[Cite as State ex rel. Daily Servs., L.L.C. v. Buehrer, 2016-Ohio-8333.]

IN THE COURT OF APPEALS OF OHIO 

TENTH APPELLATE DISTRICT 

State of Ohio ex rel. Daily Services, LLC, : 

 

 Relator, : 

v. : No. 14AP-405 

Stephen Buehrer, Administrator, : (REGULAR CALENDAR) 

Ohio Bureau of Workers' Compensation, 

 : 

 Respondent. 

 : 

 

D E C I S I O N 

Rendered on December 22, 2016 

 

On brief: Law Office of W. Evan Price II, LLC, and W. 

Evan Price, II, for relator. Argued: W. Evan Price, II. 

On brief: Porter, Wright, Morris & Arthur LLP, James A. 

King and David S. Bloomfield, Jr., for respondent. 

Argued: James A. King. 

 

 

IN MANDAMUS 

ON OBJECTIONS TO THE MAGISTRATE'S DECISION 

KLATT, J. 

{¶ 1} Relator, Daily Services, LLC, commenced this original action in mandamus 

seeking an order compelling respondent, the Administrator of the Ohio Bureau of 

Workers' Compensation ("bureau"), to vacate the November 14, 2013 order finding that 

relator is the successor of I-Force, LLC, and therefore, has the rights and obligations of IForce under the workers' compensation law pursuant to former Ohio Adm.Code 4123-17-

02(C) ("2006 successor liability rule"), and to enter an order finding that relator is not the 

successor of I-Force. 
No. 14AP-405 2 

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

Appeals, we referred this matter to a magistrate who issued a decision, including findings 

of fact and conclusions of law, which is appended hereto. The magistrate found that the 

undisputed facts fail to support the bureau's determination that relator "wholly 

succeeded" I-Force in the operation of its business. Because relator did not wholly 

succeed I-Force in the operation of its business, the bureau abused its discretion in 

finding that relator has the rights and obligations of I-Force under the workers' 

compensation law. Based upon this determination, the magistrate has recommended that 

we grant relator's request for a writ of mandamus. 

{¶ 3} The bureau has filed three objections to the magistrate's decision. In its first 

objection, the bureau contends that the magistrate erred by failing to make factual 

findings relevant to the merits of the successor liability issue. In addition, the bureau 

contends that the magistrate should have applied a deferential standard of review to the 

facts already found by the adjudicating committee. We find this argument unpersuasive. 

{¶ 4} The magistrate applied a deferential standard of review to the factual 

findings of the adjudicating committee and the administrator designee. In fact, the 

magistrate included most of those factual findings in the findings of fact section of his 

decision by expressly quoting the relevant portions of the adjudicating committee's 

decision and the decision of the administrator designee. However, the magistrate 

concluded that those factual findings demonstrate that relator did not wholly succeed the 

business operations of I-Force. 

{¶ 5} Because the magistrate made the necessary factual findings and applied a 

deferential standard of review to the bureau's factual findings, we overrule the bureau's 

first objection. 

{¶ 6} In its second objection, the bureau contends the magistrate wrongly 

concluded that the bureau lacked a factual basis for the determination that relator wholly 

succeeded the business operation of I-Force for purposes of the 2006 successor liability 

rule. We disagree. 

{¶ 7} The bureau makes several arguments in support of this objection. First, the 

bureau argues that the magistrate wrongly found that the bureau applied the wrong 

version of the successor liability rule. The premise of the bureau's argument is incorrect. 
No. 14AP-405 3 

The magistrate did not find that the bureau applied the wrong version of the rule. Quite 

the contrary, it is clear that the magistrate recognized that the bureau applied the 2006 

successor liability rule. Therefore, this argument is without merit. 

{¶ 8} Next, the bureau argues that there are compelling facts to support the 

conclusion that relator wholly succeeded I-Force's business operations for purposes of the 

2006 successor liability rule, thereby permitting the bureau to transfer I-Force's rights 

and obligations to relator. We disagree. 

{¶ 9} The 2006 successor liability rule states as follows: 

(C) Succeeding employers -- risk coverage transfer. 

(1) Whenever one employer succeeds another employer in the 

operation of a business in whole or in part, the successor shall 

notify the bureau of the succession. Where one employer 

wholly succeeds another in the operation of a business, the 

bureau shall transfer the predecessor's rights and obligations 

under the workers' compensation law. The successor shall be 

credited with any credits of the predecessor, including the 

advance premium security deposit of the predecessor. This 

paragraph shall apply where an employer wholly succeeds 

another employer in the operation of business on or after 

September 1, 2006. 

Former Ohio Adm.Code 4123-17-02. 

{¶ 10} The language of the rule indicates that the drafters recognized the difference 

between a whole and partial succession of business operations. Notice to the bureau is 

required if one employer succeeds another employer's business operations in whole or in 

part. But, for the transfer of a predecessor's rights and obligations under the workers' 

compensation law, an employer must "wholly succeed" the predecessor's business 

operations. There is no reference to a partial succession for the transfer of a predecessor's 

rights and obligations. 

{¶ 11} Here, it is undisputed that relator did not purchase any of I-Force's assets. 

Nor did it directly acquire any of I-Force's business. We recognize that with I-Force's 

assistance, relator was able to attract the business of many of I-Force's former customers 

and it quickly hired 54 of I-Force's 71 permanent staff. Nevertheless, relator attracted 

only about one-third of I-Force's former customers, which represented about 50 percent 

of I-Force's sales. Relator also renegotiated leases for approximately 11 out of I-Force's 30 
No. 14AP-405 4 

former locations. We agree with the magistrate that these undisputed facts fail to support 

the bureau's determination that relator "wholly succeeded" I-Force's business for 

purposes of the transfer of I-Force's rights and obligations under the workers' 

compensation law. 

{¶ 12} Highlighting the "some evidence standard," the bureau points to a number 

of facts that it contends demonstrate that relator orchestrated a business strategy to take 

over the most profitable aspects of I-Force's business by cherry picking certain customers, 

employees, and business locations. We agree that the factual findings support the 

conclusion that this was relator's business strategy. Nevertheless, simply because relator 

acquired some of the most profitable aspects of I-Force's business does not establish that 

relator "wholly succeeded" the business operations of I-Force, which is the standard set 

forth in the 2006 successor liability rule for the transfer of a predecessor's rights and 

obligations under the workers' compensation law. 

{¶ 13} The bureau cites to RFFG, LLC v. Ohio Bur. of Workers' Comp., 10th Dist. 

No. 11AP-647, 2013-Ohio-241, aff'd., 141 Ohio St.3d 331, 2014-Ohio-5199, State ex rel. 

V & A Risk Servs. v. Ohio Bur. of Workers' Comp., 10th Dist. No. 11AP-742, 2012-Ohio3583, and AWL Transport, Inc. v. Ohio Dept. of Job and Family Servs., 10th Dist. No. 

15AP-674, 2016-Ohio-2954 in support of its arguments. We find these cases 

unpersuasive. None of these cases involve a determination of whether an employer has 

wholly succeeded another in the operation of a business for purposes of the transfer of the 

predecessor's rights and obligations under the workers' compensation law. Both RFFG

and V & A Risk involved successor-in-interest determinations in the context of experience 

ratings and whether there had been a change in the nature of the risk for the ongoing 

business. AWL Transport involved a successor-in-interest determination for purposes of 

unemployment compensation pursuant to a different statute that sets out a different 

standard. Again, none of these cases shed any light on what facts are necessary to 

establish that an employer has "wholly succeeded" another in the operation of a business 

as set forth in the 2006 successor liability rule.

{¶ 14} Lastly, the bureau argues that the relator's intent should be a factor that can 

be considered in determining if relator wholly succeeded I-Force's business operations. 

Contrary to the bureau's assertion, the magistrate did not hold that intent was an 
No. 14AP-405 5 

irrelevant factor. Rather, the magistrate simply noted that in a subsequent version of the 

successor liability rule, intent was an express ground for authorizing the transfer of the 

predecessor employer's rights and obligations. That express ground does not exist in the 

2006 successor liability rule. Without excluding intent as a possible factor, the magistrate 

concluded that by attracting only about a third of I-Force's former customers, which 

represented about 50 percent of I-Force's sales, hiring 54 of I-Force's 71 permanent staff, 

and by renegotiating leases for approximately 11 out of I-Force's 30 former locations, 

relator did not wholly succeed the business operations of I-Force as required by the 2006 

successor liability rule. The magistrate simply noted that the result may have been 

different under the subsequent version of the rule.

{¶ 15} For all these reasons, we overrule the bureau's second objection.

{¶ 16} In its third and final objection, the bureau contends the magistrate erred by 

failing to address its argument that, because relator did not challenge the bureau's 

transfer of I-Force's experience rating to relator, relator cannot challenge the transfer of IForce's rights and obligations. We agree that the magistrate did not expressly address this 

argument, but for the reasons suggested in the magistrate's decision, we find the 

argument unpersuasive.

