Gadson v. Unemployment Comp. Bd. of Review, 2290 C.D. 2015

Patricia Gadson, Petitioner v. Unemployment Compensation Board of Review, Respondent

No. 2290 C.D. 2015

COMMONWEALTH COURT OF PENNSYLVANIA

Submitted: May 20, 2016

June 9, 2016

BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge HONORABLE PATRICIA A. McCULLOUGH, Judge HONORABLE DAN PELLEGRINI, Senior Judge

OPINION NOT REPORTED

MEMORANDUM OPINION BY SENIOR JUDGE PELLEGRINI

Patricia Gadson (Claimant) petitions pro se for review of an order of the Unemployment Compensation Board of Review (Board) which affirmed the decision of an unemployment compensation referee (Referee) finding her ineligible for unemployment compensation (UC) benefits under Sections 401, 401(c), 4(u) and 404(d) of the Unemployment Compensation Law (Law)¹ and assessing a non-fraud overpayment of emergency unemployment compensation benefits in the amount of $5,121 under Section 4005 of the Emergency Unemployment Compensation Act of 2008 (EUC Act).² For the reasons that follow, we vacate and remand.

I.

Claimant was employed by Communities Putting Prevention to Work as a Project Manager, was let go due to downsizing and received UC benefits effective October 31, 2010. After exhausting "normal" UC benefits, she began receiving emergency unemployment compensation (EUC) benefits on May 31, 2011. From September-October 2011³ to January 31, 2012, Claimant was employed by Turning Points for Children (Employer) in a seasonal, part-time capacity.⁴

In March 2015, the Lancaster UC Service Center (Service Center) notified Claimant that her benefits may be temporarily or permanently terminated due to her "fail[ing] to report, underreport[ing] earnings, holiday pay or vacation pay." (Record (R.) Item No. 3.) The Service Center explained that "Information received in our office from [Employer] indicates that you overreported/underreported your earnings. The week(s) involved with this issue is/are 10/08/11-10/29/11, 11/19/11, 12/3/11-1/21/12."⁵ (Id.) Claimant responded indicating that the wages she provided and not those provided by Employer were correct, and that the reason for the discrepancy was as follows:

It appears that the reported pay periods do not line up on the grid above. As this was 4 yrs [sic] ago I no longer have pay stubs ... from this part-time employer. I did report my weekly earnings as requested [and] the amounts that are listed by the employer are incorrect. I worked 10-12 hrs [sic] per week at 20.00 per hour. I was paid bi-weekly but reported my earnings ... weekly as requested.

(Id.)

The Service Center determined that Claimant received an overpayment of EUC benefits because she received all of her regular UC entitlement and was subsequently determined not to be an exhaustee of regular UC, and classified the overpayment as fraud. In explaining the classification of "fraud," the Service Center reasoned, "Pattern of behavior; more than one employer where wages were underreported or totally unreported." (R. Item No. 4.)

The Service Center then issued five separate determinations. Three of the determinations denied EUC benefits under Sections 401(c), 401, 4(u) and 404(d) of the Law, and Section 4001(d)(2) of the EUC Act for nine intermittent claim weeks starting with the week ending October 8, 2011, and ending with the week ending January 21, 2012. The fourth determination assessed a $5,121 fraud overpayment under Sections 4005(a), 4005(b) and 4005(c) of the EUC Act, 26 U.S.C. §3304 Note. The fifth determination assessed eleven penalty weeks under Section 801(b) of the Law, 43 P.S. §871(b), and a fifteen percent penalty in the amount of $768.15 under Section 801(c) of the Law, 43 P.S. §871(c).

Claimant appealed all five determinations alleging that she reported her income based on what she was paid for each relevant week. She stated that the bi-weekly claim form that she completed online requested that she report her actual earnings and also estimate her earnings for the upcoming two weeks, and that the Service Center erred in finding that Claimant reported her estimated earnings as her actual earnings.

II.

Before the Referee,⁶ Claimant testified that she applied for UC benefits after she had been laid off from her previous job in November 2010. She testified that she had read the UC handbook and was aware of the reporting requirements. She explained that she failed to report her income from October 8, 2011, to January 21, 2012, because "I noticed here the first two weeks I reported zero and that's because I did not receive a check from [Employer] until the end of the month. And when I did, I reported my earnings and I reported my estimated earnings - what I was planning to work during the week." (R. Item No. 9 at 6.) She acknowledged that she was aware of how much she would be making and what the gross amount would be, but did not report that amount because, based on her understanding, she was only to report money that she had physically received.

