State ex rel. Bates v. Pub. Emps. Retirement Bd.

[Cite as State ex rel. Bates v. Pub. Emps. Retirement Bd., 2014-Ohio-1183.]

IN THE COURT OF APPEALS OF OHIO

TENTH APPELLATE DISTRICT

State ex rel. Marylou Altman-Bates et al., :

Relators, :

v. : No. 11AP-196

Public Employees Retirement Board : (REGULAR CALENDAR)

and Franklin County Commissioners,

:

Respondents.

:

D E C I S I O N

Rendered on March 25, 2014

John H. Bates, for Marylou Altman-Bates.

Amy Neyerlin, pro se.

Rebecca Steele, pro se.

Melani Anderson, pro se.

Michael DeWine, Attorney General, and Matthew T. Green,

for Ohio Public Employees Retirement Board.

Ron O'Brien, Prosecuting Attorney, Nick A. Soulas, Jr., and

Denise L. DePalma, for Franklin County Commissioners.

IN MANDAMUS

ON OBJECTIONS TO THE MAGISTRATE'S DECISION

BROWN, J.

{¶ 1} Relators, Marylou Altman-Bates, Amy Neyerlin, Rebecca Steele, and Melani

Anderson, four Franklin County Assistant Public Defenders, hired between January 1,

No. 11AP-196 2

1985 and December 31, 1998, have filed this original action requesting that this court

issue a writ of mandamus ordering respondent, Public Employees Retirement Board

("PERB"), to vacate its determination that relators were not public employees and thus

were not entitled to membership status and service credit during the tenure of their

employment under the Public Employees Retirement System ("PERS"). Relators also

request that the writ compel respondent, Franklin County Board of Commissioners

("Commissioners"), to remit employer and employee contributions to PERB on behalf of

relators for the relevant period.

{¶ 2} This matter was referred to a court-appointed magistrate pursuant to Civ.R.

53(C) and Loc.R. 13(M) of the Tenth District Court of Appeals. The magistrate issued the

appended decision, including findings of fact and conclusions of law, and recommended

that this court deny relators' request for a writ of mandamus. All four relators filed

objections to the magistrate's decision, and respondents filed memoranda in opposition to

relators' objections. Accordingly, this matter is now before this court for a full,

independent review.

{¶ 3} Analysis of relators' claims requires an overview of pertinent background

facts, legislative history, and case law. In 1976, the General Assembly enacted R.C.

Chapter 120, the Public Defenders Act, which established the Ohio Public Defender

Commission and authorized counties to create county and joint county public defender

commissions. In accordance with R.C. 120.13(A), the Commissioners established the

Franklin County Public Defenders Commission ("the FCPDC") to provide legal

representation to indigent criminal defendants. Pursuant to R.C. 120.14, the FCPDC

appointed attorney James Kura as the Franklin County Public Defender, and Kura hired

attorneys and support personnel to form the Franklin County Public Defender's Office

("the FCPDO"). The FCPDO operated as if it were a private, unincorporated association,

and both the FCPDO, as an employer, and its employees paid Social Security taxes on

their wages.

{¶ 4} In 1984, the General Assembly enacted R.C. 120.14(F), which authorized

county and joint county public defender commissions to contract with nonprofit

organizations to provide legal representation to indigent criminal defendants. Under the

authority of R.C. 120.14(F), the FCPDO was incorporated as a nonprofit corporation ("the

No. 11AP-196 3

FCPDO Nonprofit") on December 31, 1984, when its Articles of Incorporation were filed

with the Ohio Secretary of State.1 The Articles of Incorporation named the FCPDC as the

sole member of the corporation, and the five individual members of the FCPDC were

appointed as trustees. The FCPDC then contracted with the Commissioners and the city of

Columbus to provide legal representation for indigent criminal defendants in Franklin

County and the city of Columbus, and the FCPDC subcontracted with the FCPDO

Nonprofit to provide such services.

{¶ 5} Beginning January 1, 1999, respondents treated FCPDO Nonprofit

employees as public employees and enrolled them in PERS. At the same time, Social

Security contributions ceased.

{¶ 6} The present case is the latest of several concerning the employment status of

individuals employed by the FCPDO (in operation from 1976-1980) and the FCPDO

Nonprofit (in operation from 1985-1999). Because decisions of the Supreme Court of

Ohio in previous cases bear upon the present case, we discuss them at some length.

{¶ 7} In the first of these cases, State ex rel. Mallory v. Public Emp. Retirement

Bd., 82 Ohio St.3d 235 (1998), the Supreme Court granted a writ of mandamus ordering

PERB to credit Mallory, a former employee of both the FCPDO and the FCPDO Nonprofit,

with her years of service as a law clerk from 1978 to 1980 and an attorney from 1982 to

1994. With regard to Mallory's pre-1984 employment status, the court noted that "the

[FCPDC] was established and Kura was appointed as the Franklin County Public

Defender pursuant to the Public Defender Act of 1976" and that "[b]oth the [FCPDC] and

Kura exercised powers and duties pursuant to the Public Defender Act to comply with the

governmental duty to provide assistance of counsel to indigent criminal defendants." Id.

at 240-41. The court held that, prior to the incorporation the FCPDO Nonprofit in 1984,

the FCPDO employees were public employees under R.C. 145.01(A): "[P]re-1984 FCPDO

employees like [Mallory] were public employees during their employment with the

1 The Articles of Incorporation listed the corporate name as the Franklin County Public Defender. This

creates confusion because there were two entities with the same name—one an individual (and public

official) and the other a corporation. In order to mitigate this confusion, we use the abbreviations "FCPDO"

and "FCPDO Nonprofit" to differentiate the pre-incorporated Franklin County Public Defender in operation

from 1976-1984 from the post-incorporated Franklin County Public Defender in operation from 1985-1988.

For purposes of continuity and clarity, these abbreviations, as well as those previously set forth for the

FCPDC and the Commissioners have been incorporated into the previous court decisions rendered in the

lengthy litigation history concerning whether employees of the FCPDO Nonprofit qualified as public

employees pursuant to R.C. 145.01.

No. 11AP-196 4

FCPDO. Pursuant to statutory authority, FCPDO employees were employed by a county

agency [the FCPDC] and a county officer (Franklin County Public Defender Kura) to

perform a governmental function, i.e., the function of providing legal representation to

indigent criminal defendants, for which FCPDO employees were paid by the county." Id.

at 241.

{¶ 8} The Supreme Court went on to reject this court's conclusion that Mallory

was not a public employee because Franklin County Public Defender Kura, even prior to

the passage of R.C. 120.14(F) in 1984, had the authority to contract, and in fact had

contracted, with a private program (the FCPDO) to provide indigent legal representation.

In so doing, the court first noted that the record was devoid of any evidence of a contract,

written or oral, between Kura and the FCPDO. The court further found that any such

contract would have been invalid under R.C. 2921.42(A), which prohibits a public official

from having an unlawful interest in a public contract. The court stated that "[i]n

concluding that Kura had contracted with a private organization known as the FCPDO,

the court of appeals neglected to consider that a clear conflict of interest would have

existed if Kura, acting in his official capacity as the Franklin County Public Defender, was

permitted to determine the adequacy of services provided to the county by the 'private

agency' Kura himself directed." Id. at 242.

{¶ 9} Finally, the Supreme Court addressed whether the 1984 enactment of R.C

120.14(F), the incorporation of the FCPDO Nonprofit, and the contractual relationship

between the FCPDC and the FCPDO Nonprofit terminated Mallory's continued

membership in PERS. The court concluded that it did not, stating that an FCPDO

attorney who continued to represent indigent criminal defendants after the incorporation

of the FCPDO Nonprofit was entitled to continuing service credit with PERS under R.C.

145.01(A)(2). Id. at 245. R.C. 145.01(A)(2), colloquially referred to as the "carryover"

provision, defines a "public employee" as "[a] person who is a member of [PERS] and

who continues to perform the same or similar duties under the direction of a contractor

who has contracted to take over what before the date of the contract was a publicly

operated function."

{¶ 10} The Supreme Court next addressed the status of FCPDO and FCPDO

Nonprofit employees as public employees in State ex rel. Van Dyke v. Public Emp.

No. 11AP-196 5

Retirement Bd., 99 Ohio St.3d 430, 2003-Ohio-4123. Beginning in 1982, Van Dyke

worked for the FCPDO, first as a legal intern and then as a staff attorney. In 1985, after

the enactment of R.C. 120.14(F) and the incorporation of the FCPDO Nonprofit, Van Dyke

resigned her position and began working as a staff attorney in the Bureau of Support in

the Franklin County Court of Common Pleas, Division of Domestic Relations. In 1986,

Van Dyke resigned her position with the bureau of support and was rehired as a staff

attorney with the FCPDO Nonprofit, where she worked until 1991.

{¶ 11} Following the Supreme Court's decision in Mallory, PERB credited Van

Dyke with her years of service with the FCPDO from February 1982 to November 1985 but

refused to credit her for her employment with the FCPDO Nonprofit from 1986 to 1991.

Agreeing with PERB, the Supreme Court rejected Van Dyke's claim that she was entitled

to PERS credit for employment with the FCPDO Nonprofit because she was a "carryover"

employee under R.C. 145.01(A)(2). The court concluded that when Van Dyke "was

reemployed by FCPDO [Nonprofit] in April 1986, she was not 'continuing' her

employment with a private contractor that was taking over a previously publicly operated

function. Instead, in April 1986, she was beginning a term of employment with a private

contractor that years before had taken over the publicly operated function." Id. at ¶ 29.

The court further averred that Van Dyke "did not continu[e] in an unbroken chain of

service as an attorney for the county * * * when she returned to the FCPDO [Nonprofit]

and resumed her duties as a staff attorney. Rather, when she began her second period of

employment with FCPDO, it was no longer a county agency." Id. at ¶ 30.

{¶ 12} The present dispute began in 2001, when 51 present and former Franklin

County Assistant Public Defenders and support personnel, including relators, hired

between January 1, 1985 and December 31, 1998, sought a PERB determination that they

were public employees eligible for PERS membership and service credit during the

specified period. The claimants contended that the incorporation of the FCPDO into the

FCPDO Nonprofit did not effectuate private employment for claimants as intended.

Claimants maintained that the FCPDO Nonprofit was in fact a public employer under R.C.

145.01(D) rather than a private contractor, and that they were public employees entitled

to PERS membership. Claimants specifically alleged that, because the FCPDC was the

sole member of the FCPDO Nonprofit and FCPDC members were the trustees, the FCPDC

No. 11AP-196 6

retained sole authority to conduct the affairs of the FCPDO Nonprofit, and, accordingly,

the FCPDO Nonprofit was merely the "alter ego" of the FCPDC.

