State ex rel. Hoover Co. v. Mihm

Ohio Supreme Court

State ex rel. Hoover Co. v. Mihm

669 N.E.2d 1130, 76 Ohio St. 3d 619

Ohio Supreme Court·Decided October 9, 1996·No. No. 94-1788·Published·Cited by 8 cases

Opinions

Per Curiam.

Two issues are presented for our review. First, is the promulgation of Ohio Adm.Code 4123-17-32(D) invalid due to BWC’s failure to comply with R.C. Chapter 119? Second, does BWC owe a duty, by virtue of the asserted improper promulgation of Ohio Adm.Code 4123-17-32(D), either to grant retroactive effect to Hoover’s notice of withdrawal or to calculate Hoover’s assessment for the first half of 1990 under the pre-1990 standard? For the reasons that follow, we hold that Hoover has no right to BWC’s performance of the requested acts, regardless of whether Ohio Adm.Code 4123-17-32(D) was promulgated properly. Accordingly, we affirm the court of appeals’ judgment denying the writ of mandamus and do not pass upon the alleged invalidity of Ohio Adm.Code 4123-17-32(D).

In 1989 and before, Hoover participated in the handicap reimbursement program established under R.C. 4123.343. This statute, enacted in 1955 to encourage employment of disabled workers, charges employee injury claims . attributable to a preexisting handicap to the surplus portion of the state insurance fund. Fulton, Ohio Workers’ Compensation Law (1991) 312, Section 14.15; Young, Workman’s Compensation Law of Ohio (2 Ed.1971) 288, Section 17.5. The surplus fund either pays such claims directly or reimburses self-insured employers for paid handicap claim expenses. Fulton, supra.

Since the 1986 enactment of R.C. 4123.343(G), 141 Ohio Laws, Part I, 745, self-insured employers have been allowed to withdraw from or “opt out” of the handicap reimbursement program. In June 1990, Hoover gave notice of its ■withdrawal mainly to avoid the consequences of R.C. 4123.35(1), effective November 3,1989. 143 Ohio Laws, Part II, 3197, 3328. Beginning on July 1,1990, R.C. 4123.35(1) authorized a new basis for calculating the assessment of participating self-insured employers to compensate the surplus fund and to finance the program. Previously, all self-insurers contributed to the surplus fund by paying a percentage of the payroll-based premium they would have paid as a state fund employer, and self-insurers participating in the handicap reimbursement program paid an additional percentage of that premium. Young, supra, at 237, Section [622]*62213.6; Fulton, supra, at 310-311, Section 14.13; Ohio Adm.Code 4123-17-30(B).¹ The new handicap reimbursement assessment was to be calculated based on the “paid compensation” expended by each self-insurer in the preceding year.² Apparently, it was also to be calculated separately and only in relation to other self-insurers, such that handicap claim costs were no longer spread over all employers according to their classification of hazard. See Fulton, supra, at 311, Section 14.13. This change, together with the 12.4 percent rate Ohio Adm.Code 4123-17-32(D)³ applied to the self-insurer’s paid compensation, allegedly increased Hoover’s assessment by six hundred percent.

[623] Hoover claims that it would have opted out of the handicap reimbursement program timely, that is, before December 31, 1989, with better notice of the new assessment rate in Ohio Adm.Code 4123-17-32(D). Hoover’s speculation as to this possibility, however, is insufficient to justify retroactive relief from the assessment. Moreover, Hoover’s cited authority — Condee v. Lindley (1984), 12 Ohio St.3d 90, 12 OBR 79, 465 N.E.2d 450 — does not establish a right to this or other affirmative relief upon the invalidation or rescission of a regulation pursuant to R.C. 119.02. In Condee, we invalidated a Tax Commissioner’s policy for apportioning the tax value of public utility property because the policy had not been formally promulgated in accordance with R.C. Chapter 119. We did not go further and attempt to correct the inequity challenged by the complaining county auditor.

