State ex rel. Manor Care, Inc., Relator,
Ohio Bureau of Workers' Compensation et al., Respondents.
MANDAMUS ON OBJECTIONS TO THE MAGISTRATE'S DECISION
Kegler, Brown, Hill Ritter Co., LPA, David M. McCarty,
Randall W. Mikes, and Katja E. Garvey, for relator.
Yost, Attorney General, and Sherry M. Phillips, for
respondent Ohio Bureau of Workers' Compensation.
1} Relator, Manor Care, Inc., filed this original
action requesting a writ of mandamus ordering respondent,
Ohio Bureau of Workers' Compensation ("BWC"),
to reimburse or credit relator for disabled workers'
relief fund ("DWRF") payments made by relator.
2} Pursuant to Civ.R. 53 and Loc.R. 13(M) of the
Tenth District Court of Appeals, this matter was referred to
a magistrate who issued a decision, including findings of
fact and conclusions of law, which is appended hereto. The
magistrate recommends this court deny the request for a writ
3} Relator has filed the following two objections to
the magistrate's decision:
I. THE MAGISTRATE'S FINDINGS OF FACT CONTAIN A GLARING
OMISSION WHICH TAINTS SUBSEQUENT ANALYSIS.
II. MANOR CARE HAS A CLEAR LEGAL RIGHT TO THE REQUESTED
RELIEF IN MANDAMUS.
4} As explained in the magistrate's decision,
relator is a self-insured employer. Two of relator's
former employees suffered injuries in the course of their
employment and were ultimately awarded permanent total
disability ("PTD") compensation. The orders
granting PTD compensation in each case did not set the rate
of compensation to be paid to each employee. Ultimately,
because both former employees' PTD compensation rate was
lower than the relevant statutory threshold amount, they
received DWRF payments from BWC and relator reimbursed BWC
for those DWRF payments. In 2014, BWC determined that both
former employees had been overpaid DWRF benefits because they
were underpaid PTD compensation. In 2015, BWC ordered relator
to compensate the two former employees in the amount of the
underpaid PTD compensation. Relator ultimately paid this
compensation to both former employees under protest. Relator
requested reimbursement or a credit from BWC for the amount
of overpaid DWRF compensation. BWC's Self-Insured Review
Panel ("SIRP") denied that request, holding that an
underpayment of PTD compensation may not be offset against an
overpayment of DWRF benefits paid and accepted in good faith.
Relator filed an administrative appeal of the SIRP order and
an administrator's designee for BWC issued a decision
upholding the SIRP order. Relator then filed the present
5} The magistrate concluded the administrator's
designee did not abuse her discretion in determining that
relator should not receive reimbursement or a credit from BWC
for the DWRF payments made to the former employees. The
magistrate found that the SIRP and the administrator's
designee did not abuse their discretion in placing some
degree of fault on relator for the underpaid PTD
6} Relator argues in its first objection that the
magistrate failed to refer to evidence in the record
suggesting that the Industrial Commission of Ohio
("commission"), rather than relator, set the PTD
compensation rate to be paid to the two former employees.
Relator asserts this omission taints the magistrate's
analysis of the decisions by SIRP and the administrator's
designee placing some of the fault for the underpayment of
PTD compensation on relator. Relator further argues in its
second objection that it has a clear legal right to the
requested writ because it was not at fault for the
underpayment of PTD compensation to the two former employees.
7} We acknowledge the record contains a copy of
BWC's Procedural Guide for Self-Insured Claims
Administration, which indicates the commission calculates the
PTD compensation rate in claims determined prior to April 19,
1999. Although this suggests relator may not have been
responsible for setting the PTD compensation rate paid to
each of the former employees, as noted in the decision of the
administrator's designee, relator had access to the wage
information used to set the PTD compensation rates.
8} The Supreme Court of Ohio has held that BWC's
ability to recoup excess DWRF payments from an injured worker
when those payments were made under a mistake of fact depends
on the circumstances. State ex rel. Martin v.
Connor, 9 Ohio St.3d 213, 214 (1984). In
Martin, the injured worker received PTD compensation
and federal Social Security Disability Benefits. When his
social security benefits were reduced, the worker became
eligible for DWRF payments. After receiving DWRF payments for
approximately five years, the worker's social security
benefits were increased and he was given a lump sum payment
that was determined to have been improperly withheld. BWC
then sought to recover overpayment of DWRF benefits,
asserting that if the lump sum social security benefits had
been properly issued when he was entitled to them, he would
have received less DWRF benefits. BWC ultimately discontinued
the worker's DWRF benefits and reduced his PTD award to
compensate for the alleged DWRF overpayment. Id. at
213. The worker filed a mandamus action and the Supreme Court
granted the requested writ of mandamus, ordering BWC to
continue full payment of PTD compensation and DWRF benefits.
The court found that because all parties believed the worker
was entitled to DWRF benefits at the time they were paid, BWC
abused its discretion by trying to recover those payments.
Id. at 214 ("While [BWC] has the authority to
recoup overpayments, that authority is not unlimited. This
court has reasoned that such authority does not extend to
payments made and accepted in the good faith belief that they
9} Similarly, this court held that an employer
failed to demonstrate a clear legal right to reimbursement or
a clear legal duty on BWC to pay reimbursement for DWRF
benefits that were improperly paid to an injured worker who
was not eligible for those benefits. State ex rel.
