Title: State ex rel. Estate of McKenney v. Indus. Comm.

State: ohio

Issuer: Ohio Supreme Court

Document:

[Cite as State ex rel. Estate of McKenney v. Indus. Comm., 110 Ohio St.3d 54, 2006-Ohio-
3562.] 
 
 
THE STATE EX REL. ESTATE OF MCKENNEY, APPELLANT, v. INDUSTRIAL 
COMMISSION OF OHIO ET AL., APPELLEES. 
[Cite as State ex rel. Estate of McKenney v. Indus. Comm., 
 110 Ohio St.3d 54, 2006-Ohio-3562.] 
Workers’ compensation—Scheduled loss awards under R.C. 4123.57(B)—
Dependent’s estate denied payment unaccrued at dependent’s death. 
(No. 2005-0513 — Submitted February 7, 2006 — Decided July 26, 2006.) 
APPEAL from the Court of Appeals for Franklin County, 
No. 03AP-1196, 159 Ohio App.3d 720, 2005-Ohio-981. 
__________________ 
Per Curiam. 
{¶ 1} Patrick McKenney died while receiving weekly payments of 
scheduled loss compensation under R.C. 4123.57(B).  His widow died after 
applying for a lump-sum payment of the remaining compensation.  Her estate 
now seeks that payment.  Upon review, we affirm the judgment of the court of 
appeals denying payment to the estate. 
{¶ 2} Patrick McKenney’s workers’ compensation claim was allowed for 
quadriplegia.  He successfully applied for permanent total disability benefits and 
was also awarded 850 weeks of scheduled loss benefits under R.C. 4123.57(B) for 
the loss of use of all four limbs. 
{¶ 3} After six weeks of payment, Patrick died of an injury-related heart 
attack on March 15, 2002.  On April 26, 2002, his surviving spouse and sole 
dependent, Nancy, moved appellee Industrial Commission of Ohio for a lump-
sum payment of the remaining 844 weeks of scheduled loss compensation.  The 
next day, Nancy died.  Her estate, the appellant herein, was then substituted as a 
party for the purposes of pursuing her motion. 
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{¶ 4} On October 3, 2003, the commission awarded the estate scheduled 
loss benefits only through April 27, 2002, the date of Nancy’s death.  It reasoned: 
{¶ 5} “R.C. 4123.57(B) provides for an award of compensation for loss 
of use to the surviving spouse of the injured worker of such compensation accrued 
during the injured worker’s lifetime and that which would have accrued had the 
injured worker survived.  The statute makes no such award for compensation that 
will not accrue until after the death of the surviving spouse or any eligible 
dependent.  Therefore, when Nancy McKenney died on 04/27/2002, the 
unaccrued loss of use benefits were no longer payable in the absence of an 
eligible dependent to whom a further award could be made.  The plain language 
of R.C. 4123.57(B) makes it clear that the surviving spouse’s entitlement to the 
loss of use benefits abates upon her death and no further benefits are payable.  
The Industrial Commission declines the invitation to rewrite the statute and pay 
compensation beyond what the legislature intended.”  (Emphasis sic.)   
{¶ 6} The estate responded with a mandamus action in the Court of 
Appeals for Franklin County, seeking a writ ordering the commission to pay the 
estate the amount it sought.  The court of appeals affirmed the commission’s 
reasoning and denied the writ, prompting the estate’s appeal as of right. 
{¶ 7} No one challenges the estate’s entitlement to some portion of the 
scheduled loss award.  At issue is the amount thereof, and, in this regard, prior 
case law is clear — a dependent’s estate can recover only compensation that had 
accrued to the dependent before the dependent’s death but that had not been paid.  
Indus. Comm. v. Dell (1922), 104 Ohio St. 389, 135 N.E. 669; State ex rel. Hoper 
v. Indus. Comm. (1934), 128 Ohio St. 105, 190 N.E. 222; State ex rel. Nossal v. 
Terex Div. of I.B.H. (1999), 86 Ohio St.3d 175, 712 N.E.2d 747. 
{¶ 8} R.C. Chapter 4123 does not define “accrued,” leaving the term to 
its “usual, normal, or customary meaning.”  State ex rel. Bowman v. Columbiana 
Cty. Bd. of Commrs. (1997), 77 Ohio St.3d 398, 400, 674 N.E.2d 694.  That 
January Term, 2006 
3 
definition, however, does not advance resolution of the issue, since the term is 
defined as “to come into existence as an enforceable claim: vest as a right.”  
