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State ex rel. Pruce v. Ohio Public Employees Retirement System Board

Court of Appeals of Ohio, Tenth District

February 27, 2018

The State ex rel. Deborah Pruce, Relator,
v.
Ohio Public Employees Retirement System Board and Geauga County Department of Job and Family Services, Respondents.

         IN MANDAMUS

          James M. Gillette, for relator.

          Michael DeWine, Attorney General, John J Danish and Mary Therese J Bridge, for respondent Ohio Public Employees Retirement System Board.

          James R. Flaiz, Geauga County Prosecuting Attorney, and Susan T. Wieland, for respondent Geauga County Department of Job and Family Services.

          DECISION

          TYACK, J.

         {¶ 1} Deborah Pruce filed this action in mandamus seeking a writ to compel the Ohio Public Employees Retirement System ("OPERS") to consider her to be a public employee from April 15, 2002 through January 31, 2009.

         {¶ 2} In accord with Loc.R. 13(M) of the Tenth District Court of Appeals, the case was referred to a magistrate to conduct appropriate proceedings. The parties provided the pertinent evidence to the magistrate and filed briefs. The magistrate then issued a magistrate's decision, appended hereto, which contains detailed findings of fact and conclusions of law. The magistrate's decision includes a recommendation that we deny the request for a writ.

         {¶ 3} No party has filed objections to the magistrate's decision.

         {¶ 4} Since no party has filed objections, we are to first analyze whether the magistrate's decision displays an error of law or fact on the face of the decision.

         {¶ 5} The magistrate's decision runs some 26 pages. It carefully analyzes the distinction in the Ohio Administrative Code between a public employee and an independent contractor. The magistrate correctly determined that OPERS did not abuse its discretion when it found that Deborah Pruce was an independent contractor during the pertinent time.

         {¶ 6} No error of law or fact is present on the face of the magistrate's decision. We, therefore, adopt the findings of fact and conclusions of law in the magistrate's decision and deny the request for a writ of mandamus.

         Writ of mandamus denied.

          KLATT and SADLER, JJ., concur.

         APPENDIX

         MAGISTRATE'S DECISION

          KENNETH W. MACKE, MAGISTRATE

         {¶ 7} In this original action, relator, Deborah Pruce, requests a writ of mandamus ordering respondent, Ohio Public Employees Retirement System Board ("OPERS" or "board"), to vacate its December 16, 2015 decision that adopted the March 31, 2015 report of its hearing examiner that determined that relator was not a public employee of the Geauga County Department of Job and Family Services ("JFS") from April 15, 2002 through January 31, 2009 and, thus, she is not entitled to OPERS membership during that period. The hearing examiner determined that relator was an "independent contractor" as defined by former Ohio Adm.Code 145-5-15(A)(2) and currently by Ohio Adm.Code 145-1-42(A)(2). As an "independent contractor" relator is excluded from OPERS membership for that time period.

         Findings of Fact:

         {¶ 8} 1. On April 8, 2013, relator completed an OPERS form captioned "NOTICE OF RIGHT AND REQUEST FOR: DETERMINATION FOR OPERS MEMBERSHIP." The form is designated by OPERS as form "PEDREQ." The purpose of the form is explained at the top of the first page:

You have been identified as an individual who provided personal services to a public employer prior to Jan. 7, 2013. You were classified as an independent contractor or another classification, other than a public employee, and no contributions were made to OPERS on your behalf for these services. Ohio law requires that the public employer provide you with this notice of your right to a request a determination as to whether you should have been classified as a public employee for these services.
In order to request that OPERS determine whether you should have been classified as a public employee, please complete the information below and return this form to OPERS at * * *. Ohio law provides that a request for determination must be made within one year from Jan. 7, 2013. No requests for determinations for personal services provided prior to Jan. 7, 2013 will be accepted after Jan. 7, 2014, unless you are able to demonstrate through medical records to the Board's satisfaction that you were physically or mentally unable to do so at the time the one-year period ended.

(Emphasis sic.)

         {¶ 9} On the second page, the form states: "I am requesting that OPERS issue a determination as to my eligibility for OPERS membership for services I provided to the following public employer."

          {¶ 10} In the space provided, relator named "Geauga County Job & Family Services" as her public employer. She further indicated that her job title with JFS was "Service Coordinator for Help Me Grow Program."

         {¶ 11} 2. By letter dated May 1, 2013, OPERS informed relator:

We have recently received Notice of Right and Request for Determination for OPERS Membership, Form PEDREQ, requesting a review of membership determination for service as an independent contractor with the Geauga County Job and Family Services as Service Coordinator for Help Me Grow for the period 2/22/2002 to 1/30/2009. Before we can determine whether you are eligible for OPERS service for this employment we must have additional information from you and the employer.
Please complete the enclosed Independent Contractor/Employee Determination for Worker, form PED-1EE relative to this service. * * * We have requested that the employer complete a separate form.