{¶ 13} PERS staff determined that the Supreme Court's holding in Van Dyke

precluded the claimants' claims. Upon appeal to PERB, the claimants advanced

arguments concerning agency, control, alter ego, lack of separate mind, will or existence

of its own, and piercing the corporate veil in an attempt to establish that because of the

control exerted by the Commissioners and the FCPDC over the FCPDO Nonprofit, the

purported private corporation, i.e., the FCPDO Nonprofit, remained a public employer.

{¶ 14} Based upon the Van Dyke court's characterization of the FCPDO Nonprofit

as a "private contractor," the PERB hearing examiner determined that the doctrine of

collateral estoppel precluded relitigation of the status of the FCPDO Nonprofit during the

post-1984 time period. Accordingly, the hearing examiner did not address the claimants'

arguments or evidence regarding the purported control exerted by the Commissioners

and the FCPDC over the FCPDO Nonprofit. The hearing examiner concluded that, during

the post-1984 time period, the FCPDO Nonprofit was not a public employer and the

claimants were not public employees. PERB accepted the hearing examiner's

recommendation and denied the claimants' request for PERS service credit for the period

from January 1, 1985 through December 31, 1998.

{¶ 15} Upon the claimants' request for a writ of mandamus, the Supreme Court

determined that "PERB abused its discretion by ruling that our previous decision in Van

Dyke * * * collaterally estopped [the claimants] from raising their claims for service

credit." State v. ex rel. Davis v. Pub. Emps. Retirement Bd., 120 Ohio St.3d 386, 2008-

Ohio-6254, ¶ 44. In so finding, the court averred that both of the previous cases

concerning PERS service credit of FCPDO and FCPDO Nonprofit employees, i.e., Mallory

and Van Dyke, involved claims based upon the carryover provision of R.C. 145.01(A)(2),

and that "[i]n neither case did the claimants raise the issue that [the claimants] do here—

that even after FCPDO was incorporated as a nonprofit organization on December 31,

1984, it remained a public employer because of the county's control of FCPDO. That is,

because the issue of the postincorporation status of FCPDO was not contested by the

claimants in Mallory or Van Dyke, we did not actually litigate or determine the issue." Id.

at ¶ 33. As a result, the court granted the claimants a limited writ of mandamus ordering

No. 11AP-196 7

PERB to vacate its order denying claims for PERS service credit and to issue a new order

adjudicating the merits of their claims. Id. at ¶ 44.

{¶ 16} Proceedings upon remand commenced in January 2009. On February 26,

2009, PERB issued a journal entry notifying the claimants2 that evidence and arguments

concerning the merits of their claims would be heard before a PERB hearing examiner

commencing on July 20, 2009. The entry expressly stated that each of the 51 claimants

was entitled to appear and be heard in support of his or her respective claim. The entry

also set forth in detail the procedures for the presentation of evidence and the order of the

hearing. These procedures included the opportunity for both direct and cross-

examination of and by each of the 51 claimants. The entry also provided that any

claimant could file written objections to, or move for clarification or correction of, the

procedural orders. Via correspondence dated March 3, 2009, all four relators were

provided copies of this entry.

{¶ 17} On June 15, 2009, the hearing examiner issued a journal entry that included

modifications to the February 26, 2009 scheduling entry. The order characterized the

July 2009 hearing as an opportunity for the parties to supplement the record following

the evidentiary hearing before PERB in April 2004. The entry further indicated that all

testimony at the July 2009 hearing would be presented through deposition or affidavit,

and all deposition testimony would be subject to cross-examination by any party, at any

time. The entry reiterated that any claimant could file written objections to, or move for

clarification or correction of, the procedural orders.

{¶ 18} On July 9, 2009, the hearing examiner issued another journal entry,

reiterating the foregoing procedural orders and notifying the parties that he would not be

present at the hearing. The entry set forth the procedures for the presentation of the

deposition testimony, including procedures regarding preservation of objections to

questions presented.

{¶ 19} Following the hearing, the hearing examiner, on November 30, 2009,

issued a 49-page report and recommendation, which included findings of fact and

conclusions of law. At the outset, the hearing examiner averred that whether the

2 Sometime after the remand, the law firm who had been representing all 51 claimants ceased representing

all but 12 of the claimants. Relators in the present action were not part of that group of 12. Altman-Bates

and Neyerlin retained new counsel, and Steele and Anderson proceeded pro se.

No. 11AP-196 8

claimants were public employees under R.C. Chapter 145 turned primarily upon whether

their employer was a public employer during the relevant time period and that the

claimants had the burden of proving the public nature of their employer by a

preponderance of the evidence. The hearing examiner stated that determination of the

employer's status as public or private involved consideration of the legal consequences of

having the FCPDO Nonprofit be subject to direction by both the FCPDC and the

Commissioners.

{¶ 20} The hearing examiner acknowledged the claimants' two overarching

assertions: (1) that because the FCPDC has the statutory obligation to provide public

defender services (under R.C. 120.14(F)) and exercised control over the operation of the

FCPDO Nonprofit's activities, the FCPDC and the Commissioners were actually the

claimants' employers, and (2) that the FCPDC's decision to establish the FCPDO

Nonprofit led to adverse consequences—the creation of two classes of employees within

the same office (those whose service predated the creation of the FCPDO Nonprofit in

1984 and who benefitted from the decisions in Mallory and Van Dyke and those who

were hired after creation of the FCPDO Nonprofit and were unaffected by the Mallory and

Van Dyke decisions)—that PERB was now required to mitigate.

{¶ 21} As to the first of claimants' assertions, the hearing examiner set forth a

detailed summary of the affidavit and deposition evidence presented, including appended

exhibits, regarding the creation and operation of the FCPDO Nonprofit and the degree of

control exerted over the FCPDO Nonprofit by members of the FCPDC. From this

evidence, the hearing examiner concluded that, from January 1, 1985 through

December 31, 1998, the FCPDO Nonprofit was a private nonprofit corporation and that

the claimants failed to establish that either the Commissioners or the FCPDC had

exercised control over the FCPDO Nonprofit "that was so complete that the non-profit

corporation had no separate mind, will, or existence of its own." (Report and

Recommendation, 46.) Accordingly, the hearing examiner determined that the claimants

were not public employees as they were not working for a public employer (either the

FCPDC or the Commissioners) during the relevant time period. The hearing examiner

instead found that "the [c]laimants' employer was a non-profit corporation authorized to

provide public defender services, including legal representation to indigent persons,

No. 11AP-196 9

authorized by and created pursuant to O.R.C. 120.14(F)." (Report and Recommendation,

46.) As to the claimants' second assertion, the hearing examiner determined that PERB

was without authority under R.C. Chapter 145 to correct the inequity created by the

decision to operate the public defender's office as a non-profit corporation and cease

PERS participation from 1985 to 1998.

{¶ 22} Several of the claimants, including relators Altman-Bates, Steele, and

Neyerlin, filed objections to the hearing examiner's report and recommendation. The

matter came before PERB on March 17, 2010. Following discussion, PERB voted to

accept the hearing examiner's report and recommendation. By letter dated March 22,

2010, PERB notified the claimants, including relators, of its decision. Thus, the claimants'

requests for PERS service credit were denied by a final administrative decision of PERB.

{¶ 23} Relators filed the present mandamus action on March 1, 2011.3 Following

briefing and oral argument, the magistrate issued a decision recommending that this

court deny relators' request for a writ of mandamus to compel PERB to vacate its decision

that they were not public employees and, thus, were not entitled to PERS service credit for

the time period from January 1, 1985 through December 31, 1998, and to compel the

Commissioners to remit employer and employee contributions to PERB on behalf of

relators for that time period.

{¶ 24} " '[M]andamus is an appropriate remedy where no statutory right of appeal

is available to correct an abuse of discretion by an administrative body.' " State ex rel.

Lucas Cty. Bd. of Mental Retardation & Dev. Disabilities v. Pub. Emps. Retirement Bd.,

123 Ohio St.3d 146, 2009-Ohio-4694, ¶ 15, quoting State ex rel. Pipoly v. State Teachers

Retirement Sys., 95 Ohio St.3d 327, 2002-Ohio-2219, ¶ 14. In the absence of a statutory

right to appeal PERB's determination of PERS service credit, mandamus is an appropriate

remedy. Lucas Cty. Bd. at ¶ 15, citing State ex rel. Schachter v. Ohio Pub. Emps.

Retirement Bd., 121 Ohio St.3d 526, 2009-Ohio-1704, ¶ 24.

{¶ 25} To be entitled to the requested writ of mandamus, relators were required to

establish that PERB abused its discretion by determining that they were not entitled to

PERS service credit. Lucas Cty. Bd. at ¶ 16, citing Davis at ¶ 25. To prove an abuse of

3The March 1, 2011 action was filed by Altman-Bates, Neyerlin, and Steele. On February 29, 2012,

Anderson moved to intervene as an additional relator in the action. The magistrate granted Anderson's

motion on March 1, 2012.

No. 11AP-196 10

discretion, relators must demonstrate that PERB's decision was unreasonable, arbitrary

or unconscionable. Id. In addition, PERB does not abuse its discretion if there is some

evidence to support its determination. State ex rel. Schaengold v. Ohio Pub. Emps.

Retirement Sys., 114 Ohio St.3d 147, 2007-Ohio-3760, ¶ 19.

{¶ 26} Relators Altman-Bates and Neyerlin jointly advance 17 objections to the

magistrate's decision, and relators Steele and Anderson jointly advance eight objections to

the magistrate's decision. Upon review of all 25 objections, we find that relators'

objections collectively set forth seven basic premises: (1) the magistrate applied an

incorrect standard of review, (2) the magistrate's decision is inconsistent with prior

decisions of this court and the Ohio Supreme Court, (3) the magistrate erred in failing to

find that spoliation of evidence occurred during the course of the proceedings, (4) the

magistrate erred in failing to find that PERB did not comply with the Supreme Court's

remand order in Davis, (5) the magistrate failed to consider certain arguments raised by

relators, (6) the magistrate improperly based her decision on respondents' subjective

intent, and (7) the magistrate erred in finding that PERB's decision is supported by some

evidence.

{¶ 27} Relators' first premise concerns the applicable standard of review.

Specifically, relators contend the magistrate improperly applied the "some evidence"

standard of review.

