L. Harris v. UCBR

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Laithe Harris, :
Petitioner :
:
v. : No. 401 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.
In this order, the Board concluded that Claimant’s appeal was timely under
Section 501(e) of the Unemployment Compensation Law (Law),2 but that Claimant
was ineligible for benefits under Section 401(c) of the Law,3 relating to the improper
filing of unemployment claims. In addition, the Board held that Claimant is
responsible for a fault overpayment of $14,630 under Section 804(a) of the Law.4
For the reasons set forth below, we reverse the order of the Board.
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).
3
43 P.S. § 801(c).
4
43 P.S. § 874(a).
I. BACKGROUND
The matter before us involves one of four appeals filed by Claimant from a
series of determinations issued by the Duquesne Unemployment Compensation
Service Center (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 four
appeals involve the same set of operative facts. The instant appeal is from H-4807,
involving claim weeks ending January 3, 2015, through July 18, 2015. (C.R.,
Item No. 8 at 7; C.R., Item No. 10 at 8; C.R., Item No. 11 at 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 No. 8 at 3-7.) Section 501(e) of the Law5
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
a hearing was scheduled 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 9-10.) At the time of the hearing, Claimant’s address for
5
43 P.S. § 821(e).
2
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 the notices were
mailed. (Id. at 14.) Claimant testified that he never resided at the Carlisle address.
(Id. 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. (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.)
Based on Claimant’s testimony at the first hearing, the Referee scheduled a
second hearing to hear the merits of the appeals. (C.R., Item No. 9.) Claimant
attended the hearing, accompanied by his wife as a potential witness.
(C.R., Item No. 10.) Claimant testified that he had worked for New Standard
Corporation since 1987, but he was placed on disability sometime in 2018.
(Id. at 9-10.) Claimant stated that his employer would typically shut down during
Christmas time, and he would file for unemployment benefits around that time of
year. (Id. at 10-11.) The Referee noted that Claimant’s first application was filed in
July 2012. (Id.) Claimant testified that, to the best of his knowledge, the only time
he would have filed a claim for unemployment compensation benefits would have
3
been in December in each of the years from 2012 to 2015, but he was not certain he
filed in each of those years. (Id. at 10-11, 16.) Beginning in 2012, Claimant stated
he was the victim of identity theft by his daughter, Rhonda Harris. (Id. at 11-13.)
Claimant’s daughter filed for unemployment benefits on Claimant’s behalf for a
number of weeks between July 2012 and July 2016, the vast majority of which weeks
Claimant was working full time. (Id. at 12-14.) Claimant was unaware that his
daughter had filed the unemployment claims in question, and he never received any
of the unemployment compensation funds.6 (Id.) Claimant’s daughter was living
with Claimant at the Manchester residence until sometime in late 2014 or early 2015,
at which time Claimant’s daughter moved to Carlisle. (C.R., Item No. 8 at 14.)
The claim record states that Claimant’s address in the unemployment system was
changed to the Carlisle address on July 2, 2015. (C.R., Item Nos. 1 at 2, 8 at 11, 11
at 2.) Claimant admitted that he provided his unemployment Personal Identification
Number (PIN) and social security number to his daughter in 2012 so she could help
him file for unemployment benefits. (C.R., Item No. 10 at 14.) Claimant enlisted
his daughter’s help because he is not familiar with computers and the unemployment
offices where Claimant normally received help with filing were closed. (Id.)
Claimant only discovered the identity theft after he received a statement from the
Internal Revenue Service in 2016, notifying him of taxes owed on approximately
$47,000 in income from unemployment compensation benefits. (Id. at 13.)
Claimant stated that he immediately contacted the Department to inform it of the
identity theft after his discovery. (Id.)
6
It is unclear from the testimony whether Claimant received no funds at all or whether he
received funds only around Christmas time when he had valid unemployment claims.
4
The Referee issued a decision with regard to appeal H-4807, concluding that
the appeal was timely under Section 501(e) of the Law as a result of a breakdown in
the administrative process but holding that Claimant was ineligible for benefits
under Sections 401,7 4(u),8 and 404(d)9 of the Law for the weeks ending
January 3, 2015, through July 18, 2015. (C.R., Item No. 11 at 4.) The Referee
explained:
In this case, the claimant filed an application for benefits effective
December 14, 2014[,] and qualified for a weekly benefit amount
of $573 and a partial benefit credit of $172. The claimant was
employed full[ ]time with New Standard Corp., and during the weeks
ending January 3, 2015[,] through July 18, 2015, the claimant worked
full[ ]time and his gross earnings exceeded the combination of his
qualifying benefit amount and partial benefit credit.
