Pa. Consumer Protection Law - right to jury trial

Senter v. Mr. Rooter of Pittsburgh – Pa. Superior Court – April 27, 2021 – unreported memorandum decision**

 

In dictum in n. 3, the Court calls into question the validity of its own prior decision in a 2017 case, holding that a plaintiff under the state consumer protection law, 73 P.S. sec. 201-1 et seq., does not have a right to a jury trial.

 

Here’s what the Court said in n. 3:

 

The trial court reasoned that a plaintiff has no right to a jury trial on a UTPCPL claim, citing Krishnan v. Cutler Group, Inc., 171 A.3d 856 (Pa. Super. 2017). . . .However, the relevant statement in Krishnan appeared in a three-paragraph quotation of the trial court’s opinion, which also addressed other issues. See Krishnan, 171 A.3d at 863, quoting Trial Ct. Op. at 1-2 (“There being no right to a jury trial under the UTPCPL, the court scheduled the jury trial on [Appellees’] common law claims to begin[.]”). The remainder of the Krishnan opinion presented no discussion on the accuracy of this statement. 

Our review of the UTPCPL and relevant decisional law reveals no such authority, for the principle that a UTPCPL claim may not be presented to a jury. Indeed, several decisions by this Court have implicitly approved — by not addressing the propriety of — the presentation of a UTPCPL claim to the jury. See, e.g. Berg v. Nationwide Mut. Ins. Co., 189 A.3d 1030, 1034 (Pa. Super. 2018) (jury found UTPCPL violation, but this Court vacated trial court’s finding of bad faith), appeal granted in part and affirmed on other grounds, 235 A.3d 1223 (Pa. 2020) (plurality); Bennett v. A.T. Masterpiece Homes at Broadsprings, LLC, 40 A.3d 145, 149 (Pa. Super. 2012) (affirming jury finding of UTPCPL violation); Neal v. Bavarian Motors, Inc., 882 A.2d 1022, 1032 (Pa. Super. 2005) (affirming jury finding of UTPCPL violation, but remanding for trial court to recalculate award of attorneys’ fees). Nevertheless, neither party has challenged the bifurcated nature of the trial. 

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**An unreported, non-precedential Superior Court case decided after May 1, 2019, may be cited for its persuasive value, but it is not binding precedent.  See 210 Pa. Code 65.37(B).

 

 

UC - employer contribution tax rate

Rothrock Motor Sales v. UC Tax Services – unreported, memorandum decision** – Cmwlth. Court – April 27, 2021

 

Note: This decision is being posted to the UC listserv, because it shows how an employer’s UC contribution tax rate is  calculated.

Held: Court affirmed denial of employer appeal of it UC contribution tax rate, due to employer’s failure to comply with DOLI wage reporting requirements

Under Section 301(a)(1) of the Law, an employer’s tax contribution is calculated by multiplying the employer’s taxable wages paid during a fiscal year by the tax rate assigned by the Department. 43 P.S. § 781(a)(1). Taxable wages are determined by wage reports submitted by employers to verify their employee wages paid during the fiscal year. Section 304 of the Law, 43 P.S. § 784; 34 Pa. Code § 63.52. The Department’s regulations require that wage reports be filed through the UC Management System (UCMS), a Department-run electronic filing system. 34 Pa. Code § 63.52(e). The filing date of a report is the date of receipt by UCMS. Id. § 63.52(f). Payments are to be made concurrently with each report. Section 305 of the Law, 43 P.S. § 785. An employer’s tax contributions are held in a reserve account established and maintained by the Department. Section 302 of the Law, 43 P.S. § 782.

An employer’s tax rate is calculated based on “employer experience,” or its history and regularity of filing reports and paying tax contributions. Employers with high employer experience are eligible for a reduced tax rate; employers with less experience, or employers that fail to either timely file reports or pay tax contributions, are assigned a standard tax rate. See generally Section 301.1 of the Law, 43 P.S. § 781.1.

Employers that qualify for an adjusted tax rate under Section 301.1 of the Law are further categorized into Group 1, 2, or 3, with Group 3 having the most experience. Id. § 781.1(b)(1). An employer retains its group designation once classified under Section 301.1(b)(1); however, it must still meet the requirements of that group to qualify for an adjusted tax rate.  A Group 3 employer must make tax contributions for at least one quarter in each of the four fiscal years prior to the tax rate’s effective date. Id. Simply put, high employer experience, accrued by timely reporting and accurate payments, results in a lower tax rate in the next fiscal year, while insufficient experience results in the standard tax rate. 

