The opinion
[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as Stolz
v. J & B Steel Erectors, Inc., Slip Opinion No. 2016-Ohio-1567.]
NOTICE
This slip opinion is subject to formal revision before it is published in an
advance sheet of the Ohio Official Reports. Readers are requested to
promptly notify the Reporter of Decisions, Supreme Court of Ohio, 65
South Front Street, Columbus, Ohio 43215, of any typographical or other
formal errors in the opinion, in order that corrections may be made before
the opinion is published.
SLIP OPINION NO. 2016-OHIO-1567
STOLZ v. J & B STEEL ERECTORS, INC., ET AL.
[Until this opinion appears in the Ohio Official Reports advance sheets, it
may be cited as Stolz v. J & B Steel Erectors, Inc., Slip Opinion
No. 2016-Ohio-1567.]
Workers’ compensation—Immunity from tort claims—Self-insured construction
projects—R.C. 4123.35(O)—Subcontractors enrolled in a self-insured-
construction-project plan are immune from tort claims made by other
enrolled subcontractors’ employees who are injured or killed while working
on the self-insured construction project and whose injury, illness, or death
is compensable under Ohio’s workers’ compensation law.
(No. 2015-0628—Submitted December 2, 2015—Decided April 19, 2016.)
ON ORDER from the United States District Court for the Southern District of Ohio,
Western Division, Certifying a Question of State Law, No. 1:14-cv-44.
_____________________
SUPREME COURT OF OHIO
O’CONNOR, C.J.
{¶ 1} This case is before us on the certification of a state-law question by
the United States District Court for the Southern District of Ohio, Western Division.
The federal court asks that we determine whether Ohio’s workers’ compensation
laws, specifically R.C. 4123.35 and 4123.74, provide immunity to a subcontractor
enrolled in a self-insured construction-project plan from a tort claim for workplace
injury by an employee of another enrolled subcontractor on the same project.
{¶ 2} The unambiguous language of R.C. 4123.35 and 4123.74 compels our
conclusion that subcontractors enrolled in a self-insured-construction-project plan
are immune from tort claims made by the employees of other enrolled
subcontractors who are injured or killed while working on the self-insured
construction project and whose injury, illness, or death is compensable under
Ohio’s workers’ compensation law. We therefore answer the certified state-law
question in the affirmative.
RELEVANT BACKGROUND
{¶ 3} The federal court provided the following facts and allegations from
which the question of law arises.
{¶ 4} The plaintiff in the underlying action, Daniel Stolz, worked as a
concrete finisher for Jostin Construction, Inc. (“Jostin”) at the Horseshoe Casino
construction project in Cincinnati (“Casino Project”). Messer Construction
Company (“Messer”) was the general contractor for the Casino Project, and Jostin
was a subcontractor.
{¶ 5} An accident on the job site injured Stolz, who brought negligence
claims against Messer and against subcontractors J & B Steel Erectors (“J & B
Steel”), Terracon Consultants, Inc. (“Terracon”), Pendleton Construction Group,
L.L.C. (“Pendleton”), D.A.G. Construction Co., Inc. (“D.A.G.”), and TriVersity
Construction Co., L.L.C. (“TriVersity”). Stolz claims each of the defendants had
responsibilities related to the construction project.
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January Term, 2016
{¶ 6} Prior to the accident, Messer had applied for and obtained authority
from the Ohio Bureau of Workers’ Compensation (“BWC”) to act as the self-
insuring employer on the project under R.C. 4123.35(O). In that role, Messer was
responsible for providing workers’ compensation coverage for its own employees
as well as the employees of enrolled subcontractors working on the Casino Project,
including Jostin, J & B Steel, D.A.G., and TriVersity.
{¶ 7} Messer, J & B Steel, D.A.G., and TriVersity1 moved for summary
judgment on the basis that they were immune from Stolz’s negligence claims under
Ohio’s workers’ compensation laws, specifically R.C. 4123.35 and 4123.74. The
district court granted summary judgment to the general contractor, Messer, as the
self-insuring employer on the Casino Project. But the court denied summary
judgment to subcontractors J & B Steel, D.A.G., and TriVersity, finding that an
enrolled subcontractor on a self-insured construction project is immune only from
claims made by its own employees and not from those made by employees of fellow
enrolled subcontractors.