{¶ 28} Relators claim they were entitled to PERS service credit for the relevant

time period because they were public employees. Under R.C. 145.01(A)(3), a public

employee for purposes of PERS membership includes "an employee of a public

employer." Thus, relators' claim that they were public employees during the relevant time

period ultimately turns on whether the FCPDO Nonprofit was a public or private

employer. The FCPDO's status as a public or private employer is grounded upon whether

either the Commissioners or the FCPDC, or both, exercised such complete control over

the FCPDO Nonprofit that it had no separate mind, will or existence of its own, i.e.,

whether the FCPDO Nonprofit was merely the "alter ego" of the Commissioners or the

FCPDC. As properly found by the magistrate, this determination is a factual one;

accordingly, PERB's conclusions that the FCPDO Nonprofit operated as a private entity

and not as the "alter ego" of the Commissioners or the FCPDC and that relators were

No. 11AP-196 11

employees of this private entity, must be reviewed under the "some evidence" standard.

Because the magistrate properly employed this standard, no error occurred.

{¶ 29} Under their second premise, relators contend the magistrate's decision

either disregards or is inconsistent with the Supreme Court's decisions in Mallory, Van

Dyke, and Davis and with this court's previously vacated decision in State ex rel. Kura v.

Pub. Emp. Retirement Bd., 10th Dist. No 01AP-56 (Dec. 20, 2001) (memorandum

decision).

{¶ 30} Careful review of the decision reveals that the magistrate properly outlined

and applied the Supreme Court's decisions in Mallory, Van Dyke, and Davis to the

present case. Relators' assertions to the contrary are thus without merit.

{¶ 31} Relators' contentions regarding this court's Kura decision are similarly

misplaced. In Kura, Kura's widow attempted to collect from PERS a refund of employee

contributions which should have been made during Kura's service with the FCPDO (1976-

1984) and with the FCPDO Nonprofit (1985-October 1992). Following the Supreme

Court's decision in Mallory, the Commissioners remitted employer and employee

contributions for employees of the FCPDO but not for Kura. Adopting the magistrate's

decision, this court concluded that Kura should have been treated the same as the other

employees affected by the Mallory decision and considered a carryover employee under

R.C. 145.01(A)(2). In adopting the magistrate's decision, this court adopted the

magistrate's averment that Kura was a public employee as defined in R.C. 145.01(A) from

July 1976 to October 1992.

{¶ 32} After the case settled, this court vacated its memorandum decision. In its

February 4, 2002 judgment entry, this court stated, "[t]he Judgment Entry,

Memorandum Decision and Writs of Executions heretofore issued by this Court on

December 20, 2001, are set aside and shall not be binding on the parties or of prospective

precedential effect." Citing federal case law, relators contend that this court improperly

vacated the Kura decision and, therefore, we must reinstate it. The cases upon which

relators rely are inapposite to the present case, as they involved situations where parties

to the litigation filed contemporaneous challenges to a request or motion to vacate.

Relators do not direct us to any case law which would permit them—non-parties in

Kura—to collaterally attack this court's vacatur decision more than a decade after the fact.

No. 11AP-196 12

{¶ 33} Furthermore, reinstatement of the Kura decision would not aid relators'

cause. Relators contend that this court's statement that Kura was a "public employee"

constituted a dispositive ruling that employees of both the FCPDO and the FCPDO

Nonprofit are public employees entitled to PERS membership. As noted by the

magistrate, relators take this statement out of context. This court simply indicated that

PERS had abused its discretion when it failed to treat Kura the same as other similarly

situated employees following the Mallory decision, i.e., a carryover employee following

incorporation of the FCPDO Nonprofit. Kura did not address the status of individuals

initially hired after the incorporation of the FCPDO Nonprofit.

{¶ 34} Relators maintain in their third premise that the magistrate erred in failing

to find that spoliation of evidence occurred in this case, resulting in a denial of relators'

due process rights.

{¶ 35} As previously noted, the present case resulted from a remand order by the

Supreme Court in Davis. Upon remand, PERB reopened the record. A hearing was held

on July 20 and 21, 2009. All claimants, including relators, were provided the opportunity

to submit testimony and documentary evidence, as well as legal memoranda, pertaining

to their claims.

{¶ 36} On February 8, 2012, PERB filed four volumes of certified evidence and

served copies of these volumes on all parties. The certified record consisted of all filings

and evidentiary materials submitted to PERB following the remand in Davis through

PERB's ultimate determination in March 2010.

{¶ 37} On March 8, 2012, relators filed a motion seeking to compel PERB to

"transfer and supplement the record with the entire/complete OPERS record,"

specifically, "the entire Davis record." (Mar. 8, 2012 motion.) PERB opposed the motion

on grounds that the majority of the materials sought were duplicative of materials that

had already been submitted, that requiring PERB to bear the entire cost of copying and

filing the entire Davis record was unreasonably burdensome and cost prohibitive and that

relators could access the entire Davis record on microfiche in the Franklin County Clerk

of Court office.

{¶ 38} On March 16, 2012, relators filed a "Motion for Adverse Inference –

Spoliation of Evidence," requesting that this court "order a legal presumption and factual

No. 11AP-196 13

finding under the 'adverse inference' doctrine" that PERB had negligently or intentionally

destroyed evidence included in the Davis record that "would have unequivocally proved

that Relators were public employees and that Respondents are liable to Relators for their

OPERS retirement service credits." (Mar. 16, 2012 motion.) Respondents requested a

status conference to resolve the issue.

{¶ 39} Following a May 1, 2012 status conference, the magistrate, on May 2, 2012,

memorialized an order directing the following procedure: (1) counsel for the

Commissioners was to file and distribute to the parties a copy of the Davis record in CD

form, (2) the parties were to review the disc to determine what parts of the record were

relevant and necessary for determination of the issues before the court, (3) the parties

were to discuss whether the record was complete, (4) any party unsatisfied with the state

of the record was to advise the court, and (5) a briefing order or status conference was to

follow.

{¶ 40} On August 10, 2012, relators filed a second motion for an order directing

PERB to transfer the original Davis record and a second motion for adverse inference in

regard to the alleged spoliation of evidence. PERB opposed the motion, arguing that,

pursuant to the magistrate's May 2, 2012 directive, the certified record from the Davis

case had been obtained from the clerk and reviewed by the parties and that no party had

advised the court of any dissatisfaction with the record. PERB further maintained that no

"adverse inference" finding was required, as relators had failed to support their claim that

PERB destroyed evidence and that they were prejudiced by the alleged destruction.

{¶ 41} On September 17, 2012, the magistrate denied relators' motion, noting that

relators had been provided "a CD copy of the evidence" and had failed to produce "any

evidence supporting an argument that the record is not complete." (Sept. 17, 2012

Magistrate Order.)

{¶ 42} In her April 30, 2013 decision, the magistrate acknowledged relators'

continued allegation that PERB had failed in its duty to preserve the record and had, in

fact, destroyed evidence crucial to relators' claims. The magistrate found it disingenuous

for relators to raise the issue, given that respondents had complied with an earlier order to

prepare a CD of the record, that relators were provided time to review the record and to

No. 11AP-196 14

inform the magistrate if any documents were missing, and that relators failed to challenge

the evidentiary record.

{¶ 43} We find no error in the magistrate's conclusion. While relators continue to

argue that PERB lost or destroyed evidence related to their claims, they offer nothing

beyond conjecture in support of their assertion.

{¶ 44} Relators in their fourth premise contend that the magistrate erred in failing

to find that PERB failed to comply with the Supreme Court's remand order in Davis.

Relators maintain that, because the hearing examiner did not physically attend the July

2009 evidentiary hearing, the proceedings did not constitute an adjudication on the

merits of their claims in contravention of the remand order.

{¶ 45} Former Ohio Adm.Code 145-1-11(C)(1) permitted PERB to refer

membership determinations to an independent hearing examiner prior to making a final

decision on the matter. Former Ohio Adm. Code 145-1-11(C)(1)(a) required the appointed

hearing examiner to "conduct a hearing" and issue a report and recommendation.

Former Ohio Adm.Code 145-1-11(C)(1)(b) mandated that a transcript of the hearing be

made and that all parties be permitted to submit both testimonial and documentary

evidence at the hearing. However, former Ohio Adm.Code 145-1-11 did not specify how

the hearing examiner was to "conduct a hearing."

{¶ 46} As noted above, in the months leading up to the July 2009 hearing, all the

claimants, including relators, were notified of the procedures to be employed at the

hearing. These procedures included submission of testimony through affidavit or

deposition. Relators, like the other claimants, were permitted to testify and cross-

examine the other testifying witnesses. In addition, all the claimants, including relators,

were timely notified that the hearing examiner would not be present at the hearing.

Although relators were provided the opportunity to raise objections to these procedures,

none did so. Following the hearing, relators had the opportunity to submit briefing and

documentary evidence.

{¶ 47} In his report and recommendation, the hearing examiner averred that he

had thoroughly reviewed and considered all testimony and exhibits prior to entering his

findings, conclusions, and recommendation. The hearing examiner set forth in great

No. 11AP-196 15

detail the evidence presented regarding the claimants' alter ego and control theory,

including a detailed recitation of the submitted affidavit and deposition testimony.

{¶ 48} For the foregoing reasons, we find that, despite the hearing examiner's

physical absence from the two-day evidentiary hearing, relators were provided a full and

fair opportunity to present the merits of their alter ego and control theory. Accordingly,

we find that PERB fully complied with the Supreme Court's remand order in Davis and

the magistrate did not err in failing to find otherwise.

{¶ 49} In their fifth premise, relators contend the magistrate failed to consider

certain arguments raised by relators. Steele and Anderson contend that the magistrate

failed to address the arguments asserted in their merit brief. While the magistrate's

decision identifies only the specific propositions of law raised by relators Altman-Bates

and Neyerlin, review of the arguments set forth in the Steele/Anderson merit brief

demonstrates that they are duplicative of, and subsumed within, those raised in the

Altman-Bates/Neyerlin merit brief.

{¶ 50} Relators Altman-Bates and Neyerlin contend the magistrate failed to

consider their argument regarding the legal effect of the March 1999 renewal of the

FCPDO Nonprofit's Articles of Incorporation. Relators summarily assert that the FCPDO

Nonprofit's filing of a Statement of Continued Existence with the Ohio Secretary of State

in March 1999 established that the FCPDO Nonprofit was defectively and illegally

established at the outset. Relators point to no evidence demonstrating that either the

FCPDO Nonprofit's Articles of Incorporation or the Statement of Existence were

defective. Further, relators do not cite any authority for its proposition that the FCPDO

Nonprofit was required to dissolve in 1998 in order for it to have been a valid nonprofit

corporation in 1985.

{¶ 51} Respondent Commissioners maintain that the FCPDO Nonprofit filed the

Statement of Continued Existence in order to recover social security contributions made

on behalf of those employees who were found in Mallory to be carryover employees.

