Case Title: State ex rel. Perez v. Indus. Comm'n

Citation: 2016-Ohio-5084

Docket Number: 2015-0532

State: ohio

Court: Ohio Supreme Court

Date: 2016-07-26T00:00:00Z

Document:
[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as State 
ex rel. Perez v. Indus. Comm., Slip Opinion No. 2016-Ohio-5084.] 
 
 
 
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. 2016-OHIO-5084 
THE STATE EX REL. PEREZ, APPELLEE AND CROSS-APPELLANT, v. INDUSTRIAL 
COMMISSION OF OHIO, APPELLANT AND CROSS-APPELLEE, ET AL. 
[Until this opinion appears in the Ohio Official Reports advance sheets, it 
may be cited as State ex rel. Perez v. Indus. Comm., Slip Opinion No.  
2016-Ohio-5084.] 
Workers’ compensation—Temporary total disability—Fraud—Commission did not 
abuse discretion in finding that claimant had been overpaid compensation 
while operating his auto-repair business or in finding that claimant 
fraudulently misrepresented that he was not working during period at 
issue—Court of appeals’ judgment affirmed in part and reversed in part. 
(No. 2015-0532—Submitted April 5, 2016—Decided July 26, 2016.) 
APPEAL and CROSS-APPEAL from the Court of Appeals for Franklin County,  
No. 14AP-394, 2015-Ohio-588. 
_______________________ 
 
 
SUPREME COURT OF OHIO 
 
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Per Curiam. 
{¶ 1} We must determine whether evidence supports the findings of 
appellant and cross-appellee, Industrial Commission of Ohio, that appellee and 
cross-appellant, Manuel A. Perez, was overpaid temporary-total-disability 
compensation from September 14, 2007, through October 3, 2011, and that he 
committed fraud in applying for it.  The commission found that Perez continued to 
operate his auto-repair business during that time and fraudulently misrepresented 
to the commission that he had not worked since 2003. 
{¶ 2} The court of appeals affirmed the commission’s finding of an 
overpayment but concluded that the evidence did not support the commission’s 
finding of fraud.  The court issued a writ of mandamus solely to compel the 
commission to vacate its finding of fraud. 
{¶ 3} For the reasons that follow, we affirm the court of appeals’ judgment 
to the extent that it affirmed the commission’s finding of an overpayment of 
temporary-total-disability compensation, but we reverse the court’s issuance of a 
writ of mandamus to compel the commission to vacate its finding of fraud. 
{¶ 4} Perez was injured while working in the construction industry on 
December 30, 2002.  He filed a claim for workers’ compensation benefits, which 
was allowed for the following conditions: neck sprain, lumbar sprain, thoracic 
sprain, bulging disc and protruding discs, cervical spondylosis, major depression, 
and cognitive disorder.  The commission awarded Perez temporary-total-disability 
compensation on several occasions.  This appeal involves the order for disability 
payments beginning July 28, 2007, based on his psychological conditions only. 
{¶ 5} Prior to his injury in 2002, Perez owned and was operating an auto-
repair business known as Manuel A. Perez Enterprises, Inc.  The business was 
located in the first-floor garage of a two-story building.  Perez lived on the second 
floor. 
January Term, 2016 
 
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{¶ 6} On March 18, 2011, the Bureau of Workers’ Compensation received 
information that Perez was operating his auto-repair business while receiving 
temporary-total-disability benefits.  The Special Investigations Unit (“SIU”) of the 
bureau began investigating and obtained surveillance evidence of Perez working, 
but it closed the investigation in January 2012, based on a lack of evidence that 
Perez was being paid for his work. 
{¶ 7} In November 2012, the SIU received a new tip from an anonymous 
source that Perez had been working while he received disability benefits.  
According to the SIU, the source provided customer names and information. The 
bureau reopened its investigation.  Based on the new investigation, the bureau filed 
a motion alleging that Perez continued to operate his auto-repair business while 
receiving temporary-total-disability benefits and that he purposely concealed his 
activities in order to continue to receive benefits for which he would not otherwise 
be entitled.  The bureau asked the commission to declare an overpayment in 
temporary-total-disability benefits from September 14, 2007, through October 3, 
2011, and to make a finding of fraud. 
{¶ 8} The commission concluded that Perez was overpaid temporary-total-
disability compensation and had committed fraud in applying for it.  The 
commission determined that the business was more than a passive investment and 
that Perez had more than just minimal involvement, based on the following 
evidence: 
 
