Case Title: State ex rel. RFFG, LLC v. Ohio Bureau of Workers' Comp.

Citation: 2014-Ohio-5199

Docket Number: 2013-0451

State: ohio

Court: Ohio Supreme Court

Date: 2014-11-25T00:00:00Z

Document:
[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as 
State ex rel. RFFG, L.L.C. v. Ohio Bur. of Workers’ Comp., Slip Opinion No. 2014-Ohio-
5199.] 
 
 
 
NOTICE 
This slip opinion is subject to formal revision before it is published in 
an advance sheet of the Ohio Official Reports.  Readers are requested 
to promptly notify the Reporter of Decisions, Supreme Court of Ohio, 
65 South Front Street, Columbus, Ohio 43215, of any typographical or 
other formal errors in the opinion, in order that corrections may be 
made before the opinion is published. 
 
SLIP OPINION NO. 2014-OHIO-5199 
THE STATE EX REL. RFFG, L.L.C., APPELLANT, v. OHIO BUREAU OF 
WORKERS’ COMPENSATION, APPELLEE. 
[Until this opinion appears in the Ohio Official Reports advance sheets, it 
may be cited as State ex rel. RFFG, L.L.C. v. Ohio Bur. of Workers’ Comp., 
Slip Opinion No. 2014-Ohio-5199.] 
Workers’ compensation—Successor in interest—Experience rating—Court of 
appeals’ judgment denying writ of mandamus affirmed. 
(No. 2013-0451—Submitted August 19, 2014—Decided November 25, 2014.) 
APPEAL from the Court of Appeals for Franklin County,  
No. 11AP-647, 2013-Ohio-241. 
_______________________ 
Per Curiam. 
{¶ 1} Appellant, RFFG, L.L.C., appeals the judgment of the Tenth District 
Court of Appeals denying its request for a writ of mandamus.  The court of 
appeals concluded that the decision of appellee, Ohio Bureau of Workers’ 
Compensation, finding RFFG to be the successor in interest to Ameritemps, Inc., 
for purposes of calculating RFFG’s premium rate for workers’ compensation 
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coverage was supported by the evidence and was not an abuse of discretion.  We 
agree, and we affirm the judgment of the court of appeals. 
{¶ 2} On December 18, 2008, WTS Acquisition Corporation purchased 
Ameritemps, Inc., a temporary-employment agency.  The parties executed an 
assets-purchase agreement that referred to two schedules that identified specific 
assets, customers, and contracts purchased and those excluded in addition to the 
employees that did or did not transfer to the new company.  WTS then transferred 
the assets to its wholly owned subsidiary, RFFG.  RFFG continued operating the 
business under the Ameritemps name. 
{¶ 3} To activate workers’ compensation coverage for the new business, 
RFFG filed a notification-of-business-acquisition form, known as a U-118, in 
which it stated that it had purchased from Ameritemps select vehicles, personal 
property, office leases and locations, and the right to contract with certain 
Ameritemps clients.  The U-118 also stated that RFFG had acquired the right to 
use Ameritemps’ business name and that it intended to conduct the business in a 
similar manner. 
{¶ 4} The bureau asked RFFG for a copy of one of the schedules 
mentioned in the purchase agreement to verify the assets purchased and the 
number of employees acquired, but RFFG did not produce the document.  
Consequently, the bureau notified RFFG that it had determined that RFFG was a 
successor employer for workers’ compensation purposes and that it intended to 
calculate RFFG’s workers’ compensation premium rate based on Ameritemps’ 
experience rating. 
{¶ 5} RFFG filed a protest, claiming that it did not succeed Ameritemps in 
the operation of its business or, in the alternative, that it should be considered only 
a partial successor.  At a hearing before the bureau’s adjudicating committee in 
which no sworn testimony was taken, RFFG’s chief financial officer stated that 
the company had acquired a significant number of Ameritemps’ clients and had 
January Term, 2014 
 
