State ex rel. Able Temps, Inc. v. Indus. Comm. - Ohio Supreme Court Opinion - Ohio Supreme Court Decision

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The State ex rel. Able Temps, Inc. et al. v. Industrial
Commission of Ohio et al.
[Cite as State ex rel. Able Temps, Inc. v. Indus. Comm.
(1993), Ohio St.3d .]
Workers' compensation -- Rates of premium -- New classification
created for temporary help agencies invalidated by Supreme
Court decision -- Reimbursement of overpaid premiums --
Period over which temporary help agencies may be
reimbursed governed by Ohio Adm. Code 4121-7-17(C)'s
two-year limitation.
(No. 92-688 -- Submitted January 5, 1993 -- Decided
February 24, 1993.)
In Mandamus.
An employer's workers' compensation premium rates are
based on a basic rate derived from the occupational
classifications applicable to its employees. By resolution
effective July 1, 1985, respondent Industrial Commission
prohibited temporary help agencies ("THAs") from using the over
two hundred classifications available to other employers. THAs
were instead assigned nine broad classifications, which
resulted, in many cases, in an unfavorable disparity between
the rates assessed to THAs and those assessed to other
employers with employees doing identical work.
On December 4, 1991, State ex rel. Minutemen, Inc. v.
Indus. Comm. (1991), 62 Ohio St. 3d 158, 580 N.E.2d 777,
invalidated the separate THA classifications, finding that they
were not based on "degree of hazard" as former R.C. 4123.29
(now 4123.29[A]) required. Effective July 1, 1992, those
classifications were officially eliminated. In this present
class action, relators, all THAs, seek to compel reimbursement
of any overpaid premiums.

Pickrel, Schaeffer & Ebeling, David C. Korte and Mary M.
Biagioli, for relators.
Lee I. Fisher, Attorney General, Gerald H. Waterman,
Dennis L. Hufstader and Cordelia A. Glenn, Assistant Attorneys
General, for respondents.

Per Curiam. Preliminarily, two questions may be quickly
resolved. First, relators' request to compel reclassification
is moot, since reclassification occurred on July 1, 1992.
Second, relators' request that this court declare the special
THA classifications unconstitutional ignores our express
refusal to address that issue in Minutemen, supra, 62 Ohio
St.3d 158, 580 N.E.2d 777. For the reason expressed in
Minutemen, the constitutional question does not merit
examination in this case.
Disposition of these questions leaves one matter for
determination - - the period over which relators may be
reimbursed. Relators urge repayment from July 1, 1985, citing
R.C. 2305.07 and 2305.14. Respondents counter with Ohio Adm.
Code 4121-7-17(C)'s two-year limitation. We agree with the
latter.
R.C. Chapter 2305 governs timely commencement of civil
actions. The timeliness of this action is not at issue. Ohio
Adm. Code 4121-7-17(C), however, is directly on point:
"The Commission and Bureau shall * * * have the right to
make adjustments as to * * * premium rates and/or amount of
premium. No adjustments, however, shall be made in an
employer's account which result in reducing the amount of
premium below the amount of contributions made by the employer
to the fund for the periods involved, except in reference to
adjustments for the semi-annual and/or adjustment periods
ending within twenty-four months immediately prior to the
beginning of the current payroll reporting period, when such
errors affecting the reports and the premium are brought to the
attention of the Commission and Bureau by an employer through
written application for adjustment or found by the Commission
and Bureau."
Ohio Adm. Code 4121-7-17(C)'s applicability to premium
reimbursement cases was recently reaffirmed in both State ex
rel. Harry Wolsky Stair Builder, Inc. v. Indus. Comm. (1991),
58 Ohio St. 3d 222, 569 N.E.2d 900, and State ex rel. Granville
Volunteer Fire Dept., Inc. v. Indus. Comm. (1992), 64 Ohio St.
3d 518, 597 N.E.2d 127.
The existence of a specially applicable limitations period
distinguishes this case from, for example, State ex rel. Madden
v. Windham Exempted Village School Dist. Bd. of Edn. (1989), 42
Ohio St. 3d 86, 537 N.E.2d 646. In Madden, relator's tenure as
a teacher with respondent school district was interrupted by an
eight-year hiatus for maternity reasons. When she returned
during the 1979-1980 school year, she was misclassified for
salary purposes and continued at the wrong pay level until the
1985-1986 term. In 1986, relator filed a mandamus petition to
compel compensation at the appropriate level as well as back
pay.
Among other defenses, respondent in Madden claimed that
relator was not entitled to any reimbursement, since her suit,
respondent alleged, was untimely. Respondent argued that
relator's cause of action arose in 1979, placing her 1986 suit
beyond R.C. 2305.07's six-year limitations period. This court
disagreed, finding that each year in which relator had been
misclassified constituted a "separate and distinct claim."
Id., 42 Ohio St. 3d at 90, 537 N.E.2d at 649. The court thus
ordered that "[p]ursuant to R.C. 2305.07, relator should be

