2021 Ohio 1939
Ohio Ct. App.2021Background
- Relator The Newark Group is a participating self-insured employer that paid an additional award to employee John Ruckman after a staff hearing officer awarded a VSSR (violation of a specific safety requirement).
- The Ohio Supreme Court later reversed and vacated the VSSR award; Newark Group obtained reimbursement from the BWC "Sysco Fund" (optional surplus-fund reimbursement program for participating self-insurers) and was later ordered to repay that reimbursement by the BWC panel.
- BWC panel reasoned VSSR awards are penalties (not "compensation") and that R.C. 4123.512(H) does not authorize Sysco Fund reimbursement for self-insured employers where a VSSR award is vacated; administrator adopted the panel decision.
- Newark Group filed this original mandamus action seeking an order requiring BWC to vacate its denial and reimburse Newark Group from the Sysco Fund for the overturned VSSR payments.
- The magistrate found (and the court adopted) that VSSR awards paid to claimants are "compensation" for purposes of R.C. 4123.512(H) (citing constitutional, regulatory, and statutory definitions) and that BWC abused its discretion by denying Sysco Fund reimbursement to the self-insured employer; the Tenth District granted the writ.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a VSSR award paid by an employer to a claimant qualifies as "compensation" under R.C. 4123.512(H) | VSSR is "compensation" because Article II, §35 and OAC 4121-3-20 call it an "additional award of compensation," and OAC 4123-17-32(B) and R.C. 4123.35 include VSSR in "paid compensation." | VSSR is a punitive/prophylactic penalty (not wage-replacement compensation) and so falls outside the statute's reimbursement for "compensation." | Court: VSSR awards paid to claimants are "compensation" for purposes of R.C. 4123.512(H). |
| Whether participating self-insured employers may obtain surplus-fund (Sysco Fund) reimbursement for overturned VSSR payments | Yes — the reimbursement scheme covers any "compensation" later determined to have been wrongly paid, and the Sysco Fund's assessment calculations already include VSSR payments. | No — the 2014 statutory amendment expressly provides VSSR reimbursement for state-fund employers but is silent as to self-insured employers, implying exclusion. | Court: Reimbursement is available to participating self-insured employers; the 2014 amendment does not negate that result. |
| Whether BWC abused its discretion in denying the Sysco Fund reimbursement | BWC misinterpreted the statutes/regulations and thus abused its discretion; mandamus is appropriate to correct that legal error. | BWC's construction distinguishing penalties from compensation was reasonable and supported panel decision. | Court: BWC abused its discretion; mandamus granted ordering reimbursement. |
Key Cases Cited
- State ex rel. Kroger Co. v. Indus. Comm., 62 Ohio St.2d 4 (Ohio 1980) (describing VSSR awards as penal as to employers but compensatory as to employees)
- State ex rel. Sysco Food Servs. of Cleveland, Inc. v. Indus. Comm., 89 Ohio St.3d 612 (Ohio 2000) (recognized need for meaningful surplus-fund remedy for self-insured employers)
- State ex rel. Byington Builders, Ltd. v. Indus. Comm., 156 Ohio St.3d 35 (Ohio 2018) (discussing VSSR awards and their application)
- State ex rel. Ohio Paperboard v. Indus. Comm., 152 Ohio St.3d 155 (Ohio 2017) (Supreme Court vacating a VSSR award against the employer)
- State ex rel. Emmich v. Indus. Comm., 148 Ohio St. 658 (Ohio 1947) (historical precedent on VSSR awards going to employee)
- State ex rel. Frank Brown & Sons, Inc. v. Indus. Comm., 37 Ohio St.3d 162 (Ohio 1988) (characterizing VSSR awards and their legal treatment)