New Castle Area S.D. v. UCBR ( 2021 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
New Castle Area School District, :
Petitioner :
:
v. : No. 645 C.D. 2020
: Submitted: April 9, 2021
Unemployment Compensation :
Board of Review, :
Respondent :
BEFORE: HONORABLE P. KEVIN BROBSON, President Judge
HONORABLE ANNE E. COVEY, Judge
HONORABLE J. ANDREW CROMPTON, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY PRESIDENT JUDGE BROBSON FILED: September 23, 2021
New Castle Area School District (Employer) petitions for review of an order
of the Unemployment Compensation Board of Review (Board), dated June 17, 2020,
which awarded Claimant unemployment compensation benefits. In so doing, the
Board reversed the order of the Unemployment Compensation Referee (Referee),
which denied Claimant benefits pursuant to Section 402(e) of the Unemployment
Compensation Law (Law),1 relating to discharge for willful misconduct. We affirm.
1
Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P.S.
§ 802(e). Section 402(e) of the Law provides that an employee shall be ineligible for compensation
for any week “[i]n which his unemployment is due to his discharge or temporary suspension from
work for willful misconduct connected with his work.” Relevant to this matter, our Court has held
that when an employer discharges a claimant due to an alleged criminal act like theft, acceptance
into an accelerated rehabilitative disposition (ARD) program is insufficient proof that the claimant
Claimant was a custodial employee with Employer beginning in 1991 until
his suspension from work on September 26, 2019.2 (C.R. at 9, 31, 35-36;
Reproduced Record (R.R.) at 2a, 41a-45a.) On September 12, 2019, the New Castle
Police Department filed criminal charges against Claimant, alleging that Claimant
used his access as an employee with Employer to obtain funds from a parent teacher
organization “to pay his personal First Energy/Penn Power utility bills totaling
$1[,]017.85.”3 (R.R. at 35a-37a.) Claimant was charged with theft, access device
fraud, and criminal use of a communication facility. (C.R. at 42; R.R. at 36a.)
Employer learned of the charges and subsequently suspended Claimant without pay
as of September 26, 2019. (C.R. at 36.) On October 3, 2019, Employer issued to
Claimant a Notice of Right to Hearing and Statement of Charges letter, alleging that
Claimant engaged in improper conduct, as follows:
That on or about January 25, 2018[,] through May 2019, [Claimant]
unlawfully took, converted and otherwise exercised control over
$1,017.85 from funds belonging to [a parent teacher organization]
without authority or permission to do so. [Claimant] used these funds
for personal expenses[,] and [Claimant’s] act[ion]s or conduct has
resulted in criminal charges [against him] . . . . [Claimant’s] actions
and conduct are a breach of trust and/or a misuse of power as an
employee.
committed willful misconduct. Reading Area Water Auth. v. Unemployment Comp. Bd. of Rev.,
137 A.3d 658, 663 (Pa. Cmwlth. 2016) (citing Unemployment Comp. Bd. of Rev. v. Vereen,
370 A.2d 1228, 1230-31 (Pa. Cmwlth. 1977)).
2
Employer suspended Claimant with pay beginning September 16, 2019, and without pay
beginning September 26, 2019. (Certified Record (C.R.) at 35-36, 47.) Both Employer and
Claimant reported Claimant’s final day of work as September 25, 2019. (C.R. at 9, 25.)
3
The funds were allegedly drawn from the account of the Croton Parent Teacher
Organization (hereafter, parent teacher organization), which account Claimant had access to as an
employee. (C.R. at 38, 42.)
2
(R.R. at 31a-32a.) The letter also provided that Claimant’s “actions and conduct
violated [Employer] [P]olic[y] #517,” which prohibits employees from violating
federal, state, or municipal laws or regulations, but it noted that Claimant had a right
to a hearing before Employer’s school board at which he could contest the
allegations laid against him. (Id. at 31a-34a.) Thereafter, Claimant entered into the
ARD program for first-time offenders in relation to his criminal charges, wherein,
upon successful completion of the ARD program, he could have the pending charges
dismissed and expunged from his record. (See C.R. at 50-54.) A school board
hearing was held on November 25, 2019, and the school board officially terminated
Claimant’s employment on December 16, 2019. (R.R. at 41a-45a.)
Claimant applied for unemployment compensation benefits on
December 8, 2019, stating that he was discharged by Employer because of a
“wrongful accusation.” (C.R. at 8-10.) Employer similarly reported that it
terminated Claimant’s employment, but it stated that the cause of separation was
Claimant’s “theft of funds from the [parent teacher] organization,” as well as a
violation of Employer’s policy. (Id. at 21.) The Indiana UC Service Center (Service
Center) denied benefits pursuant to Section 402(e) of the Law, concluding that
Claimant’s theft constituted willful misconduct. (Id. at 60.) Claimant appealed the
Service Center’s determination, and a hearing was scheduled before the Referee.
(Id. at 64, 75.) Claimant attended the hearing accompanied by counsel, and
Employer’s counsel and an additional witness appeared on behalf of Employer.4
(Id. at 80.)
4
At the Referee hearing, Employer’s counsel testified as a witness on Employer’s behalf.
