Payne v. Greater Cleveland R.T.A.,
Cuyahoga App. No. 83240,
decided November 26, 2003, unreported

SUBJECT
Subrogation

RULE
The Ohio Supreme Court’s ruling that the subrogation statute was unconstitutional does not permit claimants to pursue subrogation payments previously deducted or paid from their tort recovery.

CASE DISCUSSION
In 1996, while working for RTA, claimant suffered injuries after a third-party motorist struck the bus he was operating. Claimant collected workers’ compensation benefits from his self-insured employer. In 1997, claimant brought suit against the driver of the vehicle that struck his bus. RTA intervened on authority of former R.C. 4123.931.

Claimant challenged the constitutionality of R.C. 4123.931, and filed a motion to dismiss RTA’s subrogation claim, but then settled with the tortfeasor. As part of that settlement, claimant and RTA agreed that RTA would take one-third.

Thereafter, in 2001, the Ohio Supreme Court found that R.C. 4123.931 was unconstitutional in that parts of the statute violated the Equal Protection Clause of Article 1, Section 2, of the Ohio Constitution because it created “disparate treatment” of claimants who settled their claims and claimants who litigated their claims. The Court found this disparate treatment was “irrational and arbitrary.” Holeton v. Crouse Cartage Co. (2001), 92 Ohio St.3d 115, 132, 2001-Ohio-109.

As a result, Claimant instituted this action to determine what effect the Holeton decision has on parties who settled a subrogation claim prior to the release of the decision. Citing to Clark v. Bureau of Workers’ Compensation, Franklin App. No. 02AP-743, 2003-Ohio-2193, the Court granted summary judgment. Clark stands for the proposition that courts cannot apply a subsequent change in the law retrospectively in instances where contractual rights have arisen or a party has acquired vested rights under the prior law.

Here, the parties agreed to terminate the subrogation litigation before the Ohio Supreme Court released Holeton. Once they settled the matter, contract rights vested with RTA. Consequently, Holeton cannot be applied retrospectively.