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John D. Volk v. Unemployment Compensation Board

IN THE COMMONWEALTH COURT OF PENNSYLVANIA


July 26, 2012

JOHN D. VOLK, PETITIONER
v.
UNEMPLOYMENT COMPENSATION BOARD
OF REVIEW, : RESPONDENT :

The opinion of the court was delivered by: Renee Cohn Jubelirer, Judge

Submitted: May 16, 2012

BEFORE: HONORABLE DAN PELLEGRINI, President Judge HONORABLE BERNARD L. McGINLEY, Judge HONORABLE RENEE COHN JUBELIRER, Judge HONORABLE ROBERT SIMPSON, Judge HONORABLE MARY HANNAH LEAVITT, Judge HONORABLE PATRICIA A. McCULLOUGH, Judge HONORABLE ANNE E. COVEY, Judge

OPINION BY JUDGE COHN JUBELIRER

John D. Volk (Claimant), pro se, petitions for review of the Order of the Unemployment Compensation Board of Review (Board), which affirmed the determination of the Unemployment Compensation Referee (Referee) that Claimant was ineligible for Unemployment Compensation (UC) benefits under Section 402(e) of the Unemployment Compensation Law (Law),*fn1 43 P.S. § 802(e). In doing so, the Board declined to grant Claimant a hearing at which he could present evidence: (1) to support his allegation that he did not attend the Referee's hearing because he did not receive notice of the hearing; and (2) on the merits of his claim for UC benefits. The issue before this Court is whether the Board abused its discretion and/or erred as a matter of law by denying Claimant's request to reopen the hearing record to submit additional evidence based solely on its determination that Claimant's statement in his appeal that he did not receive notice of the time and place of the first hearing was insufficient to overcome the presumption of receipt of the first hearing notice.

Claimant worked as a registered nurse for Bradford Hospital (Employer) from April 14, 2008, until his discharge on June 24, 2010. Claimant filed a claim for UC benefits with the Altoona Service Center (Service Center) and the Service Center found that Claimant committed willful misconduct in connection with his work. The Service Center, therefore, determined that Claimant was ineligible for UC benefits pursuant to Section 402(e) of the Law. Claimant appealed this determination, and the Referee held a hearing at which Claimant did not appear. The Referee also found Claimant ineligible for benefits and that the hearing notice was mailed to Claimant. Claimant filed a timely appeal of the Referee's order with the Board. In his appeal, Claimant asserted that he did not attend the hearing because he was not notified of the time and place of the Referee's hearing and that the Referee erred in finding that Claimant had committed willful misconduct in connection with his work. The Board affirmed the Referee's decision and denied Claimant's request to reopen the hearing to submit additional evidence because:

[t]he record establishes that the Referee's Notice of Hearing was mailed to [C]laimant at his last known address. Therefore, there is a presumption of timely receipt. A party's denial alone is insufficient to overcome this presumption. [C]laimant has not alleged a reason for his nonappearance other than his allegedly not receiving notice of the hearing. This is insufficient to overcome the presumption of receipt. (Board Op. at 1.) Claimant now petitions this Court for review.*fn2

On appeal, Claimant argues that he never received notice of the date and time of the Referee's hearing and that the Board abused its discretion and/or erred as a matter of law in failing to grant his request for a remand hearing. Claimant essentially contends that he did not know that the Referee's hearing took place until he received the Referee's adjudication.*fn3 In response, the Board asserts that, because the hearing notice was mailed to Claimant's last known address and was not returned as undeliverable, it is presumed that Claimant received the notice, citing Gaskins v. Unemployment Compensation Board of Review, 429 A.2d 138 (Pa. Cmwlth. 1981), and, therefore, the Board did not err in denying Claimant's request for a remand hearing.

The Department of Labor and Industry's (Department) regulation at 34 Pa. Code § 101.24 addresses requests for reopening the record where a party does not attend a scheduled hearing and states, in relevant part:

(a) If a party who did not attend a scheduled hearing subsequently gives written notice, which is received by the tribunal prior to the release of a decision, and it is determined by the tribunal that his failure to attend the hearing was for reasons which constitute "proper cause," the case shall be reopened. Requests for reopening, whether made to the referee or [the] Board, shall be in writing; [and] shall give reasons believed to constitute "proper cause" for not appearing[.]