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*An unreported, non-precedential Commonwealth Court case can be cited for its persuasive value but is not binding precedent.  See 210 Pa. Code § 69.414(b) and Pa. R.A.P.  3716

 

 

 

UC - fault overpayment - finding required on claimant's state of mind - effect of receipt of UC Handbook

Harris v. UCBR – Cmwlth. Court – March 17, 2021 – precedential – reported decision

http://www.pacourts.us/assets/opinions/Commonwealth/out/401CD20_3-30-21.pdf?cb=2

 

Held: UCBR erred in finding claimant was guilty of a fault overpayment, since the Board did not make any finding about the claimant’s state of mind and did not establish gross negligence on the part of claimant.

 

Fault - Section 804(a) of the Law provides that “[a]ny person who by reason of his fault has received any sum as compensation under this act to which he was not entitled, shall be liable to repay . . . a sum equal to the amount so received by him and interest.” Under Section 804(b) of the Law, 43 P.S. § 874(b), where the compensation is issued or received due to no fault of the claimant, recoupment of funds is deducted from future compensation, if any, as opposed to imposing a fault overpayment. 

The word “fault” in Section 804(a) means “an act to which blame, censure, impropriety, shortcoming, or culpability attaches.” Fugh v. Unemployment Comp. Bd. of Rev., 153 A.3d 1169, 1174 (Pa. Cmwlth. 2017) (quoting Daniels v. Unemployment Comp. Bd. of Rev., 309 A.2d 738, 742 (Pa. Cmwlth. 1973)).  Negligence alone is not sufficient to establish fault. Id. at 1176-77. Rather, fault is demonstrated by a showing of knowing recklessness or gross negligence. Id. at 1176. The Board or Referee must make findings concerning an actor’s state of mind in order to establish fault. Castello v. Unemployment Comp. Bd. of Rev., 86 A.3d 294, 298 (Pa. Cmwlth. 2013). [emphasis added] An actor’s intent may be ascertained through circumstantial evidence, however. See Cochran v. Cmwlth., 450 A.2d 756, 759 (Pa. Cmwlth. 1982). 

Gross negligence - The Pennsylvania Supreme Court recently defined the concept of gross negligence in Feleccia v. Lackawanna College, 215 A.3d 3 (Pa. 2019). The Feleccia Court explained, “gross negligence involves more than a simple breach of the standard of care (which would establish ordinary negligence), and instead describes a ‘flagrant’ or ‘gross deviation’ from that standard.” Id. at 21. Importantly, however, the Court noted that “gross negligence does not rise to the level of the intentional indifference or ‘conscious disregard’ of risks that defines recklessness, but it is defined as an ‘extreme departure’ from the standard of care, beyond that required to establish ordinary negligence, and is the failure to exercise even ‘scant care.’” Id. at 20. 

Gross negligence is not established where the claimant shared his PIN # with his daughter two years before he was mailed UC Handbook did not alone established gross negligence. Claimant had no reason to think to rescind his information from his daughter, even if he looked at the UC Handbook and saw the warning. Claimant did not learn of the daughter’s fraud until 2016 or 2017, at which time he participated in several investigations against her. The Board makes a significant leap from the mailing of the UC Handbook to gross negligence without showing exactly how Claimant’s deviation from the standard of care was gross.

Under the Board’s interpretation, every claimant who receives a UC Handbook in the mail commits gross negligence if they violate its terms. This absurd result reveals the difficulty in squaring the Board’s argument with the present facts. Accordingly, while we held in the substantial evidence section that the lack of testimony concerning the UC Handbook and Claimant’s awareness did not preclude the Board’s findings of fact, we conclude it is fatal to the Board’s showing of gross negligence. The fact that Claimant should have been aware of the UC Handbook’s restrictions does not, without more, necessarily constitute gross negligence. As a result, we conclude the Board erred as a matter of law in determining Claimant’s actions constituted gross negligence and in imposing a fault overpayment. 

 

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This case is also reported in the PLAN Legal Update  http://planupdate.blogspot.com/ , which is searchable and can be accessed without a password.