{¶ 17} There is a significant difference between determining succession in the 

context of experience rating where the focus is on whether there has been a change in the 

business functions and the nature of the workplace risk, and succession for purposes of 

the transfer of rights and obligations under the workers' compensation law, where the 

focus is on whether an employer has wholly succeeded the business operations of a 

predecessor employer.

{¶ 18} Therefore, relator's failure to contest the transfer of I-Force's experience 

rating does not preclude relator's argument that it did not wholly succeed I-Force's 

business operations for purposes of the transfer of I-Force's rights and obligations. For 

these reasons, we overrule the bureau's third and final objection.

{¶ 19} Following an independent review of this matter, we find that the magistrate 

has properly determined the facts and applied the appropriate law. Therefore, we adopt 

the magistrate's decision as our own, including the findings of fact and conclusions of law 
No. 14AP-405 6 

contained therein. In accordance with the magistrate's decision, we grant relator's 

request for a writ of mandamus.

Objections overruled; writ of mandamus granted.

TYACK and BRUNNER, JJ., concur. 

 
No. 14AP-405 7 

APPENDIX 

IN THE COURT OF APPEALS OF OHIO 

TENTH APPELLATE DISTRICT 

State of Ohio ex rel. Daily Services, LLC, : 

 

 Relator, : 

v. : No. 14AP-405 

Stephen Buehrer, Administrator, : (REGULAR CALENDAR) 

Ohio Bureau of Workers' Compensation, 

 : 

 Respondent. 

 : 

 

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

Rendered on May 11, 2016

 

Law Office of W. Evan Price II, LLC, and W. Evan Price, II,

for relator. 

Porter, Wright, Morris & Arthur LLP, James A. King and 

David S. Bloomfield, Jr., for respondent. 

 

IN MANDAMUS 

{¶ 20} In this original action, relator, Daily Services, LLC ("Daily Services" or 

"relator"), requests a writ of mandamus ordering respondent, the Administrator of the 

Ohio Bureau of Workers' Compensation ("administrator" or "bureau"), to vacate the 

November 14, 2013 order of the administrator's designee finding that relator is the 

successor to I-Force, LLC ("I-Force") and therefore liable for the rights and obligations of 

I-Force pursuant to former Ohio Adm.Code 4123-17-02(C)(1), and to enter an order 

finding that relator is not the successor of I-Force. 
No. 14AP-405 8 

Findings of Fact: 

{¶ 21} 1. In a prior decision in this action, State ex rel. Daily Services, LLC v. 

Buehrer, 10th Dist. No. 14AP-405, 2015-Ohio-4956, this court determined that the 

bureau retained jurisdiction over an October 15, 2009 order of its adjudicating committee 

("AC") that had ruled on relator's protest and affirmed the bureau's experience 

combination of Daily Services and I-Force. This court held that the bureau had 

appropriately exercised its jurisdiction through an order issued by its AC following a 

March 20, 2013 hearing and an order issued by the administrator's designee following a 

November 14, 2013 hearing. This court held that the bureau had retained jurisdiction to 

adjudicate that portion of relator's protest regarding its liability for the rights and 

obligations of I-Force. This court remanded this action to the magistrate with instructions 

to address the merits of the successor liability determination by the March 20, 2013 AC 

and the November 14, 2013 administrator's designee. 

{¶ 22} 2. As noted in the prior findings of fact, I-Force was in the business of 

providing temporary staffing services to its customer employers. Up to the time it closed 

its business on or about March 23, 2009, I-Force was owned by Ryan Mason. I-Force had 

opened a workers' compensation policy with the bureau in April 2006. Daily Services was 

also in the business of providing temporary staffing services to its customer employers. 

Daily Services was also owned by Ryan Mason at the time that I-Force closed its business. 

{¶ 23} 3. As noted in the prior findings of fact, in April and May 2009, the bureau 

conducted an audit of Daily Services. By letter dated May 22, 2009, the bureau notified 

relator that it is the successor employer of I-Force, that Daily Services is responsible for 

the financial rights and obligations of I-Force, and that the experiences of I-Force and 

Daily Services were being combined to establish the premium rate for Daily Services. 

{¶ 24} 4. By letter dated June 15, 2009, relator's counsel protested the bureau's 

decision. 

{¶ 25} 5. Following an October 15, 2009 hearing, the bureau's AC issued an order 

that affirmed the experience combination based on agreement of the parties. However, 

the order failed to determine whether Daily Services was the successor of I-Force for 

purposes of imposing I-Forces' liabilities on Daily Services. 
No. 14AP-405 9 

{¶ 26} 6. Following a complexity of legal proceedings in the courts, on 

March 20, 2013, the bureau's AC heard relator's protest. Thereafter, the AC issued a 

lengthy order (23 pages). Approximately nine of those pages are reprinted here: 

Background Facts and Issues Presented: In May 2009, 

the Bureau determined that Daily Services, LLC was the 

successor to I-Force, LLC and responsible for I-Force's 

unpaid premiums. In June 2009, the Bureau issued invoices 

to Daily Services, billing Daily Services for I-Force's unpaid 

premiums. The invoices noted that Daily Services was the 

successor to I-Force, LLC and responsible for I-Force's 

unpaid premiums, stating that, "[a]s the successor to I-Force 

LLC, you are responsible for any total balance shown on the 

Invoice/Statement for this policy." 

In a letter dated June 15, 2009, the employer protested the 

Bureau's determination that Daily Services was a successor 

in interest to I-Force within the meaning of O.A.C. 4123-17-

02(C). Specifically, the employer argued that the "amount 

invoiced is a liability solely of I-Force, not Daily 

[Services]...." 

On October 15, 2009, the Bureau's Adjudicating Committee 

held a hearing on the employer's protest. The statement of 

facts for that hearing noted that the Bureau would 

determine, first, whether I-Force's experience should be 

transferred to Daily Services under O.A.C. 4123-17-02(B), 

and, second, whether Daily Services was a successor to IForce and thus was liable for I-Force's obligations under 

O.A.C. 4123-17-02(C). 

In a decision dated October 15, 2009, the Adjudicating 

Committee held that I-Force's experience should be 

transferred to Daily Services under O.A.C. 4123-17-02(B). As 

determined by two judges of the Franklin County Court of 

Common Pleas, however, the Adjudicating Committee never 

determined the second issue, i.e., whether Daily Services was 

a successor to I-Force and thus was liable for I-Force's 

obligations under O.A.C. 4123-17-02(C). 

Therefore, this hearing is scheduled with the Adjudicating 

Committee to provide the employer the opportunity to fully 

administratively adjudicate the Bureau's determination on 

successor liability under O.A.C. 4123-17-02(C). 
No. 14AP-405 10 

Employer's Position: 

I-Force did not voluntarily transfer its business operations so 

that Daily Services wholly succeeded I-Force for workers' 

compensation purposes. In "trying to figure out who 

succeeded I-Force, you look at I-Force and say where did its 

customers go?" (Transcript of Hearing at 58, hereinafter, Tr. 

at ). See Hearing Brief of Daily Services, transcript of 

hearing, and discussion below for details of position. 

Bureau's Position: 

The question is, is Daily Services a transferee of I-Force's 

business? Daily Services agreed it wholly succeeded I-Force 

in the 2009 hearing. An employer does not wholly succeed 

for one purpose and not wholly succeed for another. In 

February of 2009, Mr. Ryan Mason renamed Daily Services 

to Talocity because Daily Services denotes day laborers and 

that is not what I-Force did so a name change was needed. 

The date of the transfer of operations was March 23, 2009. 

Mr. Mason directed the employees of I-Force, now Daily 

Services to transition the business slowly so red flags don't 

go off in the eyes of the bureau. This is the same business. 

It's just operating under a different name, but a year later it's 

operating under the same name. Fifty percent of sales from 

customers were transferred from I-Force to Daily Services. 

Daily Services identified and shed client employers with a 

poor claims record. Exhibit 28 shows a comparison of IForce's website in February 2009, before the sale, with IForce's website today and the history of the company going 

back to 1996 is the same. The [State ex rel. Cleveland 

Professional Football, LLC v. Buehrer, 10th Dist. No. 11AP428, 2012-Ohio-6020] and [State ex rel. K&D Group, Inc. v. 

Buehrer, 135 Ohio St.3d 257, 2013-Ohio-734] cases do not 

apply to this scenario. The [State ex rel. RFFG, LLC v. Ohio 

Bureau of Workers' Comp., 10th Dist. No. 11AP-647, 2013-

Ohio-241] case does apply because the experience 

combination was upheld and both companies are temporary 

help businesses. 

