, therefore, the
untimeliness cannot be excused. Claimant argues the Board erred as a matter of law
in imposing this inquiry notice.
1. Fraud
We first address the question of fraud. Claimant contends that where the
circumstances surrounding a delayed appeal involve fraud, an appeal nunc pro tunc
is warranted. Fraud, as contemplated in this Court’s precedent, however, means
fraud by the administrative board or body against a claimant. Cook, 671 A.2d
at 1131; see also Hessou, 942 A.2d at 198 (“First, he can show the administrative
authority engaged in fraudulent behavior or manifestly wrongful or negligent
conduct.”); Blast Intermediate, 645 A.2d at 449 (“[T]he statutory time limit for filing
an appeal is mandatory in the absence of fraud or manifestly wrongful or negligent
conduct of the administrative authorities.”). Accordingly, while we do not question
whether a fraud has been inflicted upon Claimant by his daughter, this fraud would
not, under our case law, compel a finding that Claimant’s appeal be considered
timely.
2. Administrative Breakdown
As to the administrative breakdown, the Board concedes that an
administrative breakdown occurred, but only with regard to the three related appeals
filed by Claimant—H-4801, H-4803, and H-4807. The determinations for those
appeals were mailed in April 2018. The Department investigator, after speaking
with Claimant regarding the identity theft issue in January and February 2018, failed
to update his correct address. As a result, the Board allowed the appeals in
9
H-4801, H-4803, and H-4807 to proceed nunc pro tunc due to administrative
breakdown. The determinations in the instant matter, however, were mailed in
August 2016. At that time, the Board was unaware that Claimant’s address was
incorrect. The Board argues that, because the determinations were mailed to
Claimant’s last known address, no administrative breakdown occurred, despite the
fact that the address was incorrect.9
As noted previously, administrative breakdown occurs when the Department
acts in a negligent or improper manner. For example, in UPMC Health System v.
Unemployment Compensation Board of Review, 852 A.2d 467 (Pa. Cmwlth. 2004),
we concluded that the Department’s failure to address a determination to the correct
zip code was an administrative breakdown for which the employer should not be
punished. UPMC Health Sys., 852 A.2d at 468, 471. The appeal in UPMC Health
System was, therefore, allowed to proceed nunc pro tunc. Likewise, in United States
Postal Service v. Unemployment Compensation Board of Review, 620 A.2d 572 (Pa.
Cmwlth. 1993), we concluded that the Department’s failure to mail a
determination to the correct address, as provided to the referee at the outset of the
referee hearing, constituted an administrative breakdown. United States Postal
9
In support of its argument, the Board relies on Duhigg v. Unemployment Compensation
Board of Review, 181 A.3d 1 (Pa. Cmwlth. 2017), for the proposition that, if the Department mails
a determination to a claimant’s last known—but incorrect—address, it does not constitute an
administrative breakdown. The Board mischaracterizes the holding of Duhigg. There, while we
did reach the conclusion the Board claims, it was only because the claimant failed to update her
address after moving. Duhigg, 181 A.3d at 4-5. We reached a similar conclusion in Ferraro v.
Unemployment Compensation Board of Review, 464 A.2d 697 (Pa. Cmwlth. 1983), where the
claimant failed to update her address with the postal authorities more than two weeks after moving,
and, as a result, she never received the determinations at issue. Ferraro, 464 A.2d at 698-99.
While we disagree with the Board’s characterization of Duhigg, we nevertheless reach the same
conclusion that no administrative breakdown occurred, as explained in more detail hereafter.
10
Service, 620 A.2d at 574. In these cases, however, it was readily apparent there was
fault on behalf of the Department.
By contrast, in the instant matter, there was no negligence or improper action
by the Department with regard to mailing the determinations. The Department was
unaware that Claimant’s daughter changed Claimant’s address in the Department’s
system. The determinations were also not returned as undeliverable. Thus, the
Department mailed the determinations to Claimant’s last known address, as required
under Section 501(e) of the Law. Accordingly, we cannot conclude an
administrative breakdown occurred.
