UC- EUC - overpayment - waiver - remand for lack of findings

Deklinski v. UCBR - February 23, 2012 - Cmwlth. Court



http://www.pacourts.us/OpPosting/Cwealth/out/1379CD11_2-23-12.pdf



Claimant here does not merely argue that the overpayment was not her fault. Claimant also argues that repayment would be against equity and good conscience because it would cause her financial hardship, a claim not made in Stelter v. UCBR, 14 A.3d 929 (Pa. Cmwlth. 2011), and she presented evidence to support this claim at the hearing. This court has recognized financial hardship as a basis for a waiver request. See, e.g., Grunwald v. UCBR, 829 A.2d 786, 788 (Pa. Cmwlth. 2003).



Although Claimant raised the financial hardship claim before the referee and in her appeal to the UCBR, the UCBR failed to address it. Accordingly, we vacate the UCBR’s order and remand for findings of fact and conclusions of law on the issue of whether repayment of the EUC overpayment would cause Claimant financial hardship.



Title IV of the Supplemental Appropriation Act of 2008, P.L. 110-252, 122 Stat. 2353, Section 4005(b), 26 U.S.C. §3304 Note. Section 4005(b) of the Act provides: In the case of individuals who have received amounts of [EUC] under this title to which they were not entitled, the State shall require such individuals to repay the amounts of such [EUC] to the State agency, except that the State agency may waive such repayment if it determines that – (1) the payment of such [EUC] was without fault on the part of any such individual; and (2) such repayment would be contrary to equity and good conscience. 26 U.S.C. §3304 Note.

contracts - interest - dilatory conduct

Truserve Corp., et al., Aplt v. Morgan's Tool & Supply, No. 10 WAP 2010
Opinion By: Todd, Debra
Posted By: W.D. Prothonotary
	Date Rendered: 2/21/2012
	Date Posted: 2/21/2012
	Opinion Type: Majority Opinion	J-76-2010mo.pdf
	Date Rendered: 2/21/2012
	Date Posted: 2/21/2012
	Opinion Type: Concurring and Dissenting Opinion	J-76-2010codo.pdf

We granted allowance of appeal in the instant case to consider whether a trial court may refuse to award contractual interest to the prevailing party in a contract dispute based on a finding of dilatory conduct by the prevailing party. We hold . . . that a trial court may not refuse to award interest to the prevailing party when the right to interest has been expressly reserved under the terms of the contract.

Where a party to a contract reserves the right to the payment of interest, that interest is considered conventional or contractual interest. In cases where the contract expressly provides for the payment of interest, or the payment of interest is implied by the nature of the promise, the interest is said to become an integral part of the debt itself, and, therefore, is recoverable as of right under the terms of the contract. . . . “If the parties have agreed on the payment of interest, it is payable not as damages but pursuant to a contract duty that is enforceable”)

Moreover, it is a well-established principle of contract law that, where the language of a contract is clear and unambiguous, a trial court is required to give effect to that language. . . .Indeed, this Court has cautioned that it is not the function of a court to rewrite agreements between parties, and a court must give effect to the clear terms to which the parties have agreed. . . . Thus, we have no hesitation in concluding that, where the terms of a contract provide for the payment of interest, a court’s award of such interest in favor of the prevailing party is not discretionary.

Perhaps recognizing that the award of contractual interest was not discretionary, the panel majority of the Superior Court, as noted above, affirmed the trial court’s decision on the basis that TruServ failed to take reasonable steps to mitigate its losses. A party who suffers a loss due to a breach of contract generally has a duty to make reasonable efforts to mitigate his losses. . . . . Moreover, the burden is on the breaching party to show how losses could have been avoided. . . . However, “an injured party . . . is not obligated to mitigate damages when both it and the liable party have an equal opportunity to reduce damages.”. . .

We recognize that, in situations involving a breach of contract for the payment of a sum certain, the breaching party could always reduce its obligation for losses incurred by the non-breaching party simply by paying the amount due and performing the contract. Nevertheless, we conclude that a party who breaches a contract containing an express promise to pay interest may not be permitted to reduce or escape entirely his contractual obligation by subsequently arguing that the nonbreaching party did not prosecute its breach of contract claim with dispatch.

UC - willful misconduct - absenteeism, illness - last absence

Illness may constitute a good cause justification for excessive absenteeism. McKeesport, 625 A.2d at 114 (citing Green v. UCBR, 433 A.2d 587 (Pa. Cmwlth. 1981)).

Even where a history of absenteeism is present, where the final absence which precipitated claimant’s discharge was due to illness, a claimant is entitled to compensation benefits because the last absence “was the result of illness rather than willful misconduct.” Grace v. UCBR, 412 A.2d 1128, 1130 (Pa. Cmwlth. 1980) (quoting Tritex Sportswear, Inc. v. UCBR, 315 A.2d 322 (Pa. Cmwlth. 1974)).

_____________

This discussion appears in an unreported case published today in which the Court affirmed the Board's grant of benefits

http://www.pacourts.us/OpPosting/Cwealth/out/863CD11_2-17-12.pdf

UC - educational employee - commencement of unemployment during holiday/vacation

Garnet Valley School District v. UCBR - February 13, 2012 - unreported memorandum decision

http://www.pacourts.us/OpPosting/Cwealth/out/1318CD11_2-13-12.pdf

Claimant was a substitute paraprofessional who was called on an as-needed basis to replace or fill in for regular fulltime paraprofessionals. Claimant had a long-term substitute assignment that ended on January 6, 2011. There was no work available for Claimant from January 6, 2011, until the pay period ending March 25, 2011, when she worked for four hours. The school was closed for students and paraprofessionals on February 21, 2011, for President‟s Day. Claimant is not paid for holidays. Claimant filed an application for benefits for the claim week ending February 26, 2011.

The court upheld the UCBR decision that claimant was not disqualified by sec. 402.1 of the UC Law, which prohibits employees of educational institutions from receiving benefits during summer and holiday breaks, provided that they have a reasonable assurance of employment following the break. Employer argued that Claimant had reasonable assurance of continuing work in this case but the court did not reach that question.

Rather, it held that the issue of reasonable assurance because, by its own terms, section 402.1(3) does not apply to the week in question, which was not an "established and customary vacation period or holiday recess" -- as the UC Law specifies. Section 402.1(3) precludes benefits only for "any week which commences during an established and customary vacation period or holiday recess…. 43 P.S. §802.1(3). The week in question that included the President's Day holiday did not commence on that day so section 402.1(3) is facially inapplicable. North Penn School District v. UCBR, 662 A.2d 1161, 1163 (Pa. Cmwlth. 1995).

