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.

foreclosure - HEMAP notice - jurisdiction

Beneficial Consumer Discount Company v. Vukmam - Superior Court - January 30, 2012

http://www.pacourts.us/OpPosting/Superior/out/a38038_11.pdf

The sheriff's sale of a home was properly set aside by the trial court, which held that it lacked subject matter jurisdiction over the matter because the mortgagee failed to comply with the notice requirements of the Homeowner’s Emergency Mortgage Act, 35 P.S. §§ 1680.401c et seq. (“Act 91”), in that it failed to inform her that she had thirty days to have a face-to-face meeting with Appellant.

Subject matter jurisdiction

In the context of discussing subject matter jurisdiction, the Superior Court has held that “the notice requirements pertaining to foreclosure proceedings are jurisdictional, and, where applicable, a failure to comply therewith will deprive a court of jurisdiction to act.” Philadelphia Housing Authority v. Barbour, 592 A.2d 47, 48 (Pa. Super. 1991) (citation omitted), affirmed without opinion, 615 A.2d 339 (Pa. 1992); see also, Marra v. Stocker, 615 A.2d 326 (Pa. 1992) (concluding that, despite the fact that a judgment had been entered in the underlying mortgage foreclosure action, the trial court erred by refusing to set aside a sheriff’s sale where the mortgagee failed to provide to the mortgagor the mortgage foreclosure notice required by 41 P.S. § 403). The trial court thus properly considered whether the pertinent Act 91 notice was deficient.

At the time relevant to this appeal,** Act 91 provided that: Before any mortgagee may accelerate the maturity of any mortgage obligation covered under this article, commence any legal action including mortgage foreclosure to recover under such obligation, or take possession of any security of the mortgage debtor for such mortgage obligation, such mortgagee shall give the mortgagor notice as described in section 403-C. [35 P.S. § 1680.403c], which states that the "notice shall also advise the mortgagor of his delinquency or other default under the mortgage and that such mortgagor has thirty (30) days to have a face-to-face meeting with the mortgagee who sent the notice or a consumer credit counseling agency to
attempt to resolve the delinquency or default by restructuring the loan payment schedule or otherwise." [emphasis added]

In this case, the parties agree that the Act 91 notice told the homeowner that she had thirty days to have a face-to-face meeting with a consumer credit counseling agency but did not tell her that that she could meet face-to-face with the mortgagee, i.e., Appellant. The trial court interpreted the language highlighted above to mean that the Act 91 notice had to tell the homeowner about both options and held that, because the Act 91 notice failed to inform the homeowner of the second option, the notice was deficient and it lacked subject matter jurisdiction to
entertain the matter. The trial court set aside the sheriff’s sale and the judgment and then dismissed Appellant’s complaint without prejudice.

Wells Fargo Bank v. Monroe distinguished - The court distinguished its opinion in Wells Fargo Bank v. Monroe, 966 A.2d 1140 (Pa. Super. 2009), where it held that a homeowner who actually met with a mortgagee had to prove that she was prejudiced by the deficiency in the Act 91 notice. The court said "We find Wells Fargo Bank to be sufficiently distinguishable from the matter sub judice, such that the decision in Wells Fargo Bank has no impact on our decision in this case. As best we can discern, the deficiencies cited by the Monroes, with regard to the Act 91 notice they received, did not implicate Act 91’s explicit requirement that the mortgagee’s Act 91 notice must inform the mortgagor that the mortgagor can meet face-to-face with the mortgagee or a consumer credit counseling agency. Moreover, unlike in Wells Fargo Bank, there is no failure on the part of the parties to this appeal to provide this Court with pertinent legal authority. ,. . . .Act 91 explicitly states that, before a mortgagee can even commence a mortgage foreclosure action, it must give the mortgagor the notice described in Section 1680.403c; Subsection 1680.403c(b)(1) clearly and unambiguously mandates that the notice must inform a mortgagor, inter alia, that the mortgagor can meet face-to-face with the mortgagee."

The court held that the trial court had properly set aside the sheriff's sale.