THE QUESTION OF STATE LAW
{¶ 8} Following the summary-judgment decision, J & B Steel, D.A.G., and
TriVersity moved the federal court to certify a question of state law to this court.
The federal court granted the motion and certified to us the following question:
Whether Ohio Rev. Code §§ 4123.35 and 4123.74 provide
immunity to subcontractors enrolled in a Workers’ Compensation
self-insurance plan from tort claims made by employees of [other]
enrolled subcontractors injured while working on the self-insured
project.
1
J & B Steel, Messer, D.A.G., and TriVersity are the petitioners in this action. Terracon and
Pendleton, who were not enrolled subcontractors, did not assert an immunity defense.
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SUPREME COURT OF OHIO
(Brackets sic.) We accepted the question, 142 Ohio St.3d 1515, 2015-Ohio-2341,
33 N.E.3d 64, and granted Messer’s motion to be designated as a petitioner
alongside the three petitioning subcontractors, 143 Ohio St.3d 1423, 2015-Ohio-
3021, 34 N.E.3d 935.
ANALYSIS
Applicable canons of statutory construction
{¶ 9} When a court interprets the meaning of a statute, “[w]ords and phrases
shall be read in context and construed according to the rules of grammar and
common usage,” R.C. 1.42, and the court must give effect to all of the statute’s
words, Bryan v. Hudson, 77 Ohio St.3d 376, 380, 674 N.E.2d 678 (1997). “If the
meaning of the statute is unambiguous and definite, it must be applied as written
and no further interpretation is necessary.” State ex rel. Savarese v. Buckeye Local
School Dist. Bd. of Edn., 74 Ohio St.3d 543, 545, 660 N.E.2d 463 (1996).
Additionally, a court must give effect to the natural and most obvious import of a
statute’s language, avoiding any subtle or forced constructions. Ohio
Neighborhood Fin., Inc. v. Scott, 139 Ohio St.3d 536, 2014-Ohio-2440, 13 N.E.3d
1115, ¶ 22.
Ohio’s statutory scheme for workers’ compensation
{¶ 10} Ohio’s workers’ compensation scheme is codified in Chapter 4123
of the Revised Code.
{¶ 11} R.C. Chapter 4123 requires most employers to pay premiums into
the state insurance fund that administers and pays out workers’ compensation
claims. R.C. 4123.35(A). In return for these premium payments, an employer, in
most cases, receives immunity from claims for common-law and statutory damages
made by its employees “for any injury, or occupational disease, or bodily condition,
received or contracted by any employee in the course of or arising out of his
employment” or for any resulting death. R.C. 4123.74.
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January Term, 2016
{¶ 12} Ohio’s workers’ compensation law contains a special carve-out for
“self-insuring employers,” who do not pay into the state insurance fund. R.C.
4123.35(B). Employers eligible for the carve-out “may be granted the privilege to
pay individually compensation, and furnish medical, surgical, nursing, and hospital
services and attention and funeral expenses directly to injured employees or the
dependents of killed employees.” Id. In return for providing this coverage, self-
insuring employers receive the same protections against employee claims as those
paying into the state fund. R.C. 4123.74.
{¶ 13} At issue in this case is a specific class of self-insuring employers
recognized in the workers’ compensation scheme: those involved in a construction
project that is “scheduled for completion within six years after the date the project
begins” and has total estimated costs in excess of $100 million. R.C. 4123.35(O).
As Messer did with respect to the Casino Project, the general contractor of a
qualifying construction project may seek to self-insure the project and provide
workers’ compensation coverage for its own employees as well as the employees
of “[a]ll contractors and subcontractors who perform labor or work or provide
materials for the construction project” or “[a]ll contractors and * * * a substantial
number of all the subcontractors who perform labor or work or provide materials
for the construction project.” R.C. 4123.35(O). In return for providing this
coverage and satisfying other related statutory obligations, the self-insuring
employer gains protection against claims arising from the work-related injury or
death of any of its own employees as well as the employees of any subcontractors
that are enrolled in the self-insurance plan. R.C. 4123.35 and 4123.74.
{¶ 14} A subcontractor who enrolls in the contractor’s self-insurance
program does not pay workers’ compensation premiums to the state for the payroll
that it reports for work performed at the construction site by covered employees.
