tax sale - owner-occupied property - personal service - waiver - good cause

Consolidated Reports and Return of TCB of Northumberland Co. – Appeal of Neff – Commonwealth Court – en banc (6-1) – January 21, 2016

http://www.pacourts.us/assets/opinions/Commonwealth/out/752CD14_1-21-16.pdf?cb=1 (42pp.)

The majority upheld the tax sale in this case, in which

  -the resident property owner did not get service by certified mail, as required by RETSL, 72 P.S. 5860.101 et seq.

  - because of lack of such service, tax claim bureau (TCB) had to attempt personal service

  - 3 attempts at person service made (August 5^th, 8^th, 9^th) – all during the normal work day

  - personal service not successful

  - trial court granted TCB petitions court for waiver of personal service

The majority held that the property owner had actual notice of the tax sale, thus obviating strict compliance with the notice provisions of RETSL.   Strict compliance with the notice requirements of Section 5860.602 is not required when the Bureau proves that a property owner received actual notice of a pending tax sale. Sabbeth v. TCB of Fulton County, 714 A.2d 514, 517 (Pa. Cmwlth. 1998).

In addition to the notice requirements of Section 602, if the property is, as here, occupied by the owner, Section 601(a)(3) of the Law requires that each owner-occupant receive additional notice of a tax sale by personal service by the sheriff, a deputy or other person appointed by the country commissioners. 72 P.S. § 5860.601(a)(3). The requirements of Section 601(a)(3) are cumulative and apply in addition to the tax claim bureaus’ obligations to provide notice through publications, posting, and mail.  This provision shows the General Assembly’s “heightened concern for owner[-]occupants being divested of the very property in which they are residing.” Matter of Tax Sales by Tax Claim Bureau of Dauphin County, 651 A.2d 1157, 1159 (Pa. Cmwlth. 1994).   

However, the requirement of personal service can be waived “for good cause shown.”   “In sum, in the absence of actual notice, the Bureau must prove strict compliance with the notice requirements of Section 602 of the Law. Further, and notwithstanding whether a taxpayer received actual notice, the Bureau must demonstrate that it personally served notice on any owner-occupant of the Property subject to the upset tax sale or obtained a waiver of personal service from the trial court.”

The trial and appellate courts held that a waiver was appropriate, since the TCB had shown “good cause” for it.  The appellate court held that the trial court’s finding of “good cause” was a “factual-based inquiry...entrust to the trial court’s discretion” and thus subject to only very limited appellate review for abuse of discretion  (slip opinion at 19-21).

Dissent

Judge Leavitt filed a strong dissent.  She argued that  the “process followed by the Tax Claim Bureau...turned the statutory scheme on its head” and that the required “good cause” for waiver of personal service had not been shown.    She noted that the TCB’s attempt at service were not a “practical effort,” since the attempts at service were made during a single week and at times when the taxpayer “was not there and not likely to be there.”   She also noted that service was not made by sheriff, a deputy, or a person properly appointed by the county commissioners, as required by the statute

Judge Leavitt also decisively and at length rejected the notion that the issue of good cause was a fact-based inquiry.  “Whether a trial court reaches the proper legal conclusion on the evidence presented is a question of law....[citations omitted] Likewise, a question of statutory interpretation is a question of law. Navickas v. UCBR, 787 A.2d 284, 288 (Pa. 2001). As our Supreme Court has explained, the proper interpretation and application of language [in a contract] … presents a question of law over which our scope of review is plenary and standard of review de novo.” Pennsylvania National Mutual Ins. Co. v. St. John, 106 A.3d 1 (Pa. 2014). Likewise, the interpretation and application of language in a statute presents a question of law; accordingly, the trial court is afforded no deference and its decision “will instead be reviewed de novo.” Id.  A tribunal lacks discretion to construe a statute incorrectly. The application of the law to facts is a legal conclusion, and the appellate standard of review is de novo; no deference is owed to the tribunal below. See, e.g., Bowling v. Office of Open Records, 75 A.3d 453, 466 (Pa. 2013)....See also In re Doe, 33 A.3d 615.

The dissent argued that “by affirming the trial court, this Court has established the paradigm for a waiver of personal service in all 67 counties: three property visits (i) in a single week in August (when owner-occupants often vacation), (ii) between the hours of 9:19 a.m. and 4:10 p.m., and (iii) by any person, whether or not qualified by virtue of being a member of the sheriff’s office or having been appointed by the county commissioners. Effectively, this replaces the personal service requirement with three visits to an owner-occupied property by anyone who can read and operate a vehicle.

"At stake is a family home scheduled for a tax sale. It was the legislature’s intent that the sheriff, or server appointed by the county, notify the owner of that sale, at least ten days before its occurrence, by placing a notice into the hands of the owner-occupant. The Tax Claim Bureau made three visits to Taxpayer’s property. It did not make a practical effort at personal service upon Taxpayer herself. It did not designate a server qualified to make personal service."

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UC - willful misconduct - negligent failure to follow employer policy

Clark v. UCBR – Cmwlth. Court – January 6, 2016 – unreported memorandum opinion*

http://www.pacourts.us/assets/opinions/Commonwealth/out/469CD15_1-6-16.pdf?cb=1

UCBR finding of willful misconduct reversed, since employer evidence failed to show that claimant, a liquor store manager, sough to wrongfully manipulated store records and steal money.  Employer did not show that claimant’s conduct was anything more than negligence.  Weighing in favor of claimant was the fact that the store inventory match the bottles on the shelf.

