State ex rel. First Natl. Supermarkets, Inc. v. Indus. Comm. - Ohio Supreme Court Opinion - Ohio Supreme Court Decision

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The State ex rel. First National Supermarkets, Inc., Appellant,
v. Industrial Commission of Ohio et al., Appellees.
[Cite as State ex rel. First Natl. Supermarkets, Inc. v. Indus.
Comm. (1994), Ohio St.3d .]
Workers' compensation -- Permanent total disability award --
Industrial Commission's order vacated for lack of "some
evidence," when -- Termination of handicap reimbursement
not an abuse of discretion, when.
(No. 93-1891 -- Submitted August 17, 1994 -- Decided
October 19, 1994.)
Appeal from the Court of Appeals for Franklin County, No.
92AP-253.
It is undisputed that claimant, Ella L. Walton, suffered
from arthritis before sustaining any of her three industrial
injuries with appellant First National Supermarkets, Inc.
("FNS"), her self-insured employer. Pursuant to R.C. 4123.343,
FNS, in 1983, was awarded a twenty-percent handicap
reimbursement for that condition in claim No. 574182-22. In
1989, three years after her last injury, claimant moved
appellee Industrial Commission for permanent total disability
compensation. Among other evidence was the report of Dr. W.
Jerry McCloud, who wrote:
"Claim allowed for left lumbar myofascitis and lumbar
strain with a pre-existing arthritis. * * *
"* * * It is important to note that her right knee claim
is allowed for pre-existing arthritis * * *.
"* * *
"In summary, this claimant does have two sources of loss
of function. One is related to loss of lumbar reserve, and the
second to her right knee. I do feel that her historical
representation of her problems in regard to both areas is
typical of one describing discomfort from arthritic changes. I
think that she would have restrictions against any activity
that was done in the standing or ambulatory position, and this
would include kneeling or bending or going up or down steps or
stairs or incline[d] planes. She would also have restrictions
against repetitive bending or lifting of objects whose weight
would exceed an estimated 10 pounds. In my impression, the

only thing within her capabilities would be sedentary
activities done while sitting and even then there would be
restrictions against uninterrupted intervals of sitting or
standing or ambulating that would exceed an estimated two
hours. This is because of a diagnosis of osteoarthritis, and I
think this is progressive. * * *
"It is my opinion that the weight of the medical evidence
would indicate that this claimant should be considered
permanently and totally impaired. I do not think she would be
capable of sustained remunerative activities in the future. * *
* It is my impression that the diagnosis of osteoarthritis is
responsible for the entirety of her clinical presentation in
this claim [907297-22]. In claim 574182-22[,] * * * once
again, osteoarthritis is responsible for the entirety of her
clinical presentation in this regard." (Emphasis added.)
The commission awarded permanent total disability
compensation, writing:
"The reports of Drs. de la Iglesia and McCloud were
reviewed and evaluated. The findings and award are based
particularly on the medical report of Dr. McCloud, the evidence
in the file and the evidence adduced at the hearing.
"It is found that Ms. Walton is approximately 65 years of
age with an unknown level of education and no special
vocational skills. Ms. Walton has a work history as a grocery
cashier. The report of Dr. McCloud states that Ms. Walton is
permanently and totally impaired as a result of the allowed
conditions. It is therefore found that Ms. Walton is
permanently and totally disabled."
FNS filed a complaint in mandamus in the Court of Appeals
for Franklin County, contesting both the permanent total
disability award and the termination of handicap reimbursement
that independently occurred during the permanent total
disability proceedings. The appellate court upheld both acts
and denied the writ.
This cause is now before this court on appeal as of right.

Thomas M. Carolin, for appellant.
Lee Fisher, Attorney General, and Gerald H. Waterman,
Assistant Attorney General, for appellee Industrial Commission.

Per Curiam. We must consider whether the commission
abused its discretion in either awarding compensation for
permanent total disability or terminating handicap
reimbursement. For the reasons to follow, an affirmative
response to the first inquiry only is warranted.
FNS seeks to overturn the permanent total disability
award, claiming a lack of both due process and "some
evidence." Only the latter assertion has merit.
FNS initially contends that due process was offended when
Commissioner Mayfield, who missed the permanent total
disability hearing, voted to award permanent total disability
compensation. Contrary to FNS's representation, the
commissioner's absence, standing alone, does not establish a
constitutional violation. It must also be shown that the
absent commissioner did not, in "some meaningful manner,"
review the evidence presented. (Emphasis deleted.) State ex
rel. Ormet Corp. v. Indus. Comm. (1990), 54 Ohio St.3d 102,

