Court Opinion

ID: 7798097
Source: CourtListenerOpinion
Date Created: 2022-08-05 13:09:48.105585+00
Date Added: 2024-06-11T16:28:43.935591
License: Public Domain

IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Jesse Snak,                                      :
                               Petitioner        :
                                                 :
                 v.                              :   No. 1034 C.D. 2021
                                                 :   Submitted: June 10, 2022
Unemployment Compensation                        :
Board of Review,                                 :
                    Respondent                   :

BEFORE:          HONORABLE PATRICIA A. McCULLOUGH, Judge
                 HONORABLE MICHAEL H. WOJCIK, Judge
                 HONORABLE STACY WALLACE, Judge

OPINION NOT REPORTED

MEMORANDUM OPINION
BY JUDGE WALLACE                                             FILED: August 5, 2022

         Jesse Snak (Claimant) petitions for review of the August 26, 2021 order of the
Unemployment Compensation Board of Review (Board) that affirmed the decision
of the referee and denied Claimant unemployment compensation (UC) benefits for
the week ending February 6, 2021, pursuant to Section 401(c) of the Unemployment
Compensation Law (Law),1 under the second of his two UC benefit applications. In
addition, the Board found that Claimant received a non-fault overpayment of $11,
which was subject to recoupment. After careful review, we affirm.

1
    Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P.S. § 801(c).
                     I. Background and Procedural History
      Our review of the certified record reveals that the Scranton UC Service Center
(Service Center) issued notices of determination to Claimant on March 5, 2021. The
notices indicated that Claimant had filed an application for UC benefits, and that the
Service Center deemed Claimant eligible for benefits with a benefit year of February
16, 2020, through February 13, 2021. Claimant’s weekly benefit rate was $572. The
notices indicated that Claimant later filed an additional application for UC benefits,
and that the Service Center deemed Claimant eligible with a benefit year of February
14, 2021, through February 12, 2022. Claimant’s new weekly benefit rate was $583.
      Importantly, the notices of determination explained that a “system error” had
caused the Department of Labor and Industry (Department) to pay Claimant’s UC
benefits for the week ending February 6, 2021, under the second of his UC benefit
applications summarized above. Certified Record (C.R.), Item No. 2, Notices of
Determination, 3/5/21.     The notices stated, in relevant part, that Claimant
erroneously received UC benefits “to which he/she was not entitled on the UC
[application] with an effective date of 2/14/2021 . . . . The week[] ending 02/06/2021
. . . should have been applied to the initial [application] with an effective date of
02/16/2020.”    Id. (underlining omitted).    The notices indicated that Claimant
received a non-fault overpayment of $11 due to this error.
      Claimant appealed to a UC referee who held a telephone hearing on April 28,
2021, in which Claimant participated pro se and was the sole witness to testify. The
referee issued a decision on May 5, 2020. Like the Service Center, the referee found
that Claimant had filed an application for UC benefits with an effective date of
February 16, 2020, and that Claimant’s “benefit year [was] valid from February 16,
2020 - February 13, 2021.” C.R., Item No. 8, Referee’s Decision/Order, 5/5/21. The

                                          2
referee found that Claimant then filed a second application for UC benefits with an
effective date of February 14, 2021, and a benefit year of February 14, 2021, through
February 12, 2022. The referee explained that Claimant filed a claim for UC benefits
for the week ending February 6, 2021, but that he received benefits under his second
UC benefit application with a benefit year that did not begin until February 14, 2021.
Because the week ending February 6, 2021, did not fall within the benefit year that
began February 14, 2021, the referee affirmed the Service Center’s determination as
modified, explaining that UC benefits for the week ending February 6, 2021, “must
be denied . . . . in respect to the application of February 14, 2021 . . . .” Id.
       Claimant appealed to the Board, which issued an order on August 26, 2021.
The Board affirmed the referee’s decision as modified, adopting and incorporating
the referee’s conclusions with slight adjustments, and denied Claimant UC benefits
for the week ending February 6, 2021, under his second UC benefit application. The
Board reasoned, “[b]ecause . . . February 6, 2021, falls within the claimant’s previous
benefit year, there was not a valid application for compensation for that week during
the claimant’s current benefit year and benefits are denied under Section 401(c) of
the . . . Law for that week.” C.R., Item No. 10, Board’s Order, 8/26/21. The Board
added that the referee’s decision did not address the non-fault overpayment indicated
on the notices of determination. Accordingly, the Board clarified that Claimant “has
a non-fault overpayment of $11 . . . which is subject to recoupment.” Id.
       Claimant retained counsel and now petitions for review of the Board’s order.2
Claimant challenges the Board’s finding that he received an overpayment subject to
recoupment. Claimant argues that he was entitled to UC benefits for the week ending

