State ex rel. Seibert v. Richard Cyr, Inc.

Decision Date22 August 2019
Docket NumberNo. 2017-0185,2017-0185
Citation157 Ohio St.3d 266,2019 Ohio 3341,134 N.E.3d 1185
Parties The STATE EX REL. SEIBERT, Appellant, v. RICHARD CYR, INC., et al.; Industrial Commission of Ohio, Appellee.
CourtOhio Supreme Court

Becker & Cade and Dennis A. Becker, Loveland, for appellant.

Dave Yost, Attorney General, and Kevin J. Reis, Assistant Attorney General, for appellee.

French, J. {¶ 1} Appellant, Kenneth J. Seibert, appeals the judgment of the Tenth District Court of Appeals denying his request for a writ of mandamus ordering appellee, Industrial Commission, to vacate its order that (1) terminated his permanent-total-disability ("PTD") compensation, (2) determined that he had been overpaid PTD compensation, and (3) found that he had committed fraud while receiving PTD compensation. In denying Seibert's request, the court of appeals determined that there was some evidence to support the commission's finding that he was engaged in sustained remunerative employment through various horse-training and horse-grooming activities that he was performing at a raceway while receiving PTD compensation. It also determined that there was some evidence to support the commission's finding that he had committed fraud by concealing these activities.

{¶ 2} Seibert makes four arguments on appeal: (1) that his raceway activities do not constitute work, (2) that even if the activities could be construed as work, he was not working as of the effective date of the commission's termination of his benefits, (3) that the commission did not identify the evidence it relied on to reach its decision, and (4) that he did not commit fraud. For the following reasons, we affirm in part and reverse in part the court of appeals' judgment.

FACTS AND PROCEDURAL BACKGROUND

Seibert's PTD award

{¶ 3} In 1990 and 1991, Seibert sustained workplace injuries; his ensuing workers' compensation claims were allowed for various back and psychological conditions. In a 2007 order, the commission awarded Seibert PTD compensation, effective in 2006. In granting the award, the commission found that Seibert was incapable of performing any sustained remunerative employment. The commission specified that Seibert's compensation was to "continue without interruption unless or until future facts and circumstances justify the stopping of the award."

The SID investigation

{¶ 4} In 2013, the Special Investigations Department ("SID") of the Bureau of Workers' Compensation initiated an investigation into Seibert after determining that he "had an active groomer/owner license with the Ohio State Racing Commission" while receiving PTD compensation. The SID later determined that Seibert held a "groom/owner" license for 2008 and an owner license for 2009, 2010, 2011, 2012, and 2013.

{¶ 5} From April to June 2014, the SID conducted surveillance of Seibert at Lebanon Raceway. SID agents witnessed him jogging horses around the track, wearing riding attire and a helmet, hosing off a horse, maneuvering a sulky (a two-wheeled horse cart) and removing it from a horse, hauling a horse trailer with his truck, pushing a wheelbarrow and dumping its contents, and walking a horse to a shower stall.

{¶ 6} In June 2014, SID agents interviewed Seibert at barn 11 of the raceway. Seibert was washing a horse when the agents arrived. Seibert told the agents that he had "worked/trained" at the raceway for the past four to five years and that he currently owned two horses. Seibert stated that he kept his horses in stalls rented from Jim Davis and that Davis sometimes waived his rental and feed fees in exchange for Seibert's running, bathing, and feeding Davis's horses. Seibert said he had performed similar services for Brent Hopper, who also kept horses in barn 11. On a typical day at the raceway, Seibert would run each of his horses, as well as two or three other horses belonging to Davis or Hopper, for three miles around the track. Seibert told the agents he was physically able to work with horses and wanted to pursue it as a career.

{¶ 7} SID agents also interviewed several other individuals about Seibert's activities. Davis, who rented barn 11 and stabled 12 horses there, knew Seibert from Seibert's "hanging around" the barns for as long as Davis could remember.

In his June 2014 interview, Davis reported to the agents that Seibert "came around his barn last year and helped for a short time but then was ‘missing’ for about six months and returned in February 2014." Davis stated that in March 2014, he gave Seibert a one-half ownership interest in a horse named Edna Lou, which Davis valued at $500. Davis stated that he had not been paying Seibert for working at the barn, because Seibert owed him for Seibert's part of Edna Lou's upkeep. Edna Lou had raced ten times in 2014, earning almost $2,000. Davis and Seibert split these winnings evenly after giving 5 percent to the driver and 5 percent to the trainer. It appears, however, that Davis ultimately retained Seibert's share of the winnings because of the continued cost of maintaining Edna Lou. Davis stated that Seibert had previously owned other horses, which he housed in other barns.