An investigation into the activities at the garage was 
conducted by the Bureau of Workers’ Compensation Special 
Investigations Unit, including surveillance with a video from 
06/03/2011 through 07/16/2011.  The Injured Worker was observed 
performing auto repair work including working on a tractor and 
SUPREME COURT OF OHIO 
 
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helping with repair work on an engine block.  He was also observed 
meeting customers and discussing auto issues with them. 
There are statements from various customers on file stating 
they dealt exclusively with the Injured Worker when doing business 
at his shop.  They never actually saw him physically work on their 
cars, but he performed activities such as scheduling when to bring 
the car into the shop, diagnosing their car problem, and receiving 
payment when picking up the car.  There is also a statement from 
Scott McNabb, Manager of Advanced Auto Parts stating the Injured 
Worker would order and pick-up parts.  Also, on file are records 
supporting numerous purchases from Advanced Auto Parts and 
credit card records for auto parts purchased. 
 
{¶ 9} Perez filed a complaint for a writ of mandamus, arguing that the 
commission abused its discretion.  The court of appeals affirmed the commission’s 
finding of an overpayment but concluded that there was insufficient evidence of 
fraud.  The court issued a writ of mandamus to compel the commission to vacate 
its finding that Perez committed fraud. 
{¶ 10} This matter is before this court on the direct appeal of the 
commission and the cross-appeal filed by Perez. 
Overpayment of Temporary-Total-Disability Benefits 
{¶ 11} Perez contends that there was no evidence supporting the 
commission’s finding that he was working while he was receiving temporary-total-
disability compensation from September 14, 2007 to October 3, 2011. 
{¶ 12} Work is not defined for workers’ compensation purposes, but it is 
generally considered to be labor in exchange for pay.  State ex rel. Honda of Am. 
Mfg. Co. v. Indus. Comm., 113 Ohio St.3d 5, 2007-Ohio-969, 862 N.E.2d 478,  
¶ 18;  State ex rel. Griffith v. Indus. Comm., 109 Ohio St.3d 479, 2006-Ohio-2992, 
January Term, 2016 
 
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849 N.E.2d 28, ¶ 10.  We have recognized an exception to this general principle for 
“unpaid activities that directly generate income for a separate entity” that, in some 
situations, may be considered work for purposes of temporary-total-disability 
compensation eligibility.  State ex rel. McBee v. Indus. Comm., 132 Ohio St.3d 209, 
2012-Ohio-2678, 970 N.E.2d 937, ¶ 4.  In McBee, while the claimant received 
temporary-total-disability compensation, he also helped with his wife’s business.  
The commission determined that this constituted work, though unpaid, and the 
court of appeals affirmed, reasoning that his activities directly generated income 
and were consistent and ongoing.  Id. at ¶ 7 (noting that McBee did not appeal that 
determination to this court). 
{¶ 13} Conversely, if the claimant’s activities are minimal and relate only 
indirectly to generating income, they may not be considered work that would 
disqualify a claimant from receiving temporary-total-disability compensation.  
State ex rel. Ford Motor Co. v. Indus. Comm., 98 Ohio St.3d 20, 2002-Ohio-7038, 
780 N.E.2d 1016, ¶ 24.  In Ford, the claimant worked for Ford and also had a lawn-
care business.  After an injury at work temporarily forced him from his job at Ford, 
he began receiving temporary-total-disability compensation.  Ford tried to recoup 
the compensation paid on the grounds that the claimant still worked at his lawn-
care business. 
{¶ 14} The commission denied Ford’s request.  We agreed, noting that 
following his injury, the claimant hired others to do the physical work for his 
business.  Thus, his “activities did not, in and of themselves, generate income; 
claimant’s activities produced money only secondarily, e.g., claimant signed the 
paychecks that kept his employees doing the tasks that generated income.”  
(Emphasis sic.)  Id. at ¶ 23.  The court concluded that his activities with the business 
“were truly minimal and only indirectly related to generating income” and therefore 
did not constitute work that would preclude payment of temporary-total-disability 
compensation.  Id. at ¶ 24. 
SUPREME COURT OF OHIO 
 
