Attorney Casey Jones

Despite laws requiring drivers to carry insurance, we have unfortunately seen a number of cases recently involving accidents caused by uninsured or underinsured motorists. Luckily, most car insurance policies can provide some relief in these circumstances.

When does a UIM claim come into play?

An uninsured driver scenario is fairly self-explanatory – the driver who causes the accident doesn’t have insurance and, thus, collecting on a claim against him or her may prove difficult, so you have to go through your own auto insurance policy for compensation. An example of an underinsured driver, on the other hand, may be a situation where you are in an accident caused by another driver, and your medical bills and lost wages total around $40,000.00; however, the at-fault driver only has policy limits of $10,000.00. Your own auto insurance policy may kick in to cover the difference, as well as additional damages for pain and suffering. Of note, many underinsured motorist policies have specific conditions – for example, coverage may only “kick in” if the at-fault driver’s coverage is below a certain threshold, regardless of whether that threshold adequately compensates the victim.

“My insurance company is not offering me as much as I think the claim is worth. . .”

Many people operate under the reasonable but, unfortunately, mistaken belief that because it is their own insurance company that is responsible for paying a UIM claim, they should have an easier time receiving fair compensation.

“But we pay them ‘good money’ each month in premiums, and they work for us. Shouldn’t they be willing to pay more to make us whole?”

Many are surprised to learn that really isn’t the case.

We often hear complaints that the insurance company is offering an insultingly low settlement figure. It is not uncommon for our clients to have already received an offer before they reach out to us, and they do so because aren’t satisfied with the initial offer.

We can help make sure you submit an appropriate demand amount, provide all of the supporting documentation for your insurance company to make a reasonable and informed settlement offer, and frame your claim in a way that makes sense for the assigned adjuster, all in order to maximize your recovery.

. . . And if they still don’t offer a reasonable settlement figure?

Insurance companies are bound by a duty of good faith in investigating and evaluating first-party claims like UIM claims. If your insurance company unreasonably denies your claim, refuses to make a timely investigation and offer (i.e., drags their feet), or offers you an unreasonably low figure relative to your damages after exhausting all negotiations, you may have an additional claim for bad faith. If successful in bringing that claim, you may also be entitled to punitive damages, court costs, and/or attorneys’ fees, in addition to your recovery on the underlying accident claim.

We are here to help…

I often hear of car accident victims being afraid to involve an attorney for fear that their legal fees may “eat into” any settlement they may receive. While this is certainly a valid concern, working with counsel frequently has the opposite effect, ultimately. This is because we can often increase the “net” to you by framing your claim in a way that maximizes recovery and, possibly, getting your subrogation liens reduced where appropriate. We make it a priority to never take a case unless we believe we can “create value” for the client. Please feel free to reach out to me at (513) 943-5673 or casey@finneylawfirm.com if you’d like to set up a free consultation. I am also offering remote consultations to during this time to honor COVID-19 health concerns.

 

Attorney Casey A. Jones

Unless you’ve been living under a rock somewhere, chances are the current COIVD-19 pandemic has affected at least one, and likely multiple facets of your life. But how do these circumstances impact contractual obligations made pre-COVID-19? Can the pandemic or the economic turmoil it is has created serve as a justification or excuse for getting out of a contract? For instance, if you contracted to purchase real estate in February, before all of the furloughs and Stay at Home Orders, do you still have an obligation to close on that purchase? While the case law surrounding this question is likely to dramatically expand in light of recent events, the answer could likely be “no” under Ohio law, at least as it stands today.

Four Corners Rule

As an initial proposition, contracts are governed by the “four corners rule,” meaning they will be interpreted consistent with what appears on the face of the document. Chan v. Miami Univ., 73 Ohio St. 3d 52, 57 (1995) (“[A]n instrument must be considered and construed as a whole, taking it by the four corners as it were.”). Where unambiguous, no additional terms will be read into the contract, and the terms that are contained within the document will be given their ordinary meaning. Fidelity & Casualty Co. v. Hartzell Bros. Co., 109 Ohio St. 566, 569 (1924) (“This court cannot make a new contract for the parties where they themselves have employed express and unambiguous terms. In the construction of contracts the language employed must be given its usual and ordinary meaning.”).