3. Non-Negligent Circumstances
In the final segment of our nunc pro tunc analysis, we consider whether
non-negligent circumstances should allow Claimant’s appeal to proceed. The Board
made several conclusions on this point. First, it held that non-negligent
circumstances led to the determinations being mailed to the wrong address, i.e., the
intervening actions of Claimant’s daughter was no fault of either Claimant or the
Department. Nevertheless, the Board imposed a duty upon Claimant to inquire into
the existence of the determinations, and it concluded that Claimant’s duty was
triggered when Claimant received the February 27, 2017 IRS notice, informing him
of an additional income from unemployment. The Board stated that, at that point in
time, Claimant should have learned of the notice of determinations and filed his
appeal. Alternatively, the Board held that, whether or not Claimant had inquiry
notice, Claimant had actual notice of the determinations by, at the latest, February
5, 2018. The Board based this conclusion on two documents: (1) a March 24, 2017
police report from Northeastern Regional Police Department regarding Claimant’s
charge against his daughter, which states that Claimant had in his possession an
11
adverse determination from the Department; and (2) a UC Fraud Investigation
Report from a Department audit and investigation specialist detailing meetings with
Claimant on January 31, 2018, and February 5, 2018, during which meetings
Claimant noted he had in his possession the determinations. (C.R., Item No. 17;
Suppl. Certified Record (S.C.R.), Item Nos. 1, 2.)
In reviewing a request for nunc pro tunc relief on non-negligent grounds,
“[t]he question of whether there are unique and compelling facts, which establish a
non-negligent failure to timely appeal, is a legal conclusion to be drawn from the
evidence and is reviewable on appeal.” V.S. v. Dep’t of Pub. Welfare, 131 A.3d 523,
527 (Pa. Cmwlth. 2015). In Cook, our Supreme Court addressed the issue of notice
and timeliness, stating:
[W]here an appeal is not timely because of non-negligent
circumstances, either as they relate to appellant or his counsel, and the
appeal is filed within a short time after the appellant or his counsel
learns of and has an opportunity to address the untimeliness, and the
time period which elapses is of very short duration, and appellee is not
prejudiced by the delay, the court may allow an appeal nunc pro tunc.
Cook, 671 A.2d at 1131 (emphasis added). Accordingly, a claimant must proceed
with reasonable diligence once he learns of the necessity to act. See also UPMC
Health Sys., 852 A.2d at 470; Stanton v. Dep’t of Transp., Bureau of Driver
Licensing, 623 A.2d 925, 927 (Pa. Cmwlth. 1993). Less clear in our precedent is
what an individual must do to learn of the necessity to act.
The Board directs this Court to Ercolani v. Department of Transportation,
Bureau of Driver Licensing, 922 A.2d 1034 (Pa. Cmwlth. 2007). In Ercolani, the
appellant alleged in support of his petition for an appeal nunc pro tunc that he never
received a notice suspending his driver’s license. Ercolani, 922 A.2d at 1036. The
appellant attached a copy of his certified driving record to his petition, however,
12
which included a notice that the document had been mailed to him. Citing the
“mailbox rule,” we held the record of mailing to his correct address was sufficient
to establish he received the document. Id. at 1037. Despite this conclusion, we
noted that, regardless of whether he received the document in question, the appellant
received a different letter shortly thereafter with similar information that gave him
actual notice of the issue, and the appellant still waited a month or two before filing.
This delay showed a lack of reasonable diligence and would, nevertheless, have
precluded his nunc pro tunc petition. Id. at 1037-38.
We addressed a similar albeit distinct issue in Croft v. Board of Property
Assessment, Appeals & Review, 134 A.3d 1129 (Pa. Cmwlth. 2016), which provides
further instruction. There, a taxpayer purchased property in 1999 that consisted of
two parcels, but the taxpayer was unaware of the property’s separation.