_________________

The opinion, though not reported, may be cited "for its persuasive value, but not as binding precedent." 210 Pa. Code § 67.55. Citing Judicial Opinions.

UC - willful misconduct - rule violation

Here's a nice summary of the law on rule violation cases that appears in a recent unpublished decision

http://www.pacourts.us/OpPosting/Cwealth/out/1151CD11_2-10-12.pdf


“Our Supreme Court defines willful misconduct as behavior that evidences a willful disregard of the employer‟s interest, a deliberate violation of the employer‟s work rules, or a disregard of the standards of behavior that the employer can rightfully expect from its employees.” Ductmate Industries, Inc. v. UCBR, 949 A.2d 338, 341 (Pa. Cmwlth. 2008) (citing Caterpillar, Inc. v. UCBR, 550 Pa. 115, 123, 703 A.2d 452, 456 (1997)).

“If the employer alleges willful misconduct because the claimant violated a work rule, the employer must prove both the existence of the rule and its violation.” Caterpillar, 550 Pa. at 123, 703 A.2d at 456.

In determining whether the violation of the work rule constitutes willful misconduct, our Court must “examine whether „the rule or policy is reasonable in light of all the circumstances and if so, whether the employee [had] good cause to violate the rule or policy.‟” Id. (quoting Spirnak v. UCBR, 557 A.2d 451, 453 (Pa. Cmwlth. 1989)).

“Reasonableness is determined by whether the employer‟s application of the rule under the circumstances is fair, just and appropriate to pursue a legitimate interest.” Caterpillar at 123, 703 A.2d at 456-57.

UC - indpt. contractor - "customarily engaged" in indpt. business

Minelli v. UCBR - Cmwlth. Court (en banc) - February 9, 2012

http://www.pacourts.us/OpPosting/Cwealth/out/440CD11_2-9-12.pdf

Pro se claimant held to be an employee and not an indpt. contractor, despite having signed an "independent contractor agreement" to perform a management evaluation of a hospice program.

Claimant worked for employer during a three (3) day "consulting arrangement." Although she was " free from control and direction in the performance of the contracted services," she "was not, and never has been, customarily engaged in an independently established trade or business; therefore, her activities do not meet the second element of Section 4(l)(2)(B) of the Law. Silver v. Unemployment Compensation Board of Review, ___ A.3d ___ (Pa. Cmwlth., No. 1366 C.D. 2010) (December 29, 2011). The fact that an unemployed person agrees to accept, and thereafter does accept, an occasional offer of work is simply not enough to demonstrate that said individual is customarily engaged in an independently established trade, occupation, profession or business. Id. at ___, slip op. at 10.

In holding that the second element of Section 4(l)(2)(B) has not been met under the facts of this case, the court pointed out that it was "in no way departing from the three part test described by our Supreme Court in Victor, 586 Pa. at 222-23, 892 A.2d at 797-98, to determine whether one is engaged in an "independently established trade, occupation, profession or business." Rather, we are simply recognizing that the Law requires an additional element, that the claimant be customarily engaged in such trade or business in order to be considered self-employed. This element was not discussed in Victor, or other cases which followed, because the persons found to be independent contractors in those cases were clearly engaged in ongoing business activities rather than an isolated or sporadic job(s).

Minelli v. UCBR - Cmwlth. Court (en banc) - February 9, 2012

http://www.pacourts.us/OpPosting/Cwealth/out/440CD11_2-9-12.pdf

Pro se claimant held to be an employee and not an indpt. contractor, despite having signed an "independent contractor agreement" to perform a management evaluation of a hospice program.

Claimant worked for employer during a three (3) day "consulting arrangement." Although she was " free from control and direction in the performance of the contracted services," she "was not, and never has been, customarily engaged in an independently established trade or business; therefore, her activities do not meet the second element of Section 4(l)(2)(B) of the Law. Silver v. Unemployment Compensation Board of Review, ___ A.3d ___ (Pa. Cmwlth., No. 1366 C.D. 2010) (December 29, 2011). The fact that an unemployed person agrees to accept, and thereafter does accept, an occasional offer of work is simply not enough to demonstrate that said individual is customarily engaged in an independently established trade, occupation, profession or business. Id. at ___, slip op. at 10.

In holding that the second element of Section 4(l)(2)(B) has not been met under the facts of this case, the court pointed out that it was "in no way departing from the three part test described by our Supreme Court in Victor, 586 Pa. at 222-23, 892 A.2d at 797-98, to determine whether one is engaged in an "independently established trade, occupation, profession or business." Rather, we are simply recognizing that the Law requires an additional element, that the claimant be customarily engaged in such trade or business in order to be considered self-employed. This element was not discussed in Victor, or other cases which followed, because the persons found to be independent contractors in those cases were clearly engaged in ongoing business activities rather than an isolated or sporadic job(s).

UC - willful misconduct - incompetence, inexperience, inability

"[I]ncompetence, inexperience, or inability which may well justify discharge will not constitute willful misconduct so as to render an employee ineligible for benefits." Geslao v. Unemployment Comp. Bd. of Review, 519 A.2d 1096, 1097 (Pa. Cmwlth. 1987).

cited in http://www.pacourts.us/OpPosting/Cwealth/out/1742CD11_2-8-12.pdf - a recent, unpublished memorandum decision

UC - overpayment - fraud - state of mind

Marsh v. UCBR - Cmwlth. Court - February 7, 2012 - unreported memorandum opinion

http://www.pacourts.us/OpPosting/Cwealth/out/1155CD11_2-7-12.pdf

Claimant failed to report earnings received while getting EUC. The referee and Board found that she had been overpaid (undisputed) and that the OP was fraudulent.

The Court reversed, because neither the referee nor the Board found that Marsh "knowingly" made a "false statement or representation of a material fact" or "knowingly . . . failed . . . to disclose a material fact." Both of the underlying decisions fail to address Marsh’s state of mind when making her claim for benefits.

"To find fault, the Board must make some findings with regard to a claimant’s state of mind." Chishko v. UCBR, 934 A.2d 172, 177 (Pa. Cmwlth. 2007) [citing Kelly v. UCBR, 840 A.2d 469, 473 (Pa. Cmwlth. 2004)]. Absent such findings, the Board’s order establishing a fraud overpayment must be reversed, and the case remanded for assessment under Section 4005(b) of the EUC Act.

