Title: State ex rel. WFAL Constr. v. Buehrer

State: ohio

Issuer: Ohio Supreme Court

Document:

[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as 
State ex rel. WFAL Constr. v. Buehrer, Slip Opinion No. 2015-Ohio-2305.] 
 
 
 
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. 2015-OHIO-2305 
THE STATE EX REL. WFAL CONSTRUCTION, APPELLANT, v. BUEHRER, ADMR., 
APPELLEE. 
[Until this opinion appears in the Ohio Official Reports advance sheets, it 
may be cited as State ex rel. WFAL Constr. v. Buehrer, Slip Opinion  
No. 2015-Ohio-2305.] 
Workers’ compensation—Premium audit—Construction contracts—Employment 
relationship—Independent contractor—R.C. 4123.01(A)(1)(c)—Factors 
for determining whether person working pursuant to construction contract 
is “employee” for workers’ compensation purposes—Bureau did not 
abuse discretion in finding employment relationship. 
(No. 2014-0050—Submitted February 3, 2015 — Decided June 16, 2015.) 
APPEAL from the Court of Appeals for Franklin County, No. 12AP-966,  
2013-Ohio-5700. 
_______________________ 
 
 
SUPREME COURT OF OHIO 
 
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Per Curiam. 
{¶ 1} This appeal involves the results of an audit of appellant, WFAL 
Construction, by appellee, Steve Buehrer, Administrator of the Bureau of 
Workers’ Compensation.  The audit was conducted to determine whether WFAL, 
during calendar year 2009, was required to report its payroll to the bureau for 
purposes of setting and collecting a premium to be paid to the bureau for workers’ 
compensation coverage.  See R.C. 4121.41(B).  If WFAL’s workers were 
employees, WFAL owed the premium as an “employer” subject to the Workers’ 
Compensation Act.  R.C. 4123.35(A).  If, as WFAL claimed, its workers were 
independent contractors, WFAL was not an employer, and no premium was owed. 
{¶ 2} The bureau concluded from the audit that those working for WFAL 
in 2009 were employees, not independent contractors.  Because WFAL had not 
reported payroll for employees for that year, the bureau determined that WFAL 
owed back premiums. 
{¶ 3} WFAL filed a protest of the audit findings.  An adjudicating 
committee of the bureau denied the protest, and the administrator’s designee 
affirmed the decision.  WFAL filed this action for mandamus relief in the Tenth 
Appellate District.  The court of appeals concluded that the bureau appropriately 
found that WFAL met the statutory criteria to support its decision that WFAL’s 
workers were employees. 
{¶ 4} For the reasons that follow, we affirm. 
{¶ 5} Gary Buyer owns WFAL, a sole proprietorship.  In 2009, WFAL 
contracted with Ohio Fresh Eggs to repair some storm-damaged barns.  WFAL 
provided the labor, and Ohio Fresh Eggs supplied the materials for the job. 
{¶ 6} In 2010, Penny J. Young, an auditor for the bureau, conducted an 
audit of WFAL for the year 2009.  R.C. 4123.01(A)(1)(c) lists 20 factors for 
determining whether a person working pursuant to a construction contract is an 
“employee” for purposes of workers’ compensation; if ten of those criteria are 
January Term, 2015 
 
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satisfied, the worker is an employee.  Id. Young determined that 15 criteria 
applied to WFAL’s workers.  Thus, the persons Buyer hired to perform the work 
for Ohio Fresh Eggs were employees, not independent contractors.  WFAL had 
not reported payroll for those employees. 
{¶ 7} WFAL filed a protest of the audit findings, maintaining that the 
workers were independent contractors.  In support, WFAL argued that the bureau 
had conducted an audit in 1999, and the IRS had also audited him, and those 
audits did not find that the workers were employees. 
{¶ 8} Following a hearing, the bureau’s adjudicating committee 
determined that the evidence established the following factors demonstrating an 
employee/employer relationship:     
 
1.)  The individuals were required to comply with instruction from 
either the owner or an onsite lead carpenter; 2) the services 
provided by these workers are integrated into the regular 
functioning of this employer as they do all of the work; 
3) the named persons on the various timesheets and logs performed 
the work personally;  4)  the individuals were paid by the employer;  
5)  records that were available to the auditor showed that the same 
workers performed work repeatedly for the employer;  6)  the 
individuals were paid for the specific number of hours worked on a 
weekly basis;  7)  as the employer had a supervisor or foreman on 
the worksite if he was not present himself, the Committee finds that 
the order of work was determined by the employer;  8)  given the 
hourly payments, the workers would not realize a profit or loss as a 
result of the services provided;  9)  the employer has the right to 
discharge any of these individuals; and 10)  there is no indication 
SUPREME COURT OF OHIO 
 
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that any of the individuals would incur liability if the relationship 
ended. 
 
