ZARBANA INDUSTRIES, INC. v. JEREMY M. HAYES et al.
No. 18AP-104
IN THE COURT OF APPEALS OF OHIO, TENTH APPELLATE DISTRICT
December 11, 2018
2018-Ohio-4965
SADLER, J.
(C.P.C. No. 17CV-2705), (REGULAR CALENDAR)
Rendered on December 11, 2018
On brief: Bugbee & Conkle, LLP, Gregory B. Denny, and Mark S. Barnes, for appellant. Argued: Mark S. Barnes.
On brief: Michael DeWine, Attorney General, and John Smart, for appellees Industrial Commission of Ohio and Ohio Bureau of Workers’ Compensation. Argued: John Smart.
APPEAL from the Franklin County Court of Common Pleas
SADLER, J.
{¶ 1} Plaintiff-appellant, Zarbana Industries, Inc., appeals the judgment of the Franklin County Court of Common Pleas dismissing appellant‘s declaratory action for lack of jurisdiction. For the following reasons, we affirm.
I. FACTS AND PROCEDURAL HISTORY
{¶ 2} In June 2013, Jeremy M. Hayes was an employee of appellant when he sustained a serious injury to his right hand involving multiple amputations and fractures. After his workers’ compensation claim was allowed, on May 27, 2015, Hayes filed an application alleging appellant violated various specific safety requirements pursuant to
{¶ 3} By letter dated October 29, 2015, the Industrial Commission of Ohio (“commission“) informed the parties that the potential award in the VSSR claim ranged from $20,866 to $69,554, subject to increase as compensation is paid. The letter states that whether to negotiate a settlement is a discretionary matter between the parties, and “[i]f a settlement is reached, it is the policy of the [commission] to assist in bringing the matter to rapid conclusion.” (Claim Value at Settlement Letter at 1.) The letter points the parties to the commission‘s IC-10 VSSR Settlement Agreement form (“IC-10 form“), which is not required by the commission, to assist in expediting in the process. The letter indicates if settlement is reached, the parties should submit the IC-10 form for approval to the commission.
{¶ 4} A staff hearing officer (“SHO“) heard the merits of the VSSR application on March 17, 2016; a transcript of the hearing was filed on April 4, 2016. Before the SHO mailed a decision on the merits of the SHO application, the parties negotiated and eventually agreed to settle the VSSR claim for $2,000 and filed the IC-10 form with the commission on April 8, 2016. The IC-10 form filed by the parties states the settlement is “subject to the approval of the [commission].” (IC-10 Form at 1.) A hearing on the VSSR settlement was then scheduled for May 11, 2016 before the same SHO who heard the merits of the VSSR application. The commission denied appellant‘s request to cancel the hearing due to the settlement.
{¶ 5} On May 12, 2016, the SHO mailed two orders: one considering the merits of Hayes’ VSSR claim (“VSSR merit order“) and one considering the VSSR settlement (“denial of settlement order“). In the VSSR merit order, the SHO found a violation of
{¶ 6} Appellant filed an IC-12 notice of appeal asking the commission to reconsider and vacate the SHO‘s denial of settlement order, to set the request for reconsideration for hearing before the full commission, and to approve the VSSR settlement. The commission set appellant‘s request for reconsideration for a hearing, pursuant to
{¶ 7} On May 17, 2017, appellant filed in the common pleas court a complaint for declaratory action pursuant to
[E]nter judgment, declaring neither the Commission nor the [BWC] has authority over VSSR settlement agreements; declaring the Commission‘s [May 12, 2016 orders] void; and granting such other and further relief as the court deems just and proper.
(Compl. for Declaratory Jgmt. at 7.)
{¶ 8} On October 19, 2017, the BWC filed a motion to dismiss requesting the trial court dismiss the BWC as a party in the action. The trial court granted the motion to dismiss on December 16, 2017, stating “the [BWC] and [appellant] are not adverse parties and no controversy exists between them.” (Dec. 26, 2017 Entry at 4-5.)
{¶ 9} On January 22, 2018, the trial court filed a decision dismissing the case for lack of jurisdiction. The trial court offered two reasons to support its lack of jurisdiction. First, the commission has “original, exclusive jurisdiction over VSSR settlements” under Article II, Section 35 of the Ohio Constitution,
{¶ 10} Appellant filed a timely appeal.