Parties to a contract are, thus, bound by the contract’s plain and unambiguous terms and are obligated to do that which they have promised in the contract, subject to certain narrow exceptions…

Force Majeure

Contracts often contain “force majeure” clauses. Roughly translated, force majeure is Latin for “superior forces.” Often, you will see this interpreted or referred to as an “Act of God.” What this means in a practical sense is that there is some sort of unforeseeable, intervening circumstance that justifies non-performance under the contract. For example, you have a contract to rent an apartment unit (a lease) but, right before you move in, a bolt of lightening strikes the apartment building and it burns to the ground. Depending on the language of the force majeure clause, this would likely be a qualifying unforeseeable circumstance that could nullify the lease.

Relative to real estate transactions, force majeure clauses are perhaps more often seen in the commercial context than the residential. Many standard realtor’s contracts do not contain such clauses. These clauses may also appear in certain consumer transactions – think contracts for goods or services to be performed.

Consistent with the four corners rule, courts cannot “read in” a force majeure clause where one does not appear on the face of the contract. Therefore, if your contract does not contain a force majeure clause, you likely cannot claim it as a reason for terminating the contract or skirting your obligations thereunder. See Wells Fargo Bank, N.A. v. Oaks, 2011 Ohio Misc. LEXIS 4812, at *7 (Franklin C.P. June 24, 2011) (rejecting force majeure argument where the contract did not contain a force majeure clause).

Where a contract does contain a force majeure clause, courts are likely to interpret such clauses in a very narrow fashion. Thus, if the clause does not specifically contemplate disease, pandemic, unexpected unemployment, or business closures, it may not provide relief in the specific COVID-19 context.

What about changing financial circumstances or “impossibility” of complying with your obligations, more generally?

Despite the non-existence of an applicable force majeure clause, one might think that his or her general inability to pay that which they promised under the contract or worsening financial conditions might excuse performance under the contract. While this may seem like a logical conclusion at first glance,  the law dictates that “[m]istaken assumptions about future events or worsening economic conditions, however, do not qualify as a force majeure.” Stand Energy Corp. v. Cinergy Servs., 144 Ohio App. 3d 410, 416 (1st Dist. 2001); see also Wells Fargo, at *7-8 (“[E]conomic down-turn is a risk that every business person necessarily undertakes when they enter into a contract . . .That this country incidentally suffered an economic downturn during the term of their contract does not discharge them from their contractual obligations.”). “A party cannot be excused from performance merely because performance may prove difficult, burdensome, or economically disadvantageous.” State ex rel. Jewett v. Sayre (1914), 91 Ohio St. 85, 109 N.E. 636, 12 Ohio L. Rep. 291.

This body of case law generally speaks to “objective” versus “subjective” impossibility. While the law might sanction non-performance based on objective impossibility (i.e., no one could reasonably fulfill their obligations under the circumstances), it typically does not excuse performance based on subjective impossibility (i.e., a particular party cannot fulfill their obligations under the circumstances).

Can challenges posed by COVID-19, independent of financial concerns, create a justification for non-performance?

In the real estate context, for instance, what about the health risks posed by out-of-state buyers or sellers traveling for closings? Fortunately, we live in an era that offers a wealth of technological options here. For example, many title companies are offering “remote” closings.  If this is a concern for you, consider reaching out to Ivy Pointe Title for your closing needs, as they offer a staff of experienced title professionals, e-notary licensure in both Ohio and Kentucky, and remote closings, which allow parties to close on real estate transactions from the comfort and safety of their own homes where necessary.