____________

Note that the HEMAP statutuory provisions may not be operative at the present time, because of the dormancy of the program due to a lack of adequate funding. See, the statement of Brian Hudson, exec. director of PHFA. PHFA published a notice to this effect in the Pennsylvania Bulletin on May 28, 2011, stating that, because the “Agency will have insufficient money available in [HEMAP] . . . to accept new applications for emergency mortgage assistance,” it will only accept applications “up to and including” June 30^th. In fact, some previously approvals are being rescinded, back to around March 2011. As Brian Hudson's June 30th statement says: Lenders and servicers are reminded that . . . Act 91 requires compliance with the Act 91 Notice prior to instituting a foreclosure action in accordance with Section 409-C. . . August 27, 2011, [is the date] after which mortgagees may take legal action to enforce a mortgage without any additional restriction or requirement under Act 91. [emphasis added]

UC - issue-switching

Saleem v. UCBR - Cmwlth. Court - January 27, 2012

http://www.pacourts.us/OpPosting/Cwealth/out/152CD11_1-27-12.pdf

The UCBR erred in finding claimant ineligible for benefits, because the reason given for Claimant's discharge was not the reason cited by the Referee and Board in finding him ineligible for benefits. The reason given for the employer appeal from the initial grant of benefits by the UCSC was that the claimant was an independent contractor. At the hearing and on appeal to the Board, the referee and Board reversed, finding that the claimant, a clinician, had committed willful misconduct by mishandling a situation involving a student at a school for troubled students.

"In order to deny benefits to a discharged employee, the employer’s stated reasons for the discharge must be the actual cause of the claimant’s unemployment." Charles v. UCBR, 764 A.2d 708, 711 n.4 (Pa. Cmwlth. 2000) (emphasis added) (citing Century Apartments, Inc. v. UCBR, 373 A.2d 1191, 1192 (Pa. Cmwlth. 1977)). "Not only must the employer prove the claimant committed some act which constitutes „willful misconduct,‟ the employer must also prove that the act in question was the actual reason for the claimant's discharge." Panaro v. UCBR, 413 A.2d 772, 774 (Pa. Cmwlth. 1980) (emphasis added). The Board "may not in its findings rely on reasons for discharge that were not considered relevant by the employer." Tundel v. UCBR, 404 A.2d 434, 435 (Pa. Cmwlth. 1979). The Board contends that, because Employer could have discharged Claimant for violating Employer‟s policies, it, essentially, could disregard the reason given by Employer for discharging Claimant and find Claimant ineligible on a different basis. However, this is contrary to Charles, Panaro, Tundel, and Century Apartments.

After-discovered evidence cases are not on point - In the few cases where the court has permitted an employer to assert reasons other than those given for an employee‟s separation to contest eligibility for benefits, those reasons were based, inter alia, on after-discovered evidence of criminal conduct that, in and of itself, would have supported the discharge. In Preservation Pennsylvania v. UCBR, 673 A.2d 1044 (Pa. Cmwlth. 1996), the Court stated that there is a narrow exception to the rule "that the burden is on an employer to prove an employee‟s willful misconduct and that it was the actual reason for the employee‟s termination from employment." Id. at 1047-48. The court held in Preservation Pennsylvania, that the claimant, who was otherwise eligible for benefits based on the stated reason for her separation from employment, was ineligible because she embezzled funds from her employer, which was not discovered until after she had been separated from her employment due to the employer‟s budgetary problems. Id. at 1048. It stated that "the Board is not deprived of authority to permit evidence of the after-discovered criminal conduct [and t]he Board may thereafter reconsider the employee‟s entitlement to benefits in light of the after-discovered criminal conduct and terminate benefits if the employer sustains its burden of proof." Id. Similarly, in PrimePay, LLC v. UCBR, 962 A.2d 684, 688 (Pa. Cmwlth. 2008), it held that an employer can meet its burden to disqualify an employee from receiving benefits if it proves, by after-discovered evidence, that the employee‟s willful misconduct was concealed and, had the employer been aware of the conduct, the employer would have discharged the employee.

Here, unlike Preservation Pennsylvania and PrimePay, LLC, there was no after-discovered evidence of willful misconduct and there was no concealment of the alleged willful misconduct, i.e., how Claimant handled the incident with Student. The Board‟s finding of willful misconduct, through Claimant‟s violation of Employer‟s procedures, is not based on information discovered after Claimant‟s discharge. Rather, this conduct was contemporaneous to his filing of criminal charges against Student, which was the reason Employer fired Claimant.

PFA - family/household member - relationship by affinity - child of long-time paramour

Commonwealth v. Walsh - Superior Court - January 19, 2012

http://www.pacourts.us/OpPosting/Superior/out/a33042_11.pdf

Conviction for contempt of PFA order upheld for violating terms of order prohibiting threats. Appellant threatened the protected party -- S.S., the teen-age daughter of his paramour of 13 years -- when he told the daughter's friend that if he saw SS, "she'd be fucked." The friend relayed this message to SS, who went to the police, who filed a contempt petition.

