State ex rel. Ohio Valley Selective Harvesting, L.L.C. v. Buehrer ( 2017 )

[Cite as State ex rel. Ohio Valley Selective Harvesting, L.L.C. v. Buehrer, 2017-Ohio-369.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
The State ex rel. :
Ohio Valley Selective Harvesting, L.L.C.
and :
Peggy A. Lansing,
:
Relators, No. 16AP-5
:
v. (REGULAR CALENDAR)
:
Stephen Buehrer, Administrator of the
Ohio Bureau of Workers' Compensation, :
Respondent. :
___________________________________________
DECISION
Rendered on January 31, 2017
___________________________________________
Anthony A. Moralja, for relators.
Michael DeWine, Attorney General, and John R. Smart, for
respondent.
___________________________________________
IN MANDAMUS
BRUNNER, J.
{¶ 1} Relators Ohio Valley Selective Harvesting, L.L.C. ("OVSH") and Peggy A.
Lansing have filed an original action requesting this Court issue a writ of mandamus
ordering respondent, Stephen Buehrer, Administrator of the Ohio Bureau of Workers'
Compensation ("BWC"), to vacate BWC's final order issued on November 30, 2015 finding
that OVSH had underreported its payroll by not reporting its workers as employees, but
claiming that they were independent contractors, and ordering BWC to issue a new order
finding that OVSH's workers were independent contractors for purposes of reporting
payroll.
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No. 16AP-5
{¶ 2} We referred this matter to a magistrate of this Court 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, recommending this
Court deny relators' request for a writ of mandamus.
{¶ 3} No objections have been filed to the magistrate's decision.
{¶ 4} Having conducted an independent review of the record in this matter and
finding no error of law or other defect on the face of the magistrate's decision, this Court
adopts the magistrate's decision as our own, including the findings of fact and conclusions
of law contained therein. In accordance with the magistrate's decision, we deny the
requested writ of mandamus.
Writ of mandamus denied.
BROWN and SADLER, JJ., concur.
_____________
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No. 16AP-5
APPENDIX
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
The State ex rel. :
Ohio Valley Selective Harvesting, L.L.C.
and :
Peggy A. Lansing,
:
Relators, No. 16AP-5
:
v. (REGULAR CALENDAR)
:
Stephen Buehrer, Administrator of the
Ohio Bureau of Workers' Compensation, :
Respondent. :
MAGISTRATE'S DECISION
Rendered on August 17, 2016
Anthony A. Moraleja, for relators.
Michael DeWine, Attorney General, and John R. Smart, for
respondent.
IN MANDAMUS
{¶ 5} Relators, Ohio Valley Selective Harvesting, L.L.C. ("OVSH") and Peggy A.
Lansing ("Lansing"), filed this original action requesting that this court issue a writ of
mandamus ordering respondent, Ohio Bureau of Workers' Compensation ("BWC"), to
vacate its order finding that OVSH had underreported its payroll by not reporting its
workers as employees but claiming that they were independent contractors, and ordering
the BWC to issue a new order finding that OVSH's workers were independent contractors
for purposes of reporting payroll.
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No. 16AP-5
Findings of Fact:
{¶ 6} 1. OVSH is involved in the business of cutting trees and hauling away the
cut logs.
{¶ 7} 2. On May 8, 2012, Peggy A. Cooper (kna Peggy Lansing), doing business as
OVSH, signed an application for workers' compensation coverage. In that application,
Lansing identified herself as the owner of the company, indicated that the machinery,
equipment, and tools necessary included a skidder, loader, and chain saws, that the
operation type for purposes of payroll was cutting timber. As a sole proprietor, Lansing
did not elect coverage for herself and further claimed she had no employees, and no
payroll. Coverage was effective May 9, 2012.
{¶ 8} 3. In April 2014, Kelly Smith filed a First Report of an Injury, Occupational
Disease or Death ("FROI"), asserting that, while employed by OVSH, he sustained a work-
related injury when a tree he was cutting down fell on his leg. In his application, Smith
indicated that he was hired July 28, 2010.
{¶ 9} 4. In a memorandum dated May 16, 2014, Jason Price of the BWC's Special
Investigations Unit ("SIU") summarized his review of Smith's claim. Price's memo
provides, in pertinent part:
The attorney for the EOR, Tony Moraleja contacted SMITH'S
assigned Claim Service Specialist (CSS) and notified BWC
that SMITH was terminated from Employment on April 22,
2014, the day before the alleged industrial injury.