With regard to the finding that she underreported her income, Claimant testified that "I don't believe I underreported my income.... [E]ven whatI wrote in my appeal is that I was asked to estimate ... report what it was I earned and then report - like estimate what I was going to make in the next week." (Id.) She stated that she did not know why she did not estimate the previous two weeks, but that she just estimated what she could work because she did not have office hours. Claimant testified that she worked from home anywhere between five and twenty hours a week, and that she estimated what she planned on working the next week and reported that.

Claimant further testified that she received $1,138 in May 2012 because she was still unemployed, explaining that her job with Employer was seasonal. After that ended, she took a part-time job as a substitute teacher and made approximately $114 a week. She reported every other week because she did not work consistently as a substitute teacher. She stated that she did not report her earnings consistently because she was not working consistently. She also denied any wrongdoing or fraudulent behavior.

The Referee found Claimant's statements denying any wrongdoing and her testimony that she reported her earnings by estimating her earnings to be incredible and unconvincing. The Referee also found that Claimant underreported her earnings and failed to report her full and correct earnings during certain weeks. Accordingly, the Referee determined that Claimant must be disapproved benefits for the weeks at issue under Sections 401, 401(c), 4(u) and 404(d) of the Law. With regard to the Service Center's determination of a fraud overpayment, the Referee found nothing in the record that indicated that Claimant deliberately misled the UC authorities to receive benefits to which she was not entitled.However, he found that Claimant was overpaid $5,121 under the non-fraud overpayment provisions of Sections 4005(b) and 4005(c) of the EUC Act. Moreover, the Referee held that based on Section 801(b) of the Law and Section 4005(a)(1) of the EUC Act, Claimant would not be penalized eleven weeks of benefits because there was no competent evidence that Claimant deliberately misled the Service Center to receive benefits to which she was not entitled. Finally, the Referee concluded that under Section 801(c) of the Law, Claimant was not liable to pay a penalty of $768.15. Claimant appealed to the Board which adopted and incorporated the Referee's determination in whole. This appeal followed.

III.

A.

On appeal,⁷ Claimant argues that the Referee's Finding of Fact Number 4⁸ is erroneous because she reported all of her earnings and projected earnings. She states that she had to project hours that she planned on working and as a per diem, seasonal employee, who worked from home based on Employer's needs, she often would work either more or less than the hours she projected.

A claimant bears the burden of establishing her eligibility for UC benefits. Paglei v. Unemployment Compensation Board of Review, 37 A.3d 24, 26 (Pa. Cmwlth. 2012). Under Section 401(c) of the Law, a claimant must make "a valid application for benefits with respect to the benefit year for which compensation is claimed" and her claim must be made in the "proper manner." Section 401(c) of the Law, 43 P.S. §801(c). The UC handbook instructs that after a claimant has filed her initial application, she must file a claim for each week in which she is totally or partially unemployed.⁹ Moreover, a claimant's bi-weekly claim must be filed during the week immediately following the two weeks being claimed.¹⁰

Claimant's weekly earnings figures as reported by Employer differ from those reported by Claimant when filing her bi-weekly claims for the weeks at issue. Claimant explained the discrepancies by stating, "It appears that the reported pay periods do not line up on the grid above," and simply asserting that her values are correct. (R. Item No. 3.) She also explained that when reporting her earnings, she would estimate what she was going to earn in the following week and report that value; that amount would sometimes be incorrect because she would end up working either more or less than the projected hours. This is in directopposition to the handbook's instructions, which Claimant admitted to being familiar with, of filing immediately after the claimed two weeks, thereby requiring Claimant to look backwards at the previous two weeks to report her actual earnings and not guess the amount of money she would potentially make by looking at the coming week. By not reporting/underreporting her earnings during the time at issue, Claimant received a total of $5,121.00 in EUC benefits.

Citing to this Court's recent decision in Stock v. Unemployment Compensation Board of Review, ___ A.3d ___ (Pa. Cmwlth., No. 415 C.D. 2015, filed April 8, 2016), the Board asserts that because Claimant did not act with fraudulent intent in the receipt of the EUC benefits, her ineligibility under Section 401(c) of the Law should not have been deemed total...