compensated for the six years prior to the filing of her
complaint." Id.
Relators in the instant case have broadly interpreted this
language as blanket authority for a recovery period dating back
six years from the filing of the complaint any time any party
seeks reimbursement from a defendant whose liability was
created by statute. This construction fails for two reasons.
First, R.C. Chapter 3317, from which the back pay claim in
Madden stemmed, had no statute of limitations for
reimbursements. Second, R.C. 2305.07 was used in Madden only
to determine the timeliness of the complaint. The actual right
to reimbursement flowed automatically under R.C. 3317.14.
Madden, accordingly, is distinguishable from this case, as are
State ex rel. Gingrich v. Fairfield City. Bd. of Edn. (1985),
18 Ohio St. 3d 244, 18 OBR 300, 480 N.E.2d 485, Zion Nursing
Home, Inc. v. Creasy (1983), 6 Ohio St. 3d 221, 6 OBR 293, 452
N.E.2d 1272, and State ex rel. Country Court v. Creasy (1980),
62 Ohio St. 2d 419, 16 O.O.3d 446, 406 N.E.2d 521, on which
relators also rely.
Having determined that Ohio Adm. Code 4121-7-17(C)
controls, we must ascertain how far back adjustments that
result in refunds may be made to relators' accounts.
Respondents maintain that the date from which reimbursement
should run is July 1, 1990 - - two years prior to the beginning
of the payroll period in which separate THA rates were
abandoned. Relators argue that under this rule they are
entitled to reimbursement starting July 1, 1989 - - two years
before the beginning of the payroll period in which the
Minutemen decision fell. We favor the second alternative.
Ohio Adm. Code 4121-7-17(C) permits repayment from the
point at which the "errors affecting the reports and the
premiums are brought to the attention of the Commission and
Bureau * * * or found by the Commission and Bureau." In this
case, at the latest, respondents knew of the "error" as of
December 4, 1991 (July 1, 1991 payroll period) - - the date
Minutemen was decided. However, if an individual THA can prove
that it notified the respondents of the error prior to that
date, the applicable commencement date may vary accordingly.
Relators lastly urge us to prohibit respondents'
overpayment audits as unnecessary and time-consuming.
Relators' request, however, ignores respondents' fiduciary duty
to the State Insurance Fund. Included among respondents'
responsibilities is a duty to ensure that disbursements - -
here, as refunds - - are accurate. Indus. Comm. v. Dell
(1922), 104 Ohio St. 389, 396-397, 135 N.E. 669, 672.
Respondents' audits will help ensure accurate reimbursement,
benefitting both the THAs and the State Insurance Fund.
Relators have a clear legal right to reimbursement of
premiums unlawfully assessed by respondents, with the two-year
restriction of Ohio Adm. Code 4121-7-17(C) controlling. A writ
of mandamus is accordingly granted to this extent only.
Writ granted.
Moyer, C.J., A.W. Sweeney, Douglas, Wright, Resnick, F.E.
Sweeney and Pfeifer, JJ., concur.