A review of SMITH'S claim 14-819572 revealed a First
Report of Injury (FROI signed and dated by Smith on
April 25, 2014, when SMITH was cutting down a tree that fell
on him. The date of injury and the last date worked are both
listed as April 23, 2014. * * *
On May 14, 2014, Special Agent Jason Price (Agent Price)
conducted an interview with Ohio Valley Selective
Harvesting business owner, Peggy Lansing (Lansing).
Lansing advised that on April 22, 2014, SMITH arrived to
work and demanded her husband, Brad Lansing (Brad) drive
SMITH to a trailer park so he could obtain a pain pill, which
Brad refused. During lunch that same day, SMITH again
requested Brad drive him into town so he could obtain a pain
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No. 16AP-5
pill. Brad refused again, and notified Lansing of the events.
At the end of the work day, Lansing met SMITH and the
other employees at the business * * *. Lansing advised she
terminated SMITH'S employment with several witnesses in
the area.
Lansing further stated that on April 23, 2014, SMITH
showed up to a job site without permission. SMITH took a
chain saw from his nephew, Jake Smith, proceeded down
into the brush, and began alleging that a tree fell on him and
he was hurt. Lansing was notified of the events and
proceeded to the job site. When Lansing arrived on site,
SMITH was walking around. Lansing stated she informed
SMITH that she was there to take him to the hospital.
SMITH denied being in any pain and refused to go to the
hospital. Lansing advised she dropped SMITH off at his
mother's residence.
(Emphasis sic.)
{¶ 10} 5. Following Smith's claim, the BWC initiated an audit of OVSH's business
and requested specific documentation from Lansing. Among the documents provided
was the 2013 tax return for OVSH indicating wages of $67,612, specific business expenses
which included work clothes, employee fines, cell phones and supplies, employee drug
tests, and membership fees to the BWC. Lansing also provided a blank unsigned copy of a
contractor and subcontractor agreement and a certain amount of worker payment
information.
{¶ 11} 6. The auditor made the following findings:
The risk issued 1099's for all individuals that worked for the
employer. In 2012 they did have two that worked as drivers
however the[y] also worked performing the other functions
as well (cutting trees, operating skidders & loaders). There
was no segregation. The risk did provide a[n] unsigned
contract. However it does not address terms of work. The
risk owns all equipment the contractors use. The employer
made verbal agreements on what they would pay individuals
to perform any work. There is [sic] no invoices or any other
document to support independence. Per tax return showed
the employer was [sic] expenses for work clothes, license
tags, cell phone & supplies, employees fines & drug test.
These are the actual titles on the tax return deductions
section.
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No. 16AP-5
{¶ 12} The auditor also noted that he was still awaiting additional information
from OVSH including 1099s, the 2012 Federal Tax Return, and all signed contracts for the
1099s issued in 2012 and 2013.
{¶ 13} 7. The BWC found that OVSH had failed to report its payroll and failed to
pay workers' compensation premiums from May 2012 to December 2013 and noted that
the determination was based on the limited information provided by Lansing.
{¶ 14} 8. OVSH was sent an invoice dated December 15, 2014 in the amount of
$67,688.07.
{¶ 15} 9. In a letter dated January 8, 2015, OVSH disputed the audit findings,
stating:
This notice to inform the Bureau of Worker's [sic]
Compensation that my office represents Peggy Cooper, aka
Peggy Lansing, and Ohio Valley Selective Harvesting
regarding the invoice she received on December 15, 2014.
Ohio Valley Selective Harvesting pays subcontractors with a
1099, they do not have a payroll of employees. The company
is a lumbering business with sporadic/seasonal work and
therefore can only hire on a job-by-job basis. Depending on
the extent of each individual timbering contract, the
company decides on the number of subcontractors
necessary. The number varies from job to job. My client
would like to dispute the invoice that she received and have
this matter further reviewed. Please advise my office of the
next course of action would be [sic].
{¶ 16} 10. In a letter dated January 22, 2015, the BWC notified OVSH that its
protest had been denied, stating:
Your complaint received on 1/15/15 protesting audit findings
for the period covering 5/9/12 — 12/31/13 has undergone a
departmental review. Regrettably, the BWC has denied your
request and the audit findings have been affirmed.