(C.R. at 101-02.)
3
After the hearing, the Referee issued a decision, concluding that Claimant was
ineligible for benefits pursuant to Section 402(e) of the Law. (R.R. at 6a-11a.) The
Referee reasoned:
[B]ased on the credibl[e] testimony of . . . [E]mployer’s two witnesses
as to their personal knowledge and observations[,] and due to the
inferences of . . . [C]laimant’s guilt of theft and [the] competent
evidence that . . . [C]laimant is now participating in the ARD program
as a result of criminal charges for his alleged use of checking account
information belonging to the [parent teacher organization] account to
pay . . . [C]laimant’s personal electric utility bills, the Referee finds that
. . . [C]laimant committed theft[,] which is a per se finding of willful
misconduct.
(Id. at 11a.)
Claimant appealed the Referee’s decision to the Board. (C.R. at 236.) The
Board reversed, concluding that Employer had not met its burden to establish that
Claimant engaged in the alleged willful misconduct—i.e., the theft of the funds from
the parent teacher organization. (R.R. at 2a-4a.) In so doing, the Board issued its
own findings of fact, as follows:
1. [C]laimant worked as a full[-]time, year-round custodial
employee for . . . [Employer] from June 1991 to September 26,
2019.
2. During . . . [C]laimant’s employment, . . . [E]mployer maintained
a written policy that prohibited employees from violati[ng] . . .
federal, state[,] or applicable municipal laws or regulations and
provided that the [s]uperintendent or designee [of the school
district] shall prepare and promulgate disciplinary rules for
violations of [Employer’s] policies, rules and procedures that
provide progressive penalties, including verbal warning, written
warning, reprimand, suspension, dismissal or pursuit of civil and
criminal sanctions.
3. [C]laimant was aware of . . . [E]mployer’s policy and of [its]
consequences.
4
4. [C]laimant’s position required him to work in several schools for
. . . [Employer], as well as within the administration building,
where he had access to various buildings including rooms where
checking account information belonging to the [parent teacher
organization] was stored.
5. In 2019, . . . [E]mployer became aware of a pending criminal
investigation by the New Castle Police Department into . . .
[C]laimant’s alleged wrongdoings related to use of the [parent
teacher organization] checking account information to pay his
personal utility bills.
6. After becoming aware of the New Castle Police Department’s
investigation, . . . [E]mployer initiated an internal investigation
conducted by . . . [E]mployer’s administrator and . . . counsel.
7. In September 2019 criminal charges were filed against . . .
[C]laimant for allegedly using checking account information
belonging to the [parent teacher organization] account to pay . . .
[C]laimant’s personal electric utility bills.
8. On September 16, 2019, during . . . [E]mployer’s internal
investigation, . . . [E]mployer placed . . . [C]laimant on
suspension.
9. On October 3, 2019, . . . [E]mployer’s counsel sent . . . [C]laimant
a Notice of Right to Hearing and Statement of Charges letter.
10. In November 2019, . . . [C]laimant was being considered for the
[ARD] program which, if approved, would permit . . . [C]laimant
the opportunity to participate in supervised probation[.] [A]t the
successful completion of the supervised probation and ARD
program, . . . [C]laimant would have the opportunity to expunge
any record of the . . . pending criminal charges.
11. A hearing before the . . . school board was conducted on
November 25, 2019.
12. On December 16, 2019, the [s]chool [b]oard passed a vote to
discharge . . . [C]laimant, . . . and found that [he] violated . . .
[E]mployer’s policy by violating state laws and . . . that . . .
[C]laimant’s actions and conduct were a breach of trust and[/]or
a misuse of power as an employee.
5
13. As of December 24, 2019, . . . [C]laimant was enrolled in the
ARD program for the related criminal charges and he was
anticipating completion of the ARD program as of June 12, 2020.
14. [C]laimant never pled guilty to, nor has he been convicted of, any
of the charges levied against him.
(Id. at 2a-3a.) The Board explained its rationale for reversing the decision of the
Referee, writing:
Most, if not all, of the evidence in support of . . . [E]mployer’s
allegation that . . . [C]laimant repeatedly stole money from the [parent
teacher organization] and used the funds to pay his utility bills, is from
documents that were not properly authenticated, as well as hearsay
statements. [E]mployer’s witnesses had no firsthand testimony
concerning the allegations. [C]laimant’s counsel properly objected to
all of this evidence. Moreover, it is not clear from the record that when
. . . [C]laimant and . . . [E]mployer entered into a stipulation regarding
the exhibits to be used at the hearing before [the] school board, that . . .
[C]laimant was stipulating that he had, in fact, engaged in the alleged
misconduct. Finally, . . . [C]laimant’s statement at the school board
hearing clearly was not an apology for committing theft. Rather, it
appears that [he] was apologizing for implicating others. In no way
does the Board find . . . [that C]laimant’s statement was an admission
of guilt for stealing the funds. Finally, the courts have repeatedly held
that a claimant’s admittance into an ARD program does not constitute
a guilty plea[,] nor is it a conviction. Therefore, benefits are granted
under Section 402(e) of the Law.
