Title: State ex rel. Sheppard 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. Sheppard v. Indus. Comm., Slip Opinion No. 2014-Ohio-1904.] 
 
 
 
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. 2014-OHIO-1904 
THE STATE EX REL. SHEPPARD, APPELLANT, v. INDUSTRIAL COMMISSION OF 
OHIO ET AL., APPELLEES. 
[Until this opinion appears in the Ohio Official Reports advance sheets,  
it may be cited as State ex rel. Sheppard v. Indus. Comm.,  
Slip Opinion No. 2014-Ohio-1904.] 
Workers’ compensation—Permanent total disability—R.C. 4123.52—Continuing 
jurisdiction of Industrial Commission—Clear mistake of law as basis for 
granting reconsideration—Commission does not abuse discretion by 
exercising continuing jurisdiction to correct order granting permanent-
total-disability benefits when order failed to address employer’s defense 
of voluntary retirement—Once jurisdiction is invoked, commission has 
discretion to reexamine all evidence and decide claim on its merits. 
(No. 2012-1755—Submitted February 4, 2014—Decided May 7, 2014.) 
APPEAL from the Court of Appeals for Franklin County, No. 11AP-553,  
2012-Ohio-4301. 
____________________ 
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Per Curiam. 
{¶ 1} Robert L. Sheppard has appealed the judgment of the court of 
appeals denying his request for a writ of mandamus.  The court of appeals 
concluded that the Industrial Commission did not abuse its discretion when it 
invoked its continuing jurisdiction to reconsider a mistake of law and that the 
commission’s continuing jurisdiction vested it with authority to review the merits 
of the underlying application for permanent-total-disability compensation. 
{¶ 2} For the reasons that follow, we affirm the judgment of the court of 
appeals. 
{¶ 3} On October 9, 1997, Sheppard was injured while working for 
Shelly & Sands, Inc., a self-insured employer.  His workers’ compensation claim 
was allowed for lumbosacral sprain and a herniated disc.  Sheppard also suffered 
from degenerative disc disease not related to his industrial injury.  Furthermore, in 
February 2002, he reinjured his back.  That incident was apparently not work-
related; in any event, no claim has been allowed for the 2002 injury.  In 2004, 
Sheppard took early retirement.  MRI results around that time confirmed that his 
herniated disc had resolved. 
{¶ 4} In 2006, Sheppard filed a motion to reactivate his claim to pay for 
further medical treatment.  The commission determined that the treatment was 
related to his degenerative disc disease, a nonallowed condition, and denied his 
motion. 
{¶ 5} On March 5, 2010, Sheppard filed an application for permanent-
total-disability compensation.  Following a hearing, a staff hearing officer granted 
the application based on the opinion of Dr. Richard M. Ward.  The hearing officer 
also identified Sheppard’s nonmedical disability factors but did not analyze their 
effect on his inability to work. 
{¶ 6} Shelly & Sands, Sheppard’s former employer, filed a request for 
reconsideration on the basis that the staff hearing officer’s order contained 
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mistakes of both fact and law.  The commission issued an interlocutory order 
finding that the staff hearing officer failed to address the employer’s critical 
argument regarding the 2002 intervening injury and that this omission was a clear 
mistake of law justifying a further hearing on the matter to address the issues of 
continuing jurisdiction and permanent total disability. 
{¶ 7} Following that hearing, the commission issued a detailed order that 
(1) confirmed that the staff hearing officer’s order contained a clear mistake of 
law, specifically, his failure to address the employer’s critical argument alleging 
that the 2002 intervening injury was the actual cause of Sheppard’s condition, (2) 
concluded that there was insufficient evidence that the intervening injury broke 
the causal connection between Sheppard’s current symptoms and the allowed 
conditions of his claim, and (3) denied the underlying request for permanent-total-
disability compensation based on the report of Dr. Charles Lowrey and an 
analysis of Sheppard’s nonmedical disability factors. 