The requirements for being an independent contractor are
found in Ohio Revised Code Section 4123.01. BWC uses a
factor test to determine employee/employer relationships.
Because the following conditions apply: There was no
information to support that the individuals were true
independent contractors. We have determined that there was
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No. 16AP-5
an employee/employer relationship with all 1099's that were
issued by the company for 2012 & 2013.
You may appeal BWC's decision pursuant to Ohio Revised
Code Section 4123.291 and Ohio Administrative Code
Section 4123-14-06. If you have any questions regarding this
matter, please call me.
{¶ 17} 11. Lansing requested a hearing before the BWC adjudicating committee
and that hearing was held on May 5, 2015. Within the findings of fact section of the
adjudicating committee's order are the following facts which related to the claim
submitted by Smith in April 2014:
[Five] On May 16, 2014, Jason Price, BWC Special
investigations Unit (SIU), submitted a memorandum in
claim 14-819572, which contains certain relevant
information as follows:
a. The attorney for the employer, Tony Moraleja contacted
Smith's CSS and told BWC "that SMITH was terminated
from employment on April 22, 2014, the day before the
alleged industrial industry."
b. An Interview Statement signed by Peggy Lansing on
May 14, 2014, wherein she states that after Mr. Smith asked
her husband to take him into town to get a pain pill, she
"fired Smith on the spot and wrote him his final paycheck on
the 22nd." (Reference is to April 22, 2014.)
[Six] The claim filed by Kelly Smith was denied by BWC on
May 20, 2014. The order reflects that the claim was being
denied based upon the lack of an employer/employee
relationship because the worker was terminated on April 22,
2014. Similarly, on June 26, 2014, the DHO denied the claim
based upon the documentation submitted by SIU. The SHO
also denied the claim stating that the decision was based
upon SIU records and written statements from Peggy
Lansing, Brad Lansing, and Jacob Smith, "all of whom agree
the applicant was not employed with the named
employer on the alleged date of injury." [Emphasis
added.]
[Seven] On September 18, 2014, BWC Auditor Joe Maurizi
conducted an audit of the employer's business for the
periods set forth above. The audit resulted in significant
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No. 16AP-5
findings based upon payments picked up for various workers
that the employer considered to be independent contractors.
Specific Description of Operations and Findings &
Comments from the audit, are as follows:
THE RISK IS A CONTRACTOR THAT CUTS DOWN TREES.
THE RISK USES A NON MECHANIZED PROCESS (HAND
CHAIN SAWS ) TO CUT DOWN TREES. THEY OPERATE A
SKIDDER TO HAUL THE TREES TO AN OPEN AREA, IN
WHICH A LOADER LOADS THE TREES ON THE TRUCK
TO BE DELIVERED TO THE SAWMILL. THE RISK OWNS
ALL EQUIPMENT USED. ALL OF WHICH ARE
REPORTABLE TO MANUAL 2701.
THE RISK ISSUED 1099'S FOR ALL INDIVIDUALS THAT
WORKED FOR THE EMPLOYER. IN 2012 THEY DID
HAVE TWO THAT WORKED AS DRIVERS HOWEVER
THE[Y] ALSO WORKED PERFORMING THE OTHER
FUNCTIONS AS WELL (CUTTING TREES, OPERATING
SKIDDERS & LOADERS ). THERE WAS NO
SEGREGATION. THE RISK DID PROVIDE A[N]
UNSIGNED CONTRACT. HOWEVER IT DOES NOT
ADDRESS TERMS OF WORK. THE RISK OWNS ALL
EQUIPMENT THE CONTRACTORS USE. THE EMPLOYER
MADE VERBAL AGREEMENTS ON WHAT THEY WOULD
PAY INDIVIDUALS TO PERFORM ANY WORK. THERE IS
[SIC] NO INVOICES OR ANY OTHER DOCUMENT TO
SUPPORT INDEPENDENCE. PER TAX RETURN SHOWED
THE EMPLOYER WAS [SIC] EXPENSES FOR WORK
CLOTHES, LICENSE TAGS, CELL PHONE & SUPPLIES,
EMPLOYEES FINES & DRUG TEST. THESE ARE THE
ACTUAL TITLES ON THE TAX RETURN DEDUCTIONS
SECTION.