R.C. 4123.35(O). According to Stolz, subcontractors interested in enrolling in the
self-insurance program deduct their costs for workers’ compensation premiums
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SUPREME COURT OF OHIO
from their bids to the contractor because this expense will be undertaken by the
self-insured employer for the project.
Application of R.C. Chapter 4123 to the certified question
{¶ 15} The parties agree that a general contractor that is a self-insuring
employer on the project receives immunity from suits by its own employees as well
as the employees of enrolled subcontractors arising from injuries or death occurring
in the course of work on the project. It is also undisputed that the subcontractor
who actually employs a worker who is injured or killed on the job is protected from
that worker’s claims. At issue here is whether an enrolled subcontractor is subject
to claims by an employee of a different enrolled subcontractor working on the same
self-insured construction project.
{¶ 16} In support of his argument that enrolled subcontractors are not
immune from suits by other enrolled subcontractors’ employees on the project,
Stolz relies on the placement of the apostrophes in the phrase “contractor’s or
subcontractor’s” in the following portion of R.C. 4123.35(O):
The contractors and subcontractors included under a certificate
issued under this division are entitled to the protections provided
under this chapter and Chapter 4121. of the Revised Code with
respect to the contractor’s or subcontractor’s employees who are
employed on the construction project which is the subject of the
certificate, for death or injuries that arise out of, or death, injuries,
or occupational diseases that arise in the course of, those employees’
employment on that construction project.
(Emphasis added). Stolz argues that because the italicized phrase employs singular
possessive nouns, each subcontractor is protected only from claims brought by its
own employees.
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January Term, 2016
{¶ 17} Petitioners contend that all subcontractors enrolled in the
construction project’s self-insurance plan are immune from suit by any covered
employee. They rely on a different portion of the same paragraph, stating,
“[C]ontractors and subcontractors included under a certificate issued under this
division are entitled to the protections provided under this chapter * * *.” Id.
Petitioners argue that this statutory language does not explicitly limit immunity to
the employer-subcontractor and the self-insuring general contractor. Instead, they
assert, it offers expansive protection against claims from the employee of any
enrolled subcontractor against any other enrolled subcontractor. We find that the
key to answering the certified question lies in R.C. 4123.35(O), though the relevant
passage is not quoted by the parties.
{¶ 18} Amid the complex statutory framework for workers’ compensation,
the General Assembly has created a legal fiction in which the contractor who is the
“self-insuring employer” is the legal employer, for workers’ compensation
purposes, of all employees of enrolled subcontractors who are engaged in work at
the construction site.
{¶ 19} R.C. 4123.35(O) provides:
A self-insuring employer who complies with this division is
entitled to the protections provided under this chapter and Chapter
4121. of the Revised Code with respect to the employees of the
contractors and subcontractors covered under a certificate issued
under this division for death or injuries that arise out of, or death,
injuries, or occupational diseases that arise in the course of, those
employees’ employment on that construction project, as if the
employees were employees of the self-insuring employer * * *.
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SUPREME COURT OF OHIO
(Emphasis added.) It is with this language that the General Assembly established
the legal fiction that the self-insuring employer is the employer of all covered
employees, including employees of enrolled subcontractors, for purposes of
workers’ compensation. That fiction is reiterated later in R.C. 4123.35(O) with the
instruction that “[t]he contractors and subcontractors included under a certificate
issued under this division shall identify in their payroll records the employees who
are considered the employees of the self-insuring employer listed in that certificate
for purposes of this chapter * * *.” (Emphasis added).
{¶ 20} When R.C. 4123.35(O) is read in conjunction with R.C. 4123.74, as
it must be, see Bryan v. Hudson, 77 Ohio St.3d 376, 380, 674 N.E.2d 678 (1997),
the statute provides that the self-insuring employer, who through the legal fiction
is the only employer on the project, will “not be liable to respond in damages at
common law or by statute for any injury, or occupational disease, or bodily
condition, received or contracted by any employee in the course of or arising out
of” work on the self-insured construction project, R.C. 4123.74.
