Case Title: State ex rel. Occidental Chem. Corp. v. Ohio Bur. of Workers' Comp.

Citation: 2001-Ohio-29

Docket Number: 19990686

State: ohio

Court: Ohio Supreme Court

Date: 2001-04-11T00:00:00Z

Document:
[Cite as State ex rel. Occidental Chem. Corp. v. Ohio Bur. of Workers’ Comp, 91 
Ohio St.3d 249, 2001-Ohio-29.] 
 
 
 
THE STATE EX REL. OCCIDENTAL CHEMICAL CORPORATION, APPELLANT, v. 
BUREAU OF WORKERS’ COMPENSATION ET AL., APPELLEES. 
[Cite as State ex rel. Occidental Chem. Corp. v. Ohio Bur. of Workers’ Comp. 
(2001), 91 Ohio St.3d 249.] 
Workers’ compensation — Employer’s switch from self-insured status to state 
insurance fund status — Employer’s insured status at time of employee’s 
injury or injurious exposure controls which fund is responsible for the 
claim. 
(No. 99-686 — Submitted January 9, 2001 — Decided April 11, 2001.) 
APPEAL from the Court of Appeals for Franklin County, No. 98AP-505. 
__________________ 
 
Per Curiam.  Diamond Shamrock Corporation (“Diamond”) went through 
significant corporate changes in the 1980s.  Two are relevant here: (1) the 
convoluted merger of Diamond’s chemical division into Occidental Chemical 
Corporation (“Occidental”) and (2) a change in workers’ compensation insurance 
status. 
 
In 1983, Diamond changed its corporate structure.  A holding company of 
the same name was formed.  Nonchemical operations were transferred to newly 
created subsidiaries of the new Diamond.  The chemical component of old 
Diamond became a subsidiary of the new Diamond and changed its name to 
Diamond Shamrock Chemicals Company (“Shamrock Chemicals”). 
 
This corporate reorganization presumably prompted a change in the 
workers’ compensation insurance status of the former chemical division.  Old 
Diamond had been self-insured.  On July 1, 1984, it canceled its self-insured 
status, and Shamrock Chemicals, as a result, became a state insurance fund 
employer.  This is significant because in 1986, new Diamond sold Shamrock 
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Chemicals’ outstanding stock to a company owned by Occidental Petroleum 
Corporation.  Shamrock Chemicals was again renamed, and on November 30, 
1987, was merged into Occidental Chemical Corporation, appellant herein.  As 
part of the merger, Shamrock Chemicals dropped its separate state fund risk 
number and moved under Occidental’s state fund risk. 
 
In 1992, Lewis Tobul, who worked for Diamond from 1941 through 1976, 
died.  His widow alleged that his death was due to chemical exposure at a 
Diamond plant in Painesville.  The Industrial Commission of Ohio awarded death 
benefits against “Diamond Shamrock Chemical Company C/O Occidental 
Chemical Corporation.”  No payments, however, were forthcoming. 
 
While the widow waited, both Occidental and a corporate successor of 
Diamond, Maxus Energy Corporation, clashed with appellee Bureau of Workers’ 
Compensation—and each other—over responsibility for claims arising while 
Diamond was self-insured, including Tobul’s claim.  Occidental argued that 
because Shamrock Chemicals was insured by the state fund when Occidental 
bought it, the state fund was the responsible payor.  The bureau, however, ruled 
that companies that changed from self-insured to state fund status retained direct 
financial responsibility for all claims arising while the company was self-
insured—responsibility did not pass to the state fund.  Therefore, because (1) the 
chemical manufacturing portion of Diamond was self-insured during Tobul’s 
injurious chemical exposure, and (2) Occidental was the successor-by-merger of 
that operation, Occidental, not the state fund, was liable for payment. 
 
The Self-Insured Review Panel of the bureau stressed: 
 
“Both parties [Occidental and Maxus] have expressed their concerns of 
potentially being assessed self-insured liabilities when they are not self-insured 
employers.  This Panel is in no way attempting to transfer the self-insured status 
of Diamond Shamrock Corporation to either of these employers.  Instead, this 
panel is attempting to ascertain which party is responsible for the self-insured 
January Term, 2001 
3 
liabilities.  Self-insured liabilities, like other corporate liabilities, pass to the 
successor corporations along with the assets. 
 
“After a review of the statement of facts and testimony elicited at the 
conference, the Panel finds that Occidental Chemical Co. is the employer 
responsible for those claims attributable to Diamond Shamrock Chemicals 
Company.  Stated simply: the Panel finds that Occidental Chemical Co. is a 
successor employer to Diamond Shamrock and is therefore responsible for its 
self-insuring workers’ compensation obligations.”  (Emphasis sic.) 
 
Occidental filed a complaint in mandamus in the Court of Appeals for 
Franklin County, alleging that the bureau had abused its discretion in determining 
that Occidental was responsible for Lewis Tobul’s claim.  The court of appeals 
disagreed and denied the writ.  This cause is now before this court upon an appeal 
as of right. 
 
Occidental does not dispute the principle that the responsibilities of the 
merged corporation are assumed by the surviving entity.  See R.C. 1701.82(A)(4); 
ASA Architects, Inc. v. Schlegel (1996), 75 Ohio St.3d 666, 665 N.E.2d 1083.  It 
instead disputes the determination that liability for decedent’s claim ever fell 
within Shamrock Chemicals’ self-insured risk. 
 
Occidental argues that because decedent died after Shamrock Chemicals 
had converted to state fund insurance, expenses related to his death were not 
Shamrock Chemicals’ and, hence, not Occidental’s after merger.  Occidental 
claims that any statutory or regulatory authority for a contrary finding was not 
enacted or adopted until after the two companies merged. 
 
While Occidental’s statutory argument is true, State ex rel. Marion Power 
Shovel Co. v. Indus. Comm. (1950), 153 Ohio St. 451, 41 O.O. 438, 92 N.E.2d 14, 
substantially preceded the merger and supports the bureau’s assessment of 
liability.  That case was precipitated by a situation that is not uncommon to 
workers’ compensation administration—an employer’s switch from state fund to 
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self-insured status or vice versa.  Marion Power Shovel entailed the latter and 
touched upon a question obvious to the situation—when an employer changes 
insured status, from what fund do claims that arose before the change continue to 
be paid?  Marion Power Shovel ruled that the employer’s insured status at the 
time of injury or injurious exposure controlled.  Thus, because the claimant in that 
case was exposed while the employer was self-insured, the company retained 
direct responsibility for that claim and could not pass it off to the state insurance 
fund. 
 
Accordingly, the judgment of the court of appeals is affirmed. 
Judgment affirmed. 
 
MOYER, C.J., DOUGLAS, RESNICK, F.E. SWEENEY, PFEIFER, COOK and 
LUNDBERG STRATTON, JJ., CONCUR. 
__________________ 
 
Schottenstein, Zox & Dunn, L.P.A., William J. Barath and Robert D. 
Weisman, for appellant. 
 
Betty D. Montgomery, Attorney General, and Gerald H. Waterman, 
Assistant Attorney General, for appellees. 
__________________