The issue was whether Claimant’s departure from Employer’s directions on record keeping constitutes willful misconduct.   Rung v. UCBR, 689 A.2d 999 (Pa. Cmwlth. 1997), is instructive in this regard. In Rung, the claimant was a bank teller who inexplicably came up $600 short when cashing out her till at the end of the day.   The court held that inadvertent, nonintentional violations of an employer’s policies do not constitute willful misconduct. Rung, 689 A.2d at 1001. Furthermore, we explained: [A]n employer cannot demonstrate willful misconduct by ‘merely showing that an employee committed a negligent act, but instead must present evidence indicating that the conduct was of an intentional and deliberate nature. Id. (emphasis added) (quoting Myers v. UCBR, 625 A.2d 622, 625 (Pa. 1993)). Because the claimant’s error was the result of nothing more than mere negligence, the claimant had not committed willful misconduct. Therefore, the claimant was entitled to unemployment benefits. Here, Claimant’s actions are analogous to the actions of the claimant in Rung.

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

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Personnel Files Act - 43 P.S. 1321 - 1324 - "currently employed"

Thomas Jefferson Univ. Hospital v. Dept. of Labor and Industry – Cmwlth. Court – January 6, 2016

http://www.pacourts.us/assets/opinions/Commonwealth/out/2275CD14_1-6-16.pdf?cb=1

The purpose of the Personnel Files Act (PFA), 43 P.S. 1321 – 1324, “is to acknowledge the right of both public and private employees to review files held by their employers that contain information about themselves[.]” Bangor Area Educ. Ass’n v. Angle, 720 A.2d 198, 202 (Pa. Cmwlth. 1998).  Section 2 of the Act provides in relevant part: “An employer shall, at reasonable times, upon request of an employee, permit that employee . . . to inspect his or her own personnel files used to determine his or her own qualifications for employment, promotion, additional compensation, termination or disciplinary action.” 43 P.S. § 1322 (emphasis added). Section 1 of the Act, defines an “[e]mployee]” as “[a]ny person currently employed, laid off with reemployment rights or on leave of absence.   [emphasis added) The term ‘employee’ shall not include applicants for employment or any other person.” 43 P.S. § 1321.

The court rejected all of the employer’s several arguments that the terminated employee was not “currently employed” and thus had no rights under the PFA.  The court discussed rules of statutory interpretation, legislative history, et al.

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UC - employee v. independent contractor

Weaver Hauling & Excavating,LLC v. Dept. of Labor and Industry, Office of UC Tax Services –

http://www.pacourts.us/assets/opinions/Commonwealth/out/266CD15_1-6-16.pdf?cb=1

Weaver Hauling’s petition for reassessment of UC tax rejected.    Employees were neither self-employed partners nor independent contractors, but, in fact, employees under the UC Law.

Weaver set up scheme under which employees had to buy into company, for modest fee.  However, Weaver was set up as an LLC, not a partnership. 

Presumption of that a person is an “employee”

Section 4(l)(2)(B) of the Law “presumes that an individual is an employee.” Beacon Flag Car Co., Inc. (Doris Weyant) v. UCBR, 910 A.2d 103, 107 (Pa. Cmwlth. 2006).   Section 4(l)(2)(B) of the law provides: Services performed by an individual for wages shall be deemed to be employment subject to this act, unless and until it is shown to the satisfaction of the department that--(a) such individual has been and will continue to be free from control or direction over the performance of such services both under his contract of service and in fact; and (b) as to such services such individual is customarily engaged in an independently established trade, occupation, profession or business.

Wages are defined as “all remuneration . . . paid by an employer to an individual with respect to his employment.” Section 4(x) of the Law, 43 P.S. § 753(x). If the (continued…) whether the entity in question is a partnership or an LLC. See Watson v. UCBR, 491 A.2d 293, 295-96 (Pa. Cmwlth. 1985). 20 Department shows that an individual has performed services for wages, an employer may thus rebut the presumption of employment by demonstrating that the individual meets the criteria listed in Section 4(l)(2)(B) of the Law. CE Credits Online v. Unemployment Comp. Bd. of Review, 946 A.2d 1162, 1167 (Pa. Cmwlth.), appeal denied, 971 A.2d 493 (Pa. 2009). “Unless both of these showings are made, the presumption stands that one who performs services for wages is an employee.” Beacon Flag Car Co., Inc., 910 A.2d at 107.

Employee v. independent contractor – burden  and burden shifting

After the Department demonstrated that Weaver’s members received wages, the burden shifted to Weaver to show that “the [individual]’s services are performed free of the employer’s control and the [individual]’s services are the type performed in an independent trade or business.” CE Credits Online, 946 A.2d at 1167. As to the control prong of this test, the court Court has explained:

In analyzing the issue of control, courts consider factors such as: whether there was a fixed rate of remuneration; whether taxes were withheld from the [individual]’s pay; whether the employer supplied the tools necessary to carry out the services; whether the employer provided on-the-job training; whether the employer set the time and location for work; and, whether the employer had the right to monitor the [individual]’s work and review performance.