Croft, 134 A.3d at 1131. When the local property assessment office processed the
deed, it erroneously transferred only one of the parcels to the taxpayer’s name,
leaving the second parcel in the name of seller. Over the following years, the
taxpayer paid taxes on the one parcel but not on the second. In May 2013, the
taxpayer’s neighbor, a member of the city council, informed the taxpayer that his
property was actually two lots and that a number of liens were assessed on the second
lot. After learning of the issue through the neighbor, the taxpayer immediately began
contacting local tax authorities to resolve the issue. The taxpayer then filed an appeal
nunc pro tunc relating to the tax assessments on the second parcel dating back to
1999, but the trial court rejected his petition, holding, in relevant part, that he
unreasonably delayed from first having notice of the issue in May 2013 to his filing
in April 2014. Id. at 1133-34. Reversing the trial court’s decision, we held, in the
first instance, that the time of delay is not the defining factor in assessing a nunc pro
13
tunc appeal. While noting that time of delay is significant to the consideration, the
Court stated the primary matter of concern is the reason for the delay, as nunc pro
tunc relief is limited to cases where “unique and compelling factual circumstances
[are] presented to the court.” Id. at 1136 (quoting Dep’t of Transp., Bureau of Traffic
Safety v. Johnson, 569 A.2d 409, 411 (Pa. Cmwlth. 1990)). As it concerns due
diligence, the Croft Court looked to the Pennsylvania Supreme Court’s guidance in
Sprague v. Casey, 550 A.2d 184 (Pa. 1988), where the Supreme Court explained:
The correct inquiry in determining whether his conduct resulted in a
want of due diligence is to focus not upon what the plaintiff knows,
but what he might have known, by the use of the means of information
within his reach, with the vigilance the law requires of him.
What the law requires of petitioner is to discover those facts which
were discoverable through the exercise of reasonable diligence.
In the instant case, petitioner had not only to discover the facts
surrounding his claim, but also to ascertain the legal consequences of
those facts.
Croft, 134 A.3d at 1137 (quoting Sprague, 550 A.2d at 188) (emphasis added)
(internal citations and quotations omitted). The Croft Court then held that the
taxpayer had presented unique and compelling facts demonstrating that, from the
time the taxpayer learned of the issue, he engaged in significant efforts to have it
resolved, “weaving from one official to another among the [t]axing [a]uthorities until
it became clear that he needed legal assistance.” Croft, 134 A.3d at 1137. The Croft
Court also noted as significant the fact that it was the taxpayer’s own investigation,
rather than that of the taxing authorities, that brought the issue to light, despite the
fact the taxing authorities had the information at their disposal to discover and
resolve the problem. Id. at 1134-35. It was, therefore, apparent that the taxpayer
“exercised reasonable diligence to discover the facts underpinning his request to
14
appeal nunc pro tunc and the legal consequences of those facts,” and his untimely
appeal was allowed to proceed. Id. at 1137.
Accordingly, based on the foregoing, our review in the present case is focused
on whether Claimant has presented unique and compelling facts demonstrating
that: (1) if he had inquiry notice of his untimely appeal, he engaged in reasonable
diligence to uncover the facts underlying his appeal (and the legal consequences
thereof); or (2) if he had actual notice of his untimely appeal, he engaged in
reasonable diligence to file his appeal within a reasonable time.
We first consider the question of inquiry notice. The Board argues that
Claimant had inquiry notice as early as February 27, 2017, when he received the IRS
notice, but that he unreasonably waited a year to first contact the Department.
(Board Brief at 15.) The Board cites to the claim record, which indicates that
Claimant contacted the Department regarding possible fraud on January 30, 2018.
