Bur. of Workers' Comp. v. Verlinger (Slip Opinion) , 153 Ohio St. 3d 492 ( 2018 )

[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as Bur.
of Workers’ Comp. v. Verlinger, Slip Opinion No. 2018-Ohio-1481.]
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SLIP OPINION NO. 2018-OHIO-1481BUREAU OF WORKERS’ COMPENSATION, APPELLANT, v. VERLINGER ET AL.,
APPELLEES.
[Until this opinion appears in the Ohio Official Reports advance sheets, it
may be cited as Bur. of Workers’ Comp. v. Verlinger, Slip Opinion No.
2018-Ohio-1481.]
Workers’ compensation—R.C. 4123.931(G)—A claimant becomes eligible for
benefits at time of injury or death that occurred during course of
employment and remains eligible unless and until a determination that
claimant is not entitled to benefits has been made and has become final (i.e.,
is no longer subject to appeal) or, if no claim is filed, until time allowed for
filing a claim has elapsed—Benefits applicant was a claimant at time she
settled with insurance companies—Applicant and insurance companies are
jointly and severally liable to statutory subrogee, Bureau of Workers’
Compensation, for full amount of its subrogation interest—Court of
appeals’ judgment affirming trial court’s summary-judgment entry vacated
and cause remanded.
SUPREME COURT OF OHIO
(No. 2017-0102—Submitted February 14, 2018—Decided April 19, 2018.)
APPEAL from the Court of Appeals for Summit County,
No. 27763, 2016-Ohio-8029.
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O’CONNOR, C.J.
{¶ 1} In this appeal, we consider the definition of “claimant” for purposes
of R.C. 4123.931(G). This statute describes the responsibility of a claimant seeking
workers’ compensation benefits to notify a statutory subrogee and, if applicable,
the attorney general of all third parties against whom the claimant may have a right
of recovery and to provide the subrogee an opportunity to assert its subrogation
rights against each third party. We hold that a claimant is any party who is eligible
to receive compensation, medical benefits, or death benefits from the Ohio Bureau
of Workers’ Compensation (“BWC”). We further hold that a claimant becomes
eligible at the time of the injury or death that occurred during the course of
employment and remains eligible unless and until a determination that the claimant
is not entitled to benefits has been made and has become final (i.e., is no longer
subject to appeal) or, if no claim is filed, until the time allowed for filing a claim
has elapsed.
{¶ 2} Moreover, we hold that appellee Loretta M. Verlinger was a claimant
at the time she settled with appellee Metropolitan Property and Casualty Insurance
Company (“Metropolitan”) and appellee Foremost Property and Casualty Insurance
Company (“Foremost”). Appellant, BWC, was a statutory subrogee, and Verlinger
never gave it the opportunity to assert its subrogation rights prior to settling with
the two insurers. Accordingly, appellees are jointly and severally liable to BWC
for the full amount of its subrogation interest. We vacate the judgment of the Ninth
District Court of Appeals that affirmed the summary-judgment entry of the Summit
County Court of Common Pleas, and we remand the cause to the trial court for
further proceedings in accordance with this opinion.
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January Term, 2018
Facts and Procedural History
{¶ 3} The parties do not dispute the relevant facts in this case. Verlinger
sustained serious injuries in an accident on August 1, 2011. She applied for
workers’ compensation benefits from BWC on August 17, but BWC disallowed the
claim on September 6. She appealed the denial to the Industrial Commission on
September 22. During the pendency of that appeal, Verlinger settled claims with
Metropolitan, the insurer of the driver who caused the crash, and Foremost, her own
insurer, resulting in payments to Verlinger and her husband. The parties finalized
the settlements on December 15, 2011. On December 23, 2011, the Industrial
Commission allowed Verlinger’s claim, finding that she “sustained an injury in the
course of and arising out of her employment,” and she began receiving workers’
compensation benefits.
{¶ 4} In July 2013, BWC filed a complaint in the Summit County Court of
Common Pleas against appellees, seeking compensation, pursuant to R.C.
4123.931, the subrogation statute, for the amounts it had paid and would pay on
Verlinger’s workers’ compensation claim. BWC and Verlinger filed cross-motions
for summary judgment. The trial court granted Verlinger’s motion, finding that
because BWC had rejected Verlinger’s application at the time she settled with the
two insurers, she was not a claimant pursuant to R.C. 4123.931.
{¶ 5} BWC appealed, arguing that the trial court erred by finding that
Verlinger was not a claimant under the subrogation statute. In a split decision, the
appellate court affirmed the trial court’s judgment.
Analysis
{¶ 6} Statutory interpretation is a matter of law, so we review the appellate
court’s decision de novo. State v. Pariag, 137 Ohio St.3d 81, 2013-Ohio-4010, 998
N.E.2d 401, ¶ 9. When reviewing a statute, “[w]ords and phrases shall be read in
context and construed according to the rules of grammar and common usage.” R.C.
1.42.
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SUPREME COURT OF OHIO
{¶ 7} R.C. 4123.931(G) states:
A claimant shall notify a statutory subrogee and the attorney
general of the identity of all third parties against whom the claimant
has or may have a right of recovery, except that when the statutory
subrogee is a self-insuring employer, the claimant need not notify
the attorney general. No settlement, compromise, judgment, award,
or other recovery in any action or claim by a claimant shall be final
unless the claimant provides the statutory subrogee and, when
required, the attorney general, with prior notice and a reasonable
opportunity to assert its subrogation rights. If a statutory subrogee
and, when required, the attorney general are not given that notice, or
if a settlement or compromise excludes any amount paid by the
statutory subrogee, the third party and the claimant shall be jointly
and severally liable to pay the statutory subrogee the full amount of
the subrogation interest.
