State ex rel. The Newark Group, Inc. v. Administrator, Bureau of Workers’ Compensation
No. 19AP-544
IN THE COURT OF APPEALS OF OHIO, TENTH APPELLATE DISTRICT
June 8, 2021
[Cite as State ex rel. Newark Group, Inc. v. Admin., Bur. of Workers’ Comp., 2021-Ohio-1939.]
KLATT, J.
(REGULAR CALENDAR)
Rendered on June 8, 2021
On brief: Morrow & Meyer LLC, Corey V. Crognale, and Susan Chae, for relator.
On brief: Dave Yost, Attorney General, John R. Smart, for respondent.
IN MANDAMUS
ON OBJECTIONS TO THE MAGISTRATE‘S DECISION
KLATT, J.
{1} Relator, The Newark Group, Inc., commenced this original action in mandamus seeking an order compelling respondent, the Administrator of the Ohio Bureau of Workers’ Compensation (“BWC“), to vacate its order denying relator‘s request for full reimbursement from the surplus fund for amounts relator paid to a claimant as an additional award for relator‘s violation of a specific safety requirement (“VSSR“) after that award was overturned in subsequent proceedings.
{3} In support of the conclusion that a VSSR award is “compensation” under
{4} Because an erroneously paid VSSR award is compensation paid by an employer to a claimant, the magistrate found that
{5} The BWC has filed objections to the magistrate‘s decision. In its first objection, the BWC contends that “[t]he magistrate erred in finding a VSSR is compensation as applied to the employer.” The BWC argues that because the purpose of a VSSR award is to punish the employer, and the purpose of compensation paid to a claimant is to replace lost wages due to a workplace injury, a VSSR award paid by an employer to a claimant is not compensation under
{6} Regardless of the purpose of a VSSR award, or the general purpose of workers’ compensation benefits paid to a claimant, a VSSR award is compensation paid by an employer to the claimant.
{7} In its second objection, the BWC argues that the magistrate erred when he found that “a VSSR award is compensation to the employer.” However, the magistrate made no finding that a VSSR award is compensation to the employer. Rather, for the
{8} In its third objection, the BWC argues that the magistrate erred in misapplying the term “paid compensation,” as defined in
{9} Although not identified as a specific objection, the BWC also argues that because
{10} In determining whether
The language spells out conditions for reimbursement for state fund employers who have been the object of a VSSR finding and paid assessments for the violation, the VSSR award having been initially paid to the claimant out of the general fund. For state fund employers who have yet to be assessed, no out of pocket cost exists and no reimbursement should follow. The statute therefore addresses the differing conditions under which state fund and self-insured employers incur VSSR award expenses, since the latter pay such awards directly, and the former pay indirectly by means of subsequent assessments.
(Emphasis sic; Mag‘s. Decision at ¶ 45.)
{11} We agree with the magistrate‘s observation. Because the statute‘s specific reference to reimbursement of state-fund employers for erroneously paid VSSR awards is not superfluous or inconsistent with the finding that “compensation” as used
{12} Following an independent review of this matter, we find that the magistrate has properly determined the facts and applied the appropriate law. Therefore, we adopt the magistrate‘s decision as our own, including the findings of fact and conclusions of law contained therein. In accordance with the magistrate‘s decision, we grant relator‘s request for a writ of mandamus.
Objections overruled; writ of mandamus granted.
BROWN and MENTEL, JJ., concur.
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
State ex rel. The Newark Group, Inc., Relator, v. Administrator, Bureau of Workers’ Compensation, Respondent.
No. 19AP-544
(REGULAR CALENDAR)
MAGISTRATE‘S DECISION
Rendered on December 30, 2020
Morrow & Meyer LLC, Corey V. Crognale, and Susan Chae, for relator.
Dave Yost, Attorney General, John R. Smart, for respondent.