(Id. at 4a.) Employer now petitions this Court for review.
In its brief on appeal,5 Employer provides the following in its statement of
questions involved: “Whether the [Board] made an error of law in granting
unemployment benefits to Claimant when substantial evidence presented by
[Employer] clearly established willful misconduct under [S]ection 402(e) [of the
5
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.
6
Law?]” (Employer’s Brief at 4.) At the outset, it is somewhat unclear from this
language whether Employer is attempting to argue that the Board erred in concluding
there was no willful misconduct or that the record lacks substantial evidence to
support the Board’s findings of fact. This point is further complicated by the fact
that, in its argument section, Employer abandons any substantial evidence and/or
error of law issue and instead asserts that the Board capriciously disregarded
evidence of Claimant’s testimony and the stipulation of an exhibit at the school
board hearing. As a result, the Board asserts that Employer has waived the error of
law issue on appeal because the argument is not sufficiently developed in
Employer’s brief. In support thereof, the Board cites Berner v. Montour Township,
120 A.3d 433 (Pa. Cmwlth. 2015), for the proposition that “a party’s failure to
sufficiently develop an issue in a brief constitutes a waiver of the issue.” (Board’s
Brief at 11-12 (citing Berner, 120 A.3d at 437 n.6).) The Board further argues that,
because Employer does not challenge the Board’s findings of fact, those factual
findings are binding on appeal. (Board’s Brief at 7 n.6 (citing Salamak v.
Unemployment Comp. Bd. of Rev., 497 A.2d 951, 954 (Pa. Cmwlth. 1985)).) We
agree with the Board.
Employer provides no examples or elucidation in its brief as to how the Board
erred on the law or where the record does not support the Board’s factual findings.
Rather, the entirety of Employer’s argument concerns whether the Board
capriciously disregarded relevant evidence. The error of law argument, therefore, is
not sufficiently developed for appellate review, and we conclude the issue is waived.
See In re Tax Claim Bureau of Lehigh Cnty. 2012 Judicial Tax Sale, 107 A.3d 853,
857 n.5 (Pa. Cmwlth.) (“A party’s failure to develop an issue in the argument section
of its brief constitutes waiver of the issue.”), appeal denied, 117 A.3d 299 (Pa. 2015).
7
We similarly find that Employer has not challenged any specific factual finding, and
the Board’s findings are, therefore, binding on appeal. Campbell v. Unemployment
Comp. Bd. of Rev., 694 A.2d 1167, 1169 (Pa. Cmwlth. 1997).
Pennsylvania Rule of Appellate Procedure 2116 mandates, moreover, that
“[n]o question will be considered [on appeal] unless it is stated in the statement of
questions involved or is fairly suggested thereby.” As noted above, Employer’s
statement of questions involved inexactly argues substantial evidence and/or error
of law, but it does not set forth a question concerning capricious disregard.
Nevertheless, even if Employer’s statement of questions involved could be read
expansively to include a capricious disregard argument, we agree with the Board’s
position that the evidence at issue—Claimant’s testimony and the stipulation of the
exhibit at the school board hearing—was clearly considered in the Board’s decision,
where the Board concluded that neither piece of evidence was dispositive of whether
Claimant engaged in willful misconduct.
The Board is the ultimate finder of fact and is entitled to make its own
determinations as to witness credibility and evidentiary weight, as well as to resolve
conflicts in the evidence. Peak v. Unemployment Comp. Bd. of Rev., 501 A.2d 1383,
1388-89 (Pa. 1985); DeRiggi v. Unemployment Comp. Bd. of Rev., 856 A.2d 253,
255 (Pa. Cmwlth. 2004). Our standard for capricious disregard is as follows: “When
determining whether the Board capriciously disregarded the evidence, the Court
must decide if the Board deliberately disregarded competent evidence that a person
of ordinary intelligence could not conceivably have avoided in reaching a particular
result, or stated another way, if the Board willfully or deliberately ignored evidence
that any reasonable person would have considered to be important.” Bennett v.
Unemployment Comp. Bd. of Rev., 33 A.3d 133, 136 n.3 (Pa. Cmwlth. 2011), appeal
8
denied, 67 A.3d 798 (Pa. 2013) (quoting Jackson v. Unemployment Comp. Bd. of
Rev., 933 A.2d 155, 156 n.4 (Pa. Cmwlth. 2007)).
Employer directs that Claimant’s statement at the school board hearing, which
Employer characterizes as an admission of Claimant’s guilt, was unjustifiably
ignored by the Board in rendering its decision. Claimant made the following
statement at the November 25, 2019 hearing before the school board:
Ladies and gentlemen, members of the [school b]oard, I’m sorry that
we all have to be here today and I’m sorry that this [school] district[,]
that I’ve grown up in, that I’ve worked [in] for almost thirty years, has
to be subject to this embarrassment. I’ve been with this [school] district
my entire life and I am embarrassed by this whole thing. On advice of
counsel I’m very limited [i]n what I can discuss here today, beyond how
much I care for this [school] district and how much I’m proud of and
need my employment here. What I can say is that if it was ever
perceived that I was attempting to accuse or that I did accuse someone
of the things that I was being accused of[,] I’m truly sorry for that. I
never meant to . . . accus[e] anybody of anything. I certainly wouldn’t
wish anybody to have to go through what I’ve gone through with these
allegations in the past six months. Especially not anybody in this room
or anybody [that] someone in this room cares about. For that I am truly
sorry. Thank you for listening to me. And I am pleading with you to
let me continue my employment with . . . [Employer]. I will not make
you regret it. Thank you.