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{¶ 15} Likewise, in Honda, 113 Ohio St.3d 5, 2007-Ohio-969, 862 N.E.2d 
478, the injured worker was receiving temporary-total-disability benefits for an 
injury sustained while working at Honda.  She also owned a scrapbook store.  An 
investigator observed the claimant at her store on several occasions answering a 
customer’s questions, pointing out displays, and speaking on the telephone as well 
as once, using the cash register.  The commission denied Honda’s request for a 
declaration of overpayment.  We agreed, reasoning that the claimant’s mere 
presence at the store did not itself disqualify her from receiving temporary-total-
disability compensation and that even if she had engaged in some business 
activities, those activities were geared toward promoting goodwill and generated 
income only secondarily.  Id. at ¶ 28-29. 
{¶ 16} Perez argues that, like the claimants in Ford and Honda, his business 
activities were unpaid and minimal, that they did not directly produce income for 
the business, and that they therefore did not constitute work that would be 
inconsistent with receiving temporary-total-disability compensation.  According to 
Perez, the video surveillance and witness statements did not establish that he was 
performing work for a customer or that his activities generated income for the 
business, and the mere existence of a commercial account to purchase car parts does 
not, by itself, generate business income. 
{¶ 17} The commission maintains that Perez was providing customer 
service that directly generated business and produced revenue—ordering and 
picking up parts, scheduling appointments, talking with customers—activities that 
were more than passive.  According to the commission, this case is similar to State 
ex rel. Meade v. Indus. Comm., 10th Dist. Franklin No. 04AP-1184, 2005-Ohio-
6206, and State ex rel. Cassano v. Indus. Comm., 10th Dist. Franklin No. 03AP-
1227, 2005-Ohio-68, in which the unpaid activities of both claimants generated 
income for the business. 
January Term, 2016 
 
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{¶ 18} In Meade, the claimant was receiving temporary-total-disability 
compensation for an injury that he received while working for Allied Systems, Inc.  
He also owned a pizza business.  The commission declared an overpayment of 
compensation because the evidence indicated that Meade “ ‘took an active and 
physically demanding part in the business working in the kitchen, conducting 
repairs, delivering pizzas and conducting various other work related activities.’ ”  
Id. at ¶ 17, quoting the hearing officer’s order.  The Tenth District Court of Appeals 
upheld the commission’s decision, reasoning that although he was not paid wages, 
“there can be no question that [the claimant’s] activities—taking orders, preparing 
food, serving customers, working the cash register, and delivering pizzas—
generated income for” his pizza shop.  Id. at ¶ 7. 
{¶ 19} Likewise, in Cassano, the commission concluded that the claimant 
continued to operate his car dealership while receiving temporary-total-disability 
compensation.  The court of appeals agreed that there was evidence that Cassano 
had engaged in work activities that generated income, such as performing 
mechanical work on cars and attending auto auctions.  Cassano at ¶ 8. 
{¶ 20} The commission is the exclusive fact-finder with sole responsibility 
to evaluate the weight and credibility of the evidence.  State ex rel. Burley v. Coil 
Packing, Inc., 31 Ohio St.3d 18, 20-21, 508 N.E.2d 936 (1987).  As a reviewing 
court, we generally defer to the commission’s expertise in these matters and do not 
substitute our judgment for that of the commission.  State ex rel. Pass v. C.S.T. 
Extraction Co., 74 Ohio St.3d 373, 376, 658 N.E.2d 1055 (1996).  This court’s role 
is limited to determining whether there is some evidence in the record to support 
the commission’s stated basis for its decision.  Burley at 21. 
{¶ 21} Mindful of these principles, we find that the evidence supports the 
commission’s decision that Perez, like the claimant in Cassano, was engaged in 
more than minimal activities that were income-producing for his auto-repair 
business.  The bureau received a tip that Perez was working at his business while 
SUPREME COURT OF OHIO 
 