Challenge to SS's status as a protected party because of lack of a family relationship was rejected. SS had lived with appellant for about 13 years, during which time he treated her as a stepdaughter. She left appellant's home because he had sexually abused her.

The court determined that Appellant and SS were related by affinity. The term “affinity” is not defined in the PFA Act. See 23 Pa.C.S. § 6102. The dictionary defines “affinity” as, inter alia, “related by marriage or by ties other than those of blood.” Webster’s American Dictionary, 14 (2nd College ed. 2000) (emphasis added). Instantly, S.S. has ties other than those of blood to Appellant as S.S.’s two half-siblings are the natural children of Appellant and S.S.’s mother. Given the remedial purpose of the PFA Act it is incumbent upon us to interpret “affinity” so as to include this relationship.

Challenge to sufficiency of the evidence also rejected, since the order prohibited contact with SS, either directly or through third parties.

Appellant's subpoena of phone records was properly rejected, where it was not served until the day before the contempt hearing.

admin. law - due process

Gombach v. Department of State, 692 A.2d 1127, 1129-30 (Pa. Cmwlth. 1997)

The right to due process is equally applicable to administrative agencies as it is to judicial proceedings. The fundamental requirements of due process are notice and an opportunity to be heard at a meaningful time and in a meaningful manner. Procedural due process requires that the individual be given adequate information with which to prepare a defense. For notice to be adequate, it must at the very least contain a sufficient listing and explanation of any charges against the individual.

See also First National Bank of Pike County v. Department of Banking, 300 A.2d 823, 825 (Pa. Cmwlth. 1973) (The essential elements of due process in administrative proceedings are "notice and [the] opportunity to be heard and to defend in an orderly proceeding adapted to the nature of the case before a tribunal" with jurisdiction over the matter.)

UC - vol. quit - late payment of wages - single instance

Smith v. UCBR - Cmwlth Court - January 9, 2012 - unreported memorandum decision

http://www.pacourts.us/OpPosting/Cwealth/out/835CD11_1-9-12.pdf

Claimant did not have good cause to quit work because of late payment of wages where

- only one instance of late payment

- Claimant did not complaint to ER before quitting

- Claimant did not tell ER before she quit.

UC - refusal of drug-testing

Keeler Transport v. UCBR - January 9, 2012 - unreported memorandum decision.

http://www.pacourts.us/OpPosting/Cwealth/out/820CD11_1-9-12.pdf

Claimant held ineligible for UC because of failure to immediately report for drug testing when instructed to do so.

In UGI Utilities, Inc. v. Unemployment Compensation Board of Review, 851 A.2d 240 (Pa. Cmwlth. 2004), this Court held that Section 402(e.1) of the Law governs discharges related to drug tests and not the general willful misconduct discharge governed by Section 402(e) of the Law. UGI Utilities, 851 A.2d at 245. See also Architectural Testing, Inc. v. Unemployment Compensation Board of Review, 940 A.2d 1277, 1281 (Pa. Cmwlth. 2008) (noting both the failure of a drug test, and the refusal to take a drug test, are now analyzed under Section 402(e.1)). Accordingly, Section 402(e.1) requires an employer to (1) demonstrate that it adopted a substance abuse policy; and (2) that the employee violated that policy. UGI Utilities, 851 A.2d at 252. Further, the policy permitting drug and alcohol testing need not be detailed. Architectural Testing, 940 A.2d at 1282. Once the employer establishes the policy, the burden shifts to the employee to show that the policy was either trumped by a statute or collective bargaining agreement. UGI Utilities, 851 A.2d at 252.