2
  Claimant also filed for reconsideration. The Board issued a reply on October 8, 2021, explaining
that it deemed the reconsideration request denied because Claimant had filed a petition for review,
and the 30-day appeal period had concluded.

                                                3
February 6, 2021, and that it was only due to the Department’s error that he received
benefits under his second UC benefit application. Claimant’s Br. at 10-13. Claimant
argues that he “should not have to pay for the Department’s error” and asks that this
Court remove the overpayment. Id. at 10.
                                   II. Discussion
      This Court reviews unemployment compensation orders for violations of the
appellant’s constitutional rights, violations of agency practice and procedure, and
other errors of law. 2 Pa.C.S. § 704. Generally, we also review whether substantial
evidence supports the findings necessary to sustain a decision. Id. “A claimant has
the burden of proving financial eligibility for UC benefits.” Clark v. Unemployment
Comp. Bd. of Rev., 129 A.3d 1272, 1274 (Pa. Cmwlth. 2015) (quoting Logan v.
Unemployment Comp. Bd. of Rev., 103 A.3d 451, 453 (Pa. Cmwlth. 2014)). Where
the claimant had the burden of proof and was the only party to present evidence, as
was the case here, we review whether the Board capriciously disregarded competent
evidence. Bennett v. Unemployment Comp. Bd. of Rev., 33 A.3d 133, 136 n.3 (Pa.
Cmwlth. 2011) (citing McKenna v. Unemployment Comp. Bd. of Rev., 981 A.2d 415,
417 n.4 (Pa. Cmwlth. 2009)).
      The Board based its decision in this case on Section 401(c) of the Law, which
provides that UC benefits will be payable to any employee who is or becomes
unemployed and makes “a valid application for benefits with respect to the benefit
year for which compensation is claimed and has made a claim for compensation in
the proper manner and on the form prescribed by the [D]epartment . . . .” 43 P.S. §
801(c). As noted above, the Board’s order provides that, “[b]ecause the week at
issue, February 6, 2021, falls within the claimant’s current benefit year, there was
not a valid application for compensation for that week during the claimant’s current

                                         4
benefit year . . . .” C.R., Item No. 10, Board’s Order, 8/26/21. We are puzzled by
the Board’s statement, but it does not impact the outcome of the case. The Law
defines a “valid application for benefits” as, in relevant part, “an application for
benefits on a form prescribed by the [D]epartment, which is filed by an individual,
as of a day not included in the benefit year previously established . . . .” Section
4(w)(1) of the Law, 43 P.S. § 753(w)(1). Further, the Law defines a “benefit year”
as “the [52] consecutive week period beginning with the day as of which” a claimant
files a valid application for benefits, “and thereafter the [52] consecutive week
period beginning with the day as of which” a claimant next files a valid application
for benefits after the termination of his or her last preceding benefit year. Section
4(b) of the Law, 43 P.S. § 753(b).
       Claimant filed a valid application for benefits with the benefit year of
February 16, 2020, through February 13, 2021, which included the week ending
February 6, 2021. No one disputes that Claimant was eligible for UC benefits for
the week ending February 6, 2021, under the first application. Most critically, our
review of the record reveals no allegation that Claimant filed his claim for UC
benefits for that week improperly or was somehow at fault for the Department paying
the claim under his second benefit year, which began on February 14, 2021.3 The
record, therefore, does not support the conclusion that Claimant was noncompliant
with Section 401(c) by failing to make “a valid application for benefits with respect
to the benefit year for which compensation is claimed” or by failing to make “a claim
for compensation in the proper manner and on the form prescribed by the

3
 An “application” for UC benefits is not the same thing as a “claim” for UC benefits. The pertinent
regulations define an “application for benefits” as, in part, “[t]he initial request for unemployment
compensation . . . preliminary to filing claims for compensation.” 34 Pa. Code § 61.1. In contrast,
a “claim for compensation” is “[a] request for waiting week credit or payment of compensation
for a week when the claimant was unemployed . . . .” Id.

