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UNIVERSITY CITY HOUSING CO. v. COMMONWEALTH PENNSYLVANIA (03/25/88)

decided: March 25, 1988.

UNIVERSITY CITY HOUSING CO., 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 Anthony Roccia, No. B-253980.

COUNSEL

Saul H. Krenzel, for petitioner.

Peter C. Layman, Deputy Chief Counsel, with him, Clifford F. Blaze, Deputy Chief Counsel, for respondent.

Judges Colins and Palladino, and Senior Judge Barbieri, sitting as a panel of three. Opinion by Judge Colins.

Author: Colins

[ 114 Pa. Commw. Page 609]

University City Housing Co. appeals an Order of the Unemployment Compensation Board of Review (Board) affirming a referee's decision granting Anthony Roccia (claimant) benefits pursuant to the doctrine enunciated in Starinieri v. Unemployment Compensation Board of Review, 447 Pa. 256, 289 A.2d 726 (1972), which provides that a self-employed businessman who becomes unemployed shall not be eligible for unemployment compensation benefits.

Claimant began working for University City Housing Co. in January, 1985. He was hired by Amy and Michael Karp to help develop a long distance telephone company.*fn1 Claimant started at an annual salary of $50,000, with the title of Senior Vice President. He was also promised, at the time of hire, that he would receive a 12.5% ownership interest in the company. No documentation was ever created establishing that claimant was part owner of the company. Amy Karp became President of the company after "discussions between my husband and myself."*fn2 Michael Karp was also an "officer", although he was not given a specific title.*fn3 Claimant's function in this company was to oversee the company's day-to-day operations. His expertise was in sales and marketing and he was involved in sales of the company's service. However, claimant had no authority to sign checks or hire employees without acquiring approval by the Karps.

[ 114 Pa. Commw. Page 610]

The company began to lose money in the amount of $80,000 per month in late 1985 and early 1986. Conflicts arose regarding the management of the business primarily due to the dissatisfaction on the part of the Karps with reference to the projected figures and substantial losses which were occurring. On March 25, 1986, the President of the company informed the claimant that his services were no longer needed and that he was being refused entry into the building which housed the company. The company continued to operate after the severing of the employment relationship between the claimant and the company.

Claimant applied for benefits on April 27, 1986, and was granted benefits by the Office of Employment Security (OES) on July 10, 1986. On appeal, this decision was affirmed by the referee. On further appeal, the Board affirmed. The referee stated in Finding of Fact No. 8:

8. At no time was the claimant a partner in the [company] . . . nor did he hold any stock in that company. The company continued operating after the employment arrangement was severed between the claimant and the owner.

Analyzing the facts of this matter under the standard set forth in Starinieri , the referee concluded that:

Since the claimant was hired specifically for his expertise in the field of tele-communications, signed no contract obtaining partnership and was dismissed by the owner of the company on or about 3-25-86 due to dissatisfaction on the part of the owner, the claimant cannot be ...


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