We can help…

All this being said, parties to a transaction can often jointly agree to terminate or delay performance if they so choose, though a subsequent writing may be required to effectuate this agreement in a manner that will be enforceable and protect both sides down the road.  If you are party to a transaction and the other side has threatened non-performance where there has been no agreement to terminate or delay, these are likely some of the arguments you will see. On the other hand, if you are concerned about your ability to perform under a contract, there may be additional language within the “four corners” of your contract that could provide some relief. Contracts are exceedingly unique from one another, such that there really is no “one size fits all” approach.

Finney Law Firm has a team of legal professionals with experience ranging from real estate to employment to general commercial law, and we would be happy to review your contract and provide feedback as to your options or help with drafting amendments thereto. Please feel free to reach out to me at (513) 943-5673 or casey@finneylawfirm.com to set up a remote consultation.

Additionally, our attorneys have authored a number of blog entries relative to the COVID-19 crisis and hosted webinars as to potential relief for employers, small businesses, and 1099 employees that may also be of interest. And for more on commercial or real estate transactions and “force majeure,” click here.

We hope you are all staying safe and healthy during this unprecedented time.

Ohio Dog Bite Statute – When Man’s Best Friend Isn’t So Friendly

During my first year of law school, we were assigned a research and writing project on the Ohio Dog Bite Statute but, until recently, I had not yet been faced with this legal issue in my practice. In revisiting this area of the law, I found I have a new appreciation for it, both in terms of being able to help my clients and because I now have two German Shepherds of my own. I also realized there are quite a few misconceptions out there as to when a dog bite/attack may be actionable.

Statutory language

The Ohio Dog Bite Statute provides in relevant part:

The owner, keeper, or harborer of a dog is liable in damages for any injury, death, or loss to person or property that is caused by the dog, unless the injury, death, or loss was caused to the person or property of an individual who, at the time, was committing or attempting to commit criminal trespass or another criminal offense other than a minor misdemeanor on the property of the owner, keeper, or harborer, or was committing or attempting to commit a criminal offense other than a minor misdemeanor against any person, or was teasing, tormenting, or abusing the dog on the owner’s, keeper’s, or harborer’s property.

Ohio Rev. Code 955.28(B). In simpler terms, an “owner, keeper, or harborer” of a dog is strictly liable to anyone their dog injures, unless the injured person was trespassing, committing a criminal offense, or “teasing, tormenting, or abusing the dog on the Owner’s, keeper’s or harborer’s property” at the time of the injury.

Myth: “Dogs in Ohio get ‘one free bite.’”

Many believe that a dog owner (or keeper or harborer) is not liable to a person injured by their dog unless they had reason to know the dog was aggressive. This is often colloquially referred to as a “one free bite” rule. The idea is that the owner is not liable the first time it happens because he or she has no reason to know that the dog is capable of such behavior but, after that, the first bite serves as the “reason to know,” and the owner can be held responsible from that point forward.

Ohio does not have a “one free bite rule.” There is no requirement that the injured person prove negligence, or that the owner knew the dog was dangerous, or even that the owner did anything wrong whatsoever. This is often referred to as “strict liability.” In other words, the “owner, keeper, or harborer” of the dog is liable even if they aren’t at fault. See Allstate Ins. Co. v. U.S. Associates Realty, Inc., 11 Ohio App. 3d 242, 464 N.E.2d 169, 1983 Ohio App. LEXIS 11287 (Ohio Ct. App., Summit County 1983) (finding that R.C. 955.28, the dog bite statute, does not establish negligence per se; rather, the statute establishes liability without regard to fault or the dog owner’s negligence).

Myth: “I can’t be liable if it isn’t my dog.”

The Ohio Dog Bite Statute imposes liability on, not only owners, but also keepers and harborers. Individuals other than the owner of a dog have been found to be harborers or keeper under the statute in several cases throughout Ohio. See, e.g., Lewis v. Chovan, 2006-Ohio-3100 (Ohio Ct. App., Franklin County 2006) (pet groomer found to be a “keeper” under the statute even she was only temporarily exercising control over the dog); Buettner v. Beasley, 2004-Ohio-1909 (Ohio Ct. App., Cuyahoga County 2004) (while boyfriend was technically the owner, his girlfriend was considered a “keeper”); Sengel v. Maddox, 31 Ohio Op. 201 (Ohio C.P. 1945) (finding that a person who is in possession and control of the premises where the dog lives, and silently acquiesces in the dog being kept there by the owner, can be held liable as a “harborer” of the dog).