(Emphasis sic.)
{¶ 18} The adjudicating committee outlined the relevant case law for determining
whether someone is an employee or an independent contractor, stating:
In Gillum v. Industrial Com., 141 Ohio St. 373, 48 N.E.2d
234, 1943 Ohio LEXIS 427, 25 Ohio Op. 531 (Ohio 1943),
paragraph 2, syllabus, the Supreme Court of Ohio set forth
the test for determining whether a person is an independent
contractor, as follows:
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No. 16AP-5
Whether one is an independent contractor or in service
depends upon the facts of each case. The principal test
applied to determine the character of the arrangement is that
if the employer reserves the rights to control the manner or
means of doing the work, the relation created is that of
master and servant, while if the manner or means of doing
the work or job is left to one who is responsible to the
employer only for the result, an independent contractor
relationship is thereby created.
In determining the amount of control exercised over the
alleged employee in order to determine his status, the
Supreme Court has set forth certain factors to be considered.
These factors include such indicia as who controls the details
and quality of the work; who controls the hours worked; who
selects the materials, tools, and personnel used; who selects
the routes traveled; the length of employment; the type of
business; the method of payment; and any pertinent
agreements or contracts. Bostic v. Connor, 37 Ohio
St.3d 144, 146, 524 N.E.2d 881, 1988 Ohio LEXIS 164 (Ohio
1988).
Generally, independent contractors provide goods or services
to another entity under terms specified in a contract or
within a verbal agreement Unlike an employee, an
independent contractor does not work regularly for an
employer. Independent contractors usually perform a special
service that is not in the normal course of business of the
employer. Independent contractors often advertise, maintain
a visible business location, and are available to work in a
trade, or some other service. Contractors often work through
a sole proprietorship, LLC, or franchise, which they
themselves own. As a business owner, the independent
contractor incurs its own expenses to provide the contracted
service. Independent contractors also typically retain control
over their schedule and number of hours worked, jobs
accepted, and performance of their job. In addition, they
may have a major investment in equipment, furnish all their
own supplies, provide their own insurance and repairs, and
cover all other expenses related to their business.
In denying OVSH's protest, the adjudicating committee stated:
In this particular case, the employer's representative stated
in the initial complaint and at hearing that the employer's
need for workers is not regular and may be sporadic. The
Committee believes that the record supports this statement.
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No. 16AP-5
At the same time, employment status under RC 4123.01 and
the Ohio common law is not limited to full time workers.
Rather, workers' compensation coverage is still required for
part time employees, as well as casual workers earning more
than $160.00 per calendar quarter.
In terms of the "right to control," the Committee was
presented with credible testimony that the employer's
husband is perceived as being the manager. Moreover, the
report from BWC SIU referenced in paragraph 5 of the
Findings of Fact, above, confirms Mr. Lansing's presence on
the jobsite. At the hearing, the employer's representatives
conceded that at least in some cases, the workers are
transported from the employer's location to the worksite. In
addition, with regard to Kelly Smith, Peggy Lansing provided
a statement that after being contacted by her husband, she
personally fired Mr. Smith.
While perhaps less important than control over the workers,
there are additional factors that support an
employer/employee relationship with regard to the workers
at issue. There was no evidence that any of the workers had
their own businesses in the form of signed contracts with any
individual business owners. The workers did not have any of
their own expenses associated the work performed for Peggy
Cooper/Select Harvesting. While some of the workers may
have had their own hand tools, it is apparent that tools were
made available by the employer and any larger equipment
was provided by the employer. The employer's representative
stated that the employer had no "continuing relationship"
with the workers. However, the information obtained in the
audit shows that there were continuing relationships with
many of the workers. For example, Kelly Smith was paid
almost $34,000 by the employer in 2012.
The employer's representative stated that the workers are
able to work for others. Given that there was or is not
continuous work available, the Committee recognizes that
many or all the workers may have performed work for
others. While, they may not have had specific daily hours,
the opportunities to work are at times specified by the
employer. Finally, the firing of an individual worker is not
consistent with independent contractor status.
(Emphasis sic.)