Here, Employer’s substance abuse policy states that [r]efusal to submit to a requested alcohol or drug test is grounds for immediate discharge. Refusal includes refusing to report immediately to the testing location upon request …. The Federal regulation, by which Employer is bound, also states that drivers must report immediately for testing. 49 C.F.R. §382.305(l). The Federal regulation provides that an employee is considered to have refused a drug test when he "fail[s] to appear for any test . . . within a reasonable time, as determined by the Employer, . . . after being directed to do so by the employer." 49 C.F.R. §40.191(a)(1)

Claimant did not comply with the requirement to proceed immediately to the testing facility, i.e., first thing Monday morning. Telling Employer that he would go for the drug screen after he returned from Massachusetts constitutes a "refusal" as that term is defined in Employer’s substance abuse policy and in FMCSA regulations

abuse - expungement - single hearsay statement by alleged victim

In re E.A. - Cmwlth. Court - January 9, 2012

http://www.pacourts.us/OpPosting/Cwealth/out/650CD11_1-9-12.pdf

Corroboration needed for hearsay statement of very young child. - CYS determintion of abuse based on single out-of-state DVD about which defendant had no notice does not support finding of abuse. The Supreme Court‟s guidelines in A.Y. appear to allow that, in special situations, uncorroborated hearsay testimony of a child can constitute substantial evidence of child abuse. We have been unable, however, to find a single instance of an indicated report of abuse being based upon a single, out-of-court statement of a child of any age, let alone a child of four years.

Daughter‟s statements of sexual abuse involve Father, Father's wife, a cow and dogs. Her statements ramble, describing incidents that took place under a bed and in her bed, years ago or several days ago. Daughter's statement is simply not competent to stand as the sole support of a finding of sexual abuse.

Daughter's statement was not corroborated by the testimony of CWS workers, whose only experience with Daughter was attendance at the interview is not corroboration. Their testimony about what Daughter said at her interview is double hearsay that was redundant, not corroborative, of the out-of-state DVD. Hearsay can not constitute independent corroborative evidence of hearsay. A.P. v. Department of Public Welfare, 696 A.2d 912, 916 (Pa. Cmwlth. 1997). In short, there was no corroboration to support the Bureau‟s finding that Father sexually assaulted Daughter.

As noted, there is no prior case where a court has allowed a child‟s uncorroborated hearsay statement to serve as the sole evidence to support a factual finding of child abuse. Indeed, county agencies routinely offer corroborating evidence. In C.E. v. Department of Public Welfare, 917 A.2d 348, 351 (Pa. Cmwlth 2007), for example, the county agency offered testimony from the emergency room physician who treated the child as corroborating evidence. See also A.O. v. Department of Public Welfare, 838 A.2d 35 (Pa. Cmwlth. 2003) (testimony of physician with expertise in sexually abused children offered to corroborate hearsay statements of child victim); Mortimore v. Department of Public Welfare, 697 A.2d 1031 (Pa. Cmwlth 1997) (testimony of physician offered to corroborate hearsay statement of child victim of sexual abuse); D.P., 733 A.2d 661 (testimony of child psychiatrist and medical doctor offered to corroborate hearing statement of child victim, although the child‟s statement was held inadmissible). Here, the CYW offered no comparable evidence to corroborate Daughter‟s out-of-court statement that Father, as well as his wife and family dogs, had subjected her to various acts of defilement. The evidence CYS claims to be corroboration was only more hearsay.

Where the hearsay statement is that of a very young child, corroboration is needed to find that a perpetrator engaged in sexual intercourse, cunnilingus and digital penetration of the child, as was reported here by CYS. A medical examination to confirm vaginal penetration and an investigation of Daughter‟s living situation in New York, to consider what other persons had an opportunity to abuse Daughter in the past, should have been undertaken. This is not the exceptional case where uncorroborated hearsay alone may be sufficient to justify a finding of abuse.

The DVD was admitted without prior determination of indicia of reliability - In his second issue, Father contends that the hearing officer erred, procedurally, in ruling that the New York DVD was admissible in lieu of Daughter‟s testimony. We agree. The ruling was made before the hearing officer reviewed the New York DVD. A stenographer did not transcribe the videotaped interview, so the hearing officer did not have a written transcript available at the in camera hearing. Instead, the hearing officer relied upon the telephonic statements of Hall, the interviewer, for a recital of what Daughter said in the interview. CYS opinion that the videotaped interview of Daughter satisfied the requirements of 42 Pa. C.S. §5986(a)(1) was beside the point. It is the job of the factfinder to ensure "that the time, content and circumstances of the statement provide sufficient indicia of reliability …." 42 Pa. C.S. §5986(a)(1) (emphasis added). This requires a review of the hearsay statement to determine its admissibility.