IN MANDAMUS
{13} Relator, The Newark Group, Inc. (“Newark Group“), brings this original action seeking a writ of mandamus ordering respondent, the Administrator of the Ohio Bureau of Workers’ Compensation (“BWC“), to vacate its order denying Newark Group‘s request for full reimbursement from the surplus fund for amounts paid to a worker pursuant to an additional award for Newark Group‘s violation of a specific safety requirement (“VSSR“) after the VSSR award was ultimately overturned in subsequent proceedings.
{14} 1. Newark Group is a corporation authorized to do business in the state of Ohio.
{15} 2. Newark Group is a self-insured employer under applicable Ohio workers’ compensation laws.
{16} 3. Newark Group participates in and has paid into BWC‘s Optional Disallowed Claim Reimbursement Program pursuant to
{17} 4. Newark Group‘s employee, John Ruckman, suffered an injury in the course and scope of his employment with Ohio Paperboard, a division or subsidiary of Newark Group, in 2012. (Stip. at 5.) Ruckman‘s claim was allowed for severe injuries. Ruckman filed in 2013 an application for an additional award, asserting that a VSSR by Newark Group caused his accident. (Stip. at 1.)
{18} 5. An Industrial Commission (“commission“) staff hearing officer (“SHO“) granted the VSSR award by order mailed May 7, 2015. (Stip. at 8.)
{19} 6. Newark Group began a mandamus action to set aside the VSSR award. The Tenth District Court of Appeals denied the writ. State ex rel. Ohio Paperboard v. Indus. Comm., 10th Dist. No. 15AP-871, 2016-Ohio-7005.
{20} 7. On appeal, the Supreme Court of Ohio reversed and granted a writ ordering the commission to vacate its order and enter an order denying the VSSR award. State ex rel. Ohio Paperboard v. Indus. Comm., 152 Ohio St.3d 155, 2017-Ohio-9233.
{21} 8. Newark Group sought and obtained reimbursement from the Sysco Fund in the amount of $165,506.26 for payments made to the claimant during the period the initial VSSR order was in force. (Stip. at 39, 48.)
{22} 9. By decision dated June 19, 2019, the BWC self-insured review panel determined that the Sysco Fund reimbursement was issued in error and ordered Newark Group to repay the funds to the BWC. (Stip. at 52.) Newark Group complied.
The Sysco case addressed an issue regarding temporary total compensation, not a VSSR award. Temporary total compensation is created under
R.C. 4123.56 . VSSR awards are penalties to employers created under theOhio Constitution, Article II, Section 35 which states “[s]uch board shall have full power and authority to hear and determine whether or not an injury, disease or death resulted because of the failure of the employer to comply with any specific requirement for the protection of the lives, health or safety of employees, enacted by the General Assembly or in the form of an order adopted by such board, and its decision shall be final.”Because VSSRs are penalties, they are treated differently than compensation. The non-adversarial nature of workers’ compensation proceedings does not apply to VSSR proceedings. See State v. Ohio Stove Co. (1950), 154 Ohio St. 27. Moreover, VSSR awards place a higher burden of proof on the claimant, namely strict construction as opposed to a mere preponderance of evidence used when determining compensation awards. State ex rel. Burton v. Indus. Comm. (1986), 39 Ohio St.3d 317, (“[b]ecause a VSSR award is a penalty...it must be strictly construed and all reasonable doubts concerning the interpretation of the safety standard are to be construed against its applicability to the employer.“). Procedurally, a VSSR award against a state fund employer, and a VSSR award against a self-insuring employer, are handled differently. For state fund employers, VSSR awards are paid upfront from the State Insurance Fund, with the payments subsequently billed by BWC dollar-for-dollar to the employer. Alternatively, active self-insuring employers are responsible for direct payment of VSSR awards, as was the case here.