(c) A request for reopening the hearing which . . . is received or postmarked on or before the 15th day after the decision of the referee was mailed to the parties shall constitute a request for further appeal to the Board and a reopening of the hearing, and the Board will rule upon the request. . . . If the request to have the hearing reopened is denied, the Board will append to the record the request, supporting material and the ruling on the request, so that it shall be subject to review in connection with any further appeal to the Commonwealth Court.

Id. (emphasis added). We have held that not receiving or not timely receiving a hearing notice can constitute "proper cause" for reopening a hearing. Verdecchia v. Unemployment Compensation Board of Review, 657 A.2d 1341, 1343-44 (Pa. Cmwlth. 1995); Coin Automatic Laundry Equipment Company v. Unemployment Compensation Board of Review, 447 A.2d 690, 691 (Pa. Cmwlth. 1982).

Generally, when a party asserts that it did not receive a notice from the Department, the analysis begins with the Department invoking an evidentiary presumption to show that the notice was received by the party. This evidentiary presumption of receipt is used where the sender establishes with proof that a hearing notice was placed into the mail addressed to the last known address of the addressee and it was not returned by postal authorities as undeliverable. Gaskins, 429 A.2d at 140 (applying the common law mailbox rule); see also 34 Pa. Code § 101.53 (providing that "[m]ailing of notices, orders or decisions of a referee, or of the Board to the parties at their last known addresses as furnished by the parties to the referee, the Board or the Department, shall constitute notice of the matters therein contained.") This presumption is based on the notion that, once the notice, properly addressed, is placed in the mail, there are usually two options: either the notice will be delivered as addressed, or, if it cannot be delivered, it will be returned to the sender. See Bee v. Unemployment Compensation Board of Review, 119 A.2d 558, 559 (Pa. Super. 1956) ("Presumably [the notice] was received by claimant for it was not returned by the postal authorities.").*fn4 Although those two options are the most likely to occur in our experience, there are occasions in which mail is lost or not delivered for some reason. See, e.g., Verdecchia, 657 A.2d at 1343-44 (where the addressee provided evidence that the postal authorities did not forward mail as requested by addressee). Therefore, the courts only presume that the notice was received; the burden then shifts to the addressee to prove this presumption wrong and that the mail was not received. The presumption is, thus, merely "a procedural device which shifts the burden of persuasion or the burden of going forward with the evidence," Bixler v. Hoverter, 491 A.2d 958, 959 (Pa. Cmwlth. 1985), to the claimant.*fn5 See also Commonwealth v. Shaffer, 447 Pa. 91, 106, 288 A.2d 727, 735 (1972) (stating "[a] rebuttable presumption forces the defendant to come forth or suffer inevitable defeat on the issue in controversy").

As described, the courts have applied the presumption of receipt as a rebuttable presumption and, therefore, that the addressee must be given the opportunity to submit evidence to rebut the presumption. For example, in Coin Automatic Laundry, the claimant was awarded UC benefits pursuant to a referee's hearing at which the employer failed to appear and, on appeal, the employer argued that it did not receive the notice until after the hearing had been concluded. Coin Automatic Laundry, 447 A.2d at 691. The issues before this Court were "whether the employer had notice of that hearing" and "whether the employer has had an opportunity to support its contention as to lack of notice." Id. After affirming that there is a rebuttable presumption of timely receipt, we held that the employer here has had no opportunity to present proof which could rebut the presumption. The employer's offer of proof, as presented to the [Board] in support of its request for reconsideration, is that the employer in fact did not receive the notice in the mail until the day of the hearing, at a time when the hearing had already been concluded.

We cannot pass upon the adequacy or truth of such offered evidence, but neither can we conclude that it has been adjudicated absent any opportunity to present it. We therefore must remand this case so that the [B]oard may provide for the taking of evidence concerning whether or not the mailed notice was in fact delivered too late by the postal system.