Here, the factfinder relied upon CYS testimony in admitting the New York DVD in lieu of Daughter‟s testimony. This was error. CYS testimony was appropriate for establishing the time and circumstances of Daughter‟s statement. However, only by viewing the New York DVD could the hearing officer determine whether the content of Daughter‟s statement demonstrated sufficient indicia of reliability to warrant its admission. By admitting the New York DVD on the basis of a CYS statement of what it contained, the hearing officer repeated the mistake identified in A.Y.: [T]he Agency was able to rely on its own employees‟ recitation of what the three-year old child stated had occurred … [This] procedure … prevented the hearing officer from having any opportunity to judge the evidence except through the prism provided by the Agency. A.Y. at 125, 641 A.2d at 1152 (emphasis added). Likewise here, the hearing officer decided the admissibility of the New York DVD "through the prism provided by" Wyoming County.

Alleged abuser not required to provide contradictory evidence - The hearing officer criticized Father for not providing "significant contradictory evidence." This was not Father‟s burden. We do not require litigants to prove a negative because it cannot be done. It was Wyoming County‟s duty to investigate the serious allegations made by Mother, and it did not do so. It relied entirely upon New York personnel, for whose work Wyoming County could not vouch. Wyoming County did not investigate Father‟s background, character, reputation or family or offer any evidence such as a physical exam or evaluation of a physician or psychologist to corroborate the New York DVD hearsay statement.

Accordingly, we conclude that substantial evidence does not support the factual finding that Father committed a sexual assault and, therefore, reverse

UC - vol. quit - firm offer of new job - temp. v. permanent

Solar Innovations v. UCBR - January 5, 2012 - Cmwlth. Court (2-1)

http://www.pacourts.us/OpPosting/Cwealth/out/933CD11_1-5-12.pdf

Although an employee who resigns from employment to accept a "firm offer" of employment elsewhere may be eligible for UC benefits when the second job proves to be unavailable, Empire Intimates v. UCBR, 655 A.2d 662 (Pa. Cmwlth. 1995), this is not what occurred here. The second job did not become unavailable to Claimant; it simply ran the course expected of a temporary contract job with a finite period of employment.

The issue presented here appears to be one of first impression5—whether one can quit a stable, full-time, non-temporary job and accept a temporary job, yet remain eligible for UC benefits when the temporary job foreseeably ends, as it did in this case after approximately one month.

Here, the Board found that Claimant‟s employment with Staffing Agency was “temporary, between one and six months.” The Board additionally found that “[t]his assignment could be followed by another.”

"It is well-established that . . . „the receipt and acceptance of a firm offer of employment does constitute termination for cause of a necessitous and compelling nature.‟" Township of North Huntingdon, 450 A.2d at 769 (quoting Steinberg v. UCBR, 383 A.2d 1284, 1286 (Pa. Cmwlth. 1978)). "The offer of employment, however, must be definite," Id. at 769 (citing Baron v. UCBR, 384 A.2d 271, 272 (Pa. Cmwlth. 1978)), and "the claimant must act prudently with regard to his employer." Id. (citing UCBR v. Pennsylvania Power and Light Co., 351 A.2d 698, 699 (Pa. Cmwlth. 1976)). "[T]he mere possibility of obtaining another job is insufficient to establish that employment was terminated for good cause." Id. In addition, although "the claimant may have personal, economic, or career reasons for making h[is] decision to leave the employer . . . that does not constitute a necessitous and compelling cause for voluntarily quitting." Empire Intimates, 655 A.2d at 665.

The Board cites Brennan v. UCBR, 504 A.2d 432, 433 (Pa. Cmwlth. 1986) and Antonoff v. UCBR, 420 A.2d 800, 801 (Pa. Cmwlth. 1980), are distinguishable; neither involved a claimant quitting non-temporary employment to take a new position known to be temporary at the time of quitting.

Here, as in Empire Intimates, the ultimate unavailability of work for Claimant was the result of Claimant‟s personal choice. Instead of remaining at his full-time, non-temporary position with Employer, Claimant chose to accept a temporary job with Staffing Agency, which ended within the period of time the position was expected to end, sometime between one and six months. The offer and acceptance of a known temporary position is not akin to situations where a claimant is offered non-temporary, but part-time, work that subsequently becomes unexpectedly unavailable; rather, it is more like quitting a full-time, non-temporary position in favor of a seasonal position of limited duration. The claimant in the former situation is eligible for benefits, Brennan, 504 A.2d at 433; the claimant in the latter situation is not. Luongo v. UCBR, 190 A.2d 344, 346 (Pa. Super. 1963) (holding that quitting a full-time position to work a seasonal position.