{¶ 8} According to Davis, Seibert was working at the raceway three to five days a week, usually arriving between 10 and 10:30 a.m. and working until between 1:30 and 2 p.m. He stated that Seibert harnessed and attached horses to sulkies and jogged, hosed off, and fed them. If Seibert had not been doing this work, Davis would have been paying someone approximately $100 to $125 a week to perform it.

{¶ 9} Hopper told SID agents that he had stabled his horses with Davis in barn 11 for about two years and that Seibert, whom he had known for only about a year, had been helping out in barn 11 by jogging the horses, cleaning their stalls, and spraying them down. Hopper said he had been paying Davis a monthly rental fee for boarding, feeding, and exercising his horses. In his signed statement, Hopper stated, "If Ken Seibert gets paid for anything he does at the barn, I do not know about that or how he was paid." While agents were interviewing Hopper, Seibert approached him and asked what other work was left to be done. Seibert then removed a harness from a horse, led it into a stall, and sprayed it down. Hopper told one agent that earlier in 2014, he had paid Seibert $500 from the proceeds of a horse he sold as thanks for helping out around the barn "last year and years prior."

{¶ 10} Doug Stovall, who stabled one horse in barn 6, told agents that Seibert did not work for anyone at the raceway but that Seibert sometimes came around to "hang out and talk" or to ride horses. When an agent presented to Stovall a copy of a $25 check that Stovall had made out to Seibert in 2010, Stovall stated that it might have been to pay Seibert for retrieving a trailer. But Stovall otherwise denied that Seibert performed any work, including training or exercising his horse, for him.

{¶ 11} Stacey Nisonger, who kept one or more horses in barn 14, told agents that Seibert had "sporadic[ally]" and "not very often" helped her out by cleaning stalls and harnessing and jogging horses but that Seibert was no longer working for her. Nisonger did not offer any details of when Seibert had performed work for her, but she did state that in 2013, she had twice paid $40 to Seibert for transporting horses to races.

{¶ 12} Dr. Dennis Ward, who had been treating Seibert while Seibert was receiving PTD compensation, told agents that he did not know that Seibert had been working at the raceway while receiving treatment and that he felt deceived by Seibert. Dr. Ward nevertheless opined that Seibert was permanently disabled.

Commission proceedings

{¶ 13} In September 2014, the bureau filed a motion with the commission requesting that it (1) terminate Seibert's PTD compensation effective March 26, 2009, (2) declare as overpaid all PTD compensation paid to Seibert as of March 26, 2009, and (3) declare that Seibert had committed fraud by concealing his employment while receiving PTD compensation.

{¶ 14} In January 2015, a staff hearing officer ("SHO") held a hearing for the commission at which Seibert and an SID agent testified. Following the hearing, the SHO issued a decision granting the bureau's motion. The SHO found that a bartering system existed between Davis and Seibert, in which Seibert was performing work in exchange for horse-stall rentals and horse feed, and that Seibert engaged in sustained remunerative employment while helping with the horses in Davis's barn. The SHO found that Seibert had been engaged in sustained remunerative employment since March 26, 2009, the date when he received a $350 check from Lebanon Trotting Club, Inc., as prize earnings for a horse he had owned. The SHO also found that Seibert had engaged in civil fraud by concealing the fact that he was working at the raceway while receiving PTD compensation.

Court-of-appeals proceedings

{¶ 15} Seibert filed an original action in the Tenth District Court of Appeals for a writ of mandamus ordering the commission to vacate its decision. The court of appeals referred the action to a magistrate, who recommended that the writ be granted in part. The magistrate concluded that the commission did not abuse its discretion in finding that Seibert had been engaged in sustained remunerative employment since March 26, 2009. But the magistrate concluded that the record did not support the commission's finding of fraud.

{¶ 16} Both parties filed objections to the magistrate's decision, with Seibert objecting to the conclusion that he was engaged in sustained remunerative employment beginning March 26, 2009, and the commission raising two objections challenging the conclusion that Seibert had not committed fraud. The court of appeals rejected Seibert's objection, finding that there was "some evidence" to support the commission's determination that Seibert engaged in sustained remunerative employment as of March 26, 2009. 2016-Ohio-8335, 2016 WL...

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