Quality Care Options v. UCBR, 57 A.3d 655, 660 (Pa. Cmwlth. 2012).  “No single factor is controlling; therefore, the ultimate conclusion must be based on the totality of the circumstances.” Id.   We agree with the Department that Weaver did not satisfy its burden to show that its members were free from its control and direction.  There was “insufficient evidence presented overall indicating that the member and not the firm controlled the means and methods of how work was done.” Payments were largely based on services performed. There was no evidence presented relating to whether Weaver supplied the tools necessary for its members’ work, whether Weaver provided on-the-job training, whether Weaver set the time and location of work, or whether Weaver monitored its members’ work.  Based on the totality of the circumstances, Weaver did not satisfy its burden.   The court therefore rejected Weaver’s argument that the Department erred in concluding that the members of Weaver were employees rather than independent contractors.

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UC - voluntary quit - increase of 66 miles/day in daily commute

Intermediate Unit 1 v. UCBR – Cmwlth. Court – January 6, 2016 – unreported memorandum opinion

http://www.pacourts.us/assets/opinions/Commonwealth/out/161CD15_1-6-16.pdf?cb=1

Court upheld UCBR finding of good cause for claimant to quit her job where

            - claimant’s work was part-time

            - employer relocated her workplace

            - claimant commute increased 66 miles per day

            - no public transportation

            - claimant suggested several changes that would allow her to keep her job, including working more hours on fewer days

no capricious disregard

Court rejected employer argument that UCBR capriciously disregarded evidence that claimant’s proferred reason for resignation was pretextual.   It held that the board was free to accept claimant’s testimony and reject employer’s.   “Disturbing an agency’s adjudication for a capricious disregard of evidence is appropriate only where the factfinder has refused to resolve conflicts in the evidence, has not made essential credibility determinations or has completely ignored overwhelming evidence without comment,” neither of which was true in this case.   Wise v. UCBR, 111 A.3d 1256, 1263 (Pa. Cmwlth. 2015).

good cause established

Generally, in order to establish cause of a necessitous and compelling nature, a claimant must establish that: (1) circumstances existed that produced real and substantial pressure to terminate employment; (2) like circumstances would compel a reasonable person to act in the same manner; (3) the claimant acted with ordinary common sense; and (4) the claimant made a reasonable effort to preserve her employment. Procito v. UCBR, 945 A.2d 261, 264 (Pa. Cmwlth. 2008). “Cause of a necessitous and compelling nature may arise from domestic circumstances and need not be connected with or arise out of the claimant’s employment.” Green v. UCBRw, 529 A.2d 597, 598-99 (Pa. Cmwlth. 1987). Transportation problems may constitute cause of a necessitous and compelling nature. Lee v. UCBR, 401 A.2d 12, 13 (Pa. Cmwlth. 1979). A claimant’s transportation problems,  however, “must be so serious and unreasonable as to present a virtually insurmountable problem and the claimant must demonstrate that he or she took reasonable steps to remedy or overcome the transportation problems prior to severing the employment relationship.” Id.

reasonableness of employer action in changing claimant’s work condition is not relevant

Employer’s focus on the reasonableness of its actions and whether Claimant was aware of the possibility that her job could be relocated is “misplaced” and not relevant to the inquiry. Employer may have been entirely reasonable in its decision, and it may have informed Claimant of the possibility that her job may be moved. The focus, however, is on whether, following the relocation of her job, Claimant had necessitous and compelling reasons to resign voluntarily her employment.    The reasons for the change in employment terms and conditions are irrelevant, as “[i]t is not a defense for the employer to merely establish that it had good reasons for the unilateral change.” Chavez (Token) v. UCBR, 738 A.2d 77, 82 (Pa. Cmwlth. 1999), appeal denied, 761 A.2d 551 (Pa. 2000). 

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

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UC - wages - lack of W-2 not dispositive

Clark v. UCBR - Cmwlth. Court – December 23, 2015

http://www.pacourts.us/assets/opinions/Commonwealth/out/2425CD14_12-23-15.pdf?cb=1

In a case involving amount of qualifying wages and indpt. contractor v. employee, the court held that the claimant did earn sufficient “wages” to qualify for benefits under sec. 4(w)(2) of the UC Law, 43 P.S. 753(w)(2), and was an “employee” rather than an independent contractor.  The claimant had received benefits during a preceding year and had to show receipt of wages in excess of six times his WBR, under sec. 753 (w)(2) in order to establish eligibility.  The claimant furnished documentation in the form of payment logs but no W-2s.

The court reversed the UCBR and held that

            - the claimant had established his status as an employee rather than an independent contractor (IC), and

            - the lack of W-2s from the employer was not alone enough to show that he was an IC.   

            - claimant earned sufficient wages in employment to establish eligibility.

            - He worked on an as-needed basis for several different employers, none of whom furnished him with W-2s.

 “A claimant has the burden of proving financial eligibility for UC benefits.” Logan v. UCBR, 103 A.3d 451, 453 (Pa. Cmwlth. 2014).   Here, Claimant did provide evidence of payment for work, but the question remains, however, whether those  earnings were “wages [from] ‘employment.’” 43 P.S. § 753(w)(2).   The Law defines “[w]ages” as “all remuneration . . . paid by an employer to an individual with respect to his employment . . . . ” 43 P.S. § 753(x). “Employment” is defined therein as “all personal service performed for remuneration by an individual under any contract of hire, express or implied, written or oral[.]” 43 P.S. § 753(l)(1).   

