M.M. Frantz v. UCBR ( 2020 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Marlene M. Frantz, :
Petitioner :
:
v. :
:
Unemployment Compensation :
Board of Review, : No. 1474 C.D. 2019
Respondent : Argued: June 8, 2020
BEFORE: HONORABLE P. KEVIN BROBSON, Judge
HONORABLE MICHAEL H. WOJCIK, Judge
HONORABLE CHRISTINE FIZZANO CANNON, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE FIZZANO CANNON FILED: July 7, 2020
Marlene M. Frantz (Claimant) petitions for review of the October 4,
2019 order of the Unemployment Compensation Board of Review, which affirmed
a referee’s decision finding that Claimant had voluntarily quit her employment
without a necessitous or compelling cause and was, therefore, ineligible for
unemployment compensation benefits (benefits) under Section 402(b) of the
Unemployment Compensation Law (Law).1 Upon review, we affirm.
1
Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P.S. §
802(b). Section 402(b) provides that an employee shall be ineligible for compensation for any
week in which his/her unemployment is due to voluntarily leaving work without cause of a
necessitous and compelling nature.
The underlying facts of this case are not in dispute. Claimant was in a
longstanding relationship with Charles S. Nemeth (Nemeth), the owner of King
Kone and the Jungle Kafe (King Kone), an ice cream business. Finding of Fact
(F.F.) 2; Certified Record (C.R.) at 105.2 Claimant worked for a third party
(Employer) as a full-time assistant manager of King Kone from January 1, 2015,
through June 28, 2019. F.F. 1; C.R. at 105. In late 2014, Nemeth entered into a
purchase agreement to sell the business to Employer, but the agreement required
Employer to keep Claimant and Nemeth employed until the sale was finalized. F.F.
3; C.R. at 105.
More specifically, the purchase agreement, dated December 15, 2014,
required Employer to make annual payments for a period of five years, with a final
payment due and owing on August 1, 2020, during which time Claimant would
remain employed. C.R. at 90. The purchase agreement further provided Claimant
and Nemeth with the option of extending their employment for three years past the
August 1, 2020 date. Id. Claimant was fully aware of the terms of the purchase
agreement. F.F. 4; C.R. at 105. Following negotiations with Employer with respect
to increased wages and vacation time in late 2018/early 2019, Employer agreed to
promptly pay the remaining balance due under the purchase agreement. F.F. 5; C.R.
at 106. As a condition of this accelerated payment, however, Claimant and Nemeth
agreed to a cessation of their employment upon the final payoff which was scheduled
for June 28, 2019, and was later extended to July 3, 2019.3 F.F. 6; C.R. at 106. In
2
The certified record does not include page numbers. The citations to the certified record
contained herein will refer to the page of the certified record in PDF format as submitted to this
Court.
3
The record reveals that Claimant and Nemeth executed an amendment to the original
purchase agreement on December 31, 2018, which included a waiver of their option to extend their
2
anticipation of the closing of the sale of the business, Claimant and Nemeth informed
Employer that June 28, 2019, would be the last day of their employment. F.F. 7;
C.R. at 106. Thus, “[C]laimant voluntarily left her job as a condition of the sale[] of
the business.” F.F. 8; C.R. at 106.
On July 3, 2019, Claimant initiated a claim for benefits via the internet.
C.R. at 9-12. By notice of determination mailed July 24, 2019, the Department of
Labor & Industry (Department) denied benefits to Claimant, concluding that she was
ineligible under Section 402(b) of the Law, because she had voluntarily quit her
employment without a necessitous or compelling reason. C.R. at 34-36. Claimant
appealed to a referee, who scheduled and held a hearing on August 15, 2019, at
which Claimant, Nemeth, and Employer testified. Id. at 38-41, 48, 59, 64-89. The
referee affirmed the Department’s determination. Referee’s Decision & Order at 2,
C.R. at 107. Claimant appealed to the Board, which affirmed the referee’s decision.
Board’s Order at 2, C.R. at 122.