Lutheran Hosp. v. Buehrer, 10th Dist. No. 13AP-670,
2015-Ohio-380. In Lutheran Hospital, an injured
worker applied for and was awarded PTD compensation. She was
then notified that she would receive DWRF benefits. After a
rehearing at the employer's request, the worker's
application for PTD compensation was denied. Despite the
ultimate denial of PTD compensation, the worker received DWRF
benefits for nearly 20 years before BWC notified her the
benefits would be terminated. Throughout the period when the
worker received DWRF benefits, BWC billed the self-insured
employer for those payments. Id. at ¶ 4. The
employer then sought reimbursement from BWC for the DWRF
payments made to the injured worker. Id. at ¶
27. BWC denied the request for reimbursement and the employer
sought a writ of mandamus from this court. Id. at
¶ 32-33. We adopted the magistrate's decision
recommending that the writ be denied because both BWC and the
employer operated under a mutual mistake of fact during the
period when BWC was paying DWRF benefits to the injured
worker and the employer was reimbursing BWC for those
payments, and because the self-insured employer was in the
best position to correct that mistake. Id. at ¶
52, 59. In overruling the employer's objections to the
magistrate's decision, this court found that the employer
failed to present clear and convincing evidence that it had a
right to reimbursement or that the BWC had a duty to pay
reimbursement. Id. at ¶ 7.
10} Assuming for purposes of analysis in the present
case that the commission initially set the PTD compensation
rates, it appears that, similar to Lutheran
Hospital, both BWC and relator operated under a mutual
mistake of fact during the relevant period because both
believed the PTD compensation and DWRF benefit rates were
properly set and calculated. As in Lutheran
Hospital, relator was a self-insured employer and in the
best position to correct that mistake. Thus, consistent with
our prior decision in Lutheran Hospital, we find
that relator has failed to demonstrate clear and convincing
evidence that it has a right to reimbursement or that BWC has
a duty to pay reimbursement.
11} Accordingly, relator's objections to the
magistrate's decisions lack merit and are overruled.
12} Upon review of the magistrate's decision, an
independent review of the record, and due consideration of
relator's objections, we find the magistrate has properly
determined the pertinent facts and applied the appropriate
law. We therefore overrule relator's two objections to
the magistrate's decision and adopt the magistrate's
decision as our own, including the findings of fact and
conclusions of law contained therein. Accordingly, the
requested writ of mandamus is hereby denied.
overruled; writ of mandamus denied.
and LUPER SCHUSTER, JJ., concur.
on September 20, 2018
KENNETH W. MACKE MAGISTRATE
13} In this original action, relator, Manor Care,
Inc., requests a writ of mandamus ordering respondent Ohio
Bureau of Workers' Compensation ("respondent"
or "bureau") to vacate the April 6, 2016 decision
of the administrator's designee that affirms the
September 16, 2015 order of the bureau's Self-Insured
Review Panel ("SIRP") that denied relator's
request for reimbursement from the disabled workers'
relief fund ("DWRF") for relator's payments to
two injured workers for underpayments of permanent total
disability ("PTD") compensation.
14} 1. Following a February 17, 1994 hearing, two
commission staff hearing officer's ("SHO")
awarded PTD compensation to Mozell Kelly in her industrial
claim in which relator is the self-insured employer. The
SHO's order does not set the rate of PTD compensation to
be paid to Kelly by relator.
15} 2. Following a September 21, 1995 hearing, two
SHOs awarded PTD compensation to Katalin Palotay in her three
industrial claims in which relator is the self-insured
employer. The SHO's order does not set the rate of PTD
compensation to be paid to Palotay by the self-insured
16} 3. Because their PTD rates were lower than the
statutory mandated minimum rate, Kelly and Palotay received
DWRF benefits from the bureau.
17} 4. In 2014, the bureau conducted audits of Kelly
and Palotay's industrial claims and particularly the
payments of PTD compensation and DWRF benefits they had
18} 5. On September 25, 2014, the bureau mailed an
order regarding Palotay's industrial claim. The order
found that Palotay had been overpaid $32, 627.36 in DWRF
benefits because of an underpayment of PTD compensation. The
order further explained: "DWRF overpayments are recouped
by withholding the cost of living amounts from the date the
overpayment is determined."
19} 6. On September 30, 2014, the bureau mailed an
order regarding Kelly's industrial claim. The order found
that Kelly had been overpaid $46, 535.58 in DWRF benefits
because of an underpayment of PTD compensation. The order
further explained: "DWRF overpayments are recouped by
withholding the cost of living amounts from the date the
overpayment is determined."
20} 7. On January 28, 2015, relator filed a motion
in Kelly's claim, stating:
Now comes the employer and hereby requests that the
Industrial Commission exercise its continuing jurisdiction to
determine what obligation, if any, Manor Care has to pay
allegedly underpaid permanent total disability compensation
benefits to the claimant. The BWC has not issued a formal
order or formal audit findings demanding that Manor Care make
such payment. Documentation, to be submitted, will establish
that the claimant received all the compensation to which she
was entitled and the Bureau already has been fully reimbursed
for all payment of DWRF benefits it has paid. The Commission
should exercise its continuing jurisdiction to find that
neither the BWC nor the claimant are entitled to any
A similar motion was filed in Palotay's claims.
21} 8. Following an April 30, 2015 hearing, an SHO
issued an order in Kelly's industrial claim. The
SHO's order of April 30, 2015 rules on relator's
January 28, 2015 motion, and states:
The Staff Hearing Officer finds that the Bureau of
Workers' Compensation order of 09/30/2014 was the result
of a mistake of fact and law, in that 1) there is no evidence
that demonstrates that the Self-Insuring Employer's prior
payment of permanent total disability compensation was at a
rate calculated by the Self-Insuring Employer herein and not
at a rate determined and ordered by the Industrial Commission
(see, the Bureau of Workers' Compensation's
Procedural Guide for Self-Insured Claims Administration) and
2) a mistake of fact is evident in that the Bureau of
Workers' Compensation order presumes ...