Spencer v. Freight Handlers, Inc.

[Cite as Spencer v. Freight Handlers, Inc., 131 Ohio St.3d 316, 2012-Ohio-880.]
SPENCER, APPELLEE, v. FREIGHT HANDLERS, INC.;
BUEHRER, ADMR., APPELLANT.
[Cite as Spencer v. Freight Handlers, Inc.,
131 Ohio St.3d 316, 2012-Ohio-880.]
The R.C. 4123.512 requirements that a party appealing from an Industrial
Commission order name the administrator of the Bureau of Workers’
Compensation as a party to the appeal and serve the administrator with
the notice of appeal are not jurisdictional requirements.
(No. 2010-2138—Submitted October 18, 2011—Decided March 8, 2012.)
APPEAL from the Court of Appeals for Miami County, No. 09-CA-44,
2010-Ohio-5288.
__________________
SYLLABUS OF THE COURT
The R.C. 4123.512 requirements that a party appealing from an Industrial
Commission order name the administrator of the Bureau of Workers’
Compensation as a party to the appeal and serve the administrator with the
notice of appeal are not jurisdictional requirements.
__________________
LANZINGER, J.
{¶ 1} This case addresses the requirements for vesting jurisdiction in the
common pleas court pursuant to R.C. 4123.512, the workers’ compensation
statute that permits a claimant or an employer to appeal from an Industrial
Commission order affecting the right to participate in the workers’ compensation
fund. The issue is whether the administrator of the Bureau of Workers’
Compensation must be named as a party and served with the notice of appeal to
vest the court with subject-matter jurisdiction. We hold that the R.C. 4123.512
requirements that a party appealing from an Industrial Commission order name
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the administrator of the Bureau of Workers’ Compensation as a party to the
appeal and serve the administrator with the notice of appeal are not jurisdictional
requirements.
I. Case Background
{¶ 2} James Spencer, the appellee, filed a workers’ compensation claim
against his employer, Freight Handlers, Inc. (“FHI”), for a shoulder injury he
allegedly suffered while lifting at his job in Miami County. His claim was denied
by the Industrial Commission in an order dated June 4, 2009.
{¶ 3} On August 7, 2009, Spencer filed a notice of appeal in the Darke
County Court of Common Pleas under R.C. 4123.512, naming FHI as the sole
appellee and claiming the right to participate in the workers’ compensation fund.
The notice of appeal did not name as an appellee the administrator of the Bureau
of Workers’ Compensation, and Spencer did not serve a copy of the notice of
appeal on the administrator “at the central office of the Bureau of Workers’
Compensation in Columbus” as required by R.C. 4123.512(B). He filed the
petition required by R.C. 4123.512(D) on September 3, 2009, but again failed to
serve a copy of the petition on the administrator.
{¶ 4} FHI filed a motion to dismiss based upon both the common pleas
court’s lack of subject-matter jurisdiction and the failure to join a necessary party
because the administrator was not named as a party or served with a copy of the
notice of appeal as required by R.C. 4123.512(B). In the alternative, FHI sought
to transfer the case to the Miami County Court of Common Pleas because
Spencer’s injury occurred in Miami County. R.C. 4123.512(A) allows either a
claimant or an employer to appeal an order of the Industrial Commission other
than a decision as to the extent of disability “to the court of common pleas of the
county in which the injury was inflicted.”
{¶ 5} Spencer responded by filing a motion for leave to amend his
petition on September 24, 2009. He attached a revised petition, this time naming
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the administrator as a party, and he served the administrator with a copy of the
amended petition. The following month, the Darke County Court of Common
Pleas transferred the case to the Miami County Court of Common Pleas.
{¶ 6} The administrator filed an answer to Spencer’s amended petition in
Miami County. Two days later, the Miami County Court of Common Pleas
granted FHI’s motion to dismiss for lack of subject-matter jurisdiction,
concluding that “omitting the Administrator as a party and failing to serve the
Administrator with the notice of appeal does not substantially comply” with the
requirements of R.C. 4123.512(B). The court also denied Spencer’s motion to
amend his petition because the defective notice of appeal meant that jurisdiction
had never vested in the trial court, so the “defect could not be corrected by the
amendment of the pleadings.”
{¶ 7} The court of appeals reversed the judgment of the common pleas
court, holding that “failure to name the Administrator in the notice of appeal or to
serve the Administrator with the notice of appeal does not deprive a court of
common pleas of subject matter jurisdiction to hear an R.C. 4123.512 appeal.”