Id. (emphasis added). If the addressee is not given the opportunity to present evidence to rebut the presumption of receipt, the presumption would become irrebuttable, a legal consequence that is generally disfavored by both the United States and Pennsylvania Supreme Courts as violating due process. See Department of Transportation, Bureau of Driver Licensing v. Clayton, 546 Pa. 342, 349, 684 A.2d 1060, 1063 (1996) (citing, inter alia, Cleveland Board of Education v. LaFleur, 414 U.S. 632 (1974) and Bell v. Burson, 402 U.S. 535 (1971), for the general proposition that statutes that create an irrebuttable presumption that are "not universally true and did not grant an individual the opportunity to rebut the presumption" violate due process).

Thus, our case law has established the necessity of providing an addressee the opportunity to rebut the presumption of receipt, which here could establish proper cause for not attending a referee's hearing pursuant to 34 Pa. Code § 101.24. In addition, the Department's own regulations address the need for holding such a hearing. Generally, pursuant to Section 504 of the Law, 43 P.S. § 824,*fn6 "the Board has the discretion to decide whether to grant a request for a remand." Fisher v. Unemployment Compensation Board of Review, 696 A.2d 895, 897 (Pa. Cmwlth. 1997). However, the Board's regulation at 34 Pa. Code § 101.104(c), which relates to the Board's allowance or disallowance of an appeal, states in pertinent part:

The Board will review the previously established record and determine whether there is a need for an additional hearing. Under section 504 of the [Law] (43 P.S. § 824), the Board may affirm, modify or reverse the decision of the referee on the basis of the evidence previously submitted in the case, or the Board may direct the taking of additional evidence, if in the opinion of the Board, the previously established record is not sufficiently complete and adequate to enable the Board to render an appropriate decision. The further appeal shall be allowed and additional evidence required in any of the following circumstances:

(1) Whenever the further appeal involves a material point on which the record below is silent or incomplete or appears to be erroneous. (3) Under § 101.24 (relating to reopening of hearing) a request for reopening received after the decision of the referee was issued which constitutes a request for further appeal to the Board.

Id. (emphasis added). Thus, the regulation at 34 Pa. Code § 101.104(c) requires the Board to allow a further appeal, including the submission of additional evidence, where the further appeal involves a material point on which the record below is silent, incomplete, or where, as here, the request for reopening is made under 34 Pa. Code § 101.24. For the purposes of reopening the record under 34 Pa. Code § 101.24, whether the petitioner had proper cause for not attending the hearing is a material point on which there is no evidence in the existing record for the Board to review.

Applying the above-referenced legal principles, we consider whether the Board erred in denying Claimant a hearing to submit evidence to rebut that presumption to establish that he had proper cause for not attending the Referee's hearing.*fn7

Our Supreme Court and this Court have addressed what constitutes "proper cause" in numerous cases, including McNeill v. Unemployment Compensation Board of Review, 510 Pa. 574, 511 A.2d 167 (1986), Sanders v. Unemployment

Compensation Board of Review, 524 A.2d 1031, 1032-33 (Pa. Cmwlth. 1987), and Verdecchia. In McNeill, the employer did not appear at the first hearing, resulting in a determination favorable to the claimant. The employer sent an appeal letter to the Board that gave no explanation for its failure to attend the first hearing, stating only that it did not agree with the referee's decision and wanted a "further hearing." McNeill, 510 Pa. at 579, 511 A.2d at 169. Notwithstanding the lack of explanation, the Board allowed the appeal and remanded the case for a second hearing "for the purpose of establishing additional testimony regarding the merits of the case." Id. at 577, 511 A.2d at 168 (citation omitted). After this Court affirmed the subsequent decision in the employer's favor, our Supreme Court reversed. The Supreme Court held that the Board's remand for an additional hearing was "not in accordance with the law" because the employer never claimed that it had not received notice of the first hearing or given any other "reasons believed to constitute proper cause for not appearing at the first hearing" in either the employer's appeal or at the subsequent hearing. Id. at 579 & n.2, 511 A.2d at 169 & n.2. Without an explanation or reason ever being proffered by the employer, the Supreme Court found that the Board was "unable to, and in fact did not, determine whether [ ]the employer's[] failure to attend the hearing was for reasons which [would] constitute proper cause." Id. at 579, 511 A.2d at 169 (citation omitted).