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required all employees to immediately reapply to work for the new company.  A 
representative from Ameritemps stated that he had been prepared to provide the 
bureau with copies of the client lists and assets purchased but that he had been 
instructed not to do so by RFFG’s counsel.  Counsel for RFFG assured the 
adjudicating committee that it would submit the documents, but he later notified 
the committee that RFFG could not locate them.  Instead, RFFG produced several 
lists of information that it had created for the committee.1  RFFG redacted the 
names and addresses of the clients from the lists that were provided. 
{¶ 6} The adjudicating committee denied RFFG’s protest.  The order 
stated: 
 
Based on the testimony at the hearing and the materials 
submitted with the protest, the Adjudication Committee DENIES 
the successor’s protest of the transfer/Combination.  The [bureau] 
correctly transferred and/or combined the predecessor’s experience 
and/or rights and/or obligations to the Employer under the Code.  
The Committee properly applied the rule.  Although the operations 
might have changed over time, it is clear that a snap shot of the 
two business [sic] from December 31 to January 4th, indicate that a 
significant number of both clients and employees were retained by 
the successor.  The business name remained the same, the business 
locations remained the same, the clients significantly remained the 
same and the employees significantly remained the same.  There 
was a “no compete” clause in the contract.  All these factors 
                                                 
1 Counsel for RFFG described the supplemental information as Exhibit 1, a copy of the list of 
assets not taken as part of the agreement; Exhibit 2, the core employee list; Exhibit 3, a list of 
locations before and after the asset purchase, and Exhibit 4, a copy of Ameritemps’ client list but 
with names and addresses redacted as privileged information; and Exhibit 5, a copy of one of the 
schedules attached to the purchase agreement that identified the contracts assumed by RFFG.    
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indicate that this was a full purchase of the operations of the 
business and the transfer was appropriate. 
 
{¶ 7} On January 18, 2011, the bureau issued a final order affirming the 
committee’s decision. 
{¶ 8} RFFG filed a complaint for a writ of mandamus alleging that the 
bureau had abused its discretion when it determined RFFG to be the successor in 
interest to Ameritemps.  The case was referred to a magistrate who determined 
that the bureau did not abuse its discretion in light of RFFG’s failure to produce 
the evidence that the bureau had requested.  In addition, the magistrate concluded 
that the bureau had set forth the evidence it relied upon and had explained its 
order:   
 
There is no language in the purchase agreement from which the 
[bureau] could have concluded that a whole transfer did not occur.  
To the extent that the purchase agreement references certain 
schedules which might more accurately identify the purchased 
assets, none of those schedules were submitted. * * * Based on 
what little evidence the [bureau] had, the magistrate finds that the 
[bureau] did not abuse its discretion. 
 
2013-Ohio-241, ¶ 43. 
{¶ 9} The court of appeals adopted the magistrate’s decision and denied 
the writ. 
{¶ 10} This cause is before the court on RFFG’s appeal as of right. 
{¶ 11} When an employer transfers a business, either in whole or in part, 
to a successor in interest, the bureau is authorized to calculate the successor’s 
premium rate based on the predecessor’s experience within the most recent 
January Term, 2014 
 
