IN THE COMMONWEALTH COURT OF PENNSYLVANIA 
Thomas C. Chishko, : 

Petitioner : 
: 
v. :
: 
Unemployment Compensation 
Board of Review, : 

Respondent : 


BEFORE: HONORABLE BERNARD L. McGINLEY, Judge 

 HONORABLE DAN PELLEGRINI, Judge 

 HONORABLE MARY HANNAH LEAVITT, Judge 

OPINION 
BY JUDGE LEAVITT FILED: October 15, 2007 

Thomas Chishko (Claimant) petitions for review of an adjudication of 
the Unemployment Compensation Board of Review (Board) holding Claimant 
ineligible for unemployment compensation benefits he received in 2005 and 
ordering recoupment of those benefits. In doing so, the Board reversed the 
decision of a Referee. In this case, we consider whether the Board erred in 
concluding that Claimant submitted an improper application for benefits. We also 
consider whether the Board properly subjected Claimant to a fault overpayment 
recoupment and penalties. Finding no error by the Board, we affirm. 

In June 2005, Claimant applied to the Indiana UC Service Center for 
benefits under the Unemployment Compensation Law (Law).1 Claimant received 
$4302 in unemployment compensation benefits for the 15 claim weeks from 
October 8, 2005, through January 14, 2006. During this time period, Claimant 
entered into an oral agreement with Sue Woodward to renovate a house for resale. 
Under the terms of their agreement, Woodward was to pay for all materials and 
supplies, and Claimant was to do the actual renovations for which he was to 
receive $700 per month. Claimant and Woodward also agreed to split the profit 
from the sale of the renovated house. Claimant did not report this construction 
work to the UC Service Center. 

Eventually, the relationship between Claimant and Woodward soured. 
Claimant filed a civil suit against Woodward and requested a mechanic’s lien 
against the property and improvements “for the payment of a debt due [C]laimant 
as contractor for labor and services furnished by [C]laimant in the alteration and 
repair of the improvements.” Board Opinion at 2; Finding of Fact No. 17 (F.F. 
__). An anonymous tipster informed the Department that Claimant was employed 
while he was also collecting unemployment benefits. In response to the 
anonymous tip, the Department conducted an investigation. 

On September 19, 2006, the UC Service Center issued a Notice of 
Determination, finding Claimant to be ineligible for the benefits he had received 
because he had been employed during the weeks he claimed to be unemployed. As 
a result, the UC Service Center determined Claimant was overpaid benefits in the 
amount of $4,302. The UC Service Center also issued a Notice of Penalty Weeks 
Determination finding that Claimant had knowingly failed to disclose his 
employment and subjecting him to an additional seventeen-week period of 
disqualification pursuant to Section 801(b) of the Law, 43 P.S. §871(b).2 Claimant 
appealed. 

At a hearing before a Referee, Claimant testified that Woodward paid 
him $700 per month so he could purchase supplies, such as gasoline, gloves, face 
masks and clothing suitable for asbestos removal. Claimant testified that he did 
not report this work to the UC Service Center because he “never received payment 
for the work.” Notes of Testimony, November 8, 2006, at 14 (N.T. __); 
Reproduced Record at 17a (R.R. ___). Woodward disputed Claimant’s account. 
Woodward testified that she paid for Claimant’s materials and expenses and 
established an account at Lowe’s for Claimant to use for that purpose. According 
to Woodward, the monthly $700 payment was intended “to give [Claimant] an 
income so he could work” and that “he worked and he was paid for work.” N.T. 
19, 20; R.R. 22a, 23a. 

The Referee found, as fact, that Claimant was not employed by 
Woodward because he had received no wages or remuneration. The Referee stated 
that there was conflicting testimony at the hearing and, as fact finder, he resolved 
all conflicts in Claimant’s favor. The Referee further stated that “[C]laimant’s 
services involved in [renovating] a house is not services in employment or even 
considered any type of employer/employee relationship but more in the line of any 
other type of investment venture.” Referee’s Decision at 2. The Referee reversed 
the UC Service Center’s decision and granted benefits. The Bureau of UC 
Benefits and Allowances appealed to the Board. 

On appeal, the Board found, as fact, that the $700 Claimant received 
from Woodward every month represented wages, not reimbursement for project 
expenses. The Board noted that Claimant’s mechanic’s lien was “for the payment 
of a debt due [C]laimant as contractor for labor and services furnished by 
[C]laimant in the alteration and repair of the improvements.” Board Adjudication 
at 2; F.F. 17. The Board also found, based on Claimant’s own testimony, that he 
spent a total of 996 hours working on the project, or an average of 55 hours per 
week. Id.; F.F. 13-14. 

Based on the foregoing findings, the Board reversed the determination 
of the Referee and disallowed benefits. The Board first held that Claimant was 
ineligible for the benefits he received pursuant to Section 401 of the Law, 43 P.S. 
§801,3 because he was employed during the relevant time period, either as 
Woodward’s employee or as an independent contractor. The Board also held that 
Claimant was retroactively disqualified from receiving benefits because he had 
failed to comply with the reporting requirements of Section 401(c) of the Law, 43 

P.S. §801(c). Additionally, the Board concluded that Claimant was in receipt of a 
fault overpayment of $4,302, which it ordered to be repaid. Finally, the Board 
assessed a seventeen-week period of disqualification from future unemployment 
compensation benefits based upon its determination that Claimant had deliberately 
misled the UC Service Center. Claimant now petitions this Court for review. 
Before this Court,4 Claimant argues, inter alia, that he did not submit 
an improper application for benefits because he had no duty to report his home 
renovation activities.5 Claimant also contends that the Board erred in subjecting 
him to recoupment of a fault overpayment and a seventeen-week penalty period of 
disqualification. 

