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JOHN T. MORELLI v. COMMONWEALTH PENNSYLVANIA (09/28/81)

decided: September 28, 1981.

JOHN T. MORELLI, PETITIONER
v.
COMMONWEALTH OF PENNSYLVANIA, UNEMPLOYMENT COMPENSATION BOARD OF REVIEW, RESPONDENT



Appeal from the Order of the Unemployment Compensation Board of Review in case of In Re: Claim of John T. Morelli, No. B-183677.

COUNSEL

David M. Axinn, for petitioner.

Charles G. Hasson, Assistant Attorney General, with him Richard Wagner, Chief Counsel, and Harvey Bartle, III, Attorney General, for respondent.

President Judge Crumlish and Judges Rogers and Williams, Jr., sitting as a panel of three. Opinion by Judge Williams, Jr.

Author: Williams

[ 62 Pa. Commw. Page 67]

Claimant, John T. Morelli, appeals from an order of the Unemployment Compensation Board of Review (Board) denying him benefits for the claim weeks ending December 15, 1979 and December 22, 1979. That denial was based upon a determination that the claimant was self-employed during those claim weeks and, therefore, ineligible for benefits by force of Section 402(h) of the Unemployment Compensation Law (Law).*fn1

The record shows that claimant's employment with National Fuel Gas was phased out after claimant had been employed there for seventeen years, and that his last day of work was June 30, 1979. In April of 1979, apparently in anticipation of losing his job, claimant entered into a partnership agreement which provided for equal interests between claimant and his partner in a septic tank cleaning business. The operation went into effect July 1, 1979. The claimant invested almost $21,000.00 in the business. By the terms of the agreement, each partner was to draw a salary of $200.00 a week. Subsequently, however, the loss of two major business contracts caused the partners to decide that the business would not support both their families, and plans were made to terminate the partnership. The claimant ceased to draw a salary on November 9, 1979, even though the partnership was not actually dissolved until December 31, 1979.

Claimant filed an application for benefits on December 9, 1979, which was initially denied by the Bureau of Employment Security. The referee affirmed the Bureau on appeal and determined that during the claim weeks in question, the claimant was self-employed

[ 62 Pa. Commw. Page 68]

    within the meaning of Section 402(h) of the Law and therefore ineligible for benefits. The Board, thereafter, affirmed the referee; and this appeal followed.

The claimant's argument on appeal is not clearly focused. Giving it its best reading, however, claimant's argument appears to be that since he drew no salary and performed no work in the partnership business after November 9, 1979, his status as a self-employed person ceased as of that date. The claimant further argues that he thus purged himself of the disqualifying status of being self-employed, and restored himself to an eligibility that arose upon his separation from National Fuel Gas. We reject the claimant's argument.

The claimant here concedes that upon the formation of the partnership in April of 1979, he became self-employed.*fn2 That concession is in accordance with our decision in Unemployment Compensation Board of Review v. Finn, 25 Pa. Commonwealth Ct. 512, 360 A.2d 288 (1976), that a positive act of establishing an independent business enterprise renders a person self-employed within the meaning of Section 402(h) of the Law. Given that the formation of the partnership rendered the claimant self-employed, it ...


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