Webster’s Third New International Dictionary (1986) 13.  Precisely when the 
interest at issue becomes an enforceable claim or right – the question here – is not 
answered by the definition. 
{¶ 9} The estate claims that the entire amount of the scheduled loss 
award accrued to Nancy at Patrick’s death.  R.C. 4123.57(B) does not support this 
assertion.  The relevant passage provides: 
{¶ 10} “When an award under this division has been made prior to the 
death of an employee all unpaid installments accrued or to accrue under the 
provisions of the award shall be payable to the surviving spouse, or if there is no 
surviving spouse, to the dependent children of the employee and if there are no 
such children, then to such dependents as the administrator determines.” 
{¶ 11} The estate’s reliance on the mandatory “shall” is misplaced, 
because  the mandate presumes a living dependent, which is not the case here.  
Moreover, the statute specifically refers to installments “accrued or to accrue.”  
(Emphasis added.)  If the entire amount accrued immediately, as the estate claims, 
there would be no need for this language.  The estate’s interpretation of the statute 
is, therefore, rendered untenable by the statute’s very language. 
{¶ 12} The estate’s position is also not advanced to the extent it hoped by 
the concurring opinion in LaCavera v. Cleveland Elec. Illum. Co. (1984), 14 Ohio 
App.3d 213, 217-218, 14 OBR 240, 470 N.E.2d 476 (Markus, J., concurring).  
The estate relies on this passage: 
{¶ 13} “No real distinction exists between unpaid compensation for 
temporary disability and unpaid dismemberment compensation under R.C. 
4123.57(C) [now 4123.57(B)].  Additional compensation accrues for temporary 
disability when the worker’s temporary disability continues or he incurs 
additional medical expenses.  R.C. 4123.56 and 4123.66.  Therefore, no further 
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compensation can accrue for a temporary disability or additional medical expense 
after the worker dies. 
{¶ 14} “By contrast, compensation for dismemberment under R.C. 
4123.57(C) is fully determined when the dismemberment occurs.  The total 
compensation payable under R.C. 4123.57(C) is measured as a fixed multiple of 
the worker’s ‘average weekly wage’ rate, as defined by the Revised Code.  
However, the ‘accrued’ compensation is payable by a lump sum disbursement or 
by weekly installments as the Industrial Commission deems appropriate.  R.C. 
4123.64.  Thus, the total compensation for dismemberment under R.C. 
4123.57(C) is ‘accrued but unpaid’ immediately after the dismemberment 
occurs.”  (Emphasis sic.) 
{¶ 15} According to the estate, the LaCavera concurrence supports the 
notion that scheduled loss compensation is unique and should be unfettered by the 
principles governing other forms of compensation upon the death of a relevant 
party.  Larson, however, in his treatise, Workers’ Compensation Law (2001), 
cautions against undue reliance on the supposed uniqueness of scheduled loss 
compensation, reminding that those benefits are “not, however, to be interpreted 
as an erratic deviation from the underlying principle of compensation law – that 
benefits relate to loss of earning capacity and not to physical injury as such.  The 
basic theory remains the same;  the only difference is that the effect on earning 
capacity is a conclusively conclusively [sic] presumed one * * *.”  (Footnote 
omitted.)  4 Larson, Section 86.02. 
{¶ 16} It therefore follows that the loss of earning capacity that scheduled 
loss compensation was intended to ameliorate ceases upon the death of the injured 
worker – just as it does with all other forms of disability compensation. 
{¶ 17} Perhaps a more problematic aspect of the LaCavera concurrence is 
its offhand equation of lump-sum and installment payments.  Larson advises that 
“[w]hen the award takes the form of a lump sum, the amount due as accrued 
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payments is the entire amount of the lump sum.”  Section 89.02.  Alabama’s 
highest court speaks for the majority of jurisdictions – including Ohio – that 