Exceptions to Liability

In addition to the explicit exceptions set forth in the statute (i.e., if the injured person is trespassing, committing a criminal act, or otherwise tormenting/abusing the dog), case law has carved out a couple of additional caveats. The first is that an injured person cannot recover if they were a harborer or keeper of the dog. For example, in the Lewis case cited above, a pet groomer was determined to be a “keeper” of the dog during the time it was in the groomer’s possession and control. In that instance, the pet groomer likely could not recover against the owner of that dog under the statute for any injury the dog caused while under the groomer’s possession and control – i.e., while he or she was a “keeper.” The same would presumably be true for a veterinarian. Similarly, as set forth in the above Buettner case, a live-in girlfriend can likely not recover against her boyfriend who is, technically, the owner of the dog. In other words, an owner is likely not strictly liable to a keeper or harborer under the statute for injuries that occur while the injured person is considered a keeper or harborer.

Landlord/Tenant Liability

Another niche of the case law interpreting the Ohio Dog Bite Statute exists relative to landlord/tenant situations, i.e., situations where an injured person seeks to hold a landlord liable for injuries sustained after an attack by a tenant’s dog. The cases throughout Ohio tend to be fairly fact specific as to this issue. Most courts have held that landlords can be liable if the attack occurs in a common area (such as a hallway or foyer). See Weisman v. Wasserman, 2018-Ohio-290, 2018 Ohio App. LEXIS 335 (Ohio Ct. App., Cuyahoga County 2018) (finding that a landlord was not entitled to summary judgment where the dog attack occurred in a hallway, which could potentially be considered a common area). The critical question is whether the tenant retained exclusive possession and control over the area in which the attack occurred. See Pangallo v. Adkins, 2014-Ohio-3082, 2014 Ohio App. LEXIS 3018 (Ohio Ct. App., Clermont County 2014) (landlord was not a harborer of the dog because the incident did not occur in a common area, but rather in an area where the tenant had sole possession and control).

It follows that landlord liability is perhaps more common in apartment complexes than, for instance, a situation where the tenant is renting an entire house (where there are likely not “common areas” and the tenant retains possession and control of the entire premises). Additionally, a landlord will generally not be liable where the landlord or lease explicitly prohibits dogs from being on the premises and does not know that about the dog, regardless of whether the attack occurs in a common area. See Lynch v. Lilak, 2008-Ohio-5808, 2008 Ohio App. LEXIS 4865 (Ohio Ct. App., Erie County 2008) (finding that the landlord could not be a “harborer” under the statute where the lease prohibited pets and the landlord did not know of the dog, or permit or acquiesce to the dog’s presence).

Practically speaking, how do these claims work?

Generally, when we evaluate cases, we focus on three key factors: liability, damages, and collectability. With the Ohio Dog Bite Statute, liability is typically a non-issue provided that one of the above-described exceptions does not apply. We also look at damages (such as medical expenses, lost wages, and anxiety when faced with dogs in the workplace). Often, the clients we represent in these cases were treated in an ER setting, were forced to miss some work, have scarring, etc. and are, thus, entitled to compensation for those damages in addition to pain and suffering. Where many cases become complicated is the collectability aspect – in other words, even if we get a judgment against the liable party, will they be able to pay it or do they have assets to which we could attach in satisfaction of that judgment? However, many homeowner’s insurance policies cover liability for injuries caused by the homeowner’s dog, making the collectability question a bit of a non-issue as well.

