Ohio Court Takes Broad View of “Arising Out of Employment”
Owner/Employee’s Injuries in Wreck Were Work-Related Despite Fact That Meeting’s Purpose Was Tangential
Injuries sustained in an auto accident by the owner/employee of a commercial-vehicle tire changing service as the owner traveled to meet two subordinate employees for breakfast arose out of and in the course of the owner’s employment in spite of the fact that the likely outcome of that breakfast meeting would have been to utilize the subordinate employee’s labor for the owner’s unrelated and uninsured side business, held an Ohio appellate court [Stewart v. Bear’s Tire, 2019-Ohio-1832, 2019 Ohio App. LEXIS 1914 (May 13, 2019)]. That determination was crucial for the owner, as it effectively undermined the finding by an Industrial Commission hearing officer that the owner’s receipt of workers’ compensation benefits following the accident had been procured by civil fraud.
Background
Stewart founded the business that would eventually become Bear’s Tire, Inc. (“Bear’s”). The business provided mobile commercial-vehicle tire changing services in southwest Ohio. In 2009, Bear’s had three employees: Stewart, Chuck King, and John Dillon. Stewart was the company president and worked from his home office managing the company’s finances, billing, and customer relations. King and Dillon were both commercial tire changers who worked in the field. King and Dillon drove Bear’s service trucks and responded to service calls. Contemporaneously, Stewart was also the sole member of “Larry Stewart, LLC.” Larry Stewart, LLC owned several multi-unit apartment buildings in Cincinnati.
On February 18, 2009, Stewart arranged for Dillon to meet him at a Bob Evans restaurant. Stewart left his home and was driving southbound on Interstate 75 towards the restaurant when a vehicle driving the opposite direction crashed head-on into Stewart’s vehicle. Stewart later submitted a claim for benefits to the BWC and asserted that he was working for Bear’s at the time of the accident. The Bureau of Workers’ Compensation (“BWC”) approved Stewart’s claim for a variety of medical conditions.
Third-Party Civil Action
Stewart sued the wrong-way driver. During a deposition, Stewart testified that he had been driving to meet Dillon to take Dillon to work at the Larry Stewart, LLC apartments because Bear’s business had been slow. Stewart’s testimony apparently led BWC to conclude that Stewart had defrauded the fund by applying for workers’ compensation benefits because, while Bear’s had workers’ compensation coverage for its employees, Larry Stewart, LLC did not.
Civil Fraud?
Eventually, a hearing officer concluded that Stewart’s failure to inform the BWC that he was driving to meet Dillon with the intention of taking Dillon to work at the Larry Stewart, LLC apartments was civil fraud. Based upon this finding, the hearing officer declared an overpayment for the workers’ compensation benefits received by Stewart. Stewart apealed to the County Common Pleas Court.
At a bench trial, Stewart, Dillon, King, and others testified that Bear’s was not nearly as busy during winter months because there were fewer blowouts and that during this slack period, Stewart often utilized Dillon and King at his apartments so that they could have a 40-hour work week. Stewart testified that it took two to three years for a commercial tire change to become proficient and that there were other significant costs in training new employees for the job. Stewart contended that it was in Bear’s best interests to keep Dillon and King fully employed during winter months. Stewart also testified that by gathering for breakfast, it would essentially “buy another hour” during which a tire service call might be received.
Common Pleas Court Disagrees
Based on that testimony, the Common Pleas Court concluded that Stewart’s injury was received in the course of and arose out of his employment with Bear’s. It reasoned that that Stewart scheduled and travelled to the breakfast with the intention to boost morale, discuss company business, and to buy time in hope that tire service calls would be received. The court also found that Stewart’s actions were in furtherance of Bear’s business because Stewart was ensuring that Dillon, a highly-trained employee, maintained a 40-hour work week during Bear’s slow season and that retaining Dillon was a benefit to Bear’s. The Bureau of Workers’ Compensation (BWC) appealed.
Appellate Court Applies Supreme Court’s “Lord” Principles
The appellate court noted that workers’ compensation cases were fact-specific, but that the state’s Supreme Court, in Lord v. Daugherty, 66 Ohio St.2d 441 (1981), had laid down three factors to assist courts in determining if an employee’s injury arose out of his or her employment:
- The proximity of the scene of the accident to the place of employment,
- The degree of control the employer had over the scene of the accident, and
- The benefit the employer received from the injured employee’s presence at the scene of the accident.
The appellate court observed that the first two Lord factors, while not negating, did not support the notion that Stewart’s injuries arose out of his Bear’s employment. The situation was different with the third. The evidence indicated it was important to Dillon and other Bear’s employees to make full-time wages in the winter months when Bear’s business was slow. The cost of training new employees had to be considered as well. Bear’s also always paid for its employees’ work at the apartments. The trial court had concluded—and the appellate court agreed—that Bear’s benefitted from this arrangement despite the concurrent benefit enjoyed by Larry Stewart, LLC.
Based on the foregoing, the appellate court concluded that substantial evidence supported the trial court’s conclusion. With that conclusion, there could, of course, be no support for the claim of civil fraud.