II. ASSIGNMENT OF ERROR
{¶ 11} Appellant assigns the following as trial court error:
- I. THE TRIAL COURT ERRED IN IN [sic] FINDING IT LACKED JURISDICTION TO ADDRESS APPELLANT‘S DECLARATORY JUDGMENT ACTION.
- II. THE TRIAL COURT ERRED IN DISMISSING THE BUREAU OF WORKERS’ COMPENSATON [sic] FROM APPELLANT‘S DECLARATORY JUDGMENT ACTION.
III. STANDARD OF REVIEW
{¶ 12} Generally, “[d]ismissal of a declaratory judgment action is reviewed under an abuse-of-discretion standard.” Mid-Am. Fire & Cas. Co. v. Heasley, 113 Ohio St.3d 133, 2007-Ohio-1248, paragraph two of the syllabus, following Bilyeu v. Motorists Mut. Ins. Co., 36 Ohio St.2d 35, 37 (1973) (reviewing dismissal of declaratory actions under
{¶ 13} However, a dismissal based on the lack of subject-matter jurisdiction over a declaratory action “inherently raises questions of law, and our review is de novo.” Zupancic v. Wilkins, 10th Dist. No. 08AP-472, 2009-Ohio-3688, ¶ 6 (applying de novo review in addressing the issue of “whether the trial court had jurisdiction over appellants’ declaratory action, the resolution of which depends upon whether a declaratory judgment action is the appropriate mechanism by which to contest a determination made by the Tax
{¶ 14} “[S]ubject-matter jurisdiction involves a court‘s power to hear and decide a case on the merits.” B.H. at ¶ 14. “The standard for dismissal for lack of subject-matter jurisdiction is whether any cause of action cognizable in the forum has been asserted in the complaint.” Id.
IV. LEGAL ANALYSIS
A. Appellant‘s First Assignment of Error
{¶ 15} Appellant‘s first assignment of error contends the trial court erred in finding it lacked jurisdiction to address appellant‘s declaratory judgment action. Specifically, appellant argues the trial court erred in dismissing its declaratory judgment action for lack of jurisdiction because: (1) “neither the workers’ compensation statute nor the constitution of Ohio give the industrial commission or the [BWC] exclusive jurisdiction to intervene in settlements of VSSR claims“; and (2)
{¶ 16} The commission‘s authority in relation to VSSR claims originates in Article II, Section 35 of the Ohio Constitution, which reads in pertinent part:
For the purpose of providing compensation to workmen and their dependents, for death, injuries or occupational disease, occasioned in the course of such workmen‘s employment, laws may be passed establishing a state fund to be created by compulsory contribution thereto by employers, and administered by the state, determining the terms and conditions upon which payment shall be made therefrom. * * * Such 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.
{¶ 17} The statutory scheme enacted reflects this constitutional provision of authority and addresses VSSR violations in
{¶ 18}
Joint application of the claimant and the employer, or the administrator in a case where the settlement proceeds are to be paid from the state insurance fund, on an agreed settlement shall be considered by a staff hearing officer without hearing. Such an application to settle a violation application shall be considered by a staff hearing officer either prior to the determination of the application for an additional award for violation of a specific safety requirement, or after such an application has been adjudicated, and such agreed settlements shall be processed in the same manner. If the staff hearing officer finds that the settlement is appropriate, the staff hearing officer shall issue an order approving it. If the staff hearing officer does not find the settlement to be appropriate in its present form, the staff hearing officer shall schedule a hearing with notices to all parties and their representatives where the matter of the proposed settlement is to be considered. Following the hearing, the staff hearing officer shall issue an order either approving or disapproving the settlement, and the order shall be final.
(Emphasis added.) The rule cites
{¶ 19} Pursuant to
{¶ 20} “Courts of Common Pleas do not have inherent jurisdiction in workmen‘s compensation cases but only such jurisdiction as is conferred on them under the provisions of the Workmen‘s Compensation Act.” Jenkins v. Keller, 6 Ohio St.2d 122 (1966), paragraph four of the syllabus. The Supreme Court of Ohio has found that Article II, Section 35 of the Ohio Constitution “vests exclusive and final jurisdiction in the commission, with respect to specific-safety-requirement violations, subject to correction in mandamus upon a showing of an abuse of discretion.” State ex rel. B & C Machine Co. v. Indus. Comm., 65 Ohio St.3d 538, 541 (1992). See also OMG at ¶ 13. “Without question, specific-safety-requirement-violation determinations by the commission are not directly appealable to the court of common pleas.” B & C Machine Co. at 540. Richard Goettle, 2007-Ohio-4466, at ¶ 11 (affirming the trial court‘s dismissal of the employer‘s declaratory action complaint after concluding, “[g]iven the exclusivity of the Industrial Commission‘s jurisdiction, * * * the trial court properly held that it did not have jurisdiction to determine whether [the injured worker] had released his VSSR claim as a part of the settlement agreement“).