The UCBR determined that Claimant was self-employed because he did not receive W-2 Forms and, thus, he “earned no wages in employment.”    “The term ‘self-employment’ is not defined in the Law; however, the courts have relied upon [S]ection 4(l)(2)(B) of the Law, 43 P.S. § 753(l)(2)(B), to fill the void . . . .” Beacon Flag Car Co., Inc. v. UCBR,  910 A.2d 103, 107 (Pa. Cmwlth. 2006).  Section 4(l)(2)(B) of the Law states, in pertinent part:  Services performed by an individual for wages shall be deemed to be employment subject to this act, unless and until it is shown to the satisfaction of the [D]epartment that- -(a) such individual has been and will continue to be free from control or direction over the performance of such services both under his contract of service and in fact; and (b) as to such services such individual is customarily engaged in an independently[-]established trade, occupation, profession or business. 43 P.S. § 753(l)(2)(B) (emphasis added). 10 “[T]he existence of an employer/employee relationship is a question of law that depends upon the unique facts of each case.” Res. Staffing, Inc. v. UCBR, 961 A.2d 261, 263 (Pa. Cmwlth. 2008).

However, “there is a presumption in the . . . Law  that an individual receiving wages is an employee and not . . . engaged in selfemployment.” Training Assocs. Corp. v. UCBR, 101 A.3d 1225, 1233 (Pa. Cmwlth. 2014) Self-employment requires a positive act of establishing a private enterprise or independent business. See Staffmore, LLC v. UCBR, 92 A.3d 844 (Pa. Cmwlth. 2014); see also Kirk v. UCBR, 425 A.2d 1188 (Pa. Cmwlth. 1981); Miller v. UCBR  (Pa. Cmwlth. 1979). “[T]he fact that an unemployed person . . . accept[s] an occasional offer of work is simply not enough to demonstrate that said individual is customarily engaged in an independently established trade, occupation, profession or business[]” and, therefore, self-employed.11 Minelli v. UCBR,, 39 A.3d 593, 598 (Pa. Cmwlth. 2012).

The evidence in this case “the evidence in this case did not overcome the strong presumption that Claimant was an employee of the various concerns that he worked for.  There is no evidence that Claimant had established a private enterprise or independent business through which he provided services.  The mere fact that Claimant did not receive W-2 Forms from those entities is not conclusive of self-employment. In fact, in concluding whether an employment relationship exists, “[n]o single factor is controlling, [] therefore, the ultimate conclusion must be based on the totality of the circumstances.”  Res. Staffing, Inc., 961 A.2d at 264. Thus, although a W-2 Form may be one type of evidence that an individual earned wages in employment and was not self-employed, this Court has found no precedent under which such documentation was the only conclusive evidence of earnings sufficient to satisfy Section 4(w)(2) of the Law. 

Lack of a W-2 Form cannot alone be sufficient to establish independent contractor relationship, especially because a W-2 Form is an employer-issued form.   The Department did not offer any evidence to overcome the “strong presumption” that an employment relationship existed.   The lack of W-2 forms is not dispositive.

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UC - online registration for job search services - good cause for late compliance

Office of UC Benefits Policy v. UCBR – January 7, 2016 – Cmwlth. Court – en banc.

http://www.pacourts.us/assets/opinions/Commonwealth/out/1641CD14_1-7-16.pdf?cb=1

Held:  The claimant demonstrated “good cause” for not complying with the statutory requirement that he register on-line for employment search services within 30 days of applying for UC benefits,43 P.S. sec. 801(b), 34 Pa. Code 65.11(c).

Good cause for late registration

A failure of a claimant to register timely in accordance with Section 401(b)(1)(i) of the Law is not a per se violation that automatically disqualifies a claimant from unemployment compensation.   Section 401(b)(6) of the Law provides that “[t]he [D]epartment may waive or alter the requirements of this subsection in cases or situations with respect to which the secretary finds that compliance with such requirements would be oppressive or which would be  inconsistent with the purposes of this act.” 43 P.S. §801(b)(6).  

In Sharpe v. UCBR (Pa. Cmwlth., No. 431 C.D. 2014, filed October 21, 2014), the Court addressed the Department’s ability to waive the registration requirement. We observed as follows: During the promulgation of the Department’s regulations implementing Section 401(b), a commenter asked whether a “good cause” standard should be incorporated into the regulations. 43 Pa. B. 4730, 4735 (2013). The Department replied that in most cases where a “good cause” standard is applied, it is because it is directed by statute and that it would not adopt one on its own initiative. Id. However, the Department noted that, “if a claimant’s ‘good cause’ for noncompliance with the regulation also constitutes a reason why compliance ‘would be oppressive or ... inconsistent with the purposes of’ the law, the claimant’s circumstances could be addressed under the waiver provision in [S]ection 401(b)(6) of the [L]aw and [the regulation, 34 Pa. Code §65.11(f)(6)].”    In short, where a claimant can show “good cause” for not registering on time, the Department may waive the time requirement of Section 401(b)(1)(i) of the Law.

What is “good cause” ?