{¶ 8} Sheppard filed a complaint for a writ of mandamus alleging that 
the commission had abused its discretion when it exercised continuing jurisdiction 
and denied permanent-total-disability compensation.  A magistrate concluded that 
the commission had not abused its discretion and recommended that the court 
deny the writ. 
{¶ 9} Sheppard filed objections to the magistrate’s report.  First, he 
argued that the magistrate never explained why the hearing officer’s failure to 
address the intervening-injury argument was a mistake of law, and second, he 
objected to the magistrate’s conclusion that the commission had authority to 
reexamine the evidence of permanent total disability after finding that there was 
no intervening injury. 
{¶ 10} The court of appeals overruled the objections and denied the writ.  
The court cited State ex rel. Mackey v. Ohio Dept. of Edn., 10th Dist. Franklin No. 
09AP-966, 2010-Ohio-3522, for the proposition that a staff hearing officer’s 
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failure to address an issue raised by an employer constitutes a mistake of law 
sufficient for the commission to invoke its continuing jurisdiction.  The appellate 
court refused to assume that the hearing officer’s failure to address the 
intervening-injury argument meant that he had rejected it.  The court also 
concluded that once the commission invoked its continuing jurisdiction, it had 
authority to reconsider the issue of permanent total disability. 
{¶ 11} Sheppard filed this appeal as of right.  
{¶ 12} To be entitled to the extraordinary remedy of a writ of mandamus, 
Sheppard must show that the commission abused its discretion in carrying out its 
duties.  State ex rel. Gen. Motors Corp. v. Indus. Comm., 117 Ohio St.3d 480, 
2008-Ohio-1593, 884 N.E.2d 1075, ¶ 9.  Sheppard maintains that the 
commission’s decision to exercise continuing jurisdiction to review what it 
described as a mistake of law was an abuse of discretion. 
{¶ 13} Sheppard raises the following issues: (1) whether the staff hearing 
officer’s failure to address the intervening injury constituted a mistake of law 
justifying the exercise of continuing jurisdiction and, if so, (2) whether the 
commission’s continuing jurisdiction vested it with authority to issue a new order 
that denied permanent-total-disability compensation. 
The Commission’s Continuing Jurisdiction   
{¶ 14} R.C. 4123.52 provides the Industrial Commission with continuing 
jurisdiction over each case to modify or change former findings or orders.  But 
this authority is not unlimited.  It can be invoked only when there is evidence of  
“(1) new and changed circumstances, (2) fraud, (3) clear mistake of fact, (4) clear 
mistake of law, or (5) error by [an] inferior tribunal.”  State ex rel. Nicholls v. 
Indus. Comm., 81 Ohio St.3d 454, 459, 692 N.E.2d 188 (1998).  The commission 
is required to identify and explain the basis for invoking its continuing 
jurisdiction.  State ex rel. Lowe v. Cincinnati, Inc., 124 Ohio St.3d 204, 2009-
Ohio-5864, 921 N.E.2d 205, ¶ 17. 
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{¶ 15} Here, the commission determined that the staff hearing officer’s 
failure to address the employer’s critical argument about an intervening injury 
was a mistake of law.  Sheppard contends that the hearing officer was not 
required to address an intervening injury; thus, failure to address the issue was not 
a mistake of law justifying the exercise of continuing jurisdiction. 
{¶ 16} Permanent total disability is defined as the inability to perform 
sustained remunerative employment as a result of the allowed conditions in the 
claim.  Ohio Adm.Code 4121-3-34(B)(1);  State ex rel. Nissan Brake Ohio, Inc. v. 
Indus. Comm., 127 Ohio St.3d 385, 2010-Ohio-6135, 939 N.E.2d 1242, ¶ 12.  The 
burden is on the claimant to establish that the disability is permanent and that the 
inability to work is causally related to the allowed conditions.  Ohio Adm.Code 
4121-3-34(D)(3)(a);  State ex rel. LTV Steel Co. v. Indus. Comm., 65 Ohio St.3d 
22, 23, 599 N.E.2d 265 (1992).  An intervening injury is one that is not related to 
the allowed claim and breaks the causal connection between the industrial injury 
and the disability.  Casone v. Herb Kay Co., 6 Ohio St.3d 155, 451 N.E.2d 815 
(1983).  An intervening injury could eliminate the industrial injury as the 
proximate cause of the inability to work and thus destroy the claimant’s eligibility 
for permanent-total-disability compensation. 