Statutory construction also distinguishes VSSR awards from compensation. As a preliminary matter, counsel‘s reference to
R.C. 4123.512(F) is not found to be relevant to the issue before the Panel. Counsel also argued the applicability ofR.C. 4123.512(H)(1) , which states:An appeal from an order issued under division (E) of section 4123.511 of the Revised Code or any action filed in court in a case in which an award of compensation or medical benefits has been made shall not stay the payment of
compensation or medical benefits under the award, or payment for subsequent periods of total disability or medical benefits during the pendency of the appeal. If, in a final administrative or judicial action, it is determined that payments of compensation or benefits, or both, made to or on behalf of a claimant should not have been made, the amount thereof shall be charged to the surplus fund account under division (B) of section 4123.34 of the Revised Code. In the event the employer is a state risk, the amount shall not be charged to the employer‘s experience, and the administrator shall adjust the employer‘s account accordingly. In the event the employer is a self-insuring employer, the self-insuring employer shall deduct the amount from the paid compensation the self-insuring employer reports to the administrator under division (L) of section 4123.35 of the Revised Code. If an employer is a state risk and has paid an assessment for a violation of a specific safety requirement, and, in a final administrative or judicial action, it is determined that the employer did not violate the specific safety requirement, the administrator shall reimburse the employer from the surplus fund account under division (B) of section 4123.34 of the Revised Code for the amount of the assessment the employer paid for the violation. (Emphasis added.) The first italicized sentence only applies to compensation and/or medical benefits. A VSSR award is neither; hence, this provision does not apply. The second italicized sentence indicates, that for compensation or benefits, a self-insuring employer‘s remedy is to deduct the amount of the compensation or benefits from the required annual paid compensation report to determine annual self-insured assessments. The third italicized sentence sets forth how VSSR awards are treated. Most notably, the statute addresses relief for state fund employers and is silent as to VSSR awards for self-insuring employers.
When construing a statute, the Panel‘s main objective is to determine and give effect to the legislative intent. State ex rel. Solomon v. Police & Firemen‘s Disability & Pension Fund Bd. of Trustees (1995), 72 Ohio St.3d 62, 65. The intent of the General Assembly must be determined primarily from the language of the statute itself. Stewart v. Trumbull Cty. Bd. of Elections (1973), 34 Ohio St.2d 129, 130. When a statute is unambiguous, the statute is applied as written. Portage Cty. Bd. of Commrs. v. Akron (2006), 109 Ohio St.3d 106 (citing other cases). The plain wordings of
R.C. 4123.512(H) demonstrates the Ohio Legislature did not intend for self-insuring employers to be reimbursed for overturned VSSR awards. Further, the statute clearly did not include VSSR awards as compensation. Moreover, the statute separately addresses VSSR awards. Specifically, the statute sets forth how VSSR awards are to be treated for state fund employers only, and the statute is silent as to VSSR awards for self-insuring employers. The only conclusion that can be drawn is the statute does not apply to overturned VSSR awards for a self-insuring employer. The Sysco Fund assessment is authorized under
O.A.C. 4123-17-32(D) . This rule states the assessment to be “fund the portion of the surplus fund that is used for claims reimbursement for all self-insuring employers operating in Ohio who have not made an election to opt out of the right to reimbursement under the provisions of division (H) of section 4123.512 of the Revised code.” As noted above, there is no remedy inR.C. 4123.512(H) for the self-insuring employer to obtain reimbursement for overturned VSSR awards. (Emphasis sic.)
(Stip. at 49-50.)
{24} 11. The administrator‘s designee adopted the panel decision by order entered July 15, 2019. (Stip. at 55.)
{25} 12. Newark Group filed its complaint in mandamus on August 16, 2019, seeking a writ of mandamus to correct BWC‘s alleged abuse of discretion in denying Sysco Fund reimbursement to Newark Group for the overturned VSSR award.