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No. 16AP-5
{¶ 19} 12. Relator requested a hearing before the administrator's designee and
that hearing occurred on September 10, 2015. After setting out the basic test for
determining whether workers are employees or independent contractors is the amount of
control the employer exercises over the manner and means of the work, the
administrator's designee discussed the evidence presented by OVSH as follows:
OVSH's representative stated that OVSH does not control
the manner or means of the work. OVSH stated that the
workers get to the job site by any means they chose and can
stay overnight at their own expense. While OVSH prefers
that the workers drive themselves to the work location,
OVSH testified that there have been occasions, for logistical
reasons, where workers meet at OVSH's main office and then
travel together to the jobsite, following Brad Lansing, an
OVSH employee. The main office is the home of the
Lansings.
OVSH's representative stated that OVSH does not control
the hours worked. The workers do not arrive all at the same
time. The days worked are determined by need and contract
with the Lansings. The workers are contacted to see if they
are available for the job once the need is established, and are
only contacted for that specific job. Workers are paid by the
terms of the contract. There are no regular wages.
OVSH stated that Brad Lansing is not a supervisor; but as
the general contractor, he is responsible for the work and
makes sure the workers stay within the boundaries of the
land that they are permitted to cut timber. OVSH's
representative stated that Brad Lansing is not titled as a
manager. Some workers do refer to him as such, but it is not
his title. The workers do not issue progress reports. The
workers will, and OVSH prefer; that they provide their own
tools if they have them. However, OVSH does have
equipment available and supplies it [to] the workers if
needed in order to avoid a work stoppage. If a worker shows
up and does not have a tool that he needs, OVSH does not
want that to impact the work schedule.
OVSH's representatives stated that the nature of OVSH's
business does not allow for them to have regular employees,
as the need for workers changes with each job. Each worker
is allowed to work for themselves and even work on the same
day they work for OVSH. Most of the workers do other odd
jobs. The job does not require special skills and the workers
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No. 16AP-5
are not trained by OVSH. OVSH does not have an ongoing
relationship with the workers.
There was some discussion about the Kelly Smith matter,
whether Smith was "fired" by Brad Lansing, and whether
that action indicated an employment relationship. The
Administrator's Designee notes the discussion of this issue in
the Adjudicating Committee order of May 5, 2015, and the
testimony at the Administrator's Designee hearing.
Thereafter, the administrator's designee set out the bureau's position:
The Bureau's auditor stated that there were no written
contracts available for the Bureau to review, nor were there
any invoices from the alleged independent contractors to
OVSH for the work performed. The Bureau auditor stated
that there were no W-2 forms and that there were 1099
forms. More significantly, the Bureau auditor stated that the
OVSH tax returns show deductions for worker fines, work
clothes, supplies, and drug tests. The Bureau auditor stated
that the workers used OVSH equipment, loading timber with
OVSH loaders and skidders. The Bureau representative
claims that the Bureau's investigation establishes that Brad
Lansing is the manager and foreman on the job site, and that
all of the workers recognize him as such, proving that he is in
a management position over the workers. The workers also
do not retain their own insurance, which would be expected
if the workers were self employed. Finally, the Bureau
testified that the workers do not appear to be [in] a position
of sustaining a profit or loss, an indication that they are not
actually in a business, but are employees paid by the job.
{¶ 20} In finding that OVSH exercised sufficient control over the manner and
means of performing the work, the administrator's designee made the following findings:
The Administrator's Designee finds that the temporary or
sporadic nature of the worker [sic] available for the workers
is not a determining factor of whether the workers are
employees or independent contractors. As noted by the
Bureau auditor, workers who work occasionally are referred
to as spot labor, but there is still an employer-employee
relationship with spot labor. The May 5, 2015, order of the
Adjudicating Committee also addressed this issue as follows:
In this particular case, the employer's
representative stated in the initial complaint
and at hearing that the employer's need for
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No. 16AP-5
workers is not regular and may be sporadic.
The Committee believes that the record
supports this statement. At the same time,
employment status under RC 4123.01 and the
Ohio common law is not limited to full time
workers. Rather, workers' compensation
coverage is still required for part time
employees, as well as casual workers earning
more than $160.00 per calendar quarter.