(Id.) The Referee further determined that Claimant was ineligible under
Section 401(c) of the Law because Claimant significantly underreported his earnings
in the claims for those weeks. (Id.) Lastly, the Referee concluded that Claimant was
responsible for a fault overpayment under Section 804(a) of the Law for the funds
issued, an amount totaling $14,630. (Id.) The Referee reasoned that, while
Claimant’s testimony was credible that his daughter stole his identity and applied
for benefits without his knowledge, Claimant willingly provided his daughter his
unemployment PIN and other confidential information to file for benefits on his
behalf, which information Claimant was “required not to disclose.” (Id.)
7
43 P.S. § 801.
8
43 P.S. § 753(u).
9
43 P.S. § 804(d).
5
Claimant appealed the Referee’s decision to the Board, which affirmed.
(C.R., Item Nos. 12, 13, 14, 15, 16.) In so doing, the Board issued its own findings
of fact, as follows:
1. On December 15, 2014, the claimant applied for unemployment
compensation benefits, effective December 14, 2014.
2. On December 15, 2014, the Department . . . mailed to the claimant
the unemployment compensation handbook [(UC Handbook)], which
notified him, [“]Protect Your PIN: Your personal identification
number (PIN) and Social Security number identify you when you file a
claim or access benefit information. Your PIN has the same legal
authority as your signature. DO NOT GIVE YOUR PIN TO
ANYONE, including family members. It is your responsibility to
file your own biweekly claims. It is ILLEGAL for another person
to file your biweekly claims for you. If you give your PIN to another
person, or allow another person to gain access to your PIN, you are
responsible for any improper benefit payments that occur as a
result.[”]
3. The claimant gave his PIN to his daughter, who lived with him, to
file claims on his behalf.
4. For each week ending December 20, 2014, through July 18, 2015,
the claimant’s daughter filed claims for benefits while the claimant was
working full time and significantly underreported his remuneration.
5. For the weeks ending January 3 through July 18, 2015, the claimant’s
account received $14,630.00 because he shared his PIN with his
daughter.
6. On [July 2, 2015], the claimant’s address was changed to his
daughter’s new address in Carlisle, Pennsylvania.10
7. In January and February 2018, the claimant participated in the
Department’s investigation into his allegation against [sic] that his
daughter was fraudulently filing claims for benefits using his account.
10
It appears the Board made an error in finding that Claimant’s address was changed on
January 8, 2016. The claim record states that Claimant’s address was changed on July 2, 2015,
which corresponds with the finding of the Referee. (C.R., Item Nos. 1 at 2, 11 at 2.) We do not
find, however, that this error has a material impact upon the case.
6
8. On April 18, 2018, the Department mailed to the claimant’s
daughter’s address in Carlisle a determination denying benefits to the
claimant for the weeks ending December 20, 2014, through
July 18, 2015, under Section 401(c) of the . . . Law, while also denying
benefits under Section 401 and Section 4(u) of the Law for many of the
same weeks.
9. On April 19, 2018, the Department mailed to the Carlisle address a
determination establishing a $14,630.00 fault overpayment under
Section 804(a) of the Law.
10. May 3 and 4, 2018, were the final days to file valid appeals from
the determinations to a referee.
11. The claimant did not appeal by May 3 or 4, 2018, because he did
not receive the determinations.
12. On [August] 20, 2019, the claimant updated his address with the
Department.11
13. On September 27, 2019, a Department representative advised the
claimant of how to file a late appeal from the determinations.
14. The claimant’s appeal was filed on October 3, 2019.
(C.R., Item No. 16 at 1-2 (emphasis in original).) With regard to the fault
overpayment, the Board reasoned:
Here, the claimant’s daughter fraudulently filed claims for benefits on
his behalf, but was enabled to do so because the claimant shared his
PIN with her. The claim record reveals the [UC Handbook] was mailed
to the claimant before his address was changed to Carlisle. The Board
notes that the [UC Handbook] specifically advised the claimant he
would be “responsible for any improper benefit payments that
occur as a result.” . . . Here, the claimant received $14,630.00 in
benefits to which he was not entitled, so an overpayment exists.