___________________

The opinion, though not reported, may be cited "for its persuasive value, but not as binding precedent." 210 Pa. Code § 67.55. Citing Judicial Opinions.

__._,_.___

UC - self-employment - businessman

Dunkelberger v. UCBR - Cmwlth. Court - February 7, 2012

http://www.pacourts.us/OpPosting/Cwealth/out/1199CD11_2-7-12.pdf

The Court upheld the Board's denial of benefits pursuant to Section 402(h) of the UC, which declares self-employed individuals ineligible for unemployment compensation. The issue before the Court was whether the Board erred by finding that Claimant was ineligible for benefits as an unemployed businessman under Starinieri v. UCBR, 447 Pa. 256, 289 A.2d 726 (1972). The court affirmed.

Claimant was employed by Window World as vice-president of the corporation. He was a founder of the corporation, one-third owner of Window World, and served as one of the corporation‟s directors. In May of 2009, the corporate president, also a one-third owner, purchased a one-third interest and thereby became the majority shareholder, holding two-thirds of the. At that point, Claimant and the president were Window World‟s only directors. In August 2010, however, the president elected his wife to the board of directors, then he and his wife then used their majority vote to immediately terminate Claimant‟s employment as vice-president.

At its most fundamental level, the UC Law is purposed by the General Assembly of this Commonwealth "for the benefit of persons unemployed through no fault of their own." The Law was not intended, however, to supplement the income of individuals who become unemployed businessmen. Starinieri. Therefore, the General Assembly determined, as a matter of policy, to declare self-employed individuals ineligible for unemployment compensation. See Section 402(h) of the Law. Thus, the Law effectively embraces the notion that a self-employed individual is responsible for his own employment, and leaves him to shoulder his own burden for any loss.

The Board‟s findings here, based on information supplied by Claimant, show that until his termination, Claimant exercised substantial policymaking control over Window World. Accordingly, Claimant falls squarely within the definition that Stanieri and other cases have set out of a businessman and not an employee.

Admittedly, in enacting Section 402.4, the General Assembly set a standard for a limited class of business persons under which their eligibility for benefits is determined, not by their status, but by their ability to control their loss of employment. Further, it is undeniable that this paradigm is consistent with the overall purpose of the law to provide for persons who involuntarily lose their jobs through no fault of their own and that Starinieri and its progeny stand in contrast to this paradigm. Under Starinieri, business persons like Claimant who, by virtue of their minority shareholder status, are unable to prevent their termination of employment, even where they are devoid of fault, are still ineligible for benefits. Moreover, their loss of employment in most of these cases is not due to a failed business venture, but simply to an ouster by those who have majority control of the corporation. Nonetheless, the Starinieri doctrine has been the law for several decades and neither our Supreme Court nor the legislature has seen fit to change it. We are bound to follow these precedents. Accordingly, the Board‟s order is affirmed.

UC - financial elig. - no earnings/employment in Pa. in base year

Pagliei v. UCBR - Cmwlth. Court - February 3, 2012

http://www.pacourts.us/OpPosting/Cwealth/out/519CD11_2-3-12.pdf

Pro se claimant held not financially eligible for UC benefits under 43 P.S. §753(l)(2), because her employment and earnings during her base year were in Delaware, not Pennsylvania.

abuse - expungement - appeal - nunc pro tunc

P.S. v. DPW - Cmwlth. Court - 2/3/12 - unreported memorandum opinion

http://www.pacourts.us/OpPosting/Cwealth/out/168CD11_2-3-12.pdf

Alleged abuser filed a timely appeal from an indicated DPW report in 2000. In 2004, DPW claims that it sent appellant a Rule to Show Cause why the appeal should not be dismissed, then dismissed the appeal when appellant did not respond.

However, there is nothing in the record to show that the Rule to Show Cause was properly served on P.S. or her counsel. While the names of P.S. and her counsel were listed on the Rule, there is no address provided for them and no certificate of service upon which we could rely to determine whether P.S. was properly served. Therefore, we are unable to make a determination as to whether there was a breakdown in the administrative process that would justify an appeal nunc pro tunc.

Case remanded for a hearing on whether P.S. is entitled to a hearing nunc pro tunc.

__._,_.___

foreclosure/bankruptcy - real party in interest - 10th Cir. opinion

http://www.ca10.uscourts.gov/opinions/11/11-1232.pdf

In re: MARK STANLEY MILLER, also known as A Moment to Remember Photo & Video, also known as Illusion Studioz; JAMILEH MILLER, Debtors. MARK STANLEY MILLER; JAMILEH MILLER, Appellants, v. DEUTSCHE BANK NATIONAL TRUST COMPANY, Appellee.

No. 11-1232

UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT

2012 U.S. App. LEXIS 1863

February 1, 2012, Filed

PRIOR HISTORY: [*1]

APPEAL FROM THE UNITED STATES BANKRUPTCY APPELLATE PANEL FOR THE TENTH CIRCUIT. (BAP No. 10-073-CO).

COUNSEL: Submitted on the briefs:^*

* After examining the briefs and appellate record, this panel has determined unanimously that oral argument would not materially assist the determination of this appeal. SeeFed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore ordered submitted without oral argument.

Mark S. Miller and Jamileh Miller, Pro se.

Susan J. Hendrick, Aronowitz & Mecklenburg, LLP, Denver, Colorado, for the Appellee.

JUDGES: Before KELLY, Circuit Judge, PORFILIO, Senior Circuit Judge, and MATHESON, Circuit Judge.

OPINION BY: PORFILIO

OPINION

PORFILIO, Senior Circuit Judge.

After Deutsche Bank National Trust Company (Deutsche Bank) brought a foreclosure action against the home owned by appellants Mark Stanley Miller and Jamileh Miller and obtained an Order Authorizing Sale (OAS) from a Colorado court, the Millers filed a Chapter 13 bankruptcy petition. Upon the filing of their petition, an automatic stay entered, halting the foreclosure proceedings. See 11 U.S.C. § 362(a). Deutsche Bank obtained an order from the bankruptcy court relieving it from the stay to permit the foreclosure to continue. See id. [*2] § 362(d). The Tenth Circuit Bankruptcy Appellate Panel (BAP) affirmed the bankruptcy court's order granting Deutsche Bank relief from the automatic stay. The Millers now appeal from the BAP's order affirming relief from stay.

The issue before us is whether Deutsche Bank established that it was a "party in interest" entitled to seek and obtain relief from the stay. See id. Because we conclude that Deutsche Bank did not meet its burden of proof on this issue, we reverse the BAP's order and remand for further proceedings.