We consider, first, the Board’s determination that Claimant was 
ineligible for benefits because he failed to comply with the reporting requirements 
set forth in the Law. Section 401(c) of the Law provides that a claimant must 
make his “claim for compensation in the proper manner and on the form prescribed 
by the department.” 43 P.S. §801(c). In applying this provision, this Court has 
described a claimant’s disclosure responsibilities as follows: 

A claimant seeking unemployment compensation benefits is
required to divulge to the OES [Office of Employment Security]
all pertinent information regarding the claimant's employment 
status. This information is required so that the OES may make 
an intelligent and informed determination as to the claimant's 
eligibility for benefits and computation of a weekly benefit rate 
and partial benefit credit. This requirement which is imposed 
upon claimants recognizes the Commonwealth's interest in 
unemployment compensation and assists in fulfilling the 
Commonwealth's duty to protect the unemployment 
compensation fund against dissipation by those not entitled to 
benefits under the law. 

Amspacher v. Unemployment Compensation Board of Review, 479 A.2d 688, 690691 
(Pa. Cmwlth. 1984) (emphasis added). In order for information to be pertinent 
and material to an OES investigation, “the information must somehow affect either 
a claimant’s eligibility for benefits or the amount of benefits to which the claimant 
is entitled.” Hanley v. Unemployment Compensation Board of Review, 506 A.2d 
994, 996 (Pa. Cmwlth. 1986). Where there is a failure to disclose material 
information, the “ineligibility is total, rather than dependent upon the relationship 
between the unreported amount and the partial benefit credit.” Smith v. 
Unemployment Compensation Board of Review, 500 A.2d 186, 190 (Pa. Cmwlth. 
1985). 

The evidence of record supports the Board’s conclusion that Claimant 
omitted pertinent information from his application. Claimant admitted that he 
worked an average of 55 hours per week on the renovation project. He received 
$700 per month, which the Board found was not for project expenses since 
Woodward secured a line of credit at Lowe’s for Claimant to purchase supplies. 
Claimant also expected to receive 50 percent of the profit generated by the sale of 
the house.6 Claimant failed to disclose any of this relevant information when he 
applied for benefits during the relevant time period. Because this information 
would have affected either Claimant’s eligibility for benefits or the amount of 
benefits to which he was entitled, the Board did not err in holding that Claimant 
failed to comply with Section 401(c). 

Claimant argues, next, that the Board erred in its imposition of a fault 
overpayment. Claimant contends he was under no duty to report his home 
renovation activities and, therefore, he was not “at fault” when he collected $4,302 
in benefits to which he was not entitled. 

Section 804(a) of the Law, 43 P.S. §874(a),7 states that if a person 
receives unemployment benefits by reason of his fault, he will be responsible for 
repaying the amount received in error plus interest. The word “fault” within the 
meaning of Section 804(a) of the Law connotes “an act to which blame, censure, 
impropriety, shortcoming or culpability attaches....” Kelly v. Unemployment 
Compensation Board of Review, 840 A.2d 469, 473 (Pa. Cmwlth. 2004). Conduct 
that is designed improperly and intentionally to mislead the unemployment 
compensation authorities is sufficient to establish a fault overpayment. Id. For 
example, an intentional misstatement on an application for benefits can support a 
finding of fault. Matvey v. Unemployment Compensation Board of Review, 531 
A.2d 840, 844 (Pa. Cmwlth. 1987). To find fault, the Board must make some 
findings with regard to a claimant's state of mind. Kelly, 840 A.2d at 473. 

Here, the Board found Claimant “deliberately misled the Department” 
when he neglected to mention his home renovation activities, and rejected as not 
credible Claimant’s testimony to the contrary. Board Opinion at 2; F.F. 19. The 
Board’s findings regarding Claimant’s state of mind are supported by substantial 
evidence. First, Claimant filed a mechanic’s lien against the property “for the 
payment of a debt due [C]laimant as contractor for labor and services furnished by 
[C]laimant in the alteration and repair of the improvements.” Id.; F.F. 17. Second, 
Claimant testified that he understood that an individual applying for or collecting 
unemployment compensation benefits is obligated to inform the UC Service Center 
when he is “working for someone.” N.T. 17; R.R. 20a. Based on the foregoing 
evidence, the Board did not err in concluding that Claimant’s misstatements on his 
application for benefits were intentional and rendered him at fault for purposes of 
Section 804(a) of the Law. 

Finally, Claimant challenges the Board’s imposition of seventeen 
penalty weeks pursuant to Section 801(b) of the Law, 43 P.S. §871(b).8 Section 
801(b) allows the Board to impose an additional penalty upon a claimant who has 
received benefits to which he was not entitled. The Board may disqualify the 
claimant with respect to future claims for benefits, for a penalty period of two 
weeks and one additional week for each current week of improper payment. 
Disqualification is authorized under Section 801(b) when an applicant “makes a 
false statement knowing it to be false, or knowingly fails to disclose a material fact 
to obtain or increase” his unemployment compensation benefits. 43 P.S. §871(b). 

We have already affirmed the Board’s findings that Claimant omitted 
material information from his application and that he deliberately misled the UC 
Service Center in doing so. Thus, it follows that the Board did not err in 
concluding that Claimant knowingly failed to disclose a material fact in order to 
obtain or increase his benefits. Penalty weeks were appropriate. 

For the foregoing reasons, we affirm the order of the Board. 

MARY HANNAH LEAVITT, Judge