Nor has Hoover shown a clear right to assessment for the first half of 1990 under pre-1990 standards. The parties agree that the enactment of R.C. 4123.35(1) changed the self-insurers’ handicap reimbursement assessment from a percentage of the payroll-based premium under former Ohio Adm.Code 4123-17-30(B) to a calculation based on paid compensation. Ohio Adm.Code 4123-17-30(B), therefore, has been superseded by R.C. 4123.35(1). DLZ Corp. v. Dept. of Adm. Serv. (1995), 102 Ohio App.3d 777, 781, 658 N.E.2d 28, 31 (“An administrative rule that would preclude the use of a statute must yield to the statute.”). See, also, State ex rel. Kildow v. Indus. Comm. (1934), 128 Ohio St. 573, 581, 1 O.O. 235, 238, 192 N.E. 873, 876, and State ex rel. Galloway v. Indus. Comm. (1938), 134 Ohio St. 496, 13 O.O. 102, 17 N.E.2d 918, paragraph one of the syllabus (rules in conflict with express provisions of statutes are unenforceable).

For this reason, Hoover’s cited authority for invoking the previous assessment standard — State ex rel. Reider’s, Inc. v. Indus. Comm. (1988), 48 Ohio App.3d 242, 549 N.E.2d 532 — also does not apply here. In Reider’s, the Court of Appeals for Franklin County invalidated a resolution in which the Industrial Commission declared a “temporary moratorium” on processing applications for self-insured status. The court held that the temporary moratorium “was but a thinly veiled attempt to rescind a preexisting rule, as defined by R.C. 119.01(C), by resolution,” id. at 245, 549 N.E.2d at 534, and it ordered that the applications for self-insurance be processed in accordance with the preexisting rule. However, the Reider’s court was not confronted with an intervening statute, similar to R.C. [624]*6244123.35(1), that had changed the procedure for processing these applications and was in conflict with the preexisting rule.

Finally, Hoover complains that the court of appeals’ decision — to deny mandamus despite its conclusion that Ohio Adm.Code 4123-17-32(D) was invalid — left the parties “in limbo” as far as the assessment of self-insured employers participating in the handicap reimbursement program. However, the invalidation of an administrative rule does not, as Hoover seems to argue, necessarily leave the regulated agency rudderless in carrying out statutory duties. Rather, the agency must still execute authority reasonably and in a manner consistent with the objectives and standards that governing statutes impose. See, e.g., Dressler Coal Corp. v. Call (1981), 4 Ohio App.3d 81, 85, 4 OBR 161, 166, 446 N.E.2d 785, 789 (agency permissibly enforced statutory standards with internally developed evaluation criteria where its previously adopted rules had been enjoined and new rules had not yet been promulgated). Thus, even if we were to declare Ohio Adm.Code 4123-17-32(D) invalid as improperly promulgated, BWC would nevertheless have been required to execute its charge under R.C. 4123.35(1) in accordance with R.C. Chapter 4123 and other applicable law.

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Per Curiam.

Two issues are presented for our review. First, is the promulgation of Ohio Adm.Code 4123-17-32(D) invalid due to BWC’s failure to comply with R.C. Chapter 119? Second, does BWC owe a duty, by virtue of the asserted improper promulgation of Ohio Adm.Code 4123-17-32(D), either to grant retroactive effect to Hoover’s notice of withdrawal or to calculate Hoover’s assessment for the first half of 1990 under the pre-1990 standard? For the reasons that follow, we hold that Hoover has no right to BWC’s performance of the requested acts, regardless of whether Ohio Adm.Code 4123-17-32(D) was promulgated properly. Accordingly, we affirm the court of appeals’ judgment denying the writ of mandamus and do not pass upon the alleged invalidity of Ohio Adm.Code 4123-17-32(D).

In 1989 and before, Hoover participated in the handicap reimbursement program established under R.C. 4123.343. This statute, enacted in 1955 to encourage employment of disabled workers, charges employee injury claims . attributable to a preexisting handicap to the surplus portion of the state insurance fund. Fulton, Ohio Workers’ Compensation Law (1991) 312, Section 14.15; Young, Workman’s Compensation Law of Ohio (2 Ed.1971) 288, Section 17.5. The surplus fund either pays such claims directly or reimburses self-insured employers for paid handicap claim expenses. Fulton, supra.