Discussion and Conclusions of Law:
{26} Newark Group argues that exclusion of VSSR overpayment refunds from the Sysco Fund violates a self-insured employer‘s right to a remedy under
{27} For this court to issue a writ of mandamus as a remedy from a determination by BWC, Newark Group must show a clear legal right to the relief sought and that BWC has
{28} Newark Group first asserts that in Sysco, the Supreme Court held that denial of surplus fund TTD reimbursement to a self-insured employer violated the constitutional guarantee of a right to a remedy found in
{29} The magistrate notes that, other than its general discussion of the constitutional right to remedy and its inspiration of a legislative response, Sysco is not particularly instructive on the present facts. Sysco involved a right to recover TTD compensation from the surplus fund. Since the Supreme Court‘s decision in Sysco, numerous amendments to the statute and structure of such repayments have altered the legal framework under which the court addresses the current question. Moreover, because the matter can be resolved by reference to statutes, administrative rules, and Supreme Court precedent, the magistrate does not unnecessarily reach the constitutional arguments put forth here. A court should not reach constitutional arguments where legal arguments will dispose of the question. In re Miller, 63 Ohio St.3d 99 (1992); First Bank of Marietta v. Roslovic & Partners, Inc., 10th Dist. No. 03AP-332, 2004-Ohio-2717, ¶ 52.
{31} Most pertinently to the present case, “[i]t is a well-settled rule of statutory interpretation that statutory provisions be construed together and the Revised Code be read as an interrelated body of law.” State v. Moaning, 76 Ohio St.3d 126, 128 (1996). ” ‘This court in the interpretation of related and co-existing statutes must harmonize and give full application to all * * * statutes [concerning the same subject matter] unless they are irreconcilable and in hopeless conflict.’ ” United Tel. Co. of Ohio v. Limbach, 71 Ohio St.3d 369, 372 (1994) (brackets in United Telephone), quoting Johnson‘s Mkts., Inc. v. New Carlisle Dept. of Health, 58 Ohio St.3d 28, 35 (1991); see also State v. Cook, 128 Ohio St.3d 120, 2010-Ohio-6305, ¶ 45. But when statutes conflict, courts “must resort to statutory interpretation and construe the statutes so as to give effect to the legislature‘s intent.” Summerville v. Forest Park, 128 Ohio St.3d 221, 2010-Ohio-6280, ¶ 24; State v. Pribble, 158 Ohio St.3d 490, 2019-Ohio-4808, ¶ 12.
{32} Ascertaining legislative intent in creating the Sysco Fund requires some examination of history. The surplus fund is created under
{33} The legislature then enacted 2006 Am. Sub. S.B. No. 7 and replaced
{34} The question here is whether the
An appeal * * * in a case in which an award of compensation or medical benefits has been made shall not stay the payment of compensation * * * during the pendency of the appeal. If, in a final administrative or judicial action, it is determined that payments of compensation or benefits, or both, made to or on behalf of a claimant should not have been made, the amount thereof shall be charged to the surplus fund account under division (B) of section 4123.34 of the Revised Code. In the event the employer is a state risk, the amount shall not be
charged to the employer‘s experience, and the administrator shall adjust the employer‘s account accordingly. In the event the employer is a self-insuring employer, the self-insuring employer shall deduct the amount from the paid compensation the self-insuring employer reports to the administrator under division (L) of section 4123.35 of the Revised Code. If an employer is a state risk and has paid an assessment for a violation of a specific safety requirement, and, in a final administrative or judicial action, it is determined that the employer did not violate the specific safety requirement, the administrator shall reimburse the employer from the surplus fund account under division (B) of section 4123.34 of the Revised Code for the amount of the assessment the employer paid for the violation.
{36} Newark Group argues that, analytical distinctions aside regarding their deterrent purpose to the employer, VSSR awards remain “compensation” paid by an employer to the claimant. The magistrate agrees.
{37} VSSR awards find their source in the
When it is found, upon hearing, that an injury, disease or death resulted because of [a VSSR violation] such failure by the employer, such amount as shall be found to be just, not greater than fifty nor less than fifteen per centum of the maximum award established by law, shall be added by the board, to the amount of the compensation that may be awarded on account of such injury, disease, or death, and paid in like manner as other awards.