The Law does not define “good cause. ”   The Supreme Court has established that it “must be determined in each case from the facts of that case.”  Barclay White Co. v. UCBR, 50 A.2d 336, 340 (Pa. 1947). In each case, “good cause” must be “so interpreted that the fundamental purpose of the [Law] shall not be destroyed.” Id. The central purpose of Section 401(b) of the Law is to require claimants to make “an active search for suitable employment” while collecting benefits.  43 P.S. §801(b). 

In Sharpe, Commonweealth Court questioned the Board’s proposed use of the strict “nunc pro tunc standard” that is used in deciding questions of jurisdiction.  The Court suggested, and the Board has since adopted, the more relaxed “good cause” standard.   The Board notes here that not every claimant can be expected to be “computer savvy” and that a single keystroke mistake can fail to effect a registration. Further, registration cannot be done by letter or by phone call.

The Board rejects the argument of the Office of UC Benefits in favor of a strict liability standard.  The Board believes, instead, that a case-by-case examination of “good cause” is appropriate and consistent with the remedial and humanitarian  objectives of the Law set out in Section 3, which should not be frustrated “by slavish adherence to technical and artificial rules.” Lehr v. UCBR, 625 A.2d 173, 175 (Pa. Cmwlth. 1993) (quoting UCBR  v. Jolliffe, 379 A.2d 109, 110 (Pa. 1977)).   The Board explains that in on-line registration waiver cases, “good cause” should be considered in the same way it is used to mitigate willful misconduct. In that context, good cause has been explained as follows: [W]e must evaluate both the reasonableness of the employer’s request in light of all the circumstances, and the employee’s reasons for noncompliance. The employee’s behavior cannot fall within “wilful misconduct” if it was justifiable or reasonable under the circumstances, since it cannot then be considered to be in wilful disregard of conduct the employer “has a right to expect.” In other words, if there was “good cause” for the employee’s action, it cannot be charged as wilful misconduct.   The UC authorities and the court “must evaluate both the reasonableness of the employer’s request in light of all the circumstances, and the employee’s reasons for noncompliance.”  McLean v. UCBR, 383 A.2d 533, 535 (Pa. 1978).

The Board concluded that, here, using a reasonableness test, Claimant had good cause for his action, or non-action, to wit.   The claimant testified without contradiction that he believed that he had properly registered, since he got several communications from “Beyond.com,” which he believed was affiliated with jobgateway.pa.gov.  The evidence shows that “[p]lainly, Claimant was not ducking registration.  As soon as he learned from the Referee that he was not registered, he responded. That very day. Because Claimant was receiving job referrals, it is clear that he was complying with the real purpose of Section 401(b), which is to ensure that a claimant “[i]s making an active search for suitable employment.” 43 P.S. §801(b). We agree with the Board’s case-by-case approach to evaluating whether a claimant had good cause for failing to timely register for employment search services under Section 401(b)(l)(i) of the Law, 43 P.S. §801(b)(l)(i). The Board reviewed the facts and exercised its judgment to conclude that good cause existed to waive the 30-day deadline for Claimant’s on-line registration. We agree and affirm its adjudication.”

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attorney fees - 42 Pa. C.S. 2503 - conduct prior to v. during litigation

F. Zacherl, Inc.  v.  Flaherty Mechanical Contractors, LLC – Cmwlth. Court – January 6, 2016

http://www.pacourts.us/assets/opinions/Commonwealth/out/1196CD14_1-6-16.pdf?cb=1

The trial court erred in finding that the losing party acted in bad faith and awarding attorney’s fees to the prevailing party  under Section 2503 of the Judicial Code, 42 Pa. C.S. § 2503, which provides, in pertinent part: The following participants shall be entitled to a reasonable counsel fee as part of the taxable costs of the matter: . . . . (7) Any participant who is awarded counsel fees as a sanction against another participant for dilatory, obdurate or vexatious conduct during the pendency of a matter. . . . . (9) Any participant who is awarded counsel fees because the conduct of another party in commencing the matter or otherwise was arbitrary, vexatious or in bad faith.

The trial court found that the defendant’s pre-litigation conduct was in bad faith, based entirely upon the party’s behavior prior to the institution of this lawsuit. This Court, however, has held that a trial court cannot award attorney’s fees under Section 2503 of the Judicial Code for behavior predating the lawsuit: 12 We review the trial court’s decision to award attorney’s fees pursuant to Section 2503 of the Judicial Code for an abuse of discretion. Maurice A. Nernberg & Assocs. v. Coyne, 920 A.2d 967, 969 n.3 (Pa. Cmwlth. 2007).  [A]n award for counsel fees under Section 2503 [owf the Judicial Code] is meant to compensate the innocent litigant for costs caused by the actions of the opposing party. [Section 2503 of the Judicial Code], by its very terms, is a “taxable costs” provision, thereby relating to the conduct of a party at some point during the litigation process. Thus, activity that occurs before litigation is commenced cannot form the basis for a counsel fee award. Carlson v. Ciavarelli, 100 A.3d 731, 745 (Pa. Cmwlth. 2014) (alterations in original) (citations omitted) (internal quotation marks omitted). Because the trial court relied entirely upon the District’s pre-litigation behavior, as opposed to the conduct of the District in commencing the matter or its conduct during the litigation, the trial court applied an incorrect analysis. We, therefore, vacate the trial court’s order to the extent that it awarded attorney’s fees under Section 2503 of the Judicial Code, and we remand the matter to the trial court so that it may apply the correct analysis to determine whether Zacherl is entitled to attorney’s fees under Section 2503 of the Judicial Code.

