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06/09/97 JUDITH SQUIRE v. PENNSYLVANIA DEPARTMENT

COMMONWEALTH COURT OF PENNSYLVANIA


June 9, 1997

JUDITH SQUIRE, PETITIONER
v.
PENNSYLVANIA DEPARTMENT OF PUBLIC WELFARE, RESPONDENT

Appealed From No. 23H0006-001. State Agency Department of Public Welfare.

Before: Honorable Rochelle S. Friedman, Judge, Honorable Jim Flaherty, Judge, Honorable Jess S. Jiuliante, Senior Judge. Opinion BY Judge Friedman.

The opinion of the court was delivered by: Friedman

OPINION BY JUDGE FRIEDMAN

FILED: June 9, 1997

Judith Squire petitions for review of a final order of the Secretary of the Pennsylvania Department of Public Welfare (DPW) upholding as untimely the dismissal of Squire's appeal from the termination of her disability benefits received pursuant to the Act of December 8, 1959, P.L. 1718, as amended, 61 P.S. § 951 (Act 534).

Squire was employed at Haverford State Hospital (HSH) as a medical technologist and lab supervisor when, on November 3, 1992, she was injured by a psychiatric patient. Squire was disabled as a result of the work injury and remained out of work from the date of injury until August 1995. During most of this time, Squire received benefits pursuant to Act 534. *fn1

By letter dated May 11, 1995, signed by the Director of Personnel at HSH, DPW informed Squire that it would terminate her Act 534 benefits thirty days from the date of the letter. The letter stated:

Dear Ms. Squire:

You were ordered to return to work on 5/1/95, by letter dated 4/24/95. As a result of your failure to return to work, the Department has notified PHICO Services Company to file a petition to modify/suspend/terminate your workers' compensation and the Department will terminate your Act 534 benefits 30 days from the date of this letter.

You have the right to appeal the Department's decision to terminate your Act 534 benefits as provided by the Administrative Agency Law, 2PA, CSA, [sic] Sections 103 through 508. The appeal must be sent to Bureau of Personnel, Employee Benefits Section, DPW Bertolino Building, 2nd Floor, P.O. 2675 Harrisburg, PA 17105-2675. Your appeal must be filed within thirty (30) days from the date of this notice. Please indicate a telephone number where you can be reached during the day and if represented by counsel, please provide counsel's name and telephone number. Absent the receipt of a timely written appeal, the Department's action will be final.

The Personnel Staff is prepared to counsel and assist you in understanding the work related injury program and may be reached at 610-526-2621.

(R.R., Attachment A.)

Squire also received a second letter scheduling a pre-disciplinary conference (PDC) for May 15, 1995, so that Squire could respond to the charge of failure to return to work as ordered. Unable to attend the PDC on May 15, 1995, Squire rescheduled it for May 25, 1995; based on a conversation with the Director of Personnel at HSH, Squire understood that any decision regarding her Act 534 benefits would be postponed until after the scheduled PDC. *fn2 (R.R., Letter of November 29, 1995 requesting reconsideration of order dismissing Squire's appeal as untimely; Petition for Review at paras. 8-13.)

Thirty days after the May 11, 1995 letter, without holding a prior hearing, DPW terminated Squire's Act 534 benefits. Squire ultimately appealed DPW's decision to terminate her Act 534 benefits on or about June 23, 1995; this date was within 30 days of the scheduled PDC and within 30 days of the actual termination of benefits, but was more than thirty days from the date of the May 11, 1995 letter. Consequently, by letter dated August 7, 1995, sent to the Director of DPW's Office of Hearings and Appeals (OHA), DPW requested that Squire's appeal be dismissed as untimely. OHA granted DPW's request and, by order of November 15, 1995, dismissed Squire's appeal because it was filed more than 30 days from the date of the May 11, 1995 letter. Squire sought and was granted reconsideration; however, DPW upheld OHA's decision to dismiss and, on September 13, 1996, DPW issued a final order on the merits. Squire now appeals to this court. *fn3