Spencer v. Freight Handlers, Inc., 2d Dist. No. 09-CA-44, 2010-Ohio-5288, 2010
WL 4312798, ¶ 22. FHI and the administrator moved to certify a conflict, which
the court of appeals denied. We accepted for review the following proposition of
law: “R.C. 4123.512(B)’s requirements that the Administrator be a party to the
appeal and be served with a notice of appeal are jurisdictional, and
noncompliance with these requirements cannot be cured later.”
{¶ 8} We hold that because R.C. 4123.512(B) does not require that the
administrator be named in the notice of appeal itself and because filing the notice
is “the only act required to perfect the appeal” pursuant to R.C. 4123.512(A),
naming and sending notice to the administrator are not requirements to vest the
court of common pleas with subject-matter jurisdiction under R.C. 4123.512. We
therefore affirm the judgment of the court of appeals.
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II. Analysis
A. Statutory Procedure
{¶ 9} Workers’ compensation cases follow a specific statutory
procedure. A claimant who seeks workers’ compensation benefits must first file a
claim with the Bureau of Workers’ Compensation, and the administrator of the
bureau makes an initial determination whether to grant or deny the claim. R.C.
4123.511(B). That order is then reviewable through a number of administrative
proceedings before the Industrial Commission, which enters a final order. Once
these administrative proceedings are completed, R.C. Chapter 4123 provides the
exclusive manner by which a common pleas court gains jurisdiction over a
workers’ compensation appeal. Jenkins v. Keller, 6 Ohio St.2d 122, 216 N.E.2d
379 (1966), paragraph four of the syllabus. The employer or the claimant who
wishes to appeal must file a notice of appeal within 60 days after receipt of the
Industrial Commission’s order. R.C. 4123.512(A). “The filing of the notice of
the appeal with the court is the only act required to perfect the appeal.” Id. The
statute then sets forth, in the first paragraph of R.C. 4123.512(B) (which consists
of one sentence), what a valid notice of appeal must contain: “The notice of
appeal shall state the names of the claimant and the employer, the number of the
claim, the date of the order appealed from, and the fact that the appellant appeals
therefrom.” The next paragraph of subsection (B) states:
The administrator of workers’ compensation, the claimant,
and the employer shall be parties to the appeal and the court, upon
the application of the commission, shall make the commission a
party. The party filing the appeal shall serve a copy of the notice
of appeal on the administrator at the central office of the bureau of
workers’ compensation in Columbus.
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B. Issues Raised
{¶ 10} The amici in this case1 assert that the first paragraph of R.C.
4123.512(B) lists the jurisdictional items: (1) the claimant’s name, (2) the
employer’s name, (3) the claim number, (4) the date of the order appealed from,
(5) and the fact that the appellant is appealing that order. They contend that the
second paragraph, which states that the administrator must be a party to the appeal
and that the party filing the appeal must serve a copy of the notice of appeal on
the administrator, is not a paragraph addressing jurisdiction.
{¶ 11} The appellant, the administrator, argues that both subsection (A)
and subsection (B) of R.C. 4123.512 are jurisdictional because those subsections
contain the statutory requirements that must be fulfilled before one may appeal an
order of the Industrial Commission. He maintains that while subsection (A) sets
forth the act required to vest jurisdiction—the act of filing the appeal, the first
sentence of subsection (B) relates to the matter being appealed, and paragraph two
of subsection (B) relates to the naming and notice requirements of the notice of
appeal. According to the administrator, a notice of appeal that omits any of the
subsection (A) or (B) requirements is statutorily defective and thereby deprives
the court of jurisdiction.
{¶ 12} The amici’s position is more persuasive. In interpreting
substantially similar prior versions of the present-day R.C. 4123.512, formerly
numbered R.C. 4123.519, we held that the notice-of-appeal requirements
(inclusion of the names of the claimant and the employer, the claim number, the
date of the order being appealed from, and the fact that the appellant is appealing
from the order) are jurisdictional requirements “and must be strictly complied
with.” Starr v. Young, 172 Ohio St. 317, 318, 175 N.E.2d 514 (1961). In Starr,
1. The amici in the case are the Ohio Association of Claimants’ Counsel and the Ohio Association
for Justice, who jointly filed a brief urging this court to affirm the court of appeals’ judgment. The
appellee himself did not file a brief.