{¶ 21} In his first argument concerning the authority of the commission, appellant agrees the power to hear and determine VSSR applications lies exclusively with the commission under Article II, Section 35 of the Ohio Constitution,
{¶ 22} Appellant cites to State ex rel Ashcraft v. Indus. Comm., 15 Ohio St.3d 126 (1984), as an example of a case where the Supreme Court held that any action taken by the commission under a resolution adopted in a manner exceeding its authority was a nullity. Ashcraft was a case arising in mandamus and does answer the question of why the trial court had jurisdiction over the declaratory judgment action here. The other two cases cited by appellant originated through a direct administrative appeal and through an action for a writ of prohibition, respectively, and therefore likewise do not address the propriety of the declaratory action here. In re Application of Ohio Power Co., 144 Ohio St.3d 1, 2015-Ohio-2056 (considering an administrative appeal related to Public Utilities Commission of Ohio‘s power and authority under statute related to certain rates and charges); Chesapeake Exploration, L.L.C. v. Oil & Gas Comm., 135 Ohio St.3d 204, 2013-Ohio-224 (considering an action for a writ of prohibition to prevent the Oil and Gas Commission from exercising further jurisdiction in the appeal and to vacate any actions taken by the commission).
{¶ 23} Overall, appellant‘s first argument simply reiterates the merits of the declaratory action appellant filed in the trial court, which concerns the commission‘s authority relative to VSSR settlement agreements. However, appellant did not provide any argument or legal authority connecting why the commission‘s alleged lack of authority over VSSR settlement agreements necessarily means the trial court has jurisdiction over this declaratory judgment action. Therefore, appellant has not met his burden in demonstrating error on appeal in this regard.
{¶ 24} Appellant‘s second argument regarding the lack of a special statutory proceeding similarly falls short of demonstrating reversible error. Appellant agrees that a declaratory judgment action cannot be used to bypass a special statutory proceeding. Zupancic, 2009-Ohio-3688, at ¶ 19 (finding actions for declaratory judgment are inappropriate where a special statutory proceeding would be bypassed); Ferguson v. State, 151 Ohio St.3d 265, 2017-Ohio-7844.
{¶ 25} However, appellant argues the trial court erroneously found
{¶ 26} First, appellant‘s statement that the trial court found
{¶ 27} Furthermore, as provided above, the Supreme Court has found that Article II, Section 35 of the Ohio Constitution “vests exclusive and final jurisdiction in the commission, with respect to specific-safety-requirement violations,” resulting in VSSR determinations to be not directly appealable to the court of common pleas. B & C Machine Co. at 541; Richard Goettle at ¶ 11. Where a direct appeal of an administrative order is not provided by statute, this court has held it is nonetheless improper to use a declaratory action as a substitute for a direct appeal. Zupanic at ¶ 19-23 (addressing the issue of whether the trial court had jurisdiction over appellant‘s declaratory judgment action). In
{¶ 28} Collectively, under this assignment of error, appellant is essentially claiming a declaratory action is a proper vehicle to challenge “the validity of the Commission‘s authority under the workers’ compensation statute or under
{¶ 29} Accordingly, we overrule appellant‘s first assignment of error.
B. Appellant‘s Second Assignment of Error
{¶ 30} Appellant‘s second assignment of error contends the trial court erred in dismissing the BWC from its declaratory judgment action since BWC is a necessary party to the action. In the first assignment of error, we overruled appellant‘s assignment of error contending the trial court erred in dismissing the case due to the lack of jurisdiction. As a result, we find appellant‘s second assignment of error to be moot.
{¶ 31} Accordingly, appellant‘s second assignment of error is moot.
V. CONCLUSION
{¶ 32} Having overruled appellant‘s first assignment of error and finding the second assignment of error moot, we affirm the judgment of the Franklin County Court of Common Pleas.
Judgment affirmed.
TYACK and LUPER SCHUSTER, JJ., concur.