{¶ 21} It is also through this legal fiction that the General Assembly gives
effect to the provision in the law that “[t]he contractors and subcontractors included
under a certificate issued under this division are entitled to the protections provided
under this chapter * * *.” As described above, R.C. 4123.35(O) provides that for
the purpose of workers’ compensation matters, the employer of all workers on the
self-insured construction project is the self-insuring employer. Thus, the General
Assembly has made clear that for purposes of workers’ compensation, enrolled
subcontractors do not have employees working on the construction project.
Accordingly, those subcontractors cannot be liable for the workplace injuries of
their own employees on the construction project under the workers’ compensation
scheme—the general contractor is the responsible party.
{¶ 22} Ohio law also limits recovery through tort law by employees or their
families for workplace injury or death from any enrolled subcontractor on the
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January Term, 2016
project, to the same extent that recovery is limited by workers’ compensation law.
This is true because under the law an employee “who is injured as a result of a co-
employee’s negligent acts, who applied for benefits under Ohio’s workers’
compensation statutes, and whose injury is found to be compensable thereunder is
precluded from pursuing any additional common-law or statutory remedy against
such co-employee.” Kaiser v. Strall, 5 Ohio St.3d 91, 449 N.E.2d 1 (1983),
paragraph one of the syllabus. See also R.C. 4123.741. Accordingly, a worker who
may be compensated with workers’ compensation benefits is prevented from suing
a co-employee (any other employee on the job site who is enrolled in the self-
insuring employer’s plan), and thus the worker cannot seek to hold the co-
employee’s actual employer vicariously liable in order to recover damages in tort.
See Natl. Union Fire Ins. Co. of Pittsburgh, PA v. Wuerth, 122 Ohio St.3d 594,
2009-Ohio-3601, 913 N.E.2d 939, ¶ 22 (“a principal is vicariously liable only when
an agent could be held directly liable”).
Stolz’s Argument
{¶ 23} In reaching this conclusion, we are mindful of the language on which
Stolz focuses his argument:
The contractors and subcontractors included under a certificate
issued under this division are entitled to the protections provided
under this chapter and Chapter 4121. of the Revised Code with
respect to the contractor’s or subcontractor’s employees who are
employed on the construction project which is the subject of the
certificate, for death or injuries that arise out of, or death, injuries,
or occupational diseases that arise in the course of, those employees’
employment on that construction project.
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SUPREME COURT OF OHIO
R.C. 4123.35(O). That language relates to the scope of protection a subcontractor
enjoys through the self-insurance program. The next sentence also relates to the
limited class of covered employees: “[t]he contractors and subcontractors included
under a certificate issued under this division shall identify in their payroll records
the employees who are considered the employees of the self-insuring employer
listed in that certificate for purposes of this chapter * * *.” Id.
{¶ 24} Read in context with the entirety of R.C. 4123.35(O), the import of
this language is to clarify that only those employees working on the covered
construction project are included in the self-insurance program and that they are
covered only while they are engaged in work for the construction project. The fact
that a subcontractor is covered under the certificate for the self-insured construction
project does not exempt the subcontractor from its independent obligation to obtain
workers’ compensation coverage for those employees who are not working on the
construction project. Thus, the only reasonable interpretation of “contractor’s or
subcontractor’s employees” in R.C. 4123.35(O), on which Stolz relies, is as a
limitation on which employees are covered under the self-insurance plan, not which
employers are entitled to immunity.
{¶ 25} Because our interpretation is based on the plain, unambiguous
language of the statute, we do not delve into the legislative history of the pertinent
provisions. Sears v. Weimer, 143 Ohio St. 312, 55 N.E.2d 413 (1944), paragraph
five of the syllabus (“An unambiguous statute is to be applied, not interpreted”).
{¶ 26} Nor may we reach Stolz’s policy argument that the social bargain of
workers’ compensation begins to break down when a construction project is self-
insured. Although we recognize that it has some merit, that argument must be
directed to the General Assembly, rather than to this court.
CONCLUSION
{¶ 27} We conclude that R.C. 4123.35 and 4123.74 create a legal fiction
that a self-insuring employer for a self-insured construction project is the single
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January Term, 2016
employer, for workers’ compensation purposes, of all employees working for
enrolled subcontractors on that project. Accordingly, Ohio’s workers’
compensation scheme provides immunity to subcontractors enrolled in a self-
insured construction project from the claims of employees of other enrolled
subcontractors who are injured or killed while working on the project, provided that
the injury, illness, or death is compensable under Ohio’s workers’ compensation
laws. Thus, we answer the certified state-law question in the affirmative.