107, 561 N.E.2d 920, 925. Since FNS has made no such
allegation, further inquiry is unnecessary.
FNS next argues that the commission improperly relied on
McCloud's report in support of its award. We agree.
McCloud's report is not evidence of entitlement to
compensation because it attributed claimant's disability
exclusively to arthritis -- a nonallowed condition.
Since McCloud's report was the only one on which the
commission relied, its removal from consideration leaves the
commission's order unsupported by any evidence of medical
impairment with which the nonmedical factors could conceivably
combine to produce permanent total disability. This renders a
return for further consideration futile and dictates vacation
of the commission's order for lack of "some evidence." State
ex rel. LTV Steel Co. v. Indus. Comm. (1992), 65 Ohio St.3d 22,
599 N.E.2d 265; State ex rel. Owens-Corning Fiberglas, Corp. v.
Indus. Comm. (1994), 70 Ohio St.3d 263, N.E.2d .
Turning to FNS's remaining challenge, we note that the
handicap reimbursement program was created to "encourage
[employers] to employ and retain in their employment
handicapped employees as defined in this section." R.C.
4123.343. Arthritis is one of those enumerated conditions.
R.C. 4123.343(A)(4). Employers are eligible for reimbursement
of all or part of the compensation and benefits paid to a
claimant where (1) the injury or occupational disease would not
have occurred but for the pre-existing condition or (2) the
disability arising from an industrial injury was caused at
least in part through aggravation of the pre-existing
condition. R.C. 4123.343(D)(1) and (2).
Handicap reimbursement is paid from the State Surplus
Fund. R.C. 4123.343(B). The State Surplus Fund, in turn, is
an offshoot of the larger State Insurance Fund. Under R.C.
4123.34(B):
"Ten per cent of the money paid into the state insurance
fund shall be set aside for the creation of a surplus fund
until the surplus amounts to the sum of one hundred thousand
dollars, after which time, whenever necessary in the judgment
of the administrator to guarantee a solvent state insurance
fund, a sum not exceeding five percent of all the money paid
into the state insurance fund shall be credited to the surplus
fund. * * *"
Self-insured employers also contribute to the State
Surplus Fund. R.C. 4123.35(D) requires the Administrator of
Workers' Compensation to establish by rule that self-insured
employers "shall pay into the state insurance fund such amounts
as are required to be credited to the surplus in division (B)
of section 4123.34 of the Revised Code." This requirement is
at Ohio Adm. Code 4123-17-30.
Prior to 1986, there was no limit on the amount to which
an employer could be reimbursed. On August 22, 1986, however,
R.C. 4123.343 was amended to include:
"(F) No employer shall in any year receive credit under
this section in an amount greater than the premium he paid if a
state fund employer or greater than his assessments if a
self-insuring employer.
"(G) Employers granted permission to pay compensation
directly under section 4123.35 of the Revised Code may, for all

claims made after January 1, 1987, for compensation and
benefits under this section, pay the compensation and benefits
directly to the employee or the employee's dependents. If an
employer chooses to pay compensation and benefits directly, he
shall receive no money or credit from the surplus fund for the
payment under this section, nor shall he be required to pay any
amounts into the surplus fund that otherwise would be assessed
for handicapped reimbursements for claims made after January 1,
1987. Where an employer elects to pay for compensation and
benefits pursuant to this section, he shall assume
responsibility for compensation and benefits arising out of
claims made prior to January 1, 1987, and shall not be required
to pay any amounts into the surplus fund and may not receive
any money or credit from that fund on account of this section.
The election made under this division is irrevocable." Am.
Sub. S.B. No. 307, 141 Ohio Laws, Part I, 718, 745.
FNS opted out of the handicap reimbursement program on
December 19, 1989. As a result, the commission quit
reimbursing FNS for expenditures made thereafter. FNS argues
that because its entitlement to reimbursement arose before the
statute was amended, it retains the right to continued
reimbursement in this claim. This assertion is unpersuasive.
FNS's reliance on R.C. 1.58 and State ex rel. Am. Seaway
Foods, Inc. v. Indus. Comm. (1991), 62 Ohio St.3d 50, 577
N.E.2d 1085, is misplaced. R.C. 1.58(A) reads:
"(A) The reenactment, amendment or repeal of a statute
does not, except as provided in division (B) of this section:
"(1) Affect the prior operation of the statute or any
prior action taken thereunder;
"(2) Affect any validation, cure, right, privilege,
obligation, or liability previously acquired, accrued,
accorded, or incurred thereunder;
"* * *
"(4) Affect any investigation, proceeding, or remedy in
respect of any such privilege, obligation [or] liability * * *."
FNS's position fails to recognize that it was FNS's own
actions, not the amendment of the statute, that eliminated its
right to reimbursement. Had FNS not voluntarily opted out of
the program, its right to reimbursement would still exist.
Am. Seaway also does not advance appellant's cause. That
decision held that R.C. 4123.343(F) could not be used to limit
the amount of reimbursement to which an employer was eligible
on claims on which the right to reimbursement accrued before
the statute's amendment. Am. Seaway did not involve the
provision currently at issue -- R.C. 4123.343(G). Equally
important, the accrued right in Am. Seaway was indeed destroyed
by the commission's application of the statute. In this case,
again, any accrued right was destroyed by appellant's own
actions, not statutory amendment.
To hold as FNS urges would allow it to receive handicap
reimbursement without contributing to the Reimbursement Fund.
This is unfair to those employers who may have elected to
remain in the program and would continue to pay into it. When
FNS chose no longer to contribute to the fund, it also chose
not to receive money from it. Therefore, the commission did
not abuse its discretion in denying reimbursement.
Accordingly, that portion of the appellate judgment that

returned claimant's permanent total disability application to
the commission for further consideration and amended order is
reversed. The balance of the judgment is affirmed.
Judgment reversed in part,
affirmed in part
and writ allowed.
Moyer, C.J., A.W. Sweeney, Wright and Pfeifer, JJ., concur.
Douglas, Resnick and F.E. Sweeney, JJ., dissent.
Douglas, J., dissenting. I respectfully dissent. I would
affirm the judgment of the court of appeals.
Resnick and F.E. Sweeney, JJ., concur in the foregoing
dissenting opinion.