Since the 1986 enactment of R.C. 4123.343(G), 141 Ohio Laws, Part I, 745, self-insured employers have been allowed to withdraw from or “opt out” of the handicap reimbursement program. In June 1990, Hoover gave notice of its ■withdrawal mainly to avoid the consequences of R.C. 4123.35(1), effective November 3,1989. 143 Ohio Laws, Part II, 3197, 3328. Beginning on July 1,1990, R.C. 4123.35(1) authorized a new basis for calculating the assessment of participating self-insured employers to compensate the surplus fund and to finance the program. Previously, all self-insurers contributed to the surplus fund by paying a percentage of the payroll-based premium they would have paid as a state fund employer, and self-insurers participating in the handicap reimbursement program paid an additional percentage of that premium. Young, supra, at 237, Section [622]*62213.6; Fulton, supra, at 310-311, Section 14.13; Ohio Adm.Code 4123-17-30(B).¹ The new handicap reimbursement assessment was to be calculated based on the “paid compensation” expended by each self-insurer in the preceding year.² Apparently, it was also to be calculated separately and only in relation to other self-insurers, such that handicap claim costs were no longer spread over all employers according to their classification of hazard. See Fulton, supra, at 311, Section 14.13. This change, together with the 12.4 percent rate Ohio Adm.Code 4123-17-32(D)³ applied to the self-insurer’s paid compensation, allegedly increased Hoover’s assessment by six hundred percent.

[623] Hoover claims that it would have opted out of the handicap reimbursement program timely, that is, before December 31, 1989, with better notice of the new assessment rate in Ohio Adm.Code 4123-17-32(D). Hoover’s speculation as to this possibility, however, is insufficient to justify retroactive relief from the assessment. Moreover, Hoover’s cited authority — Condee v. Lindley (1984), 12 Ohio St.3d 90, 12 OBR 79, 465 N.E.2d 450 — does not establish a right to this or other affirmative relief upon the invalidation or rescission of a regulation pursuant to R.C. 119.02. In Condee, we invalidated a Tax Commissioner’s policy for apportioning the tax value of public utility property because the policy had not been formally promulgated in accordance with R.C. Chapter 119. We did not go further and attempt to correct the inequity challenged by the complaining county auditor.

Nor has Hoover shown a clear right to assessment for the first half of 1990 under pre-1990 standards. The parties agree that the enactment of R.C. 4123.35(1) changed the self-insurers’ handicap reimbursement assessment from a percentage of the payroll-based premium under former Ohio Adm.Code 4123-17-30(B) to a calculation based on paid compensation. Ohio Adm.Code 4123-17-30(B), therefore, has been superseded by R.C. 4123.35(1). DLZ Corp. v. Dept. of Adm. Serv. (1995), 102 Ohio App.3d 777, 781, 658 N.E.2d 28, 31 (“An administrative rule that would preclude the use of a statute must yield to the statute.”). See, also, State ex rel. Kildow v. Indus. Comm. (1934), 128 Ohio St. 573, 581, 1 O.O. 235, 238, 192 N.E. 873, 876, and State ex rel. Galloway v. Indus. Comm. (1938), 134 Ohio St. 496, 13 O.O. 102, 17 N.E.2d 918, paragraph one of the syllabus (rules in conflict with express provisions of statutes are unenforceable).

For this reason, Hoover’s cited authority for invoking the previous assessment standard — State ex rel. Reider’s, Inc. v. Indus. Comm. (1988), 48 Ohio App.3d 242, 549 N.E.2d 532 — also does not apply here. In Reider’s, the Court of Appeals for Franklin County invalidated a resolution in which the Industrial Commission declared a “temporary moratorium” on processing applications for self-insured status. The court held that the temporary moratorium “was but a thinly veiled attempt to rescind a preexisting rule, as defined by R.C. 119.01(C), by resolution,” id. at 245, 549 N.E.2d at 534, and it ordered that the applications for self-insurance be processed in accordance with the preexisting rule. However, the Reider’s court was not confronted with an intervening statute, similar to R.C. [624]*6244123.35(1), that had changed the procedure for processing these applications and was in conflict with the preexisting rule.