So answered.
O’DONNELL, LANZINGER, KENNEDY, and O’NEILL, JJ., concur.
FRENCH, J., dissents with an opinion that PFEIFER, J., joins.
_____________________
FRENCH, J., dissenting.
{¶ 28} I respectfully dissent from the majority opinion. I agree that if the
meaning of the statute is unambiguous and definite, we must apply it, and we need
not interpret it further. State ex rel. Savarese v. Buckeye Local School Dist. Bd. of
Edn., 74 Ohio St.3d 543, 545, 660 N.E.2d 463 (1996). In my view, however, the
correct analysis of R.C. 4123.35(O) does not require that any paragraph perform
double duty in delineating the workers’ compensation status of the self-insuring
employer, enrolled contractors and subcontractors, and employees of the enrolled
contractors and subcontractors. Instead, each of four sequential paragraphs in R.C.
4123.35(O) sets up an aspect of the workers’ compensation scheme applicable to
self-insured construction projects.
{¶ 29} The sixth paragraph of R.C. 4123.35(O) creates a legal fiction in
which the self-insuring employer is the employer of every enrolled contractor and
subcontractor’s employees for workers’ compensation purposes. It says:
A self-insuring employer who complies with this division is
entitled to the protections provided under this chapter and Chapter
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SUPREME COURT OF OHIO
4121. of the Revised Code with respect to the employees of the
contractors and subcontractors covered under a certificate issued
under this division for death or injuries that arise out of, or death,
injuries, or occupational diseases that arise in the course of, those
employees’ employment on that construction project, as if the
employees were employees of the self-insuring employer, provided
that the self-insuring employer also complies with this section. No
employee of the contractors and subcontractors covered under a
certificate issued under this division shall be considered the
employee of the self-insuring employer listed in that certificate for
any purposes other than this chapter and Chapter 4121. of the
Revised Code. Nothing in this division gives a self-insuring
employer authority to control the means, manner, or method of
employment of the employees of the contractors and subcontractors
covered under a certificate issued under this division.
(Emphasis added.) R.C. 4123.35(O).
{¶ 30} R.C. 4123.35(O) requires the self-insuring employer to administer
and pay these employees’ eligible workers’ compensation claims. In return, the
self-insuring employer receives protection from negligence suits. In short,
workers’ compensation benefits are an employee’s exclusive remedy against the
self-insuring employer. See Freese v. Consol. Rail Corp., 4 Ohio St.3d 5, 7, 445
N.E.2d 1110 (1983), citing Ohio Constitution, Article II, Section 35.
{¶ 31} The next paragraph—the one the parties primarily contest—extends
the protections of R.C. Chapter 4121 and 4123 to the enrolled contractors and
subcontractors. But it specifies that each enrolled contractor or subcontractor
receives this protection with respect solely to its own employees. It provides:
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January Term, 2016
The contractors and subcontractors included under a
certificate issued under this division are entitled to the protections
provided under this chapter and Chapter 4121. of the Revised Code
with respect to the contractor’s or subcontractor’s employees who
are employed on the construction project which is the subject of the
certificate, for death or injuries that arise out of, or death, injuries,
or occupational diseases that arise in the course of, those employees’
employment on that construction project.
(Emphasis added.) R.C. 4123.35(O) (seventh paragraph).
{¶ 32} This provision is necessary because the enrolled contractors and
subcontractors do not actually pay workers’ compensation premiums for their
employees on the project. But the contractors and subcontractors’ employees
remain employees of the contractor and subcontractor employers—even for
workers’ compensation purposes—because the contractors and subcontractors
retain “the right to control the manner or means of performing the work.” Daniels
v. MacGregor Co., 2 Ohio St.2d 89, 206 N.E.2d 554 (1965), syllabus; R.C.
4123.35(O) (sixth paragraph, discussing self-insuring employer’s protections under
R.C. Chapters 4121 and 4123). And generally, to get the protection of the workers’
compensation statutes—immunity from common-law or statutory damages—an
employer must pay into the state insurance fund for its employees. Daniels at the
syllabus, citing Ohio Constitution, Article II, Section 35, and R.C. 4123.74.