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UC - voluntary quit - late payment of wages

Jacobs v. UCBR – Cmwlth. Court – 12-21-15

 

http://www.pacourts.us/assets/opinions/Commonwealth/out/484CD15_12-21-15.pdf?cb=1

 

Held:  Claimant had good cause to quit his job because of Employer’s failure to pay him in a timely manner, which resulted in his financial hardship and, consequently, caused transportation issues.

 

Where an employee terminates an employment relationship because of the employer’s repeated failure to pay wages in a timely manner and on an established pay day, Pennsylvania’s Wage Payment and Collection Law[5] is implicated. Section 4 of the Wage Payment and Collection Law generally provides:

 

It shall be the duty of every employer to notify his employes at the time of hiring of the time and place of payment and the rate of pay and the amount of any fringe benefits or wage supplements to be paid to the employe . . . or . . . for the benefit of the employe[]. . . .

43 P.S. § 260.4. Moreover, Section 3 of the Wage Payment and Collection Law is absolutely explicit in its statement that: ‘Every employer shall pay all wages . . . due to his employes on regular paydays designated in advance by the employer.’ 43 P.S. § 260.3. Thus, employees are well within their rights to demand timely payment for work performed. Indeed, payment as agreed for services rendered is the very essence of an employment relationship, such that no employee can be compelled to work without payment.

 

Accordingly:

 

This Court has held that several instances of tardy wage payments resulting in employee protest and refusal by the employer to guarantee timely payment of wages as demanded by the employee can constitute necessitous and compelling cause for that termination.  Warwick v. Unemployment Comp. Bd. of Review, 700 A.2d 594, 597 (Pa. Cmwlth. 1997) (citation omitted).

. . . .

This Court’s opinion in Warwick indicates, without examination of the Wage Payment and Collection Law, that claimants must request a guarantee of adherence to a rigid payment schedule after protesting tardy payments in order to retain eligibility for unemployment compensation. See Warwick, 700 A.2d at 597 (citing Koman v. Unemployment Comp. Bd. of Review, . . . 435 A.2d 277 ([Pa. Cmwlth.] 1981)). Given that the Wage Payment and Collection Law already requires adherence to a rigid payment schedule, we hold that it is sufficient for employees to complain of late payments, so long as the employer is afforded a reasonable opportunity to address the employee’s complaints.  Clearly, failure to make timely payment for services rendered creates a real and substantial pressure upon an employee to terminate employment. Without question, repeat occurrences would cause a reasonable person to terminate employment.

 

Shupp v. Unemployment Comp. Bd. of Review, 18 A.3d 462, 464-65 (Pa. Cmwlth. 2011) (emphasis added).

 

The record evidence in the instant case established that Employer failed to timely pay Claimant for his services. Claimant twice notified Employer and accepted non-payroll checks in an effort to preserve his employment. It was not until Employer notified Claimant that he would have to wait yet another 30 days for his pay that Claimant voluntarily quit. Accordingly, under the specific circumstances of this case, the UCBR erred as a matter of law by concluding that Claimant voluntarily quit his employment without a necessitous and compelling reason.

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consumer - insurance - bad faith denial of claim

Rancosky v. Washington National Insurance Company –Superior Court – December 16, 2015

 

http://www.pacourts.us/assets/opinions/Superior/out/J-A19039-15o.pdf?cb=2

 

In the course of holding against an insurance company on a claim by its insured, the court said the following:

 

Insurance bad faith actions are governed by 42 Pa.C.S.A. § 8371, which provides as follows:

In an action arising under an insurance policy, if the court finds that the insurer has acted in bad faith toward the insured, the court may take all of the following actions:

(1) Award interest on the amount of the claim from the date the claim was made by the insured in an amount equal to the prime rate of interest plus 3%.

(2) Award punitive damages against the insurer.

(3) Assess court costs and attorney fees against the insurer.

 

The Pennsylvania legislature did not provide a definition of bad faith, as that term is used in section 8371, nor did it set forth the manner in which an

insured must prove bad faith. While our Supreme Court has not yet addressed these issues, this Court has ruled that, to succeed on a bad faith

claim, the insured must present clear and convincing evidence to satisfy a two part test: (1) the insurer did not have a reasonable basis for denying

benefits under the policy, and (2) the insurer knew of or recklessly disregarded its lack of reasonable basis in denying the claim. Terletsky,

649 A.2d at 688.

 

“There is a requisite level of culpability associated with a finding of bad faith. Merely negligent conduct, however harmful to the

interests of the insured, is recognized by Pennsylvania courts to be categorically below the threshold required for a showing of bad faith.”

Greene, 936 A.2d at 1189. Bad faith claims are fact specific and depend on the conduct of the insurer vis à vis the insured. Condio v. Erie Ins.

