Thе question presented is whether R.C. 4123.82 bars an employer whose employee suffers injuries and recovers workers’ compensation therefor from recovering damages for increased workers’ compensation premiums from a third party whose conduct caused the employee’s injuries. This issue has vexed this court for decades.
R.C. 4123.82 states in pertinent part as follows:
“(A) All contracts and agreements are void which undertake to indemnify or insure an employer against loss or liability for the payment of compensation to workmen or their dependents for death, injury, or occupational disease occasioned in the course of such workmen’s employment, or which provide that the insurer shall pay such compensation, or which indemnify the employer against damages when the injury, disease, or death arises from the failure to comply with any lawful requirement for the protection of the lives, health, and safety of employees, or when the same is occasioned by the willful act of the employer or any of his officers or agents, or by which it is agreed that the insurer shall pay any such damages. * *
Truscon Steel Co. v. Trumbull Cliffs Furnace Co. (1929),
Midvale Coal Co. v. Cardox Corp. (1949),
*128 “Where a third party negligently injures an employer’s employee and such injury is a direct result of a breach of contract which the third party had with employee’s employer, and as a direct result of such breach the employer suffers damagеs, such damages are recoverable by the employer against the third party in an action for breach of contract.”
In Midvale the court stated at page 444 that “* * * it would seem that Section 1465-101 means that there shall be no agreements of insurance or indemnity in this state to insure or indеmnify any employer for any sums he may have to pay an injured employee or his dependents under the Workmen’s Compensation Act.” This was essentially the view adumbrated in the Truscon concurrence.
Midvale distinguished Truscon on the basis that Truscon dealt with a claim arising from the negligence of a third party whereas in Midvale the claim arose from a breaсh of contract. The court at 445 determined that the first paragraph of the Truscon syllabus was “very broad in its language in the use of the words ‘or otherwise,’ ” but concluded that the Truscon syllabus “must be confined and applied to the facts of that case.” Id.
Fischer Constr. Co. v. Stroud (1963),
The court in Fischer also determined that Truscon and Midvale could not be reconciled and overruled Midvale. The court did not, however, explain the basis for its preference for Truscon over Midvale, other than to state at page 33 that “the Truscon case holding does not permit recovery for negligence of a third party, whereas the Midvale case holding permits recovery against a third party for breach of a contract which flows from negligence. We now think that such differing results are without basis in reason, and that the better rule under the law and statutes is the one laid down in the Truscon case.”
The commentators have not been kind to Fischer. Professor Larson has written that in Fischer “* * * [t]he court supplies no discussion, no arguments, no authorities, no analogies, no reference to the fact that the result is inconsistent with that in every jurisdiction but one. The only supporting factor added is that the damages were speculative. * * *
“* * * As mattеrs now stand in Ohio, the employee gets a double recovery [workers’ compensation and damages from the third-party tortfeasor] and the employer gets no reimbursement even when he has been the victim of a breach of warranty by the third person.” 2A Larson, The Law of Workmen’s Compensation (1983) 14-778 to 14-779, Section 77.13.
Midvale, too, has been criticized. Professor Larson characterized the decision as “slightly weird,” stating that after Midvale (and before Fischer) “* * * if everyone pressed his rights to the utmost in Ohio, the result, * * * was this: the employer paid compensation and recovered from the party his added premiums, thus coming out approximately even; the employee recovered once from his employer in compensation and again from the third party in tort; and the third party paid twice, once to the employer for breach of contract and once to the employee for tort.” Larson, supra, at 14-777. Nevertheless, Professor Larson recognized that the Midvale outcome was largely attributable to the absence of an Ohio statute which would subrogate the employer to the employee’s claim against the third party to the extent of workers’ compensation received by the employee. Without a subrogation statute this court in Midvale was “* * * able to proceed squarely on the ground that this was a simple breach of contract, from which there naturally flowed as damages the increased premiums produced by the normal operation of the experience rating systems * * *. The fact that the third party might be subject to a double liability, once to the employer and again to the employee, did not disturb the court, since the third party was guilty of a breach of two duties.” Id.
In the instant case, as in Midvale, we are confronted with a third party who allegedly was “guilty of a breach of two duties.” Appellant urges this court to overrule Fischer and reinstate Midvale, and advances the arguments that thе court found persuasive in Midvale. Appellant, echoing the commentators, first contends that Fischer construed R.C. 4123.82 too broadly. The statute’s basic provision is that “[a]ll contracts and agreements are void which undertake to indemnify or insure an employer against loss or liability for the payment of compensation to workmen * * In Midvale, at page 445, the court stated that “the enactment of Section 1465-101 was to prevent competition with the state insurance fund by those who are in the business of
Appellant makes similar arguments with respect to its tort claims, namely that the Fischer rule is far too broad and that R.C. 4123.82 is not designed to insulate third parties from the consequences of their tortious conduct at the expense of employers. Appellant argues that R.C. 4123.82 does not apply because the statute by its terms is limited to “contracts” or “agreements,” which are not at issue when the claim sounds in tort. Moreover, as one commentator has observed, “[i]t makes little sense to continue the present rule denying emplоyers protection of the common law tortfeasor doctrine and giving them no right of recovery against negligent * * * [third parties]. This practice is doubly insulting because the * * * [third party] has benefited from employer dollars that placed the product in the hands of the worker.” Butler, supra, at 51, fn. 111.
We find appellant’s contentions to be well-taken. The Midvale interрretation of R.C. 4123.82 is consistent with the limited language of the statute while the Fischer holding goes far beyond the terms of the statute in precluding an employer from recovering “from any source.” If the Midvale approach creates asymmetrical relationships among the parties as the аppellees and commentators contend, this asymmetry results directly from the statutes as written. Moreover, under the Midvale rule, unlike Fischer, any additional burden falls on the third party whose conduct caused the injuries and not on the non-culpable employer.
The appellees make the superficially appealing argument that recognition of appellant’s cause of action would mix no-fault workers’ compensation law and fault-based theories of tort and contract. Thus, Container makes the argument that if this case goes to trial, then it and Heatbath “will be рermitted to interpose the common law defenses of the employer’s contributory negligence and its assumption of the risk, under our comparative negligence statute. More important, however, is the fact that the defendants will interpose the defense of the employee’s cоntributory negligence or assumption of the risk for the purposes of the comparative negligence statute and, moreover, interplead [sic] the employee himself in an effort to secure damages from him for his proportionate share of the damages to thе employer.” We reject this argument because a defendant in the position of the appellees in the instant case would only be liable for their comparative negligence. R.C. 2315.19.
The appellees further assert that the issue presented in this case is largely onе of policy. Therefore, according to the appellees, the matter should be resolved by the General Assembly. The appellees then note that the General
Finally, the appellees argue the damages sought are too speculative and remote to permit recovery. Although the Fischer court spoke of the speculative nature of the damages at issue, any question regarding the amount of damages seems to be one of рroof and not one of whether the statute precludes an employer from recovering increased workers’ compensation premiums as damages in a proper case.
We also reject the appellees’ contention that the damages sought by the appellant are too remote. In Dayton Power & Light Co. v. Westinghouse Elec. & Mfg. Co. (C.A. 6, 1923),
For the reasons hereinbefore stated, we hold that R.C. 4123.82 does not bar an employer whose employee suffers injuries and recovers workers’ compensation therefor frоm recovering damages for increased workers’ compensation premiums from a third party whose conduct caused the employee’s injuries. By this holding we expressly overrule Fischer and reinstate Midvale. Accordingly, the judgment of the court of appeals is reversed and the cause is remanded to the trial court for further proceedings.
Judgment reversed and cause remanded.