Vandemark v. Southland Corp.

Holmes, J.,

dissenting. Under any analysis of the law, either under the facts as this case was presented and decided by the lower courts, or under the actual facts as presented herein, the majority opinion is legally erroneous even though arriving at a correct conclusion.

Unfortunately, counsel for the employer permitted this case to advance through the lower courts in a most unusual stance. The issues come to us for a determination of the liability of the employer here as if this employer were a self-insured employer under the workers’ compensation law of Ohio. Indeed, the issues were presented to the trial court on motion for judgment on the pleadings in this manner, and the trial court dismissed, relying on Greenwalt v. Goodyear Tire & Rubber Co. (1955), 164 Ohio St. 1 , 57 O.O. 57 , 128 N.E. 2d 116 . The matter *8 was also reviewed by the court of appeals in that stance, and the trial court was reversed, both upon the basis that Southland was a non-complying self-insured employer under R.C. 4123.77, and that “the complaint alleges a pecuniary loss as the direct result of misconduct or negligence * *

It was not until briefs were filed with this court, and again upon oral argument, that it was disclosed that Southland was in fact not a self-insured employer, but a complying employer contributing to the State Insurance Fund. Further, the facts show Southland was carrying health and accident group coverage through a private insurance carrier, and Vandemark had received short-term disability benefits from such source.

The law that would be applicable to a complying State Insurance Fund employer, versus the law that would be applicable to a self-insured employer, differs as regards the duty of the employer to file applications for the payment of compensation and medical expenses of the employees. Although Ohio Adm. Code 4123-3-08(A)(8) does mandate a duty upon all employers to “assist” injured or disabled employees in the preparation and submission of applications for compensation and/or benefits, this section does not require the insurance fund employer to be the one responsible for the filing of the application. There is greater specificity in this regard by way of Ohio Adm. Code 4123-3-06(A)(l) which states that “[a]n employee of an employer contributing to the private fund shall make application for the payment of such compensation and medical expenses * * (Emphasis added.) And, further, relative to a self-insuring employer, (A)(2) of this regulation provides that “[t]he employee and the self-insuring employer shall complete form C-50 and file same with the bureau * * *.” (Emphasis added.)

The consideration of the rights and duties of a complying insurance-fund employer could well be viewed in a different light if there had been malice, fraud, misrepresentation, or affirmative misconduct alleged in the complaint here, but no such allegations were set forth. Upon the basis of the actual facts known to be present here and the applicable law, this matter should be remanded to the trial court for a correct determination upon such facts and the law. Otherwise, judgment should be entered for the defendant Southland Corporation. On this basis, I dissent from the opinion of the majority.

However, in that the majority has rendered an advisory opinion herein based upon facts other than actually exist, I shall herewith set forth pertinent commentary disagreeing with the law enunciated by the majority, but agreeing with the conclusion as it would relate to a self-insured employer.

The majority mischaracterizes Vandemark's cause of action as one which “falls outside the scope of the workers’ compensation statutes” and into the scope of the common law. More accurately, Vandemark’s cause of action against Southland Corporation for damages suffered by his alleged self-insured employer’s noncompliance with the requirements of R.C. 4123.35 is preserved and defined by the workers’ compensation statutes, R.C. 4123.75 through 4123.77. Vandemark timely filed such action, pursuant to R.C. 2305.09(D). Our decision in Greenwalt , wherein the employer was not a “noncomplying employer” under then existing statutes, is patently distinguishable from the instant case and need not be overruled. Therefore, I concur only in the conclusion as reached by the majority in this regard.

Southland Corporation, as a self- *9 insured (direct payment) employer for workers’ compensation purposes, was required to comply with the provisions of R.C. 4123.35 and the rules promulgated thereunder. The rules mandated by R.C. 4123.35 were first promulgated in July 1962 and now provide strict standards and procedures to be followed by self-insured employers. Ohio Adm. Code 4121-9-01(C) states:

“ ‘Self-insurance’ is a privilege granted or denied after an appropriate hearing before the industrial commission. Once granted the privilege of self-insurance, the company determines the first level of a claim and must have employees with a working knowledge of current Ohio workers’ compensation law and all rules and regulations of the bureau of workers’ compensation and the industrial commission. A self-insured employer may, without any prior order from the commission, grant or refuse to grant any claim made under the Ohio Workers’ Compensation Act. * * * It may not pay compensation or benefits less than that which is required by law.” (Emphasis added.)

Thus, under this rule, the self-insured employer is responsible for determining an injured employee’s claim for compensation, which determination must be made following the guidelines of the Workers’ Compensation Act. If an award is made, the compensation paid may not be less than the amount payable under the Act. This requirement is reiterated in Ohio Adm. Code 4121-9-03(M):

“Minimal level of performance as a criterion for granting permission to pay compensation directly.