Claimant accepted the temporary position with Staffing Agency believing that, after the first position ended, there was a possibility of future assignments through Staffing Agency. The mere possibility that other assignments could become available “is insufficient to constitute good cause for voluntarily terminating one‟s employment.” Pennsylvania Power and Light, 351 A.2d at 699. To establish eligibility for UC benefits pursuant to Section 402(b) of the Law, the claimant must show that he acted with ordinary common sense and made a reasonable effort to preserve his employment. Brunswick Hotel & Conference Center, 906 A.2d at 660.

We conclude that Claimant‟s actions here are imprudent where he quit his regular, non-temporary job in exchange for a temporary job of fixed duration. Thus, as we did in Pennsylvania Power and Light, we conclude that Claimant‟s actions do not “demonstrat[e] that [he acted] with ordinary common sense and prudence,” Id. at 699, or that he made a reasonable effort to preserve his employment.

Dissent - Just because a job is temporary does not mean that a claimant is not entitled to unemployment compensation. According to the Law, a claimant is eligible for unemployment compensation benefits provided he "earned no less than $50 for at least 16 weeks during the five calendar quarters preceding the first day of the claimant’s unemployment." Earnest v. UCBR, 30 A.3d 1249, 1254 (Pa. Cmwlth. 2011) (citing Section 404(c) of the Law, 43 P.S. §804(c)). This financial eligibility provision does not distinguish between permanent and temporary employment. I do not believe that an employee becomes ineligible for unemployment compensation simply because he leaves full-time employment for other work as employees are free to change jobs in order to, inter alia, reduce the total number of hours worked or change shifts. See Baldwin-Whitehall School District v. UCBR, 848 A.2d 1021 (Pa. Cmwlth. 2004). The permanent or temporary nature of the employment does not change the fact that Claimant was laid off through no fault of his own. Given the fact that employment is typically "at will," Claimant’s situation is no different than if he had accepted a "permanent" position with another employer but was laid off after only one month due to lack of work.

UC - employee v. indpt. contractor

Tobey-Karg Sales Agency v. Dept. of Labor and Industry - Cmwlth. Court - December 30, 2011

http://www.pacourts.us/OpPosting/Cwealth/out/283CD10_12-30-11.pdf

Company petitioned for reassessment for past unpaid Unemployment Compensation (UC) contributions, interest, and penalties on wages not previously reported to the Department.

Sales reps held to be independent contractors rather than employees under Section 4(l)(2)(B) of the Unemployment Compensation Law (Law),1 43 P.S. § 753(l)(2)(B),

UC - appeal - email - timeliness - opportunity to rebut absence of evid. of receipt by UCBR

Bennett v. UCBR - Cmwlth. Court - December 16, 2011 (en banc, 6-1)

http://www.pacourts.us/OpPosting/Cwealth/out/2703CD10_12-16-11.pdf

The Court vacated the UCBR decision on timeliness of the appeal and remanded the case, directing the Board to consider the claimant's evidence on the issue, which the Board had previously ignored, holding that this was a capricious disregard of competent evidence.

Wright v. UCBR, ___ A.3d ___ (Pa. Cmwlth., filed December 16, 2011) (en banc, 5-2), established that the absence of an appeal document in the Board’s record creates, at best, an inference that the Board did not receive the document and, therefore, that it was not filed. In that situation, a claimant should be given an opportunity to establish, at a hearing before a referee, that he or she filed a timely appeal notwithstanding the absence of the appeal document in the Board’s record.

Here and in Wright (also filed today), the court held that the failure to consider the claimant's uncontradicted evidence on the issue of timeliness constituted a capricious disregard of the uncontradicted evidence at the hearing before the referee. In each case, that evidence included testimony and documents that showed that, though not in the Board’s record, the claimant transmitted the earlier appeal document to the Board

Like the claimant in Wright, here Claimant offered testimony that, if found credible and persuasive, would establish that he sent an appeal of the notice of determination to the Board by electronic means before the expiration of the appeal deadline.

Neither the Referee nor the Board addressed Claimant’s testimony or supporting documents in their decisions. Instead, like the Board in Wright, they both appear to have ignored the hearing record and, instead, based their decisions solely on what was (and was not) in the Board’s record prior to the hearing.

The court found this "particularly troubling", because the Board’s hearing notice expressly provided that purpose of the hearing was to take testimony on the issue of the timeliness of Claimant’s appeal. It found that Claimant’s testimony, if found credible and persuasive, and exhibits could support a finding that he filed a timely appeal by e-mail, notwithstanding the absence of that earlier e-mail appeal in the Board’s record. Accordingly, the Board capriciously disregarded record evidence.