{¶ 17} The court of appeals relied on Mackey, 10th Dist. Franklin No. 
09AP-966, 2010-Ohio-3522, as authority that a hearing officer’s failure to address 
an issue raised by an employer constitutes a mistake of law sufficient for the 
commission to invoke its continuing jurisdiction.  In Mackey, the hearing officer 
awarded the claimant compensation for permanent total disability, but the order 
did not address the employer’s argument that the claimant had voluntarily retired.  
Mackey’s employer moved for reconsideration, alleging that the hearing officer 
had made a clear mistake of law when he failed to address the issue of voluntary 
abandonment of employment.  The commission agreed.  Upon reconsideration, 
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the commission found that Mackey had voluntarily retired and was ineligible for 
permanent-total-disability compensation. 
{¶ 18} We affirmed.  130 Ohio St.3d 108, 2011-Ohio-4910, 955 N.E.2d 
1005.  We held that because the issue of voluntary abandonment was critical to 
Mackey’s eligibility for an award, the hearing officer’s failure to address the issue 
was a clear mistake of law, and the commission did not abuse its discretion when 
it reopened the issue of Mackey’s eligibility for compensation in order to consider 
the effect of Mackey’s retirement.  Id., ¶ 5. 
{¶ 19} Sheppard argues that Mackey is distinguishable because it involves 
voluntary abandonment, an issue that Ohio Adm.Code 4121-3-34(D)(1)(d) 
requires a hearing officer to address, whereas there is no similar requirement that 
a hearing officer address an argument involving an intervening injury. 
{¶ 20} Sheppard’s narrow focus on the particular issue of voluntary 
retirement fails to acknowledge other factors that the commission must consider 
in evaluating proximate cause and ultimately, the claimant’s eligibility for 
benefits.  Like voluntary retirement or abandonment of employment, an 
intervening injury is critical to the issue of proximate cause and to determining 
whether the claimant is eligible for permanent-total-disability compensation.  It is 
true that the commission’s administrative guidelines expressly require the hearing 
officer to address the issue of voluntary abandonment, Ohio Adm.Code 4121-3-
34(D)(1)(d), but the Code also requires the hearing officer to specifically 
determine whether the claimant established proximate cause.  Ohio Adm.Code 
4121-3-34(D)(1)(h) and (3)(e). 
{¶ 21} Sheppard also argues that there is no indication in the record that 
the employer actually brought the intervening injury to the hearing officer’s 
attention during the hearing.  Sheppard did not raise this argument below; thus, it 
is waived.  State ex rel. Quarto Mining Co. v. Foreman, 79 Ohio St.3d 78, 81-83, 
679 N.E.2d 706 (1997).  Nevertheless, there is no dispute that the record 
January Term, 2014 
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contained evidence substantiating the 2002 injury.  Furthermore, a hearing officer 
is required to review all relevant factors in the record that may affect the 
claimant’s ability to work, Ohio Adm.Code 4121-3-34(D)(3)(g), and the 2002 
injury would be one of those factors. 
{¶ 22} Therefore, the commission did not abuse its discretion when it 
determined that the hearing officer’s failure to address the intervening-injury 
argument was a mistake of law that justified the commission’s reopening the 
claim to examine the issue.  Mackey, 130 Ohio St.3d 108, 2011-Ohio-4910, 955 
N.E.2d 1005.  Once the commission specifically identified the grounds that 
constituted a mistake of law, the commission did not abuse its discretion in 
exercising its continuing jurisdiction. 
The Commission’s Authority to Modify or Change a Former Order 
{¶ 23} Sheppard contends that once the commission determined that there 
was insufficient evidence that an intervening injury broke the causal connection 
between his allowed conditions and his inability to work, it did not have authority 
to review the merits of his underlying application and deny his request for 
compensation. 