(emphasis added)
The Administrator's Designee finds that OVSH exercises
sufficient control over the manner and means of doing the
work such that the workers are employees. The
Administrator's Designee adopts the reasoning of the
Adjudicating Committee in its May 5, 2015, [sic] order as
follows:
In terms of the "right to control," the
Committee was presented with credible
testimony that the employer's husband is
perceived as being the manager. Moreover, the
report from BWC SIU referenced in
paragraph 5 of the Findings of Fact, above,
confirms Mr. Lansing's presence on the jobsite.
At the hearing, the employer's representatives
conceded that at least in some cases, the
workers are transported from the employer's
location to the worksite. In addition, with
regard to Kelly Smith, Peggy Lansing provided
a statement that after being contacted by her
husband, she personally fired Mr. Smith.
While perhaps less important than control over
the workers, there are additional factors that
support an employer/employee relationship
with regard to the workers at issue. There was
no evidence that any of the workers had their
own businesses in the form of signed contracts
with any individual business owners. The
workers did not have any of their own expenses
associated the work performed for [OVSH].
While some of the workers may have had their
own hand tools, it is apparent that tools were
made available by the employer and any larger
equipment was provided by the employer. The
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No. 16AP-5
employer's representative stated that the
employer had no "continuing relationship"
with the workers. However, the information
obtained in the audit shows that there were
continuing relationships with many of the
workers. For example, Kelly Smith was paid
almost $34,000 by the employer in 2012.
The Administrator's Designee also finds that the Bureau's
determination of independent contractor status is for the
purpose of reporting Ohio workers' compensation payroll
and premiums only, and this determination is not conclusive
or binding on OVSH for other payroll reporting obligations,
such as to the Internal Revenue Service for taxes or to the
Ohio Department of Job and Family Services for
unemployment compensation.
(Emphasis sic.)
{¶ 21} 13. Thereafter, relator filed the instant mandamus action in this court.
Conclusions of Law:
{¶ 22} For the reasons that follow, it is this magistrate's decision that relator has
failed to demonstrate that the BWC abused its discretion in finding that OVSH's workers
were employees and, as such, OVSH owed premiums to the BWC, and this court should
deny relator's request for a writ of mandamus.
{¶ 23} The Supreme Court of Ohio has set forth three requirements which must be
met in establishing a right to a writ of mandamus: (1) that relator has a clear legal right to
the relief prayed for; (2) that respondent is under a clear legal duty to perform the act
requested; and (3) that relator has no plain and adequate remedy in the ordinary course
of the law. State ex rel. Berger v. McMonagle, 6 Ohio St. 3d 28 (1983).
{¶ 24} Ohio employers are required to report their payroll to the BWC and are
required to keep those records available for inspection by the BWC. Specifically,
R.C. 4123.24 provides:
Every employer amenable to this chapter shall keep,
preserve, and maintain complete records showing in detail
all expenditures for payroll and the division of such
expenditures into the various divisions and classifications of
the employer's business. The records shall be preserved for
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No. 16AP-5
at least five years after the respective times of the
transactions upon which the records are based.
All books, records, papers, and documents reflecting upon
the amount and the classifications of the payroll
expenditures of an employer shall be kept available for
inspection at any time by the bureau of workers'
compensation or any of its assistants, agents,
representatives, or employees. If an employer fails to keep,
preserve, and maintain the records and other information
reflecting upon payroll expenditures, fails to make the
records and information available for inspection, or fails to
furnish to the bureau or any of its assistants, agents,
representatives, or employees, full and complete information
in reference to expenditures for payroll when the
information is requested, the bureau may determine the
amount of premium due from the employer upon such
information as is available to it, and its findings are prima-
facie evidence of the amount of premium due from the
employer.
{¶ 25} In the present case, OVSH came under scrutiny by the BWC after Kelly
Smith filed a workers' compensation claim asserting that he was injured during the course
of his employment with OVSH. As the stipulated evidence reveals, OVSH argued that
Smith was not entitled to workers' compensation benefits for his alleged injury because
Smith had been terminated the day before he allegedly was injured. Specifically, in the
addendum to memorandum to claim file, Jason Price of the Portsmouth Special
Investigations Unit, noted in the June 23, 2014 addendum:
On May 14, 2014, Fraud Analyst Rita Johnson (Analyst
Johnson) received a notification that Kelly Smith (SMITH)
filed a claim. SMITH had previously filed a false claim in
2010 against a company he was never employed by. On
December 16, 2011, SMITH pled no contest to Attempted
Workers' Compensation Fraud, was fined $250, and
received 1 year of community control, and 35 hours of
community service.