The court rejected the Board argument that this case is controlled by Roman-Hutchinson v. UCBR, 972 A.2d 1286 (Pa. Cmwlth. 2009), since in that case, the Board at least considered the claimant’s evidence and made factual findings with respect to the claimant’s claim that, notwithstanding its absence from the Board’s record, the claimant filed an earlier, timely appeal by e-mail. Here, the Board and the Referee made no such findings. Claimant here, like the claimant in Wright, attempted to establish by evidence at a hearing that the Board did, in fact, receive the earlier filed appeal and received it before the appeal deadline. For these reasons, Roman-Hutchinson does not control this appeal.

The court vacated the Board’s decision and remanded the matter for the Board to consider the evidence of record put forth by Claimant to show that he filed a timely appeal by e-mail and to make appropriate and necessary factual findings.

admin. law - federal APA - arbitrary and capricious

http://www.supremecourt.gov/opinions/11pdf/10-694.pdf

key quote -

This case requires us to decide whether the BIA’s policy for applying a section of the immigration law is "arbitrary [or] capricious" under the Administrative Procedure Act(APA), 5 U. S. C. §706(2)(A). The scope of our reviewunder this standard is "narrow"; as we have often recognized, "a court is not to substitute its judgment for that of the agency." . . . . Agencies. . . have expertise and experience in administering their statutes that no court can properly ignore. But courts retain a role, and an important one, in ensuring that agencies have engaged in reasoned decision-making. When reviewing an agency action, we must assess, among other matters, "‘whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment.’" . . . .That task involves examining the reasons for agency decisions—or, as the case may be, the absence of such reasons. . . . .See FCC v. Fox Television Stations, Inc., 556 U. S. 502, 515 (2009) (noting "the requirement that an agency provide reasoned explanation for its action").

The BIA has flunked that test here. By hinging a deportable alien’s eligibility for discretionary relief on the chance correspondence between statutory categories—amatter irrelevant to the alien’s fitness to reside in this country—the BIA has failed to exercise its discretion in a reasoned manner. [emphasis added]

_______________________

SUPREME COURT OF THE UNITED STATES

Syllabus

JUDULANG

v

. HOLDER, ATTORNEY GENERAL

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

No. 10–694. Argued October 12, 2011—Decided December 12, 2011

Federal immigration law governs both the exclusion of aliens from admission to this country and the deportation of aliens previously admitted. Before 1996, these two kinds of action occurred in different procedural settings; since then, the Government has employed a unified "removal proceeding" for exclusions and deportations alike. But the immigration laws have always provided separate lists of substantive grounds for the two actions. One list specifies what crimes render an alien excludable, see 8 U. S. C. §1182(a), while another—sometimes overlapping and sometimes divergent—list specifies what crimes render an alien deportable, see §1227(a). Until repealed in 1996, §212(c) of the Immigration and Nationality Act permitted the Attorney General to grant discretionary relief to an excludable alien, if the alien had lawfully resided in the United States for at least seven years before temporarily leaving the country and if the alien was not excludable on one of two specified grounds. By its terms, §212(c) applied only in exclusion proceedings, but the Board of Immigration Appeals (BIA) extended it decades ago to deportation proceedings as well. Although Congress substituted a narrower discretionary remedy for §212(c) in 1996, see §1229b, §212(c)’s broader relief remains available to an alien whose removal is based on a guilty plea entered before §212(c)’s repeal, INS v. St. Cyr, 533 U. S. 289, 326.

In deciding whether to exclude such an alien, the BIA first checks the statutory ground identified by the Department of Homeland Security (DHS) as the basis for exclusion. Unless that ground is one of the two falling outside §212(c)’s scope, the alien is eligible for discretionary relief. The BIA then determines whether to grant relief based on such factors as the seriousness of the offense.

This case concerns the BIA’s method for applying §212(c) in the deportation context. The BIA’s approach, known as the "comparable grounds" rule, evaluates whether the charged deportation ground has a close analogue in the statute’s list of exclusion grounds. If the deportation ground consists of a set of crimes "substantially equivalent" to the set making up an exclusion ground, the alien can seek §212(c) relief. But if the deportation ground covers different or more or fewer offenses than any exclusion ground, the alien is ineligible for relief, even if the alien’s particular offense falls within an exclusion ground.