Therefore, only the language of the seventh paragraph of R.C. 4123.35(O) extends
the protections of R.C. Chapters 4121 and 4123 to these actual employers who do
not pay into the state insurance fund. That is, the statute creates a second legal
fiction in which the contractor or subcontractor employers receive the benefits of
the workers’ compensation system without directly contributing to it.
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{¶ 33} The next paragraph limits the self-insuring employer’s workers’
compensation responsibility to those employees who actually work on a particular
project. It begins:
The contractors and subcontractors included under a
certificate issued under this division shall identify in their payroll
records the employees who are considered the employees of the self-
insuring employer listed in that certificate for purposes of this
chapter and Chapter 4121. of the Revised Code, and the amount that
those employees earned for employment on the construction project
that is the subject of that certificate.
R.C. 4123.35(O) (eighth paragraph).
{¶ 34} This paragraph provides the mechanism that limits the self-insuring
employer’s responsibility for administering and paying workers’ compensation
claims to the enrolled contractors’ and subcontractors’ employees who actually
work on the self-insured construction project. It accomplishes this by requiring the
enrolled contractors and subcontractors to identify in their payroll records their
employees who, under the statute’s legal fiction, are considered employees of the
self-insuring employer.
{¶ 35} The next and, for our purposes, final paragraph of R.C. 4123.35(O)
confirms that fellow-servant immunity does not bar employees of one enrolled
contractor or subcontractor from suing employees of another enrolled contractor or
subcontractor. In short, this paragraph preserves an employee’s right to sue
tortfeasors employed by other enrolled contractors or subcontractors. The majority
fails to consider this provision. It provides:
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January Term, 2016
Nothing in this division shall be construed as altering the
rights of employees under this chapter and Chapter 4121. of the
Revised Code as those rights existed prior to September 17, 1996.
Nothing in this division shall be construed as altering the rights
devolved under sections 2305.31 and 4123.82 of the Revised Code
as those rights existed prior to September 17, 1996.
R.C. 4123.35(O) (ninth paragraph).
{¶ 36} By its plain language, this provision preserves an injured employee’s
rights as they existed prior to September 17, 1996—the effective date of Sub.H.B.
No. 245, 146 Ohio Laws, Part II, 2955, which first introduced provisions
substantially similar to those now contained in R.C. 4123.35(O), id. at 2971-2976.
Then, as now, a worker who was injured on the job and who received workers’
compensation benefits from his employer’s participation in the workers’
compensation system could sue a tortfeasor who was employed by a different
employer, subject to the subrogation rights of the workers’ compensation
administrator or a self-insuring employer. See R.C. 4123.931 (enacted in 1995,
Am.Sub.H.B. No. 278, 146 Ohio Laws, Part II, 3581, 3595-3597; setting forth
rights of subrogation with respect to a workers’ compensation claimant’s claims
against third-party tortfeasors); R.C. 4123.93 (defining claimant, statutory
subrogee, and third party for purposes of subrogation provision). Therefore, an
injured employee of one enrolled contractor or subcontractor may sue an employee
of another enrolled contractor or subcontractor who caused the injury, as if the legal
fiction created in R.C. 4123.35(O) did not exist.
{¶ 37} In short, based on a comprehensive reading of the relevant
provisions, I disagree with the majority’s ultimate holding that R.C. 4123.35(O)
and 4123.74 preclude the employees of one enrolled contractor or subcontractor
from suing in tort employees of another contractor or subcontractor—and
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SUPREME COURT OF OHIO
recovering from the other contractor or subcontractor under respondeat superior
principles. Because I would answer the certified question in the negative, I dissent.
PFEIFER, J., concurs in the foregoing opinion.
_____________________
Goodson & Co. and Brett C. Goodson, for respondent.
Kohnen & Patton, L.L.P., and Colleen M. Blandford, for petitioner J & B
Steel Erectors, Inc.
Patsfall, Yeager & Pflum, L.L.C., Stephen M. Yeager, and Steve Patsfall,
for petitioners D.A.G. Construction Co., Inc., and TriVersity Construction Co.,
L.L.C.
Green & Green, Jane M. Lynch, and Jared A. Wagner, for petitioner Messer
Construction Co.
_____________________
16