(R.R. at 26a-27a.)
Contrary to Employer’s averment, however, the Board directly addressed
Claimant’s testimony before the school board in its decision, writing: “[C]laimant’s
statement at the school board hearing clearly was not an apology for committing
[the] theft. Rather, it appears that . . . [C]laimant was apologizing for implicating
others. In no way does the Board find . . . [that C]laimant’s statement was an
admission of guilt for stealing the funds [from the parent teacher organization].”
(R.R. at 4a.) Based on this language, it is clear the Board considered Claimant’s
9
testimony at the school board hearing and concluded that it was not dispositive on
the issue of Claimant’s guilt of the theft of the funds. As a result, we conclude the
Board did not “willfully or deliberately ignore[]” this evidence. Bennett, 33 A.3d at136 n.3.
Next, as it concerns the stipulation of an exhibit between the parties, counsel
for Employer and counsel for Claimant agreed prior to the school board hearing to
stipulate to seven exhibits. (R.R. at 18a.) The exhibits included, inter alia, a copy
of the New Castle Police Department criminal complaint and the affidavit of
probable cause.6 (R.R. at 19a.) When this exhibit was officially admitted at the
hearing, Employer’s counsel stated:
Exhibit No. 4 is a copy of the [New Castle Police Department] criminal
complaint and the affidavit of probable cause. Now, this is where the
stipulation [becomes relevant][.] Officer Buzzwell . . . is here. He’s in
an anteroom at the moment. [Counsel for Claimant has] indicated that
he has literally no questions [for the Officer]. [As such, Officer
Buzzwell] would be testifying [directly] from th[e] affidavit. So, we
are stipulating and putting that criminal complaint and affidavit into
evidence as an agreed-upon document.
(Id.)
In its brief, Employer essentially argues the foregoing stipulation is
“tantamount to an admission of the facts” concerning Claimant’s theft of funds from
the parent teacher organization, and the Board, therefore, erred in disregarding this
6
The exhibits included: (1) the letter suspending Claimant with pay, (2) the Notice of
Right to Hearing and Statement of Charges letter suspending Claimant without pay, (3) a notice
of charges letter from Employer after Employer engaged in its own internal investigation into
Claimant’s conduct, (4) a copy of the New Castle Police Department criminal complaint and the
affidavit of probable cause, submitted in lieu of testimony from the charging officer, (5) a
document with Employer’s own calculations of the wages that were withheld from Claimant
during his suspension, (6) a letter from the parent teacher organization indicating that
Claimant entered into the ARD program, and (7) a copy of the common pleas court docket.
(R.R. at 18a-21a.)
10
competent and relevant evidence. (See Employer’s Brief at 6, 9.) Again, however,
the Board did, in fact, address this evidence in its decision, finding that “it [was] not
clear from the record that when . . . [C]laimant and . . . [E]mployer entered into a
stipulation regarding the exhibits to be used at the hearing before [the] school board,
that . . . [C]laimant was stipulating that he had, in fact, engaged in the alleged
misconduct.” (R.R. at 4a.) This language clearly shows that the Board did not
“deliberately disregard[]” the stipulated exhibit.7 Bennett, 33 A.3d at 136 n.3.
Rather, like Claimant’s statement at the school board hearing, the Board clearly
considered the evidence and concluded that it was not dispositive on the question of
Claimant’s guilt of the theft of funds.
Accordingly, the Board did not capriciously disregard the evidence of record,
and we, therefore, affirm the order of the Board.
P. KEVIN BROBSON, President Judge
7
In the statement of facts section of its brief, Employer also seems to argue that “the Board
completely discounts or ignores . . . Employer’s two witnesses[’] . . . personal knowledge and
observations.” (Employer’s Brief at 7.) While this was not raised in the argument section of
Employer’s brief, we nevertheless note that the Board also addressed this evidence, finding that
“[E]mployer’s witnesses had no firsthand testimony concerning the allegations [against
Claimant]” and “[C]laimant’s counsel properly objected to [the testimony as hearsay].”
(R.R. at 4a.) Hence, as with the other evidence Employer challenges, the Board clearly considered
and discounted the testimony of Employer’s witnesses. Accordingly, even if this argument was
properly raised, we would nonetheless conclude that the evidence was not capriciously disregarded
by the Board. Bennett, 33 A.3d at 136 n.3.
11
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
New Castle Area School District, :
Petitioner :
:
v. : No. 645 C.D. 2020
:
Unemployment Compensation :
Board of Review, :
Respondent :
ORDER
AND NOW, this 23rd day of September, 2021, the order of the Unemployment
Compensation Board of Review, dated June 17, 2020, is hereby AFFIRMED.