In Sanders, the employer contacted the referee a half-hour before the hearing started to state that its representative would be unable to attend and was told by the referee's staff member that the referee would telephone the representative during the hearing. The referee did not telephone the employer's representative and, subsequently, issued a determination in the claimant's favor. The employer appealed and requested that the record be reopened, claiming it did not receive the notice until thirty minutes before the hearing commenced. The Board granted the employer's request and remanded the matter for another hearing, at which the employer claimed that the negligence of the third party it used for its clerical staff had not forwarded the hearing notice to employer until thirty minutes before the hearing. Ultimately, the employer was permitted to present evidence on the merits, which resulted in a determination in the employer's favor. This Court reversed on appeal, holding that the reasons offered for the employer not attending the first hearing, that the representative who was going to testify called in sick, the employer was too far away to appear, and did not receive the notice of the hearing until thirty minutes before the hearing due to the negligence of its contracted office support staff, were mutually exclusive and did not constitute proper cause to allow the Board to remand the matter for another hearing on the merits. Specifically, we held that the negligence involved was not that of a disinterested third party, but of an agent of the employer and, therefore, could not be used to excuse the employer's non-attendance. Sanders, 524 A.2d at 1033.

Finally, in Verdecchia, the employer, who did not appear at the first hearing, appealed a determination in favor of the claimant to the Board claiming it had not received the hearing notice. Verdecchia, 657 A.2d at 1343-44. The Board remanded for a second hearing, at which it required the employer to present evidence to support its allegation that it did not receive the hearing notice. The employer complied, offering testimony that it was having problems with the Post Office not forwarding its mail as requested and that the Post Office, in some instances, held the employer's mail for as long as six weeks. The Board credited that evidence, held that the employer had "proper cause" for not attending the first hearing, and permitted employer to present evidence on the merits of the underlying UC claim. Relying on Sanders, we affirmed and agreed that the credited evidence established the negligence of a disinterested third party, the Post Office, resulted in the non-receipt of the hearing notice, which constituted "proper cause" for not attending the first hearing.*fn8 Id. at 1344.

In his appeal and hearing request, Claimant explained that he "was not notified of the time and date of [the] hearing so I was not in attendance." (Claimant's Appeal to the Board, R. Item at 10). Relying on this statement, the Board held that Claimant "has not alleged a reason for his nonappearance other than his allegedly not receiving notice of the hearing" and "[t]his is insufficient to overcome the presumption of receipt." (Board Op. at 1). However, we conclude that the Board erred in basing its decision that Claimant lacked proper cause solely on the sufficiency of Claimant's statement in his appeal and hearing request, without giving him the opportunity to present evidence to support his allegation.

First, the Board's determination is contrary to Coin Automatic Laundry and the principles of due process, which require that an addressee be given the opportunity to present evidence to rebut the presumption of receipt, which would support a claim of proper cause under the Department's regulations. Like the employer in Coin Automatic Laundry, Claimant appealed a contrary referee's determination asserting that he did not get timely receipt, and the Board did not provide an opportunity for Claimant to present evidence to support his allegation of proper cause. In Coin Automatic Laundry, we remanded the matter back to the Board, requiring it to hold a hearing to allow the employer to present evidence to rebut the presumption of timely receipt, and prove its allegations of proper cause under 34 Pa. Code § 101.24. As we said in Coin Automatic Laundry, "[w]e cannot pass upon the adequacy or truth of such offered evidence [in support of the claim of proper cause], but neither can we conclude that it has been adjudicated absent any opportunity to present it." Coin Automatic Laundry, 447 A.2d at 691. The same can be said here: we cannot conclude that Claimant's assertions of non-receipt have been adjudicated because he has not been given the opportunity to present evidence to support those claims. This is not the same situation as in McNeill, where the petitioner never explained why it did not attend the first hearing, either in its appeal documents or at the remand hearing the Board ordered, thereby preventing the Board from being able to "determine whether []the employer's[] failure to attend the hearing was for reasons which [would] constitute proper cause." McNeill, 510 Pa. at 579, 511 A.2d at 169. Instead, here, Claimant provided the "reason[] [he] believed to constitute 'proper cause' for not appearing," 34 Pa. Code § 101.24(a) (emphasis added), which was that he did not receive notice of the time and date of the hearing and he should, therefore, be given the opportunity to present evidence to support that claim to rebut the presumption upon which the Board relies. Claimant must be given the opportunity to satisfy his burden of rebutting the presumption, whether the evidence he presents is ultimately credited or not.*fn9