{¶ 8} We find this case to be straightforward. Verlinger was a claimant,
and BWC was a statutory subrogee, R.C. 4123.93(B). Therefore, Verlinger had a
responsibility to notify BWC of the settlement and because she did not, appellees
are jointly and severally liable to BWC for the full amount of the subrogation
interest.
{¶ 9} R.C. 4123.93(A) defines “claimant” for purposes of R.C. 4123.931 as
“a person who is eligible to receive compensation, medical benefits, or death
benefits under this chapter.” “Eligible” means “qualified to be chosen.” Webster’s
Third New International Dictionary 736 (2002). Appellees argue that Verlinger
was not eligible to receive workers’ compensation benefits and therefore was not a
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January Term, 2018
claimant within the meaning of R.C. 4123.931(G) because BWC had denied her
claim for benefits at the time she reached her settlement with the insurers.
{¶ 10} However, it is clear that Verlinger was qualified to be chosen for
benefits at the time she settled with the insurers, because just eight days later, the
Industrial Commission allowed her claim and ordered BWC to start paying her
benefits. Nothing about Verlinger’s qualifications changed during those eight days.
Indeed, Verlinger’s qualifications did not change at any time between the time of
her injury and the commission’s decision. Because she was injured in the course
of her employment, Verlinger remained eligible for benefits at all times thereafter.
BWC initially disallowed her claim based on a lack of proof that the accident
occurred in the course of her employment. But BWC’s decision was based on a
lack of evidence as to eligibility, and because Verlinger timely appealed that
decision, it did not become a final determination that Verlinger was ineligible.
{¶ 11} By appealing BWC’s decision, Verlinger at all times acted as though
she was eligible for benefits. A claimant maintains eligibility for benefits until a
final determination is made that the claimant is not entitled to benefits, either
because neither party has timely appealed or because all appeals have been
exhausted, or, if no claim is filed, until the statutory period for filing a claim has
elapsed.
{¶ 12} Verlinger also argues that even if she was a claimant, the subrogation
statute does not apply because BWC had not yet made any payment on her claim
at the time she settled. This argument is unavailing.
{¶ 13} For purposes of the subrogation statute, “statutory subrogee” is
defined as “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). Here, BWC meets this definition. Nothing in the definition requires
a statutory subrogee to have identified the claimant as being entitled to benefits or
to have made any payments to the claimant.
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SUPREME COURT OF OHIO
{¶ 14} Verlinger attempts to support her argument by conflating
“subrogation rights” with “right of recovery,” but these are distinct. The statute is
clear that it is the “payment of compensation or benefits” that “creates a right of
recovery,” R.C. 4123.931(A). In contrast, the statute does not require a statutory
subrogee to make payments in order to possess a subrogation right; the “right of
subrogation * * * is automatic,” R.C. 4123.931(H).
{¶ 15} Because Verlinger was eligible to receive workers’ compensation
benefits at the time she settled her claims with the insurers, she was a claimant for
purposes of R.C. 4123.931(G). Indeed, at the time of settlement, her benefits claim
was on appeal from BWC’s decision. Furthermore, pursuant to the same provision,
because she failed to provide BWC, the statutory subrogee, and the attorney general
a reasonable opportunity to assert their subrogation rights, appellees “shall be
jointly and severally liable to pay the statutory subrogee the full amount of the
subrogation interest.” R.C. 4123.931(G).
{¶ 16} We understand Foremost’s argument that it is unfair to hold a third
party jointly and severally liable without regard to its knowledge of any subrogation
rights. However, this is a policy argument best made to the General Assembly. As
Foremost notes, the General Assembly chose in R.C. 5160.37(F), governing
recovery rights of the Department of Medicaid, to limit third-party liability for a
subrogee’s recovery when the third party is unaware of any subrogation rights. But
the General Assembly did not limit third-party liability in R.C. 4123.931(G), and it
is our job to apply the law as written, not as we might choose to write it.
{¶ 17} We hold that for purposes of R.C. 4123.931(G), Verlinger was a
claimant and BWC was a statutory subrogee at the time she reached her settlement
with the two insurers. Verlinger failed to notify BWC and the attorney general of
her settlement. Accordingly, she and the insurers are jointly and severally liable to
BWC for the full amount of BWC’s subrogation interest.
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January Term, 2018
Judgment vacated
and cause remanded.
O’DONNELL, KENNEDY, FRENCH, FISCHER, DEWINE, and DEGENARO, JJ.,
concur.
_________________
Michael DeWine, Attorney General, Eric E. Murphy, State Solicitor, and
Michael J. Hendershot and Peter T. Reed, Deputy Solicitors; and Edward T. Saadi,
L.L.C., and Edward T. Saadi, for appellant.
Nicholas A. Papa, for appellee Loretta M. Verlinger.
Smith Marshall, L.L.P., Kallen L. Boyer, and R. Eric Smearman, for
appellee Metropolitan Property and Casualty Insurance Company.
Law Offices of Craig S. Cobb and Craig S. Cobb, for appellee Foremost
Property and Casualty Insurance Company.
Donahey, Defossez & Beausay and Curtis M. Fifner, urging affirmance for
amicus curiae, Ohio Association for Justice.
_________________
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