According to the Commissioners, only the contributing employer, i.e., the FCPDO

Nonprofit, could recover those contributions. Evidence in the record establishes that the

FCPDO Nonprofit was working toward that recovery, and relators point to no

No. 11AP-196 16

contradictory evidence. Accordingly, even assuming the magistrate failed to consider

relators' argument, no prejudice resulted.

{¶ 52} Under their sixth premise, relators contend the magistrate improperly

based her decision to deny the writ of mandamus upon the subjective intent of

respondents, rather than objective evidence in the record, as to the incorporation of the

FCPDO Nonprofit. In support, relators cite two statements from the magistrate's

decision. The first statement was made in the context of discussing the initial formation

of the FCPDO in 1976: "review of the earliest documents in the record concerning the

formation of the FCPDO establishes that the reason this format was utilized was to avoid

what many saw as a legitimate conflict: that the government should not both prosecute

and defend indigent criminal defendants." (Magistrate Decision, 11.) The second

statement was made in the context of discussing relators' argument that the FCPDO

Nonprofit was created for the sole purpose of avoiding enrolling the post-1985 hires in

PERS: "all the evidence reviewed beginning with the first meeting where the matter was

first discussed leads to one conclusion: because of the perceived conflict of interest in

having the county both prosecute criminal defendants and defend criminal defendants,

steps were taken to create a private entity with whom the county would contract for those

services." (Magistrate Decision, 23-24.)

{¶ 53} Contrary to relators' assertion, the magistrate did not conclude that

respondents' subjective intent was a relevant factor in analyzing the merits of relators'

alter ego and control claims. The magistrate expressly stated, "[t]he question currently

before this court focuses on whether or not the actions taken after the General Assembly

enacted the amendments to R.C. Chapter 120 and the [FCPDO Nonprofit] was

incorporated as a non-profit corporation were sufficient to carry out the original goal of

creating a non-government organization." (Magistrate Decision, 11.) In addressing that

question, the magistrate thoroughly analyzed all of relators' arguments regarding their

alter ego and control theory and concluded that some evidence supported PERB's

conclusion that neither the Commissioners nor the FCPDC had exercised such complete

control over the FCPDO Nonprofit that it had no separate mind, will or existence of its

own. Thus, it was analysis of the objective evidence in the record, not the subjective

No. 11AP-196 17

intent of respondents in creating the FCPDO Nonprofit, upon which the magistrate

recommended denial of the writ.

{¶ 54} In their seventh and final premise, relators contend the magistrate erred in

concluding that PERB's decision was supported by "some evidence." Relators' arguments

in this regard fall into one of two categories: (1) the magistrate erred by failing to give

sufficient weight to certain evidence in the record or (2) the magistrate erred in rejecting

relators' legal arguments challenging the formation of the FCPDO Nonprofit.

{¶ 55} Regarding the first category, relators point to evidence in the record that

they insist compels the conclusion that, between 1985 and 1998, their employer, the

FCPDO Nonprofit, was the alter ego or under the control of the FCPDC or the

Commissioners, and, therefore, they were public employees employed by a public

employer. For instance, relators note that during the relevant time period, the

Commissioners provided them with group health insurance and resolved to obligate the

county for accrued vacation and unemployment costs should the FCPDO Nonprofit cease

doing business; in addition, relators participated in the Ohio Deferred Compensation

program. Relators also cite evidence that the FCPDC set policies for day-to-day

operations of the FCPDO Nonprofit.

{¶ 56} After examining all the evidence, however, the magistrate concluded that

PERB's finding—that between 1985 and 1998, the FCPDO Nonprofit functioned as a

private, nonprofit corporation, independent of the Commissioners and the FCPDC, and

that relators were employed by this private employer—was supported by some evidence.

{¶ 57} A review of the record reveals that "some evidence" supports the

magistrate's finding. For example, the FCPDO Nonprofit's Articles of Incorporation

designate that it is a "non-profit corporation" formed in accordance with R.C. Chapter

1702, for the primary purpose of providing free legal representation to indigent persons in

Franklin County. As noted by the hearing examiner, the FCPDO Nonprofit maintained

the requisite functions of a bona fide corporation: it had a statutory agent, it promulgated

internal policies, it obtained audits of its financial accounts, its officers held meetings and

recorded those meetings through corporate minutes, its officers acted through the

adoption of resolutions, and it entered into contracts.

No. 11AP-196 18

{¶ 58} In addition, prior to the incorporation of the FCPDO Nonprofit, both

meeting minutes of the FCPDC and organizational charts of the FCPDO referred to the

position held by Kura as the Franklin County Public Defender. On January 9, 1985, the

FCPDO Nonprofit adopted its Code of Regulations, which created the position of Director,

and appointed Kura to that position. The FCPDO Nonprofit's meeting minutes and

organizational charts consistently identified Kura's position and that of his successor,

Judith Stevenson, as "Director." After January 1, 1999, when the employees of the

FCPDO Nonprofit became public employees, the position once again was identified as the

"Franklin County Public Defender," not the "Director" of the FCPDO Nonprofit. In

addition, contracts between the FCPDC and the FCPDO Nonprofit specifically identify the

counterparty to the FCPDC as the "Franklin County Public Defender, an Ohio non-profit

corporation."

{¶ 59} Testimony provided at the hearing also provides "some evidence" that the

FCPDO Nonprofit operated independently of the FCPDC and the Commissioners.

Although the FCPDC set policies for day-to-day operations of the FCPDO Nonprofit,

implementation of those policies was exercised by the Director of the FCPDO Nonprofit,

not the FCPDC or the Commissioners. Employee paychecks were signed by the Director

of the FCPDO Nonprofit and identified the payor as the "Franklin County Public

Defender," i.e., the FCPDO Nonprofit, not the FCPDC or the Commissioners. In addition,

employees hired by the FCPDO Nonprofit were made aware that PERS contributions were

not being withheld. Testimony also established that the employees of the FCPDO

Nonprofit never attended FCPDC meetings, never took direct instructions from FCPDC,

and were generally unsure of FCPDC's role.

{¶ 60} As noted by the magistrate, this court's task is to determine whether PERB

abused its discretion, i.e., acted unreasonably, arbitrarily or unconscionably, in denying

relators' request for PERS service credit. In making this determination, we do not assess

the credibility or weight of the evidence. Rather, we determine only if "some evidence"

supports PERB's decision.

{¶ 61} As to relators' legal challenges to the formation of FCPDO Nonprofit, we

note that relators generally reiterate the arguments advanced in their merit brief and

assert that the magistrate erred in rejecting them. Relators again contend that the

No. 11AP-196 19

contracts between FCPDC and FCPDO Nonprofit violated both R.C. 120.14 and 2921.42.

For the reasons set forth in the magistrate's decision, we disagree.

{¶ 62} R.C. 120.14(A)(2) provides that a county public defender commission "shall

not appoint a county public defender" if the commission contracts with a nonprofit

corporation to provide indigent legal services. Relators contend the FCPDC violated R.C.

120.14(A)(2) by both appointing the Franklin County Public Defender and contracting

with the FCPDO Nonprofit. As the magistrate found, however, there was no person

holding the office of Franklin County Public Defender between 1985 and 1999. Rather,

that person was appointed as the "Director" of the FCPDO Nonprofit. In addition, the

FCPDC contracted with the FCPDO Nonprofit, and Kura (and later, Stevenson) signed

these contracts in their capacity as Director of the FCPDO Nonprofit. Thus, no violation

of R.C. 120.14(A)(2) occurred.

{¶ 63} Similarly, no violation of R.C. 2921.42(A)(4) occurred. That statute

prohibits a public official from knowingly having an "interest in the profits or benefits of a

public contract entered into by or for the use of the political subdivision or governmental

agency or instrumentality with which the public official is connected." As noted above,

between 1985 and 1999, Kura and Stevenson served as the Director of FCPDO Nonprofit,

not as the Franklin County Public Defender, and the contracts were between two

entities—the FCPDC and the FCPDO Nonprofit. Thus, unlike in Mallory—which

addressed Kura's status prior to 1985, neither Kura nor Stevenson had an unlawful

interest in a public contract between 1985 and 1999 in contravention of R.C.

2921.42(A)(4).

{¶ 64} Finally, we agree with the magistrate that relators' attempts to employ

arguments regarding R.C. Chapter 1701 and the Code of Professional Responsibility as a

means to invalidate the status of the FCPDO Nonprofit are neither persuasive nor

dispositive as to the issue of relators' employment status between 1985 and 1999.

{¶ 65} After an examination of the magistrate's decision, an independent review of

the record pursuant to Civ.R. 53, and due consideration of relators' objections, we

overrule the objections and adopt the magistrate's findings of fact and conclusions of law.

Accordingly, relators' request for a writ of mandamus is denied.

Objections overruled;

writ of mandamus denied.

No. 11AP-196 20

KLATT and CONNOR, JJ., concur.

_____________________

No. 11AP-196 21

APPPENDIX

IN THE COURT OF APPEALS OF OHIO

TENTH APPELLATE DISTRICT

State ex rel. Marylou Altman-Bates et al., :

Relators, :

v. : No. 11AP-196

Public Employees Retirement Board : (REGULAR CALENDAR)

and Franklin County Commissioners,

:

Respondents.

:

MAGISTRATE'S DECISION

Rendered on April 30, 2013

John H. Bates, for Marylou Altman-Bates.

Amy Neyerlin, pro se.

Rebecca Steele, pro se.

Melani Anderson, pro se.

Michael DeWine, Attorney General, and Matthew T. Green,

for respondents.

IN MANDAMUS

No. 11AP-196 22

{¶ 66} Relators Marylou Altman-Bates, Amy Neyerlin, Rebecca Steele, and Melani

Anderson, have filed this original action requesting that this court issue a writ of

mandamus ordering respondent the Public Employees Retirement Board ("PERB" or

"board") to grant their requests for membership status and service credit in the Public

Employees Retirement System ("PERS") for the tenure of their employment as public

defenders between 1985 and 1998 on grounds that they worked for a public employer and

ordering respondent Franklin County Commissioners ("commissioners") to make both

the employee and the employer contributions on their behalf for the same time period.

{¶ 67} Because these issues have been litigated since the 1980's and the various

entities have been identified by different abbreviations, I am going to set out below the

abbreviations I will be using to identify these entities. Further, I have gone through the

various court decisions and, where cited or quoted, I have inserted the particular

abbreviation I am using in place of the abbreviation that was used in order to help this

court understand the factual history and timeline. Hopefully, these changes will make

this case and the issues easier to understand.