Conclusion

We understand that it can be difficult to navigate this fairly nuanced area of the law, which, as we’ve seen, is full of misconceptions, exceptions, and caveats. If you have been injured by a dog, we would love to meet with you and walk you through some of your options – at no charge.

For help defending against or pursuing a dog bite claim, contact Casey Jones at 513.943.5673.

 

 

Finney Law Firm prevails in “Mansion House case” through Ohio Supreme Court

Attorney Casey A. Taylor

Recently, our firm had a probate decision make its way all the way up to the Ohio Supreme Court as part of joint effort by Attorneys Isaac T. Heintz of our transactional team and Casey A. Taylor of our litigation team.

While the precise legal issues in that case were somewhat idiosyncratic (and certainly underutilized), the underlying situation in that case was not all that unique. That is, our firm has been approached on more than one occasion by an individual whose spouse has passed away and, to their surprise (or perhaps not), had disinherited them before their passing.

Many times, the surviving spouses are left believing they have no recourse and will be left with pennies on the dollar relative to the decedent’s estate. However, that is not always the case.

A Surviving Spouse’s Right to Purchase Assets from Decedent’s Estate

Under Ohio law, a surviving spouse has the right to purchase certain assets from an estate at the appraised value, including “the mansion house.” See R.C. 2106.16 (providing the right to purchase “the mansion house, including the decedent’s title in the parcel of land on which the mansion house is situated and lots or farm land adjacent to the mansion house and used in conjunction with it as the home of the decedent” at its appraised value, provided that it is not specifically devised/bequeathed to someone else).

The “mansion house” is often not an actual mansion, as the name would suggest but, generally speaking, can be thought of as the decedent’s primary residence. See id. (“. . . as the home of the decedent.”) (emphasis added). Additionally, if there is a farm associated with the mansion house, which is used in connection with the home (and not a commercial farming operation), the farm should also be subject to the surviving spouse’s right to purchase.

The statute, however, is not limited to the “mansion house” but also may apply to household goods and other personal property under certain circumstances. Although it is typically not the focal point of a surviving spouse’s rights, R.C. 2106.16 can provide an opportunity for a surviving spouse to promote a more expeditious resolution of an estate and, if the facts and circumstances are right, benefit monetarily.

As a threshold issue, R.C. 2106.16 only applies to assets that are, “not specifically devised or bequeathed.”  A specific devise or bequeath occurs when a Will specifically references a designated asset transferring to a particular party (e.g., I give to John Doe the real estate located on 123 General Street, Anytown, Ohio).

A residual devise/bequest, by contrast, almost never qualifies as a specific devise/bequest (e.g., I give to John Doe the rest, residue and remainder of my estate).  As long as the asset in question is not subject to a specific bequest, R.C. 2106.16 may be an option as to the asset in question.

R.C. 2106.16 – the “Mansion House Statute” – Applied in Real Life

Not only can the exercise of this right allow the surviving spouse to purchase and, at his or her election, remain in the home that served as the decedent’s residence (and, perhaps, as the surviving spouse’s residence too, though this is not required – keep reading. . . ), but it can also serve to maximize an otherwise disinherited spouse’s share under the decedent’s estate. For instance (and especially where the mansion house appraises for less than the surviving spouse believes it is worth), a practical, yet largely overlooked strategy available to surviving spouses is to purchase the mansion house (or another undervalued asset contemplated under the statute) and immediately sell it to a third-party purchaser for a higher price. R.C. 2106.16 imposes no requirement that the surviving spouse maintain ownership of the mansion house/asset for any set period of time.

Thus, if the subsequent sale generates excess proceeds, those proceeds would belong to the spouse. In this scenario, even a disinherited surviving spouse who would otherwise take very little under the decedent’s estate may be able to pocket a significant amount by capitalizing on the difference between the appraised value and market value/purchase price of a sale to a subsequent buyer, consistent with his or her rights under R.C. 2106.16.