P. KEVIN BROBSON, President Judge
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
New Castle Area School District, :
Petitioner :
:
v. :
:
Unemployment Compensation :
Board of Review, : No. 645 C.D. 2020
Respondent : Submitted: April 9, 2021
BEFORE: HONORABLE P. KEVIN BROBSON, President Judge
HONORABLE ANNE E. COVEY, Judge
HONORABLE J. ANDREW CROMPTON, Judge
OPINION NOT REPORTED
DISSENTING OPINION
BY JUDGE COVEY FILED: September 23, 2021
Respectfully, I disagree with the Majority’s conclusions: New Castle Area
School District “[(]Employer[)] provides no examples or elucidation in its brief as to
how the [Unemployment Compensation (UC) Board of Review (UCBR)] erred on the
law . . . . The error of law argument, therefore, is not sufficiently developed for
appellate review, and we conclude the issue is waived[,]” New Castle Area Sch. Dist.
v. Unemployment Comp. Bd. of Rev. (Pa. Cmwlth. No. 645 C.D. 2020, filed September
23, 2021), slip op. at 7 (emphasis added); and “Employer’s statement of questions
involved inexactly argues substantial evidence and/or error of law, but it does not set
forth a question concerning capricious disregard.” Id. at 8 (emphasis added).
Further, I disagree with the Majority’s ruling that “the [UCBR] did not capriciously
disregard the evidence of record[.]” Id. at 11. I believe that a reasonable person
considering: John J. Beshero’s (Claimant) testimony at the New Castle Area School
Board (School Board) hearing, i.e., Claimant apologized for the embarrassment caused
to Employer and acknowledged his own embarrassment; and the stipulation of an
exhibit offered at the School Board hearing, i.e., Claimant stipulated that if the police
officer who wrote the criminal complaint and Affidavit of Probable Cause was called,
he would testify accordingly, would find that Claimant committed willful misconduct.
Accordingly, I would reverse the UCBR’s order.
Claimant worked as a full-time, year-round custodial employee for
Employer from June 1991 to September 26, 2019. See Reproduced Record (R.R.) at
2a (UCBR Dec. Finding of Fact (FOF) 1). During Claimant’s employment, Employer
maintained a written policy that prohibited employees from violating federal, state or
applicable municipal laws or regulations. See id. (FOF 2). Claimant was aware of
Employer’s policy and the consequences of violating the policy. See id. (FOF 3).
Claimant’s position required him to work in several of Employer’s buildings, including
the administration building, where he had access to rooms in which checking account
information belonging to the Croton Area Parent Committee (PTC) was stored. See id.
(FOF 4).
In 2019, Employer became aware that the New Castle Police Department
was conducting a criminal investigation into Claimant’s alleged use of the PTC
checking account information to pay his personal utility bills. See R.R. at 2a-3a (FOF
5). Thereafter, Employer initiated an internal investigation conducted by Employer’s
administrator and Employer’s counsel. See R.R. at 3a (FOF 6). In September 2019,
Claimant was criminally charged for using PTC’s checking account information to pay
his personal electric utility bills. See id. (FOF 7). On September 16, 2019, Employer
suspended Claimant pending its internal investigation. See id. (FOF 8).
On October 3, 2019, Employer’s counsel sent Claimant a Notice of Right
to Hearing and Statement of Charges letter. See id. (FOF 9). In November 2019,
Claimant was being considered for the Accelerated Rehabilitative Disposition (ARD)
program, which, if approved, would permit Claimant the opportunity to participate in
AEC - 2
supervised probation and, at the successful completion of the supervised probation and
ARD program, Claimant would have the opportunity to expunge any record of the
related pending criminal charges. See id. (FOF 10). The School Board conducted a
hearing on November 25, 2019. See id. (FOF 11). On December 16, 2019, having
found that Claimant violated Employer’s policy by violating state laws and school
laws, and that his actions were a breach of trust and/or a misuse of power as an
employee, Employer’s School Board discharged Claimant. See id. (FOF 12). Claimant
was enrolled in the ARD program on December 24, 2019, and had an anticipated
completion date of June 12, 2020. See id. (FOF 13). Claimant never pled guilty to,
nor has he been convicted of, any of the charges against him. See id. (FOF 14).
Preliminarily, the Majority incorrectly concludes that Employer waived
the capricious disregard of evidence issue. The Pennsylvania Supreme Court has
declared:
Since an adjudication cannot be in accordance with law if it
is not decided on the basis of law and facts properly adduced,
. . . review for capricious disregard of material, competent
evidence is an appropriate component of appellate
consideration in every case in which such question is
properly brought before the [C]ourt.
Leon E. Wintermyer, Inc. v. Workers’ Comp. Appeal Bd. (Marlowe), 812 A.2d 478,
487 (Pa. 2002).
In its “STATEMENT OF THE QUESTIONS INVOLVED [(Statement of
Questions)],” Employer sets forth: “Whether the [UCBR] made an error of law in
granting unemployment benefits to Claimant when substantial evidence
presented by [Employer] clearly established willful misconduct under [S]ection
402(e) [of the UC Law].” Employer Br. at 4 (emphasis added).