(C.R., Item No. 1 at 2.) The Board makes no mention of the five other notations in
the claim record concerning Claimant’s attempt to contact the Department regarding
the identity theft, all of which predate the January 30, 2018 notation. The earlier
notations are as follows: (1) a February 3, 2017 notation stating “LEFT VM
@ 7:30 FOR CLT TO CALL ME DIRECTLY RE: POTENTIAL FRAUD ISSUE”;
(2) three notations, all from March 2, 2017, stating in full: “SPOKE TO CLT RE:
FRAUD; POSSIBLE DAUGHTER FILED FOR BENEFITS ON HIS CLAIM
WHILE HE WAS WORKING . . . CLT ADV TO CONTACT ME WITH ADD’L
INFO; ADV HIS CASE IS CURRENTLY PENDING PROSECUTION AND WE
NEED TO KNOW IF SOMEONE OTHER THAN HIM FILED”; and (3) a notation
on March 3, 2017, stating: “CLT CALLED STATED FILED POLICE REPORT.”
(C.R., Item No. 1 at 2.) Thus, according to the claim record, at the time the Board
15
is charging Claimant with inquiry notice, Claimant was in direct contact with the
Department to inform it of the identity theft and that he was filing criminal charges
against his daughter. (Id.) Claimant’s testimony was that he contacted the
Department immediately upon discovering the identity theft issue through the IRS.
(C.R., Item No. 11 at 13.) There is no evidence that the Department furnished
Claimant with the adverse notices of determination or even informed him of their
existence. To the contrary, Claimant testified that when he first contacted the
Department, a Department representative advised him to go to the IRS and file a
claim there. (C.R., Item No. 8 at 9-10.) Claimant then contacted the Department
again on January 30, 2018, which corresponds to this notation in the claim record:
“CLMT CALLED IN CONCERNING POSSIBLE FRAUD; EXPLD TO FILL
OUT ONLINE FORM, WHICH HE SAID HE DID 2WKS AGO.” (C.R., Item
No. 1 at 2.) The UC Fraud Investigation Report indicates that the Department
investigator, Bonnie Haas, first met with Claimant in late January and early
February 2018 and that it was Claimant’s contact that triggered the investigation by
the Department.10 (S.C.R., Item No. 1 at 2-3.) Consequently, this is not a situation
like Ercolani, where the individual received inquiry notice and did nothing.
Rather, the facts here are more akin to Croft, where the taxpayer received inquiry
notice and immediately contacted the relevant authority in an attempt to resolve the
issue.
The UC Fraud Investigative Report provides: “This investigation was initiated as a result
10
of a UC Fraud Message submitted by Laithe Harris (claimant) alleging someone else filed for and
received UC benefits under his name and social security number while he was fully employed.”
(S.C.R., Item No. 1 at 2.)
16
The Board’s decision is similarly based upon a narrow review of the record
as it relates to actual notice and the police and investigative reports.11 Again, like
the taxpayer in Croft, Claimant engaged in significant efforts to resolve the issue
from the outset. Claimant testified and the claim record demonstrates that, after the
IRS notified him of the additional unemployment income, he contacted the
Department to inform it of the issue. (C.R., Item No. 8 at 8-10.) This contact is
confirmed by the claim record. (C.R., Item No. 1 at 2.) Claimant testified that a
Department representative instructed Claimant to work on the issue with the IRS and
later advised him to file a claim with the FTC, both of which he did. (C.R., Item
No. 8 at 10.) The claim record and Identity Theft Form, which form Claimant
generated with the Department, further confirm that Claimant filed criminal charges
against his daughter and participated in an investigation with the Northeastern
Regional Police Department into her actions. (C.R., Item No. 1 at 2; S.C.R., Item
No. 2 at 1-7.) The UC Fraud Investigation Report shows that it was Claimant who
contacted the Department and initiated the fraud investigation, which resulted in
Claimant meeting with a Department investigator on two separate occasions and
providing information regarding his daughter’s actions. (S.C.R., Item No. 1 at 2-3.)
Thus, over the time period in question, Claimant was involved in four different
investigations with state, local, and federal authorities, including a criminal
11
We also note here that both documents are hearsay. Hearsay is an out-of-court statement
that a party offers in evidence to prove the truth of the matter asserted in the statement.
