[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 I-
Force 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-Ohio-
3583, 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 I-
Force'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.
                                               :



                          MAGISTRATE'S DECISION

                                 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 I-
             Force 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 I-
           Force's website in February 2009, before the sale, with I-
           Force'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. 11AP-
           428, 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 I-
           Force 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, I-
           Force 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, I-
           Force'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. I-
           Force 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 I-
           Force 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 "e-
           mod 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 I-
           Force, 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 I-
           Force 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 I-
           Force 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 I-
           Force'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 I-
           Force 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 I-
           Force 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 I-
             Force 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 I-
             Force'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 ("I-
              Force") 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 I-
           Force 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 Fame-
           Midamco Company, L.L.C. (by and through Fame-
           Midamco'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 I-
                   Force's line of business through I-Force, LLC.
                   (SoF #31)

                  Daily Services purchased the right to use the name "I-
                   Force. (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 I-
                 Force'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 I-
                 Force'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 I-
Force 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-Ohio-
6020.
        {¶ 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 Fame-
               Midamco 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, 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.

               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).