(Emphasis sic.)

         {¶ 12} 3. On November 25, 2013, relator signed an OPERS form captioned "Independent Contractor/Employee Determination for Worker." At the top of the first page of this four-page form, the form explains:

This form is used by OPERS to obtain information to determine whether a worker is a public employee for purposes of state retirement * * *.
* * *
Complete this form in its entirety, sign and date it, and submit it directly to OPERS at the above address. Any supporting documentation should accompany this form. The employer will complete and submit an Independent Contractor/Employee Determination for Employer (PED-1ER) that asks for similar information.

         {¶ 13} 4. By letter dated February 6, 2014 from "Employer Compliance Specialist" Rosetta M. Freeman, OPERS issued its staff determination pursuant to Ohio Adm.Code 145-1-10. The one-page letter explains the determination that relator was not a public employee for the period at issue:

I am writing in response to your request for a determination on whether you were a public employee for your service as Help Me Grow Service Coordinator for the period of 4/15/2002-2/1/2009.
Based upon my review of the information submitted by both parties, I find that you are not a public employee for the services provided during the time period stated above.
Please be advised Ohio Admin.Code 145-5-15 and 145-1-42(A)(2) defines an independent contractor as an individual who is party to a bilateral agreement which may be a written document, ordinance, or resolution that defines the compensation, rights, obligations, benefits and responsibilities of both parties; is paid a fee, retainer or other payment by contractual arrangement for particular services; is not eligible for Workers' Compensation, is not eligible for unemployment compensation; may not be eligible for employee fringe benefits such as vacation or sick leave; does not appear on a public payroll; is required to provide his own supplies and equipment, and provide and pay his assistants or replacements if necessary; is not controlled or supervised by personnel of the public employer as to the manner of work; and should receive an Internal Revenue Service Form 1099 for income tax reporting purposes.
According to the information submitted, your position was established with an annual contract by which both parties were in agreement. You were paid a fee per hour with a limit set not to exceed. You submitted invoices for compensation and received a 1099 for income tax purposes. You were allowed to subcontract your work after getting approval from the employer. Additionally, you did not receive fringe benefits such as sick, vacation or insurance, nor were you covered by the employer's Workers' Compensation or Unemployment Compensation, all which were addressed in your contract.
Based on this information and the above definition we have determined the working relationship to be not that of a public employee and; therefore, is excluded from contributing Ohio PERS membership per Section 145.012 of the Ohio Revised Code.
Any party may appeal this staff determination within thirty (30) days from the date of this letter. A written request for appeal, accompanied by additional information supporting the appeal, must be submitted to Julie Emch Becker, OPERS General Counsel.

         {¶ 14} 5. By letter dated March 1, 2014, relator administratively appealed the February 6, 2014 staff determination pursuant to Ohio Adm.Code 145-1-10.

         {¶ 15} 6. By letter dated April 30, 2014, OPERS, through its General Counsel, Julie Emch Becker, issued its senior staff determination pursuant to Ohio Adm.Code 145- 1-10(C). General Counsel's three-page letter explains:

