Bartering Arrangement Results in Loss of PTD Benefits for Ohio Man

A partially-divided Supreme Court of Ohio has affirmed a decision by a lower level appellate court that, in turn, had refused to vacate an order terminating an injured worker’s PTD benefits on the basis that he had committed fraud while receiving PTD compensation [State ex rel. Seibert v. Richard Cyr, 2019-Ohio-3341, 2019 Ohio LEXIS 1734 (Aug. 22, 2019)]. The Supreme Court agreed that there was some evidence to support the Industrial Commission’s finding that the worker had knowingly engaged in sustained remunerative employment through various horse-training and horse-grooming activities at a raceway in exchange for a waiver of various expenses related to the housing and feeding of the worker’s own horses.

Background

In 1990 and 1991, Seibert sustained workplace injuries and his claims were allowed for various back and psychological conditions. In 2007, the Commission awarded Seibert PTD compensation, effective in 2006. In 2013, the Special Investigations Department (SID) of the Bureau of Workers’ Compensation initiated an investigation into Seibert after determining that he had an active groomer/owner license with the Ohio State Racing Commission while receiving PTD compensation. The SID later determined that Seibert held a “groom/owner” license for 2008 and an owner license for 2009 through 2013.

In April through June 2014, the SID conducted surveillance at Lebanon Raceway in which Seibert was observed jogging horses around the track, wearing riding attire and a helmet, hosing off a horse, maneuvering a sulky and removing it from a horse, hauling a horse trailer with his truck, pushing a wheelbarrow and dumping its contents, and walking a horse to a shower stall.

Interviews of Seibert and others at the track indicated Seibert had “worked/trained” at the track for approximately five years, that he currently owned two horses, that he kept the horses in rented stalls, and that the stall owner sometimes waived rental and feed fees in exchange for Seibert’s running, bathing, and feeding the owner’s horses. Other evidence suggested Seibert “worked” at the track three hours per day, Monday through Saturday.

The Commission’s Proceedings

The Bureau filed a motion with the Commission requesting that it terminate Seibert’s PTD compensation effective March 26, 2009, that it declare as overpaid all PTD compensation paid as of that date, and that it declare that Seibert had committed fraud by concealing his employment while receiving PTD compensation. Following a hearing, a staff hearing officer granted the Bureau’s motion.

Appeal to Court of Appeals

Seibert sought review in the Tenth District Court of Appeals, which referred the matter to a magistrate. The magistrate concluded that the Commission did not abuse its discretion in finding that Seibert had been engaged in sustained remunerative employment since March 26, 2009. But the magistrate concluded that the record did not support the commission’s finding of fraud. Both parties filed objections to the magistrate’s decision, with Seibert objecting to the conclusion that he was engaged in sustained remunerative employment beginning March 26, 2009, and the commission raising two objections challenging the conclusion that Seibert had not committed fraud.

The Court of Appeals rejected Seibert’s objection, finding that there was “some evidence” to support the commission’s determination that Seibert engaged in sustained-remunerative-employment as of March 26, 2009. But the Court of Appeals sustained the commission’s objections, finding that there was “some evidence” to support the commission’s fraud finding. Seibert appealed.

Supreme Court Decision

The Supreme Court agreed with the District Court of Appeals. The high court indicated that while cash payments were not being made to Seibert, under established law, the barter system qualified as “remunerative.” Moreover, Seiber’s activities were “sustained.” There was some evidence to support the Commission’s fraud findings as well. Seibert testified that he was aware that the types of activities he was performing at the raceway were ordinarily compensable. He testified that he knew he was not permitted to work while receiving PTD compensation. He repeatedly represented to the Bureau that he was not, in fact, working. The Court said that under those circumstances, there was at least some evidence of fraud.

The Court agreed, however, with Seibert’s assertion that there was insufficient evidence to support the Commission’s decision to terminate PTD benefits as of March 26, 2009. The Court acknowledged that termination was appropriate at some point; there just was no evidence in the record to support a finding that such a date was March 26, 2009. The Court reversed that part of the Commission’s findings and remanded the case for further proceedings to determine the appropriate date of termination of benefits.