If no evidence was presented to support the prevailing party,
there is no evidence upon which to apply the “substantial
evidence” test; i.e., it is impossible to find substantial
AEC - 3
evidence to support a position for which no evidence was
introduced. In such cases, therefore, the appropriate scope of
review, . . . is whether the agency erred as a matter of law or
capriciously disregarded competent evidence.
Leon E. Wintermyer, Inc., 812 A.2d at 486 (italics and citation omitted) (quoting
Russell v. Workmen’s Comp. Appeal Bd. (Volkswagen of Am.), 550 A.2d 1364, 1365
(Pa. Cmwlth. 1988)). Here, Claimant did not present any evidence before the Referee.
“As th[e Pennsylvania Supreme] Court has explained previously, the substantial-
evidence facet of the appellate review of administrative agency adjudications simply
may not apply to scenarios in which a prevailing party presented no evidence.” IA
Constr. Corp. v. Workers’ Comp. Appeal Bd. (Rhodes), 139 A.3d 154, 162 (Pa. 2016).
In its brief, Employer argues, in pertinent part:
The entire, but short transcript of the [D]ue [P]rocess hearing
was offered and admitted before the Referee and is made part
of the reproduced record. Contained therein is [] Claimant’s
statement regarding [Employer’s] charges and a stipulation
between [the] parties which is tantamount to an admission of
the facts.
Respectfully, the [UCBR] ignored this uncontradicted
evidence in overturning the Referee’s decision. Also, the
[UCBR] did not take into consideration the statement of
Claimant given to the [UCBR] at the time of the Due Process
hearing. When reviewing the evidence in its totality, the
[UCBR] ignored substantial creditable evidence of willful
misconduct.
Employer Br. at 9 (emphasis added).
Pennsylvania Rule of Appellate Procedure 2116(a) provides, in relevant
part:
The statement of the questions involved must state concisely
the issues to be resolved, expressed in the terms and
circumstances of the case but without unnecessary
detail. The statement will be deemed to include every
subsidiary question fairly comprised therein. No question
AEC - 4
will be considered unless it is stated in the statement of
questions involved or is fairly suggested thereby.
Pa.R.A.P. 2116(a) (emphasis added). A review of Employer’s Statement of Questions
and corresponding argument makes clear that the error of law argument, i.e., the UCBR
erred by granting UC benefits when Employer clearly established willful misconduct,
was sufficiently developed for appellate review, and the capricious disregard argument
was fairly suggested by the Statement of Questions.1 Accordingly, Employer did not
waive the capricious disregard of evidence issue.
Concerning the Majority’s ruling that the UCBR did not capriciously
disregard the record evidence,
[t]his Court has defined the term “willful misconduct” to
mean:
(1) the wanton and willful disregard of the
employer’s interest, (2) the deliberate violation of
rules, (3) the disregard of standards of behavior
which an employer can rightfully expect from his
employee, or (4) negligence which manifests
culpability, wrongful intent, evil design, or
intentional and substantial disregard for the
employer’s interests or the employee’s duties and
obligations.
K[y.] Fried Chicken of Altoona, Inc. v. Unemployment
Comp[.] [Bd.] of Rev[.], . . . 309 A.2d 165, 168-69 ([Pa.
Cmwlth.] 1973). “The burden of proving willful misconduct
rests with the employer.” Walsh v. Unemployment Comp[.]
[Bd.] of Rev[.], 943 A.2d 363, 368 (Pa. Cmwlth. 2008).
Geisinger Health Plan v. Unemployment Comp. Bd. of Rev., 964 A.2d 970, 973-74 (Pa.
Cmwlth. 2009).
1
In addition, the Majority agrees with the UCBR that, because Employer does not challenge
the UCBR’s findings of fact, those factual findings are binding on appeal. However, Employer does
not dispute the factual findings, only the conclusions drawn therefrom.
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“Circumstantial evidence, if substantial, is sufficient to support a finding
of willful misconduct.” Ruiz v. Unemployment Comp. Bd. of Rev., 887 A.2d 804, 808
(Pa. Cmwlth. 2005); see also Dunkleberger v. Unemployment Comp. Bd. of Rev., 467
A.2d 653 (Pa. Cmwlth. 1983) (circumstantial evidence that the claimant embezzled
money from the employer’s funds was sufficient to support a finding of willful
misconduct).2 “[E]vidence is substantial where it so preponderates in favor of a
conclusion that it outweighs, in the mind of the fact[-]finder, any inconsistent evidence
and reasonable inferences drawn therefrom.” Wysocki v. Unemployment Comp. Bd. of
Rev., 487 A.2d 71, 72-73 (Pa. Cmwlth. 1985).