FCPDO: Office of the Franklin County Public Defender in

operation from 1976-1984.

FCPDNP: Franklin County Public Defender, Non-Profit in

operation from 1985-1998.

FCPDC: Franklin County Public Defender Commission.

Commissioners: Franklin County Commissioners.

Findings of Fact:

{¶ 68} 1. Relators are attorneys hired to work for the Franklin County Public

Defender, Non-Profit ("FCPDNP") after 1984 and before 1999.

{¶ 69} 2. Relators are part of the group of public defenders and support staff

("claimants") who, in 2001, requested a determination from PERS that they were public

employees eligible for PERS membership and service credit during the specified period

{¶ 70} 3. In September 2003, PERS staff rejected claimants' contention that,

although the FCPDNP was formed as a non-profit entity in 1985, it was a public employer

or an agent of a public employer

No. 11AP-196 23

{¶ 71} 4. PERS staff determined that, in State ex rel. Van Dyke v. Pub. Emp.

Retirement Bd., 99 Ohio St.3d 430, 2003-Ohio-4123, the Supreme Court of Ohio had

found that post-1984 employees of the FCPDNP were not public employees and were not

subject to coverage in PERS for the time period at issue because their employment was

with a private entity and not a public employer nor an agent of a public employer

{¶ 72} 5. Claimants appealed the PERS staff determination and, in June 2004,

following an administrative hearing, a PERS hearing examiner issued a report and

recommendation and concluded that claimants were collaterally estopped from raising

their claims because of the court's decision in Van Dyke

{¶ 73} 6. The hearing examiner recommended that PERB affirm the staff

determination denying claimants' request for service credit for the period from January 1,

1985 through December 31, 1998

{¶ 74} 7. PERB accepted the examiner's findings of fact and conclusions of law and

denied claimants' request finding that the FCPDNP was not operating as a public

employer during that time period

{¶ 75} 8. As such, PERB never addressed claimants' arguments concerning

agency, control, alter ego, piercing the corporate veil and lack of separate mind, will, or

existence, that were raised to establish that, because of Franklin County's control over the

FCPDNP, the purported private corporation remained a public employer

{¶ 76} 9. Claimants filed a mandamus action and, in December 2007, this court

granted a limited writ of mandamus ordering PERB to vacate its order denying claimants'

service credit and ordering PERB to issue a new order after adjudicating claimants' claims

on the merits. This court determined that PERB abused its discretion when it found that

the decision in Van Dyke collaterally estopped claimants from claiming that the FCPDNP

was a public employer. State ex rel. Davis v. Pub. Emp. Retirement Bd., 10th Dist. No.

04AP-1293, 2007-Ohio-6594.

{¶ 77} 10. PERB appealed and the Supreme Court of Ohio determined that it had

not actually decided the FCPDNP's post-incorporation status in either Van Dyke or State

ex rel. Mallory v. Pub. Emp. Retirement Bd., 82 Ohio St.3d 235 (1998). The court

granted a limited writ of mandamus ordering PERB to vacate its order denying claimants'

No. 11AP-196 24

claims for PERS service credit and to issue a new order adjudicating the merits of those

claims

{¶ 78} 11. After the matter was remanded, it was determined that counsel

continued to represent only 12 of the original 51 claimants. Relators were not part of that

group of 12. However, notice of the proceedings was sent to each claimant no longer

represented

{¶ 79} 12. An evidentiary hearing was scheduled and an opportunity to

supplement the record following the hearing was provided. Relators Altman-Bates and

Steele attended the hearing and relator Steele testified

{¶ 80} 13. On November 30, 2009, the hearing examiner issued a report and

recommendation. At the outset of the report, the hearing examiner set out the issue:

[T]he overarching issue is whether the Claimants have

proved, by at least a preponderance of the evidence, that they

worked for a public employer between 1985 and 1998.

***

[T]he Board must consider the nature of the relationship

between the Claimants' employer - a non-profit corporation

[FCPDNP] created on December 31, 1984 - and both the

Franklin County Commission [commission] and the Franklin

County Public Defender Commission [FCPDC].

(Hearing examiner's report, at 3.) The hearing examiner explained further:

[T]hree things happened in 1984 and 1985 that have yet to

be considered by the Board: First, in 1984 the General

Assembly enacted O.R.C. 120.14(F), which authorized county

public defender commissions to contract with non-profit

organizations to provide representation to indigent criminal

defendants. Second, under the authority of O.R.C. 120.14(F),

the Franklin County Public Defender Commission [FCPDC]

created such a non-profit organization. Starting on

January 1, 1985, all of the employees who had, to that date,

been working for the Franklin County Public Defender (the

individual), now became employees of the non-profit

corporation [FCPDNP], identified in the articles of

incorporation as the "Franklin County Public Defender." And

third, after creating the non-profit corporation [FCPDNP],

the Franklin County Public Defender Commission [FCPDC]

entered into contracts with Franklin County and the city of

No. 11AP-196 25

Columbus (and, later on, with some of the suburbs near

Columbus), by which the newly created non-profit

corporation would provide the same services as those that

had been provided by the employees of the Franklin County

Public Defender prior to January 1, 1985.

(Hearing Examiner's report, at 3.)

{¶ 81} As the hearing examiner stated: "Once the Board considers the evidence

presented, it must determine whether the Claimants' employer was the non-profit

corporation formed in 1984 [FCPDNP], or either the Franklin County Board of

Commissioners [Commissioners] or the Franklin County Public Defender Commission

[FCPDC]." (Hearing Examiner's report, at 4.

{¶ 82} Ultimately, the hearing examiner concluded that claimants did not meet

their burden of proof finding that the evidence established that claimants were employed

by a non-profit corporation (FCPDNP) that was not a public employer between 1985 and

1999

{¶ 83} 14. Relators Altman-Bates and Neyerlin filed separate objections to the

report and recommendation

{¶ 84} 15. PERB met to consider the hearing examiner's report and

recommendation on March 17, 2010. The board voted to accept the findings of fact and

conclusions of law contained in the report and recommendation and found that FCPDNP

was a non-profit corporation that employed claimants to provide public defender services

and was not a public employer for purposes of PERS

{¶ 85} 16. Thereafter, relators filed the instant mandamus action in this court.

Conclusions of Law:

{¶ 86} For the reasons that follow, it is this magistrate's decision that this court

should deny relator's request for a writ of mandamus.

{¶ 87} In Mallory, the Supreme Court of Ohio explained the history of the various

entities involved up until 1985:

In 1976, the General Assembly enacted R.C. Chapter 120, the

Public Defender Act. The Act established the Ohio Public

Defender Commission and authorized counties to create

county and joint county public defender commissions. 136

Ohio Laws, Part I, 1868. In accordance with R.C. 120.13, the

Franklin County Commissioners established the Franklin

No. 11AP-196 26

County Public Defender Commission ("commission")

[FCPDC] to provide legal representation to indigent persons

as required by law. Pursuant to R.C. 120.14, the commission

appointed the Franklin County Public Defender. Attorney

James Kura was appointed to the position. Kura then hired

attorneys and support personnel to form the Franklin

County Public Defender's Office (“FCPDO”). The FCPDO

employed many of the same attorneys and staff who were

formerly employed by the Franklin County Legal Aid and

Defender Society, a nonprofit corporation that ceased its

work in the criminal defense area in 1976. The FCPDO,

thereafter, provided public defender services to indigent

criminal defendants in Franklin County, and pursuant to

R.C. 120.18, Franklin County received reimbursement from

the state for the cost of operating the FCPDO. Once

established, the FCPDO operated as if it were a non-public,

unincorporated association and both the FCPDO, as an

employer, and its employees paid Social Security taxes on

their wages. The commission and Kura considered the

FCPDO to be a non-county agency and thus FCPDO

employees were not treated as “public employees” for

purposes of the Public Employees Retirement System

(“PERS”).

Under the 1976 Public Defender Act, in addition to Franklin

County, twenty-four other counties established county public

defender commissions that appointed county public

defenders. Twenty-three of these counties treated employees

of their public defender offices as county employees and

members of PERS. Summit County was the only other

county, besides Franklin, that considered employees of the

public defender's office to be private employees.

***

In 1980, the State Auditor informed Summit County officials

that the county's public defender office was operating

illegally and was not entitled to state reimbursement under

R.C. 120.18. Summit County permitted the office to continue

to operate, but without state reimbursement. The State

Auditor's action evidently resulted from an informal 1980

opinion issued by the Administrative Agencies Section Chief

of the Attorney General's Office, wherein the section chief

had concluded that employees of county public defender

offices were county employees for purposes of PERS.

No. 11AP-196 27

Minutes from the commission's 1980 meetings clearly

indicate that Kura and members of the commission were

keenly aware of the Attorney General's opinions and,

consequently, decided that an amendment to R.C. Chapter

120 was necessary to “legalize the way [the FCPDO]

operates.” In addition, the Ohio Public Defender informed

Kura as early as 1980 that the FCPDO was not legally

constituted and that it was a county agency. During one of

the commission's 1982 meetings, Kura conceded that if R.C.

Chapter 120 were not amended the State Auditor would

advise the FCPDO that it needed to treat its employees as

county employees. Further, Kura advised one commission

member that the commission did not have to worry about

the possibility of FCPDO employees raising the issue of

entitlements to PERS membership because the new

amendment to R.C. Chapter 120 would include a provision

retroactively legalizing the FCPDO's operation as a private

entity.

In 1984, the General Assembly enacted R.C. 120.14(F) to

specifically permit county and joint county public defender

commissions to contract with non-profit organizations to

provide representation to indigent criminal defendants. 140

Ohio Laws, Part I, 949, 956–957. However, R.C. 120.14(F)

did not contain a provision giving it retroactive effect.

Following the enactment, the FCPDO was incorporated as a

non-profit corporation [FCPDNP]. Thereafter, the

commission (Franklin County Public Defender Commission)

[FCPDC] contracted with the county commissioners and the

city of Columbus to provide legal representation for indigent

criminal defendants in Franklin County, and the commission

[FCPDC] subcontracted with the newly incorporated * * *

[FCPDNP] to provide the contracted-for services.

Id. at 235-237.

{¶ 88} Several cases have addressed the employment status of individuals

employed by the Franklin County Public Defender Office (FCPDO in operation from 1976

to 1984), and the Franklin County Public Defender Non-Profit (FCPDNP in operation

from 1985 through 1998).

Prior to 1985

{¶ 89} Mallory involved the FCPDO and events prior to 1985. Diane Mallory was

employed at the FCPDO as a law clerk from June 1978 to September 1980 and as an

No. 11AP-196 28

attorney from February 1982 to January 1994. During that time, no contributions were

made to PERS on her behalf. Instead, Mallory and the FCPDO paid Social Security taxes.