The Board adopted the referee’s findings in their entirety, except that
the Board amended the referee’s Finding of Fact 8 to read that “[C]laimant
voluntarily quit due to personal reasons.” Board’s Order at 1, C.R. at 121. The
Board resolved all conflicts in testimony in favor of Employer. Id. The Board noted
that Nemeth called Employer on June 27, 2019, to inform Employer that the next
day would be Nemeth’s and Claimant’s last day of work, which constituted a
voluntary quit. Id. The Board also noted that Employer credibly testified that
Claimant and Nemeth celebrated their last day with “flowers, balloons, friends
visiting, and photographs.” Id.
employment for a period of three years after August 1, 2020, the original closing date for the sale
of King Kone. See C.R. at 100-01. The record also reveals that Claimant and Nemeth executed
affidavits on June 22, 2019, whereby they agreed that their employment would cease entirely upon
Employer’s final payoff. See C.R. at 96-97.
3
The Board indicated that “[t]he totality of the circumstances demonstrates a
conscious intention to quit.” Id. Finally, the Board stated that any issues with
respect to Claimant’s continued employment under the purchase agreement, and her
argument that she could not have quit her employment on June 28, 2019, in light of
the same, were “contractual legal issues” not relevant to the Board’s consideration
of whether Claimant had voluntarily quit her employment. Id.
Before this Court,4 Claimant argues as follows:
The question posed to the court for consideration is
whether a prior owner [Nemeth] when transferring the
business (identified as King Kone) pursuant to a fully
executed Business Purchase Agreement which contains a
guarantee of continued employment (IA) for [Claimant]
until the business is in fact transferred, can in any way
deny benefits to [Claimant] based on some form of alleged
voluntary/conscious dismissal of [e]mployment, when it is
impossible to be unemployed under the Agreement until
transfer of the Business pursuant to Section IA of the
Business Purchase Agreement is perfected (via full
payment of existing purchase from [Employer to
Nemeth]?
Claimant’s Brief at 3. In other words, Claimant appears to argue that she cannot be
deemed to have voluntarily quit her employment when her continued employment
is required in accordance with the terms of the purchase agreement, and, consistent
with the subsequent amendment to this agreement and affidavit, her employment
could only cease after the final payoff by Employer. We disagree.
This Court addressed an identical issue in the companion case of
Nemeth v. Unemployment Compensation Board of Review (Pa. Cmwlth., No. 1473
C.D. 2019, filed July 7, 2020), and the reasoning in that case applies equally herein.
4
This Court’s review is limited to a determination of whether substantial evidence
supported necessary findings of fact, whether errors of law were committed or whether
constitutional rights were violated. Johns v. Unemployment Comp. Bd. of Review, 87 A.3d 1006,
1009 n.2 (Pa. Cmwlth. 2014).
4
The fact that the purchase agreement required Claimant’s continued employment
until the final payoff was made has no bearing on the determination of whether her
actions constituted a voluntary quit such that she is precluded from receiving
benefits. Claimant, similar to Nemeth in the companion case, voluntarily chose to
forgo her continued employment with Employer in consideration of Nemeth
receiving an accelerated payoff to complete the purchase agreement. Claimant
executed an affidavit on June 22, 2019, while still employed, whereby Claimant
agreed that her employment with King Kone would terminate upon final payoff
under the purchase agreement, effectively renouncing any right she had to continued
employment. Further, Claimant simply ceased working after June 28, 2019, without
cause of a necessitous and compelling nature. Like Nemeth, Claimant’s actions in
this regard render her ineligible for benefits under Section 402(b) of the Law. See
Monaco v. Unemployment Comp. Bd. of Review, 565 A.2d 127 (Pa. 1989); Greenray
Indus. v. Unemployment Comp. Bd. of Review, 135 A.3d 1140 (Pa. Cmwlth. 2016);
Wise v. Unemployment Comp. Bd. of Review, 111 A.3d 1256 (Pa. Cmwlth. 2015);
Middletown Twp. v. Unemployment Comp. Bd. of Review, 40 A.3d 217 (Pa. Cmwlth.
2012).
Accordingly, the order of the Board is affirmed.
__________________________________
CHRISTINE FIZZANO CANNON, Judge
5
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Marlene M. Frantz, :
Petitioner :
:
v. :
:
Unemployment Compensation :
Board of Review, : No. 1474 C.D. 2019
Respondent :
ORDER
AND NOW, this 7th day of July, 2020, the October 4, 2019 order of
the Unemployment Compensation Board of Review is AFFIRMED.
__________________________________
CHRISTINE FIZZANO CANNON, Judge