The Ohio Supreme Court affirms the necessity of a voluntary transfer from the predeceasing employer to the succeeding employer for the Ohio Bureau of Workers’ Compensation to deem the later a successor in interest.
In the case of State Ex Rel. K&D Group, Inc. v. Buehrer (2013), 135 Ohio St.3d 257, the Ohio Supreme Court held that in order for the Ohio Bureau of Workers’ Compensation (“BWC”) to hold an employer as a successor in interest to another employer, that there must be a voluntary transfer of some or all of the proceeding employer’s business to the succeeding employer.
The facts of this case were summarized by the Court as follows:
In 2004, K&D Enterprises, Inc., contracted with Fame-Midamco Company, L.L.C., through K&D Enterprises’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, Euclid-Richmond 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-to-day operations of the complex. In this case, the BWC initially found K & D Group (“K & D”) as the partial successor in interest to Mid-America Management Corporation (“Mid-America”) with respect to the management of an apartment complex. The Court held that this was in error as K & D Group was hired by an entity unrelated to Mid-America, Euclid-Richmond Gardens, Ltd., to manage the complex.
Through an audit, the BWC determined that K&G Group was a partial successor to Mid-America. K&G Group disagreed as did the Ohio Supreme Court. In its decision the Court noted that there was no evidence of a voluntary transfer of business from Mid-America to K&G Group. As such, it held that the BWC abused its discretion when it found K&G Group the partial successor to Mi-America.
This case adds to a growing line of cases which combat the BWC’s occasionally overzealous drive to find employers successors in interest to other employers (see State ex rel. Crosset Co., Inc. v. Conrad (2000), 87 Ohio St.3d 467 and State ex rel. Valley Roofing L.L.C. v. Ohio Bur. of Workers’ Comp. (2009), 122 Ohio St.3d 275).