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Narducci v. Unemployment Compensation Board of Review

Commonwealth Court of Pennsylvania

April 4, 2018

John E. Narducci, Petitioner
v.
Unemployment Compensation Board of Review, Respondent

          Submitted: March 8, 2018

          BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge HONORABLE MICHAEL H. WOJCIK, Judge HONORABLE DAN PELLEGRINI, Senior Judge

          OPINION

          DAN PELLEGRINI, SENIOR JUDGE.

         John E. Narducci (Claimant) petitions for review of the Unemployment Compensation Board of Review (Board) decision imposing a fault overpayment of $14, 768, and assessing 28 penalty weeks and a $2, 215.20 monetary penalty pursuant to Section 804(a) of the Unemployment Compensation Law[1] (Law). Claimant contends that the Department of Labor and Industry (Department), through its Service Centers, did not have jurisdiction to reopen his case ten months after unemployment compensation (UC) benefits were awarded to find that he was ineligible for benefits and to impose fault overpayment and penalties. In the event the Department did have jurisdiction, Claimant contends that it improperly imposed a fault overpayment. For the following reasons, we affirm.

         I.

         Claimant worked for PECO Energy (Employer) as a full-time service distribution mechanic between June 10, 2002, and September 13, 2013. On September 13, 2013, Claimant was suspended pending a job review due to an incident in which he threw a bottle of hand soap at a fellow employee and was escorted off the premises. On October 14, 2013, Employer sent Claimant a letter discharging him as of October 11, 2013, based on his violation of safety rules and "actions that were threatening, intimidating, and physically aggressive." (Record (R.) at Item No. 8, Referee's Hearing: Transcript of Testimony w/Claimant Exhibit, dated 10/17/2014.)

         Before the discharge letter, on October 13, 2013, [2] Claimant submitted an online application for UC benefits indicating that the reason for separation from his employment was due to lack of work. At some point between October 17, 2013, and October 19, 2013, Claimant received Employer's October 14, 2013 letter notifying him that he had been discharged for cause. On October 17, 2013, the Department mailed Employer a notification that Claimant had filed for benefits.[3]

         On October 21, 2013, the Department sent Employer a Form UC-44F(3), Notice of Financial Determination, that found Claimant financially eligible for benefits, [4] together with a Form UC-44FR, Request for Relief from Charges. Nothing in the record indicates that the Department issued an official Notice of Determination granting Claimant benefits or that the Department sent questionnaires to either Claimant or Employer seeking information regarding the claim.

         On October 30, 2013, Claimant spoke to a Department representative, explaining that he was confused about the requirement that he be able and available for work in order to receive benefits. The Claimant, however, did not correct the reason for his separation from employment in his claim record.

         On November 5, 2013, Employer sent a letter to the Department's Charge Office (Charge Office) requesting relief of charges, [5] stating, "[Claimant] was discharged for unacceptable and improper conduct. On 9/12/13 [he] threw a bottle of water at an employee and threw a container of skin cleanser at an employee that left a dent in the wall." (R. at Item No. 3, Employer Separation Information, November 5, 2013 letter.) It was not until December 16, 2013, that the Department noted on Claimant's claim record that Employer had requested a relief from charges. Because of a staff shortage, the Department took no action based on the information contained in that request. On January 22, 2014, the Department placed a general annotation on the claim record indicating that Employer discharged Claimant for cause but again took no action based on that information. Claimant continued to receive benefits until April 19, 2014.

         On July 30, 2014, Employer sent a letter to the Charge Office protesting the Monthly Notice of Compensation Charged report requesting investigation into Claimant's matter and noting:

Our records indicate that, to date, no determination/decision has been issued to the protested claim on the separation issue. If a determination has been issued[, ] please forward a copy so that we may complete our files. If a copy is not available, please indicate to what address it was mailed.

(R. at Item No. 3, Employer Separation Information, July 30, 2014 letter.)

         Prompted by Employer's letter, on August 4, 2014, the Department, for the first time, sent questionnaires to both Claimant and Employer. Based upon this information, on August 21, 2014, the Department issued three determinations. The first was a Notice of Determination that denied benefits under Section 402(e) of the Law because Claimant was discharged for cause.[6] The second was a Notice of Determination Overpayment of Benefit (Fault or NonFault) which found that Claimant had a fault overpayment of $14, 768 representing the amount of UC benefits he received. The third was a Notice of Determination issuing a 15% penalty of $2, 215.20 for over 28 penalty weeks pursuant to Sections 801(b)[7] and (c)[8] of the Law. Claimant timely appealed the three determinations and a Referee held a hearing.