BACKGROUND

On April 20, 2006, the Millers executed a promissory note (Note) in the amount of $216,236 in favor of IndyMac Bank, F.S.B. (IndyMac). The Note was secured by a Deed of Trust assigning a security interest in the Millers' Colorado home to the public trustee of Arapahoe County and creating a power of sale in the public trustee. The Deed of Trust identified Mortgage Electronic Registration Systems, Inc. (MERS), acting as a nominee for IndyMac, as its beneficiary. It further provided that "[t]he Note . . . (together with this Security Instrument) can be sold one or more times without prior notice to Borrower." Aplt. App. at 31.

1. State Court Proceedings

The Millers [*3] failed to make the required payments on the Note. In February 2010, Deutsche Bank, claiming to be the current holder of the Note, filed a foreclosure action in the Arapahoe County, Colorado District Court and sought an OAS under Colorado Rule of Civil Procedure 120.¹

1 Deutsche Bank applied for the OAS in the name of "Deutsche Bank National Trust Company, as Trustee of the IndyMac INDX Mortgage Loan Trust 2006-AR13, Mortgage Pass-Through Certificates, Series 2006-AR13 Under the Pooling and Servicing Agreement dated May 1, 2006." Aplee. Supp. App. at 49.

On May 4, 2010, the Millers filed their "Motion for Hearing on Jurisdiction" in the Rule 120proceeding. The Millers argued that Deutsche Bank lacked standing to seek an OAS. See Aplee. Supp. App. at 56 (arguing that "standing to bring [a Rule 120] proceeding stems from an interest recorded in the public record which the Petitioner here does not have and has made no effort to present such evidence to the court").

On May 6, 2010, the state district court entered an order denying the Millers' motion. In this order, the court determined that Deutsche Bank had made a sufficient showing that it was an "interested person" entitled to an OAS. [*4] The text of the order reads as follows:

The issue before the Court is whether the party seeking the ord[e]r auth[or]izing sale is an "interested person" as that term is used in C.R.C.P. 120. A copy of the note is attached to the motion requesting an order auth[oriz]ing sale. The note on page 6 below the respo[n]d[e]nts' signatures is endorsed in blank by Lender. No evidence has been presented to suggest that the endorsement is not genuine or that the pet[i]tioner is not in possession of the original note. The pet[i]tioner is entitled to an order auth[oriz]ing sale.

Id. at 51 (emphasis added).

The state court thus reached its conclusions based on its review of a copy of the Note, which had been indorsed in blank. There is no evidence that the state court was presented with the original Note before it authorized the sale. A few days later, the Millers again moved for a hearing on the jurisdictional issue. The state court summarily denied their motion. It later entered an OAS and an additional summary order finding that Deutsche Bank had established jurisdiction in its pleadings and that the Millers had "not specified a legal reason why jurisdiction has not been established."Id. at 62.

2. [*5] Proceedings in Bankruptcy Court

The Millers filed their Chapter 13 bankruptcy petition on June 22, 2010. On October 7, 2010, Deutsche Bank filed its motion for relief from stay. In its motion, Deutsche Bank recited that it was the current owner of the Note and Deed of Trust. A copy of the Note, indorsed in blank, was attached to the motion.²

2 The copy of Deutsche Bank's motion in the record on appeal does not include an attached copy of the Note.

The Millers responded in two ways. First, they filed an adversary proceeding in which they accused Deutsche Bank of filing a fraudulent foreclosure and fraudulently seeking relief from stay. (The adversary proceeding is not a subject of this appeal.) Second, they lodged an objection to the motion for relief from stay. In their objection, the Millers asserted that Deutsche Bank was not the proper party in interest and lacked standing to bring the motion. Specifically, they complained that Deutsche Bank had not produced the original Note or proved that it was in possession of the Note.

On November 3, 2010, the bankruptcy court held a hearing on the motion for relief from stay. During the hearing, counsel for Deutsche Bank proffered a copy of the [*6] Note indorsed in blank by IndyMac, along with a copy of the Deed of Trust. The bankruptcy judge asked counsel "where is the original of the note right now?" Aplt. App., Vol. II at 95. Counsel responded, "The original of the note has been requested, and it should be on the way to our firm here shortly. I can present that at any evidentiary hearing." Id.

Apparently, no further evidentiary hearing was held on the issue of Deutsche Bank's possession of the Note. Instead, the bankruptcy court made findings from the bench at the close of the hearing on the motion for relief from stay. The court observed that it had a copy of the Note and that "I have representation of counsel that the original is on its way." Id. at 107. After noting the state court's findings that Deutsche Bank had standing to proceed under Colorado Rule of Civil Procedure 120, the bankruptcy court found that "sufficient grounds exist for the lifting of the automatic stay" and that relief from stay was appropriate. Id. at 110.

3. The BAP Appeal

The Millers appealed the bankruptcy court's order granting relief from stay to the BAP. The BAP began its decision by noting that "[t]he details surrounding the assignment to Deutsche [*7] Bank are not part of the record on appeal." Aplee. Supp. App. at 6 n.8. In particular, the record submitted to the BAP did not even contain a copy of the Note, much less the original.³

3 To the extent the Millers assert that the absence of a copy of the indorsed Note from the BAP record prevents us from taking notice of the indorsement in this appeal, we disagree. The bankruptcy court had in its possession a copy of the Note, indorsed in blank, and made a finding based on the copy that the Note had been so indorsed. It was the Millers' duty as the appealing parties to designate the record for the BAP appeal. See Fed. R. Bankr. P. 8006. Having failed to provide a complete record on this issue, they could not challenge the bankruptcy court's findings concerning the copy of the Note containing the indorsement. See Lopez v. Long (In re Long), 255 B.R. 241, 245 (10th Cir. B.A.P. 2000) ("[W]hen the record on appeal fails to include copies of the documents necessary to decide an issue on appeal, [the BAP] is unable to rule on that issue and may summarily affirm the bankruptcy court.").

In its decision, the BAP spent little time discussing the adequacy of proof that Deutsche Bank was in possession [*8] of the original Note, and the legal consequences thereof. Instead, the BAP relied on the Rooker-Feldman doctrine.See Rooker v. Fid. Trust Co., 263 U.S. 413 (1923); D.C. Court of Appeals v. Feldman, 460 U.S. 462 (1983). Though noting that the bankruptcy court had not expressly mentioned this doctrine, it concluded that the court had relied on the state court's decision on the standing issue. The BAP further concluded that in light of this doctrine, which generally prohibits federal courts from entertaining suits by parties who have lost in state court and who seek review of state court decisions in federal court, "the bankruptcy court properly declined to revisit the state court's decision that Deutsche Bank was an 'interested person' entitled to a Rule 120 order of sale." Aplee. Supp. App. at 16. Armed with the state-court decision finding Deutsche Bank had standing to proceed with the foreclosure, the BAP reached a further conclusion that Deutsche Bank had standing to seek relief from stay.