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the claim was dismissed for lack of jurisdiction due to the appellant’s failure to
include the claim number and designate which of the defendants was the
employer. Fifteen years later, we again applied a strict-compliance standard and
dismissed a claim for lack of jurisdiction because the appellant had named the
wrong order being appealed from. Cadle v. Gen. Motors Corp., 45 Ohio St.2d 28,
340 N.E.2d 403 (1976).
{¶ 13} We then retreated from the harsh results of the strict-compliance
rule in two cases: Mullins v. Whiteway Mfg. Co., 15 Ohio St.3d 18, 471 N.E.2d
1383 (1984) (listing the date of the order being appealed from in the notice of
appeal is not a jurisdictional requirement) and Wells v. Chrysler Corp., 15 Ohio
St.3d 21, 22, 472 N.E.2d 331 (1984) (fact that the notice of appeal “did not
contain the name of the appellee-employer in its text and appellee was never
designated as the employer” did not defeat jurisdiction). Later, we overruled
Cadle in its entirety and held that the notice-of-appeal requirements of R.C.
4123.519 (now R.C. 4123.512) require substantial rather than strict compliance.
Fisher v. Mayfield, 30 Ohio St.3d 8, 505 N.E.2d 975 (1987), paragraph one of the
syllabus.
{¶ 14} In Fisher, we stated that we were guided by the fundamental tenet
of judicial review in Ohio that courts should decide cases on their merits and that
to be in substantial compliance, the notice must “include[] sufficient information,
in intelligible form, to place on notice all parties to a proceeding that an appeal
has been filed from an identifiable final order which has determined the parties’
substantive rights and liabilities.” Id. at 11.
{¶ 15} The appellant in Fisher had designated the incorrect order from
which an appeal was being taken, and we invoked the substantial-compliance rule
to allow the case to continue on its merits. The appellant in Fisher had, in fact,
substantially complied with the contents requirements for the notice of appeal.
Here, we have complete compliance. Spencer’s notice of appeal included the
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names of the claimant and employer, the claim number, the date of the order
being appealed from, and the fact that he is appealing from the order—all that the
statute requires.
C. Interpretation of R.C. 4123.512
{¶ 16} In interpreting a statute, we rely on general principles of statutory
construction. Cline v. Ohio Bur. of Motor Vehicles, 61 Ohio St.3d 93, 97, 573
N.E.2d 77 (1991). The starting point is the statute’s text (“[W]here the language
of a statute is clear and unambiguous, it is the duty of the court to enforce the
statute as written, making neither additions to the statute nor subtractions
therefrom.” Hubbard v. Canton City School Bd. of Edn., 97 Ohio St.3d 451,
2002-Ohio-6718, 780 N.E.2d 543, ¶ 14). Furthermore, to determine the
legislative intent behind a statute, we must read the language in context and we
must construe related sections together. State v. Buehler, 113 Ohio St.3d 114,
2007-Ohio-1246, 863 N.E.2d 124, at ¶ 29; State ex rel. United States Steel Corp.
v. Zaleski, 98 Ohio St.3d 395, 2003-Ohio-1630, 786 N.E.2d 39, at ¶ 12. The
second paragraph of R.C. 4123.512(B) provides a variety of instructions that are
directed at multiple parties:
The administrator of workers’ compensation, the claimant,
and the employer shall be parties to the appeal and the court, upon
the application of the commission, shall make the commission a
party. The party filing the appeal shall serve a copy of the notice of
appeal on the administrator at the central office of the bureau of
workers’ compensation in Columbus. The administrator shall
notify the employer that if the employer fails to become an active
party to the appeal, then the administrator may act on behalf of the
employer and the results of the appeal could have an adverse effect
upon the employer’s premium rates.
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{¶ 17} The second paragraph of subsection (B), when read in context, is
not a continuation of the first paragraph, dictating additional items that must be
included in a notice of appeal. Instead, the second paragraph lists a number of
things that are required in addition to or subsequent to a notice of appeal.
Because the statute’s jurisdictional requirements are explicitly limited to filing a
notice of appeal, the additional requirements in the second paragraph of
subsection (B) are not jurisdictional.
{¶ 18} This interpretation of the statute is consistent with the majority of
Ohio’s case law on the issue. See, e.g., Milenkovich v. Drummond, 88 Ohio Law
Abs. 103, 181 N.E.2d 814 (C.P.1961) (although the administrator must be made a
party, failure to name the administrator in the notice of appeal is not a
jurisdictional error, interpreting R.C. 4123.519, which was recodified as R.C.