“(7) The employer shall pay all compensation as required by the workers’ compensation laws of the state of Ohio. By becoming self-insured, the employer agrees to abide by the rules and regulations of the bureau and industrial commission and further agrees to pay compensation and benefits subject to the provisions of these rules. * * *”

Most importantly in the case at bar, Ohio Adm. Code 4121-9-03(M)(10) requires the employer to notify the claimant, the Bureau of Workers’ Compensation or the Industrial Commission in writing as to what conditions of the claimant’s injury it has recognized and those conditions it refuses to recognize. Until such notice is given to the Industrial Commission or the bureau, the two-year limitations period (measured from time of injury), assuming this period is the one applicable, continues to run. It is obvious, then, that when the self-insured employer fails to file the notice, it is not only in violation of these rules but is also seriously jeopardizing the rights of the claimant to participate in the State Insurance Fund.

An employee certainly has a cause of action against such non-complying self-insured employer. That action is not born of this court’s Blankenship decision, but rather is statutory in its origin. R.C. 4123.77 provides:

“Employers mentioned in division (B)(2) of section 4123.01 of the Revised Code, who fail to comply with section 4123.35 of the Revised Code are not entitled to the benefits of sections 4123.01 to 4123.94, inclusive, of the Revised Code, during the period of such noncompliance, but are liable to their employees for damages suffered by reason of personal injuries sustained in the course of employment caused by the wrongful act, neglect, or default of the employer, or any of the employer’s officers, agents, or employees, and also to the personal representatives of such employees where death results from such injuries, and in such action the defendant shall not avail himself or itself of the following common law defenses:

*10 “(A) The defense of the fellow servant rule;

“(B) The defense of the assumption of risk;

“(C) The defense of contributory negligence.

“Such employers are subject to sections 4123.37 and 4123.75 3 of the Revised Code.” (Emphasis and footnote added.)

Thus, the noncomplying self-insured employer is not entitled to the immunity of R.C. Chapter 4123 and is fully liable to the employee for amounts it unlawfully underpaid and for damages which flow from its failure to toll the statute of limitations by notifying the commission or bureau of the claim.

Furthermore, Vandemark’s claim is not governed by the two-year period of R.C. 4123.84, as that section affects only claims for compensation, not civil actions against a noncompliant employer stripped of its immunity. That statute is clearly limited to “claims for compensation or benefits for the specific part or parts of the body injured.” Rather, his claim is governed by the four-year torts provision of R.C. 2305.09(D):

“An action for any of the following causes shall be brought within four years after the cause thereof accrued:

‘ ‘(D) For an injury to the rights of the plaintiff not arising on contract nor enumerated in sections 2305.10 to 2305.12, inclusive, 2305.14 and 1304. 29 of the Revised Code.”

Since Vandemark’s claim for damages accrued upon discovery of his employer’s neglect, allegedly in June 1985, his action was timely filed.

Finally, as suggested above, Greenwalt v. Goodyear Tire & Rubber Co., supra, is distinguishable from the facts presented herein, based on the change in law since that case was decided. Although Goodyear was a self-insured employer, as allegedly is Southland Corporation, the workers’ compensation law in 1955 (R.C. 4123.35, effective October 1, 1953) did not require Goodyear to notify the commission of Greenwalt’s claim. At that time, the burden to do so was with Greenwalt, and the gratuitous promise *11 of Goodyear to do so did not alter Greenwalt’s responsibility. Now, since the self-insured employer has been given the duty both to determine the initial claim and notify the commission of its decision, the Greenwalt case is not dispositive.

Although I agree with conclusions as reached by the majority albeit through the application of other law, I dissent in that the actual facts of the matter would require the application of the aforestated law pertaining to a complying State Insurance Fund employer.

Moyer, C.J., and Wright, J., concur in the foregoing dissenting opinion.

R.C. 4123.75 provides, in part:

“Any employee whose employer has failed to comply with section 4123.35 of the Revised Code, who has been injured or has suffered an occupational disease in the course of his employment, which was not purposely self-inflicted, or his dependents in case death has ensued, may file his application with the industrial commission for compensation and the commission shall hear and determine such application for compensation in like manner as in other claims and shall make such award to such claimant as he would be entitled to receive if such employer had complied with section 4123.35 of the Revised Code. Payment of the claim shall be made promptly from the statutory surplus fund. Such payment shall not bar any action under section 4123.77 of the Revised Code.- If a recovery is made in an action under section 4123.77 of the Revised Code any funds paid from the state insurance fund under this section shall be repaid by the claimant. * * *”

Similarly, Ohio Adm. Code 4121-14-01 provides:

“The employers, as defined in division (B) of section 4123.01 of the Revised Code, who either fail to establish industrial coverage and make payments of premiums to the state insurance fund, as required by Chapter 4123. of the Revised Code and rules of the industrial commission and the bureau of workers’ compensation, or fail to comply with the requirements for self-insurance under section 4123.35 of the Revised Code and the rules of the industrial commission, shall be regarded as noncomplying employers.”