State ex rel. Wfal Constr. v. Buehrer

• Decision Date: 16 June 2015
• Docket Number: No. 2014–0050.,2014–0050.
• Citation: 2015 Ohio 2305,144 Ohio St.3d 21,40 N.E.3d 1079
• Parties: The STATE ex rel. WFAL CONSTRUCTION, Appellant, v. BUEHRER, Admr., Appellee.
• Court: Ohio Supreme Court

144 Ohio St.3d 21

40 N.E.3d 1079

2015 Ohio 2305

The STATE ex rel. WFAL CONSTRUCTION, Appellant,

v.BUEHRER, Admr., Appellee.

No. 2014–0050.

Supreme Court of Ohio.

Submitted Feb. 3, 2015.

Decided June 16, 2015.

William W. Johnston, Columbus, for appellant.

Michael DeWine, Attorney General, and John Smart, Assistant Attorney General, for appellee.

PER CURIAM.

{¶ 1} This appeal involves the results of an audit of appellant, WFAL Construction, by appellee, Steve Buehrer, Administrator of the Bureau of Workers' Compensation. The audit was conducted to determine whether WFAL, during calendar year 2009, was required to report its payroll to the bureau for purposes of setting and collecting a premium to be paid to the bureau for workers' compensation coverage. See R.C. 4121.41(B). If WFAL's workers were employees, WFAL owed the premium as an "employer" subject to the Workers' Compensation Act. R.C. 4123.35(A). If, as WFAL claimed, its workers were independent contractors, WFAL was not an employer, and no premium was owed.

{¶ 2} The bureau concluded from the audit that those working for WFAL in 2009 were employees, not independent contractors. Because WFAL had not reported payroll for employees for that year, the bureau determined that WFAL owed back premiums.

{¶ 3} WFAL filed a protest of the audit findings. An adjudicating committee of the bureau denied the protest, and the administrator's designee affirmed the decision. WFAL filed this action for mandamus relief in the Tenth Appellate District. The court of appeals concluded that the bureau appropriately found that WFAL met the statutory criteria to support its decision that WFAL's workers were employees.

{¶ 4} For the reasons that follow, we affirm.

{¶ 5} Gary Buyer owns WFAL, a sole proprietorship. In 2009, WFAL contracted with Ohio Fresh Eggs to repair some storm-damaged barns. WFAL provided the labor, and Ohio Fresh Eggs supplied the materials for the job.

{¶ 6} In 2010, Penny J. Young, an auditor for the bureau, conducted an audit of WFAL for the year 2009. R.C. 4123.01(A)(1)(c) lists 20 factors for determining whether a person working pursuant to a construction contract is an "employee" for purposes of workers' compensation; if ten of those criteria are satisfied, the worker is an employee. Id. Young determined that 15 criteria applied to WFAL's workers. Thus, the persons Buyer hired to perform the work for Ohio Fresh Eggs were employees, not independent contractors. WFAL had not reported payroll for those employees.

{¶ 7} WFAL filed a protest of the audit findings, maintaining that the workers were independent contractors. In support, WFAL argued that the bureau had conducted an audit in 1999 and the IRS had also audited it and those audits did not find that the workers were employees.

{¶ 8} Following a hearing, the bureau's adjudicating committee determined that the evidence established the following factors demonstrating an employee/employer relationship:

1.) The individuals were required to comply with instruction from either the owner or an onsite lead carpenter; 2) the services provided by these workers are integrated into the regular functioning of this employer as they do all of the work; 3) the named persons on the various timesheets and logs performed the work personally; 4) the individuals were paid by the employer; 5) records that were available to the auditor showed that the same workers performed work repeatedly for the employer; 6) the individuals were paid for the specific number of hours worked on a weekly basis; 7) as the employer had a supervisor or foreman on the worksite if he was not present himself, the Committee finds that the order of work was determined by the employer; 8) given the hourly payments, the workers would not realize a profit or loss as a result of the services provided; 9) the employer has the right to discharge any of these individuals; and 10) there is no indication that any of the individuals would incur liability if the relationship ended.

In addition, the committee noted that two workers' compensation claims had been allowed against WFAL in 2009 and 2010. Those claimants were "employees" for workers' compensation purposes. Thus, the committee denied the protest and upheld the audit findings.

{¶ 9} WFAL filed an administrative appeal under R.C. 4123.291(B). Following a hearing, the administrator's designee affirmed the order of the adjudicating committee.

{¶ 10} WFAL filed a complaint for a writ of mandamus. The court of appeals determined that there was evidence supporting the order of the administrator's designee denying WFAL's protest of the audit findings. The court denied the writ.

{¶ 11} This matter is before the court on WFAL's appeal of right.

{¶ 12} To be entitled to an extraordinary remedy in mandamus, the relator must demonstrate that the administrative body abused its discretion by entering an order not supported by any evidence in the record. State ex rel. Avalon Precision Casting Co. v. Indus. Comm., 109 Ohio St.3d 237, 2006-Ohio-2287, 846 N.E.2d 1245, ¶ 9. The relator must make that demonstration by clear and convincing evidence. State ex rel. Doner v. Zody, 130 Ohio St.3d 446, 2011-Ohio-6117, 958 N.E.2d 1235, ¶ 57.

{¶ 13} The commission is the exclusive evaluator of the weight and credibility of the evidence. State ex rel. LTV Steel Co. v. Indus. Comm., 88 Ohio St.3d 284, 287, 725 N.E.2d 639 (2000). When an order is adequately explained and based on some evidence, even if other evidence of record may contradict it, there is no abuse of discretion, and a reviewing court must not disturb the order. State ex rel. Mobley v. Indus. Comm., 78 Ohio St.3d 579, 584, 679 N.E.2d 300 (1997). Thus, the issue before us is whether the bureau's order was supported by evidence in the record.

{¶ 14} R.C. 4123.01(A)(1)(c) provides that every person who performs labor or provides services pursuant to a construction contract, as defined in R.C. 4123.79, is an employee for purposes of workers' compensation, if the individual meets at least ten of the 20 enumerated statutory criteria. WFAL concedes that it met two of the criteria: it paid the workers and retained the right to discharge them.

{¶ 15} WFAL disagrees that the evidence supports the other criteria identified by the bureau. In particular, WFAL contests the bureau's findings as to criteria nos. 1, 2, 6, 7, and 8. In addition, WFAL argues that without evidence of new and changed circumstances, the bureau is prohibited by collateral estoppel from reversing the position it took in the 1999 audit, which found no employment relationship. WFAL's arguments lack merit.

A. The Bureau's Findings of Fact Are Supported by the Evidence

{¶ 16} The bureau's findings of fact nos. 1 and 7 involve the person or persons who controlled the work performed at the site. WFAL argues that it was not Buyer, but rather Paul Hendershot, the on-site supervisor for Ohio Fresh Eggs, who directed and controlled the work performed.

{¶ 17} At the hearing, auditor Young stated that the workers followed instructions on a work order given to Buyer. In addition, Buyer stated that both he and Hendershot gave instructions to the WFAL workers. Thus, we find that the evidence in the record supports the administrator's determination that Buyer, in addition to Hendershot, instructed the workers and determined the order of the work.

{¶ 18} The bureau's finding of fact no. 2 involves whether the workers' services were integrated into the regular functioning of the employer. WFAL contends that Buyer's statement at the hearing that he used job-specific workers on an as-needed basis demonstrated that their work was not integrated into the regular functioning of WFAL.

{¶ 19} According to the auditor, because WFAL...