Title: State ex rel. McBee v. Indus. Comm'n

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. McBee v. Indus. Comm., Slip Opinion No. 2012-Ohio-2678.] 
 
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. 2012-OHIO-2678 
THE STATE EX REL. MCBEE, APPELLEE, v. INDUSTRIAL COMMISSION 
 OF OHIO, APPELLANT, ET AL. 
[Until this opinion appears in the Ohio Official Reports advance sheets,  
it may be cited as State ex rel. McBee v. Indus. Comm.,  
Slip Opinion No. 2012-Ohio-2678.] 
Workers’ compensation—Temporary total disability compensation—Overpayment 
declared due to claimant’s fraud in working while receiving benefits—
“Work” defined—Unpaid activities may constitute work—Fraud declaration 
overturned—No evidence that claimant knew that unpaid activities could 
qualify as work. 
(No. 2010-2288—Submitted April 24, 2012—Decided June 19, 2012.) 
APPEAL from the Court of Appeals for Franklin County, No. 09AP-239,  
2010-Ohio-5547. 
__________________ 
Per Curiam. 
{¶ 1} A claimant cannot receive temporary total disability compensation 
(“TTC”) for any period in which he or she worked.  R.C. 4123.56(A).  Appellee, 
Garry K. McBee, received TTC from October 30, 2004, through March 9, 2006.  
SUPREME COURT OF OHIO 
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During that time, he also helped his wife with her business, but he was not paid 
for his services.  Appellant Industrial Commission of Ohio learned of these 
activities, determined that they constituted “work,” and concluded that TTC 
should not have been paid.  Consistent with those findings, the TTC award was 
vacated, and an overpayment was declared.  In addition, the commission found 
that McBee had committed fraud by submitting disability paperwork to the 
commission and the Bureau of Workers’ Compensation between October 30, 
2004, and March 9, 2006, in which he certified that he was not working. 
{¶ 2} McBee responded with a complaint in mandamus in the Court of 
Appeals for Franklin County.  The court upheld the finding that McBee had 
worked while receiving TTC, but it overturned the finding of fraud after 
concluding that the evidence cited in the commission’s order did not prove that 
McBee knew that his unpaid activities for his wife’s company constituted “work” 
for purposes of TTC eligibility. 
{¶ 3} Seeking to reinstate its declaration of fraud, the commission now 
appeals to this court as a matter of right. 
{¶ 4} “Work” in this context is generally considered to be labor 
exchanged for pay.  State ex rel. Griffith v. Indus. Comm., 109 Ohio St.3d 479, 
2006-Ohio-2992, 849 N.E.2d 28, ¶ 10.  There is, however, an important 
exception: unpaid activities that directly generate income for a separate entity can, 
in some situations, be considered work for purposes of TTC eligibility.  This 
principle can be extracted from our holding State ex rel. Ford Motor Co. v. Indus. 
Comm., 98 Ohio St.3d 20, 2002-Ohio-7038, 780 N.E.2d 1016. 
{¶ 5} The employer in Ford sought to recoup TTC, arguing that the 
claimant was improperly receiving compensation while “working” in his own 
lawn-care business.  Evidence showed that after his industrial injury, the claimant 
hired workers to do the lawn care, while his participation was limited to signing 
paychecks, fueling lawnmowers weekly, and driving the mowers onto a truck.  
January Term, 2012 
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There was no showing that claimant did any of the landscaping work while 
receiving TTC.  Id. at ¶ 3. All clerical work besides signing checks was performed 
by the claimant’s girlfriend.  Id. at ¶ 8. 
{¶ 6} We held that the claimant’s activities did not amount to work so as 
to disqualify him from TTC.  “[T]his claimant’s 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.”  Id. at ¶ 23.  His activities were “truly minimal and 
only indirectly related to generating income.”  Id. at ¶ 24. 
{¶ 7} It follows, therefore, that activities that are not minimal and that 
directly generate income for a separate entity may be considered work and may 
disqualify a claimant from receiving TTC even when the claimant is not paid.  
The court of appeals adopted its magistrate’s conclusion that McBee’s activities 
for his wife’s company directly generated income and were consistent and 
ongoing.  Thus, his activities, though unpaid, constituted work, precluding TTC.  
McBee has not appealed that determination to this court. 
{¶ 8} We now consider whether McBee engaged in fraud when he 
received TTC while working.  The absence of remuneration factors into this issue 
as well.  Fraud requires a knowing misrepresentation of a material fact.  Gaines v. 
Preterm-Cleveland, Inc., 33 Ohio St.3d 54, 55, 514 N.E.2d 709 (1987).  McBee 
received TTC because of his contemporaneous certification that he was not 
“working.”  For this to qualify as a knowing misrepresentation, however, it must 
be shown that McBee was aware that his unpaid activities could be considered 
“work.”  We must determine whether the evidence cited in the commission’s 
order demonstrates such an awareness.  We find that it does not. 
{¶ 9} The documents that McBee used to apply for ongoing TTC advised 
only that a claimant is “not permitted to work” while receiving TTC.  The 
documents did not define “work,” nor did they indicate that unpaid activities 
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could sometimes be classified as work.  The commission insists, however, that 
such knowledge can be inferred from the hearing testimony of McBee and his 
wife.  We disagree. 
{¶ 10} The commission has substantial leeway to draw inferences from 
the evidence before it, but its authority is not unlimited.  State ex rel. Lawson v. 
Mondie Forge, 104 Ohio St.3d 39, 2004-Ohio-6086, 817 N.E.2d 880, ¶ 34.  The 
knowledge that the commission seeks to impute to McBee involves what can be a 
complicated exception to Griffith’s general principle that “work” entails 
remuneration.  The Ford exception is not intuitive, nor is it within the realm of the 
average claimant’s experience, dealing as it does with unpaid activities within the 
context of a secondary business enterprise. 
{¶ 11} Mindful of these considerations, our examination of the evidence 
reveals nothing from which we can infer that McBee recognized that the activities 
in question could be construed as work.  If McBee was asked at the hearing 
whether he knew that work included some unpaid activities, the commission’s 
order does not reflect it.  The relevant portions of the order focused exclusively on 
why McBee’s activities were work, not on whether he knew that they were work 
for purposes of TTC eligibility.  As for Mrs. McBee, the order does not cite any 
testimony from her, so there is nothing to review. 
{¶ 12} Ultimately, there is no evidence that McBee knew that his unpaid 
activities constituted work that would preclude TTC.  Thus, there is no evidence 
that he knowingly misled the commission or the bureau.  Absent such knowledge, 
a fraud declaration cannot stand. 
{¶ 13} The judgment of the court of appeals is affirmed. 
Judgment affirmed. 
O’CONNOR, C.J., and PFEIFER, LUNDBERG STRATTON, O’DONNELL, CUPP, 
and MCGEE BROWN, JJ., concur. 
LANZINGER, J., not participating. 
January Term, 2012 
5 
 
__________________ 
John F. Potts, for appellee. 
Michael DeWine, Attorney General, and Sandra E. Pinkerton, Assistant 
Attorney General, for appellant. 
______________________