On June 2, 2014, Agent Price conducted an interview with
Brad Lansing (B. Lansing), Manager/Foreman for Ohio
Valley Selective Harvesting. B. Lansing confirmed that
SMITH was an employee of the business for approximately 2
years. When SMITH presented to work on April 22, 2014,
SMITH requested B. Lansing drive him into town so he could
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No. 16AP-5
obtain a pain pill. B. Lansing refused, and all employees
proceeded to the job site. Around lunch time, SMITH again
requested B. Lansing to take him to get a pain pill so he
wouldn't be sick, and B. Lansing again refused. B. Lansing
notified his wife and business owner Peggy Lansing
(Lansing) of the events. B. Lansing and the rest of the
employees arrived at the office at the end of the day
between 3:00 and 4:00 pm. Lansing met SMITH outside,
handed him his final paycheck, and terminated his
employment.
B. Lansing stated that on April 23, 2014, SMITH presented
to the job site without permission. SMITH took a chainsaw
from an employee, and proceeded down in the brush.
SMITH then began asserting a tree fell on his leg, and he
injured himself. B. Lansing then remained in view of SMITH
while waiting for Lansing to arrive and transport SMITH to
the hospital. B. Lansing advised SMITH indicated he was
fine, and requested to operate a loader the rest of the day.
Lansing then arrived and transported SMITH off the job site.
***
On June 2, 2014, Agent Price conducted an interview with
Jake Smith (J. Smith), identified employee of Ohio Valley
Selective Harvesting, and nephew of SMITH. J. Smith stated
that near the end of the work day on April 22, 2014, SMITH
came up to him and requested he drive him to a location to
obtain a pain pill, and J. Smith refused. J. Smith advised all
the employees returned to the office that day between 3:00
and 4:00 pm. J. Smith confirmed Lansing met SMITH
outside the office, handed him a paycheck, and terminated
him on the spot. J. Smith stated on April 23, 2014, he was
notified by another employee, Cody Lansing that SMITH was
present and saying a tree fell on him and injured his leg.
When J. Smith arrived to where the alleged injury occurred,
SMITH was sitting on a tree stump, and there were no trees
that had fallen on his leg. J. Smith stated SMITH then began
walking around the job site unassisted, and saying his leg
was injured. Lansing then arrived to the job site and
transported SMITH off the premises.
(Emphasis sic.)
{¶ 26} When the BWC conducted its investigation of OVSH concerning payroll and
the payment of premiums, OVSH made statements which contradicted the statements
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No. 16AP-5
made when they challenged Smith's workers' compensation claim. OVSH told the BWC
investigators that they had no employees, that everyone who did work for them was an
independent contractor, that Brad Lansing was not a manager even if some people
thought he was, and that the statement made to Smith, "you're fired," was simply a poor
choice of words.
{¶ 27} There was and still is contradictory evidence in the record and the BWC
evaluated that evidence and ultimately concluded that OVSH does, in fact, have
employees, failed to report payroll, and owed premiums. As this court explained in State
ex rel. Labor Works of Dayton LLC v. Ohio Bur. of Workers' Comp., 10th Dist. No. 10AP-
22, 2010-Ohio-6299, ¶ 6:
Pursuant to R.C. 4123.24, employers are required to
"maintain complete records" that "detail all expenditures for
payroll," including "the division of such expenditures into
the various divisions of the employer's business." On an
employer's failure to keep such records, "the bureau may
determine upon such information as is available to it the
amount of premium due from the employer and its findings
shall constitute prima facie evidence of the amount of
premium due from the employer." Ohio Adm.Code 4123-17-
17. When the bureau conducted an audit of relator, relator
failed to provide the information that was requested. As a
result, the bureau estimated the premium due.
{¶ 28} Based on a review of the stipulation of evidence, the magistrate finds that
relator has failed to establish that the BWC abused its discretion when it determined that
OVSH has employees, failed to report payroll as required by law, and owed premiums,
and this court should deny relator's request for a writ of mandamus.
/S/ MAGISTRATE
STEPHANIE BISCA
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
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No. 16AP-5
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).