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experience period.  R.C. 4123.32(B); Ohio Adm.Code 4123-17-02(B).  For 
workers’ compensation purposes, the term “successor in interest” means “simply 
a transferee of a business in whole or in part.”  State ex rel. Lake Erie Constr. Co. 
v. Indus. Comm., 62 Ohio St.3d 81, 83-84, 578 N.E.2d 458 (1991). 
{¶ 12} RFFG does not dispute that WTS acquired assets of Ameritemps 
through an assets-purchase agreement and subsequently transferred those assets to 
RFFG.  Rather, RFFG argues that the evidence does not support the bureau’s 
decision that RFFG was a successor employer, in whole, of Ameritemps.  
According to RFFG, because it retained only a fraction of Ameritemps’ offices, 
leases, former employees, and clients in less risky industries and merely used the 
Ameritemps name for marketing purposes, only part of the business was 
transferred.  RFFG asks the court to compare these facts to State ex rel. K & D 
Group, Inc. v. Ryan, 10th Dist. Franklin No. 10AP-608, 2011-Ohio-5051, rev’d 
State ex rel. K & D Group, Inc. v. Buehrer, 135 Ohio St.3d 257, 2013-Ohio-734, 
985 N.E.2d 1270, in which the bureau determined that there was only a partial 
transfer of experience between property-management companies, although the 
successor had assumed all existing leases, retained half of the former employees, 
and maintained the same day-to-day operations. 
{¶ 13} In matters that involve setting premium rates for workers’ 
compensation coverage, courts defer to the bureau’s decision “ ‘in all but the most 
extraordinary circumstances’ ” and will intervene only “when the agency has 
acted in an ‘arbitrary, capricious or discriminatory’ manner.”  State ex rel. Cafaro 
Mgt. Co. v. Kielmeyer, 113 Ohio St.3d 1, 2007-Ohio-968, 862 N.E.2d 474, ¶ 8, 
quoting State ex rel. Progressive Sweeping Contrs., Inc. v. Ohio Bur. of Workers’ 
Comp., 68 Ohio St.2d 393, 395-396, 627 N.E.2d 550 (1994). 
{¶ 14} Here, RFFG did not produce the documents attached to its assets-
purchase agreement to verify its claims that RFFG had purchased only select 
Ameritemps assets and had changed the focus of the business.  Even if RFFG had 
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a legitimate plan to change Ameritemps’ business, the alleged changes occurred 
during 2009, after the acquisition, not when the business transferred on January 1, 
2009.  Such changes, if proven, would be pertinent to establish RFFG’s premium 
rates for 2010, not for 2009.  We agree with the court of appeals that based on the 
evidence in the record, the bureau did not abuse its discretion in finding that there 
was a transfer of the business in whole. 
{¶ 15} Furthermore, RFFG’s comparison to K & D Group has no 
persuasive value.  These cases are fact driven.  The bureau’s analysis of the 
specific facts in K & D Group does not necessarily apply in a different situation 
and in a different industry.  In addition, we reversed the Tenth District’s decision 
in K & D Group on the basis that there had been no transfer of the business at all.  
K & D Group, 135 Ohio St.3d 257, 2013-Ohio-734, 985 N.E.2d 1270.  Thus, the 
bureau’s factual analysis in K&D Group has no application to the facts here.  
RFFG’s first proposition of law is without merit. 
{¶ 16} RFFG also argues that the bureau did not properly explain its 
decision.  The bureau has a duty to briefly explain the reasoning for its decision to 
inform the parties and, potentially, a reviewing court of the basis for its order.  
State ex rel. Craftsmen Basement Finishing Sys., Inc. v. Ryan, 121 Ohio St.3d 
492, 2009-Ohio-1676, 905 N.E.2d 639, ¶ 10;  State ex rel. Ochs v. Indus. Comm., 
85 Ohio St.3d 674, 676, 710 N.E.2d 1126 (1999).  The bureau did so when it 
stated in its order that “a significant number of both clients and employees were 
retained by the successor.  The business name remained the same, the business 
locations remained the same, the clients significantly remained the same and the 
employees significantly remained the same.”  RFFG’s second proposition of law 
is without merit. 
{¶ 17} We agree with the court of appeals that RFFG failed to demonstrate 
that the bureau acted in an arbitrary, capricious, or discriminatory manner by 
entering an order not supported by the evidence in the record.  State ex rel. Avalon 
January Term, 2014 
 
7
Precision Casting Co. v. Indus. Comm., 109 Ohio St.3d 237, 2006-Ohio-2287, 
846 N.E.2d 1245, ¶ 9.  RFFG was, therefore, not entitled to the extraordinary 
remedy of a writ of mandamus.  State ex rel. Gen. Motors Corp. v. Indus. Comm., 
117 Ohio St.3d 480, 2008-Ohio-1593, 884 N.E.2d 1075, ¶ 9.  Consequently, we 
affirm the judgment of the court of appeals. 
Judgment affirmed. 
O’CONNOR, C.J., and PFEIFER, O’DONNELL, LANZINGER, KENNEDY, 
FRENCH, and O’NEILL, JJ., concur. 
______________________ 
Fisher & Phillips, L.L.P., and Daniel P. O’Brien, for appellant. 
Michael DeWine, Attorney General, and Stephen D. Plymale, Assistant 
Attorney General, for appellee. 
__________________