                                                 5
[D]epartment . . . .” 43 P.S. § 801(c). By all appearances, Claimant made a valid
application for benefits as to the benefit year including the week ending February 6,
2021, and then properly filed a claim for benefits; the Department simply committed
an error by attributing that claim to the wrong benefit year.          See Duby v.
Unemployment Comp. Bd. of Rev., 497 A.2d 699, 702 (Pa. Cmwlth. 1985) (quoting
Hunt v. Unemployment Comp. Bd. of Rev., 302 A.2d 866, 868 (Pa. Cmwlth. 1973))
(“[Section] 401(c) is a procedural requirement calling for the use of proper forms
when one applies for compensation. The Board’s attempt to invest this section with
substantive requirements is erroneous and is needless in arriving at a just
adjudication.”).
      Any error in the Board’s application of Section 401(c) is harmless, however,
as the Board’s order indicates that Claimant is subject to recoupment for only the
difference between the UC benefits that he received for the week ending February
6, 2021, and the UC benefits that he would have received if the Department
processed his claim correctly. See Gallitzin Apparel Corp. v. Unemployment Comp.
Bd. of Rev., 569 A.2d 392, 395 (Pa. Cmwlth. 1990) (citing Colonial Taxi Co. v.
Unemployment Comp. Bd. of Rev., 479 A.2d 96 (Pa. Cmwlth. 1984)) (“An appellate
court will not disturb a decision of the Board on the basis of an error which
is harmless. The burden is on the petitioner to affirmatively show that the alleged
error resulted in prejudice and had a material effect on the outcome of the case.”).
The Board’s order explains that Claimant “has a non-fault overpayment of $11 . . .
which is subject to recoupment,” but it does not require recoupment of the entire
amount of UC benefits Claimant received for the week ending February 6, 2021.
C.R., Item No. 10, Board’s Order, 8/26/21.

                                         6
      It is important to emphasize that Section 804 of the Law distinguishes between
fault and non-fault overpayments. See 43 P.S. § 874. In a fault overpayment, a
claimant must pay back the amount of the overpayment along with interest. 43 P.S.
§ 874(a). In a non-fault overpayment, the Department may only deduct the amount
of the overpayment from a claimant’s future UC benefits. 43 P.S. § 874(b)(1). Even
this has its limits, as the Law caps the amount of a deduction when an overpayment
exceeds $100 and may even apply a credit toward or excuse an overpayment in
certain circumstances. 43 P.S. § 874(b)(1)(i)-(iii). Since the Board’s order imposed
a non-fault overpayment here, it does not make Claimant “pay for the Department’s
error” as he alleges. Claimant’s Br. at 10. The order merely makes Claimant whole
by directing that he will not receive $11 in the future, as he had already received $11
to which he was not entitled. Given that the overpayment was so small, the
Department could likely recoup the entire amount in a single payment. See 43 P.S.
§ 874(b)(1)(i). The Law therefore contemplates that mistakes can happen, and that
claimants should not be penalized when they receive excess UC benefits through no
fault of their own.
                                   III. Conclusion
      Accordingly, we discern no basis to disturb the Board’s decision and affirm
the August 26, 2021 order.

                                              ______________________________
                                              STACY WALLACE, Judge

                                          7
              IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Jesse Snak,                                :
                         Petitioner        :
                                           :
              v.                           :   No. 1034 C.D. 2021
                                           :
Unemployment Compensation                  :
Board of Review,                           :
                    Respondent             :

                                      ORDER

              AND NOW, this 5th day of August, 2022, the August 26, 2021 order
of the Unemployment Compensation Board of Review is AFFIRMED.

                                        ______________________________
                                        STACY WALLACE, Judge