ANALYSIS

1. Standard of Review

"Although this appeal is from a decision by the BAP, we review only the Bankruptcy Court's decision."C.O.P. Coal Dev. Co. v. C.W. Mining Co. (In re C.W. Mining Co.), 641 F.3d 1235, 1240 (10th Cir. 2011) [*9] (internal quotation marks omitted). "We review matters of law de novo, and we review factual findings made by the bankruptcy court for clear error." Id. (citation omitted). "[W]e treat the BAP as a subordinate appellate tribunal whose rulings are not entitled to any deference (although they certainly may be persuasive)." Parks v. Dittmar (In re Dittmar), 618 F.3d 1199, 1204 (10th Cir. 2010).

The bankruptcy court's decision whether to grant relief from stay is reviewed for an abuse of discretion.Chizzali v. Gindi (In re Gindi), 642 F.3d 865, 872 (10th Cir. 2011),overruled on other grounds by TW Telecom Holdings, Inc. v. Carolina Internet Ltd., 661 F.3d 495, 497 (10th Cir. 2011). We review the application of the Rooker-Feldman doctrine de novo. See Mann v. Boatright, 477 F.3d 1140, 1145 (10th Cir. 2007) (holding that the dismissal of a complaint pursuant to the Rooker--Feldmandoctrine is reviewed de novo).

2. Relief from Stay Standard

The Bankruptcy Code provides that "[o]n request of a party in interest and after notice and a hearing, the court shall grant relief from the stay" if the party in interest has made the appropriate showing to obtain such relief. 11 U.S.C. § 362(d).⁴ The Bankruptcy [*10] Code does not define the term "party in interest" for purposes of this subsection. Courts have concluded, however, that in order to invoke the court's power to award relief under § 362(d), a party must be either a creditor or a debtor of the bankruptcy estate. See, e.g., Roslyn Savings Bank v. Comcoach Corp. (In re Comcoach Corp.), 698 F.2d 571, 573 (2d Cir. 1983). The question, then, is whether Deutsche Bank has established its status as a creditor of the Millers' bankruptcy estate.

4 The Code provides that with the exception of the debtor's equity in the property, the party opposing relief from stay has the burden of proof on all issues. 11 U.S.C. § 362(g)(2). Whether a party has standing to seek relief as a party in interest, however, is an issue distinct from whether that party's underlying claim is valid. We conclude that Deutsche Bank bears the burden of proving its statutory standing as a "party in interest." See Colorado Farm Bureau Federation v. U.S. Forest Service, 220 F.3d 1171, 1174 (10th Cir. 2000)(affirming dismissal of complaint where plaintiffs failed to carry their burden of establishing statutory standing under Administrative Procedures Act). Cf. Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992) [*11] (stating general rule that party invoking federal jurisdiction bears burden of establishing Article III standing).

3. Applicability of Rooker-Feldmanand Other Preclusion Doctrines

Deutsche Bank argues that in reaching their conclusions on the standing issue, the BAP and the bankruptcy court properly relied on the Rooker-Feldmandoctrine. But we conclude this reliance was unjustified for at least two reasons. First, given the posture of the parties in this bankruptcy court proceeding, the issue should have been analyzed as one of collateral estoppel (issue preclusion) rather than application of the Rooker-Feldman doctrine. Second, neitherRooker-Feldman nor issue preclusion applies because the state court finding of "standing" was not a final judgment to which these doctrines could attach.

The Rooker-Feldman doctrine precludes a losing party in state court who complains of injury caused by the state-court judgment from bringing a case seeking review and rejection of that judgment in federal court. See, e.g., Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 291-92 (2005). While the Millers did "lose" in state court on their standing argument, it is Deutsche Bank that now seeks [*12] affirmative relief in a federal court, in the form of relief from the automatic stay.

It is undeniable that the Millers have not accepted the state court's judgment on the standing issue. They do raise as a defense a similar standing issue to that on which they lost in state court.⁵ But attempts merely to relitigate an issue determined in a state case are properly analyzed under issue or claim preclusion principles rather thanRooker-Feldman. This is because, in addition to the inherently limited scope of Rooker-Feldman, preclusion in federal court on the basis of a state-court judgment is determined by state law, not a federally-specified doctrine. "[I]ncorporation of preclusion principles into Rooker-Feldman risks turning that limited doctrine into a uniform federalrule governing the preclusive effect of state-court judgments, contrary to the Full Faith and Credit Act." Lance v. Dennis, 546 U.S. 459, 466 (2006)(citing 28 U.S.C. § 1738).

5 We also note that the standing required for a creditor to proceed under Rule 120(a) ("any interested person") is not precisely the same as the statutory standing required to seek relief from stay under § 362(d)(a "party in interest"). In light of [*13] our other reasons for rejecting the preclusive effect of the state court order, we need not determine whether the slight difference in wording would have any effect on the preclusion analysis.

We must therefore consider the preclusive effect under Colorado law of the standing determination the Colorado state court reached in the Rule 120 proceeding. We note that Rule 120itself provides that "[t]he granting of [aRule 120 motion] shall be without prejudice to the right of any person aggrieved to seek injunctive or other relief in any court of competent jurisdiction[.]" Colo. R. Civ. P. 120(d) (emphasis added). By filing their bankruptcy petition, the Millers sought and obtained injunctive relief in a court of competent jurisdiction, in the form of the automatic stay.

We further note indications that the Colorado courts would limit the effect of determinations in Rule 120proceedings. The Colorado Court of Appeals has stated that "proceedings pursuant to C.R.C.P. 120 are not adversarial in nature, are not final, and generally no appeal may be taken to review the resulting orders." United Guar. Residential Ins. Co. v. Vanderlaan, 819 P.2d 1103, 1105 (Colo. Ct. App. 1991).⁶ Accordingly, [*14] no final judgment is entered inRule 120 proceedings and the rulings of the court in such proceedings do not have preclusive effect. Id.