Statement of Facts

[One] Per counsel for Daily Services at hearing, "I-Force 

before 2006 was a division of Mancan, which is part of 

Manpower, and in 2006, I-Force was - - the assets of a 

portion of Mancan were sold and that was what created IForce and Daily Services...." (Tr. at 72). Mancan was owned 

by Ryan Mason's father and Ryan Mason managed the 
No. 14AP-405 11 

Columbus/Central Ohio division of Mancan. (Tr. at 73). Mr. 

Mason acquired the Central Ohio division of Mancan. Id. 

[Two] Daily Services is a temporary employment service 

agency owned by Ryan Mason operating out of Columbus, 

Ohio. 

[Three] Daily Services has had a workers' compensation 

policy (1495057) since April 3, 2006. 

[Four] For payroll reporting period 01/01/2008 -

06/30/2008, Daily Services reported $197,470.00 in payroll. 

[Five] For payroll reporting period 07/01/2008 -

12/31/2008, Daily Services reported $691,324.00 in payroll. 

[Six] For payroll reporting period 01/01/2009 - 

06/30/2009, Daily Services reported $5,298,626.00 in 

payroll. 

[Seven] Daily Services was participating in a group rating 

program the second half of 2008 and first half of 2009, and 

was credit rated with an experience modifier of 0.15. 

[Eight] I-Force is a temporary employment service agency 

owned by Ryan Mason operating out of Columbus, Ohio. 

[Nine] I-Force opened a workers' compensation policy 

(1484986) effective 12/19/2005. 

[Ten] Force and Daily Services are located in adjacent 

buildings on Morse Road in Columbus. 

[Eleven] Daily Services registered the trade name Talocity 

with a date of first use 2/16/2009. 

[Twelve] In 2008, Mr. Mason applied for self-insured status 

for I-Force and Daily Service. The Self-Insured Review Panel 

denied the application. An appeal to the Administrator's 

Designee was denied. 

[Thirteen] For payroll period 01/01/2008 - 06/30/2008, IForce reported $26,363,641.00 in payroll that resulted in a 

premium of $210,413.74 based on its experience modifier 

established for that reporting period while participating in a 

group rating program. 
No. 14AP-405 12 

[Fourteen] Due to a poor claims history, I-Force lost group 

rating status on June 30, 2008. 

[Fifteen] In the second half of 2008 I-Force's experience 

modifier increased to 1.80. An experience modifier above 

1.00 is penalty rated. 

[Sixteen] For payroll period 07/01/2008 - 12/31/2008, IForce's payroll of approximately $28,000,000 generated a 

premium of approximately $3.5 million dollars. 

[Seventeen] For payroll reporting period 07/01/2008 — 

12/31/2008, premiums were due by February 28, 2009. IForce filed a payroll report but did not make the payroll 

payment for the second half of 2008. 

[Eighteen] In April and May of 2009, the Bureau initiated 

and was conducting an audit of Daily Services. 

[Nineteen] On April 29, 2009, the Bureau executed a 

subpoena where payroll records and client lists were 

obtained. 

[Twenty] As part of this audit, on 5/12/2009 and 5/19/2009, 

an auditor with the Employer Compliance Department and 

investigators from the Special Investigations Unit conducted 

interviews of former employees of I-Force. 

[Twenty-one] The following statements were made by Daily 

Services through counsel: 

The contracts between I-Force and its customers were not 

assignable. (Tr. at 47). I-Force did sign up its customers with 

requirements contracts. Id. The customers at anytime could 

choose to leave and go somewhere else. Id. I-Force did not 

transfer any contracts to Daily Services. Daily Services did 

solicit former I-Force customers. (Tr. at 54). "I-Force had no 

ability to either obligate a customer to continue using I-Force 

or to assign a customer to a third party, whether it be Daily 

Services, Resource Staffing, or anyone else." (Tr. 55). 

When "I-Force closed down, it had 71 permanent staff that 

were employed." (Tr. at 62). The week before "I-Force closed 

down, it had 800 temporary employees out on assignment." 

(Tr. at 62-63). When I-Force closed "all of those people were 

terminated, were let go. The permanent staff was released, as 

was the temporary employees." (Tr. at 63). When I-Force 
No. 14AP-405 13 

shut down, Daily Services "had something like six or seven" 

permanent employees and hired a number of I-Force's 

permanent employees. (Tr. at 64). Daily Services made job 

offers "to virtually everyone" and on "the next pay date, or 

the first that came after that, 54 of those folks were then 

employed by Daily Services." Id. They were terminated on 

Friday and most accepted positions at Daily Services. (Tr. at 

66). "I-Force did not have the right to sell or assign its 

permanent staff to anyone..." (Tr. at 71-72). Some of the 

permanent staff are long-time employees doing the same 

thing - some were "previously employed by Mancan when IForce was still part of Mancan...." (Tr. at 73). 

"Daily Services took over the former headquarters...they took 

over the headquarters facility." (Tr. at 67-68). "I-Force had 31 

offices, locations...So it had a main office here but it had 30 

around the state. You got one person at each of these locations. 

Most of those locations were closed down and those people 

were let go or transferred to another location. So the majority 

of I-Force's workforce as far as permanent staff wasn't all 

housed in a single location." (Tr. at 68). "Twenty of the 31 

closed down." (Tr. at 70). Daily Services had one location in 

Columbus and did not have satellite offices. (Tr. at 69-70). The 

remaining 11 became Daily Services and "as you go forward in 

the years, more were opened." (Tr. at 70). 

Daily Services asserted that "I-Force's leases were terminated 

or breached. Daily Services went in and signed new leases for 

the properties, to the extent they were able to. Some of the 

properties were actually owned by Ryan Mason personally. 

They have previously been leased by I-Force and were 

subsequently leased by Daily Services." (Tr. at 92). "[T]he 

properties weren't transferred, I-Force shut down, had 31 

locations and Daily Services was able to lease 11 of those 

locations thereafter." (Tr. at 93). Daily Services took over the 

computer leases of I-Force. (Tr. at 113). Daily Services made all 

of their quarterly tax payments to the Federal Government. Id. 

[Twenty-two] Based on her interviews with former 

employees and knowledge of the Special Investigations Unit 

investigation, Nancy Archer testified to the following: 

a) Mr. Mason had his employees contact his I-Force clients 

who were to contact and resign [sic] them to Daily Services. 

(Tr. at 138). 
No. 14AP-405 14 

b) The contracts mirrored those of I-Force with the only 

difference being the name of the company and contracting 

services. (Tr. at 138). 

c) The clients were not notified that at the time they could 

solicit other agencies for services. (Tr. at 138). 

d) The staff employees were moved from one company to the 

other over a weekend and were required to sign no-compete 

clauses and some employees were asked to backdate those 

employee forms to March of 2009. (Tr. at 139). 

e) There was no interview process, there was no termination 

or rehire process, but simply the employees were moved 

from one company to the other over a weekend. (Tr. at 139). 

f) Referring to the email in Joint Exhibit 8, Ms. Archer 

testified the email was significant because "they submitted to 

us kind of a timeline of evidence for a slow changeover, not to 

raise any red flags to the Bureau." (Tr. at 148). 

g) Ms. Archer also testified about a ranking system that was 

used to determine which clients Daily Services would want to 

keep from I-Force where the client employers were ranked 

between 1 and 3. (Tr. at 148-150). 

h) The strides to alleviate the high workers' compensation 

premiums are very evident here. (Tr. at 151). I-Force's "emod was going from maybe 18 to a 120, I think, in the second 

half of '08." Id. 

i) The other red flags were evident outside of the interviews 

that were conducted. A temporary services agency is required 

to use the same manual codes that their clients have and must 

notify the Bureau who the client is so the proper manual code 

can be assigned. During the months of April and early March 

of 2009, BWC's Workers' Compensation Insurance System 

(WCIS) reflects an extreme number of notes for new manual 

codes to be added to the Daily Services' account. (Tr. at 151). 

This indicates "they were preparing to move the clients, from 

I-Force to Daily so the manual codes would he there so when 

they had to report the payroll under that six months, there 

would be three months under one company and three 

months under the other." (Tr. at 152). 

j) "Based on the interviews...the regional supervisors were 

sent out with new contracts and told them to let the customers 

know that it was just a name change, it would be no 

interruption of their services, that they were just wanting 
No. 14AP-405 15 

them to sign the new paperwork with the new Talocity name 

on it." (Tr. at 160). 

k) In a temporary agency, there are two main things that 

drive a temporary agencies' profit: 1) the workers' 

compensation and unemployment costs. (Tr. at 150). 

l) SIU investigators went to all the locations and verified that 

the I-Force information on "the doors and outside signage 

had all been covered over with Talocity names." (Tr. at 188). 

[Twenty-three] Joint Exhibit 8 contains a copy of an email 

from Ryan Mason titled "New Beginning," that states: 

Today's is an exciting day. A new beginning means a fresh 

start and change. The iforce [sic] brand is no longer. The 

Talocity brand has been growing. Please start making 

communication and signage changes immediately. Please 

make this as seamless as possible. We will be getting 

everyone together to discuss clarity on the direction of our 

organization. 

[Twenty-four] Joint Exhibit 8 contains a copy of an email 

from Ryan Mason titled "Dedication," that states: 

You stayed late and got it done. Thank you. Many of us 

would not be here today if it wasn't for you. This is exactly 

what makes this organization the best. This type of 

dedication, patience and hard work makes me very proud to 

know that we have a solid core of employees. No more do we 

have time for finger pointing, drama and useless 

distractions. It's the teamwork, respect and the fighting for 

every customer and employee who has built the company. 

* * * 

[Thirty] Joint Exhibit 8 contains a printout of Talocity 

Staffing branch locations throughout Ohio that indicates 13 

of the 16 are in the same location as I-Force locations. The 

three that are in different locations are in the same city as 

before, but with a different address. 

[Thirty-one] On March 23, 2009, Ryan Mason ceased 

operating I-Force's line of business through I-Force, LLC. 

[Thirty-two] Daily Services purchased the right to use the 

name "I-Force." (Joint Exhibit 11). Since then, Daily Services 
No. 14AP-405 16 

has operated under the trade name "I-Force" with date of 

first use being listed as 05/01/2010. (Joint Exhibit 27). 

* * * 

Successor Issue 

The Committee has before it the issue of whether Daily 

Services is a successor to I-Force within the meaning of R.C. 

4123.32 and Ohio Adm.Code 4123-17-02(C). The Revised 

Code authorizes the Bureau to transfer the experience and 

liabilities of a predecessor employer under the workers' 

compensation laws to a succeeding employer. 

* * * 

Both I-Force and Daily Services are Ohio limited liability 

companies that provide temporary staffing services to 

employers. Both are headquartered in Columbus, and both 

are owned by the same person. Ryan Mason is the sole owner 

of each company and he was the President of each company. 

(Tr. at 45-46). Daily Services provided workers on a daily 

basis and I-Force tended to do more industrial-type 

employees on a longer-term basis. Ryan Mason decided to 

stop operating I-Force through the veil of the legal entity IForce, LLC. Due to a poor claims history, I-Force had lost 

group rating status on June 30, 2008. In the payroll 

reporting period for the second half of 2008 the premium for 

I-Force increased to approximately $3.5 million. This large 

increase in premiums was going to negatively affect 

profitability. 

This is a situation where I-Force stopped operating on a 

Friday (March 20, 2009) as I-Force, LLC and began 

operating using the same employees in 11 of the same 

locations on Monday (March 23, 2009), as the legal entity 

Daily Services dba Talocity. Daily Services was not servicing 

the type of client employers I-Force served on Friday, but 

was on Monday. I-Force did not go bankrupt and there were 

no bankruptcy proceedings. Ryan Mason simply stopped 

servicing the long-term temporary staffing for client 

employers through a debit rated legal entity he controlled on 

Friday, and began operating on Monday through a different 

legal entity he controlled with an improved credit rating. The 

maneuver to avoid bad experience obviously had a positive 

effect on profitability. 
No. 14AP-405 17 

The sudden expansion of Daily Services into a new type of 

temporary agency staffing operations was accomplished 

through a massive effort of I-Force employees to get client 

employers to sign new agreements with Daily Services dba, 

Talocity. Those same employees were employees of I-Force 

on Friday and subsequently employees of Daily Services dba 

Talocity on Monday. Some employees did not even know 

they were technically employed by a different legal entity 

until well after the transition. Some employees were 

confused on what to tell people about the change and how to 

respond to temporary workers asking how to get a copy of 

their W-2. One particular employee obviously had access to 

I-Force's tax records, but since I-Force was technically not 

operating as a legal entity, that employee was instructed to 

not release the W-2. 

Over that weekend, Daily Services grew from one location in 

Columbus to twelve locations because it took over eleven IForce locations. Daily Services dba Talocity also took over 

the headquarters facility of I-Force. Daily Services did not 

provide documentation or detailed factual statements on 

exactly how the leases for each physical location were 

switched from I-Force to Daily Services. However, through a 

separate legal entity, Ryan Mason was the owner/landlord of 

some of the I-Force locations. In these locations, there 

obviously would be no complications in simply changing the 

name of the tenant from I-Force to Daily Services in a new 

lease, and no complications in I-Force being released from a 

lease in a building owned by a Ryan Mason company. 

Daily Services argues it is not a successor to I-Force because 

business operations were not transferred. There was no need 

to "transfer" the business operations of I-Force, LLC to Daily 

Services in a legal sense through a purchase agreement 

because both companies were owned and controlled by the 

same individual. This is not a situation where there are 

transactional documents to review to determine what was 

transferred. There were not assets to transfer like the typical 

successor scenario where a business is sold. The only asset 

that I-Force had that was of any significant value was its 

accounts receivable. (Tr. at 112). The line of credit used by IForce was secured with these assets. Id. When Mr. Mason 

stopped operating through the veil of I-Force, LLC, its main 

creditor, Key Bank, collected the accounts receivable and 

used it to pay down the line of credit. Id. Federal taxes that 

were owed were paid and any other creditors apparently 

were paid. The only liability of I-Force that was not paid 
No. 14AP-405 18 

during the combination of the operations of Daily Services 

and I-Force were the Bureau premiums reported on the 

payroll report for the second half of 2008. 

Daily Services focuses its arguments on its customers and the 

head count of the number of temporary employees. Daily 

Services asserts that picking up roughly a third of I-Force's 

payroll and a third of its locations might support a transfer of 

experience, but not what the courts have construed is 

required to conclude that someone wholly succeeded another 

company's business operations. (Tr. 96-97). Daily Services 

asserts it should be compared to the competitors of I-Force 

because if Resource Staffing had taken over 100% of all of IForce's payroll (book of business), the experience of I-Force 

may have transferred to Resource Staffing, but the liabilities 

should not because there was no transfer of business 

operations from I-Force to Resource Staffing: "Here, the IForce operations were taken over but not just by Daily 

Services, they were also taken over by I-Force's competitors." 

(Tr. at 105). 

Daily Services references Joint Exhibit 20 and points out 

that in the week before I-Force closed it had 800 temporary 

employees assigned to various locations around the state. In 

the week following Daily Services placed 353 temporary 

employees and those employees were not necessarily the 

same employees. (Tr. at 74). That figure is just the total 

number of temporary employees placed each week. Id. 

"[W]hen you look at just head count and when you include 

the temporaries as well as permanent staff, right after IForce closed roughly 47 percent of the former head count 

was at Daily Services. By the end of four months, that had 

dropped to 22 percent. And the average over the four months 

is 34.7 percent." (Tr. at 75). 

Daily Services posits the question "if Daily Services captured 

a portion of I-Force's business, what portion did it capture?" 

(Tr. at 75). Daily Services asserts "roughly one-third of the 

business that formerly belonged to — the payroll that it 

formerly belonged to I-Force wound up being utilized, being 

billed out by Daily Services in the following months." (Tr. at 

76). Counsel for the Bureau pointed out that on day one of 

business. Daily Services had approximately half of I-Force's 

business. The 30 percent of the customers comprised 50 

percent of I-Force sales for that snapshot period of time. 
No. 14AP-405 19 

In any event, comparing the number of client employers that 

were resigned by Daily Services dba Talocity, is only one lens 

to look through in determining if Ryan Mason voluntarily 

transferred the business operations of I-Force to Daily 

Services. I-Force's book of business may have been smaller 

after the combination, but the decreased size of the book of 

business was due in part to a specific effort by Ryan Mason 

to no longer pursue the business of certain client employers 

that had poor claims history, were slow payers, or otherwise 

problematic. A ranking system was set up to help determine 

which client employers should be dropped during the 

campaign and to have the remaining client employers sign 

new agreements. Also, during this time period there was the 

recession that had an effect on business generally. 

Moreover, counsel for Daily Services used the term "business 

operations" and "client employers" interchangeably, but they 

are not interchangeable terms. At the hearing, Daily Services 

described the "business operations" being taken over by not 

just Daily Services, but also by competitors. The "operations" 

of a business in a temporary staffing agency are what makes 

that type of a business function, such as the reputation of the 

owner, marketing efforts that recruit client employers and 

temporary employees, trade name, relationships of key 

employees that have ongoing informal relationships with 

client employers, employees, physical locations for 

operations, and necessary computer software hardware to 

manage the business. Client employers are the "product" of 

the business and are comparable to accounts. The number of 

client employers can change monthly, weekly, or daily. Client 

employers are not in assignable contracts that can be 

transferred or sold to another staffing agency, so they are 

technically net assets of a temporary staffing agency. 

At the hearing, Daily Services was asked what would prevent 

Mr. Mason from having six staffing companies and 

transferring operations from one company to another every 

time the experience modifier became too high. Counsel for 

Daily Services responded that businesses close down all the 

time: "I'm not sure I've answered your question. But like I 

said, I think it gets back to the idea when someone closes 

down a company, would it be the position that you can't open 

another company. If you open another company, you are 

then going to be the successor to that company...I think it 

goes back to under the law you have to look at whether there 

was a transfer, not just where did the employees move or 

who is at this location...." (Tr. 99-101). Counsel for Daily 
No. 14AP-405 20 

Services was unable to directly answer the question because 

stopping operations under one legal entity and moving 

operations to another legal entity under the cover of 

darkness over the weekend is not a business practice that can 

legitimately be employed by temporary staffing agencies to 

avoid workers' compensation premiums. 

This Committee does not find that Daily Services was simply 

a fortuitous competitor that had the good fortune of being in 

the position to beat the other competitors of I-Force to its 

physical locations, employees, and client employers. Daily 

Services already shared certain facilities such as 

headquarters, offices, and management services; Daily 

Services and I-Force already cross marketed each other's 

services. According to the Affidavit of Rick Fazzino, Chief 

Financial Officer, I-Force charged Daily Services a 

management fee for I-Force's management services. (Exhibit 

D ¶ 13 to Daily Services Hearing Brief). Mr. Mason, as owner 

of both companies, controlled all the details of the 

paperwork necessary to technically stop operating under 

one entity, and technically begin operating under another 

entity. 

Mr. Mason arranged to change the name of everything that 

was required to manage and operate the I-Force line of 

business to Daily Services. The employees of I-Force were 

told to tell client employers there was simply a name change. 

The line of credit that I-Force had was paid with I-Force's 

main asset. All of the pieces and parts that were necessary to 

operate I-Force's line of business were switched to Daily 

Services as directed by Mr. Mason. Competitors would not 

have even known that I-Force's entire book of business was 

up for grabs because it did not "close down" like a company 

that is going out of business closes down. All Mr. Mason did 

was stop operating through the legal entity I-Force on 

Friday, and began operating on Monday through the legal 

entity Daily Services dba Talocity, which was soon thereafter 

changed to I-Force. 

If Daily Services had not already been in existence and a new 

application for coverage was submitted, the application 

would have been denied pursuant to Ohio Adm.Code 4123-

17-13(C). The Bureau would have viewed Daily Services as 

essentially the same employer for which risk coverage 

previously had been provided. The Bureau policy for this rule 

states the rule was put in place to prevent policy 

manipulation being "utilized to escape previous liability" and 
No. 14AP-405 21 

to "ensure that only one policy is established for any given 

individual, group of individuals or legal entity in light of 

statutory guidance and rule." 

The determination that Daily Services is a successor to IForce is just in the circumstances before this Committee. Mr. 

Mason's actions had the result of immediately increasing the 

profitably of companies he controls to the detriment of the 

State Insurance Fund. The Bureau has a fiduciary 

responsibility as a steward of the State Insurance Fund to 

ensure employers pay their fair share of the costs associated 

with workplace injuries, and to avoid subsidization by other 

employers that are paying their premiums as required by 

law. It should be kept in mind that the higher experience 

modifier that caused the higher premium is due to a higher 

than average number of claims. Experience rating is 

employed industry wide and is not unique to Ohio's workers' 

compensation system. A high experience modifier may be 

one indicator of an employer's lack of emphasis on 

workplace safety. Often, employer's that become debit rated 

focus on safety and what can be done to put an emphasis on 

a safe work environment. 

Conclusion 

This Adjudicating Committee DENIES the Employer's 

protest of the transfer/Combination based on the Joint 

Exhibits, evidence outlined in the Statement of Facts, and 

the referenced testimony and evidence. The Committee finds 

Daily Services is a successor-in-interest to I-Force for 

workers' compensation purposes under Ohio Adm.Code 

4123-17-02(C) and thus, liable for I-Forces obligations. Ryan 

Mason guided I-Force through a "seamless" takeover of IForce's occupation or industry in such a way that Daily 

Services wholly succeeded I-Force for workers' 

compensation purposes. The maneuvering that moved 

business operations from one legal entity to another 

discussed above amounts to a voluntary transfer of business 

operations. 

(Footnotes omitted.) (Emphasis sic.) 

{¶ 27} 7. Relator administratively appealed the March 20, 2013 AC order to the 

administrator's designee pursuant to R.C. 4123.291. 
No. 14AP-405 22 

{¶ 28} 8. Following a November 14, 2013 hearing, the administrator's designee 

issued an order affirming the March 20, 2013 decision of the AC. The eight-page order of 

the administrator's designee states in part: 

Pursuant to Ohio Revised Code Section 4123.291, this matter 

came on for hearing before the Administrator's Designee on 

the employer's appeal of the Adjudicating Committee order 

dated March 20, 2013. At issue before the Administrator's 

Designee was the Bureau's determination that Daily Services, 

LLC ("Daily Services") was the successor to I-Force, LLC ("IForce") and responsible for I-Force's unpaid premiums. 

In a decision dated October 15, 2009, the Adjudicating 

Committee held that I-Force's experience should be 

transferred to Daily Services under OAC 4123-17-02(B). As 

determined by two judges of the Franklin County Court of 

Common Pleas, however, the Adjudicating Committee never 

determined the second issue, i.e., whether Daily Services was 

a successor to I-Force and thus was liable for I-Force's 

obligations under OAC 4123-17-02(C). 

Therefore, the Administrator's Designee hearing was 

scheduled to provide the employer the opportunity to fully 

administratively adjudicate the Bureau's determination on 

successor liability under OAC 4123-17-02(C). 

* * * 

The Administrator's Designee adopts the Statement of Facts 

("SoF") contained in the order of the Adjudicating Committee 

dated March 20, 2013. 

* * * 

Determination of Successorship 

At issue in this case is whether Daily Services is the successor 

employer of I-Force under the Ohio workers' compensation 

laws, specifically for purposes of determining Daily Services' 

liability for the unpaid premium obligations of I-Force. The 

relevant issues in determining whether there is a 

successorship are whether there was a transfer of the 

operations of the business, in whole or in part, and whether 

the transfer was voluntary. 
No. 14AP-405 23 

R.C. 4123.32 provides the basis for the Bureau to make 

successorship determinations. R.C. 4123.32(C) states: 

The administrator of workers' compensation, with the advice 

and consent of the bureau of workers' compensation board of 

directors, shall adopt rules with respect to the collection, 

maintenance, and disbursements of the state insurance fund 

including all of the following: 

* * * 

(C) Such special rules as the administrator considers 

necessary to safeguard the fund and that are just in the 

circumstances, covering the rates to be applied where one 

employer takes over the occupation or industry of another or 

where an employer first makes application for state 

insurance, and the administrator may require that if any 

employer transfers a business in whole or in part or 

otherwise reorganizes the business, the successor in interest 

shall assume, in proportion to the extent of the transfer, as 

determined by the administrator, the employer's account and 

shall continue the payment of all contributions due under 

this chapter; ... 

(Emphasis added.) 

On the authority of R.C. 4123.32(C), BWC adopted Rule 

4123-17-02 to further the purposes embodied in the statute. 

The rule has been in effect in some form since at least 1962. 

During the time period relevant to this case [March 2009], 

Paragraph (B) of the rule provided (and still provides) 

various scenarios to determine whether the Bureau will 

transfer the experience of the predecessor, in whole or in 

part, to the successor to establish an experience modifier rate 

for the successor, based upon the Bureau's determination of 

whether, and the extent to which, the employer succeeded 

another legal entity in the operation of a business. The 

Adjudicating Committee order dated October 15, 2009, 

affirmed that Daily Services wholly succeeded I-Force for 

purposes of experience combination under OAC 4123-17-

02(B), and that order was not appealed. (SoF #42, 43) 

Paragraph (C) of the rule as in effect during the time period 

relevant to this case (the version initially effective July 27, 

2006), provided for the transfer of the liabilities of the 

predecessor to the successor employer where the Bureau 
No. 14AP-405 24 

determines that "one employer wholly succeeds another in 

the operation of a business:" 

(C) Succeeding employers -- risk coverage transfer. 

(1) Whenever one employer succeeds another employer in 

the operation of a business in whole or in part, the successor 

shall notify the bureau of the succession. Where one 

employer wholly succeeds another in the operation of a 

business, the bureau shall transfer the predecessor's rights 

and obligations under the workers' compensation law. The 

successor shall be credited with any credits of the 

predecessor, including the advance premium security deposit 

of the predecessor. This paragraph shall apply where an 

employer wholly succeeds another employer in the operation 

of a business on or after September 1, 2006. 

(Emphasis added.) 

* * * 

Daily Services argued before the Administrator's Designee 

and in its Hearing Brief submitted November 14, 2013 that 

the Ohio Supreme Court decision in State ex rel. K&D 

Group, Inc. v. Buehrer, 135 Ohio St.3d 257, 2013-Ohio-734, 

precludes a finding that Daily Services is a successor to IForce because, it alleges, there was no "voluntary transfer" of 

business operations from I-Force to Daily Services. The K&D 

Group, Inc., case dealt with the management of an 

apartment complex upon transfer of ownership of the 

apartment complex. The Court found in that case that the 

new management company was not a successor to the old 

management company; * * * 

The Administrator's Designee finds that the Court held K&D 

Group, Inc. was not a successor because of the unique facts 

of that case, facts that are not present in this adjudication. 

In that case, K&D Enterprises, Inc. contracted with FameMidamco Company, L.L.C. (by and through FameMidamco's management company, Mid-America) to 

purchase an apartment complex, and assigned its rights 

under the purchase agreement to newly created company 

Euclid-Richmond Gardens, Ltd. The new company hired 

K&D Group, Inc. to manage the apartments. K&D Group, 

Inc. hired some former employees of Mid-America and 

assumed the day-to-day operations of the complex. Under 
No. 14AP-405 25 

these facts, the Court found there was no voluntary transfer 

of business operations from Mid-America to K&D Group, 

Inc.; rather, the Court held, "K&D Group merely contracted 

with the new owner to assume management of the existing 

apartment complex." K&D Group, Inc., at ¶ 16. In other 

words, the Court held that the new owners of the complex 

had simply hired a new management company. 

The present case is distinguishable. Both I-Force and Daily 

Services are owned by the same individual. Ryan Mason (SoF 

#2, 3), and the testimony and other evidence submitted to 

the Adjudicating Committee support the Committee's 

conclusion that, at Ryan Mason's direction (see generally 

Joint Exhibit 8), employees transferred the business 

operation of long-term temporary staffing from I-Force to 

Daily Services, which previously had offered only day laborer 

services (Tr. at 91). Among the evidence to support such 

conclusion, as set forth in the Adjudicating Committee's 

Statement of Facts and the evidence presented: 

 When I-Force shut down, Daily Services "had 

something like six or seven" permanent employees 

and hired a number of I-Force permanent employees. 

(Tr. at 64). Daily Services made job offers "to virtually 

everyone" and on "the next pay date, or the first that 

came after that, 54 of those folks were then employed 

by Daily Services." Id. They were terminated on 

Friday and most accepted positions at Daily Services. 

(Tr. at 66) I-Force did not have the right to sell or 

assign its permanent staff to anyone..." (Tr. at 71-72) 

Some of the permanent staff are long-time employees 

doing the same thing some were "previously employed 

by Mancan when I-Force was still part of Mancan..." 

(Tr. at 73) (SoF #21) 

 Daily Services asserted that "I-Force's leases were 

terminated or breached. Daily Services went in and 

signed new leases for the properties, to the extent they 

were able to. Some of the properties were actually 

owned by Ryan Mason personally. They have 

previously been leased by I-Force and were 

subsequently leased by Daily Services." (Tr. at 92). 

"[T]he properties weren't transferred, I-Force shut 

down, had 31 locations and Daily Services was able to 

lease 11 of those locations thereafter." (Tr. at 93). 

Daily Services took over the computer leases of I-
No. 14AP-405 26 

Force. (Tr. at 113). Daily Services made all of their 

quarterly tax payments to the Federal Government. 

Id. (SoF #21) 

 Mr. Mason had his employees contact his I-Force 

clients who were to contact and re-sign them to Daily 

Services. (Tr. at 138)(SoF #22a) 

 The contracts mirrored those of I-Force with the only 

difference being the name of the company and 

contracting services. (Tr. at 138)(SoF #22b) 

 The staff employees were moved from one company to 

the other over a weekend and were required to sign 

no-compete clauses and some employees were asked 

to backdate those employee forms to March of 2009. 

* * * 

 Ms. Archer also testified about a ranking system that 

was used to determine which clients Daily Services 

would want to keep from I-Force where the client 

employers were ranked between 1 and 3. (Tr. at 148-

150)(SoF #22g) 

 During the month of April and early March of 2009, 

BWC's Workers' Compensation Insurance System 

(WCIS) reflects an extreme number of notes for new 

manual codes to be added to the Daily Services' 

account. (Tr. at 151) This indicates "they were 

preparing to move the clients from I-Force to Daily so 

the manual codes would be there so when they had to 

report the payroll under that six months [reporting 

period], there would be three months under one 

company and three months under the other." (Tr. at 

152)(SoF #22i) 

 "Based on the interviews ... the regional supervisors 

were sent out with new contracts and told them to let 

the customers know that it was just a name change, it 

would be no interruption of their services, that they 

were just wanting them to sign the new paperwork 

with the new Talocity name on it." (Tr. at 160)(SoF 

#22j) 

 Daily Services asserted before the Adjudicating 

Committee that "roughly one-third of the business 
No. 14AP-405 27 

that formerly belonged to - the payroll that it formerly 

belonged to I-Force wound up being utilized, being 

billed out by Daily Services in the following months." 

(Tr. at 76) However, as counsel for the Bureau pointed 

out during the hearing, on day one of business, Daily 

Services had approximately half of I-Force's business. 

The 30 percent of the customers comprised 50 

percent of I-Force sales for that snapshot period of 

time. (Tr. at 128-129; Joint Exhibits 21 and 21 A) 

 On March 23, 2009, Ryan Mason ceased operating IForce's line of business through I-Force, LLC. 

(SoF #31) 

 Daily Services purchased the right to use the name "IForce. (Joint Exhibit 11). Since then, Daily Services 

has operated under the trade name "I-Force" with 

date of first use being listed as 5/01/2010. (Joint 

Exhibit 27)(SoF #32) 

 Daily Services dba I-Force held itself out as a 

continuation of I-Force on its website, which at the 

time of the Adjudicating Committee hearing on 

March 20, 2013 displayed a company history nearly 

identical to that on I-Force's website in February 

2009, prior to I-Force's ceasing operations. (Joint 

Exhibit 20) 

 Columbus CEO magazine's ranking of temporary 

staffing agencies based on the number of Central Ohio 

hours billed during 2008 (prior to I-Force's ceasing 

operations), 2011, and 2012 all list "I-Force" as the 

second-largest temporary staffing agency in Central 

Ohio, with the same address, website, and telephone 

number for "I-Force" on all three lists. (Joint 

Exhibits 29, 33) 

Thus, the evidence supports the Adjudicating Committee's 

conclusion that Ryan Mason, as owner of both companies, 

orchestrated the assumption of I-Force's long-term 

temporary staffing business operations by Daily Services, 

targeting the most desirable client employers based on a 

ranking system, to avoid the negative experience rating and 

unpaid premium obligations of I-Force. 

As noted above, the Court in K&D Group, Inc., clearly stated 

that "[a] business operation may be transferred through 
No. 14AP-405 28 

methods other than a purchase," and it is reasonable to find 

these circumstances to constitute such an occasion. For Daily 

Services to assert there was no voluntary transfer of business 

operations in this case is akin to arguing that Mr. Mason's 

right hand did not know what his left hand was doing. 

In addition to K&D Group, Inc., Daily Services cites to two 

Tenth District Court of Appeals cases as support that a 

finding of successorship against Daily Services is not 

appropriate; however, a reading of the cases does not 

support Daily Services' contention. 

* * * 

Daily Services cites to both the Cleveland Professional 

Football and RFFG cases for the proposition that, since Daily 

Services "did not pick up all of I-Force's business operations, 

customers, or employees" (Hearing Brief submitted 

November 14, 2013, p. 20)(emphasis in original), a finding 

that Daily Services wholly succeeded I-Force is improper. 

Daily Services' argument hinges largely on its pointing out 

that it did not assume 100% of I-Force's permanent staff, 

temporary staff, or client employers on March 23, 2009. 

However, as the RFFG case suggests, the numbers alone are 

not dispositive. Like RFFG, Daily Services has not 

demonstrated, and the evidence submitted does not support, 

that the nature of Daily Services' business operations (or 

risks) as of March 23, 2009, forward is significantly different 

from that of I-Force. Instead, the evidence shows that Daily 

Services requested "an extreme number of new manual 

codes" be added to its BWC account, so as to enable it to 

offer the long-term temporary staffing services I-Force had 

offered, which it could then offer not only to I-Force clients 

moving to Daily Services, but to any new clients as well. (Tr. 

at 151-152). 

In Cleveland Professional Football, New Gladiators could 

demonstrate its risk was significantly different from that of 

Old Gladiators, and the Tenth District accordingly found 

New Gladiators did not wholly succeed Old Gladiators' 

business operations: Daily Services, like RFFG, has not 

demonstrated so. Therefore, a finding that Daily Services 

wholly succeeded I-Force -- both for purposes of experience 

combination under OAC 4123-17-02(B), as the Adjudicating 

Committee had previously determined (see SoF #42.43), and 
No. 14AP-405 29 

for the transfer of liabilities under OAC 4123-17-02(C) -- is 

appropriate. 

* * * 

[T]he Administrator's Designee specifically finds, for the 

reasons set forth in this order and in the Adjudicating 

Committee order dated March 20, 2013, that Daily Services 

wholly succeeded I-Force for purposes of the transfer of IForce's "rights and obligations under the workers' 

compensation law," including I-Force's unpaid premium 

liabilities, to Daily Services pursuant to OAC 4123-17-

02(C)(1) as in effect at the time of the voluntary transfer of IForce's business operations to Daily Services on March 23, 

2009. 

Based on the testimony and other evidence presented at the 

hearing, the Administrator's Designee, with the Affirmation 

of Legal Standard Applied as set forth above, AFFIRMS the 

decision, findings, and rationale set forth in the order of the 

Adjudicating Committee dated March 20, 2013. 

(Emphasis sic.) 

{¶ 29} 9. On May 19, 2014, relator, Daily Services, LLC, filed this mandamus 

action. 

Conclusions of Law: 

{¶ 30} It is the magistrate's decision that this court grant relator's request for a writ 

of mandamus, as more fully explained below. 

 R.C. 4123.32 currently provides: 

The administrator of workers’ compensation, with the advice 

and consent of the bureau of workers’ compensation board of 

directors, shall adopt rules with respect to the collection, 

maintenance, and disbursements of the state insurance fund 

including all of the following: 

* * * 

(B) Such special rules as the administrator considers 

necessary to safeguard the fund and that are just in the 

circumstances, covering the rates to be applied where one 

employer takes over the occupation or industry of another or 

where an employer first makes application for state 

insurance, and the administrator may require that if any 
No. 14AP-405 30 

employer transfers a business in whole or in part or 

otherwise reorganizes the business, the successor in interest 

shall assume, in proportion to the extent of the transfer, as 

determined by the administrator, the employer’s account 

and shall continue the payment of all contributions due 

under this chapter. 

{¶ 31} Former R.C. 4123.32, effective June 30, 2006, provided: 

The administrator of workers' compensation, with the advice 

and consent of the workers' compensation oversight 

commission, shall adopt rules with respect to the collection, 

maintenance, and disbursements of the state insurance fund 

including all of the following: 

* * * 

(D) Such special rules as the administrator considers 

necessary to safeguard the fund and that are just in the 

circumstances, covering the rates to be applied where one 

employer takes over the occupation or industry of another or 

where an employer first makes application for state 

insurance, and the administrator may require that if any 

employer transfers a business in whole or in part or 

otherwise reorganizes the business, the successor in interest 

shall assume, in proportion to the extent of the transfer, as 

determined by the administrator, the employer's account and 

shall continue the payment of all contributions due under 

this chapter. 

{¶ 32} At the time the bureau conducted its audit of Daily Services in April and 

May 2009, as well as the time of the October 15, 2009 AC hearing, former R.C. 

4123.32(D) was effective and applicable herein. It can be noted that former R.C. 

4123.32(D) and current R.C. 4123.32(B) read essentially the same for purposes of this 

action. 

{¶ 33} Effective July 5, 2010 and currently, Ohio Adm.Code 4123-17-02 provides: 

(C) Succeeding employers - risk coverage transfer. 

(1) Whenever one employer succeeds another employer in 

the operation of a business in whole or in part, the successor 

shall notify the bureau of the succession. Where one 

employer wholly succeeds another in the operation of a 

business, the bureau shall transfer the predecessor's rights 

and obligations under the workers' compensation law: 
No. 14AP-405 31 

(a) The successor expressly or impliedly agrees to assume 

such obligations; 

(b) The succession transaction amounts to a de facto 

consolidation or merger; 

(c) The successor is merely a continuation of the 

predecessor; or 

(d) The succession transaction is entered into for the 

purpose of escaping obligations under the workers' 

compensation law. 

If one or more of the criteria set forth in this paragraph is 

met, the bureau shall transfer the predecessor's rights and 

obligations under the workers' compensation law, regardless 

of whether the predecessor's transfer to the successor was 

voluntary or through an intermediary bank or receivership. 

{¶ 34} Effective July 27, 2006, former Ohio Adm.Code 4123-17-02 provided: 

(C) Succeeding employers -- risk coverage transfer. 

(1) Whenever one employer succeeds another employer in 

the operation of a business in whole or in part, the successor 

shall notify the bureau of the succession. Where one 

employer wholly succeeds another in the operation of a 

business, the bureau shall transfer the predecessor's rights 

and obligations under the workers' compensation law. The 

successor shall be credited with any credits of the 

predecessor, including the advance premium security deposit 

of the predecessor. This paragraph shall apply where an 

employer wholly succeeds another employer in the operation 

of a business on or after September 1, 2006. 

{¶ 35} It can be observed that former Ohio Adm.Code 4123-17-02(C) was in effect 

and applicable at the time of the bureau audit during April and May 2009, as well as at 

the time of the October 15, 2009 AC hearing. It can be further noted that paragraphs 

(C)(1)(a) to (d) were added to Ohio Adm.Code 4123-17-02(C), effective July 5, 2010. 

Therefore, paragraphs (C)(1)(a) to (d) of current Ohio Adm.Code 4123-17-02 are not 

applicable to the instant action. 

{¶ 36} Based upon the statute, former R.C. 4123.32(D) and its supplementary rule, 

former Ohio Adm.Code 4123-17-02(C)(1) effective July 27, 2006, the issue before the 
No. 14AP-405 32 

March 20, 2013 AC and the November 14, 2013 administrator's designee was whether 

Daily Services "wholly succeeds" I-Force "in the operation of a business" as those terms 

appear in former Ohio Adm.Code 4123-17-02(C)(1). 

{¶ 37} To further clarify, notwithstanding the language in former R.C. 4123.32(D) 

regarding an employer who "transfers a business in whole or in part," the issue before the 

March 20, 2013 AC and November 14, 2013 administrator's designee was not whether IForce had transferred a business in whole or in part. This is so because former R.C. 

4123.32 commands the administrator to adopt special rules as described in the statute. 

Notwithstanding the statutory command, the administrator has not adopted a special rule 

providing that "if any employer transfers a business in whole or in part * * * the successor 

in interest shall assume, in proportion to the extent of the transfer, as determined by the 

administrator, the employer's account." 

{¶ 38} Again, former R.C. 4123.32, as well as current R.C. 4123.32 are written as a 

statutory command that the administrator shall adopt rules as specified in the statute. 

Therefore, it is the rule that provides the standard applicable here. 

{¶ 39} While the issue before the March 20, 2013 AC and the November 14, 2013 

administrator's designee was whether Daily Services "wholly succeeds" I-Force, 

unfortunately, the Ohio Administrative Code does not define the term "wholly succeeds." 

Nor does the case law. 

{¶ 40} Here, relator makes the same point: 

Despite the guidance provided by * * * recent decisions, no 

cases have addressed the precise question presented here: 

what does "wholly succeed" mean in OAC 4123-17-02(C)? 

(Relator's Brief, 49.) 

{¶ 41} According to relator, the evidence shows that Daily Services only succeeded 

to a "portion" of I-Force. (Relator's Brief, 12.) Because the alleged succession to only a 

portion of I-Force's business is insufficient under former Ohio Adm.Code 4123-17-02(C) 

to permit the bureau to transfer I-Force's rights and obligations, relator concludes that the 

bureau abused its discretion, and this court must order the bureau to grant relator's 

protest as to the transfer of I-Force's rights and obligations. 
No. 14AP-405 33 

{¶ 42} In support of its position, relator discusses several cases which are not on 

point, but may be helpful in deciding this action. 

{¶ 43} Relator discussed at length three cases which the magistrate shall discuss 

here. 

{¶ 44} The first case is this court's decision in State ex rel. RFFG, LLC v. Ohio 

Bureau of Workers' Comp., 10th Dist. No. 11AP-647, 2013-Ohio-241, affirmed without 

published opinion, 135 Ohio St.3d 1406, 2013-Ohio-1506, which relator refers to as the 

"Ameritemps Case." (Relator's Brief, 36.) 

{¶ 45} In the Ameritemps case, the bureau determined that RFFG, LLC ("RFFG") 

was the successor to Ameritemps, Inc. ("Ameritemps"), and therefore subject to the risk 

expenses of Ameritemps for purposes of contribution rates for workers' compensation. 

{¶ 46} Ameritemps was purchased by WTS Acquisition Corporation ("WTS") and 

subsequently transferred to RFFG. The purchase included a purchase of equipment, 

leases, contracts, general intangibles, customer lists, and good will. RFFG continued to do 

business under the Ameritemps name. 

{¶ 47} After RFFG notified the bureau of the purchase, the bureau notified RFFG 

that it was considered the successor employer to Ameritemps for workers' compensation 

purposes. 

{¶ 48} RFFG protested the bureau's finding that it was Ameritemps' successor. 

The protest was heard before the bureau's AC. The AC denied the protest. On the appeal 

to the administrator's designee, the decision of the AC was affirmed. RFFG then filed a 

mandamus action in this court. 

{¶ 49} This court's decision to deny the writ turned on RFFG's failure to provide 

key information to the bureau. This court explained: 

Key information as to the risks for workers in the ongoing 

business was not provided. RFFG/Ameritemps may employ 

fewer people, but the risks associated with the work done 

may well be unchanged. What RFFG/Ameritemps pays BWC 

will be reduced if fewer people are employed but the rate per 

employee does not need to change just because fewer or 

different people may be employed doing the same tasks. 

Id. at ¶ 10. 
No. 14AP-405 34 

{¶ 50} Based on the above review of the Ameritemps case, the magistrate 

concludes that the case provides little guidance as to the issue here. 

{¶ 51} The second case discussed by relator is this court's decision in State ex rel. 

Cleveland Professional Football, LLC v. Buehrer, 10th Dist. No. 11AP-428, 2012-Ohio6020. 

{¶ 52} The relator, Cleveland Professional Football, LLC ("New Gladiators") filed 

in this court a mandamus action seeking to compel the bureau to vacate its order that 

transferred the experience, rights, and obligations of Cleveland AFL, LLC ("Old 

Gladiators") to New Gladiators after finding that New Gladiators is the successor 

employer of Old Gladiators. 

{¶ 53} Cleveland AFL, LLC, had a team called the Gladiators in the Arena Football 

League ("AFL"). The league underwent bankruptcy. 

{¶ 54} An investor group, called Arena Football One, formed a new professional 

sports league and purchased certain assets of the AFL. Cleveland Professional Football, 

LLC agreed to run a team in the new league and purchased certain assets from the 

investor group. The team is called the Cleveland Gladiators ("New Gladiators"). 

{¶ 55} The majority owner of New Gladiators was the majority owner of Old 

Gladiators. 

{¶ 56} However, while Old Gladiators had employed professional athletes, New 

Gladiators did not. Instead, the business operation of New Gladiators involved solely the 

sale of tickets, sponsorship, and merchandise of sports. 

{¶ 57} In February 2010, New Gladiators applied for Ohio workers' compensation 

coverage. In May 2010, the bureau notified New Gladiators that it is the successor 

employer of Old Gladiators and, thus, New Gladiators is responsible for "all existing and 

future financial rights and obligations of the former employer [Old Gladiators]" Id. at ¶ 4. 

The letter further informed that New Gladiators' workers' compensation rate will be based 

upon the Old Gladiators' experience. 

{¶ 58} The bureau AC held: "BWC correctly transferred and/or combined the 

predecessor's [Old Gladiators] experience and/or rights and/or obligations to the 

subsequent Employer [New Gladiators] under the Code." Id. at ¶ 4. 
No. 14AP-405 35 

{¶ 59} On appeal to the administrator's designee, the decision of the AC was 

affirmed. Thereafter, Cleveland Professional Football, LLC, doing business as the 

Cleveland Gladiators, filed a mandamus action in this court. 

{¶ 60} This court issued a writ of mandamus, stating: 

[W]e order the BWC to vacate its order finding that New 

Gladiators was a successor employer to all of Old Gladiators' 

experience rating. We also agree with the magistrate that the 

BWC should issue a new order determining New Gladiators' 

experience rating based only upon the portion of Old 

Gladiators' business that was transferred to New Gladiators. 

Id. at ¶ 9. 

{¶ 61} Again, while the New Gladiators case is somewhat of interest and perhaps 

helpful, it provides little guidance as to the instant case. 

{¶ 62} The third case discussed by relator is State ex rel. K&D Group, Inc. v. 

Buehrer, 135 Ohio St.3d 257, 2013-Ohio-734. (Relator's Brief, 44.)

{¶ 63} In the K&D Group case, the Supreme Court of Ohio presents the facts of the 

case: 

In 2004, K&D Enterprises, Inc., contracted with FameMidamco Company, L.L.C., through K&D Enterprise's 

manager, Mid-America, to purchase an apartment complex 

known as the Euclid-Richmond Gardens. Prior to the 

closing, K&D Enterprises created a new company, EuclidRichmond Gardens, Ltd., and assigned its rights under the 

purchase agreement to that new company. 

Euclid-Richmond Gardens, Ltd., hired appellant, K&D 

Group, Inc. ("K&D Group"), a property-management 

company, to manage the apartments, which were renamed 

Parkside Garden Apartments. K&D Group hired some 

former employees of Mid-America and assumed the day-today operations of the complex. 

The bureau conducted an audit of K&D Group in 2009 and 

determined that it was the successor in interest to the 

business operations of Mid-America. This determination 

authorized the bureau to base K&D Group's experience 

rating in part on Mid-America's past experience, which 

included a large workers' compensation claim. 
No. 14AP-405 36 

K&D Group filed a protest, arguing that it was not a 

successor in interest to Mid-America, because it had not 

been involved in the purchase of the apartment complex and 

it did not acquire anything in the transaction. Following a 

hearing, the bureau's adjudicating committee denied the 

protest. The committee concluded that the bureau had 

correctly transferred the predecessor's experience to K&D 

Group as the successor in interest: "The day to day 

operations of the apartment complex remained the same 

after the purchase. The K&D Group assumed the prior leases, 

retained some of the former employees and operated under 

the same manual numbers." K&D Group's administrative 

appeal was denied. 

Id. at 257-58. 

{¶ 64} Following a legal analysis, the court concludes: 

K&D Group has demonstrated that it has a clear legal right to 

the relief requested because it was not a successor in interest 

to the business operations of Mid-America for purposes of 

workers' compensation. The bureau abused its discretion 

when it transferred part of Mid-America's experience rating 

to K&D Group based on R.C. 4123.32(C) and Ohio Adm.Code 

4123-17-02. Thus, we reverse the judgment of the court of 

appeals and issue a writ of mandamus ordering the bureau to 

determine K&D Group's experience rate without taking into 

consideration Mid-America's experience rate. 

Id. at 260-61. 

{¶ 65} The K&D Group case provides little guidance as to the issue in this action. 

{¶ 66} Analysis begins with earlier observation that paragraphs (C)(1)(a) to (d) 

were added to Ohio Adm.Code 4123-17-02(C) effective July 5, 2010, and are therefore not 

applicable here. Nevertheless, it can be noted that currently, under Ohio Adm.Code 4123-

17-02(C)(1)(d), an employer wholly succeeds another in the operation of a business when 

"[t]he succession transaction is entered into for the purpose of escaping obligations under 

the workers' compensation law." The factual findings of the March 20, 2013 AC and the 

November 14, 2013 administrator's designee clearly would merit a determination under 

current Ohio Adm.Code 4123-17-02(C)(1)(d) had that rule been adopted by the 

administrator at an earlier date. However, as relator asserts here: 
No. 14AP-405 37 

[T]he AC Order tried to show that I-Force's closure was part 

of a scheme to try and avoid paying I-Force's premiums. The 

Adjudicating Committee's misguided focus on intent may be 

explained by the fact that such intent is relevant under the 

current version of OAC 4123-17-02(C) quoted in the AC 

Order. * * * However, intent is not relevant under the version 

of OAC 4123-17-02(C) in effect when I-Force closed. 

(Emphasis sic.) (Relator's Brief, 12.) 

{¶ 67} Unfortunately, neither the March 20, 2013 AC nor the November 14, 2013 

administrator's designee had available current Ohio Adm.Code 4123-17-02(C)(1)(d). 

Rather, the two tribunals only had available Ohio Adm.Code 4123-17-02(C)(1)'s rule that 

obligations shall be transferred "[w]here one employee wholly succeeds another in the 

operation of a business." 

{¶ 68} Given the findings of the March 20, 2013 AC and the November 14, 2013 

administrator's designee, it is difficult for this magistrate to conclude that the tribunals 

presented a factual predicate for a finding that Daily Services wholly succeeds I-Force 

unless this magistrate were to ignore that Ohio Adm.Code 4123-17-02(C)(1)(d) became 

effective on July 5, 2010, i.e., on a date subsequent to the bureau's audit and the initial 

hearing of the AC on October 15, 2009. 

{¶ 69} Accordingly, based upon the above analysis, it is the magistrate's decision 

that this court issue a writ of mandamus ordering the administrator to vacate the 

November 14, 2013 order of his administrator's designee, and to enter an order that 

grants relator's protest to the extent that it is held that Daily Services did not wholly 

succeed I-Force with respect to the rights and obligations of I-Force. 

 /S/ MAGISTRATE 

 KENNETH W. MACKE 

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).