Further, there may be instances where the purchase of one or more assets by the surviving spouse (or the threat of him/her purchasing) could help facilitate a resolution or settlement of the decedent’s estate. For example, if the asset is desired by the executory/adverse party, he or she may seek a prompt resolution if that asset is in jeopardy, or the surviving spouse could otherwise use his or her right to purchase as a bargaining chip of sorts.

These are just a couple of ways that R.C. 2106.16 could be used to the benefit of a surviving spouse in an otherwise less-than-ideal situation in a practical sense. This is an area where our firm excels – we have a well-rounded team, with experience in diverse areas of the law and real estate, who come together to develop innovative solutions for our clients.

Our Case

In our “Mansion House” case, our client was a surviving spouse asserting her right to purchase the home and farm owned by her husband, which served as his primary residence. The executor of the decedent’s estate challenged our client’s right to purchase the home/farm, arguing primarily that she (the surviving spouse) did not live at the home/farm full time at the time of her husband’s (the decedent) death. In essence, the executor wished to impose a residency requirement on the surviving spouse where the statute only contemplates the residency of the decedent. Though more secondary arguments, the executor also asserted that:

  • the property was somehow specifically devised by virtue of the residuary clause in the decedent’s will and, thus, excluded from the purview of R.C. 2106.16 (conveniently, the executor was the beneficiary of the residual and desired the home/farm), and that
  • if the decedent’s home was the “mansion house,” and if our client had a right to purchase it, that right did not extend to the farmlands adjacent to the home because they were a separate parcel.

The trial court rejected all three of the executor’s arguments and found for our client (i.e., that the home/farm at issue was a “mansion house” under that statute and that our client was entitled to purchase it at its appraised value). Specifically, the trial court found that the plain language of the statute does not impose a residency requirement on the surviving spouse – the “mansion house” is the home of the decedent.

Additionally, the residuary clause contained no specific devise of the property at issue. And lastly, the statute (R.C. 2106.16) explicitly contemplates “lots or farm land adjacent to the mansion house” and used in conjunction therewith. On appeal by the executor, the Twelfth District Court of Appeals unanimously upheld the finding in our client’s favor. You can read the full appellate decision HERE (link to 12th Dist. Decision).

In a final effort to thwart our client’s purchase of the property, the executor sought discretionary review from the Ohio Supreme Court, arguing that the question was a great issue of public importance. The High Court, however, declined to exercise its jurisdiction to hear the case, leaving the lower court decisions for our client undisturbed.

Conclusion

This was a very favorable outcome for our client and our firm, and we take pride in our ability to deliver creative solutions to our clients’ unique, and often difficult, legal questions. If you would like to speak someone regarding estate planning or any other legal questions you may have, please don’t hesitate to reach out to us.  You may reach Isaac Heintz at 513.943.6654 and Casey Taylor at 513.943.5673.

 

While it may seem obvious to some, many do not realize the very harsh consequences that can result from failing to respond to a lawsuit. If you’ve been sued and don’t really understand what the next steps are, you aren’t alone.

When a party files a civil (i.e., not criminal) lawsuit against another, the case is initiated upon the filing of a “Complaint.” The Complaint sets forth the parties, the factual allegations, the causes of action, and the remedy or relief sought.

Okay, so you’ve been served with the Complaint . . . Now what?

Once the defendant is served with the Complaint (thus, putting the defendant on notice of the lawsuit), he or she is required to respond within a certain number of days (28 days in Ohio; 20 days in Kentucky). The response to the Complaint could be an “Answer” (where the party will admit or deny each of the allegations and set forth any defenses it may have) or, alternatively, a defendant can respond with a variety of motions, such as a motion to dismiss.

If a defendant fails to respond to the Complaint within the time frame allotted, the plaintiff may move for “default judgment” against the defendant. This is, essentially, what it sounds like – the moving party wins by “default.” Under Ohio law, “default judgment is proper against an unresponsive defendant ‘as liability has been admitted or confessed by the omission of statements refuting the plaintiff’s claims.’”  Ohio Valley Radiology Assoc., Inc. v. Ohio Valley Hosp. Ass’n., 28 Ohio St. 3d 118, 121, 502 N.E.2d 599 (1986). In other words, if you do not refute the plaintiff’s allegations, you are deemed to have admitted them. The onus is on the defendant.