In September 1994, Mallory requested service credit in PERS for her 14 years of prior

service with the FCPDO. PERS denied Mallory's request after finding that the FCPDO

had been an unincorporated association throughout Mallory's employment. Mallory filed

a complaint for a writ of mandamus; however, this court denied the writ, stating:

After the passage of R.C. 120.14(F) [in 1984], the FCPDO

changed the structure of its organization to a non-profit

organization and filed articles of incorporation [FCPDNP].

Immediately thereafter, the FCPDO, as an unincorporated

association, assigned all its rights, title and interest, to the

tangible and intangible property held by it to the [FCPDNP],

as an Ohio not-for-profit corporation. However, because R.C.

120.04(C)(3) had already authorized the Franklin County

Public Defender to contract with a private organization for

providing legal services to the indigent, relator's argument

fails. In 1984, the FCPDO changed its status as an

unincorporated association to a not-for-profit corporation

[FCPDNP] for whatever reasons. However, that does not

change the fact that, pursuant to the statute in effect in 1976,

the right to contract with a private organization to supply

legal services for the indigent already existed.

Id. at 238-39.

{¶ 90} On appeal, the Supreme Court of Ohio reversed and found that FCPDO

employees were employed by a county agency (the FCPDC) and a county officer (Franklin

County Public Defender James Kura) to perform a governmental function (providing legal

representation to indigent criminal defendants) for which FCPDO employees were paid by

the county. As such, the court determined that pre-1984 FCPDO employees such as

Mallory were public employees for purposes of R.C. 145.01(A)(1) and the commissioners

were held liable for both the employer and employee contributions to PERS for Mallory

and others similarly situated. Further, the court determined that Mallory was a carry-

over employee under R.C. 145.01(A)(2) and that after the FCPDO was incorporated in

1984 and became the FCPDNP, Mallory retained her right to be included as a PERS

covered employee

{¶ 91} This court had concluded that Mallory was not a public employee because,

even before the passage of R.C. 120.14(F) in 1984, the Franklin County Public Defender

No. 11AP-196 29

(Kura) had the authority to contract, and had in fact contracted, with the FCPDO.

Specifically, Kura had hired attorneys and support staff to form the FCPDO which was

operated as if it were a non-public, unincorporated association.

{¶ 92} In rejecting this court's determination, the Supreme Court of Ohio noted the

following: (1) the record was devoid of any evidence of a contract between Kura and

FCPDO and (2) even if a contract between Kura and the FCPDO did exist, the court found

that the contract would have been invalid under R.C. 2921.24, which prohibits any public

official from knowingly having an interest in the profits or benefits of a public contract

entered into by or for the use of the political subdivision or governmental agency with

which the public official is connected. Further, with little explanation, the court stated

that, because the FCPDC was created and Kura was appointed as the Franklin County

Public Defender pursuant to the Public Defender Act of 1976, and, because they exercised

powers and duties pursuant to the Public Defender Act of 1976 to comply with the

governmental duty to provide assistance of counsel to indigent criminal defendants, the

FCPDC and the FCPDO were public offices and employees such as Mallory were public

employees. And finally, the court found that the actions taken by the FCPDC and Kura in

actively advocating for the 1984 amendment was an acknowledgement that those

amendments were necessary to legalize the FCPDO thereby conceding that, prior to the

amendment, the FCPDO was a county agency staffed by county employees.

1985 and Thereafter

{¶ 93} The next case which addressed the public employment status of individuals

employed by the FCPDO or the FCPDNP was Van Dyke. Omia Nadine Van Dyke worked

for the FCPDO from 1982 until 1985 at which time she left and began working for the

Franklin County Court of Common Pleas, Division of Domestic Relations, Bureau of

Support, as a staff attorney. In 1986, Van Dyke resigned her position with the Bureau of

Support and was re-employed by the FCPDNP until she resigned in 1991.

{¶ 94} Following the decision in Mallory, Van Dyke requested that PERS grant her

service credit for her employment from 1982 through 1985 and from 1986 through 1991.

PERB granted Van Dyke's request for service credit from 1982 through 1985 pursuant to

Mallory decision, but denied her request for credit from 1986 through 1991

No. 11AP-196 30

{¶ 95} Van Dyke filed a mandamus action in this court arguing that, like Mallory,

she was a carry-over employee (hired first by the FCPDO and then re-employed with the

FCPDNP). This court rejected the decision of its magistrate and determined that PERB

abused its discretion by concluding that she was not a public employee under the carry-

over provision found in R.C. 145.01(A)(2)

{¶ 96} On appeal, the Supreme Court of Ohio reversed finding that PERB did not

abuse its discretion when it concluded that Van Dyke was not a public employee under the

carry-over provision. Specifically, the court stated:

R.C. 145.01(A)(2) requires that the employee continue to

perform the publicly operated function for the contractor

after the publicly operated function is taken over by that

contractor. See, also, R.C. 145.03(A) ("membership in the

system is compulsory upon being employed and shall

continue as long as public employment continues"). Van

Dyke continued to work until 1985 performing the public

function of providing legal services for indigent criminal

defendants for the contractor, FCPDO, after its 1984

incorporation as a nonprofit entity [FCPDNP]. In November

1985, however, she resigned her position with [FCPDNP]

and began employment with the bureau of support. When

she was reemployed by [FCPDNP] in April 1986, she was not

"continuing" her employment with a private contractor

[FCPDO] that was taking over a previously publicly operated

function. Instead, in April 1986, she was beginning a term of

employment with a private contractor [FCPDNP] that years

before had taken over the publicly operated function.

Vandyke, at ¶ 29.

The Current Action

{¶ 97} As noted in the findings of fact, relators are part of a group of individuals

who were hired after 1985 by the FCPDNP. These individuals never worked for the

FCPDO and only worked for the FCPDNP following the amendments to R.C. Chapter 120

and the incorporation of the FCPDNP as a non-profit organization. Relators are asking

for service credit in PERS from the date they were hired through 1998

{¶ 98} As a factual matter, it is undisputed that, in 1976, the commissioners, in

accordance with R.C. 120.13, established the FCPDC to provide legal representation to

indigent persons as required by law. Thereafter, the FCPDO was established and was

No. 11AP-196 31

operated as if it were a non-public, unincorporated association and both the FCPDO, as

an employer, and its employees paid Social Security taxes on their wages. Further, review

of the earliest documents in the record concerning the formation of the FCPDO

establishes that the reason this format was utilized was to avoid what many saw as a

legitimate conflict: that the government should not both prosecute and defend indigent

criminal defendants

{¶ 99} In Mallory, the Supreme Court of Ohio determined that, despite Franklin

County's efforts to contract for public defender services through a non-governmental

agency and thereby avoid the perceived conflict of interest, Franklin County had failed to

do so. The court determined that FCPDO had not properly established itself as a non-

public, unincorporated association but that it was a public office and that its employees

were public employees.

{¶ 100} The question currently before this court focuses on whether or not the

actions taken after the General Assembly enacted the amendments to R.C. Chapter 120

and the FCPDNP was incorporated as a non-profit corporation were sufficient to carry out

the original goal of creating a non-government organization. For the reasons that follow,

the magistrate finds that there is some evidence in the record to support PERB's

determination that the FCPDNP was not a public employer and that relators and other

employees hired after 1984 and before 1999 were not public employees

{¶ 101} It is undisputed that an action in mandamus is the appropriate remedy to

determine relators' claimed entitlement to PERS service credit. State ex rel. Ryan v. State

Teachers Retirement Sys., 71 Ohio St.3d 362 (1994). McAuliffe v. Bd. of Pub. Emp.

Retirement Sys. of Ohio, 93 Ohio App.3d 353 (10th Dist.1994).

{¶ 102} To be entitled to the requested writ of mandamus, relators must establish

that PERB abused its discretion by denying their request for PERS service credit. PERB

abuses its discretion if it acts in an unreasonable, arbitrary, or unconscionable manner.

Mallory. As such, this court's review is limited. This court does not determine the

credibility of the evidence and does not reweigh the evidence. Provided that PERB

correctly applied the law, if there is some evidence in the record to support PERB's

decision, then this court must uphold PERB's decision

No. 11AP-196 32

{¶ 103} In this mandamus action, relators set forth their arguments as propositions

of law one through eight:

Proposition of Law No. I

PERB abused its discretion by denying relators' request for

PERS membership and service credit from 1985 through

1999.

Proposition of Law No. II

Franklin County Public Defender was structured and created

to be controlled by Franklin County Public Defender

Commission.

Proposition of Law No. III

There was no lawful contract between Franklin County

Public Defender Commission and Franklin County Public

Defender under R.C. 2921.42.

A. Franklin County Public Defender Commission is a county

agency subject to R.C. 2921.42.

B. The name "Franklin County Public Defender" is an

unlawful corporate name pursuant to R.C. 1701.

C. Use of the name "Franklin County Public

Defender" clearly violates the Code of Professional

Responsibility.

D. The corporate form should be disregarded.

Proposition of Law No. IV

The subcontracts between Franklin County Public Defender

Commission and Franklin County Public Defender were not

at arms length and did not have two independent parties.

A. Franklin County Public Defender Commission was on

both sides of the subcontracts.

B. Franklin County Public Defender Commission violated

R.C. [1]20.14(A)(2).

No. 11AP-196 33

C. Franklin County Public Defender did not have a

contractual relationship with Franklin County Public

Defender Commission for the suburbs' legal work.

D. Franklin County Public Defender Municipal Court Staff

were appointed to their jobs by the Columbus Public

Defender, a separate appointing authority.

Proposition of Law No. V

Franklin County Public Defender Commission exercised

actual control over Franklin County Public Defender.

Proposition of Law No. VI

Statutory provisions placed control in Franklin County

Public Defender Commission and the Franklin County Board

of Commissioners.

Proposition of Law No. VII

Relators are public employees within the meaning

of R.C. 145.01(A)(1) and (3) and/or were employed

by a public employer as that term is used in R.C.

145.01(D).

A. Because Franklin County Public Defender Commission

and Franklin County Board of Commissioners have ultimate

control over and the statutory responsibility to provide legal

services under R.C. Chapter 120. They are claimants[']

employer.

B. Franklin County Public Defender was Franklin County

Public Defender Commission.

C. Statutory authority permitting a county agency or

official to contract with another for the performance

of a governmental function is mandatory and

contracts made in violation of such requirements

are void.

