                 IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Aarsand Management, LLC,                      :
                      Petitioner              :
                                              :
                       v.                     :
                                              :
Department of Labor and Industry,             :
Office of Unemployment                        :
Compensation Tax Services,                    :     No. 1726 C.D. 2016
                        Respondent            :     Submitted: April 21, 2017


BEFORE:         HONORABLE RENÉE COHN JUBELIRER, Judge
                HONORABLE ANNE E. COVEY, Judge
                HONORABLE JAMES GARDNER COLINS, Senior Judge


OPINION NOT REPORTED

MEMORANDUM OPINION BY
JUDGE COVEY                                         FILED: August 31, 2017

                Aarsand Management, LLC (Aarsand) petitions this Court for review of
the Department of Labor and Industry’s (Department) September 21, 2016 Final
Order denying its appeal of the Unemployment Compensation (UC) tax rate issued
for calendar year 2016. The sole issue before this Court is whether the Department
erred by denying Aarsand’s appeal based on untimeliness. After review, we affirm.
                Aarsand first paid wages in Pennsylvania, subject to the Pennsylvania
UC Law (Law),1 on June 28, 2005.                  Aarsand filed its Pennsylvania Enterprise
Registration Form (PA-100) on July 8, 2005, signed by Aarsand’s managing member
Kurt Aarsand.          The address provided on the PA-100 was: “AARSAND
MANAGEMENT, LLC, 11019 MCCORMICK RD [STE] 320, HUNT VALLEY,
MD 21030.” Reproduced Record (R.R.) at 29a. The Office of UC Tax Services

      1
           Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P.S. §§
751-914.
(OUCTS) notified Aarsand of its 2016 contribution rate by sending a UC
Contribution Rate Notice (Rate Notice), dated December 31, 2015, to the address
Aarsand listed on its PA-100. In the Rate Notice, OUCTS advised Aarsand that a 3%
delinquency rate had been imposed under Section 301(a)(2) of the UC Law, 43 P.S. §
781(a)(2), because Aarsand owed $6,093.53 in unpaid contributions and interest
through the second quarter of 2015. The Rate Notice provided: “The last day to
appeal this [R]ate [N]otice is March 30, 2016. See page 2 for appeal instructions.”
R.R. at 7a.
              In March 2016, Aarsand received a Statement of Account dated March
15, 2016 (Statement). The Statement was also sent to the address provided on
Aarsand’s PA-100. On May 25, 2016, OUCTS received Aarsand’s appeal from the
2016 Rate Notice (Rate Appeal). By June 23, 2016 letter, OUCTS denied Aarsand’s
Rate Appeal as untimely. OUCTS determined: (1) the Rate Notice informed Aarsand
that it had 90 days from December 31, 2015 to appeal from the rate; (2) the last day
to appeal its 2016 contribution rate was March 30, 2016; and (3) Aarsand filed its
appeal on May 25, 2016. On July 8, 2016, Aarsand appealed from the OUCTS’
determination to the Department’s UC Tax Review Office (TRO).
              By September 21, 2016 Final Order, the Department denied Aarsand’s
nunc pro tunc appeal, based on its determination that the December 31, 2015 Rate
Notice was mailed to Aarsand’s business address of record with instructions to file an
appeal within 90 days. It further ruled that Aarsand’s appeal was due by March 30,
2016, but was not filed until May 25, 2016. Finally, it concluded that Aarsand did
not establish good cause for its failure to appeal within the required timeframe. On
October 20, 2016, Aarsand appealed to this Court.2

       2
          “Our standard of review is limited to determining whether constitutional rights were
violated, whether an error of law was committed, or whether necessary findings of fact are
supported by substantial evidence. 2 Pa.C.S. § 704.” Stratigos v. Dep’t of Labor & Indus., Office
of Unemployment Comp. Tax Servs., 57 A.3d 217, 220 n.7 (Pa. Cmwlth. 2012).
                                               2
               Initially, Section 301(e)(2) of Law provides:

               The [D]epartment shall promptly notify each employer of
               his rate of contribution for the calendar year. . . . The
               determination of the [D]epartment of the employer’s
               rate of contribution shall become conclusive and binding
               upon the employer, unless within ninety (90) days after
               the mailing of notice thereof to the employer’s last
               known post office address the employer files an
               application for review, setting forth his reasons therefor:
               Provided, That if the [D]epartment finds that because of an
               error of the [D]epartment it has notified an employer that
               his rate of contribution is more than the rate to which he is
               entitled, the [D]epartment shall, within one year from the
               date of such notice, adjust the rate of contribution. The
               [D]epartment may, if it deems the reasons set forth by the
               employer insufficient to change the rate of contribution,
               deny the application, otherwise it shall grant the employer a
               fair hearing. The employer shall be promptly notified of the
               denial of his application or of the [D]epartment’s
               redetermination. In any application for review filed
               hereunder and in any further appeal taken thereafter, no
               questions shall be raised with respect to the employer’s
               contribution rate, except such as pertains to the
               determination of the employer’s Benefit Ratio Factor and
               Reserve Ratio Factor.