{¶ 24} R.C. 4123.52(A) confers broad authority on the commission to 
“make such modification or change” to a former finding or order “as, in its 
opinion, is justified.”  The commission’s broad authority under R.C. 4123.52 
permits it to address any issues pertaining to the order in question.  State ex rel. 
Haddox v. Indus. Comm., 135 Ohio St.3d 307, 2013-Ohio-794, 986 N.E.2d 939, 
¶ 32.  When the commission granted the employer’s request to reconsider and 
exercised its continuing jurisdiction, it vacated the underlying order of the staff 
hearing officer.  Once the commission vacated the entire order, it was required to 
reexamine all facets of Sheppard’s eligibility for compensation.  See State ex rel. 
York Internatl. Corp. v. Kopis, 114 Ohio St.3d 442, 2007-Ohio-4556, 872 N.E.2d 
1221, ¶ 9.  This reexamination legitimately included not only evidence of the 
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intervening injury, but also all the evidence on the merits of the underlying 
request for permanent-total-disability compensation. 
{¶ 25} Accordingly, we affirm the judgment of the court of appeals. 
Judgment affirmed. 
O’CONNOR, C.J., and O’DONNELL, LANZINGER, KENNEDY, FRENCH, and 
O’NEILL, JJ., concur. 
PFEIFER, J., dissents. 
____________________ 
PFEIFER, J., dissenting. 
{¶ 26} Robert L. Sheppard filed an application for permanent-total-
disability compensation, which was granted.  For whatever reason, the hearing 
officer who granted the application failed to consider the effect of an intervening 
injury.  The employer filed a request for reconsideration, based on the hearing 
officer’s failure to consider that issue.  The commission reviewed the matter and 
agreed that the intervening injury had not been properly considered.  Then, after a 
hearing, the commission considered the intervening injury and concluded that 
there was insufficient evidence to conclude that the injury had broken the causal 
connection between Sheppard’s current symptoms and the allowed conditions of 
his claim. 
{¶ 27} In a just world, that would have been the end of the matter.  But 
even though the legitimate reason for the reconsideration request had been 
determined to be insufficient to undermine the grant of compensation, the 
commission, as part of its continuing jurisdiction, decided to review the entire 
claim.  Reviewing a different medical report than the hearing officer had 
reviewed, the commission concluded that Sheppard’s application for permanent-
total-disability compensation should not be granted. 
{¶ 28} This process and the ensuing result strike me as unfair to Sheppard.  
There is no reason to believe that his claim would have been reviewed absent the 
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appeal by his employer, in which case, his claim would have remained 
undisturbed.  That an appeal, which, though legitimate, ultimately proved to be 
without merit, has nevertheless resulted in Sheppard’s claim being denied is a big-
picture cause for concern. 
{¶ 29} Losers in workers’ compensation claims, whether employers or 
employees, will now have incentive to scour records to search for any conceivable 
mistake of law, however trivial.  Even if the reason for reconsideration is not 
sufficient to lead to a different result, the party will have reason to hope that the 
commission will review the entire claim, as part of its ongoing jurisdiction.  That 
party will hope for a different result, whether because of a report from a different 
doctor or for any number of reasons.  The upshot of the decision today is that 
parties in workers’ compensation cases will have little prospect of finality, even 
barring a change in health or other circumstance, and every incentive to prolong 
the process as much as possible.  Under the reasoning of today’s decision, there is 
always a chance that the commission will reach a different result and that a party, 
again, whether employer or employee, will get multiple chances to obtain its 
desired result. 
{¶ 30} I dissent. 
___________________ 
Philip J. Fulton Law Office, Chelsea J. Fulton, and Philip J. Fulton, for 
appellant. 
Michael DeWine, Attorney General, and Patsy A. Thomas, Assistant 
Attorney General, for appellee Industrial Commission. 
Hanna, Campbell & Powell, L.L.P., and Lori A. Whitten, for appellee 
Shelly & Sands, Inc. 
_________________________