Case Title: Holeton v. Crouse Cartage Co.

Citation: 2001-Ohio-109

Docket Number: 20000428

State: ohio

Court: Ohio Supreme Court

Date: 2001-06-27T00:00:00Z

Document:
[Cite as Holeton v. Crouse Cartage Co., 92 Ohio St.3d 115, 2001-Ohio-109.] 
 
 
 
HOLETON ET AL., PETITIONERS, v. CROUSE CARTAGE COMPANY ET AL.; CONRAD, 
ADMR., RESPONDENT. 
[Cite as Holeton v. Crouse Cartage Co. (2001), 92 Ohio St.3d 115.] 
Workers’ compensation — Subrogation right of statutory subrogee against third 
party – R.C. 4123.931, in its present form, is unconstitutional. 
(No. 00-428 — Submitted October 10, 2000 — Decided June 27, 2001.) 
ON ORDER from the United States District Court for the Northern District of Ohio, 
Western Division, Certifying a Question of State Law, No. 98CV-7578. 
 
ALICE ROBIE RESNICK, J.  This case comes to us as certified questions of 
state law from the United States District Court for the Northern District of Ohio, 
Western Division.  The federal district court certified the following facts to us: 
 
“Plaintiff, Rick Holeton, was injured on June 18, 1998.  He and his plaintiff 
spouse, Shari, have two minor children, also plaintiffs herein.  At the time of his 
accident, Rick was part of a construction crew employed by Harper Structures, Inc., 
building an overpass across the Ohio Turnpike.  The telescoping ‘manlift’ bucket in 
which Rick was standing was struck by an eastbound truck owned and/or operated by 
defendants, James Parr and Crouse Cartage Company.  The force of the impact 
propelled Rick out of the bucket, slamming him into the underside of the overpass 
and then dropping him on to the highway below. 
 
“Because his injuries occurred in the course and scope of his employment 
with Harper Structures, Rick Holeton has received, and may indefinitely continue to 
receive, workers’ compensation benefits from defendant, Bureau of Workers’ 
Compensation (BWC), pursuant to Chapter 4123 of the Revised Code.  Rick 
Holeton’s wage and medical benefits to date exceed $190,000. 
 
“BWC is a ‘statutory subrogee’ within the meaning of R.C. § 4123.931, 
referred to herein as Ohio’s subrogation statute.  As a statutory subrogee with respect 
to workers’ compensation benefits previously or hereafter paid to Rick Holeton, 
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BWC has asserted a subrogation claim against any settlement made or judgment paid 
to Rick Holeton by or on behalf of the other defendants.1  Plaintiffs dispute the 
validity of BWC’s subrogation claim and argue that the statute violates relevant 
sections of Ohio’s Constitution.  BWC denies that the statute is unconstitutional and 
seeks to enforce its right of subrogation. 
 
“Plaintiffs filed a motion for summary judgment asking the court to declare 
the subrogation statute unconstitutional.  In the alternative, plaintiffs requested an 
order certifying the issue to the Ohio Supreme Court.  The court has stayed plaintiffs’ 
motion for summary judgment and granted plaintiffs’ motion to certify the issue to 
the Ohio Supreme Court.” 
 
On May 3, 2000, this court reviewed the preliminary memoranda pursuant to 
S.Ct.Prac.R. XVIII and determined that it will answer the following certified 
questions: 
 
“1.  Does R.C. § 4123.931 violate Article II, Section 35 of the Ohio 
Constitution? 
 
“2.  Does R.C. § 4123.931 violate Article I, Section 19 of the Ohio 
Constitution? 
 
“3.  Does R.C. § 4123.931 violate Article I, Section 16 of the Ohio 
Constitution? 
 
“4.  Does R.C. § 4123.931 violate Article II, Section 28 of the Ohio 
Constitution? 
 
“5.  Does R.C. § 4123.931 violate Article I, Section 2 of the Ohio 
Constitution? 
 
“6.  Does R.C. § 4123.931 violate Article II, Section 15 of the Ohio 
Constitution? 
 
“7.  Is R.C. § 4123.931 contrary to Ohio Civil Rule 49(C) and, therefore, 
invalid and unenforceable? 
                                                          
 
1. 
Footnote one of the order states:  “R.C. § 4123.931 provides, in part, that BWC’s right of 
subrogation is automatic, that no settlement or other recovery is final without notice to BWC, and that 
January Term, 2001 
3 
 
“8.  Does R.C. § 4123.931 constitute an invalid waiver of an injured 
employee’s right to receive and retain workers’ compensation benefits in violation of 
R.C. § 4123.80.”  (2000), 88 Ohio St.3d 1500, 727 N.E.2d 923. 
 
R.C. 4123.931 provides: 
 
“(A) The payment of compensation or benefits pursuant to this chapter or 
Chapter 4121., 4127., or 4131., of the Revised Code creates a right of subrogation in 
favor of a statutory subrogee against a third party. A statutory subrogee’s subrogation 
interest includes past payments of compensation and medical benefits and estimated 
future values of compensation and medical benefits arising out of an injury to or 
disability or disease of a claimant. 
 
“(B) A claimant shall notify a statutory subrogee of the identity of all third 
parties against whom the claimant has or may have a right of recovery. No settlement, 
compromise, judgment, award, or other recovery in any action or claim by a claimant 
shall be final unless the claimant provides the statutory subrogee with prior notice 
and a reasonable opportunity to assert its subrogation rights. If a statutory subrogee is 
not given that notice, the third party and the claimant shall be jointly and severally 
liable to pay the statutory subrogee the full amount of the subrogation interest. 
 
“(C) The right of subrogation under this chapter is automatic, regardless of 
whether a statutory subrogee is joined as a party in an action by a claimant against a 
third party. A statutory subrogee may assert its subrogation rights through 
correspondence with the claimant and the third party or their legal representatives. A 
statutory subrogee may institute and pursue legal proceedings against a third party 
either by itself or in conjunction with a claimant. If a claimant disputes the validity or 
amount of an asserted subrogation interest, the claimant shall join the statutory 
subrogee as a necessary party to the action against the third party. 
 
“(D) The entire amount of any settlement or compromise of an action or 
claim is subject to the subrogation right of a statutory subrogee, regardless of the 
manner in which the settlement or compromise is characterized. Any settlement or 
                                                                                                                                                              
 
the entire amount of any settlement is subject to BWC’s subrogation right.” 
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compromise that excludes the amount of compensation or medical benefits shall not 
preclude a statutory subrogee from enforcing its rights under this section. The entire 
amount of any award or judgment is presumed to represent compensation and 
medical benefits and future estimated values of compensation and medical benefits 
that are subject to a statutory subrogee’s subrogation rights unless the claimant 
obtains a special verdict or jury interrogatories indicating that the award or judgment 
represents different types of damages. 
 
“(E) Subrogation does not apply to the portion of any judgment, award, 
settlement, or compromise of a claim to the extent of a claimant’s attorney’s fees, 
costs, or other expenses incurred by a claimant in securing the judgment, award, 
settlement, or compromise, or the extent of medical, surgical, and hospital expenses 
paid by a claimant from the claimant’s own resources for which reimbursement is not 
sought. No additional attorney’s fees, costs, or other expenses in securing any 
recovery may be assessed against any subrogated claims of a statutory subrogee.” 
 
R.C. 4123.93(B) defines “statutory subrogee” as “the administrator of the 
bureau of workers’ compensation, a self-insuring employer, or an employer that 
contracts for the direct payment of medical services pursuant to division (L) of 
section 4121.44 of the Revised Code.” 
I 
Section 35, Article II—The Great Compromise 
 
The first certified question is whether R.C. 4123.931 violates Section 35, 
Article II of the Ohio Constitution, which provides: 
 
“For the purpose of providing compensation to workmen and their 
dependents, for death, injuries or occupational disease, occasioned in the course of 
such workmen’s employment, laws may be passed establishing a state fund to be 
created by compulsory contribution thereto by employers, and administered by the 
state, determining the terms and conditions upon which payment shall be made 
therefrom. Such compensation shall be in lieu of all other rights to compensation, or 
damages, for such death, injuries, or occupational disease, and any employer who 
January Term, 2001 
5 
pays the premium or compensation provided by law, passed in accordance herewith, 
shall not be liable to respond in damages at common law or by statute for such death, 
injuries or occupational disease.” 
 
Resolution of this issue requires some historical knowledge of the legal 
climate that invoked the unanimous adoption of Proposal Number 24, or Section 35, 
Article II, at the Constitutional Convention of 1912 and the enactment of Ohio’s first 
compulsory workers’ compensation law, 103 Ohio Laws 72, on February 26, 1913. 
 
Prior to 1913, the employee’s ability to receive compensation for work-
related injuries was governed by the common law of torts.  Although the principle of 
vicarious liability had long been recognized at common law, it was far more difficult 
for the injured worker to recover damages from his or her employer than it was for 
the stranger to the employment relationship.  The injured employee was required to 
prove that the employer violated a duty of care owed specifically to employees.  Even 
upon overcoming this hurdle, until 1911 the employee was faced with what became 
known as the “unholy trinity of common-law defenses”—contributory negligence, 
the fellow servant rule, and assumption of risk.  102 Ohio Laws 529, Section 21-1.  
These defenses were truly draconian in their application.  The defense of contributory 
negligence applied to bar any recovery if the employee’s negligence contributed even 
slightly to the injury.  The fellow servant rule was modified in most jurisdictions to 
exclude from the category of fellow servants all employees charged with carrying out 
the employer’s common-law duties, but Ohio courts limited the exclusion to 
employees serving in supervisory capacities.  Cleveland, Columbus & Cincinnati RR. 
Co. v. Keary (1854), 3 Ohio St. 201, 1854 WL 3.  And the doctrine of assumption of 
risk applied to preclude recovery on the basis that even the barely subsisting worker 
is free to decline any service in which he or she apprehends danger.  See, generally, 
Fulton, Ohio Workers’ Compensation Law (2 Ed.1998) 13-16, Sections 2.1 to 2.5. 
 