This letter is in response to your March 1, 2014 appeal of the staff determination issued on February 6, 2014 finding that you were not an employee of the Geauga County Department of Job and Family Services ("JFS") as a Help Me Grow Service Coordinator from April 15, 2002 through January 31, 2009.
Based upon my review of this matter, I find that you were providing services as an independent contractor pursuant to a personal service contract and, therefore, you are not eligible for OPERS membership for this service.
Background
You first began providing services in April 2002. During the period in question, both parties acknowledge that you provided services pursuant to annual written contracts and that no OPERS contributions were remitted to OPERS. On February 2, 2009, you were hired by the Geauga County Board of Mental Retardation and Developmental Disabilities as a public employee.
Law and Analysis
Ohio Administrative Code 145-5-15(A)(2), [1] the relevant law in place during the period in question, defines an independent contractor as an individual who:
a) Is party to a bilateral agreement which may be a written document, ordinance, or resolution that defines the compensation, rights, obligations, benefits and responsibilities of both parties;
b) Is paid a fee, retainer or other payment by contractual agreement for particular services; c)Is not eligible for workers' compensation or unemployment compensation;
d) May not be eligible for employee fringe benefits such as vacation or sick leave;
e) Does not appear on a public payroll;
f) Is required to provide his own supplies and equipment, and provide and pay his assistants or replacements if necessary;
g) Is not controlled or supervised by personnel of the public employer as to the manner of work;
h) Should receive an Internal Revenue Service Form 1099 for income tax reporting purposes.
The information provided by you and Geauga County Auditor Frank Ghila demonstrates that you provided services as an independent contractor pursuant to annual written contracts, in which you are explicitly referred to as a "contractor." The Plan of Operation for each contract specifically outlined the duties performed and rate of compensation. Further, this document specifically states that you were not an employee of Geauga County and that you were not eligible for insurance, workers' compensation, sick or vacation leave or any other benefits offered to JFS employees. The contracts also support the fact that you did not appear on JFS payroll. Instead, you were required to submit billings for work performed at designated intervals and to maintain financial records to support the billings. Lastly, you received an IRS Form 1099 for income tax reporting purposes. After becoming an OPERS contributing member on February 2, 2009, you began receiving an IRS Form W-2.
The contracts also indicate that, unlike a public employee, you were responsible for researching and acquiring Professional Liability Insurance. If you chose not to carry Professional Liability Insurance, you would maintain sole responsibility for any claim or suit brought against JFS.
The hiring or paying of assistants was not an element related to your service. However, the contact [sic] did permit you to subcontract, with the prior written approval of JFS. Additionally, either party could terminate the contact [sic] with 30 days written notice to the other. JFS exercised this right of termination in the December 30, 2008 letter from Tim Taylor to you. While JFS provided (shared) office space, equipment and supplies, these factors alone are not determinative as the remaining requirements of Administrative Code 145-5-15 have been met. Further, JFS' supervision over your service seemed appropriate, given the nature of the services performed. JFS' supervision did not appear to be * * * excessive or unreasonable.
Conclusion
The record clearly establishes that you provided services to JFS as an independent contractor under a personal service contract during the relevant time period. As a result, you were not a public employee eligible for OPERS membership or service credit for this service.

         {¶ 16} 7. By letter dated June 25, 2014, relator, through counsel, administratively appealed the April 30, 2014 senior staff determination, pursuant to Ohio Adm.Code 145-1-11, to the OPERS board.

         {¶ 17} 8. With the appeal, counsel submitted as exhibits three written contracts captioned "Help Me Grow Home Visitor CONTRACT." (Emphasis sic.)

         {¶ 18} The first contract, exhibit 1, was executed by relator and a representative of JFS in April 2002. The contract covers the period April 15 through December 30, 2002. The four-page contract provides in part:

The scope and coverage of services to be provided by the CONTRACTOR, the program description and budget for those services, as well as other necessary components are described in the attached Plan of Operation, which is incorporated into this contract in its entirety by specific reference. The Plan of Operation will be maintained on file with JFS as a part of this contract.

(Emphasis sic.)

          {¶ 19} Appended to the contract is a two-page document captioned "Help Me Grow Home Visitor[, ] PLAN OF OPERATION." The Plan of Operation was executed by relator and a representative of JFS in April 2002. The Plan of Operation states in its entirety:

I. Compensation
For time spent in direct client contact (including travel time), preparation for direct client contact, follow-up to direct client contact, data entry or required reporting or training, CONTRACTOR will be compensated at a rate of $25.00 per hour.
II. Expenses
Mileage for necessary travel specifically related to services performed under this contract will be submitted on the existing JFS Expense Form. Mileage will be reimbursed at the rate determined by the Geauga Board of County Commissioners for county employees.
Other direct expenses specifically related to services performed under this contract, such as purchasing books, toys or other incentives, will be submitted to JFS prior to purchase on a JFS Encumbrance Request form. Subsequent to the purchase, the original receipt and description of the expense will be submitted on a JFS Expense Form for reimbursement. CONTRACTOR will use a JFS tax exempt form for purchases, as sales tax will not be reimbursed.
III. Space/Supplies
JFS shall furnish all supplies and equipment necessary for the CONTRACTOR to perform its duties hereunder. This includes, but is not limited to, paper, pens, phone access, copy machine access, computer access. JFS will also furnish office space in its building or other building, if appropriate. All materials, tools and supplies must remain on JFS premises unless otherwise agreed by JFS.
IV. Supervision
Clinical supervision of CONTRACTOR will be provided by JFS, either directly or through contract with another entity.
JFS will be responsible for administrative supervision of all CONTRACTORS, either directly or through contract with another entity.
V. Training
CONTRACTOR agrees to attend any training required by the ODJFS or the ODH, as related to the provision of services under this contract. Other relevant trainings may be attended, with prior approval of the JFS. Reimbursement for travel, lodging or meals related to Training, must have prior approval on a JFS Request for Outside Training. Expenses will be submitted on a JFS Expense Form, with original receipts, for reimbursement.
VI. Reporting and Data Entry
CONTRACTOR agrees to comply with all reporting requirements of JFS, ODHS, ODH or Family First Council. CONTRACTOR also agrees to enter data into the Early Track system, as required by the program, or to submit data for entry into the Early Track system, if appropriate.
VII. Independent Contractor
CONTRACTOR is employed as an independent contractor, not as an employee of the Geauga County Job and Family Services. Accordingly, the CONTRACTOR hereby acknowledges that JFS will not provide insurance, worker's compensation, medical benefits, vacation and sick leave, or any other perquisites and benefits which are received by employees of JFS.
VIII. Insurance
CONTRACTOR is responsible for researching and acquiring Professional Liability Insurance. If the CONTRACTOR chooses to not carry Professional Liability Insurance, the CONTRACTOR will maintain sole responsibility for any claim, suit or proceeding brought against them, or against the JFS directly related to services provided by the CONTRACTOR, on the issue of malpractice, or wrongdoing of any kind and agrees to hold JFS harmless in any such claim, suit or proceeding.