(Emphasis added.) While
{38} If the Supreme Court has under some circumstances found it useful to stress the punitive and prophylactic purposes of VSSR awards, the court has nonetheless clearly considered that such awards remain compensation in the broader sense:
While awards for violations of specific safety requirements are penal insofar as they affect employers, they are compensatory
insofar as the employee is concerned. State, ex rel. Emmich v. Indus. Comm. (1947), 148 Ohio St. 658, paragraph three of the syllabus. The award goes directly to the injured employee, not to the state as a fine. Although compensation is calculated with reference to some standard of employer culpability, additional awards for violations of specific safety requirements are an integral part of Ohio‘s workers’ compensation scheme. Thus, we find that such requirements have not been preempted by federal law.
State ex rel. Kroger Co. v. Indus. Comm., 62 Ohio St.2d 4, 6 (1980); see also, Fulton, Ohio Workers’ Compensation Law, Section 13.7 (5th Ed.2018). Even the most recent case cited by BWC in fact does nothing to support the panel‘s determination in this respect:
This is a workers’ compensation case in which appellee Industrial Commission awarded appellee Thomas Trousdale additional compensation for the violation of a specific safety requirement (“VSSR“) by appellant, Byington Builders, Ltd.
* * *
The SHO awarded additional compensation in the amount of 40 percent of Trousdale‘s maximum weekly rate due to this VSSR, finding that the violation was serious and noting that another worker had fallen off the same roof a few days before Trousdale fell.
State ex rel. Byington Builders, Ltd. v. Indus. Comm., 156 Ohio St.3d 35, 2018-Ohio-5086, ¶ 1, 13.
{39} The financial structure of the Sysco Fund also postulates that VSSR awards are compensation. Self-insured employers who opt-in to the Sysco Fund pay an additional assessment computed by multiplying “paid compensation” for the preceding year by a stated percentage.
{41} Moreover, the risk computation that results in the Sysco Fund premium determination for any participating employer includes amounts paid by the employer for VSSR awards. Yet under BWC‘s interpretation, the statute does not provide for reciprocal VSSR reimbursements that correspond to this risk calculation. Applying the rule that all related statutes must be read as a whole to give coherent effect to the legislature‘s intent, the general statutory scheme funding the Sysco Fund and the plain language governing disbursements therefrom give a clear right to reimbursement for Newark Group in this case.
{42} BWC counters this conclusion by pointing to the final sentence of
If an employer is a state risk and has paid an assessment for a violation of a specific safety requirement, and, in a final administrative or judicial action, it is determined that the employer did not violate the specific safety requirement, the administrator shall reimburse the employer from the surplus fund account under division (B) of section 4123.34 of the Revised Code for the amount of the assessment the employer paid for the violation.
{44} To give the final sentence the desired meaning, BWC must interpret the provisions of the statute to mean, first, that the initial section of
{45} Declining to take the final sentence as intended by BWC does not leave the language as “mere surplusage” in violation of principles of statutory interpretation. See generally, In re Acubens, 10th Dist. No. 17AP-870, 2018-Ohio-2607, ¶ 24. The language spells out conditions for reimbursement for state fund employers who have been the object of a VSSR finding and paid assessments for the violation, the VSSR award having been initially paid to the claimant out of the general fund. For state fund employers who have yet to be assessed, no out of pocket cost exists and no reimbursement should follow. The statute therefore addresses the differing conditions under which state fund and self-insured employers incur VSSR award expenses, since the latter pay such awards directly, and the former pay indirectly by means of subsequent assessments: “[I]f such compensation is paid
{46} In sum, the BWC panel abused its discretion by giving the pertinent statutes a meaning that the legislature could not have intended. It is therefore the decision and recommendation of the magistrate that this court issue the requested writ of mandamus ordering BWC to reimburse Newark Group from the Sysco Fund for payments made under the overturned VSSR award.
/S/ MAGISTRATE
MARTIN L. DAVIS
NOTICE TO THE PARTIES