Exchange, 899 A.2d 1136, 1143 (Pa. Super. 2006). The fact-finder must consider “all of the evidence available” to determine whether the insurer’s

conduct was “objective and intelligent under the circumstances.” Berg v. Nationwide Mut. Ins. Co., 44 A.3d 1164, 1179 (Pa. Super. 2012)

 

A “dishonest purpose” or “motive of self-interest or ill will” is not a third element required for a finding of bad faith. Greene, 936 A.2d at 1191; see

also Nordi v. Keystone Health Plan West Inc., 989 A.2d 376, 385 (Pa.Super. 2010). A “motive of self-interest or ill will” may be considered in

determining the second prong of the test for bad faith, i.e., whether an insurer knowingly or recklessly disregarded its lack of a reasonable basis for

denying a claim. Greene, 936 A.2d at 1190.

 

There is a heightened duty of good faith was imposed on the insurer in a first-party claim because of the special relationship between the insurer and its insured, and the very nature of the insurance contract. See Romano v. Nationwide Mut. Fire Ins. Co., 646 A.2d 1228, 1231 (Pa. Super. 1994) (holding that an insurer must act with the “utmost good faith” toward its insured).

 

Individuals expect that their insurers will treat them fairly

and properly evaluate any claim they may make. A claim must

be evaluated on its merits alone, by examining the particular

situation and the injury for which recovery is sought. An

insurance company may not look to its own economic

considerations, seek to limit its potential liability, and operate in

a fashion designed to “send a message.” Rather, it has a duty to

compensate its insureds for the fair value of their injuries.

Individuals make payments to insurance carriers to be insured in

the event coverage is needed. It is the responsibility of insurers

to treat their insureds fairly and provide just compensation for

covered claims based on the actual damages suffered. Insurers

do a terrible disservice to their insureds when they fail to

evaluate each individual case in terms of the situation presented

and the individual affected.

Bonenberger v. Nationwide Mut. Ins. Co., 791 A.2d 378, 382 (Pa.

Super. 2002).

 

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disability - remand - ALJ failure to cite/discuss relevant evidence - GAF scores

https://www.paed.uscourts.gov/documents/opinions/15D1023P.pdf

 

Serrano v. Colvin – ED Pa. – December 9, 2015

 

The court upheld that magistrate’s conclusion that the  ALJ’s failure to cite to Serrano’s GAF scores warranted remand.

 

GAF scores assess an individual’s “psychological, social, and occupational functioning on a hypothetical continuum of mental health-illness.” Boston v. Chater, No. CIV.A. 94-5781,

1995 WL 708552, at *4 (E.D. Pa. Nov. 28, 1995) (quoting Diagnostic and Statistical Manual ofMental Disorders 32 (4th ed. 1994)). “The GAF scale, designed by the American Psychiatric

Association, ranges from 1 to 100, with a score of 1 being the lowest and 100 being the highest.” Christian v. Comm'r of Soc. Sec., No. CIV.A. 13-584, 2014 WL 4925032, at *3 (W.D. Pa. Sept. 30, 2014) (quoting West v. Astrue, 2010 WL 1659712, at *4 (E.D. Pa. Apr. 26, 2010)). Thougha GAF score alone does not necessarily indicate an impairment, it constitutes “relevant medicalevidence that ‘must be addressed by an ALJ in making a determination regarding a claimant’s disability.’” Packard v. Astrue, No. CIV.A. 11-7323, 2012 WL 4717890, at *2 (E.D. Pa. Oct. 4, 2012) (quoting Colon v. Barnhart, 424 F. Supp.2d 805, 812 (E.D. Pa. 2006)).

 

At step four in the disability analysis, an ALJ determines whether a claimant has the requisite residual functional capacity to perform her past relevant work. In making this decision,

the ALJ must consider all evidence before her and indicate why she accepts or rejects certain evidence. Adorno v. Shalala, 40 F.3d 43, 48 (3d Cir. 1994). Given this requirement, an

argument in favor of remand based on a failure to discuss GAF scores “will fail if, either: (1) the doctors who issued the GAF scores did not “express any opinions regarding [her] specific limitations,” or (2) if the ALJ provided a clear and satisfactory explanation of the basis uponwhich he dismissed the probative weight of the omitted GAF scores. Packard, No. CIV. A. 11-7323, 2012 WL 4717890 at *3.

 

In her Report, the magistrate judge reviewed the record and concluded that claimant “was assigned a GAF score of 45 on twenty-one separate treatment visits over a period of nearly

two years.” ....The ALJ made reference to only one of the at least twenty-one GAF scores—a GAF score of 50 provided by the agency examiner.  She provided no explanation for her decision to ignore the  others.  The magistrate judge reasoned that, “[t]hough remand may not be necessary where an ALJ fails to discuss one or two GAF scores of 50 or below, the Court finds that there is clear basis for remand where an ALJ ignores twenty-one such scores.”

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civil rights - sec. 1983 - under color of state law - private actor

PRBA Corp. a/k/a Bare Exposure v. HMS Host Toll Roads, Inc. – 3d Cir. – December 10, 2015

 

http://www2.ca3.uscourts.gov/opinarch/151538p.pdf

 

Private company that operates service plazas on New Jersey highways did not act “under color of any statute, ordinance, regulation, custom, or usage, of any State,”  42 U.S.C. § 1983, when it removed brochures belonging to a “gentleman’s club” from the common areas of its service plazas.  “The absence of any direct involvement by the state authorities either in the decision to remove the brochures or in the general, day-to-day operations of the service plazas compels this conclusion.”