In addition, the committee noted that two workers’ compensation claims had been 
allowed against WFAL in 2009 and 2010.  Those claimants were “employees” for 
workers’ compensation purposes.  Thus, the committee denied the protest and 
upheld the audit findings. 
{¶ 9} WFAL filed an administrative appeal under R.C. 4123.291(B).  
Following a hearing, the administrator’s designee affirmed the order of the 
adjudicating committee. 
{¶ 10} WFAL filed a complaint for a writ of mandamus.  The court of 
appeals determined that there was evidence supporting the order of the 
administrator’s designee denying WFAL’s protest of the audit findings.  The court 
denied the writ. 
{¶ 11} This matter is before the court on WFAL’s appeal of right. 
{¶ 12} To be entitled to an extraordinary remedy in mandamus, the relator 
must demonstrate that the administrative body abused its discretion by entering an 
order not supported by any evidence in the record.  State ex rel. Avalon Precision 
Casting Co. v. Indus. Comm., 109 Ohio St.3d 237, 2006-Ohio-2287, 846 N.E.2d 
1245, ¶ 9.  The relator must make that demonstration by clear and convincing 
evidence.  State ex rel. Doner v. Zody, 130 Ohio St.3d 446, 2011-Ohio-6117, 958 
N.E.2d 1235, ¶ 57. 
{¶ 13} The commission is the exclusive evaluator of the weight and 
credibility of the evidence.  State ex rel. LTV Steel Co. v. Indus. Comm., 88 Ohio 
St.3d 284, 287, 725 N.E.2d 639 (2000).  When an order is adequately explained 
and based on some evidence, even if other evidence of record may contradict it, 
there is no abuse of discretion, and a reviewing court must not disturb the order.  
State ex rel. Mobley v. Indus. Comm., 78 Ohio St.3d 579, 584, 679 N.E.2d 300 
January Term, 2015 
 
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(1997).   Thus, the issue before us is whether the bureau’s order was supported by 
evidence in the record. 
{¶ 14} R.C. 4123.01(A)(1)(c)  provides that every person who performs 
labor or provides services pursuant to a construction contract, as defined in R.C.  
4123.79, is an employee for purposes of workers’ compensation, if the individual 
meets at least ten of the 20 enumerated statutory criteria.  WFAL concedes that it 
met two of the criteria: it paid the workers and retained the right to discharge 
them. 
{¶ 15} WFAL disagrees that the evidence supports the other criteria 
identified by the bureau.  In particular, WFAL contests the bureau’s findings as to 
criteria numbers 1, 2, 6, 7, and 8.  In addition, WFAL argues that without 
evidence of new and changed circumstances, the bureau is prohibited by collateral 
estoppel from reversing the position it took in the 1999 audit, which found no 
employment relationship.  WFAL’s arguments lack merit. 
A.  The Bureau’s Findings of Fact Are Supported by the Evidence 
{¶ 16} The bureau’s findings of fact nos. 1 and 7 involve the person or 
persons who controlled the work performed at the site.  WFAL argues that it was 
not Buyer, but rather Paul Hendershot, the on-site supervisor for Ohio Fresh Eggs, 
who directed and controlled the work performed. 
{¶ 17} At the hearing, auditor Young stated that the workers followed 
instructions on a work order given to Buyer.  In addition, Buyer stated that both 
he and Hendershot gave instructions to the WFAL workers.  Thus, we find that 
the evidence in the record supports the administrator’s determination that Buyer, 
in addition to Hendershot, instructed the workers and determined the order of the 
work. 
{¶ 18} The bureau’s finding of fact no. 2 involves whether the workers’ 
services were integrated into the regular functioning of the employer.  WFAL 
contends that Buyer statement at the hearing that he used job-specific workers on 
SUPREME COURT OF OHIO 
 