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receiving temporary-total-disability compensation.  The SIU report, including the 
surveillance evidence, documented Perez in the garage area on several occasions 
looking under the hood of vehicles, engaging with customers, and performing repair 
work. 
{¶ 22} The evidence also documented Perez’s answering the telephone, 
scheduling repairs, coordinating drop-off and pick-up times, purchasing parts, and 
receiving payment from customers.  Records established that during the time period 
at issue, Perez purchased more than $43,000 in auto parts, an amount that indicates 
they were not merely for personal use. 
{¶ 23} The commission adequately identified the evidence relied upon and 
briefly explained the reasoning for its decision.  Consequently, the commission did 
not abuse its discretion when it found that Perez had been overpaid temporary-total-
disability compensation for the period of time at issue, and we affirm the judgment 
of the court of appeals to the extent that it affirmed that finding. 
Fraud 
{¶ 24} In its appeal, the commission challenges the court of appeals’ grant 
of a writ of mandamus to compel the commission to vacate its finding that Perez 
fraudulently received the temporary-total-disability compensation. 
{¶ 25} “Fraud requires a knowing misrepresentation of a material fact.”  
McBee, 132 Ohio St.3d 209, 2012-Ohio-2678, 970 N.E.2d 937, at ¶ 8.  “[T]o qualify 
as a knowing misrepresentation, however, it must be shown that [the claimant] was 
aware than his unpaid activities could be considered work.”  Id.  The commission 
points to the multiple C-84 forms requesting temporary-total-disability benefits on 
which Perez attested that he had not worked since 2003 and the medical evidence 
in the file demonstrating that Perez minimized to physicians his presence at the 
garage. 
{¶ 26} The commission has substantial leeway in interpreting and drawing 
inferences from the evidence in the record.  State ex rel. Lawson v. Mondie Forge, 
January Term, 2016 
 
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104 Ohio St.3d 39, 2004-Ohio-6086, 817 N.E.2d 880, ¶ 34.  In doing so in this case, 
the commission did not abuse its discretion when it concluded that the evidence 
supported a finding of fraud.  The evidence demonstrated that Perez not only 
represented to the commission on multiple occasions that he was not working, but 
also was not forthcoming to physicians about his activities with the auto-repair 
business.  The multiple occasions on which he reported to examining physicians 
that he rarely left his home and spent most of his time watching TV or with his dogs 
sufficiently demonstrate that he attempted to conceal the extent of his business 
activities. 
{¶ 27} Therefore, we conclude that the court of appeals abused its discretion 
when it granted a writ of mandamus to compel the commission to vacate its finding 
of fraud. 
Conclusion 
{¶ 28} Based on the foregoing, we affirm the judgment of the court of 
appeals as to the finding of an overpayment of temporary-total-disability 
compensation for the period September 14, 2007, through October 3, 2011, and we 
reverse the court’s judgment issuing a writ of mandamus to compel the commission 
to vacate its finding of fraud. 
Judgment affirmed in part 
and reversed in part. 
O’CONNOR, C.J., and O’DONNELL, LANZINGER, KENNEDY, FRENCH, and 
O’NEILL, JJ., concur. 
PFEIFER, J., dissents and would affirm the judgment of the court of appeals. 
_________________ 
The Bainbridge Firm, L.L.C., and Christopher J. Yeager, for appellee and 
cross-appellant. 
Michael DeWine, Attorney General, and Cheryl J. Nester, Assistant 
Attorney General, for appellant and cross-appellee, Industrial Commission. 
‘SUPREME CouRT OF O10

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