No. 11AP-196 34

D. All staff who worked in the municipal court unit of

Franklin County Public Defender were appointed by the

Columbus Public Defender, a separate appointing authority.

E. Because of the blended operating relationship and their

unified structure Franklin County Public Defender

Commission and Franklin County Public Defender are a joint

public employer of relators.

F. Relators qualify for PERS under R.C. 145.01(A)(1), (3) and

R.C. 145.01(D).

G. Private employers are covered by PERS.

Proposition of Law No. VIII

PERB did not comport with the law of this case.

(Emphasis sic.) (Relators' brief, at 1-4.)

{¶ 104} As will be more fully explained, the report and recommendation of the

hearing officer demonstrates that PERB has in fact considered all of relators' arguments

wherein relators tried to establish that FCPDNP was not properly incorporated and was

not properly run to avoid being a public employer. Therefore, this court must review the

record and determine whether there is some evidence in the record to support PERB's

determination.

{¶ 105} In finding that Diane Mallory was a public employee employed by a county

agency, specifically the FCPDC, and a county officer, specifically the Franklin County

Public Defender James Kura, the Supreme Court relied on the following: (1) James Kura

was appointed the Franklin County Public Defender; (2) both Kura and the FCPDC

exercised powers and duties pursuant to the Public Defender Act to comply with the

governmental duty to provide assistance of counsel to indigent criminal defendants; (3)

the record was devoid of any contracts, written or oral, between Kura and the FCPDO; (4)

any contract would have been invalid under R.C. 2921.42 which prohibits a public official

from having an interest in the profits or benefits of a public contract entered into by or on

behalf of the political subdivision or governmental agency with which the public official is

connected; and (5) Kura and the FCPDC recognized that the 1984 amendment to R.C.

No. 11AP-196 35

Chapter 120 was necessary to legalize the FCPDO thereby conceding that the FCPDO was

a county agency staffed by county employees.

{¶ 106} After the 1984 amendments to R.C. Chapter 120, what, if anything,

changed? First, the FCPDNP was incorporated as a non-profit entity. Second, James

Kura (and later Judith Stevenson), were clearly identified as directors of the FCPDNP and

were no longer identified as the Franklin County Public Defender.

{¶ 107} Third, the statutory framework remained essentially the same with one

exception. R.C. 120.14(F) was enacted and provides:

A county public defender commission, with the approval of

the board of county commissioners regarding all provisions

that pertain to the financing of defense counsel for indigent

persons, may contract * * * with any nonprofit organization,

the primary purpose of which is to provide legal

representation to indigent persons, for * * * the organization

to provide all or any part of the services that a county public

defender is required or permitted to provide by this chapter.

A contract entered into pursuant to this division may provide

for payment for the services provided on a per case, hourly,

or fixed contract basis. * * * [A]ny nonprofit organization

that contracts with a county public defender commission

pursuant to this division shall do all of the following:

(1) Comply with all standards established by the rules of the

Ohio public defender commission;

(2) Comply with all standards established by the state public

defender;

(3) Comply with all statutory duties and other laws

applicable to county public defenders.

{¶ 108} The FCPDC contracted with the FCPDNP and the FCPDNP thereafter

became responsible for complying with all relevant law. As such, by contracting with the

FCPDNP, the FCPDC no longer exercised powers and duties pursuant to the Public

Defender Act. Instead, the FCPDNP became responsible for exercising those powers and

duties.

{¶ 109} Fourth, the record contains copies of contracts between the FCPDC and the

FCPDNP. Further, those contracts were no longer entered into by a public official since

the FCPDNP was run at the direction of a director and not by the Franklin County Public

Defender.

No. 11AP-196 36

{¶ 110} Considering the above changes, the magistrate finds that PERB did not

abuse its discretion when it found, as an initial matter, that the FCPDNP was not a county

employer. However, this conclusion does not render moot relators' arguments to the

effect that, regardless of the above changes, the FCPDNP remained a public employer and

either it or the FCPDC were relators' employer thereby making relators public employees

{¶ 111} In addressing relators' claims, PERB first considered the issue of control.

Relators maintain that the FCPDC and the FCPDNP were essentially the same entity.

Relators argue that this conclusion is inevitable given the corporate structure, the Articles

of Incorporation and Code of Regulations, the institutional control the FCPDC exercised

over the FCPDNP, the requirements of the Ethics Commission, and the fact that the

FCPDC was on both sides of the contract (FCPDC contracted with itself). Relators

contend that the Ethics Commission specifically required that the FCPDC have "complete

control" over the FCPDNP and, as such, regardless of the steps taken to set up a private,

non-profit organization, the FCPDNP was controlled by the FCPDC; and therefore,

relators maintain that they were employed by a public employer. (Relator's brief at 17.)

For the following reasons, the magistrate disagrees

{¶ 112} The focus of this argument is on the fact that the FCPDC was the trustee of

the FCPDNP. The Ethics Commission was asked whether or not members of the FCPDC

were prohibited from serving on the board of trustees of the proposed FCPDNP. In a

letter dated October 25, 1984, the Ethics Commission set out the question before it:

You stated; by way of history, that Division (F) of Section

120.14 of the Revised Code provides that a county public

defender commission [FCPDC] may contract with a non-

profit organization [FCPDNP] to provide legal services as

county public defender, provided that the board of county

commissioners [commissioners] approves all provisions that

pertain to the financing of defense counsel for indigent

persons. You also stated that a county public defender

commission [FCPDC] plans to reorganize the office of the

county public defender into a non-profit corporation

[FCPDNP] with the primary purpose of providing legal

representation to indigent persons. You indicated that the

proposed articles of incorporation of the non-profit

corporation [FCPDNP] provide that the members of the

county public defender commission [FCPDC] serve as the

trustees of the non-profit corporation [FCPDNP]. Such

trustees would elect the officers of the corporation

No. 11AP-196 37

[FCPDNP] performing the duties of county public defender.

The Ohio Public Defender Commission and the Ohio Public

Defender has ultimate oversight of the county public

defender. Also, the trustees would not receive compensation.

You asked whether such an arrangement would violate the

Ohio Ethics Law and related statutes.

{¶ 113} Thereafter, the Ethics Commission explained that, because a member of a

the FCPDC is a public official as defined in R.C. 2921.01(A), a contract with the FCPDC to

purchase or acquire legal service from a non-profit corporation that provided legal

representation to indigent persons was a public contract as defined in R.C. 2921.42(E)(1).

However, the Ethics Commission indicated that such an arrangement would be

permissible provided:

(1) the governmental entity must create or be a participant in

the non-profit corporation; (2) the elected legislative

authority or the appointed governing body must formally

designate the office or position to represent the

governmental entity; (3) the public official or employee must

be instructed to represent the governmental entity and its

interests; and (4) there must be no other conflict of interest

on the part of the designated representative. If these criteria

are met, there is not a duality of interest on the part of the

public official.

{¶ 114} Relators assert that the above requirements clearly establish that the

FCPDC had "complete control" over the FCPDNP. Not so. The Ethics Commission stated

that the proposed scenario was permissible, and did not pose a conflict of interest

because:

Under the facts presented, the county public defender

commission [FCPDC] plans to create the non-profit

corporation [FCPDNP] that will provide the contract legal

services as county public defender. In addition, the

commission [FCPDC] plans to formally designate by terms of

the articles of incorporation that its members are to serve as

trustees for the non-profit corporation [FCPDNP]. Finally,

there does not appear to be any other conflict of interest.

Assuming that the commission [FCPDC] also takes formal

action to appoint its members to the board of trustees and

instructs them to represent the commission [FCPDC] and its

interests, the members would not have a prohibited interest

in a public contract with their own entity of government.

No. 11AP-196 38

{¶ 115} Contrary to relators' arguments, the Ethics Commission did not give the

FCPDC complete control of the FCPDNP. The FCPDC created the FCPDNP and was

charged with ensuring that the FCPDNP complied with the requirements imposed on the

government for representing indigent criminal defendants. Ultimately, as relators point

out elsewhere, the FCPDC was charged with the responsibility for providing legal

representation. Clearly, in the event that the FCPDNP failed to comply with the

requirements, the FCPDC would have to make changes. Oversight is not synonymous

with control. Further, as explained in the opinion of the Ethics Commission, the Ohio

Public Defender Commission and the Ohio Public Defender have ultimate oversight. As

PERB explained, there is evidence in the record indicating that the FCPDC did not have

ultimate control over the FCPDNP and, as such, PERB did not abuse its discretion in so

finding.

{¶ 116} Further, to the extent that relators argue that R.C. 2921.42(A)(4)'s

prohibition against public officials having an interest in the profits or benefits of a public

contract entered into by or for the use of the government agency with which the public

officer is connected, the magistrate finds that R.C. 2921.42(A)(4) was not violated here.

The Supreme Court found such a violation in Mallory after finding that Kura was a county

officer. Here, Kura was not a county officer; he and those who later served were directors

of the FCPDNP and no longer served as public defenders.

{¶ 117} As explained, PERB determined that there was evidence that the FCPDC

set policies for day-to-day operations, but that those policies were implemented by the

director of the FCPDNP acting through his or her staff. Attorneys and other support

personnel had no contact with the commissioners and almost no contact with the FCPDC.

Members of the FCPDC did serve as trustees of the FCPDNP but had no greater role than

required by R.C. 120.13, which enabled the creation of the FCPDC and R.C. 120.14, which

authorized the FCPDC to enter into contracts with the FCPDNP

{¶ 118} Specifically, the magistrate notes that the contracts between the FCPDC

and the FCPDNP were signed by the then-director of the FCPDNP and a member of the

FCPDC. There is no evidence indicating that the director of the FCPDNP was a member

of the FCPDC nor have relators made such an argument. Further, contracts between the

city of Columbus and its suburbs were entered into between the city/suburb and the

No. 11AP-196 39

FCPDC and a separate contract legally bound the FCPDNP to perform the obligations of

the FCPDC. As PERB found, this was specifically anticipated and provided for in R.C.

Chapter 120

{¶ 119} Contrary to relators' assertions, the magistrate finds that PERB did not

abuse its discretion when it rejected relators' argument that the FCPDC actually

contracted with itself. Further, the magistrate finds that PERB did not abuse its

discretion when it found that the FCPDC did not violate R.C. 120.14(A)(2) which provides:

If a county public defender commission contracts with the

state public defender or with one or more nonprofit

organizations for the state public defender or the

organizations to provide all of the services that the county

public defender is required or permitted to provide by this

chapter, the commission shall not appoint a county public

defender.