The common-law system proved incapable of dealing with the often 
devastating social and economic consequences of industrial accidents.  It became 
undeniable that the tort system had failed as a regulatory device for distributing 
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economic losses borne by injured Ohio workers and their families and that it should 
be replaced by a workers’ compensation system in which those losses would be 
charged, without regard to fault or wrongdoing, to the industry rather than to the 
individual or society as a whole.  See, e.g., Goodman v. Beall (1936), 130 Ohio St. 
427, 5 O.O. 52, 200 N.E. 470; Indus. Comm. v. Weigandt (1921), 102 Ohio St. 1, 4, 
130 N.E. 38, 38-39; State ex rel. Munding v. Indus. Comm. (1915), 92 Ohio St. 434, 
111 N.E. 299; State ex rel. Yaple v. Creamer (1912), 85 Ohio St. 349, 97 N.E. 602. 
 
Accordingly, Section 35, Article II represents a social bargain in which 
employers and employees exchange their respective common-law rights and duties 
for a more certain and uniform set of statutory benefits and obligations.  Thus, in 
Blankenship v. Cincinnati Milacron Chem., Inc. (1982), 69 Ohio St.2d 608, 614, 23 
O.O.3d 504, 508, 433 N.E.2d 572, 577, we explained that the Workers’ 
Compensation Act “operates as a balance of mutual compromise between the 
interests of the employer and the employee whereby employees relinquish their 
common law remedy and accept lower benefit levels coupled with the greater 
assurance of recovery and employers give up their common law defenses and are 
protected from unlimited liability.”  See, also, Bunger v. Lawson Co. (1998), 82 Ohio 
St.3d 463, 465, 696 N.E.2d 1029, 1031-1032.  “This compromise is the basic premise 
underlying the workers’ compensation system.”  Fulton, supra, at 4, Section 1.2. 
 
Petitioners contend that R.C. 4123.931 is unconstitutional “because it 
effectively deprives employees of the ‘benefit of their bargain’ and destroys the 
balance struck between employers and employees by Article II, Section 35 of the 
Ohio Constitution.”  In support, petitioners argue (1) that “[t]he subrogation statute 
unjustifiably permits [the bureau] and self-insuring employers * * * to recover 100% 
of benefits paid to injured employees, while the subrogees continue to enjoy 
immunity from suit,” (2) that the statute does not serve the “purpose of providing 
compensation to workmen and their dependents” as required by Section 35, Article II, 
but instead operates to take compensation away from them, and (3) that the statute 
January Term, 2001 
7 
forces the claimant-plaintiff to choose between workers’ compensation or a tort 
remedy, despite the fact that the Constitution guarantees him or her the right to both. 
 
We find these arguments unpersuasive.  First, at a core level petitioners are 
suggesting that the very concept of a workers’ compensation subrogation statute is 
repugnant to Section 35, Article II.  Indeed, supporting amicus Ohio Academy of 
Trial Lawyers observes that, “as argued by the Petitioner, the Ohio Constitution itself 
may prevent the legislature from ever validly enacting a subrogation statute in the 
workers’ compensation context unless the constitutional provision enabling that 
legislation is itself amended.”  However, Section 35, Article II does not preclude the 
enactment of a subrogation statute any more than it prohibits the injured claimant 
from suing the third-party tortfeasor.  Section 35, Article II enables a displacement of 
the common law only to the extent necessary to provide the injured worker with an 
automatic recovery.  Once payment of workers’ compensation benefits is ensured, the 
employer may, without any disparagement to the bargained-for rights of the 
employee, seek to impose the loss upon the ultimate wrongdoer. 
 
Moreover, as revealed by the compilation of statutes in the appendix to 
petitioners’ merit brief, virtually every jurisdiction provides some statutory 
mechanism enabling the employer or fund to recover its workers’ compensation 
outlay from a third-party tortfeasor.  Any decision that would hold the mere concept 
of a subrogation or reimbursement statute per se invalid in the workers’ 
compensation context would constitute a legal anomaly. 
 
Second, petitioners confuse the effect that R.C. 4123.931 may have on the 
claimant-plaintiff’s tort recovery with the effect that it has on the claimant’s workers’ 
compensation recovery.  R.C. 4123.931 does not operate to reduce the claimant’s 
workers’ compensation benefits.  The statute may indeed operate beyond its 
legitimate purpose and unconstitutionally affect the employee’s right to a full 
recovery against the third-party tortfeasor.  It may be true, as petitioners and 
supporting amici argue strenuously, that the statute can diminish or extinguish the 
claimant’s tort recovery irrespective of whether a double recovery has actually 
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occurred.  But these concerns are not relevant here.  Regardless of whether and to 
what extent R.C. 4123.931 impermissibly cuts into a claimant’s tort recovery, it does 
nothing to the claimant’s workers’ compensation.  After the statute completes its task, 
however unjustly to the claimant’s tort recovery, the claimant is always left with the 
full measure of compensation and benefits to which he or she is entitled under the 
Workers’ Compensation Act. 
 
Thus, R.C. 4123.931 does not disrupt any of the rights or obligations of the 
claimant and the employer with regard to the payment of statutory workers’ 
compensation benefits, and the balance of compromise upon which the viability of 
the workers’ compensation system depends remains intact. 
 
Accordingly, we answer the first certified issue in the negative and hold that 
R.C. 4123.931 does not violate Section 35, Article II of the Ohio Constitution. 
II 
Sections 16 and 19, Article I—The Take-Away 
 
The second certified issue is whether R.C. 4123.931 violates Section 19, 
Article I of the Ohio Constitution, which provides that “[p]rivate property shall ever 
be held inviolate, but subservient to the public welfare * * * and * * *, where private 
property shall be taken for public use, a compensation therefor shall first be made.” 
 
As well stated by the court in Direct Plumbing Supply Co. v. Dayton (1941), 
138 Ohio St. 540, 546, 21 O.O. 422, 424-425, 38 N.E.2d 70, 73: 
 
“No government could long continue to function if all property rights were 
unqualifiedly inviolate.  But, on the other hand, the constitutional guaranty of the 
right of private property would be hollow if all legislation enacted in the name of the 
public welfare were per se valid.  To be truly in the public welfare within the 
meaning of Section 19, and thus superior to private property rights, any legislation 
must be reasonable, not arbitrary, and must confer upon the public a benefit 
commensurate with its burdens upon private property.  This general doctrine was 
comprehensively stated by this court in Froelich v. City of Cleveland [1919], 99 Ohio 
St. 376, at 391, 124 N.E. 212 [216]:  ‘It must be remembered that neither the state in 
January Term, 2001 
9 
the passage of general laws, nor the municipality in the passage of local laws, may 
make any regulations which are unreasonable.  The means adopted must be suitable 
to the ends in view, they must be impartial in operation, and not unduly oppressive 
upon individuals, must have a real and substantial relation to their purpose, and must 
not interfere with private rights beyond the necessities of the situation.’ “ 
 
The third certified question is whether R.C. 4123.931 violates Section 16, 
Article I of the Ohio Constitution, which provides that every person, for an injury 
done, “shall have remedy by due course of law.” 
 
In dealing with the constitutionality of various collateral-benefits-offset 
statutes under Section 16, Article I, this court has recognized that the state has a 
legitimate interest in preventing double recoveries.  Thus, it is constitutionally 
permissible for the state to prevent a tort victim from recovering twice for the same 
item of loss or type of damage, once from the collateral source and again from the 
tortfeasor.  However, we have also recognized that these kinds of statutes are not 
rationally related to their purpose where they operate to reduce a plaintiff’s tort 
recovery irrespective of whether a double recovery has actually occurred.  Thus, we 
have consistently and repeatedly held that due process permits deductions for 
collateral benefits only to the extent that the loss for which the collateral benefit 
compensates is actually included in the award.  McMullen v. Ohio State Univ. Hosp. 
(2000), 88 Ohio St.3d 332, 341-344, 725 N.E.2d 1117, 1125-1127; State ex rel. Ohio 
Academy of Trial Lawyers v. Sheward (1999), 86 Ohio St.3d 451, 479-482, 715 
N.E.2d 1062, 1088-1090; Buchman v. Wayne Trace Local School Dist. Bd. of Edn. 
(1995), 73 Ohio St.3d 260, 652 N.E.2d 952; Sorrell v. Thevenir (1994), 69 Ohio St.3d 
415, 633 N.E.2d 504. 
 
There is no valid justification for dispensing with these principles in 
determining the constitutionality of R.C. 4123.931.  Like the collateral-benefits-offset 
statutes, the subrogation statute is aimed at preventing the tort victim from keeping a 
double recovery, the only conceptual difference being that the intended beneficiary is 
the statutory subrogee (i.e., the collateral payor) rather than the tortfeasor.  Thus, R.C. 
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4123.931 must also satisfy the constitutional requirement that deductible or, in this 
case, subrogable or recoupable items be matched to those losses or types of damages 
that the claimant actually recovered from the tortfeasor. 
 
We are now confronted with similar determinative issues under Sections 16 
and 19, Article I of the Ohio Constitution.  Whether expressed in terms of the right to 
private property, remedy, or due process, the claimant-plaintiff has a constitutionally 
protected interest in his or her tort recovery to the extent that it does not duplicate the 
employer’s or bureau’s compensation outlay.  Thus, if R.C. 4123.931 operates to take 
more of the claimant’s tort recovery than is duplicative of the statutory subrogee’s 
workers’ compensation expenditures, then it is at once unreasonable, oppressive upon 
the claimant, partial, and unrelated to its own purpose. 
 
The following two provisions of the statute are called into question under 
Sections 16 and 19, Article I of the Ohio Constitution:  (1) the portion of R.C. 
4123.931(A) that gives the statutory subrogee a right of subrogation with respect to 
“estimated future values of compensation and medical benefits,” and (2) the portion 
of R.C. 4123.931(D) providing that “[t]he entire amount of any settlement or 
compromise of an action or claim is subject to the subrogation right of a statutory 
subrogee, regardless of the manner in which the settlement or compromise is 
characterized.  Any settlement or compromise that excludes the amount of 
compensation or medical benefits shall not preclude a statutory subrogee from 
enforcing its rights under this section.” 
A 
Estimated Future Values 
 
By giving the subrogee a current collectible interest in estimated future 
expenditures, R.C. 4123.931(A) creates the conditions under which a prohibited 
taking may occur.  This would happen in those situations where the amount of 
reimbursement for “estimated future values of compensation and medical benefits” 
proves to be substantially greater than the subrogee’s eventual compensation outlay.  
In other words, R.C. 4123.931(A) requires the claimant to reimburse the bureau or 
January Term, 2001 
11 
self-insuring employer for future benefits that the claimant may never receive.  In that 
event, the statute operates not to prevent the claimant from keeping a double recovery 
but to provide the statutory subrogee with a windfall at the expense of the claimant’s 
tort recovery. 
 
Contrary to the assertions of respondent, there are too many situations that 
can eventuate in this kind of taking, and they occur far too often, for the problem to 
be considered merely hypothetical.  One such situation is described by amicus curiae 
Ohio Academy of Trial Lawyers as follows: 
 
“A prime example of this [kind of taking] occurs in a wrongful death situation 
where the decedent leaves a surviving spouse—say, a woman in her thirties or forties.  
In such circumstances, the BWC or self-insured employer will calculate estimated 
future benefits based upon the amounts it expects to pay over the woman’s life 
expectancy.  However, if the woman remarries, she will cease to be entitled to 
workers’ compensation benefits upon remarriage, with the exception that she will 
receive a lump sum payment at that time representing two additional years of 
benefits.  R.C. 4123.59(B)(1).  Thus, in those circumstances, if the subrogee has 
recovered estimated future benefits based upon the woman’s life expectancy, and she 
remarries shortly thereafter, the statute endows the subrogee with an enormous 
windfall at the expense of the injured party.” 
 
In fact, even the court in Yoh v. Schlachter (Mar. 17, 2000), Williams App. 
No. WM-99-008, unreported, 2000 WL 281748, upon which respondent relies 
heavily, was compelled to note as follows: 
 
“With respect to appellant’s taking issue, we note that there may exist a 
potential problem with respect to the ‘estimated future values of compensation and 
medical benefits’ aspect of R.C. 4123.931.  For instance, OTC will receive in a lump 
sum the entire estimated future amount it is supposed to pay to appellant and her 
minor child.  The statute, however, fails to specify what is to be done with any 
remainder of this sum once OTC is no longer required to pay workers’ compensation, 
such as, if appellant remarries or dies.  The entire amount could be paid in the form of 
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workers’ compensation benefits, in which case there arguably would be no taking 
issue because the beneficiaries would have received the full amount of compensation 
and medical benefits to which they were entitled.  However, if OTC’s obligation to 
pay workers’ compensation benefits expired with money still remaining in the pool of 
funds obtained through R.C. 4123.931, then OTC arguably would have a windfall if it 
was not required to release the remainder to appellant or her estate.”  Id. at 14. 
 
Because a claimant may die before his or her life expectancy, the amount 
collected by the subrogee for estimated future permanent total disability payments 
may far exceed the amount of such compensation actually received by the claimant.  
The same would hold true where any other type of ongoing statutory compensation, 
for whatever reason, is terminated earlier than was estimated for purposes of 
reimbursement.  Indeed, any statutory benefit, anticipated for purposes of 
reimbursement, may be denied or unrealized. 
 
In defending the estimated-future-values provision of R.C. 4123.931(A), 
respondent quotes various passages from Wilken v. Internatl. Harvester Co. 
(Minn.1985), 363 N.W.2d 763, and Kempa v. E.W. Coons Co. (Minn.1985), 370 
N.W.2d 414, which, as appearing on the pages of respondent’s brief, seem to suggest 
that estimating future workers’ compensation benefits in a subrogation claim is 
tantamount to estimating future damages in a tort claim, and that the disadvantage of 
imprecise estimates must yield to the advantages of a final one-time resolution of the 
subrogation claim.  Respondent argues that “[t]hese same principles apply in Ohio,” 
and thus the estimated-future-values provision of R.C. 4123.931(A) is reasonable and 
constitutionally valid. 
 
Upon closer examination, however, it becomes apparent that Wilken and 
Kempa do not support R.C. 4123.931(A)’s constitutionality.  First, neither of these 
cases involves any constitutional issue whatsoever, let alone those addressed in 
Direct Plumbing Supply Co., McMullen, Sheward, Buchman, and Sorrell. 
 
Second, the Minnesota cases have nothing to do with the subrogation rights of 
employer and employee inter se.  Instead, they involve issues of contribution and 
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13 
subrogation between the tortfeasor and the employer that have no effect on claimant’s 
tort recovery.  In fact, the employee in Kempa actually settled his claims against the 
tortfeasor exclusive and not duplicative of workers’ compensation benefits paid or to 
be paid by his employer, which is a third-party procedural mechanism expressly 
forbidden under R.C. 4123.931(D). 
 
Third, the issue of estimating future workers’ compensation obligations never 
arises between the Minnesota claimant and his or her employer, or the fund.  This is 
because Minn.Stat. 176.061(6) does not give the employer or the fund any immediate 
right of subrogation or reimbursement with regard to future payable compensation or 
medical benefits.  Instead, the Minnesota statute provides a formula under which the 
employer or fund can obtain reimbursement for compensation paid and then provides 
that certain remaining tort proceeds shall be paid to the employee and constitute a 
credit to the subrogee against future compensation payments. 
 
The Minnesota cases aside, we cannot accept the hypothesis that the 
constitutional infirmities inherent in R.C. 4123.931(A) can be justified by a presumed 
state interest in providing for a “final resolution.”  Contrary to respondent’s 
assessment, R.C. 4123.931(A) does not provide for a final resolution similar to the 
tort verdict.  The application of the estimated-future-values provision of R.C. 
4123.931(A) does not, like the tort verdict, finally determine the rights and 
obligations of the affected parties.  Despite the application of R.C. 4123.931(A), the 
subrogee remains under a continuing obligation to pay future compensation and 
medical benefits to the claimant, the claimant continues to be entitled to receive those 
payments as his or her rights accrue, and these rights and obligations still remain to 
be determined and administered.  The only “final resolution” achieved by R.C. 
4123.931(A) is to provide immediate recovery to the subrogee by imposing the risk 
of liability for overestimated future expenditures upon the claimant.  But the claimant 
is not a wrongdoer, and has not, in any legal or moral sense, caused harm to the 
subrogee.  Indeed, the subrogee’s loss is based entirely upon compensation it owes to 
the injured claimant.  Thus, unlike the tortfeasor, the claimant is innocent; and it is 
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irrational and arbitrary to impose this kind of risk upon an innocent party, especially 
when a full (and more accurate) reimbursement can be obtained by simply giving the 
subrogee the same kind of offset or credit against future payments that has always 
been used to recoup overpayments of compensation.  See R.C. 4123.511(J); State ex 
rel. Weimer v. Indus. Comm. (1980), 62 Ohio St.2d 159, 16 O.O.3d 174, 404 N.E.2d 
149. 
B 
Settlements 
 
R.C. 4123.931(D) establishes a procedural framework under which an 
unconstitutional taking of the claimant’s property or a denial of remedy by due course 
of law can occur.  This framework distinguishes between third-party claims that are 
tried and third-party claims that are settled.  In the case where an award or judgment 
is rendered in the third-party action, R.C. 4123.931(D) allows the claimant to obtain 
jury interrogatories segregating damages that do not represent workers’ compensation 
or medical benefits and, therefore, are not subject to the reimbursement right of the 
statutory subrogee.  In contrast, the entire amount of any settlement or compromise is 
deemed subject to the reimbursement right of the statutory subrogee, and the claimant 
is precluded, under any circumstances, from showing that his or her settlement or 
portions thereof do not represent or duplicate workers’ compensation or medical 
benefits. 
 
The problem with this procedure is that it assumes that settlements are always 
reached with third-party defendants who possess sufficient wealth or insurance to 
satisfy the claimant’s actual total damages and thus that the retention of the 
settlement proceeds and workers’ compensation would result in a double recovery.  
However, this assumption proves false in those situations where the claimant is 
forced to settle his or her tort claim for the limits of an insurance policy and the 
combined amount of the insurance proceeds and workers’ compensation benefits is 
insufficient to cover all of the claimant’s actual loss.  It can hardly be said that a 
double recovery results where a tort victim is allowed to retain two recoveries that, 
January Term, 2001 
15 
when combined, still do not make him or her whole.  Indeed, in some situations the 
available insurance may not even be sufficient to cover the subrogee’s interest, in 
which case the entire amount of the settlement will be taken by the subrogee.  R.C. 
4123.931(D) operates unconstitutionally in these situations because it allows for 
reimbursement from proceeds that do not constitute a double recovery. 
 
Again, contrary to respondent’s assertions, this situation cannot be considered 
merely hypothetical.  Indeed, we need look no further than In re Estate of Ross 
(1997), 116 Ohio App.3d 402, 688 N.E.2d 303, for an illustration.  James Ross was 
killed in a motor vehicle accident during the course of, and arising out of, his 
employment with appellee Wendy’s.  His surviving spouse, appellant RaShell Ross, 
and two minor children, Joshua and James Ross, filed an application for death 
benefits pursuant to R.C. 4123.59.  Wendy’s, a self-insured employer, certified the 
claim and began paying death benefits at a rate of $493 per week. 
 
Appellant then filed a wrongful death claim against the tortfeasor, James 
Horn, who was insured by Trinity Universal Insurance Company.  Appellant settled 
with Horn and Trinity for Horn’s liability limits of $100,000.  Wendy’s and appellee 
Kemper Risk Management Services asserted Wendy’s subrogation rights pursuant to 
R.C. 4123.931.  The settlement proceeds were distributed as follows:  payment of 
attorney fees, expenses, and court costs first, and the remaining balance of 
$64,906.85 to appellees.  The decedent’s wife and two minor children received 
nothing out of the settlement, serving merely as collection agents for the statutory 
subrogee. 
 
The Third District Court of Appeals upheld the constitutionality of the statute 
under Section 19, Article I, ruling that R.C. 4123.931 does not constitute a taking of 
any property right in this situation because “[t]he statute merely allows the employer 
to be reimbursed for the benefits paid by the employer to an employee as a result of 
the third-party tortfeasor’s tortious conduct.  The employee is not deprived of 
adequate compensation for any injury suffered, as the benefits received by the 
employee under the workers’ compensation laws are not diminished by the operation 
SUPREME COURT OF OHIO 
16 
of R.C. 4123.931.  Moreover, the statute allows the employee to retain any portion of 
the settlement or award greater than the employer’s reimbursement expenses.”  Id., 
116 Ohio App.3d at 406-407, 688 N.E.2d at 306. 
 
The theory that the subrogating employer takes only the tortfeasor’s money is 
offensive in the situation where the third-party recovery is no greater than the 
employer’s compensation outlay.  Reimbursement must be preceded by a double 
recovery for the statute to operate constitutionally.  It is spurious to say that these tort 
victims were not deprived of adequate compensation because they still get to keep 
workers’ compensation benefits.  Workers’ compensation laws are not intended to 
provide a full recovery, and they are not designed to restore injured workers or their 
families to what they lost.  See Blankenship, supra, 69 Ohio St.2d at 614, 23 O.O.3d 
at 508, 433 N.E.2d at 577; Indus. Comm. v. Drake (1921), 103 Ohio St. 628, 635, 134 
N.E. 465, 467.  And it is pure sophistry to argue that claimants who are staring at an 
empty coffer get to keep the unreimbursed portion of their settlement. 
 
Moreover, if the decedent in Ross had been survived not only by his wife and 
two minor children, but also by his parents, an adult child, and siblings, the statute 
would operate to extinguish their recovery as well.  However, these persons, who are 
beneficiaries for purposes of a wrongful death action, are not workers’ compensation 
claimants and do not qualify for workers’ compensation benefits.  Compare R.C. 
2125.02(A)(1) with R.C. 4123.59 and 4123.60.  In this situation, the statute operates 
unconstitutionally to allow one person’s tort recovery to be reduced or extinguished 
by another person’s workers’ compensation benefits.  See McMullen, supra, 88 Ohio 
St.3d at 343, 725 N.E.2d at 1126. 
 
While it may be accurate to say that R.C. 4123.931, in its effort to reimburse 
the employer or bureau for its outlay of compensation, always leaves the injured 
worker with the full measure of compensation and benefits to which he or she is 
entitled under the Workers’ Compensation Act, this fact alone does not automatically 
determine R.C. 4123.931’s constitutionality.  What must be considered, and what the 
court in Ross failed to consider, is that a person who receives injuries in the course of 
January Term, 2001 
17 
employment as a proximate result of a third party’s negligent act or omission 
possesses certain constitutionally protected rights of recovery beyond those provided 
in the workers’ compensation statutes and that those rights are not necessarily 
preserved by statutory workers’ compensation benefits. 
 
Yet these are the very arguments raised by respondent and its supporting 
amici in defense of R.C. 4123.931(D), with one addition.  Respondent argues that 
there is no “absolute right to settle regardless of the rights of other interested parties.”  
When settling with a third-party tortfeasor, plaintiffs must be aware that “the entire 
settlement award is subject to the right of the subrogee. * * * Therefore, if the parties 
involved do not wish to lose certain rights due to settlement, they can opt to proceed 
to trial and submit interrogatories to the jury [in order to designate the types of 
damages awarded].” 
 
However, respondent adds nothing to the analysis by invoking the platitude 
that there is no “absolute” right to settle.  If a right had to be absolute before it could 
be vindicated, virtually all rights would be worthless.  Absolute or not, this court has 
never tolerated an “illegal restriction upon the right to compromise.”  Davy v. Fid. & 
Cas. Ins. Co. (1908), 78 Ohio St. 256, 270, 85 N.E. 504, 507.  “ ‘[T]he law of Ohio 
will tolerate no lien in or out of the profession, as a general rule, which will prevent 
litigants from compromising, or settling their controversies, or which, in its 
tendencies, encourages, promotes or extends litigation.’ “  Id., 78 Ohio St. at 268-
269, 85 N.E. at 507, quoting Weakly v. Hall (1844), 13 Ohio 167, 175, 1844 WL 22.  
Indeed, settlement is part of the essential core of our judicial process.  It finds 
expression in Civ.R. 16, which specifically recognizes that one objective of pretrial 
procedure is to facilitate “[t]he possibility of settlement of the action”; in R.C. 
1343.03(C), which imposes prejudgment interest upon a party who fails “to make a 
good faith effort to settle the case”; and in Vahila v. Hall (1997), 77 Ohio St.3d 421, 
426, 674 N.E.2d 1164, 1169, where the court unanimously rejected a strict “but for” 
test in legal malpractice cases, partially on the basis that it “ ‘ignores settlement 
opportunities lost’ “ and tends to “ ‘exclude evidence about settlement, * * * the most 
SUPREME COURT OF OHIO 
18 
common form of client recovery,’ “ quoting Note, The Standard of Proof of 
Causation in Legal Malpractice Cases (1978), 63 Cornell L.Rev. 666, 670. 
 
Nor is it very meaningful to argue that plaintiffs who are faced with the 
prospect of settling for policy limits in these situations can opt for a trial of the third-
party action and obtain jury interrogatories to designate the types of damages 
awarded.  Trying the tort case in order to have damages designated does not obviate 
the problem in these situations.  Despite any allocation of damages, the claimant’s 
tort recovery is still fixed by the insurance policy limits, the combined amount of 
those limits and workers’ compensation is still insufficient to cover the claimant’s 
actual total loss, and there is still no double recovery to justify a right of subrogation 
to any of the insurance proceeds.  The only result of trying the tort claim in these 
situations would be to clutter the trial court’s docket with unnecessary litigation that 
serves only to eat away at the finite amount of available recovery. 
 
Thus, none of the theories advanced by respondent or supporting amici 
changes the fact that under certain familiar conditions, R.C. 4123.931 operates to take 
away or reduce the claimant’s tort recovery irrespective of whether a double recovery 
has actually occurred. 
C 
Propriety of Considering Additional Situations 
 
Respondent has urged us not to address the arguments raised by petitioners 
and supporting amicus regarding R.C. 4123.931(A) and (D), as they are based on 
“several hypothetical fact patterns, which have no bearing on the resolution of the 
matter pending before the federal court.”  We disagree, for several reasons. 
 
First, respondent argued in its preliminary memorandum that this court should 
address all eight certified questions in this case because “many cases will be resolved 
and judicial economy will be promoted.”  In so doing, the bureau represented as 
follows: 
 
“[T]he present case is only one of numerous recent cases challenging the 
constitutionality of the subrogation provisions found in R.C. 4123.931.  The [bureau] 
January Term, 2001 
19 
is aware of approximately fifty such cases in twenty-two counties and two federal 
district courts.  Approximately seven of these cases were appealed to courts of 
appeals in the second, third, sixth, eighth, and ninth Ohio appellate districts.  Several 
of the cases (in both common pleas courts and in the courts of appeals) have now 
been settled, but most remain pending, including three cases before the eighth and 
ninth district courts of appeals.” 
 
It would be more than a bit anomalous to now limit our consideration of R.C. 
4123.931’s constitutionality to the present certified facts. 
 
Second, after respondent’s merit brief was filed in this cause, this court 
allowed discretionary appeals in Yoh, supra, and in In re Estate of Stewart (June 28, 
2000), Lorain App. No. 99CA007422, unreported, 2000 WL 840512.  Collectively, 
these cases embody all of the issues and factual situations that respondent urges us 
not to consider.  Yet in both cases, the court has ordered that briefing be stayed and 
the cause held for the decision in this case.  See (2000), 89 Ohio St.3d 1490, 734 
N.E.2d 377; (2000), 90 Ohio St.3d 1471, 738 N.E.2d 383.  That is, Yoh and Stewart 
are poised to be decided upon the authority of the decision in this case.  Thus, as it 
stands now, if we did as respondent suggests, this court could uphold the 
constitutionality of the statute as applied in situations that we declined to consider. 
 
It may be argued that the court can nevertheless decline to consider additional 
factual situations in this case, then lift the stay on briefing in Yoh and Stewart and 
hear those cases on the merits.  But this approach would produce an absurd result.  
Assuming that a refusal to consider additional factual situations in this case would 
result in a decision in favor of constitutionality, that decision would stand only so 
long as it took us to reverse it in Yoh and Stewart. 
 
Finally, the consideration of additional situations is particularly warranted in 
judging the constitutionality of R.C. 4123.931 because it is the statute itself that 
creates those situations by virtue of its classifications and presumptions.  Otherwise, 
there would be no way to determine whether the statute is reasonable or rationally 
related to its presumed constitutional goal of preventing claimants from collecting 
SUPREME COURT OF OHIO 
20 
and keeping a double recovery.  Moreover, the situations considered above are not 
merely speculative factual scenarios that may or may not arise at some future time but 
are instead familiar and repeated circumstances that necessarily arise by virtue of the 
interplay between the common law and the workers’ compensation statutes.  In 
addition, the district court has certified this cause to us without any knowledge as to 
what situations relevant to the application of the statute will arise after trial.  Thus, 
the federal court is actually asking us to evaluate the constitutionality of R.C. 
4123.931 under the various situations that may arise in this case. 
 
Thus, we find it absolutely essential to a determination of R.C. 4123.931’s 
constitutionality that the court consider how the statute operates in the situations 
described above. 
 
Accordingly, for all of the foregoing reasons, we answer certified questions 
two and three in the affirmative and hold that R.C. 4123.931 violates Sections 16 and 
19, Article I of the Ohio Constitution. 
III 
Section 28, Article II—The Compromise Revisited 
 
The fourth certified question is whether R.C. 4123.931 violates Section 28, 
Article II of the Ohio Constitution, which provides that “[t]he general assembly shall 
have no power to pass * * * laws impairing the obligation of contracts.” 
 
This is essentially the same challenge that was made under Section 35, Article 
II, but dressed in contractual attire.  The gist of the challenge is that the workers’ 
compensation bargain as reflected in R.C. Chapter 4123 constitutes contractual 
legislation that cannot be impaired.  However, this challenge fails for the same 
reasons already stated with regard to Section 35, Article II. 
 
Accordingly, we answer the fourth certified issue in the negative and hold 
that R.C. 4123.931 does not violate Section 28, Article II of the Ohio Constitution. 
IV 
Section 2, Article I—Reclassifying the Arguments 
January Term, 2001 
21 
 
The fifth certified question is whether R.C. 4123.931 violates Section 2, 
Article I of the Ohio Constitution, which provides that government is instituted for 
the “equal protection and benefit” of the people and that “no special privileges or 
immunities shall ever be granted.” 
 
Petitioners argue that R.C. 4123.931 violates the Privileges and Immunities 
Clause because it allows employers to recover all of their workers’ compensation 
expenditures while continuing to enjoy immunity from suit.  Thus, “the statute grants 
employers the special privilege of immunity from suit without having paid or 
provided consideration for it.” 
 
Contrary to petitioners’ assertion, however, the employer has provided 
consideration for its immunity from suit by paying workers’ compensation benefits; 
and the theory that subrogation is intrinsically antithetical to the workers’ 
compensation system lacks merit here as well. 
 
Petitioners also argue that R.C. 4123.931(D) creates arbitrary classifications 
and, therefore, violates the Equal Protection Clause.  Under an equal protection 
analysis, the challenged statute will be upheld if the classification bears a rational 
relationship to a legitimate governmental interest or if reasonable grounds exist for 
drawing the distinction.  See State ex rel. Patterson v. Indus. Comm. (1996), 77 Ohio 
St.3d 201, 205, 672 N.E.2d 1008, 1011; Roseman v. Firemen & Policemen’s Death 
Benefit Fund (1993), 66 Ohio St.3d 443, 447, 613 N.E.2d 574, 577. 
 
First, petitioners maintain that the statute creates “arbitrary classifications of 
tort victims—employees injured on the job and employees injured off the job.  The 
subrogation statute creates a presumption against the former by mandating that the 
‘entire amount of any award or judgment is presumed to represent compensation * * 
* subject to a statutory subrogee’s subrogation rights.’ “  According to petitioners, 
“[t]he strict scrutiny test is appropriate here because the fundamental rights of access 
to Ohio workers’ comp system and access to Ohio’s civil justice system are clearly at 
stake.” 
SUPREME COURT OF OHIO 
22 
 
The problem with this argument is that it assumes too much.  Since R.C. 
4123.931 guarantees full workers’ compensation in all cases, the right of access to the 
workers’ compensation system is not implicated.  Nor does this classification 
implicate the right of access to Ohio’s civil justice system.  The presumption created 
in the case of awards or judgments can be rebutted by “jury interrogatories indicating 
that the award or judgment represents different types of damages.”  In providing the 
claimant with the means to segregate damages that do not duplicate workers’ 
compensation benefits, R.C. 4123.931(D) avoids offending the claimant’s rights to 
remedy, due process, and private property.  Thus, in drawing a distinction between 
workers’ compensation claimants and other tort victims, the statute does not involve 
any fundamental right. 
 
In this context, it can hardly be said that tort victims who are injured “on the 
job” or, more appropriately, in the course of and arising out of their employment, are 
similarly situated to tort victims who are injured “off the job” or, more precisely, who 
do not receive an injury in the course of and arising out of their employment.  The 
former tort victim recovers compensation and medical benefits under the Workers’ 
Compensation Act; the latter does not.  Contrary to the assertions of Ohio Academy 
of Trial Lawyers, equal protection does not require the General Assembly to pass a 
valid collateral-benefits-offset statute covering tort claims in general before it can 
enact a workers’ compensation subrogation statute.  Accordingly, we reject 
petitioners’ first equal protection argument. 
 
Petitioners’ second equal protection argument is that R.C. 4123.931(D) 
arbitrarily distinguishes between claimants who proceed to trial on their tort claims 
and claimants who settle their tort claims.  Petitioners argue that claimants who settle 
receive less favorable treatment because, unlike claimants who try their tort claims, 
they are precluded from showing that their tort recovery or portions thereof do not 
duplicate workers’ compensation benefits and, therefore, do not represent a double 
recovery.  Thus, while claimants who go to trial “may have some portion of their 
award excluded from the subrogee’s right of reimbursement, the injured employees 
January Term, 2001 
23 
who settle their claims * * * have no comparable method or opportunity to shield a 
portion of their damages from the subrogee.”  We agree. 
 
R.C. 4123.931(D) essentially creates a presumption that a double recovery 
occurs whenever a claimant is permitted to retain workers’ compensation and tort 
recovery.  Claimants who try their tort claims are permitted to rebut this presumption, 
while claimants who settle their tort claims are not.  Such disparate treatment of 
claimants who settle their tort claims is irrational and arbitrary because, as 
demonstrated in Part II above, there are situations where claimants’ tort recovery is 
necessarily limited to amounts that if retained along with workers’ compensation 
cannot possibly result in a double recovery. 
 
Contrary to respondent’s assertions, these claimants are not free to make the 
decision to proceed to trial or to settle.  Their only freedom is to choose the 
mechanism by which to forfeit their rights to property and remedy.  And in those 
situations where claimants are forced to settle for amounts that are insufficient to 
satisfy more than the subrogee’s claim, as happened in Ross, supra, their only 
freedom is to have their tort recovery obliterated. 
 
Respondent further argues that “R.C. 4123.931 is a rational response to a 
legitimate state concern to minimize the loss to the workers’ compensation fund 
caused by the wrongful actions of a third-party tortfeasor.”  However, this concern 
justifies the statute only so far as the statute operates to assess the subrogee’s loss 
against the tortfeasor.  But when the statute operates irrespectively of whether a 
double recovery has occurred, it can no longer be said that the fund is being 
replenished at the tortfeasor’s expense.  The state’s interest in conserving the fund 
can no more justify the denial of a claimant’s nonduplicative tort recovery than it can 
serve as a viable basis for denying workers’ compensation benefits to those entitled to 
it.  See State ex rel. Nyitray v. Indus. Comm. (1983), 2 Ohio St.3d 173, 177, 2 OBR 
715, 718-719, 443 N.E.2d 962, 966. 
 
Finally, several amici in support of respondent argue that distinguishing 
between settlements and trial “is also rational because settling parties will rarely, if 
SUPREME COURT OF OHIO 
24 
ever, allocate a settlement to lost wages, medical expenses and pain and suffering.”  
The corollary to this argument is that the distinction may be a rational method to 
preclude collusive settlements.  However, there is no purpose to allocating damages 
in the absence of a double recovery and, in these situations, it is difficult to conceive 
how collusion could occur, unless the tortfeasor’s financial and insurance coverage 
decisions were somehow made in collaboration with the claimant. 
 
Accordingly, we answer the fifth certified question in the affirmative and 
hold that R.C. 4123.931 violates the Equal Protection Clause of Section 2, Article I of 
the Ohio Constitution to the extent that it distinguishes between claimants who try 
their tort claims and claimants who settle their tort claims. 
V 
Section 15, Article II—One Subject 
 
The sixth certified question is whether R.C. 4123.931 violates Section 15, 
Article II of the Ohio Constitution.  Specifically, petitioners claim that R.C. 4123.931 
violates Section 15(D), Article II, which provides that “[n]o bill shall contain more 
than one subject.” 
 
1995 Am.Sub.H.B. No. 278, which enacted R.C. 4123.93 and 4123.931, 
comes nowhere close to violating the one-subject rule.  In addition to enacting these 
new sections, Am.Sub.H.B. No. 278 amended four sections of R.C. Chapters 4121 
and 4123 and made appropriations for the bureau for the biennium beginning July 1, 
1995, and ending June 30, 1997.  146 Ohio Laws, Part II, 3581.  The bill contains one 
subject, and only one subject—workers’ compensation.  There is no disunity of 
subject matter. 
 
Accordingly, we answer the sixth certified question in the negative and hold 
that R.C. 4123.931, or more appropriately, Am.Sub.H.B. No. 278, does not violate 
Section 15(D), Article II of the Ohio Constitution. 
VI 
Civ.R. 49(C)—Special Verdict 
January Term, 2001 
25 
 
The seventh certified question is whether R.C. 4123.931 is contrary to Civ.R. 
49(C) and, therefore, invalid and unenforceable. 
 
In an effort to provide the claimant with the means to rebut the presumption 
that the entire amount of any third-party award or judgment represents workers’ 
compensation, R.C. 4123.931(D) allows the use of “a special verdict or jury 
interrogatories” to segregate different types of damages.  However, Civ.R. 49(C) 
provides, to the contrary, that “[s]pecial verdicts shall not be used.”  Thus, to this 
extent R.C. 4123.931 is contrary to Civ.R. 49(C) and the latter must control.  See 
Rockey v. 84 Lumber Co. (1993), 66 Ohio St.3d 221, 611 N.E.2d 789, paragraph two 
of the syllabus. 
 
However, this certainly does not render the entire statute invalid and 
unenforceable, nor does it cause the provision of R.C. 4123.931(D) for classifying 
damages to become inoperative.  The provision can still operate without the use of a 
special verdict, since it also provides for the use of special interrogatories. 
 
Accordingly, we answer the seventh certified issue in the negative and hold 
that while R.C. 4123.931 is contrary to Civ.R. 49(C) to the extent that it provides for 
the use of a special verdict, no part of the statute is thereby rendered invalid or 
unenforceable. 
VII 
R.C. 4123.80—Waiver of Compensation 
 
The eighth and final certified question is whether R.C. 4123.931 constitutes 
an invalid waiver of an injured employee’s right to receive and retain workers’ 
compensation benefits in violation of R.C. 4123.80. 
 
R.C. 4123.80 provides that “[n]o agreement by an employee to waive his 
rights to compensation under this chapter is valid.”  Petitioners argue that R.C. 
4123.931 forces the employee who pursues a third-party claim to pay back his or her 
workers’ compensation benefits and, therefore, constitutes an invalid waiver under 
R.C. 4123.80. 
SUPREME COURT OF OHIO 
26 
 
This is the same argument that was used in an attempt to invalidate the very 
concept of a workers’ compensation subrogation statute under Sections 28 and 35, 
Article II of the Ohio Constitution, and it fails once again for the same reasons.  In no 
event does R.C. 4123.931 ever cause the claimant to end up with less than the full 
amount of workers’ compensation benefits to which he or she is entitled under R.C. 
Chapter 4123.  The statute may be construed as imposing an obligation upon an 
injured employee to waive his or her right to tort compensation, but it never causes 
the injured employee to relinquish any right to workers’ compensation. 
 
Accordingly, we answer the eighth certified question in the negative and hold 
that R.C. 4123.931 does not constitute an invalid waiver of an injured employee’s 
right to receive and retain workers’ compensation benefits in violation of R.C. 
4123.80. 
VIII 
Conclusion 
 
We hold that R.C. 4123.931 does not violate Sections 15, 28, or 35, Article II 
of the Ohio Constitution, is not rendered invalid by Civ.R. 49(C), and does not 
constitute an invalid waiver under R.C. 4123.80.  We hold, however, that R.C. 
4123.931 does violate Sections 2, 16, and 19, Article I of the Ohio Constitution.  In 
so holding, we do not accept the proposition that a workers’ compensation 
subrogation statute is per se unconstitutional, and nothing in this opinion shall be 
construed to prevent the General Assembly from ever enacting such a statute.  We 
hold only that R.C. 4123.931, in its present form, is unconstitutional. 
 
Accordingly, we advise the federal court that R.C. 4123.931 is 
unconstitutional under Ohio law. 
Judgment accordingly. 
 
DOUGLAS, F.E. SWEENEY and PFEIFER, JJ., concur. 
 
MOYER, C.J., COOK and LUNDBERG STRATTON, JJ., dissent. 
__________________ 
 
MOYER, C.J., dissenting. 
January Term, 2001 
27 
 
“The courts must declare the sense of the law; and if they should be disposed 
to exercise will instead of judgment, the consequence would equally be the 
substitution of their pleasure to that of the legislative body.”  The Federalist No. 78 
(Alexander Hamilton) (Clinton Rossiter Ed. 1961) 468-469. 
 
The principle that courts are not the creators of public policy and should not 
decide cases based on disagreement with a legislature has guided courts since the 
creation of the American judicial system. 
 
This court has adhered to the view.  See State ex rel. Bowman v. Allen Cty. 
Bd. of Commrs. (1931), 124 Ohio St. 174, 196, 177 N.E. 271, 278; State ex rel. 
Bishop v. Mt. Orab Village School Dist. Bd. of Edn. (1942), 139 Ohio St. 427, 438, 
22 O.O. 494, 498, 40 N.E.2d 913, 919; State v. Warner (1990), 55 Ohio St.3d 31, 43, 
564 N.E.2d 18, 30-31; Cent. Motors Corp. v. Pepper Pike (1995), 73 Ohio St.3d 581, 
584, 653 N.E.2d 639, 642-643; Desenco, Inc. v. Akron (1999), 84 Ohio St.3d 535, 
538, 706 N.E.2d 323, 328. 
 
The majority’s determination that R.C. 4123.931 violates Sections 2, 16, and 
19, Article I, appears to derive from its disagreement with the substance of the 
legislation.  The reasons stated for declaring the statute unconstitutional are generally 
policy arguments, not principles of constitutional law.  The majority disregards the 
principle so cogently stated by Justice Harlan Stone in his dissent in United States v. 
Butler.  He cautioned that “the only check upon our own exercise of power is our 
own sense of self-restraint.  For the removal of unwise laws from the statute books 
appeal lies, not to the courts, but to the ballot and to the processes of democratic 
government.”  United States v. Butler (1936), 297 U.S. 1, 79, 56 S.Ct. 312, 325, 80 
L.Ed. 477, 495. 
 
As I wrote in DeRolph II, “constitutional history, precedent, and logic warrant 
the conclusion that [these types of] qualitative judgments should be committed to the 
will of the people as expressed in the election of representatives to the General 
Assembly.”  DeRolph v. State (2000), 89 Ohio St.3d 1, 48, 728 N.E.2d 993, 1029 
(Moyer, C.J., dissenting). 
SUPREME COURT OF OHIO 
28 
 
Our role here is to determine whether R.C. 4123.931 violates the Ohio 
Constitution, not to determine whether R.C. 4123.931 represents the policy decision 
that we would have chosen were we legislators. 
I. Sections 16 and 19, Article I, Ohio Constitution 
 
The majority holds that because R.C. 4123.931 “operates to take more of the 
claimant’s tort recovery than is duplicative of the statutory subrogee’s workers’ 
compensation expenditures,” it is impermissibly “unreasonable, oppressive upon the 
claimant, partial, and unrelated to its own purpose.”  Specifically, the majority holds 
that R.C. 4123.931 “creates the conditions under which a prohibited taking may 
occur” when R.C. 4123.931(A) gives the statutory subrogee the right of subrogation 
with respect to “estimated future values of compensation and medical benefits.”  I 
disagree. 
 
The majority argues that the employee is unconstitutionally required to 
reimburse the Bureau of Workers’ Compensation or the self-insured employer for 
future benefits that the employee may never receive.  For instance, an injured 
employee may die before benefits equaling the subrogation amount have been 
received.  It is also suggested that the surviving spouse may remarry, at which point 
he or she is entitled to a lump-sum payment representing two additional years of 
benefits, but, under workers’ compensation law, is not entitled to further benefits.  
R.C. 4123.59(B).  Because of this potential inequity, the majority holds that because 
the General Assembly did not include an offset or credit against future payments in 
the subrogation scheme, R.C. 4123.931 unconstitutionally represents a taking and 
denial of a remedy in violation of Sections 16 and 19, Article I. 
 
It is true that an employee may die before benefits equaling the subrogation 
amount have been received.  However, it is also true that an employee may live far 
beyond his or her life expectancy as determined by the court in estimating those 
future benefits.  The estimated future values are the amount of compensation and 
medical benefits reasonably projected to be paid in the claim by the subrogee as a 
result of the actions of the tortfeasor.  The court in determining these values hears 
January Term, 2001 
29 
evidence from both the claimant and the subrogee, and may reject the subrogee’s 
projections if it finds them not well supported. 
 
This method of calculation of estimated future values is similar to the concept 
of future damages in a typical personal injury claim.  Courts routinely estimate the 
value of future payments in these cases, aided by expert testimony, mortality tables, 
and formulas for reducing future payments to present value.  Ohio Jury Instructions 
currently provides for estimating future values regarding earnings, 1 Ohio Jury 
Instructions (1996), Section 23.20, present value of future damage, 1 Ohio Jury 
Instructions (1996), Section 23.77, and damages relating to permit injury and death, 1 
Ohio Jury Instructions (1996), Sections 23.90 through 23.91.  In addition, jurors are 
provided with mortality tables to determine “the probable normal length of life of the 
decedent.”  1 Ohio Jury Instructions (1996), Section 23.76.  Jurors are empowered to 
make these types of determinations in numerous situations. 
 
The future values of workers’ compensation benefits can be calculated with 
more certainty than the typical personal injury claim, since an injured employee’s rate 
of compensation is computed according to a statutorily set scheme.  R.C. 4123.61.  
Therefore, like the tort verdict, the subrogation amount for future benefits is based on 
reasonable assumptions that, although inherently uncertain, provide for a final 
resolution. 
 
The majority contends that this final resolution is neither final nor enough to 
justify the constitutional infirmities of R.C. 4123.931.  This argument misses the 
point. The fact that the subrogee continues to administer benefits does not, as the 
majority finds, make the goal of a final resolution invalid.  While the subrogee may 
eventually pay out greater or fewer benefits to the claimant than the court determined 
was reasonable at the time of the lawsuit, the procedure of a one-time payment to the 
subrogee is reasonable.  The Constitution does not demand a method of calculation 
that results in a perfect and exact determination, only a reasonable one.  The credit 
system is also a reasonable method.  However, we are not empowered to choose 
between reasonable methods.  Our authority extends only to determining whether the 
SUPREME COURT OF OHIO 
30 
method chosen by the General Assembly is clearly unconstitutional.  Desenco, Inc. v. 
Akron, 84 Ohio St.3d at 538, 706 N.E.2d at 328.  This is a reasonable method of 
calculation and not clearly unconstitutional beyond a reasonable doubt.  Therefore, I 
would hold that R.C. 4123.931 does not violate Sections 16 or 19, Article I of the 
Ohio Constitution. 
II. Section 2, Article I, Ohio Constitution 
 
The majority holds that R.C. 4213.931(D) violates Section 2, Article I of the 
Ohio Constitution because although claimants who opt for trial can request jury 
interrogatories, claimants who opt for settlement “ ‘have no comparable method or 
opportunity to shield a portion of their damages from the subrogee,’ ” quoting the 
petitioners’ brief.  My disagreement with this holding is analogous to my concerns 
raised regarding the court’s role in determining the constitutionality of a statute and 
relates to the same fundamental difference between my view of that role and the view 
of the majority.  Again, I disagree. 
 
Injured employees are not a suspect class.  State v. Williams (2000), 88 Ohio 
St.3d 513, 530, 728 N.E.2d 342, 359.  Nor does R.C. 4123.931 implicate a 
fundamental constitutional right.  Id.  Accordingly, we evaluate R.C. 4123.931 using 
a rational-basis analysis.  Id. 
 
As stated previously, the workers’ compensation scheme relies on 
compulsory contributions by employers to a statewide fund.  Injured employees and 
their beneficiaries are paid workers’ compensation benefits from this fund.  Prior to 
adoption of R.C. 4123.931, employees injured by the wrongful actions of a third-
party tortfeasor could recover damages from third-party tortfeasors and receive 
compensation benefits from the Workers’ Compensation Fund.  R.C. 4123.931 was 
enacted to preserve the Workers’ Compensation Fund.  A rational-basis analysis 
requires us to uphold this remedy “unless it constitutes a plain affront to a specific 
provision of the Constitution.”  Am. Assn. of Univ. Professors, Cent. State Univ. 
Chapter v. Cent. State Univ. (1999), 87 Ohio St.3d 55, 61, 717 N.E.2d 286, 292.  
January Term, 2001 
31 
Accordingly, we must analyze the Holetons’ equal protection arguments to determine 
whether R.C. 4123.931 constitutes such an affront to Section 2, Article I. 
 
R.C. 4123.931 affects no fundamental right of an employee.  If an employee 
is dissatisfied with settlement policies, the employee may proceed with a jury trial.  
R.C. 4123.931 does not force employees to litigate.  Instead, like all claimants, 
injured employees are free to decide whether to proceed to trial or to settle.  Each 
process has its own advantages and disadvantages, and the employee must decide 
whether to submit his or her claim to a trial that would determine the portion of the 
award that should be shielded from subrogation, or to settle with the tortfeasor, taking 
into consideration that the settlement amount will be subject to subrogation. 
 
Without the restriction regarding settlement awards in R.C. 4123.931(D), 
employees could accept a lower settlement amount from the tortfeasor, in exchange 
for an agreement stating that the entire amount was not subject to subrogation.  In 
according only those employees who choose a trial the right to ask the jury to 
determine what portion of the award should be shielded, the General Assembly could 
have rationally conceived that this was a method to preclude collusive settlements.  
Although the majority argues that it is difficult to anticipate how these would occur, 
the situation is no more hypothetical than the many hypothetical situations the 
majority claims could result in subrogation without double recovery. 
 
Even more important, legislation aimed at preventing collusive settlements 
that would prevent a statutory subrogee from being reimbursed is a reasonable use of 
legislative power, especially when the legislation is aimed at preserving the integrity 
of the State Fund for the benefit of all workers’ compensation claimants.  
Accordingly, I would hold that R.C. 4123.931 does not violate Section 2, Article I of 
the Ohio Constitution. 
III. Conclusion 
 
For the forgoing reasons, I would answer the certified questions by advising 
the United States District Court for the Northern District of Ohio that R.C. 4123.931 
does not violate Sections 2, 16, or 19, Article I. 
SUPREME COURT OF OHIO 
32 
 
COOK and LUNDBERG STRATTON, JJ., concur in the foregoing dissenting 
opinion. 
__________________ 
 
COOK, J., dissenting.  Like the Chief Justice, I would answer “no” to each 
certified question.  And I agree with much of what the Chief Justice expresses in his 
dissenting opinion.  I write separately to address the majority’s unfortunate decision 
to declare R.C. 4123.931 unconstitutional on its face for violating the Takings and 
Right to Remedy Clauses of the Ohio Constitution. 
 
A party may challenge a statute as unconstitutional either on its face or as 
applied to a particular state of facts.  Belden v. Union Cent. Life Ins. Co. (1944), 143 
Ohio St. 329, 28 O.O. 295, 55 N.E.2d 629, paragraph four of the syllabus.  The effect 
of a successful challenge will differ depending on whether the court strikes the statute 
on its face or as applied.  “If a statute is unconstitutional as applied, the State may 
continue to enforce the statute in different circumstances where it is not 
unconstitutional, but if a statute is unconstitutional on its face, the State may not 
enforce the statute under any circumstances.”  Women’s Med. Professional Corp. v. 
Voinovich (C.A.6, 1997), 130 F.3d 187, 193.  This case necessarily presents a facial 
challenge to R.C. 4123.931.  Because there has been no verdict or settlement to which 
the statute has been applied, this case presents no set of facts upon which we can base 
an as-applied constitutional analysis.  See State v. Beckley (1983), 5 Ohio St.3d 4, 6-
7, 5 OBR 66, 68-69, 448 N.E.2d 1147, 1148-1149 (constitutional challenge had to be 
a facial one when there was no “presently existing state of facts to which to apply the 
challenged statutes”). 
 
The majority fails to appreciate the distinction between facial and as-applied 
constitutional challenges.  Because the majority deems R.C. 4123.931 unpalatable 
when applied to various factual scenarios not presented in this case, the majority 
declares the statute unconstitutional on its face.  As noted above, this decision 
precludes future application of the statute under any circumstances.  But the 
majority’s approach fails to acknowledge important precepts that are supposed to 
January Term, 2001 
33 
guide an analysis of facial challenges.  “A facial challenge to a legislative Act is, of 
course, the most difficult challenge to mount successfully, since the challenger must 
establish that no set of circumstances exists under which the Act would be valid.  The 
fact that [a statute] might operate unconstitutionally under some conceivable set of 
circumstances is insufficient to render it wholly invalid * * *.”  United States v. 
Salerno (1987), 481 U.S. 739, 745, 107 S.Ct. 2095, 2100, 95 L.Ed.2d 697, 707; see, 
also, Emerson Elec. Co. v. Tracy (2000), 90 Ohio St.3d 157, 162, 735 N.E.2d 445, 
449-450 (Cook, J., dissenting).  By ignoring this principle, the majority loses sight of 
“the strong presumption in favor of the constitutionality of legislation and the judicial 
obligation which exists to support the enactment of a lawmaking body if this can be 
done.”  Beckley, 5 Ohio St.3d at 7, 5 OBR at 69, 448 N.E.2d at 1149.  Today’s 
decision thus stands for the bizarre (and unsupportable) proposition that a court may 
declare a statute unconstitutional on its face simply because it may be applied 
unconstitutionally in some situations, under a set of facts not at bar. 
 
The majority goes to great lengths in defending its mode of analyzing the 
constitutionality of R.C. 4123.931 under the Takings and Right to Remedy Clauses.  
For example, the majority claims that it “would be more than a bit anomalous to now 
limit our consideration of R.C. 4123.931’s constitutionality to the present certified 
facts” in light of the respondent’s representations to this court that numerous pending 
cases may be resolved by our decision in this one.  The majority also contends that 
the factual scenarios it considers in this case are “familiar and repeated circumstances 
that necessarily arise” from R.C. 4123.931’s “interplay” with the common law.  But 
these arguments are unresponsive to the mistake that the majority actually makes in 
its constitutional analysis. 
 
The majority’s error is not the consideration of additional situations; indeed, 
when entertaining a facial challenge, the court necessarily considers how the statute 
may apply to a variety of circumstances.  Rather, the majority’s mistake comes in 
considering too few additional situations before declaring the statute facially 
unconstitutional.  Before we may strike the statute as facially unconstitutional, and 
SUPREME COURT OF OHIO 
34 
therefore invalid in toto, we must do more than simply find that the statute operates 
unconstitutionally in some situations.  See Village of Hoffman Estates v. Flipside, 
Hoffman Estates, Inc. (1982), 455 U.S. 489, 494-497, 102 S.Ct. 1186, 1191-1193, 71 
L.Ed.2d 362, 369-370.  Finding a law facially unconstitutional requires us “to hold 
that under no reasonable set of circumstances” could the statute operate 
constitutionally.  (Emphasis added.)  Beckley, 5 Ohio St.3d at 7, 5 OBR at 69, 448 
N.E.2d at 1149; see, also, Salerno, 481 U.S. at 745, 107 S.Ct. at 2100, 95 L.Ed.2d at 
707.  The majority’s analysis falls far short of this exhaustive standard.  Instead of 
striking R.C. 4123.931 because it violates the Right to Remedy and Takings Clauses 
in virtually all of its applications, the majority has instead voided the statute simply 
because it deems the law invalid under the limited circumstances it has chosen to 
address. 
 
The majority also justifies its departure from the proper mode of 
constitutional analysis by painting a misleading picture about how this court manages 
its docket.  The majority notes that this court has allowed discretionary appeals in 
Yoh v. Schlachter (Mar. 17, 2000), Williams App. No. WM-99-008, unreported, 2000 
WL 281748, and In re Estate of Stewart (June 28, 2000), Lorain App. No. 
99CA007422, unreported, 2000 WL 840512.  See (2000), 89 Ohio St.3d 1490, 734 
N.E.2d 377, and (2000), 90 Ohio St.3d 1471, 738 N.E.2d 383.  In both of these cases, 
this court sua sponte ordered the briefing schedules stayed and the causes “held” for 
the decision in this case.  According to the majority, this means that these cases “are 
poised to be decided” summarily “upon the authority” of this case.  Thus, the 
majority concludes that a decision upholding the facial constitutionality of R.C. 
4123.931 could result in this court “uphold[ing] the constitutionality of the statute as 
applied in situations that we declined to consider.”  But this explanation is just plain 
wrong, for it is based on an inaccurate depiction of how other cases currently pending 
before this court would be affected in the event that we upheld the facial validity of 
R.C. 4123.931 in this case. 
January Term, 2001 
35 
 
This court does not summarily decide all held causes when we have decided 
the case for which those causes are held.  The disposition of a given case may not 
warrant summary disposition of causes held for it, particularly if the held causes 
present unique issues that are not addressed in the lead case.  For example, this court 
ordered briefing in at least two recent cases that were originally held for dispositions 
in other cases.  Compare State v. Eppinger (2000), 89 Ohio St.3d 1447, 731 N.E.2d 
1136, and Paton v. Paton (2000), 89 Ohio St.3d 1436, 730 N.E.2d 990 (lifting stays 
on briefing), with State v. Eppinger (1999), 86 Ohio St.3d 1465, 715 N.E.2d 568, and 
Paton v. Paton (1999), 86 Ohio St.3d 1465, 715 N.E.2d 568 (holding causes for 
decisions in cases already pending before this court).  In Eppinger and Paton, this 
court examined each case and found it inappropriate to decide them summarily, 
despite the fact that we had originally held them for other cases pending here.  
Similarly, if Yoh and Stewart present issues not adequately addressed by the decision 
in this case, this court would lift the stay on briefing and hear the cases on the merits.  
Thus, if the majority had (correctly) upheld the facial constitutionality of R.C. 
4123.931, it would be inappropriate for this court to summarily decide Yoh and 
Stewart if those cases challenge the constitutionality of the statute as applied to the 
facts of those cases.  We would instead order briefing on the merits and the parties 
would have the opportunity to focus their arguments on the as-applied challenges 
without having to address the facial challenges we have already decided here. 
 
The majority discounts this orderly (and correct) procedure by claiming that a 
supposedly “absurd result” would flow from it.  The majority states, “Assuming that 
a refusal to consider additional factual situations in this case would result in a 
decision in favor of constitutionality, that decision would stand only so long as it took 
us to reverse it in Yoh and Stewart.”  But this assertion is woefully wrong and further 
illuminates the majority’s failure to distinguish between facial and as-applied 
constitutional challenges.  If a majority of this court had (correctly) decided here that 
the statute was not facially unconstitutional, only to decide later that the statute was 
unconstitutional as applied to the situations presented in Yoh and Stewart, we would 
SUPREME COURT OF OHIO 
36 
not “reverse” our decision in this case.  The statute would merely be unenforceable as 
applied to the circumstances presented in those previously held cases; the statute 
would remain facially valid, meaning that the law could still be enforced in other 
circumstances where its operation would be constitutional.  Simply put, a decision 
upholding the facial constitutionality of R.C. 4123.931 in this case would not 
preclude this court (or any other court for that matter) from finding the statute 
unconstitutional as applied to a particular set of facts in a later case. 
 
Finally, the majority contends that the district court, by certifying the 
constitutional questions, “is actually asking us to evaluate the constitutionality of 
R.C. 4123.931 under the various situations that may arise in this case.”  The majority 
says this is so because the district court is “without any knowledge” of what facts will 
arise after trial.  But this explanation is curious, given that the certified questions 
dealing with constitutionality ask only abstract questions of whether R.C. 4123.931 is 
constitutional under various provisions of the Ohio Constitution.  How the majority 
gleans the district court’s desire to have us decide the constitutionality of the statute 
“under the various situations that may arise in this case” is anyone’s guess.  It is more 
likely, given the general phrasing of the certified constitutional questions, that the 
district court wanted to know whether R.C. 4123.931 is unconstitutional on its face 
and therefore incapable of any application to the Holetons’ lawsuit.  With our answer 
to that question, the district court would know whether it had to consider R.C. 
4123.931 at all.  See Women’s Med. Professional Corp., 130 F.3d at 193 (statute 
unconstitutional on its face cannot be enforced under any circumstances). 
 
For these reasons, in addition to those stated by the Chief Justice, I dissent.  I 
would uphold the facial validity of R.C. 4123.931 and advise the district court 
accordingly. 
 
LUNDBERG STRATTON, J., concurs in the foregoing dissenting opinion. 
__________________ 
 
Shumaker, Loop & Kendrick, L.L.P., Jack G. Fynes and Stefanie E. Berk, for 
petitioners. 
January Term, 2001 
37 
 
Betty D. Montgomery, Attorney General, James A. Barnes, G. James Van 
Heyde and James M. Evans, Assistant Attorneys General, for respondent C. James 
Conrad, Administrator of Workers’ Compensation. 
 
Nurenberg, Plevin, Heller & McCarthy Co., L.P.A., Kathleen J. St. John and 
David M. Paris, in support of petitioners, for amicus curiae Ohio Academy of Trial 
Lawyers. 
 
Manley, Burke & Lipton, Andrew S. Lipton and Steven M. Ingram, in support 
of petitioners, for amicus curiae Armco Employees Independent Federation, Inc. 
 
Stewart Jaffy & Associates Co., L.P.A., Stewart R. Jaffy and Marc J. Jaffy, in 
support of petitioners, for amicus curiae Ohio AFL-CIO. 
 
Scott, Scriven & Wahoff, L.L.P., Timothy E. Cowans, William J. Wahoff and 
Richard Goldberg, in support of respondent, for amicus curiae Ohio Council of 
Retail Merchants. 
 
Brickler & Eckler, L.L.P., and Kurtis A. Tunnell, in support of respondent, for 
amicus curiae Ohio Manufacturers’ Association. 
 
Brickler & Eckler, L.L.P., Thomas R. Sant and Nan M. Still, in support of 
respondent, for amici curiae Ohio Chapter of the National Federation of Independent 
Business and Ohio Farm Bureau Federation, Inc. 
 
Vorys, Sater, Seymour & Pease, L.L.P., Robert A. Minor and Robin R. Obetz, 
in support of respondent, for amici curiae Kokosing Construction Company, Inc., the 
Ohio Self-Insurers’ Association, and the American Insurance Association. 
 
Garvin & Hickey and Preston J. Garvin, in support of respondent, for amicus 
curiae Ohio Chamber of Commerce. 
 
Vozar, Roberts & Matejczyk Co., L.P.A., Thomas J. Vozar, Glenna M. 
Roberts and David M. Matejczyk, in support of respondent, for amicus curiae 
National Association of Subrogation Professionals. 
__________________