Finally, Hoover complains that the court of appeals’ decision — to deny mandamus despite its conclusion that Ohio Adm.Code 4123-17-32(D) was invalid — left the parties “in limbo” as far as the assessment of self-insured employers participating in the handicap reimbursement program. However, the invalidation of an administrative rule does not, as Hoover seems to argue, necessarily leave the regulated agency rudderless in carrying out statutory duties. Rather, the agency must still execute authority reasonably and in a manner consistent with the objectives and standards that governing statutes impose. See, e.g., Dressler Coal Corp. v. Call (1981), 4 Ohio App.3d 81, 85, 4 OBR 161, 166, 446 N.E.2d 785, 789 (agency permissibly enforced statutory standards with internally developed evaluation criteria where its previously adopted rules had been enjoined and new rules had not yet been promulgated). Thus, even if we were to declare Ohio Adm.Code 4123-17-32(D) invalid as improperly promulgated, BWC would nevertheless have been required to execute its charge under R.C. 4123.35(1) in accordance with R.C. Chapter 4123 and other applicable law.

For a writ of mandamus to issue, Hoover must establish that it has a clear legal right to BWC’s performance of a clear legal duty, and that Hoover has no adequate remedy in the ordinary course of law. State ex rel. Huntington Ins. Agency, Inc. v. Duryee (1995), 73 Ohio St.3d 530, 653 N.E.2d 349. Hoover has failed to satisfy this standard. Accordingly, the court of appeals correctly denied the requested writ of mandamus and its judgment is affirmed.

Judgment accordingly.

Moyer, C.J., Resnick, F.E. Sweeney, Pfeifer, Cook and Stratton, JJ., concur. Douglas, J., concurs in part and dissents in part.

Footnotes

1

: Ohio Adm.Code 4123-17-30, effective January 1,1990, provided, in part:

“The bureau of workers’ compensation, exercising its authority to determine and levy against the self-insuring employers an amount to be paid into the state insurance fund pursuant to sections 4123.34 and 4123.35 of the Revised Code * * *, hereby sets that contribution to be effective for the payroll reporting period beginning on July 1,1989, as follows:

« * * #

“(B) Each self-insuring employer shall make payment of one and five-tenths per cent of its premium, computed at the basic rate, for self-insuring employers’ surplus fund charges excluding handicap reimbursement charges, except that each self-insuring employer that does not elect to not participate in the handicap reimbursement program shall make payment of an additional three and five-tenths per cent of its premium, computed at the basic rate.” 1989-1990 Ohio Monthly Record 656. See, also, Ohio Adm.Code 4121-7-30, the predecessor to this rule (1988-1989 Ohio Monthly Record 1315).

3

. Ohio Adm.Code 4123-17-32, also effective January 1,1990, provided:

“The workers’ compensation board, exercising its authority to determine and levy against self-insuring employers amounts to be paid to support the intentional tort fund, the safety and hygiene fund, the administrative cost fund, the portion of the surplus fund that is not used for handicap reimbursement, and the portion of the surplus fund that is used for handicap reimbursement, pursuant to sections * * * 4121.37 [safety and hygiene fund], 4121.80 [intentional tort fund], 4123.34 [premium rates fixed and maintained], 4123.342 [administrative costs fund], and 4123.35 of the Revised Code * * * hereby sets the self-insuring employer assessments to be effective January 1, 1990, and paid by August 31,1990, as follows:

“(A) The assessments shall be on the basis of the paid compensation attributable to the individual self-insuring employer as a fraction of the total amount of paid compensation for the previous calendar year attributable to all amenable self-insuring employers.

« -Jfi

“(D) The assessment to fund the portion of the surplus fund that is used for handicap reimbursement for all self-insuring employers operating in Ohio who have not made an. election to opt out of the handicap reimbursement program under the provisions of division (G) of section 4123.343 of the Revised Code shall be computed by multiplying the following rate by the individual self-insuring employer’s paid compensation for calendar year 1989: