[Cite as State ex rel. Manor Care, Inc. v. Bur. of Workers' Comp., 2019-Ohio-2578.]

IN THE COURT OF APPEALS OF OHIO 

TENTH APPELLATE DISTRICT 

State ex rel. Manor Care, Inc., : 

 

 Relator, : 

 No. 17AP-864 

v. : 

 (REGULAR CALENDAR) 

Ohio Bureau of Workers' : 

Compensation et al., 

 : 

 Respondents. 

 : 

 

D E C I S I O N 

Rendered on June 27, 2019 

 

On brief: Kegler, Brown, Hill + Ritter Co., LPA, David M. 

McCarty, Randall W. Mikes, and Katja E. Garvey, for relator. 

On brief: Dave Yost, Attorney General, and Sherry M. 

Phillips, for respondent Ohio Bureau of Workers' 

Compensation. 

 

IN MANDAMUS 

ON OBJECTIONS TO THE MAGISTRATE'S DECISION 

DORRIAN, J. 

{¶ 1} Relator, Manor Care, Inc., filed this original action requesting a writ of 

mandamus ordering respondent, Ohio Bureau of Workers' Compensation ("BWC"), to 

reimburse or credit relator for disabled workers' relief fund ("DWRF") payments made by 

relator. 

{¶ 2} Pursuant to Civ.R. 53 and Loc.R. 13(M) of the Tenth District Court of Appeals, 

this matter was referred to a magistrate who issued a decision, including findings of fact 

and conclusions of law, which is appended hereto. The magistrate recommends this court 

deny the request for a writ of mandamus. 
No. 17AP-864 2 

{¶ 3} Relator has filed the following two objections to the magistrate's decision: 

I. THE MAGISTRATE'S FINDINGS OF FACT CONTAIN A 

GLARING OMISSION WHICH TAINTS SUBSEQUENT 

ANALYSIS. 

II. MANOR CARE HAS A CLEAR LEGAL RIGHT TO THE 

REQUESTED RELIEF IN MANDAMUS. 

{¶ 4} As explained in the magistrate's decision, relator is a self-insured employer. 

Two of relator's former employees suffered injuries in the course of their employment and 

were ultimately awarded permanent total disability ("PTD") compensation. The orders 

granting PTD compensation in each case did not set the rate of compensation to be paid to 

each employee. Ultimately, because both former employees' PTD compensation rate was 

lower than the relevant statutory threshold amount, they received DWRF payments from 

BWC and relator reimbursed BWC for those DWRF payments. In 2014, BWC determined 

that both former employees had been overpaid DWRF benefits because they were 

underpaid PTD compensation. In 2015, BWC ordered relator to compensate the two former 

employees in the amount of the underpaid PTD compensation. Relator ultimately paid this 

compensation to both former employees under protest. Relator requested reimbursement 

or a credit from BWC for the amount of overpaid DWRF compensation. BWC's Self-Insured 

Review Panel ("SIRP") denied that request, holding that an underpayment of PTD 

compensation may not be offset against an overpayment of DWRF benefits paid and 

accepted in good faith. Relator filed an administrative appeal of the SIRP order and an 

administrator's designee for BWC issued a decision upholding the SIRP order. Relator then 

filed the present mandamus action. 

{¶ 5} The magistrate concluded the administrator's designee did not abuse her 

discretion in determining that relator should not receive reimbursement or a credit from 

BWC for the DWRF payments made to the former employees. The magistrate found that 

the SIRP and the administrator's designee did not abuse their discretion in placing some 

degree of fault on relator for the underpaid PTD compensation. 

{¶ 6} Relator argues in its first objection that the magistrate failed to refer to 

evidence in the record suggesting that the Industrial Commission of Ohio ("commission"), 

rather than relator, set the PTD compensation rate to be paid to the two former employees. 

Relator asserts this omission taints the magistrate's analysis of the decisions by SIRP and 
No. 17AP-864 3 

the administrator's designee placing some of the fault for the underpayment of PTD 

compensation on relator. Relator further argues in its second objection that it has a clear 

legal right to the requested writ because it was not at fault for the underpayment of PTD 

compensation to the two former employees. 

{¶ 7} We acknowledge the record contains a copy of BWC's Procedural Guide for 

Self-Insured Claims Administration, which indicates the commission calculates the PTD 

compensation rate in claims determined prior to April 19, 1999. Although this suggests 

relator may not have been responsible for setting the PTD compensation rate paid to each 

of the former employees, as noted in the decision of the administrator's designee, relator 

had access to the wage information used to set the PTD compensation rates. 

{¶ 8} The Supreme Court of Ohio has held that BWC's ability to recoup excess 

DWRF payments from an injured worker when those payments were made under a mistake 

of fact depends on the circumstances. State ex rel. Martin v. Connor, 9 Ohio St.3d 213, 214 

(1984). In Martin, the injured worker received PTD compensation and federal Social 

Security Disability Benefits. When his social security benefits were reduced, the worker 

became eligible for DWRF payments. After receiving DWRF payments for approximately 

five years, the worker's social security benefits were increased and he was given a lump sum 

payment that was determined to have been improperly withheld. BWC then sought to 

recover overpayment of DWRF benefits, asserting that if the lump sum social security 

benefits had been properly issued when he was entitled to them, he would have received 

less DWRF benefits. BWC ultimately discontinued the worker's DWRF benefits and 

reduced his PTD award to compensate for the alleged DWRF overpayment. Id. at 213. The 

worker filed a mandamus action and the Supreme Court granted the requested writ of 

mandamus, ordering BWC to continue full payment of PTD compensation and DWRF 

benefits. The court found that because all parties believed the worker was entitled to DWRF 

benefits at the time they were paid, BWC abused its discretion by trying to recover those 

payments. Id. at 214 ("While [BWC] has the authority to recoup overpayments, that 

authority is not unlimited. This court has reasoned that such authority does not extend to 

payments made and accepted in the good faith belief that they were due."). 

{¶ 9} Similarly, this court held that an employer failed to demonstrate a clear legal 

right to reimbursement or a clear legal duty on BWC to pay reimbursement for DWRF 
No. 17AP-864 4 

benefits that were improperly paid to an injured worker who was not eligible for those 

benefits. State ex rel. Lutheran Hosp. v. Buehrer, 10th Dist. No. 13AP-670, 2015-Ohio-380. 

In Lutheran Hospital, an injured worker applied for and was awarded PTD compensation. 

She was then notified that she would receive DWRF benefits. After a rehearing at the 

employer's request, the worker's application for PTD compensation was denied. Despite the 

ultimate denial of PTD compensation, the worker received DWRF benefits for nearly 20 

years before BWC notified her the benefits would be terminated. Throughout the period 

when the worker received DWRF benefits, BWC billed the self-insured employer for those 

payments. Id. at ¶ 4. The employer then sought reimbursement from BWC for the DWRF 

payments made to the injured worker. Id. at ¶ 27. BWC denied the request for 

reimbursement and the employer sought a writ of mandamus from this court. Id. at ¶ 32-

33. We adopted the magistrate's decision recommending that the writ be denied because 

both BWC and the employer operated under a mutual mistake of fact during the period 

when BWC was paying DWRF benefits to the injured worker and the employer was 

reimbursing BWC for those payments, and because the self-insured employer was in the 

best position to correct that mistake. Id. at ¶ 52, 59. In overruling the employer's objections 

to the magistrate's decision, this court found that the employer failed to present clear and 

convincing evidence that it had a right to reimbursement or that the BWC had a duty to pay 

reimbursement. Id. at ¶ 7. 

{¶ 10} Assuming for purposes of analysis in the present case that the commission 

initially set the PTD compensation rates, it appears that, similar to Lutheran Hospital, both 

BWC and relator operated under a mutual mistake of fact during the relevant period 

because both believed the PTD compensation and DWRF benefit rates were properly set 

and calculated. As in Lutheran Hospital, relator was a self-insured employer and in the best 

position to correct that mistake. Thus, consistent with our prior decision in Lutheran 

Hospital, we find that relator has failed to demonstrate clear and convincing evidence that 

it has a right to reimbursement or that BWC has a duty to pay reimbursement. 

{¶ 11} Accordingly, relator's objections to the magistrate's decisions lack merit and 

are overruled. 

{¶ 12} Upon review of the magistrate's decision, an independent review of the 

record, and due consideration of relator's objections, we find the magistrate has properly 
No. 17AP-864 5 

determined the pertinent facts and applied the appropriate law. We therefore overrule 

relator's two objections to the magistrate's decision and adopt the magistrate's decision as 

our own, including the findings of fact and conclusions of law contained therein. 

Accordingly, the requested writ of mandamus is hereby denied. 

Objections overruled; 

writ of mandamus denied. 

BROWN and LUPER SCHUSTER, JJ., concur. 

 

 
No. 17AP-864 6 

APPENDIX 

IN THE COURT OF APPEALS OF OHIO 

TENTH APPELLATE DISTRICT 

The State ex rel. Manor Care, Inc., : 

 

 Relator, : 

 

v. : No. 17AP-864 

 

Bureau of Workers' Compensation, et al., : (REGULAR CALENDAR) 

 

 Respondents. : 

 

M A G I S T R A T E ' S D E C I S I O N 

Rendered on September 20, 2018

 

Kegler, Brown, Hill + Ritter Co, LPA, David M. McCarty, 

Randall W. Mikes, and Katja E. Garvey, for relator. 

Michael DeWine, Attorney General, and Patsy Thomas, for 

respondent Bureau of Workers' Compensation. 

 

IN MANDAMUS 

{¶ 13} In this original action, relator, Manor Care, Inc., requests a writ of mandamus 

ordering respondent Ohio Bureau of Workers' Compensation ("respondent" or "bureau") 

to vacate the April 6, 2016 decision of the administrator's designee that affirms the 

September 16, 2015 order of the bureau's Self-Insured Review Panel ("SIRP") that denied 

relator's request for reimbursement from the disabled workers' relief fund ("DWRF") for 

relator's payments to two injured workers for underpayments of permanent total disability 

("PTD") compensation. 
No. 17AP-864 7 

Findings of Fact: 

{¶ 14} 1. Following a February 17, 1994 hearing, two commission staff hearing 

officer's ("SHO") awarded PTD compensation to Mozell Kelly in her industrial claim in 

which relator is the self-insured employer. The SHO's order does not set the rate of PTD 

compensation to be paid to Kelly by relator. 

{¶ 15} 2. Following a September 21, 1995 hearing, two SHOs awarded PTD 

compensation to Katalin Palotay in her three industrial claims in which relator is the selfinsured employer. The SHO's order does not set the rate of PTD compensation to be paid 

to Palotay by the self-insured employer. 

{¶ 16} 3. Because their PTD rates were lower than the statutory mandated 

minimum rate, Kelly and Palotay received DWRF benefits from the bureau. 

{¶ 17} 4. In 2014, the bureau conducted audits of Kelly and Palotay's industrial 

claims and particularly the payments of PTD compensation and DWRF benefits they had 

received. 

{¶ 18} 5. On September 25, 2014, the bureau mailed an order regarding Palotay's 

industrial claim. The order found that Palotay had been overpaid $32,627.36 in DWRF 

benefits because of an underpayment of PTD compensation. The order further explained: 

"DWRF overpayments are recouped by withholding the cost of living amounts from the 

date the overpayment is determined." 

{¶ 19} 6. On September 30, 2014, the bureau mailed an order regarding Kelly's 

industrial claim. The order found that Kelly had been overpaid $46,535.58 in DWRF 

benefits because of an underpayment of PTD compensation. The order further explained: 

"DWRF overpayments are recouped by withholding the cost of living amounts from the 

date the overpayment is determined." 

{¶ 20} 7. On January 28, 2015, relator filed a motion in Kelly's claim, stating: 

Now comes the employer and hereby requests that the 

Industrial Commission exercise its continuing jurisdiction to 

determine what obligation, if any, Manor Care has to pay 

allegedly underpaid permanent total disability compensation 

benefits to the claimant. The BWC has not issued a formal 

order or formal audit findings demanding that Manor Care 

make such payment. Documentation, to be submitted, will 

establish that the claimant received all the compensation to 

which she was entitled and the Bureau already has been fully 
No. 17AP-864 8 

reimbursed for all payment of DWRF benefits it has paid. The 

Commission should exercise its continuing jurisdiction to find 

that neither the BWC nor the claimant are entitled to any 

additional compensation/benefits. 

A similar motion was filed in Palotay's claims. 

{¶ 21} 8. Following an April 30, 2015 hearing, an SHO issued an order in Kelly's 

industrial claim. The SHO's order of April 30, 2015 rules on relator's January 28, 2015 

motion, and states: 

The Staff Hearing Officer finds that the Bureau of Workers' 

Compensation order of 09/30/2014 was the result of a 

mistake of fact and law, in that 1) there is no evidence that 

demonstrates that the Self-Insuring Employer's prior 

payment of permanent total disability compensation was at a 

rate calculated by the Self-Insuring Employer herein and not 

at a rate determined and ordered by the Industrial 

Commission (see, the Bureau of Workers' Compensation's 

Procedural Guide for Self-Insured Claims Administration) 

and 2) a mistake of fact is evident in that the Bureau of 

Workers' Compensation order presumes that the SelfInsuring Employer herein independently elected to pay 

permanent total disability compensation at a rate now 

determined to be incorrect. 

The Staff Hearing Officer grants the Employer's C-86 Motion 

request for the exercise of continuing jurisdiction to the 

following extent. The Bureau of Workers' Compensation order 

of 09/30/2014 is vacated. 

The Staff Hearing Officer has no authority to order that the 

Bureau of Workers' Compensation reimburse the SelfInsuring Employer for the lump sum amount of permanent 

total disability compensation it has paid relative to the Bureau 

of Workers' Compensation's 09/30/2014 order. 

A similar order was issued in Palotay's claims. 

{¶ 22} 9. On June 22, 2015, relator moved for commission reconsideration of the 

SHO's order of April 30, 2015. 

{¶ 23} 10. By letter dated June 26, 2015, relator withdrew its June 22, 2015 motion 

for reconsideration. 

{¶ 24} 11. On July 8, 2015, the three-member commission mailed an order 

dismissing, at relator's request, the motion for reconsideration. 
No. 17AP-864 9 

{¶ 25} 12. Earlier, by letter dated January 22, 2015, David Sievert, Supervisor, 

External Auditing of the bureau's self-insured department informed relator: 

This notice is in follow up to our conversation on January 15, 

2015, during which we discussed the underpayment of 

Permanent Total Disability (PTD) benefits for several claims 

that were identified during a compliance audit by the SelfInsured Department. As was indicated at that time, it is the 

position of the Self-Insured Department that the full 

underpayment of PTD benefits related to claims 946901-22, 

L21469-22, 926966-22 (Katalin Palotay) must be paid by 

Friday January 23, 2015. 

Confirmation of these payments must also be provided to the 

BWC Self-Insured Department by January 30, 2013 [sic]. 

Failure to comply [with] this requirement could impact the 

privilege of Manor Care, Inc.'s self-insured status. If it is 

determined that the PTD underpayments have not been 

addressed, as requested, the Self-Insured Department will 

make a referral to the Self-Insured Review Panel for nonrenewal of the self-insured policy and to the Self Insured 

Employer's Evaluation Board for further consideration of this 

matter. 

{¶ 26} 13. By letter dated January 23, 2015, relator appealed from the decision of 

the bureau's self-insured department. 

{¶ 27} 14. By letter dated January 28, 2015, Paul Flowers, director of the bureau's 

self-insured department, informed relator: 

I regret to inform you that the Ohio Bureau of Workers' 

Compensation (BWC) cannot renew your self-insurance 

policy, effective March 1, 2015, as the minimum criteria 

established in the self-insuring rules have not been met. 

The employer is in violation of Ohio Administrative Code 

4123-19-03(K)(7), for failure to pay all compensation as 

required of a self-insuring employer by the workers' 

compensation laws. In September 2014, the BWC SelfInsured Department performed an audit on the Permanent 

Total Disability (PTD) claims of the employer as permitted by 

Ohio Administrative Code 4123-19-10(A)(1). The findings of 

the audit revealed that the employer had underpaid PTD 

benefits for several claims associated with injured workers 

Katalin Palotay (claims 946901-22, L21469-22, 926966-22) 

and Mozel Kelly (claim 952061-22). The finding of this 
No. 17AP-864 10 

underpayment of PTD benefits was based on Ohio Revised 

Code 4123.58(B). 

{¶ 28} 15. By letter dated February 4, 2015, relator's counsel informed Director 

Flowers: 

As you know, we represent the self-insured employer, Manor 

Care, in connection with its workers' compensation program. 

Manor Care hereby appeals your January 28, 2015 letter 

denying renewal of the company's self-insurance policy 

effective March 1, 2015. Manor Care denies that it is in 

violation of Ohio Administrative Code §4123-19-03(K)(7). 

Manor Care further denies that it has underpaid any benefits 

to which the referenced claimants (Katalin Palotay and Mozell 

Kelly) were entitled and/or that the Bureau was not properly 

and fully reimbursed for any payments so made. Please be 

advised that, under protest and with full reservation of rights, 

Manor Care has processed the disputed amounts for payment, 

and we expect that the checks will be mailed to the claimants 

by the end of this week. Proof of payment will be provided. 

{¶ 29} 16. By letter dated February 6, 2015, relator's counsel informed Kelly: 

Our firm represents your former employer, Manor Care. 

Enclosed is 1 check totaling $47,058.40. This represents the 

amount the Bureau of Workers' Compensation (BWC) has 

directed Manor Care to pay you. BWC conducted an audit in 

September 2014 and determined that your Permanent Total 

Disability (PTD) rate should have been set higher. Manor Care 

is paying this amount under protest and believes you have 

received the correct total amount of weekly compensation at 

all times since you were declared permanently and totally 

disabled in 1995. Due to an apparent bookkeeping error, you 

previously received too little PTD compensation but, at the 

same time, you received too much Disabled Workers' Relief 

Fund (DWRF) compensation. The amount of underpaid PTD 

compensation exactly equals the amount of overpaid DWRF 

compensation. Despite the fact that the total amount due has 

been paid, the BWC has commanded Manor Care to send you 

this check. 

{¶ 30} 17. Also by letter dated February 6, 2015, relator's counsel informed Palotay: 

Our firm represents your former employer, Manor Care. 

Enclosed are 3 checks totaling $36,872.74. This represents 

the amount the Bureau of Workers' Compensation (BWC) has 

directed Manor Care to pay you. BWC conducted an audit in 
No. 17AP-864 11 

September 2014 and determined that your Permanent Total 

Disability (PTD) rate should have been set higher. Manor Care 

is paying this amount under protest and believes you have 

received the correct total amount of weekly compensation at 

all times since you were declared permanently and totally 

disabled in 1993. Due to an apparent bookkeeping error, you 

previously received too little PTD compensation but, at the 

same time, you received too much Disabled Workers' Relief 

Fund (DWRF) compensation. The amount of underpaid PTD 

compensation exactly equals the amount of overpaid DWRF 

compensation. Despite the fact that the total amount due has 

been paid, the BWC has commanded Manor Care to send you 

these checks. 

{¶ 31} 18. Following a September 16, 2015 conference (or hearing) a three-member 

SIRP panel mailed an order on January 15, 2016, stating: 

The issue presented concerned the employer's appeal of the 

denial of its request for reimbursement or a credit from BWC 

for amounts paid in claims for two injured workers. 

Specifically, the employer is requesting $78,897.34 for 

underpaid permanent total disability ("PTD") compensation 

in claims for Katolin [sic] Palotay (926966-22, 946901-22, 

L21469-22) and for Mozell Kelly (942061-22). 

The statement of facts prepared by the Self-Insured 

Department states that in August of 2014, during a BWC audit 

of the employer's self-insured claim files, it was determined 

that PTD compensation was underpaid in the four claims 

referenced above from approximately 1992 to the time of the 

audit. The employer corrected the PTD rates going forward, 

but refused to pay underpaid PTD compensation, arguing that 

Disabled Workers' Relief Fund ("DWRF") benefits were 

overpaid over the same time period, and should be offset 

against the underpaid PTD. The Self-Insured Department 

required the self-insuring employer to pay underpaid PTD 

compensation directly to the injured workers. In the 

meantime, BWC issued DWRF overpayment orders in the 

four claims, as DWRF was paid based on incorrect PTD rates 

reported to BWC by the self-insuring employer. The DWRF 

overpayment orders were subsequently vacated by a staff 

hearing officer ("SHO") of the Industrial Commission ("IC"). 

The employer initially appealed the SHO orders, and then 

withdrew the appeals. The employer has requested 

reimbursement or a credit from BWC in the amount of the 

underpaid PTD compensation, which were both denied by the 

Self-Insured Department, resulting in this appeal. 
No. 17AP-864 12 

At the conference, the employer's representatives 

acknowledged that the PTD compensation had been 

underpaid for years, but argued that the injured workers 

received DWRF benefits over this timeframe, and therefore 

received everything to which they were entitled. The 

representatives stated that the employer reimbursed BWC for 

all DWRF benefits paid in the claims, and that the overpaid 

DWRF benefits should be offset against the underpaid PTD 

compensation. The representatives further argued that the 

Self-Insured Department should not have required the 

employer to pay the underpaid PTD compensation directly to 

the injured workers. The employer regarded this as an 

accounting ledger issue, where perhaps the wrong amounts 

were paid for PTD and DWRF, in that too little PTD was paid, 

and too much DWRF was paid, but the injured workers 

suffered "no harm, no foul." The employer also expressed its 

willingness to pay self-insured assessments on the underpaid 

PTD compensation. The Panel was advised that since the SelfInsured Department required the employer to pay the 

underpaid PTD compensation, the injured workers are not 

overpaid, and BWC should either reimburse the employer for 

the underpaid PTD compensation, or make the employer 

whole by granting it a credit. 

Ohio Revised Code Section 4123.46(B) requires self-insuring 

employers to provide, at a minimum, the same level of 

medical care, compensation, and benefits that would be 

provided to injured workers employed by a participant in the 

state insurance fund. Ohio Revised Code Section 4123.35(G) 

permits BWC to audit and monitor self-insured workers' 

compensation programs to ensure employers are in full 

compliance with all requirements. The statute is 

supplemented by Ohio Administrative Code Rules 4123-19-

03(I), 4123-19-08(C), 4123-19-09(C)(2), and 4123-19-10, the 

latter of which permits audits to determine if a self-insuring 

employer is in full compliance with all requirements, 

including the proper payment of compensation or benefits. 

The Disabled Workers' Relief Fund was established in 1953 to 

provide supplemental benefits to workers who have been 

granted PTD awards with low benefit rates. Ohio Revised 

Code Section 4123.411(C) provides the following: 

For a self-insuring employer, the bureau of workers' 

compensation shall pay to employees who are participants 

regardless of the date of injury, any amounts due the 

participants under section 4123.414 [4123.41.4] of the Revised 
No. 17AP-864 13 

Code and shall bill the self-insuring employer, semiannually, 

for all amounts paid to a participant. 

The statute is supplemented by Ohio Administrative Code 

Rule 4123-17-29(B)(1), which provides the following: 

Each self-insuring employer shall reimburse the bureau 

for DWRF payments made in claims in which it is the 

employer of record, without regard to the date the 

employer was granted the privilege to pay compensation 

directly, for all DWRF payments made on or after August 22, 

1986. (Emphasis added.) 

Prior to 1986, DWRF benefits were funded by employer 

payroll assessments charged to both state fund and selfinsuring employers. In 1986, the General Assembly changed 

the DWRF funding mechanism for self-insuring employers, 

and BWC began billing each self-insuring employer of record 

for the full amount of DWRF payments made after August 22, 

1986, without regard to the date of injury, in accordance with 

the provisions referenced above. The change in the funding 

mechanism was upheld by the Ohio Supreme Court in the case 

of Wean Inc. v. Industrial Commission of Ohio (1990), 52 

Ohio St.3d 266. In that case, the Court stated that "selfinsured employers are currently responsible to reimburse the 

bureau for all past, present and future employees who are 

eligible for the DWRF." Id. at 269. 

BWC's right to be reimbursed by self-insuring employers for 

DWRF benefits was also upheld in the case of Goodyear Tire 

& Rubber Co. v. Ohio Bureau of Workers' Compensation, 

2000 WL 192364 (Ohio App. 10th Dist.), in which the Court 

found that a "self-insured employer's obligation for 

reimbursement arises at the time disbursements are made, 

rather than at the time the workers' right to receive them 

accrues under the other pertinent DWRF statutory sections." 

Id. at 5. In that case, self-insuring employers challenged 

invoices to reimburse BWC for lump sum DWRF benefits paid 

to claimants whose DWRF eligibility was not determined until 

substantial arrearages had accrued. The court determined 

that the obligation for a self-insuring employer to reimburse 

BWC for DWRF benefits arises at the time BWC pays the 

DWRF benefits, stating this is the "current responsibility" 

discussed in the Wean case, which refers to "all current DWRF 

outlays by the BWC regardless of the date of injury in relation 

to the date the employer became self-insured." Id. at 4. 
No. 17AP-864 14 

The Panel has now had an opportunity to review all of the 

information provided by the employer in support of this 

appeal, and notes the following. During a 2014 audit of the 

employer's self-insured workers' compensation program, the 

BWC auditor determined that the employer had paid PTD 

compensation to two injured workers at less than the 

statutory rate. Beginning in 1992, Ms. Palotay was paid 

$156.15 per week in PTD compensation when the correct rate 

was $188.34 per week. Beginning in 1993, Ms. Kelly was paid 

$132.81 per week in PTD compensation, when the correct rate 

was $175.12 per week. As part of the audit process, the 

employer was instructed to pay all underpaid PTD 

compensation to the injured workers, and to correct the PTD 

rate for future compensation. The underpaid PTD 

compensation will be included on the employer's 2015 Report 

of Paid Compensation, upon which self-insured assessments 

are calculated. 

During these timeframes, BWC paid DWRF benefits in good 

faith, based on the incorrect PTD rates reported by the selfinsuring employer, and these benefits were accepted in good 

faith by the injured workers. After the audit, BWC issued 

DWRF overpayment orders in these claims, which were 

subsequently vacated by the IC. As a result, the overpaid 

DWRF benefits may not be collected from future DWRF cost 

of living increases granted to the injured workers. The 

employer then requested reimbursement from BWC for the 

underpaid PTD compensation that it was required to pay to 

the injured workers following the audit. 

As discussed above, DWRF provides supplemental benefits to 

injured workers with low PTD rates, and it is separate from 

the state insurance fund. This employer has been granted the 

privilege of operating a self-insured workers' compensation 

program, and is therefore required to provide the same level 

of PTD compensation that would be paid to an injured worker 

employed by a participant in the state insurance fund. These 

injured workers were also eligible for DWRF benefits. In 

accordance with the statutory scheme, BWC pays these 

supplemental DWRF benefits directly to eligible injured 

workers, and self-insuring employers are obligated to 

reimburse BWC for these amounts. When an audit 

determined that the wrong PTD compensation was paid, the 

self-insuring employer was required to pay the correct 

amount. This part of the risk placed on those granted the 

privilege of operating as a self-insuring employer, and the fact 

that these mistakes impacted the payment of DWRF benefits 
No. 17AP-864 15 

does not change the relationship between the employer and 

BWC into one where BWC insures the employer against its 

own mistakes. 

The Panel therefore finds that the Self-Insured Department 

was authorized to conduct its audit of these claims, and was 

further authorized to instruct the self-insuring employer to 

pay the underpaid PTD compensation, and to correct the PTD 

rate for future compensation. A self-insuring employer's 

obligation to pay PTD compensation to injured workers is 

completely separate from the obligation to reimburse BWC for 

DWRF benefits in a claim. An underpayment of PTD 

compensation owed to an injured worker may not be offset 

against an overpayment in DWRF benefits paid and accepted 

in good faith. Further, BWC is under no obligation to insure 

the self-insuring employer from the consequences of its own 

mistakes. The Panel finds that it was appropriate for the SelfInsured Department to deny the employer's request for 

reimbursement or a credit for underpaid PTD compensation, 

and the employer's appeal is denied. 

(Emphasis sic.) 

{¶ 32} 19. Relator administratively appealed the September 16, 2015 SIRP order to 

the administrator's designee. 

{¶ 33} 20. Following a hearing, the administrator's designee issued a decision dated 

April 6, 2016 that upholds the September 16, 2015 SIRP order. The April 6, 2016 decision 

of the administrator's designee states: 

Pursuant to Ohio Administrative Code Rule 4123-19-14, the 

Administrator's Designee hereby undertakes consideration of 

the employer's appeal of the Self-Insured Review Panel order 

from January 15, 2016. The issue presented concerns the 

employer's request to be reimbursed or to be provided a credit 

against future Disabled Workers' Relief Fund ("DWRF") 

invoices in the amount of $78,897.34 for underpaid 

permanent total disability ("PTD") compensation. 

The order of the Self-Insured Review Panel contains a detailed 

discussion of the proceedings, which the Administrator's 

Designee adopts with additional findings. 

In August of 2014, the Self-Insured Department conducted an 

audit of the employer's self-insured claim files. During the 

audit, it was determined that PTD compensation was 

underpaid in claims for Katolin [sic] Palotay (926966-22, 
No. 17AP-864 16 

946901-22, L21469-22) and for Mozell Kelly (952061-22), 

from 1992 to the time of the audit. While the employer 

corrected the PTD payment rate going forward, it refused to 

pay the underpaid PTD compensation. Instead, the employer 

argued that DWRF benefits were overpaid during the same 

time period, and those payments should be offset against the 

underpaid PTD. The Self-Insured Department required the 

employer to pay the underpaid PTD compensation directly to 

the injured workers, and the employer did make those 

payments. 

At the same time, BWC issued DWRF overpayment orders in 

the four claims, given that the DWRF payments were based 

upon incorrect PTD rates reported to BWC by the selfinsuring employer. These orders were overturned by a Staff 

Hearing Officer ("SHO") of the Industrial Commission ("IC"), 

by orders dated June 3, 2015. Although the employer initially 

appealed these orders, the appeals were later withdrawn. The 

employer then requested reimbursement or a credit in the 

amount of the underpaid PTD compensation, which was 

denied by the Self-Insured Department. This denial resulted 

in the appeal to the Self-Insured Review Panel, which also 

denied the request. 

In its letter dated February 3, 2016, the employer sets forth 

three items for consideration. Initially, the employer 

comments that while the IC did not have jurisdiction to 

compel BWC to reimburse the employer, "certainly the Panel 

has such authority." The Panel did not determine in its order 

that it had no authority to grant the requested relief. The order 

merely states that the denial of relief by the Self-Insured 

Department was appropriate. 

Secondly, the employer states "the Order at least implies that 

Manor Care contest the notion that it must reimburse the 

Bureau dollar-for-dollar for DWRF payments and/or that it 

never made those reimbursements." While there is a lengthy 

discussion of the underpinnings of the DWRF statute and 

rule, including case law interpretation, this relates to the 

general obligation of all self-insuring employers to reimburse 

BWC for DWRF payments. There is no reference in the order, 

explicit or implicit, lending itself to the above interpretation 

set forth by the employer. 

The crux of the appeal is that BWC made "numerous and 

repeated mistakes" that led to the employer being harmed, 

citing various BWC and IC policies. Initially, there is a general 
No. 17AP-864 17 

reference to a BWC guide for self-insuring employers, which 

states that prior to April 1999, the Industrial Commission 

calculated the PTD rate. However, the actual IC orders 

granting PTD to these two injured workers do not contain any 

PTD rate calculations. There is no actual information in the 

evidence presented indicating how the PTD rates were set, or 

what entity set those rates. 

What is known is that the employer would have had access to 

the wage information used to set the PTD compensation. 

Although the employer emphasizes that BWC did not audit 

the PTD compensation for a number of years, the Panel's 

order points out that the DWRF overpayments were "based on 

the incorrect PTD rates reported by the self-insuring 

employer." When the error was discovered, BWC issued 

overpayment orders in these claims so that it could avail itself 

of the opportunity to collect the overpayment from future 

increases in DWRF benefits. The IC denied the motions, but 

the SHO did reiterate in its findings that there was no 

evidence as to how the initial PTD rate was set, and that the 

employer paid PTD compensation at an incorrect rate. 

Additionally, the IC orders of June 3, 2015, also state that 

BWC sent annual letters to the employer documenting the 

DWRF rate calculation, the rate of payment, and notice of an 

opportunity to appeal if the employer disagreed with those 

findings. No appeal was ever taken by the employer. 

The Panel's order sets out in great detail the responsibilities 

of a self-insuring employer with respect to payment of 

compensation and benefits, as well as the requirement to 

reimburse BWC for DWRF benefits paid. This is also reflected 

in the language of the SHO orders dated June 3, 2015, as 

follows: 

"Payment of permanent total disability, in the case of a SelfInsured employer, originates with and issues from that SelfInsured employer. Disable workers' relief fund benefits, not 

considered to be 'compensation', are issued by the Bureau of 

Workers' Compensation at a rate dependent upon the 

permanent total disability compensation rate paid by the SelfInsuring employer." 

DWRF is a separate fund created by statute for a specific 

purpose, to provide supplemental benefits to injured workers 

with low PTD rates of compensation. The employer's 

obligation to reimburse BWC for DWRF benefits is separate 

and distinct from its obligation to pay injured workers their 
No. 17AP-864 18 

awarded compensation. DWRF cannot be used to "offset" an 

incorrect payment of PTD, which is the relief requested by the 

employer. 

In considering this appeal, the Administrator's Designee has 

reviewed all of the material filed by the employer, whether or 

not they have been specifically referred to in this order. 

For these reasons, the Administrator's Designee upholds the 

order of the Self-Insured Review Panel. The employer's appeal 

is denied. 

{¶ 34} 21. On December 7, 2017, relator, Manor Care, Inc., filed this mandamus 

action. 

Conclusions of Law: 

{¶ 35} The main issue is whether the administrator's designee abused her discretion 

in determining that relator shall not be reimbursed from the DWRF fund for its February 

2015 payments to injured workers Kelly and Palotay for the PTD underpayments. 

{¶ 36} Finding no abuse of discretion it is the magistrate's decision that this court 

deny relator's request for a writ of mandamus, as more fully explained below. 

DWRF – Pertinent Statutes and Case Law

{¶ 37} R.C. 4123.411through 4123.419 sets forth the statutory framework regarding 

the DWRF fund. 

{¶ 38} R.C. 4123.411(C) sets forth a funding mechanism with respect to self-insured 

employers: 

For a self-insuring employer, the bureau of workers' 

compensation shall pay to employees who are participants 

regardless of the date of injury, any amounts due to the 

participants under section 4123.414of the Revised Code and 

shall bill the self-insuring employer, semiannually, for all 

amounts paid to a participant. 

{¶ 39} R.C. 4123.412 creates DWRF as a fund separate from the state insurance 

fund. Although the state treasurer has custody of the fund, disbursements from the fund 

are made by the bureau. 

{¶ 40} R.C. 4123.413 defines participant eligibility: 

To be eligible to participate in said fund, a participant must be 

permanently and totally disabled and be receiving workers' 
No. 17AP-864 19 

compensation payments, the total of which, when combined 

with disability benefits received pursuant to The Social 

Security Act is less than three hundred forty-two dollars per 

month adjusted annually as provided in division (B) of section 

4123.62of the Revised Code. 

{¶ 41} R.C. 4123.414establishes the amount of payments to eligible DWRF 

participants: 

Each person determined eligible, pursuant to section 

4123.413of the Revised Code, to participate in the disabled 

workers' relief fund is entitled to receive payments, without 

application, from the fund of a monthly amount equal to the 

lesser of the difference between three hundred forty-two 

dollars, adjusted annually pursuant to division (B) of section 

4123.62of the Revised Code, and: 

(1) The amount he is receiving per month as the disability 

monthly benefits award pursuant to The Social Security Act; 

or 

(2) The amount he is receiving monthly under the workers' 

compensation laws for permanent and total disability. * * * 

Such payments shall be made monthly during the period in 

which such participant is permanently and totally disabled. 

{¶ 42} R.C. 4123.416provides in part: 

The administrator of workers' compensation shall promptly 

require of each employer who has elected to pay 

compensation direct under the provisions of section 

4123.35of the Revised Code a verified list of the names and 

addresses of all persons to whom the employer is paying 

workers' compensation on account of permanent and total 

disability and the evidence respecting such persons as the 

administrator reasonably deems necessary to determine the 

eligibility of any such person to participate in the disabled 

workers' relief fund. 

{¶ 43} Supplementing the statute, Ohio Adm.Code 4123-17-29(B) provides: 

(1) Each self-insuring employer shall reimburse the bureau for 

DWRF payments made in claims in which it is the employer 

of record, without regard to the date the employer was granted 

the privilege to pay compensation directly, for all DWRF 

payments made on or after August 22, 1986. 
No. 17AP-864 20 

(2) Self-insuring employers shall be billed on a semi-annual 

basis for the DWRF payments made pursuant to this rule. 

{¶ 44} In Wean Inc. v. Indus. Comm., 52 Ohio St.3d 266 (1990), the Supreme Court 

of Ohio had occasion to summarize the statutory history of DWRF. The court states: 

The Disabled Workers' Relief Fund ("DWRF") was created in 

1953 by the General Assembly to provide a subsidy to 

qualifying recipients of workers' compensation. To qualify, an 

employee, pursuant to R.C. 4123.412through 4123.414, must 

be permanently and totally disabled as a result of occupational 

injury or disease and whose workers' compensation benefits, 

when combined with Social Security Act disability payments, 

fall below a statutorily mandated amount. 

From 1953 to 1959, DWRF generated its funds from the state's 

general revenues. In 1959, the General Assembly, pursuant to 

R.C. 4123.411, altered the plan of financing the program and 

provided for an employer payroll assessment. R.C. 