6 Cases from the Colorado federal district court have reached differing results concerning whether orders inRule 120 proceedings have preclusive effect or sufficient finality under the Rooker-Feldman doctrine to prevent relitigation in subsequent federal proceedings. See Goldenhersh v. Aurora Loan Servs., LLC, No. 10-CV-01936-MSK, 2010 WL 3245166, at *2 (D. Colo. Aug. 16, 2010) (discussing split in cases). We find those cases denying preclusive effect or Rooker-Feldmantreatment more persuasive than those granting preclusive effect or applyingRooker-Feldman.

We conclude that neither the Rooker-Feldman doctrine nor issue preclusion applies to prevent a federal court from determining whether Deutsche Bank is a "party in interest" entitled to seek relief from stay. Because the BAP incorrectly relied on Rooker-Feldmanand because neither the bankruptcy court nor the BAP conducted a proper statutory standing analysis under § 362(d), we could simply stop our analysis here and remand for a further consideration of the standing issue. The parties, however, [*15] have presented arguments on the merits concerning standing, and the sufficiency of Deutsche Bank's showing concerning standing in this case is a legal issue that can be resolved on appeal. We will therefore now proceed to discuss why Deutsche Bank has failed to demonstrate its standing as a "party in interest."

4. Deutsche Bank's Status as "Party in Interest"

We return to the key question: is Deutsche Bank a "creditor" of the Millers with standing to seek relief from stay? To answer this question, we turn to the Bankruptcy Code. According to the Bankruptcy Code, a "creditor" includes an "entity that has a claim against the debtor." 11 U.S.C. § 101(10)(a). A "claim" is a "right to payment." Id. § 101(5)(A).

Does Deutsche Bank have a "right to payment" from the Millers? In examining this question, we begin with the principle that "[w]ithin the context of a bankruptcy proceeding, state law governs the determination of property rights." In re Mims, 438 B.R. 52, 56 (Bankr. S.D.N.Y. 2010). We must therefore turn to Colorado law, in particular that state's version of the Uniform Commercial Code (U.C.C. or Code).

We ask first how Colorado law would classify the Note signed by the Millers. Under [*16] Colorado law, a promise or order such as the Note is payable "to order" "if it is payable (i) to the order of an identified person or (ii) to an identified person or order." Colo. Rev. Stat. § 4-3-109(b). The Note at issue here is payable "to the order of Lender. Lender is IndyMac Bank, F.S.B., a federally chartered savings bank[.]" Aplt. App., Vol. I at 14. Thus, the Note is payable to the "order" of IndyMac Bank under § 4-3-109(b).

But "[a]n instrument payable to an identified person [such as IndyMac Bank] may become payable to bearer if it is indorsed in blank pursuant tosection 4-3-205(b)." Colo. Rev. Stat. § 4-3-109(c).⁷ Section 4-3-205(b)provides that "[i]f an indorsement is made by the holder of an instrument and it is not a special indorsement, it is a 'blank indorsement.' When indorsed in blank, an instrument becomes payable to bearer and may be negotiated by transfer of possession alone until specifically indorsed." (emphasis added).

7 For U.C.C. purposes, "'Person' means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government, government subdivision, agency, or instrumentality, or any other [*17] legal or commercial entity." Colo. Rev. Stat. § 4-1-201(26).

Deutsche Bank presented evidence that IndyMac had indorsed the Note in blank. Is proof of this indorsement sufficient under the U.C.C. requirements to establish Deutsche Bank as the successor holder of the note? As we shall see, it is not, because Deutsche Bank must also prove it has possession of the Note.

The U.C.C. identifies the requirements for "negotiation" of a note, that is, for "transfer of possession . . . to a person who thereby becomes its holder." Id. § 4-3-201(a). This statute provides that "if an instrument is payable to an identified person, negotiation requires transfer of possession of the instrument and its indorsement by the holder." Id. § 4-3-201(b) (emphasis added). The Official Commentary to section 4-3-201explains that negotiation "always requires a change in possession of the instrument because nobody can be a holder without possessing the instrument, either directly or through an agent." (emphasis added). See alsoColo. Rev. Stat. § 4-1-201(b)(20)(A)(defining "holder" of negotiable instrument as "person in possession" of it).

"Possession is an element designed to prevent two or more claimants from [*18] qualifying as holders who could take free of the other party's claim of ownership." Georg v. Metro Fixtures Contractors, Inc., 178 P.3d 1209, 1213 (Colo. 2008) (citation omitted).⁸ "With rare exceptions, those claiming to be holders have physical ownership of the instrument in question." Id. (citation omitted).⁹ In the case of bearer paper such as the Note, physical possession is essential because it constitutes proof of ownership and a consequent right to payment.¹⁰

8 We note that the 9th Circuit BAP has stated that because relief from stay is a limited proceeding that does not ultimately determine the lender's and debtor's rights, "the concern of real party in interest jurisprudence for avoiding double payment is quite reduced" in such proceedings. Veal v. Am. Home Mortg. Servicing, Inc. (In re Veal), 450 B.R. 897, 914 (9th Cir. B.A.P. 2011). We also note, however, that after making this statement inVeal, the 9th Circuit BAP reversed a bankruptcy court determination granting relief from stay because the purported holder of the note and mortgage could not produce the original note or otherwise provide proof under state law that it was the holder of the note or a person entitled to [*19] enforce it. See id. at 917-18.

9 Colorado law recognizes a theory of "constructive possession" where the instrument is held for its owner in the hands of a third party. See Georg, 178 P.3d at 1213-14. There is no evidence of constructive possession or constructive delivery in this case.

10 A lost instrument may be enforced in certain circumstances by a person who was formerly in possession of it. See Colo. Rev. Stat. § 4-3-309. Here, even assuming such a loss, Deutsche Bank has offered no proof that it was ever in possession of the Note "and entitled to enforce it when loss of possession occurred."Id. § 4-3-309(a)(i).

While Deutsche Bank has offered proof that IndyMac assigned the Note in blank, it elicited no proof that Deutsche Bank in fact obtained physical possession of the original Note from IndyMac, either voluntarily or otherwise.¹¹ Under the U.C.C. requirements, Deutsche Bank has therefore failed to show that it is the current holder of the Note.

11 "The former [U.C.C.] requirement that delivery is required for a negotiation has been changed to a requirement that there be a change in possession of the instrument. Change of possession can be either voluntary or involuntary. . . . [*20] Clearly, therefore, a thief or finder [of a bearer instrument] is a holder[.]" 2 Frederick M. Hart, Erik F. Gerding & William F. Willier,Negotiable Instruments Under the Uniform Commercial Code § 3.05[1] (2011) (emphasis added) (footnotes omitted).

