August 1, 2012
Workers' Comp Overpayment

by Justice Paul E. Pfeifer

Here at the Supreme Court of Ohio we review numerous workers’ compensation cases. The questions raised in these cases cover a wide range of issues, but one that we handled earlier this year was rather unique.

The case involved Donald F. McNea Jr., a police officer for the city of Parma. In 2004, McNea was awarded permanent total disability (“PTD”) compensation for injuries that he claimed to have sustained in his capacity as a police officer.  But when the PTD was granted, none of the parties involved knew that McNea was being secretly investigated by his own department for the suspected sale of prescription medications.

According to Parma police records, the department began an investigation after receiving a tip in 2003 that McNea was selling the drugs. Over the next two years, numerous conversations occurred between McNea and confidential informants in which McNea indicated that he could obtain OxyContin or similar drugs. Between October and December 2005, McNea made four recorded sales to informants, netting $6,200.

McNea was arrested on December 23, 2005, and was later indicted on 20 counts of criminal activity. He pled guilty to four felony charges and in September 2007, he was sentenced to three years in prison.

Two months later, the Bureau of Workers’ Compensation filed a motion with the Industrial Commission of Ohio – which handles such matters – to terminate further PTD compensation and to declare past PTD overpaid as of August 25, 2004, when the payments began.

A staff hearing officer at the Commission reviewed the case and terminated benefits as of September 5, 2007 – the date of McNea’s incarceration. But the hearing officer declined to declare any earlier benefits to be overpayment because there was “no proof that the injured worker was involved in sustained remunerative employment at the time” of the PTD hearing.

What was the hearing officer referring to in making that statement? In order to receive PTD, an injured worker must be so totally and permanently disabled that he is no longer medically able to work, or to “sustain remunerative employment.” Someone who could sustain remunerative employment wouldn’t be eligible for PTD.

The Bureau urged the Commission to grant reconsideration, claiming that the hearing officer had made clear mistakes of law and fact in finding no evidence of sustained remunerative employment during the time McNea was receiving PTD compensation. The Commission agreed and granted reconsideration.

It ultimately declared that all compensation paid after McNea’s first confirmed drug sale on October 1, 2005, constituted an overpayment. In its report, the Commission wrote that it relied on the fact that the amount of money involved in the four sales to undercover agents “would equate to an annual figure of $24,000, which clearly would amount to sustained remunerative employment.”

Not satisfied with this outcome, McNea filed a complaint in the court of appeals. The court found that no abuse of discretion had occurred and denied McNea’s writ. After that, McNea brought his appeal before our court.

Ohio law specifically prohibits the payment of compensation to an incarcerated claimant, so McNea did not contest the cessation of benefits during his period of confinement.

He did, however, object to the declaration of overpayment for compensation paid earlier. He made three arguments: (1) the Commission erred in reconsidering the staff hearing officer’s order, (2) there was no evidence that he engaged in sustained remunerative employment between October 2005 and September 2007, and (3) the Commission violated his due process rights by terminating PTD while he was still in prison. We considered each argument and found that none had merit.

As to the first argument, Ohio law gives the Commission continuing jurisdiction to reopen a matter previously decided. This authority can be properly invoked when the order contains a clear mistake of law or fact for which reconsideration is being sought.

In this case, the hearing officer based his decision on a lack of evidence that McNea was working at the time of the PTD hearing. This reasoning is too narrow and constitutes a clear mistake of law. The correct focus isn’t on the date of the PTD hearing. Instead, the question is whether at any time while receiving PTD compensation McNea was doing sustained remunerative work or engaged in activities medically inconsistent with the alleged disability.

In granting reconsideration, the Commission relied on a case from 2007, which declared that remunerative employment encompasses any remunerative activity, legal or otherwise. The Commission thus found that the hearing officer had committed a clear mistake of law and fact in failing to take McNea’s illegal sales into account.

McNea also challenged the Commission’s determination that he was performing sustained remunerative employment over the period in question. McNea’s activities were clearly remunerative, so the question is whether the Commission abused its discretion in characterizing McNea’s remunerative employment – his drug sales – as sustained.

“Sustained” has not been defined for workers’ compensation purposes. But we have stated that remunerative activity doesn’t have to occur on a regular or daily basis to be considered sustained. Any “ongoing pattern” of activity can be categorized as sustained activity.

In this case, the evidence established an ongoing pattern of phone calls and other sales-related activity that culminated in the four sales that McNea made. The Commission characterized this sales activity as sustained remunerative employment, and we declined to disturb that finding.

Finally, McNea had unsuccessfully petitioned the Commission to postpone the PTD termination hearing until after his release from prison. He claimed that this denial offended his due process right because his presence at the hearing was “of the utmost importance.” We rejected that argument.

McNea’s attendance at the hearing wasn’t necessary to preserve his rights. He was represented by an attorney, and McNea never explained what allegedly indispensable evidence he would have offered had he been present. His absence didn’t compromise his rights.

Thus, by a seven-to-zero vote, we affirmed the court of appeals’ judgment that the Commission had not abused its discretion in declaring McNea’s past PTD as overpayment.

EDITOR'S NOTE: The case referred to is State ex rel. McNea v. Indus. Comm., 131 Ohio St.3d 408, 2012-Ohio-1296. Case No. 2010-1770. Decided March 29, 2012. Opinion Per Curiam.