4123.512 in 1993); Goricki v. Gen. Motors Corp., 11th Dist. No. 3527, 1985 WL
4944 (Dec. 31, 1985) (the failure to name the administrator is not a jurisdictional
error); Jarmon v. Ford Motor Co., 10th Dist. No. 95APE10-1377, 1996 WL
221523 (Apr. 30, 1996) (the requirement that the administrator be a party is
separate from the requirements for a valid notice of appeal); Karnofel v. Cafaro
Mgt. Co., 11th Dist. No. 97-T-0072, 1998 WL 553491 (June 26, 1998) (naming
the administrator is not a jurisdictional requirement). Compare Day v. Noah’s
Ark Learning Ctr., 5th Dist. No. 01-CVE-12-068, 2002-Ohio-4245, 2002 WL
1902875 (appellant’s outright failure to file a notice of appeal deprived the court
of jurisdiction); Olaru v. FedEx Custom Critical, Inc., 6th Dist. No. L-03-1143,
2003-Ohio-6376, 2003 WL 22829247 (summarily adopting decision of the trial
court, which erroneously relied on Day).
D. Other Statutes
{¶ 19} We have recognized that naming proper parties and fulfilling
service requirements are jurisdictional requirements in cases that involve statutes
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that clearly require such for jurisdiction. For example, failure to name as a party
and serve the tax commissioner when appealing from a Board of Tax Appeals
decision under R.C. 5717.03(B) is a jurisdictional flaw. Olympic Steel, Inc. v.
Cuyahoga Cty. Bd. of Revision, 110 Ohio St.3d 1242, 2006-Ohio-4091, 852
N.E.2d 178. And failure to serve the attorney general when filing a declaratory-
judgment action under R.C. 2721.12 “is a jurisdictional defect.” Asbury Apts. v.
Dayton Bd. of Zoning Appeals, 77 Ohio St.3d 1229, 673 N.E.2d 1379 (1997). But
the statutes reviewed in those cases are different from the statute at issue in this
case,2 and spell out the need for naming and service of parties for jurisdictional
purposes.
2. R.C. 5717.03(B) states:
In case of an appeal from a decision of a county board of revision, the board of tax
appeals shall determine the taxable value of the property whose valuation or assessment
by the county board of revision is complained of, or in the event the complaint and appeal
is against a discriminatory valuation, shall determine a valuation which shall correct such
discrimination, and shall determine the liability of the property for taxation, if that
question is in issue, and the board of tax appeals' decision and the date when it was filed
with the secretary for journalization shall be sent by the board to all persons who were
parties to the appeal before the board, to the person in whose name the property is listed,
or sought to be listed, if such person is not a party to the appeal, to the county auditor of
the county in which the property involved in the appeal is located, and to the tax
commissioner.
(Emphasis added.) R.C. 2721.12(A) states:
Subject to division (B) of this section, when declaratory relief is sought under this
chapter in an action or proceeding, all persons who have or claim any interest that would
be affected by the declaration shall be made parties to the action or proceeding. Except
as provided in division (B) of this section, a declaration shall not prejudice the rights of
persons who are not made parties to the action or proceeding. In any action or proceeding
that involves the validity of a municipal ordinance or franchise, the municipal corporation
shall be made a party and shall be heard, and, if any statute or the ordinance or franchise
is alleged to be unconstitutional, the attorney general also shall be served with a copy of
the complaint in the action or proceeding and shall be heard. In any action or proceeding
that involves the validity of a township resolution, the township shall be made a party and
shall be heard.
(Emphasis added.)
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{¶ 20} R.C. 4123.512(B) requires that certain facts be pled in the notice of
appeal. “The notice of appeal shall state the names of the claimant and the
employer, the number of the claim, the date of the order appealed from, and the
fact that the appellant appeals therefrom.” This sentence does not say “names of
the claimant and the employer and the administrator.” The General Assembly
could have easily added the administrator as a party to be named in the notice of
appeal, but it did not do so.
{¶ 21} The only jurisdictional requirement for a workers’ compensation
appeal is to file with the court a notice of appeal that states the names of the
claimant and employer, the claim number, the date of the order being appealed
from, and the fact that the appellant is appealing from the order. Naming and
sending notice to the administrator are simply not on this list. Failing to name and
notify the administrator would subject an appellant’s appeal to dismissal, pursuant
to Civ.R. 19, for failure to name an indispensable party. But naming and sending
notice to the administrator are simply not jurisdictional requirements. The Rules
of Civil Procedure allow complaints to be amended to add necessary parties.
Civ.R. 21.
{¶ 22} The inclusion of the administrator as a party is one of many
nonjurisdictional requirements for a workers’ compensation appeal to proceed.