Second, the Board's implicit determination that 34 Pa. Code § 101.24 requires a high level of specificity in a party's explanation of why it did not receive notice of the hearing before another hearing may be granted is not supported by the language of the Department's regulations or the Board's past practice, as evidenced in case law. The regulation at 34 Pa. Code § 101.24 states simply that, in its request for an additional hearing, a party "shall give the reasons believed to constitute 'proper cause' for not appearing." Id. This provision does not demand specificity,*fn10 and Claimant submitted the reasons he believed constituted proper cause. Moreover, the Department's regulation at 34 Pa. Code § 101.104(c) provides that, once a party makes a request for a hearing and appeal under 34 Pa. Code § 101.24, the Board is required to allow the further appeal and to allow the introduction of additional evidence.

The Board's action in this case of requiring Claimant to provide a reason why he did not receive the hearing notice does not appear to be consistently enforced, as evidenced in case law. This Court's recitation of the facts in Verdecchia and Sanders gives no evidence that the requests for rehearing in those cases were more specific than Claimant's request here.*fn11 We also know that the Board previously has granted rehearing requests where there has been no explanation at all in the appeal documents about a party's failure to attend a hearing. McNeill. The petitioners in McNeill, Sanders, and Verdecchia were given a hearing at which they had the opportunity to fully explain why they were unable to attend their respective hearings, and to submit evidence to support their claims. While the Board has some discretion in deciding whether to grant a request for a remand hearing, subject to the limitations in 34 Pa. Code § 101.104(c), the Board has not applied consistent standards for the exercise of that discretion. Sometimes the Board requires specific explanations about why the notice was not received and other times it does not. The lack of consistent standards in these matters is troubling, particularly where the refusal to remand prevents the party against whom the presumption of receipt is being asserted from having the opportunity to present evidence to satisfy its burden of rebutting that presumption. As previously stated, this effectively transforms the presumption of receipt into an irrebuttable presumption, a result not favored under the principles of due process. Clayton, 546 Pa. at 349, 684 A.2d at 1063.

The Board evaluated the sufficiency of Claimant's statement in his appeal and hearing request as evidence offered to rebut the presumption of receipt and based its determination not to grant a remand hearing on the sufficiency of that evidence. However, such statements are neither evidence, see School District of the City of Monessen v. Farnham & Pfile Co., Inc., 878 A.2d 142, 150 n.4 (Pa. Cmwlth. 2005) (providing that "statements in legal briefs and memoranda are not evidence"), nor is such a statement a judicial admission on which the Board could rely, Leonard Packel & Anne Bowen Poulin, Pennsylvania Evidence § 127, 34-35 (3d ed. 2007)

(distinguishing between evidentiary admissions and judicial admissions and stating that judicial admissions include "a party's statement in its pleadings . . . [or] in its brief," which act as "formal concessions . . . by a party . . . that have the effect of withdrawing a fact from issue and dispensing wholly with the need for proof of the fact"). Claimant's explanation that he did not attend the hearing in his appeal because he did not receive notice of the hearing would be similar to a favorable statement made by an attorney in an appeal or brief, which is neither evidence nor a judicial admission on which a factual finding could be made. Even if the statement was evidence, it is not part of the factual record before the Board for its consideration. See 34 Pa. Code § 101.104(c) (stating "[t]he Board will review the previously established record and determine whether there is a need for an additional hearing") (emphasis added). Accordingly, the Board's consideration of and reliance upon Claimant's statement in his appeal and hearing request is no substitute for holding an evidentiary hearing.

For the reasons cited above, we hold that the Board may not rely solely upon the sufficiency of statements made in a petitioner's appeal document or request to reopen the hearing, but must provide the petitioner against whom the presumption of receipt is being asserted the opportunity to submit evidence to rebut that presumption and to support the asserted reasons believed to be proper cause for not appearing at the hearing before the Board determines whether the petitioner had proper cause for not attending the hearing.*fn12 Our holding is consistent with the Department's regulation at 34 Pa. Code § 101.104, this Court's decision in Coin Automatic Laundry, and the principles of due process. To hold otherwise would effectively transform the presumption of receipt of mail into an irrebuttable presumption. Therefore, we vacate the Board's Order and remand for further proceedings consistent with this opinion.

