State ex rel. United Automobile, Aerospace & Agricultural Implement Workers of America v. Ohio Bureau of Workers' Compensation

108 Ohio St. 3d 432
CourtOhio Supreme Court
DecidedApril 5, 2006
DocketNo. 2005-0526
StatusPublished
Cited by44 cases

This text of 108 Ohio St. 3d 432 (State ex rel. United Automobile, Aerospace & Agricultural Implement Workers of America v. Ohio Bureau of Workers' Compensation) is published on Counsel Stack Legal Research, covering Ohio Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State ex rel. United Automobile, Aerospace & Agricultural Implement Workers of America v. Ohio Bureau of Workers' Compensation, 108 Ohio St. 3d 432 (Ohio 2006).

Opinions

Per Curiam.

{¶ 1} This is an appeal and cross-appeal from a judgment dismissing a complaint for a writ of mandamus to compel a state agency to follow the law expressed in two of this court’s opinions.

{¶ 2} Under R.C. 4123.931(A), the payment of workers’ compensation benefits “creates a right of recovery in favor of a statutory subrogee against a third party, and the statutory subrogee is subrogated to the rights of a claimant against that third party.” The “statutory subrogee” is “the administrator of workers’ compensation, a self-insuring employer, or an employer that contracts for the direct payment of medical services.” R.C. 4123.93(B).

{¶ 3} Former R.C. 4123.931(A) specified: “A statutory subrogee’s subrogation interest includes * * * estimated future values of compensation and medical benefits arising out of an injury to or disability or disease of a claimant.” See 1995 Am.Sub.H.B. No. 278,146 Ohio Laws, Part II, 3596.

{¶ 4} Former R.C. 4123.931(D) further provided:

{¶ 5} “The entire amount of any settlement or compromise of an action or claim is subject to the subrogation right of a statutory subrogee, regardless of the manner in which the settlement or compromise is characterized. Any settlement or compromise that excludes the amount of compensation or medical benefits shall not preclude a statutory subrogee from enforcing its rights under this section. The entire amount of any award or judgment is presumed to represent compensation and medical benefits and future estimated values of compensation and medical benefits that are subject to a statutory subrogee’s subrogation rights unless the claimant obtains a special verdict or jury interrogatories indicating that the award or judgment represents different types of damages.” Id. at 3596-3597.

{¶ 6} In June 2001, in Holeton v. Crouse Cartage Co. (2001), 92 Ohio St.3d 115, 135, 748 N.E.2d 1111, we held that former R.C. 4128.931 violated Sections 2, 16, and 19, Article I of the Ohio Constitution.

{¶ 7} More specifically, we held: “By giving the subrogee a current collectible interest in estimated future expenditures, [former] R.C. 4123.931(A) creates the conditions under which a prohibited taking may occur. This would happen in those situations where the amount of reimbursement for ‘estimated future values of compensation and medical benefits’ proves to be substantially greater than the [434]*434subrogee’s eventual compensation outlay. In other words, [former] R.C. 4123.931(A) requires the claimant to reimburse the bureau or self-insuring employer for future benefits that the claimant may never receive. In that event, the statute operates not to prevent the claimant from keeping a double recovery but to provide the statutory subrogee with a windfall at the expense of the claimant’s tort recovery.” Id. at 123, 748 N.E.2d 1111.

{¶ 8} In addition, we held:

{¶ 9} “[Former] R.C. 4123.931(D) establishes a procedural framework under which an unconstitutional taking of the claimant’s property or a denial of remedy by due course of law can occur. This framework distinguishes between third-party claims that are tried and third-party claims that are settled. In the case where an award or judgment is rendered in the third-party action, [former] R.C. 4123.931(D) allows the claimant to obtain jury interrogatories segregating damages that do not represent workers’ compensation or medical benefits and, therefore, are not subject to the reimbursement right of the statutory subrogee. In contrast, the entire amount of any settlement or compromise is deemed subject to the reimbursement right of the statutory subrogee, and the claimant is precluded, under any circumstances, from showing that his or her settlement or portions thereof do not represent or duplicate workers’ compensation or medical benefits.

{¶ 10} “ * * * [Former] R.C. 4123.931(D) operates unconstitutionally * * * because it allows for reimbursement from proceeds that do not constitute a double recovery.” Id., 92 Ohio St.3d at 125-126, 748 N.E.2d 1111; see, also, Modzelewski v. Yellow Freight Sys., Inc., 102 Ohio St.3d 192, 2004-Ohio-2365, 808 N.E.2d 381, holding former R.C. 4123.93 unconstitutional.

{¶ 11} In Holeton, 92 Ohio St.3d at 135, 748 N.E.2d 1111, despite holding the statute unconstitutional, we expressly noted that workers’ compensation subrogation statutes are not per se unconstitutional and that we were addressing only the specific provisions in former R.C. 4123.931:

{¶ 12} “We hold * * * that [former] R.C. 4123.931 does violate Sections 2, 16, and 19, Article I of the Ohio Constitution. In so holding, we do not accept the proposition that a workers’ compensation subrogation statute is per se unconstitutional, and nothing in this opinion shall be construed to prevent the General Assembly from ever enacting such a statute. We hold only that [former] R.C. 4123.931, in its present form, is unconstitutional.”

{¶ 13} We also recognized that “virtually every jurisdiction provides some statutory mechanism enabling the employer or fund to recover its workers’ compensation outlay from a third-party tortfeasor.” Id. at 120, 748 N.E.2d 1111.

[435]*435{¶ 14} Following Holeton, the General Assembly enacted 2002 Sub.S.B. No. 227 (“S.B. 227”), which amended the subrogation provisions in R.C. 4123.93 and 4123.931, effective April 9, 2003.

{¶ 15} S.B. 227 repealed the former provisions in R.C. 4123.931(A) and (D) that we had found unconstitutional in Holeton and set forth a new settlement procedure in which a claimant would receive “an amount equal to the uncompensated damages divided by the sum of the subrogation interest plus the uncompensated damages, multiplied by the net amount recovered.” R.C. 4123.931(B). The statutory subrogee would receive “an amount equal to the subrogation interest divided by the sum of the subrogation interest plus the uncompensated damages, multiplied by the net amount recovered.” Id. The claimant and statutory subrogee can instead agree to divide the net amount recovered on a more fair and reasonable basis. Id.

{¶ 16} In addition, S.B. 227 permits claimants to “establish an interest-bearing trust account for the full amount of the subrogation interest that represents estimated future payments of compensation, medical benefits, rehabilitation costs, or death benefits, reduced to present value, from which the claimant shall make reimbursement payments to the statutory subrogee for the future payments of compensation, medical benefits, rehabilitation costs, or death benefits.” R.C. 4123.931(E)(1).

{¶ 17} The manifest objective of the General Assembly in enacting S.B. 227 was to comply with our holding in Holeton. See, generally, Legislative Service Commission, Bill Analysis of 2002 S.B. 227.

{¶ 18} On April 14, 2003, five days after S.B.

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Bluebook (online)
108 Ohio St. 3d 432, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-united-automobile-aerospace-agricultural-implement-workers-ohio-2006.