Because the claimant’s gross negligence led to his improper receipt of
11
It appears the Board again made an error in finding that Claimant’s address was changed
on September 20, 2019. During testimony, the Referee directly referenced the Board’s records
when agreeing with Claimant that his address was updated on August 20, 2019. (C.R., Item No.
8 at 11, 14.) This date also corresponds with the finding of the Referee. (C.R., Item No. 11 at 2.)
Once again, however, we do not find that this error has a material impact upon the case.
7
benefits, he is at fault for receiving these benefits and they must be
repaid under Section 804(a) of the Law.
(Id. at 3 (emphasis in original).) Claimant now petitions this Court for review.
II. ISSUES
On appeal to this Court,12 Claimant argues: (1) the Board’s findings of fact
are not supported by substantial evidence of record; (2) the Board erred as a matter
of law in concluding that Claimant committed gross negligence by sharing his
unemployment PIN and other confidential information with his daughter; and (3) the
Board erred as a matter of law in holding that Claimant is liable for a fault
overpayment when he was not the recipient of the unemployment funds in question.
We address each in turn.
III. DISCUSSION
A. Substantial Evidence
In an unemployment compensation case, the Board’s findings of fact
are binding on appeal if the findings, after reviewing the record as a whole,
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 logically and
reasonably drawn from the evidence. Id. In determining whether the Board erred in
issuing its findings, this Court is bound by the record below, and we cannot accept
12
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.
8
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 erred in considering the UC Handbook in
finding of fact number two, because the UC Handbook was not introduced at the
Referee hearing or included as part of the certified record. Because Claimant had
no opportunity to rebut evidence concerning the UC Handbook, the Board’s
consideration of the UC Handbook was improper.
The Board concedes that “[o]rdinarily, the Board and this Court may not
consider evidence not entered into the record at the referee’s hearing.”
(Resp’t Br. at 8) (see Hollingsworth). The Board contends, however, that the
principle of “official notice” permitted it to take the UC Handbook into
consideration. The claim record also supports the fact that the UC Handbook was
mailed to Claimant on December 15, 2014. (C.R., Item No. 1 at 3.) For these
reasons, the Board argues it properly considered the UC Handbook despite the fact
it was not entered into the record or considered during the Referee hearing.
We agree with the Board.
Official notice is the administrative counterpart of judicial notice.
Judicial notice allows a court to establish a fact that is not subject to reasonable
dispute because it can accurately and readily be determined from sources the
accuracy of which cannot be questioned. Pa. R.E. 201(b)(2). Where facts are in
dispute, however, judicial notice should not be taken. HYK Constr. Co., Inc. v.
Smithfield Twp., 8 A.3d 1009, 1017 (Pa. Cmwlth. 2010), appeal denied, 21 A.3d
1195 (Pa. 2011). Moreover, judicial notice does not necessarily establish a fact;
after judicial notice is taken, that fact constitutes evidence, and, like any evidence,
it may be rebutted. Id. A party is entitled upon timely request to be heard concerning
9
a fact judicially noticed. Pa. R.E. 201(e). Similarly, official notice “authorizes the
finder of fact to waive proof of facts that cannot seriously be contested,” thereby
permitting “an agency to take notice of facts which are obvious and notorious to an
expert in the agency’s field.” Ramos v. Pa. Bd. of Prob. & Parole, 954 A.2d 107,
109-10 (Pa. Cmwlth. 2008) (quoting Falasco v. Pa. Bd. of Prob. & Parole, 521 A.2d
991, 994 n.6 (Pa. Cmwlth. 1987)). Official notice is broader than judicial notice,
in that it contemplates the expertise of administrative agencies and recognizes that
such agencies are a “storehouse of information on that field consisting of reports,
case files, statistics and other data relevant to its work.”13 Id.At the outset, it is significant to note that the text of the UC Handbook itself
is not being challenged here. In other words, Claimant does not contend that the
contents of the UC Handbook are in dispute, such that official notice would be
improper. Rather, Claimant’s qualm lies with his inopportunity at the Referee
hearing to challenge his receipt of the UC Handbook and his awareness of its
contents. Claimant’s brief states: “The [UC] Handbook itself was not introduced as
part of the record, and there was no testimony to support proof of mailing or delivery.
The Referee did not ask Claimant if he had ever read or received the [UC]
Handbook.” (Pet’r Br. at 9.) After careful review of the Board’s decision, however,
it is clear the Board based its findings concerning the mailing of the UC Handbook
13
The General Rules of Administrative Procedure prescribe:
Official notice may be taken by the agency head or the presiding officer of
such matters as might be judicially noticed by the courts of this Commonwealth, or
any matters as to which the agency by reason of its functions is an expert.
Any participant shall, on timely request, be afforded an opportunity to show the
contrary. Any participant requesting the taking of official notice after the
conclusion of the hearing shall set forth the reasons claimed to justify failure to
make the request prior to the close of the hearing.
1 Pa. Code § 35.173.
10
and Claimant’s constructive awareness almost entirely on the claim record, not the
UC Handbook itself. Consequently, because Claimant does not dispute the text of
the UC Handbook and his challenge is to the contents of the claim record, we see no
legal reason preventing the Board from noticing its own handbook.14 As the ultimate
finder of fact, the Board can notice its own records. See Shoemaker v. State Emps.
Ret. Bd., 688 A.2d 751, 753 n.3 (Pa. Cmwlth.), appeal denied, 698 A.2d 597 (Pa.
1997).
We further conclude that whether Claimant had the opportunity to contest the
UC Handbook evidence at the Referee hearing is irrelevant. In the unemployment
context, our precedent holds that when information is mailed to a party’s last known
address and the information is not returned as undeliverable, the party is presumed
to have received it. Mihelic v. Unemployment Comp. Bd. of Rev., 399 A.2d 825, 827
(Pa. Cmwlth. 1979). In Hollingsworth, we held that the mailing of the
unemployment compensation handbook relevant to that case and the claim record,
14
In support of his argument, Claimant cites Saracino v. Unemployment Compensation
Board of Review (Pa. Cmwlth., No. 1188 C.D. 2016, filed March 31, 2017), and Williams v.
Unemployment Compensation Board of Review (Pa. Cmwlth., No. 626 C.D. 2016, filed
March 10, 2017), two unreported and, therefore, non-precedential opinions of this Court.
Both of these cases are distinguishable. In Saracino, we disallowed evidence of the relevant
unemployment compensation handbook on appeal where the section in question was not
introduced at the referee hearing. The handbook was otherwise discussed at the referee hearing,
however, where the claimant denied that he had any knowledge of the section in question.
The Board concluded that the claimant’s testimony was credible. Accordingly, we did not permit
the Board to cite the section of the handbook on appeal to this Court. Saracino, slip op. at 3.
In Williams, the Board asked this Court to take judicial notice of the unemployment compensation
handbook relevant to that case, which the claim record supported was mailed to the claimant.
We declined to take judicial notice, citing our sister Superior Court in In re D.S., 622 A.2d 954,
959 (Pa. Super. 1993), for the proposition that “courts should not take judicial notice of something
that was neither noticed below nor supported by evidence.” Williams, slip op. at 3. Here, however,
the UC Handbook was noticed below by the Board. Moreover, official notice is broader than
judicial notice in permitting the Board to recognize its own records. Our opinion here, therefore,
is not in conflict with the precedent of this Court.
11
standing alone, constituted sufficient evidence to support the Board’s finding that
the claimant was aware of the handbook’s rules regarding reporting full-time work.
Hollingsworth, 189 A.3d at 1111, 1113.
Here, the claim record, contained in the record certified to this Court on
appeal, indicates that the UC Handbook was mailed to Claimant on
December 15, 2014. (C.R., Item No. 1 at 3.) There is no notation in the claim record
that the UC Handbook was returned as undeliverable, nor does Claimant argue that
he never received it. Claimant testified that his daughter was living with him until
she moved to Carlisle in 2014 or 2015, and the claim record shows that Claimant’s
address was changed on July 2, 2015. (Id. at 2.) The UC Handbook, therefore, was
mailed to Claimant’s correct address.