Pa. R.E. 801(c). The police report and UC Fraud Investigation Report were drafted long before
the Referee hearing, they were offered at the Referee hearing for the truth of the matter asserted in
the reports, and neither document was validated by the Department investigator Bonnie Haas or
Officer Scott George, the creators of the documents. Claimant did not preserve the issue for appeal
by including it in the statement of questions presented or argument section of his brief to this Court,
however, and, therefore, we are prevented from disposing of this case on the grounds that the
documents are hearsay. See Pa. R.A.P. 2116(a), 2119(e). Rather, Claimant addresses the potential
hearsay nature of the documents in his reply brief in response to statements in the Board’s brief.
17
investigation against his own daughter, in an attempt to resolve the issue.
These circumstances suggest that Claimant did not, by any means, sit on his hands,
although neither the Referee nor the Board engaged in such an analysis.
Most troubling to this Court, however, is the fact that, despite Claimant having
been in contact with the Department beginning in 2017, and working with a
Department investigator in 2018, Claimant’s testimony is that he first learned he
should file a late appeal on September 27, 2019, after speaking with a Service Center
representative. (C.R., Item No. 8 at 13.) According to Claimant, at no time did he
receive any direction from the Department to file a nunc pro tunc appeal, and there
is no other evidence that Claimant was aware prior to September 27, 2019, that he
should or could file a late appeal. The facts do show, however, that Claimant
received instructions from the Department advising him to engage in a number of
efforts that did not include filing an appeal. As noted previously, these instructions
included (but may not be limited to) working with the IRS to gain information
regarding the additional income, filing a claim with the FTC, and aiding a
Department investigator in an investigation into his daughter’s actions.12
We note that the facts of this case are exceptional—they may be exactly what
this Court considered in Croft when it recited the principle that nunc pro tunc relief
is reserved for “unique and compelling factual circumstances.” Croft, 134 A.3d
at 1136. It appears to this Court, however, that the Board did not consider the totality
of the “unique and compelling factual circumstances” presented in this case to
determine whether Claimant engaged in reasonable diligence in filing his appeal.
Rather, it appears that the Board misapprehended the breadth of the inquiry
12
Claimant may have believed his actions with regard to the various investigations,
including the investigation conducted by the Department, were part of the process to resolve the
identity theft matter in relation to the notice of determinations at issue in this case.
18
necessitated by the circumstances of this case, which could require consideration of
both the actions of Claimant and the Department. Along those lines, Claimant
testified that the Department failed to cooperate in the investigation of the criminal
charges in this matter, thereby resulting in the failure of the police to file criminal
charges against Claimant’s daughter. (C.R., Item No. 11 at 15.) If Claimant’s
testimony is to be believed, the Court is somewhat perplexed at the notion that the
Department, while seeming to agree that Claimant’s daughter engaged in identity
theft to the detriment of both the Department and Claimant, chose to pursue the
matter in the present forum rather than the criminal courts. It appears to the Court
that the Department may have relied upon the information provided by Claimant to
form the basis of its efforts to recoup its loss against him, while not informing him
of his appeal options or taking action against Claimant’s daughter. These
circumstances are troubling to the Court, especially considering the narrow analysis
applied by the Board in considering whether nunc pro tunc relief is warranted.
Accordingly, we must vacate the Board’s decision and remand for further
proceedings, including an evidentiary hearing to allow the parties to provide
evidence on this issue of reasonable diligence.
IV. CONCLUSION
For the reasons set forth above, we vacate the decision of the Board and
remand for further proceedings consistent with this opinion.
P. KEVIN BROBSON, Judge
19
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Laithe Harris, :
Petitioner :
:
v. : No. 402 C.D. 2020
:
Unemployment Compensation :
Board of Review, :
Respondent :
ORDER
AND NOW, this 17th day of March, 2021, the order of the Unemployment
Compensation Board of Review is VACATED, and the matter is REMANDED to
the Board for further proceedings consistent with this Opinion.
Jurisdiction relinquished.
P. KEVIN BROBSON, Judge