On appeal, Squire argues that DPW violated Squire's right to due process by unilaterally terminating her Act 534 benefits without conducting a prior hearing. She notes that a recipient of Act 534 benefits has a constitutionally protected property right in those benefits, and that both the United States and Pennsylvania Constitutions prohibit the deprivation of property without due process of law, which requires an opportunity to be heard at a meaningful time and in a meaningful manner. *fn4 Mathews v. Eldridge, 424 U.S. 319, 47 L. Ed. 2d 18, 96 S. Ct. 893 (1976). Further, Squire points out that, under section 504 of the Administrative Agency Law, 2 Pa.C.S. § 504, "no adjudication of a Commonwealth agency shall be valid as to any party unless he shall have been afforded reasonable notice of a hearing and an opportunity to be heard." Thus, Squire asserts that DPW violated her right to procedural due process with its practice here. According to Squire, the May 11, 1995 letter, stating that her Act 534 benefits will be terminated on June 11, 1995, indicated that DPW already had made the decision to terminate without convening a hearing or giving notice thereof to Squire and, thus, was clearly inadequate to qualify as an adjudication of an administrative agency. Although conceding that the letter said that Squire could appeal the decision to DPW within 30 days, Squire protests that this opportunity for appeal does not remedy the fact that the termination decision had been made previously in violation of Squire's due process rights. We agree that Squire was not afforded the requisite due process prior to the termination of her Act 534 benefits.

Squire has cited several cases in support of her position. Although DPW has pointed out, and we agree, that these cases differ factually from the situation here, *fn5 the legal principle they espouse is nonetheless applicable and controlling in this case. That principle is stated in language which, in each case remains consistent. For example, in Mihok v. Department of Public Welfare, 135 Pa. Commw. 265, 580 A.2d 905 (Pa. Commw. 1990), citing Camaione v. Borough of Latrobe, 523 Pa. 363, 567 A.2d 638 (1989) and Callahan v. Pennsylvania State Police, 494 Pa. 461, 431 A.2d 946 (1981), we stressed that, with regard to benefits under Act 534 and the "Heart and Lung Act," *fn6 a hearing must be convened prior to a change in status. Similarly, in Williams v. Department of Corrections, 164 Pa. Commw. 224, 642 A.2d 608 (Pa. Commw. 1994), we do not allow for termination of such benefits where an employer offers to conduct a hearing if one is requested; rather, we say that "an employer cannot terminate an employee's Heart and Lung benefits without conducting a full due process hearing in which it establishes [one of two bases for termination]." 642 A.2d at 610 (emphasis added). The language used in Callahan is equally unforgiving. In that case, our supreme court stated that "Administrative Agency Law expressly requires an agency to supply an aggrieved party notice of a hearing and an opportunity to be heard." Id. at 465, 431 A.2d at 948 (emphasis added). It does not say that the agency should supply an aggrieved party the opportunity to request a hearing in order to receive notice and an opportunity to be heard.

The duty, as described, is not to afford an employee the opportunity to ask for a hearing; rather, the obligation is to provide notice of a hearing and the opportunity to be heard before such benefits can be terminated. DPW did not satisfy this obligation through the May 11, 1995 letter which, although informing Squire of the right to appeal the decision to terminate her Act 534 benefits, *fn7 made no mention of a pre-termination hearing. *fn8

Once a claimant qualifies for benefits under Act 534, that disability status cannot be changed without a due process hearing at which the basis for termination is established. It is the administrative agency that bears the burden of providing an employee with notice of a hearing and an opportunity to be heard prior to terminating Act 534 benefits, and DPW cannot satisfy this burden with the procedure used here, that is, by unilaterally determining that Squire's disability has ceased and requiring that she file a written appeal from that adverse action. Because DPW violated Squire's due process rights by terminating her Act 534 benefits without first conducting a hearing, we reverse DPW's order and remand the case with directions that Squire's Act 534 benefits be restored as of June 10, 1995, the date of their termination, and that OHA conduct a full due process hearing with respect to Squire's continuing entitlement to Act 534 benefits.

ROCHELLE S. FRIEDMAN, JUDGE

ORDER

AND NOW, this 9th day of June , 1997, the order of the Secretary of the Department of Public Welfare, dated September 13, 1996, is hereby reversed, and we remand this case with directions that Act 534 disability benefits be restored to Judith Squire as of the date of their termination on June 10, 1995, and that the Office of Hearings and Appeals conduct a hearing with respect to Squire's continuing entitlement to Act 534 benefits.

Jurisdiction relinquished.

ROCHELLE S. FRIEDMAN, JUDGE


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