After noting the foregoing facts, the Board essentially concluded that
Claimant should have been aware of the warning concerning confidential
information: “The claim record reveals the unemployment compensation handbook
was mailed to the claimant before his address was changed to Carlisle. The Board
notes that the handbook specifically advised the claimant he would be ‘responsible
for any improper benefit payments that occur as a result.’” (C.R., Item
No. 16 at 3.) Thus, contrary to Claimant’s assertion, the Board’s conclusion is
properly based on substantial evidence contained in the record. The fact that
Claimant did not have an opportunity to testify concerning the UC Handbook does
not prevent the Board from making findings based on valid, substantial evidence
contained in the claim record or from supporting such findings by taking official
notice of the text of the UC Handbook. Accordingly, we conclude that the Board’s
finding of fact that Claimant should have been aware of the contents of the
UC Handbook is supported by substantial evidence.
12
B. Fault Overpayment
Claimant next challenges the Board’s conclusion that he is liable for a fault
overpayment. Section 804(a) of the Law provides that “[a]ny 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 . . . a sum equal to the amount so received by him
and interest.” Under Section 804(b) of the Law, 43 P.S. § 874(b), where the
compensation is issued or received due to no fault of the claimant, recoupment of
funds is deducted from future compensation, if any, as opposed to imposing a fault
overpayment. The word “fault” in Section 804(a) means “an act to which blame,
censure, impropriety, shortcoming, or culpability attaches.” Fugh v. Unemployment
Comp. Bd. of Rev., 153 A.3d 1169, 1174 (Pa. Cmwlth. 2017) (quoting Daniels v.
Unemployment Comp. Bd. of Rev., 309 A.2d 738, 742 (Pa. Cmwlth. 1973)).
Negligence alone is not sufficient to establish fault. Id. at 1176-77. Rather, fault is
demonstrated by a showing of knowing recklessness or gross negligence.
Id. at 1176. The Board or Referee must make findings concerning an actor’s state
of mind in order to establish fault. Castello v. Unemployment Comp. Bd. of Rev.,
86 A.3d 294, 298 (Pa. Cmwlth. 2013). An actor’s intent may be ascertained through
circumstantial evidence, however. See Cochran v. Cmwlth., 450 A.2d 756, 759 (Pa.
Cmwlth. 1982).
The Board concluded that Claimant’s actions constituted gross negligence.
The Pennsylvania Supreme Court recently defined the concept of gross negligence
in Feleccia v. Lackawanna College, 215 A.3d 3 (Pa. 2019). The Feleccia Court
explained, “gross negligence involves more than a simple breach of the standard of
care (which would establish ordinary negligence), and instead describes a ‘flagrant’
or ‘gross deviation’ from that standard.” Id. at 21. Importantly, however, the Court
13
noted that “gross negligence does not rise to the level of the intentional indifference
or ‘conscious disregard’ of risks that defines recklessness, but it is defined as an
‘extreme departure’ from the standard of care, beyond that required to establish
ordinary negligence, and is the failure to exercise even ‘scant care.’” Id. at 20.
With this standard in mind, we consider Claimant’s argument.
Claimant contends that the Board erred in concluding that his conduct was
grossly negligent because Claimant shared his PIN and confidential information with
his daughter in 2012, two years before the UC Handbook was mailed to Claimant.
Claimant, therefore, was not aware of the confidentiality requirements when he
shared his confidential information with his daughter. Furthermore, Claimant argues
the Board made no findings regarding Claimant’s state of mind.
As noted above, our precedent requires that the Board make findings
concerning an actor’s state of mind to establish fault under Section 804(a) of the
Law. The Board did not conclude that Claimant was aware of the confidentiality
restrictions contained in the UC Handbook. The Board only stated that Claimant
was advised as to its contents. Thus, the Board’s conclusion is, essentially, that
Claimant should have been aware of the UC Handbook’s restriction on sharing
confidential information because the UC Handbook was mailed to Claimant’s
correct address. The Board’s conclusion was not based on any other testimony or
evidence from the Referee hearing regarding Claimant’s state of mind, and no other
testimony or evidence was offered. Thus, while the Board did make an implicit
finding concerning Claimant’s state of mind, we conclude that, standing alone, the
Board’s finding that Claimant should have been aware of the UC Handbook’s
restrictions is not sufficient to establish gross negligence.
14
The facts support this conclusion. Claimant provided his daughter his
confidential information in 2012. Claimant is of older age and testified that he is not
familiar with computers. Claimant, therefore, turned to his daughter for help.
Roughly two years later, after Claimant received the UC Handbook in the mail, the
Board alleges Claimant was grossly negligent in failing to immediately rescind his
confidential information from his daughter. The Board, however, concluded that
Claimant was unaware that his daughter was filing unemployment claims at all.
