Refusal to Terminate Claim Based On Fraud Allegation Cannot Be Appealed

Refusal to Terminate Claim Based On Fraud Allegation Cannot Be Appealed

Posted: October, 2009

Benton v. Hamilton Cty. Educational Serv. Ctr. (9/28/09), 123 Ohio St.3d 347, 2009-Ohio-4969.

Issue: Can an employer file an R.C. §4123.512 appeal from an Industrial Commission refusal to terminate an allowed workers’ compensation claim based on the employer’s allegation that the injured worker committed fraud?

Background: Benton was injured in a car accident and her claim was allowed administratively. The employer did not appeal the allowance.

After the appeal period had passed, the employer filed a motion seeking to have Benton’s claim terminated. The employer claimed that Benton had committed fraud. The employer alleged that Benton had misrepresented her purpose for driving when she was injured and had not been in the course of her employment when the accident occurred.

The Industrial Commission found no evidence supported the employer’s claim of fraud and denied the motion. The employer filed an R.C. §4123.512 appeal from the Industrial Commission’s decision.

Benton filed a motion to dismiss the appeal because the Industrial Commission’s decision did not involve the “right to participate” and therefore could not be appealed under R.C. §4123.512. The trial court granted the motion.

The employer appealed and the Court of Appeals reversed. Benton appealed.

Decision: Supreme Court reverses.

R.C. §4123.512 provides the only basis for common pleas courts to hear appeals from Industrial Commission decisions. Under R.C. §4123.512,

The claimant or the employer may appeal an order of the industrial commission * * * in any injury or occupational disease case, other than a decision as to the extent of disability to the court of common pleas * * *.

The Supreme Court has previously explained that R.C. §4123.512 only permits appeals where the issue is the injured worker’s right to participate, or continue to participate, in the workers’ compensation fund.

The Court considers the effect of the Industrial Commission’s order in the present case. Only if that order affected the right to participate would the common pleas court have jurisdiction over an R.C. §4123.512 appeal.

The Industrial Commission refused to exercise its continuing jurisdiction to terminate Benton’s claim based on the employer’s allegations of fraud. The Supreme Court finds that this does not involve the right to participate, stating:

we hold that refusal of the Industrial Commission to discontinue a claim does not involve the right of the claimant to participate in the workers’ compensation fund under R.C. 4123.512 and thus, a court of common pleas lacks subject matter jurisdiction on appeal.

The claim had already been allowed. The Industrial Commission’s decision to deny the employer’s motion did not affect that allowance.

The Supreme Court rejects the employer’s argument that equal protection is violated because an injured worker whose claim is terminated based on allegations of fraud can appeal the termination, but an employer whose allegations of fraud do not result in termination cannot appeal the refusal to terminate the claim. The Supreme Court finds that equal protection is not violated because an employer can appeal a decision allowing a claim and an injured worker can appeal a decision denying a claim.

Editor’s Comment: The employer had not appealed the initial allowance of the claim. If it had done so all of the issues surrounding the right to participate, including Benton’s reason for driving (which formed the basis of the employer’s allegation of fraud) would have been considered at that time. The Supreme Court states that the employer cannot now put itself in the position that it would have been in had it appealed the initial allowance.

The Supreme Court also points out that in an R.C. §4123.512 appeal the injured worker must prove their claim anew. That means that if the employer could appeal, Benton would have to re-prove her right to participate, even though her claim had already been allowed. As pointed out in the editor’s comment contained in the WCB’s report of the Court of Appeals decision in this case:

Why should an injured worker be subject to the expense of a court case any time the employer wants to make such an allegation [of fraud]?

Information courtesy of the Ohio Workers’ Compensation Bulletin. Subscribe to the Ohio Workers’ Compensation Bulletin to keep informed about the Ohio workers’ compensation system.