43 P.S. § 781(e)(2) (emphasis added). Further, Section 63.21(b) of the Department’s
Regulations provides, in pertinent part: “The Department may consider an application
for review and redetermination of contribution rate filed under [S]ection 301(e)(2) of
the [L]aw only if it . . . is filed within the time specified in [S]ection 301(e)(2) of the
[L]aw.” 34 Pa. Code § 63.21(b). Consequently, because 90 days had elapsed on
March 30, 2016, and OUCTS received Aarsand’s Rate Appeal on May 25, 2016,
Aarsand’s appeal was untimely and the Department was without jurisdiction to
consider it.
               This Court has explained:

               ‘It is well settled that the statutory time limit for filing an
               appeal is mandatory in the absence of fraud or manifestly

                                             3
              wrongful or negligent conduct of the administrative
              authorities.’    Blast Intermediate Unit No. 17 v.
              Unemployment [Comp.] [Bd.] of Review, . . . 645 A.2d 447,
              449 ([Pa. Cmwlth.] 1994). In other words, an appeal nunc
              pro tunc was initially limited to circumstances of fraud or a
              breakdown in the court’s operations.
              However, in Bass v. Commonwealth, . . . 401 A.2d 1133
              ([Pa.] 1979), our Supreme Court expanded the limited
              exceptions for allowing an appeal nunc pro tunc to include
              a situation where (1) the appeal was filed late as a result of
              non-negligent circumstances, either on appellant’s part or
              on the part of his counsel, (2) the appeal was filed shortly
              after the expiration date and (3) the appellee was not
              prejudiced by the delay. These exceptions were further
              expanded in Cook v. Unemployment Compensation Board
              of Review, . . . 671 A.2d 1130 ([Pa.] 1996), wherein the
              Court allowed an appeal nunc pro tunc due to the
              appellant’s unexpected illness and hospitalization which
              resulted in a late filing. Nevertheless, the party attempting
              to file an appeal nunc pro tunc carries a ‘heavy burden to
              justify an untimely appeal.’ Blast Intermediate Unit No. 17,
              645 A.2d at 449.

Kenneth S. Hantman, Inc. v. Office of Unemployment Comp. Tax Servs., 928 A.2d
448, 452 (Pa. Cmwlth. 2007) (italics added).
              Aarsand first argues that the untimeliness of its appeal should be excused
because it was not Aarsand’s fault it did not receive the Rate Notice. Specifically,
Aarsand contends that the United States Post Office (Post Office) unilaterally
changed its zip code without notice and, thus, through no fault of its own Aarsand’s
Rate Notice was sent to the wrong address. However, Aarsand does not specify when
its zip code was changed or when it became aware of the change. Rather, Aarsand
averred in its Rate Appeal: “We did not receive all notices from [the Department] for
2015 because of a change in our mailing zip code. We have corrected the address as
of May 13, 2016.” R.R. at 11a (emphasis added). Aarsand expounded in its brief to
this Court:


                                            4
             [T]he [OUCTS] mailed the [Rate Notice] to [Aarsand] at
             the following address: Aarsand Management LLC, 11019
             McCormick Road, Suite 320, Hunt Valley, MD 21030.
             However, the . . . Post Office unilaterally changed
             [Aarsand’s] zip code from 21030 to 21031 during this time
             period. Despite this change, the Post Office never sent a
             formal Notice of the zip code change to [Aarsand].
             Moreover, the Post Office would, at times, deliver mail to
             [Aarsand] with the 21030 zip code, but at some point
             during late 2014 and 2015, [it] became inconsistent with
             delivering mail with the incorrect zip code.