Colorado law does not limit enforcement of an obligation to a holder who received the instrument through negotiation. A note may also be enforced by a transferee. See Colo. Rev. Stat. § 4-3-203. "Transfer of an instrument, whether or not the transfer is a negotiation, vests in the transferee any right of the transferor to enforce the instrument." Id. § 4-3-203(b). But transfer requires delivery: "An instrument is transferred when it isdelivered by a person other than its issuer for the purpose of giving to the person receiving delivery the right to enforce the instrument." Id. § 4-3-203(a) (emphasis added). "Delivery" with respect to an instrument "means voluntary transfer of possession" of the instrument. Id. § 4-1-201(14). Because Deutsche Bank has failed to prove transfer of possession of the original Note it has failed to establish its status as a transferee.

Deutsche Bank also argues that it has standing because under Colorado law it [*21] can initiate a public trustee foreclosure without producing the original Note. It cites Colo. Rev. Stat. §38-38-101(1), which provides that the "holder of an evidence of debt" may initiate a foreclosure. An "evidence of debt" includes a promissory note such as the Note at issue here. Colo. Rev. Stat. § 38-38-100.3(8). Under certain circumstances, the "holder of an evidence of debt" can file a public trustee foreclosure without supplying the original note. See id. § 38-38-101(b)(I)-(III).

But this argument depends, first, on Deutsche Bank's ability to show that it is a "holder of an evidence of debt." Article 38 defines a "holder of an evidence of debt" as a person "in actual possession of" or "entitled to enforce an evidence of debt." Colo. Rev. Stat. § 38-38-100.3(10) (emphasis added). Section38-38-100.3(10) lists a number of presumptive holders of a debt presumed to be the "holder of an evidence of debt." Each of these requires possessionof the evidence of debt, which Deutsche Bank has thus far failed to demonstrate.See id. § 38-38-100.3(10)(a)-(d).

Deutsche Bank appears to argue that notwithstanding its failure to prove it has actual possession of the Note, it qualifies as a "person [*22] entitled to enforce an evidence of debt" under §38-38-100.3(10) and thus is a "holder of an evidence of debt" because (1) it holds a copy of the Note indorsed in blank and (2) it can initiate a foreclosure without presenting the original Note to the public trustee. Deutsche Bank contends that it is a "qualified holder," see id. § 38-38-100.3(21), that would be permitted under Colorado law to foreclose without presenting the original note, see id. § 38-38-101(B)(II). But foreclosure under this provision requires either the bank or its attorney to execute a statement "citing the paragraph ofsection 38-38-100.3(20) under which the holder claims to be a qualified holder and certifying or stating that the copy of the evidence of debt is true and correct" and that the bank agrees to "indemnify and defend any person liable for repayment of any portion of the original evidence of debt in the event that the original evidence of debt is presented for payment to the extent of any amount, other than the amount of a deficiency remaining under the evidence of debt after deducting the amount bid at sale, and any person who sustains a loss due to any title defect that results from reliance upon [*23] a sale at which the original evidence of debt was not presented." Id. §§ 38-38-101(b)(II), 38-38-101(2)(a). There is no evidence that Deutsche Bank or its attorneys have executed such a certification or intend to do so. We therefore reject Deutsche Bank's claim to standing founded on these statutes.

5. Conclusion

For the foregoing reasons, the evidence is insufficient as it currently stands to establish that Deutsche Bank is a "party in interest" entitled to seek relief from stay. The bankruptcy court therefore abused its discretion by granting Deutsche Bank relief from stay.

The Millers raise a number of other objections to the proceedings and orders in the bankruptcy court and the BAP but we need not reach any of them in light of the remand we now order. The judgment of the BAP is REVERSED and the case is REMANDED to the BAP with instructions to remand to the bankruptcy court for further proceedings in accordance with this opinion. The Millers' motion for leave to file a supplemental appendix is DENIED.

UC - willful misconduct - mistake v. failure to work up to ability

Scott v. UCBR - Cmwlth. Court - February 1, 2012

http://www.pacourts.us/OpPosting/Cwealth/out/466CD11_2-1-12.pdf

The court affirmed a UCBR decision holding that claimant committed willful misconduct

Claimant was employed as a CSR Tech II by Abington Memorial Hospital (Employer) from August 11, 1997, through September 9, 2010. Claimant’s job duties included processing trays with instruments and items to be used by doctors performing surgeries. Employer has a policy which requires that all instruments and items on the trays be carefully examined before being processed to ensure that they are clean. The use of unclean instruments and items during a surgical procedure could have a negative effect on the health of a patient. (Findings of Fact Nos. 1-4.)

On several occasions, Claimant was about making sure that the instruments and items on the trays were cleaned before the trays were sterilized and sent to the operation room for use in surgical procedures. In May 2010, Claimant was issued a written warning for processing trays containing "bio burden" from the surgery of a previous patient on the instruments. Claimant was warned that any further infractions of the cleanliness policy would result in further discipline, up to and including termination. Despite Claimant’s ability to properly perform his job duties, on August 18, 2010, the operating room returned a tray that had been processed by Claimant on August 12, 2010, because the tray contained suture material from a previous surgical operation. As a result, on September 9, 2010, Claimant was suspended for violating Employer’s cleanliness policy. On September 23, 2010, Claimant’s suspension was converted to a discharge.

The referee and Board found that the dirty tray was not a mistake but was the result of Claimant’s failure to diligently perform an important aspect of his job duties. The referee noted that Claimant was very capable of properly performing his job duties and that he had no plausible explanation or justification for allowing a dirty tray to reach the operating room in August especially since he had received a written warning for the same type of infraction the previous May. Thus, the referee and Board held that Employer had met its burden of proving that Claimant committed willful misconduct.

Mere incompetence, inexperience, or inability to perform a job generally will not support a finding of willful misconduct. Herndon v. UCBR, 540 A.2d 633 (Pa. Cmwlth. 1988); Culbreath v. UCBR, 426 A.2d 1267 (Pa. Cmwlth. 1981). However, it is well-established that an employee’s failure to work up to his or her full, proven ability, especially after multiple warnings regarding poor work performance, must be construed as willful misconduct because such conduct demonstrates an intentional disregard of the employer’s interest or the employee’s obligations and duties. Sacks v. UCBR, 459 A.2d 461 (Pa. Cmwlth. 1983); Cullison v. UCBR, 444 A.2d 1330 (Pa. Cmwlth. 1982). In the present case, the testimony of the employer witnesses constitutes substantial evidence in support of the Board’s findings. In fact, Claimant admitted before the referee that he was aware of all policies and procedures pertaining to his job duties, he was capable of performing these duties, he had been previously warned regarding dirty trays, and the dirty trays could lead to dire consequences for a new patient. The remaining question, then, is whether the Board’s findings support the Board’s conclusion of willful misconduct. The court held that "they do in this case."