At the Referee hearing, Employer introduced the School Board hearing
transcript into evidence. Therein, Claimant stipulated that, if the police officer who
wrote the criminal complaint and Affidavit of Probable Cause was called, he would
testify accordingly. Specifically, Employer’s counsel stated at the School Board
hearing that the police officer was present and “[Claimant’s counsel] indicated that he
ha[d] literally no questions. . . . So, we are stipulating and putting that criminal
complaint and [A]ffidavit [of Probable Cause] into evidence as an agreed-upon
document.”3 R.R. at 19a. The School Board hearing transcript was accepted into
evidence as Employer’s Exhibit 1. See Certified Record at 154. The Affidavit of
Probable Cause provided, in relevant part:
2
In Dunkleberger, the employer presented no specific testimony regarding the total amount
of money alleged to have been embezzled. Rather, the record disclosed systematic and schematic
discrepancies in the business records that the claimant had the sole responsibility to keep. The
employer testified that, had these discrepancies been mere clerical errors, a cash surplus would
logically have appeared in banking records. The employer testified that none did, and the
discrepancies could not be reconciled. The Dunkleberger Court determined that the evidence, while
circumstantial, was sufficient to support a finding of willful misconduct. Here, Claimant had access
to the account numbers for the missing funds, stipulated to the police officer’s Affidavit of Probable
Cause, paid the funds back, and apologized for the embarrassment caused by the missing funds.
3
When asked if that stipulation was accurate, Claimant’s Counsel responded: “That’s
correct.” R.R. at 19a.
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I advised [Claimant] of the information we had, that his
wife’s First Energy bill had been paid three times out of the
PTC account. [Claimant] stated that the account is his.
He said he pays the electric bill at his residence and pays
by the automated phone system. He said that it must have
been a mistake and the account numbers must be close
and he simply typed in a wrong digit. He advised there
was no way he did this[,] and it is a mistake. He then said
that his personal GNC or PNC account numbers must
have been close to the PTC account numbers. He then
asked if the transaction occurred over the phone and I
advised I did not know, it either happened over the phone
or via computer, but it was an electronic check.
[Claimant] stated[:] “[Y]eah, [i]t happened over the
phone, so I punched the numbers in[.]”[] I was unable to
determine at that time what the account number was for the
PTC account. I asked [Claimant] if he wanted to check with
his wife and make sure she didn’t make the transactions. He
said that she didn’t take care of the electric bill, he did. She
has no idea what goes on with the bills. I asked him how he
didn’t notice several hundred dollars in bills not coming out
of his account and he replied that he didn’t pay attention.
During the interview [Claimant] said to me[:] “I didn’t
knowingly do this” and “[i]t could be a mistake[;] I’ll pay
for it[.]”[] He was advised that restitution would not stop the
investigation.
On 09/11/2019[,] Detective Crum advised me that a party
had reached out to him advising that [Claimant] wished to
speak with him relative to this case. I requested that
[Corporal] Hallowich attend this meeting to avoid any
conflict of interest.
They met with [Claimant] in [Employer’s] supply garage on
Taylor St[reet]. [Claimant] approached them and said[:] “I
have some questions for you.” [Claimant] then went on to
explain that he wanted to know what he should do about this
case. It should be noted that Officers [we]re aware that
[Claimant] ha[d] retained an attorney and did not ask him any
questions during this meeting. [Claimant] then went on to
state that he was told by someone within the school
district administration that the PTC would be willing to
accept re-payment to settle the case. [Claimant] was
advised that along with that payment the victims would most
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likely want some type of admission as well and further
advised that we could not make that decision because it
would ultimately be up to the victims. [Claimant] stated
that he would repay the money, but that he would not
admit to any wrongdoing. [Claimant] repeatedly asked
what he should do and was told each time that he would need
to speak with the case officer, [Corporal] Buswell.
[Claimant] stated numerous times during the interview
that he wanted to pay the PTC the missing money and
then the whole case be dismissed. [Claimant] then stated
that he thought that someone was “setting him up.”
[Claimant] continued stating over and over that he did
not steal any money from the PTC account. [Claimant]
eventually stated that he had “people interested in going after
GNC credit union” because the confusion had to occur
between GNC[,] FCU and Penn Power. [Claimant] was
again advised that he needed to speak with [Corporal]
Buswell to settle the case, who in turn would have to speak
to the victims.
R.R. at 39a-40a (emphasis added). Despite that the police officer was present at the
School Board hearing, Claimant chose to have the Affidavit of Probable Cause
admitted into evidence, rather than question the police officer about its contents.
Also included in the School Board hearing transcript was Claimant’s
statement to the School Board, wherein Claimant declared:
Ladies and gentlemen, members of the [School] Board, I’m
sorry that we all have to be here today and I’m sorry that
this district that I’ve grown up in, that I’ve worked for
almost thirty years, has to be subject to this
embarrassment. I’ve been with this district my entire life
and I am embarrassed by this whole thing. On advice of
counsel I’m very limited on what I can discuss here today,
beyond how much I care for this district and how much I’m
proud of and need my employment here.
What I can say is that if it was ever perceived that I was
attempting to accuse or that I did accuse someone of the
things that I was being accused of I’m truly sorry for that. I
never meant to make it sound like I was accusing anybody
of anything. I certainly wouldn’t wish anybody to have to
go through what I’ve gone through with these allegations in
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the past six months. Especially not anybody in this room or
anybody whom someone in this room cares about. For that[,]
I am truly sorry.