For example, a claimant is also required to file a petition describing the
underlying facts and demonstrating a cause of action within 30 days of filing the
notice of appeal. R.C. 4123.512(D). Although an appellant’s failure to comply
with R.C. 4123.512(D) could lead to dismissal of the appeal, that does not make
the requirement jurisdictional. Singer Sewing Machine Co. v. Puckett, 176 Ohio
St. 32, 36-37, 197 N.E.2d 353 (1964).
{¶ 23} But in now holding that under the current statutory scheme the
administrator need not be included in the notice of appeal to invoke the subject-
matter jurisdiction of the court, we emphasize the ambiguity in R.C. 4123.512 that
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has been raised by the positions advanced by both appellant and amici curiae. We
therefore urge the General Assembly to clarify the jurisdictional requirements for
initiating a workers’ compensation appeal.
III. Conclusion
{¶ 24} Because Spencer’s notice of appeal included the names of the
claimant and the employer, the number of the claim, the date of the order
appealed from, and the fact that he was appealing from the order, Spencer
invoked the court’s jurisdiction. Although he had not named the administrator as
a party in the notice of appeal, Spencer cured his error by amending the complaint
on September 24, 2009, to name the administrator as a party and then notifying
him by serving him with a copy of the amended complaint. By complying with
the provisions of R.C. 4123.512(B) regarding the contents of the notice of appeal,
Spencer had perfected his appeal, vesting the common pleas court with
jurisdiction to rule on his motion to amend. We therefore affirm the judgment of
the court of appeals and remand the case to the Miami County Court of Common
Pleas for further proceedings.
Judgment affirmed.
O’CONNOR, C.J., and PFEIFER, LUNDBERG STRATTON, CUPP, and MCGEE
BROWN, JJ., concur.
O’DONNELL, J., dissents.
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CUPP, J., concurring.
{¶ 25} Because I conclude that the interpretation that the court makes
today of the admittedly unclear statutory section is the one that best comports
with the statute’s text, I join in the opinion and judgment.
{¶ 26} The statute, however, if not amended by the General Assembly,
creates a potential pitfall for all three of the indispensable parties to a workers’
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compensation appeal: the claimant, the employer, and the administrator of the
Bureau of Workers’ Compensation.
{¶ 27} The administrator lays out these pitfalls for the employer and the
Bureau of Workers’ Compensation fairly clearly in his brief:
The Administrator needs notice of all R.C. 4123.512
appeals at the outset, as required by R.C. 4123.512(B), because
litigation—even at an early stage—can proceed in numerous ways
that are unfavorable to the Administrator and the state fund. For
example, if the Administrator lacks notice that an employer is
appealing the commission's approval of a workers' compensation
claim, the employer could—without the Administrator's
opposition—prevail in a motion to dismiss or motion on the
pleadings, overturn the commission's decision, and apply for a
premium rate adjustment. Alternatively, if a claimant appeals the
commission's denial of a claim without giving notice to the
Administrator and prevails on a motion for summary judgment, the
workers' compensation fund would be liable for the costs of the
claim, even though the Administrator had no opportunity to oppose
the motion.
Even more troublesome, if appeals can proceed without
notice to the Administrator, then an employer and claimant could
settle without the Administrator's participation, causing additional
difficulties related to fund administration. See, e.g., State ex rel.
Dillard Dep't Stores v. Ryan, 122 Ohio St.3d 241, 2009-Ohio-2683[910 N.E.2d 438] (employer unable to obtain reimbursement after
settling with claimant when the parties failed to notify the bureau
of the settlement). In all these situations, the Administrator, lacking
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notice, is unable to protect fully the resources that all parties want
to access and that the Administrator is charged with protecting: the
state fund and the surplus fund.
(Emphasis sic.)
{¶ 28} A claimant, however, also has reason to be concerned about the
validity of any judgment on appeal in which there was a failure to join and serve
notice of the appeal on the administrator, a statutorily indispensable party: a
potentially void or voidable judgment or settlement. The administrator is likely to
have a strong argument that any award or settlement made in a proceeding that
did not join the administrator was made without statutory authorization and is
void.
O’CONNOR, C.J., and LUNDBERG STRATTON, J., concur in the foregoing
opinion.
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Michael DeWine, Attorney General, Alexandra T. Schimmer, Solicitor
General, Michael J. Hendershot, Chief Deputy Solicitor, Elisabeth A. Long,
Deputy Solicitor, and Elise Porter and Colleen C. Erdman, Assistant Attorneys
General, for appellant.
Philip J. Fulton Law Office, Philip J. Fulton, and Ross R. Fulton, urging
affirmance on behalf of amici curiae, Ohio Association of Claimants’ Counsel and
Ohio Association for Justice.
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