Similar to the claimants in Sacks and Cullison, Claimant was repeatedly warned regarding his poor work performance with respect to the cleanliness of the surgical trays he inspected. The record reveals that he was warned and/or disciplined for dirty trays on at least three occasions from August 2009 to May 2010. Following the last incident, Claimant was specifically warned that any further infractions would result in additional discipline, up to and including termination. Despite this warning, just three months later, in August 2010, Claimant failed to properly inspect another tray, which included suture material from a previous surgical procedure. At the very least, Claimant’s continued poor work performance demonstrated an intentional disregard of the employer’s interest or the employee’s obligations and duties. Thus, the Board did not err in concluding that Claimant engaged in willful misconduct.

abuse - expungement - cocaine in infant's system is "abuse" - marital privilege and confidential communications

B.K. v. DPW - Cmwlth. Court - February 1, 2012

http://www.pacourts.us/OpPosting/Cwealth/out/514CD11_2-1-12.pdf

Expungement denied in case where the 17-month old child of a married couple, mother B.K. and father R.C., tested positive for the presence of cocaine.

Abuse - The presence of cocaine in the child's system was held to constitute "child abuse" under section 6303(b)(1)(i) of the CPSL, which defines it in pertinent part, as "[a]ny recent act or failure to act by a perpetrator which causes nonaccidental serious physical injury to a child under 18 years of age." 23 Pa.C.S. §6303(b)(1)(i). In turn, section 6303(a)(1) of the Law defines "serious physical injury," in pertinent part, as "[a]n injury that … [s]ignificantly impairs a child‟s physical functioning, either temporarily or permanently." 23 Pa.C.S. §6303(a)(1).

Marital privilege/confidential communications - The court rejected the claim of error for requiring B.K.'s husband, R.C., to testify as to spousal confidential communications after she invoked the privilege of 42 Pa. C.S. 5923. Although the ALJ erroneously relied upon section 5924(b)(3) in allowing R.C.'s testimony, he did not err in overruling B.K.'s objection. The spousal incompetence provision of section 5924 and the spousal confidential communication privilege of section 5923 are quite separate and distinct. The former provision disqualifies a husband or wife to give any testimony adverse to the spouse subject to the exceptions in 5924(b); the latter is much more limited and relates to the competence of a spouse to testify regarding confidential communications.

Section 5924(a) of the Judicial Code provides that "[i]n a civil matter neither husband nor wife shall be competent or permitted to testify against each other." 42 Pa.C.S. §5924(a). However, section 5924(b) provides, in pertinent part, that "Subsection (a) shall not apply in an action or proceeding. . . (3) For custody or care of children, including actions or proceedings relating to visitation rights and similar matters. . . . (4) Arising under 23 Pa.C.S. Ch. 61 (relating to protection from abuse)…. 42 Pa.C.S. §5924(b)(3), (4).

In addition, 23 Pa. C.S. 6381(c) states that : Except for privileged communications between a lawyer and a client and between a minister and a penitent, a privilege of confidential communication between husband and wife … shall not constitute grounds for excluding evidence at any proceeding regarding child abuse or the cause of child abuse. Thus, the spousal confidential communication privilege of section 5923 cannot be invoked in the instant expunction proceeding because B.K. could not have had a reasonable expectation of marital confidentiality in her statements pursuant to 23 Pa. C.S. 6381(c).

Copies of medical records on which medical testimony was based - The court rejected B.K. claim that the ALJ erred in permitting a doctdor to testify at the hearing because CYS failed to provide copies of the medical records that the doctor relied on while testifying. However, theorder upon which B.K. bases her claim is not contained in the certified record of this case. Rather, B.K. merely appended a copy of the order to her brief as Exhibit A. An appellate court is limited to considering only those facts that have been duly certified in the record on appeal. B.K. could have sought inclusion of the order in the certified record of this appeal as a supplemental record pursuant to Pa.R.A.P. 1926 or 1951(b). . . . Her failure to make the order underlying her claim a part of the certified record of this appeal utterly precludes this Court from considering the merits of the claim and constitutes a waiver of her allegation of error.

FMLA - "employer" - individual liability

Harbarger v. Lawrence Co. Adult Probation and Parole - 3d Circuit - January 31, 2012 (17 pp.)



http://www.ca3.uscourts.gov/opinarch/103916p.pdf



Debra Haybarger appeals the District Court's decision granting summary judgment to Defendants on her claim under the Family and Medical Leave Act ("FMLA"), 29 U.S.C. § 2601 et seq. Haybarger contends that the District Court erred in holding that, as a matter of law, Mancino--the director of the county probation/parole office--was not her "employer" under the FMLA. As a threshold matter, we hold on an issue of first impression in our Court that a supervisor in a public agency may be subject to individual liability under the FMLA.



We further hold that there exists a genuine dispute of material fact concerning whether Mancino is himself subject to such liability. Accordingly, we will vacate and remand the matter to the District Court.



Section 2611(4)(A)(ii)(I)'s [29 U.S.C. § 2611(4)(A)(i)-(iv)] inclusion of "any person who acts, directly or indirectly, in the interest of an employer" plainly contemplates that liability for FMLA violations may be imposed upon an individual person who would not otherwise be regarded as the plaintiff‟s "employer."



The Department of Labor's implementing regulations for the FMLA confirm that the FMLA permits individual liability. The regulations state that "[e]mployers . . . include any person acting, directly or indirectly, in the interest of a covered employer to any of the employees of the employer, any successor in interest of a covered employer, and any public agency." 29 C.F.R. § 825.104(a). The regulations then explicitly provide that "individuals such as corporate officers „acting in the interest of an employer‟ are individually liable for any violations of the requirements of FMLA." 29 C.F.R. § 825.104(d). In promulgating the regulations, the Department of Labor responded to concerns of imposing individual liability under the FMLA by noting that the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq., which defines "employer" similarly to the FMLA, already holds "corporate officers, managers and supervisors acting in the interest of an employer . . . individually liable." 4 Summary of Major Comments for the FMLA Regulations, 60 Fed. Reg. 2180, 2181 (Jan. 6, 1995) (citations omitted). Accordingly, the FMLA regulations leave little doubt that individual liability is available under the FMLA.