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an as-needed basis demonstrated that their work was not integrated into the 
regular functioning of WFAL. 
{¶ 19} According to the auditor, because WFAL contracted to provide the 
labor and do carpentry and related work, the workers’ services were integrated 
into the regular functioning of WFAL construction.  At the hearing, auditor 
Young stated that “WFAL was given a work order, which the people were 
supposed to follow in order to get that barn ready for the next project, so the 
services are integrated into the regular function of the business.” 
{¶ 20} The bureau relied on the evidence provided by Young that the labor 
performed by the workers was integrated into the regular functioning of WFAL.  
The appellate court determined that “[i]t is undisputed that the workers at issue 
performed the vast majority of the construction work for [Buyer’s] business 
during the audit year in question.”  The court found that Buyer’s explanation at 
the hearing was not responsive to the issue.  We agree that the evidence in the 
record supports the administrator’s finding of fact no. 2. 
{¶ 21} The bureau’s finding of fact no. 6 stated that the workers were paid 
on a weekly basis for the hours worked.  The auditor stated at the hearing that 
WFAL paid workers every week based on timesheets, not invoices, and although 
Buyer may have contracted with some workers, he conceded at the hearing that he 
paid on a weekly basis.  This constituted some evidence to support the 
administrator’s finding that WFAL paid for a specific number of hours worked on 
a weekly basis. 
{¶ 22} Finally, WFAL argues that the bureau presented no evidence to 
support finding of fact no. 8 that, given the hourly payments, the workers would 
not realize a profit or loss as a result of their services.  WFAL relies on Buyer’s 
explanation at the hearing that if a worker underbid a job and the work cost him 
more than the bid, then the worker would suffer a loss, whereas a worker may 
make a profit if he got the job done ahead of schedule. 
January Term, 2015 
 
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{¶ 23} There is no evidence of any such contracts between WFAL and its 
workers.  Instead, the evidence established that WFAL paid the workers weekly 
for the hours worked.  Under those circumstances, the workers were not at risk for 
a financial loss.  Therefore, there was some evidence to support the 
administrator’s finding. 
B.  There Is No Evidence to Support Collateral Estoppel 
{¶ 24} Collateral estoppel prevents the same parties from relitigating facts 
and issues that were fully litigated in a prior action.  State ex rel. Davis v. Pub. 
Emps. Retirement Bd., 120 Ohio St.3d 386, 2008-Ohio-6254, 899 N.E.2d 975,  
¶ 27.  Collateral estoppel also applies in administrative proceedings.  State ex rel. 
Kincaid v. Allen Refractories Co., 114 Ohio St.3d 129, 2007-Ohio-3758, 870 
N.E.2d 701, ¶ 8. 
{¶ 25} WFAL asserts that the bureau is estopped from concluding that the 
workers were WFAL employees because the issue was resolved in the 1999 audit 
in WFAL’s favor.  Although WFAL alluded to collateral estoppel in its complaint 
and mentioned it in its brief before the court of appeals, WFAL did not present 
any evidence to support the application of the doctrine, nor did it offer anything 
other than a conclusory statement that the 1999 audit precluded the bureau from 
finding an employment relationship in 2009.  Consequently, WFAL did not 
establish the necessary elements for collateral estoppel. 
C.  Conclusion 
{¶ 26} There was evidence supporting the administrator’s decision that the 
workers on the WFAL construction project were employees.  The bureau accepted 
the audit findings and also relied on two workers’ compensation claims filed in 
2009 and 2010, in which WFAL was considered the employer. 
{¶ 27} Although WFAL produced a limited number of documents 
pertaining to the 1999 audit, those documents did not establish any of the 
similarities necessary for collateral estoppel to apply.  WFAL also produced 
SUPREME COURT OF OHIO 
 
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certificates of workers’ compensation coverage from some of its workers, but the 
certificates were irrelevant because they applied to 2011 and 2012, after the audit 
period.  The result is that WFAL failed to demonstrate that the bureau’s decision 
was an abuse of discretion. 
{¶ 28} We affirm the judgment of the court of appeals. 
 
 
 
 
 
 
 
   Judgment affirmed. 
O’CONNOR, C.J., and PFEIFER, O’DONNELL, LANZINGER, KENNEDY, 
FRENCH, and O’NEILL, JJ., concur. 
___________________ 
William W. Johnston, for appellant. 
Michael DeWine, Attorney General, and John Smart, Assistant Attorney 
General, for appellee. 
___________________