(Emphasis sic.)

         {¶ 20} The second contract, exhibit 2, submitted by relator with her appeal was executed by relator and a representative of JFS in July 2003. The contract covers the period July 1 through December 31, 2003.

         {¶ 21} Appended to the second contract is, again, a two-page document captioned "Help Me Grow Home Visitor[, ] PLAN OF OPERATION." (Emphasis sic.) The Plan of Operation, was executed by relator and a JFS representative in July 2003. The Plan of Operation executed July 2003 differs somewhat from the Plan of Operation executed in April 2002. The July 2003 Plan of Operation states in its entirety:

I. Compensation
For time spent in direct client contact, preparation for direct client contact, follow-up to direct client contact, data entry or required reporting or training, CONTRACTOR will be compensated at a rate of $25.00 per hour. Hours of service provided and charged by the CONTRACTOR under the terms of this shall not exceed one thousand and forty (1040) hours during the term of this contract.
As provided for in Section V. of this Plan of Operation, CONTRACTOR will be compensated at the rate of $25.00 per hour for a maximum of ten (10) hours per calendar year for time spent in mandated training.
For time spent in training beyond the ten hours of mandated training referred to in this section, CONTRACTOR will be compensated $25.00 for every two hours of training up to a maximum of eight hours of training per day. Reimbursement for training under this provision will not exceed twelve hours of reimbursement (twenty-four hours of training) during the contract year.
II. Expenses
Mileage for necessary travel specifically related to services performed under this contract will be submitted on the existing JFS Expense Form. Mileage will be reimbursed at the rate determined by the Geauga Board of County Commissioners for county employees.
Other direct expenses specifically related to services performed under this contract, such as purchasing books, toys or other incentives, will be submitted to JFS prior to purchase on a JFS Encumbrance Request form. Subsequent to the purchase, the original receipt and description of the expense will be submitted on a JFS Expense Form for reimbursement. CONTRACTOR will use a JFS tax exempt form for purchases, as sales tax will not be reimbursed.
III. Space/Supplies
JFS shall furnish all supplies and equipment necessary for the CONTRACTOR to perform its duties hereunder. This includes, but is not limited to, paper, pens, phone access, copy machine access, computer access. JFS will also furnish office space in its building or other building, if appropriate. All materials, tools and supplies must remain on JFS premises unless otherwise agreed by JFS.
IV. Supervision
The CONTRACTOR will receive a minimum of eight hours of Clinical Supervision on a monthly basis from a Clinical Supervisor designated by JFS. Clinical Supervision will occur through case reviews and by individual consultation. The CONTRACTOR agrees to follow the recommendations and guidance of the Clinical Supervisor.
The CONTRACTOR will receive program and administrative supervision from a Supervisor designated by JFS. The Supervisor will oversee the provisions of the Contract, the Plan of Operation, policies and procedures and administrative tasks such as time sheets, mileage, travel requests, travel reimbursements and encumbrance requests. A performance evaluation assessing clinical, programmatic and contractual performance will be conducted at least once per calendar year.
V. Training
CONTRACTOR agrees to attend any training required by JFS or the ODJFS, as related to the provision of services under this contract. Other relevant trainings may be attended, with prior approval of the JFS. Reimbursement for travel, lodging or meals related to Training, must have prior approval on a JFS Request for Outside Training. Expenses will be submitted on a JFS Expense Form, with original receipts, for reimbursement. Reimbursement for expenses for training submitted under this section will be limited to $400.00 for the term of this contract.
VI. Reporting and Data Entry
CONTRACTOR agrees to comply with all reporting requirements of JFS, ODHS, ODH or Family First Council. CONTRACTOR also agrees to enter data into the Early Track system, as required by the program, or to submit data for ...

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