Fugh v. Unemployment Compensation Board of Review
153 A.3d 1169
Pa. Commw. Ct.2017Background
- Claimant Jessica Fugh resigned after her employer reduced her hours and duties; she then filed an online UC claim and selected "lack of work."
- The Service Center paid $738 in benefits for three weeks, later determining Claimant was ineligible because she left without a necessitous and compelling reason (Section 402(b)).
- The Service Center issued notices: ineligibility, fault overpayment requiring repayment with interest (Section 804(a)), and a five-week penalty under Section 801 for knowingly making a false statement.
- At hearing the Referee found Claimant misunderstood the online choice "lack of work," made a mistake, and there was no evidence of intentional false statements; nevertheless the Referee sustained fault overpayment but rescinded the penalty.
- The Board adopted the Referee’s findings but affirmed liability as a fault overpayment; Claimant appealed only the fault-versus-nonfault classification of the overpayment.
- The court reviewed statutory distinctions between fault overpayments (mandatory repayment with interest and broader collection tools) and non-fault overpayments (repayment by deduction from future benefits, without interest) and examined the meaning of "fault."
Issues
| Issue | Fugh's Argument | Board's Argument | Held |
|---|---|---|---|
| Whether Claimant’s mistaken selection of "lack of work" constitutes "fault" under Section 804(a) | Claimant: mistake/ misunderstanding is non-fault; mens rea required | Board: "fault" need not require intent or knowledge; choice was inaccurate so claimant is at fault | Court: Reversed — mistake without culpable state of mind is non-fault under Section 804(b) |
| What level of culpability "fault" requires | Fugh: follows Daniels/Cruz — blameworthy conduct and state of mind required | Board: legislative history shows shift from "fraud" to "fault" and does not demand mens rea | Court: "Fault" entails blameworthy conduct (e.g., knowing recklessness or gross negligence); mens rea is part of analysis |
| Whether prior precedent construing "fault" should be overruled | Fugh: relies on longstanding precedent (Daniels, Cruz) | Board: asks Court to abandon prior decisions and adopt lower standard | Court: Declined to abandon stare decisis; upheld precedents requiring culpable conduct |
| Appropriate remedy classification for overpayment already collected | Fugh: overpayment should be non-fault — repayable only via deductions from future benefits, no interest | Board: assessed full repayment with interest and collection tools under fault provision | Held: Remanded to reclassify as non-fault overpayment under Section 804(b) and adjust restitution method accordingly |
Key Cases Cited
- Daniels v. Unemployment Compensation Board of Review, 309 A.2d 738 (Pa. Cmwlth. 1973) ("fault" connotes blameworthy conduct and is more than a voluntary act)
- Cruz v. Unemployment Compensation Board of Review, 531 A.2d 1178 (Pa. Cmwlth. 1987) (mistaken reporting of "lack of work" held non-fault)
- Matvey v. Unemployment Compensation Board of Review, 531 A.2d 840 (Pa. Cmwlth. 1987) (intentional misstatement can establish fault)
- Maiorana v. Unemployment Compensation Board of Review, 453 A.2d 747 (Pa. Cmwlth. 1982) (claimant’s state of mind central to fault inquiry)
- Grieb v. Unemployment Compensation Board of Review, 827 A.2d 422 (Pa. 2003) (negligence alone does not constitute willful misconduct)
- Reading Area Water Authority v. Unemployment Compensation Board of Review, 137 A.3d 658 (Pa. Cmwlth. 2016) (willful misconduct defined; severe culpability required)
- Chamberlain v. Unemployment Compensation Board of Review, 114 A.3d 385 (Pa. 2015) (statutory terms are construed by their common and ordinary meaning)
- Payne v. Tennessee, 501 U.S. 808 (U.S. 1991) (stare decisis promotes predictable, consistent legal development)