 

 

admin. law - laches - delay + prejudice

McCarthy and Associates v. Bureau of Professional and Occupational Affairs – Cmwlth. Court – April 16, 2021 – memorandum opinion**

 

Held: Three-year unexplained delay in imposing a penalty on individual principal of now defunct accountancy firm rather than the firm itself was enough to establish undue delay and prejudice and properly invoke doctrine of laches against BPOA.

 

From the opinion--

Undue delay - “Delay in the administrative process, especially in the area of professional licensing, has become a serious concern for all involved, and this Court has not and will not condone or excuse improper delays,” especially when “the petitioner [] has [] met [its] burden of proving prejudice.” Jackson v. State Real Estate Commission, 456 A.2d 1169, 1170-71 (Pa. Cmwlth. 1983). 

It is clear that the defense of laches is available as a defense in an administrative disciplinary action. However, it is equally clear that for the defense of laches to apply, more than mere passage of time must be shown. It is required that the person asserting the defense show harm or prejudice resulting from the delay. As an affirmative defense, the petitioner has the burden of proving the delay and the resultant prejudice. 

Id. at 1170.

In Fumo v. Insurance Department, 427 A.2d 1259, 1263 (Pa. Cmwlth. 1981), this Court referred to a delay of three years in instituting license disciplinary action as “seemingly dilatory conduct.” Likewise, in Fumo v. State Real Estate Commission, 481 A.2d 1257, 1259 (Pa. Cmwlth. 1984),7 in commenting on a three- year lapse of time in commencing license revocation proceedings, this Court stated that “we certainly do not condone what appears to be an inordinate delay.” Pursuant to this case law, we conclude that the three-year passage of time from when the prosecutorial branch of the Department of State obtained information that enabled it to readily verify Petitioner’s noncompliance with the CPA Law, to when it issued the Rule to Show Cause on behalf of the Commonwealth, constituted a sufficient period of delay for purposes of laches. 

There are no findings of fact or explanation of record that could reasonably account for the delay. In its brief, the Board simply notes the administrative division within the Department of State. . . . Standing alone, the internal operational affairs amongst the divisions within an administrative body, their interactive features, and the process through which administrative enforcement actions are pursued cannot excuse the delay. If it could, then, conceivably, there would be no such thing as undue delay in the law of laches in disciplinary actions because most—if not all—of enforcement-related administrative agencies are separated and parsed along the lines of investigatory, prosecutorial, and adjudicatory functions. 

Therefore, we conclude that Petitioner has established that there was undue delay in this disciplinary action, and the dispositive issue ineludibly becomes whether Petitioner sustained the prejudice necessary to bar the Board’s disciplinary action against its license. 

Prejudice - Petitioner was placed in the uncanny situation of defending a disciplinary proceeding in circumstances where it was entirely unclear who or what entity will be legally responsible for the civil penalty and, should it not be paid, who or what entity will bear the legal repercussions. . . . The Commonwealth instituted a disciplinary action against Petitioner’s accountancy firm license at a time when it was defunct and had ceased operations for approximately three years, having foregone its license for out-of-business status. For all intents and purposes, at least in this licensing matter, Petitioner was effectively “dissolved,” to borrow a term from corporate law. Indeed, in its January 23, 2020 order, when the Board “levie[d] a civil penalty of $1,000.00 against the accounting firm certificate and license of Petitioner, License Number AF054824,” (Board’s decision at Final Order), that license was extinguished and did not exist for over four years. As such, Petitioner was placed in the uncanny situation of defending a disciplinary proceeding in circumstances where it was entirely unclear who or what entity will be legally responsible for the civil penalty and, should it not be paid, who or what entity will bear the legal repercussions. . . . We believe that Petitioner has established prejudice because he was forced to defend a disciplinary proceeding where a civil penalty was imposed on a defunct accountancy firm license in a pseudo-like fashion, whereupon the Board basically attempted to “pierce the corporate veil” and hold Petitioner’s principal liable for civil penalties in his individual and personal capacity for conduct that he committed in his capacity as a corporate officer. See The Village at Camelback Property Owners Association, Inc. v. Carr, 538 A.2d 528, 532 (Pa. Super. 1988) 

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**An unreported, non-precedential Commonwealth Court case can be cited for its persuasive value but is not binding precedent.  See 210 Pa. Code § 69.414(b) and Pa. R.A.P.  3716