         At the hearing, Claimant contended that because Employer did not appeal within 15 days of Claimant's grant of benefits, the Department did not have jurisdiction to open the appeal ten months later. In his testimony, Claimant acknowledged that he threw a container of hand soap at a coworker because his coworker brought up a sensitive personal matter. He went on to testify that the reason he filed for UC benefits before he had been formally discharged was because he was not being paid and that he did not intentionally try to defraud or willfully mislead anyone in his application. He further acknowledged that after receiving the letter from Employer detailing the reason for his discharge, he did not provide the Department with the true reason for his lack of work.

         Following the hearing, the Referee affirmed the Notices of Determination issued by the Service Center and, on appeal, the Board affirmed.

         II.

         Claimant then appealed to this Court, again arguing that the Department did not have authority to reopen his UC claim in 2014 after approving and paying him benefits in October 2013 because the issuance was a final determination that Employer never appealed.[9] The Board argued that it never issued a final determination until August 2014. Claimant also contended that a fault payment and penalties should not have been imposed.

         In November 2015, this Court, through Judge Cohn Jubelirer, issued an opinion vacating the Board's decision and remanding for a determination as to whether the Department had jurisdiction to issue the August 21, 2014 determinations.[10] The opinion provided:

[N]either the Referee nor the Board made findings of fact and conclusions of law with regard to the Service Center determination dates, whether there was in fact a final determination of Claimant's eligibility made in October 2013as argued by Claimant and, if so, on what basis that determination could be reopened. . . .
This hole in the factual record is crucial for appellate review of whether the Board had jurisdiction to issue the August 21, 2014 determination that Claimant was ineligible for benefits. If the Board is correct that no Notice of Determination was issued in response to Claimant's application for benefits in October 2013, Employer would have had no determination from which to appeal until the Service Center issued its August 21, 2014 determination. Conversely, if a Notice of Determination was issued in October 2013 or shortly thereafter, the appeal period would have long since passed and the Board would have lacked subject matter jurisdiction over Claimant's eligibility for UC benefits.

Narducci v. Unemployment Compensation Board of Review, (Pa. Cmwlth., 104 C.D. 2015, filed November 4, 2015). Specifically, the Board was required to make findings of fact and conclusions of law with regard to the Service Center determination dates, whether there was, in fact, a final determination of Claimant's eligibility made in October 2013, and if so, upon what basis should the determination be opened. We did not address the issue of whether the fault overpayment should have been imposed.

         In accordance with this order, the Referee, acting merely as a hearing officer, held three additional hearings in this matter to complete the record as much as possible and to take additional testimony. At the first hearing, the Referee took the testimony of Blair Stuart (Stuart), a State Examiner for Unemployment Compensation with the Department. In pertinent part, he testified:

Q: [A]ccording to you, this Determination was issued on August 21[.] Do you know why it was not issued-it looks like an [application] date of October 13, 2013. Do you know why a Decision was not issued until more than ten months later?
A: Yes.
Q: Why is that?
A: Our office here in Allentown did not receive any notification from the Employer. That doesn't necessarily mean it wasn't sent. But I'm just referring to our Service Center in Allentown and our Adjudication Unit did not receive any information until August 4 at 12:38 p.m. That's the first notification we received that Employer was contesting [inaudible] or in this case a Relief from Charge.
***
Q: So no Decision was made based upon information that you had at the time in 2013?
A: Correct . . . .
***
A: We-because the Claimant built the claim on the Internet and indicated to our knowledge that there was lack of work. There was no notification of a separation issue. Our first notification of that was through information we received through Relief from Charge Unit in Harrisburg . . . .

(R. at Item No. 17, Board Hearing - Remand: Transcript of Testimony, dated 12/4/2015, pp. 9-10.) When it was determined that several pertinent documents were missing from the record, another hearing was scheduled. At the second hearing, it was established that on November 5, 2013, Employer submitted a Request for Relief from Charges recorded in the claim record on December 16, 2013.

         Because the record was still not complete, a third hearing was held where the parties entered a stipulation ...


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