Thank you for listening to me. And I am pleading with you
to let me continue my employment with [Employer]. I will
not make you regret it. Thank you.
R.R. at 36a-37a (emphasis added). Lastly, Claimant’s counsel stated at the School
Board hearing: “[Claimant] has paid back every penny that’s been alleged to be taken
with regard[] to this matter. And [Employer] and the [PTC] ha[ve] that money back.”
R.R. at 25a.
The UCBR found as a fact that Employer discharged Claimant because he
violated Employer’s policy by violating state laws and school laws, and that Claimant’s
actions and conduct were a breach of trust and/or a misuse of power as an employee.
See R.R. at 3a (FOF 12). Such misconduct clearly falls within this Court’s definition
of willful misconduct. See Geisinger Health Plan.
However, the UCBR concluded:
[I]t is not clear from the record that when [] [C]laimant and
[] [E]mployer entered into a stipulation regarding the exhibits
to be used at the hearing before [the] [S]chool [B]oard, that
[] [C]laimant was stipulating that he had, in fact, engaged in
the alleged misconduct. [Further,] [] [C]laimant’s statement
at the [S]chool [B]oard hearing clearly was not an apology
for committing theft. Rather, it appears that [] [C]laimant
was apologizing for implicating others. In no way does the
[UCBR] find [] [C]laimant’s statement was an admission of
guilt for stealing the funds. Finally, the courts have
repeatedly held that a claimant’s admittance into an ARD
program does not constitute a guilty plea nor is it a
conviction. Therefore, [UC] benefits are granted under
Section 402(e) of the Law.
R.R. at 4a. The Majority determined: “Based on this language, it is clear the [UCBR]
considered Claimant’s testimony at the [S]chool [B]oard hearing and concluded that it
was not dispositive on the issue of Claimant’s guilt of the theft of the funds[,]” and
AEC - 9
“like Claimant’s statement at the [S]chool [B]oard hearing, the [UCBR] clearly
considered the [stipulated exhibit] and concluded that it was not dispositive on the
question of Claimant’s guilt of the theft of funds.” New Castle Area Sch. Dist., slip op.
at 9, 11.
The UCBR held that Employer did not meet its burden of proving willful
misconduct because Claimant did not stipulate to engaging in misconduct, did not
apologize for committing theft, and did not enter a guilty plea nor was convicted of
theft. However, Claimant need not be convicted of theft for Employer to prove willful
misconduct. “A finding that [Claimant] stole . . . is not necessary to make him
ineligible for [UC] benefits. [Employer’s] burden was not to prove theft . . . , but rather
to prove willful misconduct as that term has been defined by the courts.”
Unemployment Comp. Bd. of Rev. v. Atl. Richfield Co., 349 A.2d 496, 498 (Pa. Cmwlth.
1975).
Here, the UCBR ignored the fact that, rather than present a defense at the
School Board hearing, Claimant stipulated to the entry of the Affidavit of Probable
Cause. In addition, the UCBR ignored that Claimant paid the stolen funds back to the
PTC. Moreover, the UCBR disregarded the fact that, in addition to apologizing for
being perceived as accusing others of the theft, which he in fact did, Claimant also
acknowledged and apologized for the embarrassment he caused himself and
Employer.4
[This Court] may conclude that a fact-finder has capriciously
disregarded competent evidence “when the unsuccessful
party below has presented ‘overwhelming evidence’ upon
which the adjudicator could have reached a contrary
4
Notably, the UCBR also ignored the fact that when Employer questioned Claimant at the
Referee hearing, Claimant invoked his Fifth Amendment privilege against self-incrimination rather
than answer any questions. The Referee acknowledged the adverse interest properly drawn therefrom.
See Kennett Square Specialties v. Workers’ Comp. Appeal Bd. (Cruz), 31 A.3d 325 (Pa. Cmwlth.
2011). The UCBR, however, did not do so.
AEC - 10
conclusion, and the adjudicator has not satisfactorily
addressed that evidence by resolving conflicts in the
evidence or making credibility determinations that are
essential with regard to the evidence.” Balshy v. [Pa.] State
Police, 988 A.2d 813, 835-36 (Pa. Cmwlth. 2010) (quoting
Grenell v. State Civ[.] Serv[.] Comm[’n], 923 A.2d 533, 538
(Pa. Cmwlth. 2007)). “In other words, where there is strong
‘critical’ evidence that contradicts evidence supporting a
contrary determination, the adjudicator must provide an
explanation as to how it made its determination.” Id. at 836.
Kiskadden v. Pa. Dep’t of Env’t Prot., 149 A.3d 380, 401 (Pa. Cmwlth. 2016).
Here, the UCBR has disregarded the above-quoted “strong ‘critical’
[circumstantial] evidence,” and “has not satisfactorily addressed that evidence.” Id.(quoting Balshy, 988 A.2d at 835-36). Accordingly, because I believe that Employer
did not waive the capricious disregard of evidence issue, and Employer “presented
‘overwhelming [circumstantial] evidence’ upon which the [UCBR] could have reached
a contrary conclusion,” id., I would reverse the UCBR’s order.
________________________________
ANNE E. COVEY, Judge
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