endorse this result, in writing that “when there is a lump sum [workers’ 
compensation] award it has the same effect as the usual judgment for money, that 
is, it becomes vested on rendition of the judgment.”  United States Steel Corp. v. 
Baker (1957), 266 Ala. 538, 543, 97 So.2d 899. 
{¶ 18} This is an interesting analogy because, as Larson points out, “one 
of the features distinguishing a compensation award from a tort recovery is the 
absence of any property right in an award which can survive in favor of heirs.”  
Section 89.01. Thus, “[t]he recipient of installment payments does not ordinarily 
‘own’ the unpaid balance of the award so as to entitle his heirs as such to any 
interest in it.”  1 Larson, Section 1.03[6].  This prompts Larson to conclude that 
when a scheduled loss award, “although for a fixed number of weeks, is paid 
weekly or periodically, most jurisdictions in the absence of a special statute to the 
contrary have held that the heirs have no claim upon the unaccrued payments, 
since the award is a personal one.”  (Footnote omitted.)  4 Larson, Section 89.03.  
By “unaccrued,” Larson means the weekly payments that would have come due 
after the death.  Section 89.01. 
{¶ 19} R.C. 4123.57(B) anticipates the payment of scheduled loss 
compensation in weekly installments.  Commutation to a lump sum can occur, but 
only if the injured worker first applies for lump-sum payment, meets certain 
specified criteria designated in R.C. 4123.64, and receives approval from the 
bureau.  The specificity of those criteria — and the fact that satisfaction still does 
not guarantee approval by the bureau — demonstrates that the method of payment 
is of substantive concern to the General Assembly and should not be summarily 
dismissed as irrelevant to our inquiry as the LaCavera concurrence – and in turn, 
the estate – suggests. 
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{¶ 20} We, too, have acknowledged the substantive, as opposed to simply 
ministerial, nature of the payment method in a scheduled loss situation.  In 
Swallow v. Indus. Comm. (1988), 36 Ohio St.3d 55, 57, 521 N.E.2d 778, we 
approved the commission’s “rationale that claimants are generally placed in a 
better position by receiving payments consecutively rather than concurrently.”  
We held that it was within the discretion of the commission to determine that 
appellant would be put in a better position by receiving 850 weeks of payments 
consecutively rather than two 200-week periods of payments for the loss of his 
legs and two 250-week periods of payments for the loss of his arms, all 
concurrently. 
{¶ 21} The estate claims that to deny full recovery offends equal 
protection because state-fund and self-insured employees will be treated 
differently.  The estate, however, never develops this argument, using it instead as 
a forum for objecting to the commission’s decision to deny lump-sum payment in 
favor of installment payments – an action expressly within the commission’s 
discretion, and irrelevant to the employee’s status as a self-insured or state-fund 
employee. 
{¶ 22} In the end, the estate has not offered a compelling reason why we 
should deviate from prior decisions limiting the dependent’s estate to those 
amounts actually due, but unpaid, to the dependent before his or her death.  In this 
case, the commission, after careful consideration, specifically denied a request for 
lump-sum payment because no further award was payable whether by installment 
or lump sum. 
{¶ 23} The judgment of the court of appeals is affirmed. 
Judgment affirmed. 
 
MOYER, C.J., RESNICK, LUNDBERG STRATTON, O’CONNOR, O’DONNELL 
and LANZINGER, JJ., concur. 
 
PFEIFER, J., concurs in judgment only. 
January Term, 2006 
7 
_________________ 
Robert E. Gross and Scott Coghlan, for appellant. 
Jim Petro, Attorney General, and William J. McDonald, Assistant 
Attorney General, for appellee Industrial Commission. 
Duvin, Cahn & Hutton and Christine C. Covey, for appellee Wal-Mart 
Stores, Inc. 
Philip J. Fulton Law Office, Philip J. Fulton, and William A. Thorman III, 
urging reversal on behalf of amicus curiae, Ohio Academy of Trial Lawyers. 
______________________