Aarsand Br. at 13 (emphasis added).
             Based upon Aarsand’s representations, its zip code was changed in 2014.
OUCTS is obligated to notify an employer of its UC contribution rate at employer’s
last known post office address as communicated to OUCTS by employer. At the time
the 2016 Rate Notice was sent in December 2015, Aarsand’s last known address
contained the 21030 zip code. Given that Aarsand was aware it was not receiving all
of its mail addressed to its old zip code during late 2014 and 2015, Aarsand must
have been aware of the zip code change before the December 31, 2015 Rate Notice
was mailed. Under the circumstances, the onus was on Aarsand to inform OUCTS of
its address change. Aarsand did not advise OUCTS of the change to its zip code at
any time prior to the end of the appeal period.
             Notwithstanding, Aarsand also stated in its Rate Appeal: “We did
receive one notification regarding underpayments and forwarded it to our payroll
company.     [It] had a change in [its] tax support services division and those
communications were missed by [it] and we missed following up on our
correspondence with [it].” R.R. at 11a. Aarsand explicated in its brief:

             [Aarsand] was also unaware of the change in its
             contribution rate for the years 2015 and 2016 as the payroll
             company it uses, Payce Payroll, had a change in its tax
             support services division during 2014 and 2015, resulting in
             the new contribution tax rate not being communicated to
             [Aarsand].
                                           5
              Specifically, [Aarsand] was under the impression that Payce
              Payroll automatically updated [Aarsand’s] contribution
              rates on a yearly basis. Prior to the years at issue, [Aarsand]
              would receive requests or notices from Payce Payroll
              ensuring that Payce had updated rates. However, in 2014
              and 2015, Payce Payroll had a change in its tax support
              services division and communication regarding the rate
              change was never conveyed to [Aarsand]. [Aarsand] did
              receive one notification for a delinquency which it
              forwarded to Payee.[3] Payce was to investigate the notice
              and determine whether [Aarsand] actually owed the balance
              and what future actions should be taken. However, due to
              Payce’s changes in its tax support services division,
              communication of the proper rate was not conveyed to
              [Aarsand] and Payce failed to update [Aarsand’s]
              contribution tax rate.

Aarsand Br. at 14-15 (emphasis added).
              While we sympathize with Aarsand’s plight, the record lacks evidence
that Aarsand’s failure to timely appeal was caused by non-negligent circumstances.
Because the record contains no evidence that Aarsand did not become aware of its zip
code change until after the relevant time period, and Aarsand in fact did receive a
delinquency notification which its payroll company failed to consider,4 the
circumstances herein do not permit an appeal nunc pro tunc.
              Finally, Aarsand asserts that the delinquency rate the Department
applied was punitive and places an undue burden on Aarsand, violating public policy.
However, Aarsand appealed from OUCTS’ denial of its appeal challenging the
untimeliness determination.        As stated by the TRO in acknowledgement of the
appeal: “The [TRO] review of [Aarsand’s] appeal is limited to the issue(s) raised by
[Aarsand], and will result in the affirmation, modification or reversal of the OUCTS


       3
         Again, Aarsand does not specify the date the notice was received.
       4
          The alleged negligence of Aarsand’s payroll company does not warrant nunc pro tunc
relief. See Wert v. Dep’t of Transp., 468 A.2d 542, 544 (Pa. Cmwlth. 1983) (“[I]f the delay results
from the negligence of a third party whom the petitioner has chosen, the extension of time for
appeal cannot be justified.”).
                                                6
denial of the initial contribution [R]ate [A]ppeal.” R.R. at 23a. At no time did
Aarsand raise the punitive nature of the penalty before either the OUCTS or the TRO.
“When a party fails to raise an issue . . . in an agency proceeding, the issue is waived
and cannot be considered for the first time in a judicial appeal.” Hudock v. Pa. Dep’t
of Pub. Welfare, 808 A.2d 310, 313 n.4 (Pa. Cmwlth. 2002).            Further, because
Aarsand

             did not raise this issue in his statement of questions
             involved[, see Aarsand Br. at 4]; . . . it is waived. Williams
             v. Workers’ [Comp.] Appeal [Bd.] (USX Corp[.]-Fairless
             Works), 862 A.2d 137, 141 (Pa. Cmwlth. 2004) (‘Aarsand
             has failed to raise this issue anywhere within his Statement
             of the Questions Presented, and for that reason, it is
             waived.’); Pa.R.A.P. 2116(a) (‘No question will be
             considered unless it is stated in the statement of questions
             involved or is fairly suggested thereby.’)[.]

Glunk v. Dep’t of State, 102 A.3d 605, 611 n.17 (Pa. Cmwlth. 2014).
             For all of the above reasons, the Department’s Final Order is affirmed.


                                       ___________________________
                                       ANNE E. COVEY, Judge




                                           7
            IN THE COMMONWEALTH COURT OF PENNSYLVANIA


Aarsand Management, LLC,                :
                      Petitioner        :
                                        :
                  v.                    :
                                        :
Department of Labor and Industry,       :
Office of Unemployment                  :
Compensation Tax Services,              :   No. 1726 C.D. 2016
                        Respondent      :



                                     ORDER

            AND NOW, this 31st day of August, 2017, the Department of Labor and
Industry’s September 21, 2016 Final Order is affirmed.


                                     ___________________________
                                     ANNE E. COVEY, Judge