John D. Volk, : Petitioner : : v. : : Unemployment Compensation Board : of Review, : Respondent :

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

No. 576 C.D. 2011

ORDER

NOW, July 26, 2012, the Order of the Unemployment Compensation Board of Review (Board) entered in the above-captioned matter is VACATED and this matter is REMANDED to the Board for further proceedings consistent with this opinion.

Jurisdiction relinquished.

RENEE COHN JUBELIRER, Judge

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

John D. Volk, : Petitioner : : v. : Unemployment Compensation : Board of Review, : Respondent :

No. 576 C.D. 2011

: Submitted: May 16, 2012

BEFORE: HONORABLE DAN PELLEGRINI, President Judge HONORABLE BERNARD L. McGINLEY, Judge HONORABLE RENEE COHN JUBELIRER, Judge HONORABLE ROBERT SIMPSON, Judge HONORABLE MARY HANNAH LEAVITT, Judge HONORABLE PATRICIA A. McCULLOUGH, Judge HONORABLE ANNE E. COVEY, Judge

DISSENTING OPINION BY JUDGE McGINLEY

FILED: July 26, 2012

I dissent to the majority's conclusion that a remand is necessary.

Initially, I wholly agree with the majority's statement of the law that the presumption of receipt of mail is a rebuttable presumption. However, the law is crystal clear: the mere assertion that notice was not received, without factual support of any kind, is insufficient to rebut this presumption, and does not constitute "good cause" for not appearing at a hearing. McNeil v. Unemployment Compensation Board of Review, 510 Pa. 574, 511 A.2d 167 (1986).

Here, Claimant asserted in his "letter appeal" to the Board dated December 8, 2010, that "I was not notified of the time and date of hearing so I was

not in attendance." Clearly, under the well-settled case law this is insufficient to rebut the presumption.

Nevertheless, the majority believes that this bald assertion is sufficient to entitle Claimant to an evidentiary hearing before the Board. I submit that it is not.

Unlike the majority, I do not agree that an evidentiary hearing is warranted in every situation where a party merely asserts in a request to reopen the hearing and/or appeal to the Board, without more, that he "did not receive notice" of the referee's hearing.

Aside from Claimant's conclusory assertion in his appeal that he did not receive the hearing notice, Claimant failed to provide any other information to enable the Board to determine if, in fact, a disputed issue of fact existed that would even warrant an evidentiary hearing. The bald and unsupported denial of receipt, without more, is not enough to raise a question of fact to warrant an evidentiary hearing on whether the notice was received.

The majority's decision now requires an evidentiary hearing any time a party simply asserts he did not receive notice of a hearing, notwithstanding the party's failure to allege why notice was not received.

Clearly, an evidentiary hearing is warranted only when there are disputed issues of fact. However, the Board is now required to hold an evidentiary hearing to determine if an issue of fact exists. There is nothing in the Law or Regulations which require the Board to conduct an evidentiary hearing absent a legitimate factual dispute.

I believe if a party does not receive notice of a hearing, he must provide to the Board, in his written appeal/request to reopen the record, some theory, explanation or reason why he did not receive it. This will afford the party opportunity to convince the Board that an evidentiary hearing is necessary to resolve that issue of fact. It is akin to an offer of proof. The Board may then determine, in the exercise of its discretion, whether the claimant is entitled to an evidentiary hearing. This will filter out situations where the party has no explanation, other than the mere assertion that he did not receive notice, and will avoid the necessity of holding countless additional evidentiary hearings in an already overburdened system.

As the Board held, the Notice of Hearing was mailed to the Claimant at his last known address; thus, there was a presumption of timely receipt. Claimant failed to provide the Board with a satisfactory reason to reopen the record.

I would affirm.

BERNARD L. McGINLEY, Judge

President Judge Pellegrini and Judge Simpson join in this dissenting opinion.


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