Petitioner Judulang, who has lived continuously in the United States as a lawful permanent resident since 1974, pleaded guilty to voluntary manslaughter in 1988. After he pleaded guilty to another crime in 2005, DHS commenced a deportation action, charging him with having committed an "aggravated felony" involving "a crime of violence" based on his manslaughter conviction. The Immigration Judge ordered Judulang’s deportation, and the BIA affirmed, findingJudulang ineligible for §212(c) relief because the "crime of violence" deportation ground is not comparable to any exclusion ground. The Ninth Circuit, having previously upheld the BIA’s comparablegrounds rule, denied Judulang’s petition for review.

Held:

The BIA’s policy for applying §212(c) in deportation cases is "arbitrary and capricious" under the Administrative Procedure Act, 5 U. S. C. §706(2)(A). Pp. 9–21.

(a) While agencies have expertise and experience in administering their statutes that no court may properly ignore, courts retain a narrow but important role in ensuring that agencies have engaged inreasoned decisionmaking. Thus, in reviewing the BIA’s action, this Court must assess, among other matters, "whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment." Motor Vehicle Mfrs. Assn. of United States, Inc. v. State Farm Mut. Automobile Ins. Co., 463 U. S. 29, 43. That task involves examining the reasons for agency decisions, or the absence of such reasons.

The comparable-grounds approach cannot survive scrutiny underthis standard. By hinging a deportable alien’s eligibility for discretionary relief on the chance correspondence between statutory categories—a matter irrelevant to the alien’s fitness to reside in thiscountry—the BIA has failed to exercise its discretion in a reasoned manner. Pp. 9–10.

(b) Even if the BIA has legitimate reasons for limiting §212(c)’s scope in deportation cases, it must do so in some rational way. In other words, the BIA must use an approach that is tied to the purposes of the immigration laws or the appropriate operation of the immigration system. The comparable-grounds rule has no connection to these factors. Instead, it makes §212(c) eligibility turn on an irrelevant comparison between statutory provisions. Whether the set of offenses in a particular deportation ground lines up with the set in anexclusion ground has nothing to do with whether a deportable alienwhose prior conviction falls within both grounds merits the ability tostay in this country. Here, Judulang was found ineligible for §212(c)relief because the "crime of violence" deportation ground includes a few offenses—simple assault, minor burglary, and unauthorized use of a vehicle—not found in the similar moral turpitude exclusion ground. But the inclusion of simple assaults and minor burglaries in the deportation ground is irrelevant to the merits of Judulang’s case.

The BIA’s approach has other odd features. In applying the comparable-grounds rule, the BIA has denied relief to aliens whose deportation ground fits entirely within a much broader exclusion ground. Yet providing relief in exclusion cases to a broad class of aliens hardly justifies denying relief in deportation cases to a subset of that group. In addition, the outcome of the comparable-grounds analysis may itself rest on an arbitrary decision. An alien’s priorconviction could fall within a number of deportation grounds, only one of which corresponds to an exclusion ground. In such cases, an alien’s eligibility for relief would hinge on an individual official’s decision as to which deportation ground to charge. An alien appearing before one official may suffer deportation, while an identically situated alien appearing before another may gain the right to stay in this country.

In short, the comparable-grounds approach does not rest on anyfactors relevant to whether an alien should be deported. Instead, itturns deportation decisions into a "sport of chance." Rosenberg v. Fleuti, 374 U. S. 449, 455. That is what the APA’s "arbitrary and capricious" standard is designed to prevent. Pp. 10–15.

(c) The Government’s arguments in defense of the comparablegrounds rule are not persuasive. First, §212(c)’s text does not support the rule. That section cannot provide a textual anchor for any method of providing discretionary relief in deportation cases becauseit addresses only exclusion. Second, the history of the comparablegrounds rule does not work in the Government’s favor. The BIA repeatedly vacillated in its method for applying §212(c) to deportablealiens, settling on the current rule only in 2005. Third, the Government’s claim that the comparable-grounds rule saves time and moneyfalls short. Cost may be an important factor for agencies to consider in many contexts, but cheapness alone cannot save an arbitrary agency policy. In any event, it is unclear that the comparablegrounds rule saves money when compared with alternative approaches. Pp. 16–21.

249 Fed. Appx. 499, reversed and remanded. KAGAN, J., delivered the opinion for a unanimous Court.