4123.411provided, in its original form, that appellant 

Industrial Commission of Ohio ("commission") levy an 

assessment against all amenable employers in January of each 

year and that the rate was not to exceed three cents per 

hundred dollars of payroll. The commission's authority to 

maintain and administer the DWRF is derived from Section 

35, Article II of the Ohio Constitution. 

Since 1959, R.C. 4123.411has been amended on numerous 

occasions. For instance, in 1975, the statute was amended 

increasing the employer payroll assessment from a maximum 

of three cents to five cents per one hundred dollars of payroll. 

When assessments were found to be insufficient, investment 

income from the State Insurance Fund was provided, a 

funding procedure approved by this court in Thompson v. 

Indus. Comm. (1982), 1 Ohio St. 3d 244, 1 OBR 265, 438 N.E. 

2d 1167. 

In 1980, the assessment was again increased to a minimum of 

five cents but not to exceed ten cents per one hundred dollars 

of payroll. This assessment was to be apportioned among four 

classes of employers: (1) private fund, (2) counties and taxing 

districts, (3) the state, and (4) self-insurers. 

In 1986, the General Assembly decided once again to change 

the funding plan. Effective August 22, 1986, R.C. 4123.411(A) 
No. 17AP-864 21 

was amended to remove self-insured employers as one of the 

four classes established in 1980. In addition, R.C. 4123.411(C) 

provided that self-insured employers shall be liable for the full 

amount of DWRF payments to qualified employees 

"regardless of the date of injury." The DWRF payment is made 

by appellant Ohio Bureau of Workers' Compensation 

("bureau") to the qualifying employee, after which the bureau 

collects the payment from the self-insured employers. 

Id. at 266. 

Relator's Argument

{¶ 45} It is undisputed that relator, as a self-insured employer, underpaid PTD 

compensation to injured workers Palotay and Kelly beginning with the inception of the PTD 

awards in 1994 and 1995 until the 2014 audit disclosed the underpayments. Upon being 

informed of the underpayments, relator corrected the PTD compensation going forward, 

but refused to correct the PTD compensation for the period prior to that. 

{¶ 46} Relator argues that neither the bureau nor the injured workers suffered 

damage from the underpayments because the bureau's DWRF payments covered the 

underpayments and relator has reimbursed the bureau on receiving the bureau's DWRF 

bills. Relator also points out that relator's payments to the injured workers to correct the 

PTD underpayments has created a windfall in DWRF benefits to the injured workers. 

The Bureau's Argument

{¶ 47} The position of the administrator's designee and SIRP is that, as a selfinsured employer, it is obligated by statute and rule to pay the correct amount of PTD 

compensation regardless that the underpayment correction causes a DWRF overpayment. 

{¶ 48} In reaching this position, SIRP explained: 

A self-insuring employer's obligation to pay PTD 

compensation to injured workers is completely separate from 

the obligation to reimburse BWC for DWRF benefits in a 

claim. An underpayment of PTD compensation owed to an 

injured worker may not be offset against an overpayment in 

DWRF benefits paid and accepted in good faith. Further, BWC 

is under no obligation to insure the self-insuring employer 

from the consequences of its own mistakes. 
No. 17AP-864 22 

Analysis

{¶ 49} Clearly, SIRP's position is premised, at least in part, on a finding that the 

underpayment of PTD compensation was the result of relator's "own mistakes." The 

administrator's designee concurs in the SIRP finding when she states "[w]hat is known is 

that the employer would have had access to the wage information used to set the PTD 

compensation." Thus, both SIRP and the administrator designee place some fault on 

relator in reaching their decisions to deny relator's appeal. 

{¶ 50} Based on the evidence before SIRP and the administrator's designee, this 

magistrate cannot find an abuse of discretion with regard to the element of fault relied on 

by SIRP and the administrator's designee. See State ex rel. Lutheran Hosp. v. Buehrer, 

10th Dist. No. 13AP-670, 2015-Ohio-380. 

{¶ 51} "To be entitled to a writ of mandamus, a relator must carry the burden of 

establishing that he or she has a clear legal right to the relief sought, that the respondent 

has a clear legal duty to perform the requested act, and that the relator has no plain and 

adequate remedy in the ordinary course of law." State ex rel. Van Gundy v. Indus. Comm., 

111 Ohio St.3d 395, 2006-Ohio-5854, ¶ 13. 

{¶ 52} "[T]he appropriate standard of proof in mandamus cases is proof by clear and 

convincing evidence." State ex rel. Doner v. Zody, 130 Ohio St.3d 446, 2011-Ohio-6117, 

¶ 55, citing State ex rel. Pressley v. Indus. Comm., 11 Ohio St.2d 141, 161 (1967). 

{¶ 53} Moreover, "[i]t is axiomatic that in mandamus proceedings, the creation of 

the legal duty that a relator seeks to enforce is the distinct function of the legislative branch 

of government, and courts are not authorized to create the legal duty enforceable in 

mandamus." State ex rel. Pipoly v. State Teachers Retirement Sys., 95 Ohio St.3d 327, 

2002-Ohio-2219, ¶ 18. 

{¶ 54} Based on the above analysis, it is the magistrate's decision that this court deny 

relator's request for a writ of mandamus. 

 

 /S/ MAGISTRATE 

 KENNETH W. MACKE 
No. 17AP-864 23 

NOTICE TO THE PARTIES 

Civ.R. 53(D)(3)(a)(iii) provides that a party shall not assign as 

error on appeal the court's adoption of any factual finding or 

legal conclusion, whether or not specifically designated as a 

finding of fact or conclusion of law under Civ.R. 53(D)(3)(a)(ii), 

unless the party timely and specifically objects to that factual 

finding or legal conclusion as required by Civ.R. 53(D)(3)(b).