(C.R., Item No. 16 at 1-3.) Claimant, therefore, had no reason to think to rescind his
information from his daughter, even if he looked at the UC Handbook and saw the
warning. Claimant did not learn of the fraud until 2016 or 2017, at which time he
participated in several investigations against his daughter, including with the local
police, the Federal Trade Commission, and the Department. This suggests that
Claimant likely would have taken action to protect his confidential information had
he thought it was in danger of abuse. Accordingly, without any other testimony or
evidence indicating Claimant’s state of mind led to gross negligence, we cannot
conclude that Claimant’s actions were an extreme departure from the ordinary
standard of care or that Claimant failed to exercise even scant care regarding his
confidential information.
In sum, the Board makes a significant leap from the mailing of the
UC Handbook to gross negligence without showing exactly how Claimant’s
deviation from the standard of care was gross.15 Under the Board’s interpretation,
15
We further note Claimant testified that the criminal charges Claimant filed against his
own daughter were dropped because the Department investigator failed to contact the Northeastern
Regional Police Department to provide information regarding the identity theft.
(C.R., Item No. 10 at 15.) If Claimant’s testimony is to be believed, we are perplexed by the notion
that the Department, while seeming to agree that Claimant’s daughter engaged in identity theft to
15
every claimant who receives a UC Handbook in the mail commits gross negligence
if they violate its terms. This absurd result reveals the difficulty in squaring the
Board’s argument with the present facts. Accordingly, while we held in the
substantial evidence section that the lack of testimony concerning the UC Handbook
and Claimant’s awareness did not preclude the Board’s findings of fact, we conclude
it is fatal to the Board’s showing of gross negligence. The fact that Claimant should
have been aware of the UC Handbook’s restrictions does not, without more,
necessarily constitute gross negligence. As a result, we conclude the Board erred as
a matter of law in determining Claimant’s actions constituted gross negligence and
in imposing a fault overpayment in the amount of $14,630.16
C. Receipt of Unemployment Compensation Benefits
Claimant’s last issue raised on appeal concerns the fact that he did not receive
any of the unemployment compensation funds in question. Claimant argues that,
because he did not receive the fraudulently issued funds, he cannot be liable for a
fault overpayment. We need not answer this question, however, as we have already
concluded that Claimant is not liable for a fault overpayment.17
the detriment of both the Department and Claimant, chose to pursue the matter in the present
forum.
16
We do not here address the question of whether a claimant’s violation of a provision in
the Handbook could create liability for a fault overpayment. The Court questions the Department’s
reliance on the Handbook as a source of authority in this matter, as the Department appears to treat
the Handbook as a substitute for a published regulation. Furthermore, the Department’s position
ignores the stark reality that some claimants will require assistance in filing their unemployment
claims and that family members often provide such assistance.
17
In Barrick v. Unemployment Compensation Board of Review (Pa. Cmwlth.,
No. 189 C.D. 2016, filed Feb. 27, 2017), an unreported panel decision of this Court, we considered
whether a claimant had established the basis for an appeal nunc pro tunc of fault overpayment
determinations that occurred as a result of identity theft. On remand for the Board to address the
merits, we opined that the essence of a fault overpayment claim is proof that the benefits at issue
16
IV. CONCLUSION
Accordingly, the order of the Board is reversed.
P. KEVIN BROBSON, Judge
“were paid into an account that is owned by [the c]laimant or under her control.” Barrick, slip op.
at 9. In other words, we suggested that in order for a fault overpayment to succeed, the claimant
must have received the funds at issue.
Furthermore, we note that, in Barrick, the Court similarly questioned why the
unemployment compensation authorities had not reported the matter to law enforcement
authorities, stating that “[i]f [the c]laimant did not receive the payments, as she claims, she is a
bystander but not the victim. The Department is the victim.” Id. at 4, n.4. Given that
unemployment compensation authorities in the matter now before the Court once again declined
to pursue legal actions against the perpetrator of identity theft that resulted in fraud against the
Department and, instead, attempted to recoup its loss by seeking fault overpayments against what
appears to be an unwitting claimant, is concerning. The Department’s position on the merits in
both of these matters was tenuous at best.
17
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Laithe Harris, :
Petitioner :
:
v. : No. 401 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, dated April 1, 2020, is hereby REVERSED.
P. KEVIN BROBSON, Judge