{¶ 120} As the trustee of the FCPDNP, the FCPDC appointed the director of the

FCPDNP. The persons who held this position may have informally been considered to

still be the "public defender"; however, informal references aside, these persons were

clearly designated as directors for the FCPDNP. As the record demonstrates, prior to the

incorporation for the FCPDNP, the person in charge of the FCPDO was clearly and

officially designated as the public defender. This was part of the Supreme Court's

rationale for determining that the FCPDO was a public office. The court found that Kura

was a county officer, namely the Franklin County Public Defender. However, following

the incorporation of FCPDNP, the person in charge was clearly identified as the director

of the FCPDNP. The fact that in their respective briefs, relators consistently identify Kura

as the public defender both before the incorporation of the FCPDNP and after does not

change the fact that, after the incorporation of the FCPDNP, Kura was the director

{¶ 121} Relators raise several other tangential issues. Relators assert that the name

"Franklin County Public Defender" is an unlawful corporate name under R.C. 1701 and

that it misleads the public. However, the non-profit corporation was officially recognized

as the Franklin County Public Defender, non-profit. The informal reference to it as the

public defender was not misleading if for no other reason than its employees defended the

public, specifically criminal defendants prosecuted in Franklin County. Further, R.C.

Chapter 1701 applies to for-profit corporations and 1701.05 requires that certain words

No. 11AP-196 40

appear at the end of the title: corporation, corp., company, co., incorporated, or inc.

However, Chapter 1701 does not apply here. Instead, R.C. Chapter 1702, which concerns

non-profit corporations applies and requires no such words. Although relators assert that

R.C. 1701.05 does apply, relators have not presented any authority for their assertion. "In

the absence clear legislative intent to the contrary, words and phrases in a statute shall be

read in context and construed according to their plain, ordinary meaning." Kunkler v.

Goodyear Tire & Rubber Co., 36 Ohio St.3d 135, 137 (1988). Nothing in either R.C.

Chapters 1701 nor 1702 indicates that the General Assembly intended that the

requirements in R.C. 1701.05 would also apply to non-profit corporations

{¶ 122} Relators also assert that the change from a non-profit corporation to a

county agency in 1999 violates the Code of Professional Responsibility because it was akin

to the sale of a law practice and no attempt was made to notify its clients of this change in

status. This was not the sale of a law firm and Ohio's Rules of Professional Conduct R.1.17

(former Disciplinary Rule DR 2-111) does not apply. Further, Ohio Rules of Professional

Conduct R.7.5 (formerly DR 1-102) which applies to firm names and letterheads does not

apply. Relators' attempts to use such arguments to invalidate the status of the FCPDNP

as a non-profit corporation are neither persuasive nor dispositive.

{¶ 123} Relators also cite case law pertaining to piercing the corporate veil which

does not apply here. There are no shareholders to hold liable. To the extent that this law

can be considered by way of analogy, the magistrate finds that PERB's analysis and

conclusions concerning control adequately addressed this argument.

{¶ 124} Relators also assert that in State ex rel. Kura v. Public Emp. Retirement

Bd., 10th Dist. No. 01AP-58 (Dec. 20, 2001)(memorandum decision),4 (which was later

vacated after the case settled), this court held that James Kura was a public employee

from July 1976 through October 1992 when Kura left the FCPDNP and began

employment with the Ohio Public Defender. Kura's widow was attempting to collect from

PERS a refund of employee contributions which should have been made during his

service with the FCPDO (1976-1984) and with the FCPDNP (1985 - October 1992).

Following the Supreme Court's decision in Mallory, the Commissioners remitted

4The judgment entry, memorandum decision and writs of executions heretofore issued by this court on

December 20, 2011, are set aside and shall not be binding on the parties or of prospective precedential effect.

No. 11AP-196 41

employer and employees' contributions for employees of the FCPDO but not for Kura.

This court found that Kura should have been treated the same as the other employees

affected by the court's decision in Mallory. Relators argue that, pursuant to Federal case

law, this court should reinstate its decision and assert that this court already answered the

dispositive question when it found that Kura was a "public employee." As such, relators

assert that this court has previously ruled that employees of both the FCPDO and the

FCPDNP are public employees entitled to participate in PERS

{¶ 125} Relators take the magistrate's statement that Kura was a "public employee"

during his tenure with the FCPDO and FCPDNP out of context. This court simply

indicated that PERS had abused its discretion when it failed to treat Kura the same as

other similarly situated employees following the Mallory decision. As such, he too would

have been a carry-over employee following the incorporation of the FCPDNP

{¶ 126} The final argument raised by relators is that PERB failed to comply with

the law of the case. Specifically, relators contend that PERB refused to and failed to

consider all the evidence in this case and failed to truly consider their arguments. In

making this argument, relators point to a portion of one paragraph in the report and

recommendation. However, in taking certain isolated sentences and considering them

out of context, relators' argument does not accurately represent the report and

recommendation.

{¶ 127} Relators point to the following two sentences from the report and

recommendation of the hearing examiner:

While the mandate now before the Board expressly directs

an analysis of the arguments presented by the Claimants…

that mandate cannot and does not authorize the OPERS

Board to exceed the limits of its enabling authority. The

OPERS Board does not have equitable powers - it is not a

judicial-branch adjudicator. If the second prong of the

Claimants' arguments requires the Board to grant relief upon

grounds not authorized by Chapter 145 of the Ohio Revised

Code, then the Board has an affirmative obligation to reject

that argument.

(Relator's brief, at 81.)

{¶ 128} Taken in isolation, the above sentences give the impression that PERB was

refusing to follow the mandate of this court and the Supreme Court when PERB was

No. 11AP-196 42

ordered to consider all relators' arguments. However, relators' characterization is not

accurate.

{¶ 129} As indicated earlier in this decision, PERB specifically noted that relators

sought to establish two overreaching points. Relators sought to establish that the

FCPDNP created in 1984 was a sham, that its founders had the legal obligation to perform

the duties of the corporation, that the corporation was not their employer, and that they

were public employees working for either the FCPDC or for Franklin County itself. The

second point advanced by relators was that the decision of the FCPDC to establish the

FCPDNP to carry out the statutory duties of the public defender led to adverse

consequences which PERS should now be required to mitigate.

{¶ 130} The sentences quoted by relators from the report and recommendation

focus on the second point and PERB did not abuse its discretion in finding that it did not

have authority to fashion a remedy for relators in the event that relators failed to establish

their first point, i.e., that they were actually public employees employed by a public

employer, either the FCPDC or Franklin County itself. Nothing in the decision of this

court or the Supreme Court gave PERB the authority to fashion a remedy in the absence

of a finding that relators were actually public employees.

{¶ 131} The entire quote from the report and recommendation provides:

In noting the nature of this two-pronged body of evidence,

however, the OPERS Board must recognize the limits of its

authority. The appellate court decisions make it clear that

the courts expect the OPERS Board to evaluate all of the

arguments presented by the Claimants. This report

endeavors to fulfill that mandate, and the Board should

proceed with the confidence that each argument raised in the

period leading up to today has been considered when making

this report. At the same time, it is critically important that

the parties be assured that the Board acts only within the

limits of its authority. The OPERS Board is authorized to act

by the provisions of O.R.C. Chapter 145, and is bound to

limit its action based on the powers granted to it by the Ohio

General Assembly. While the mandate now before the Board

expressly directs an analysis of the arguments presented by

the Claimants (and specifically calls for the Board to consider

the alter-ego theories advanced by the Davis group in the

course of the mandamus action), that mandate cannot and

does not authorize the OPERS Board to exceed the limits of

No. 11AP-196 43

its enabling authority. The OPERS Board does not have

equitable powers - it is not a judicial-branch adjudicator. If

the second prong of the Claimants' arguments requires the

Board to grant relief upon grounds not authorized by

Chapter 145 of the Ohio Revised Code, then the Board has an

affirmative obligation to reject that argument. Doing so may

perpetuate the dichotomy created by the decision to operate

as a non-profit and to leave OPERS from 1985 to 1998; and it

may leave the Claimants understandably angry. But if this

employer was not a public employer during this

period, the OPERS Board has a statutory obligation

to affirm the decision of its senior staff, and deny

these claims.

(Emphasis added.) (Report and Recommendation of Hearing Officer.)

{¶ 132} The magistrate does not dispute the fact that the outcome is not fair. In

fact, no one disputes the fact that the outcome is not fair. However, while relators argue

that the sole reason for establishing and contracting with a non-profit corporation to

provide legal services to indigent criminal defendants was so that the county could avoid

enrolling claimants in PERS, all the evidence reviewed beginning with the first meeting

where the matter was first discussed, leads to one conclusion: because of the perceived

conflict of interest in having the county both prosecute criminal defendants and defend

criminal defendants, steps were taken to create a private entity with whom the county

would contract for those services.

{¶ 133} There has never been any dispute that the Legal Aid Society was, in fact, a

private entity. The determination was made that it was advantageous and preferable to

keep separate the prosecuting of and the defending of criminal defendants. As such, the

FCPDO was originally created in 1976. The fact that the Supreme Court ultimately

determined that the proper steps were not taken to ensure that the FCPDO was a private

employer and not a public employer does not change the fact that this was the initial and

ultimate goal. Further, the record shows that when it was determined that the FCPDO

was not legally constituted, steps were taken to correct the problem before the Supreme

Court rendered its decision in Mallory. The magistrate finds that the steps taken to

correct the failings identified by the court in Mallory were sufficient and corrected the

failings and that PERB did not abuse its discretion by finding that relators were not public

No. 11AP-196 44

employees and were not entitled to membership and service credit in PERS from 1985

through 1999.

{¶ 134} At oral argument, counsel for relator Marylou Altman-Bates raised an issue

addressed earlier. Counsel continues to assert that records have been destroyed and

PERS has failed in its duty to preserve the record. As ordered by the magistrate,

respondents prepared a CD of the record. Counsel for relators was given time to review

the record and to inform the magistrate if any documents were missing. This way, a

complete record could be presented. Counsel did not come forward to challenge the

evidentiary record and the magistrate finds it disingenuous for counsel to again raise this

issue at this time.

{¶ 135} Finding that PERB did not abuse its discretion, it is this magistrate's

decision that this court should deny relators' request for a writ of mandamus.

/S/ MAGISTRATE

STEPHANIE BISCA BROOKS

NOTICE TO THE PARTIES

Civ.R. 53(D)(3)(a)(iii) provides that a party shall not assign

as error on appeal the court's adoption of any factual finding

or legal conclusion, whether or not specifically designated as

a finding of fact or conclusion of law under Civ.R.

53(D)(3)(a)(ii), unless the party timely and specifically

objects to that factual finding or legal conclusion as required

by Civ.R. 53(D)(3)(b).