 

The touchstone for analysis of all state action claims is Brentwood v. Tennessee Secondary School Athletic Association, 531 U.S. 288 (2001), in which the Supreme Court held that “state action may be found if, though only if, there is such a close nexus between the State and the challenged action that seemingly private behavior may be fairly treated as that of the State itself.” Id. at 295; see also Rendell-Baker v. Kohn, 457 U.S. 830, 838 (1982) (“The ultimate issue in determining whether a person is subject to suit under § 1983 is the same question posed in cases arising under the Fourteenth Amendment: is the alleged infringement of federal rights)

 

The Brentwood Court also gave additional structure to several tests that lower courts had previously been using to determine whether a private party satisfied the “close nexus” requirement necessary to be considered a state actor. One of these tests is called the “entwinement test,” which asks whether “[t]he nominally private character of the Association is overborne by the pervasive entwinement of public institutions and public officials in its composition and workings, and [thus] there is no substantial reason to claim unfairness in applying constitutional standards to it.” Brentwood, 531 U.S. at 298.  This case thus shows that the entwinement test focuses on the overlap or merger of public and private entities as a result of their shared leadership or other attributes that make it hard to separate their public functions from their private ones.

 

The court also relied heavily on

            - Gannett Satellite Information Network, Inc. v. Berger, 894 F.2d 61, 67 (3d Cir. 1990), hodling that the concessionaires that leased property in the Newark Airport and decided not to distribute certain newspapers were simply “private entities pursuing private ends” because there was no “explicit governmental involvement” in the decisions of the concessionaires and thus their conduct “may not fairly be attributed to the Port Authority.” 894 F.2d 61, 67 (3d Cir. 1990), which took no part in the distribution decision.  The analysis focused on evidence of explicit involvement of the governmental authority in the specific action the plaintiffs challenge.

             - Marie v. American Red Cross, elaborating a “high bar necessary for a finding of impermissible entwinement.” 771 F.3d 344 (6th Cir. 2014).   “[M]ere cooperation simply does not rise to the level of merger required for a finding of state action.” Id. at 364. Instead, there must be “pervasive entwinement of public institutions and public officials in [the private entity’s] composition and workings [such that] there is no substantial reason to claim unfairness in applying constitutional standards to it.” Id. (emphasis added).

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default judgment - striking - failure to strictly follow Rule 237.5 - notice of intent to take default

Americhoice Federal Credit Union v. Ross – Superior Court – December 7, 2015

 

Majority                                 http://www.pacourts.us/assets/opinions/Superior/out/J-S63017-15o%20-%201024610755788899.pdf?cb=1

 

Concurrence/dissent            http://www.pacourts.us/assets/opinions/Superior/out/J-S63017-15cds%20-%201024610755788901.pdf?cb=1

 

Default judgment stricken due to Plaintiff’s failure to strictly follow Pa. R.C.P.  237.1(a(2) and 237.5 – Notice of Intent to Take Default Judgment (Important Notice)

 

Plaintiff’s notice said “YOU ARE IN DEFAULT BECAUSE YOU HAVE FAILED TO TAKE ACTION REQUIRED OF YOU IN THIS CASE.”  By contrast, the rules require the notice to state “YOU ARE IN DEFAULT BECAUSE YOU HAVE FAILED O ENTER A WRITTEN APPEARANCE PERSONALLY OR BY ATTORNEY AND FILE IN WRITING WITH THE

COURT YOUR DEFENSES OR OBJECTIONS TO THE CLAIMS SET FORTH AGAINST YOU.”

 

The court held that under Oswald v. WB Pub. Square Assocs., LLC, 80 A.3d 790 (Pa. Super. 2013) and and City of Philadelphia v. David J. Lane Adver., Inc., 33 A.3d 674, 679 (Pa. Commw. 2011), the plaintiff had to give “specific reasons” as to what defendant had failed to do and why defendant was in default, rather than just the general statement (“you have failed to take action”) required under the previous rule.  The Commonwealth Court examined the above legislative and judicial history in the context of its holding in Township of Chester v. Steuber, [] 456 A.2d 669 ([Pa. Commw.] 1983) and subsequentamendments to Rule 237.5. Id. at 678–80.   The court held that the amendments to Rule 237.5 “impose an additional notice requirement on a [AmeriChoice] who wishes to obtain a judgment by default ... the [AmeriChoice] must now include in the [Ten]–Day Notice specific reasons why the defendant is in default.” David J. Lane Advertising, 33 A.3d at 679 (emphasis in original).Oswald, 80 A.3d at 795-96.

 

The law is clear that generally, default judgments are disfavored. Attix v. Lehman, 925 A.2d 864, 866 (Pa. Super. 2007).  AmeriChoice failed to provide any indication on the face of the Notice of precisely why default judgment would be entered against Homeowners. This constitutes a failure to comply with the format contained in Pa.R.C.P. 237.5, and thus constitutes a violation of Pa.R.C.P. 237.1(a)(2). ... “It is well[]established that a record which reflects a failure to comply with Pa.R.C.P. 237.1 is facially defective and cannot support a default judgment.” Oswald, 80 A.3d at 796 (citationomitted). “Furthermore, since the prothonotary lacks authority to enter judgment under these circumstances, the default judgment would be void ab initio.” Id. at 797 (citation and italicization omitted). A default judgment that is void ab initio “must be stricken without regard to the passage of time.”

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