If you do not respond to the Complaint and, therefore, admit the allegations, the other side’s claims have, more or less, been proven in most instances. For example, if someone sues you for breach of contract and claims damages of $70,000.00, and you fail to respond to the Complaint (thus, admitting that you breached the contract and owe the sought damages), the Court can enter judgment against you for the full $70,000.00. The plaintiff can then begin to pursue collection efforts against you, including garnishing wages and/or bank accounts, foreclosing on property, etc.

Additionally, default judgments can be very difficult to have overturned. In order to get relief from the judgment, a defaulting defendant must demonstrate that he or she has a meritorious defense to the lawsuit, that one of the provisions of Civ.R. 60(B) applies, and that the motion for relief was filed within a reasonable time after the judgment was entered. GTE Automatic Electric, Inc. v. ARC Industries, Inc., 47 Ohio St. 2d 146, 150-51 (1976). This is not always an easy task.

In the case of Ben. Ohio, Inc. v. Poston, 5th Dist. Fairfield No. 03-CA-07, 2003-Ohio-4577, the court held that defendants were not entitled to relief from judgment where their daughter signed for service of the Complaint and did not inform them. In Fouts v. Weiss-Carson, 77 Ohio App. 3d 563 (11th Dist. 1991), the defendant was not entitled to relief from judgment where she claimed she was distraught from her divorce and seeking psychiatric treatment when her response was due, absent a showing that defendant’s condition rendered her incompetent). And in Universal Bank N.A. v. Thornton, 8th Dist. Cuyahoga No. 72553, 1997 Ohio App. LEXIS 5694, at *7 (Dec. 18, 1997), the court held “[a] party who willfully and deliberately chooses to ignore a complaint and has stated no other reason for failing to appear or answer a complaint has not stated adequate grounds for relief from default judgment.”

The Answer: Answer the Complaint (and Make a Plan), and We Can Help You

 Even if you believe the claims against you are entirely meritless, it is still important to respond to any claims filed against you so that you can refute the plaintiff’s claims and assert your defenses. You may even have a viable counterclaim against plaintiff (which often incentivizes an early settlement and/or dismissal). While no one wants to spend a ton of money defending a lawsuit (especially a meritless one), it is necessary to follow the proper steps and maybe even formulate an “exit strategy.” Otherwise, the result could be devastating. The litigation team at the Finney Law Firm understands that the legal process can be confusing (and, sometimes, even unforgiving) to those who, like most, don’t litigate often. We would be happy to speak with you about your rights and obligations as a party in litigation, as well as strategies to help minimize your exposure.

Our firm prides itself on being full-service. That is, we create value for our clients in matters ranging from routine contract drafting to complex litigation. However, our representation of clients in litigation isn’t just limited to the trial level – we also handle appeals (click here for more on our trips to the Supreme Court of the United Statesand Ohio Supreme Court). After all, if judges always got it right, the rate of overturned decisions would be zero.

Appellate practice is procedurally complex

Appealing a judgment requires adherence to an entirely new set of rules, separate from those involved in lower-court litigation. These rules often involve strict deadlines and harsh penalties for non-compliance. One common though rarely-discussed aspect of the appellate process is the post-judgment bond. Ohio Civ.R. 62 gives courts discretion to impose a bond on a non-prevailing party in litigation pending appeal. That is, if you are a party to litigation and you lose, you may be required to secure a bond in the full amount of the judgment (or more) to prevent the other side from seizing your assets while you pursue an appeal.

One case requiring a post-judgement bond to stay collections pending appeal

Although a rather extreme illustration, one such example of the post-judgment bond scenario is the Gibson’s Bakery v. Oberlin College case. There, Gibson’s Bakery sued Oberlin College alleging that Oberlin officials supported the narrative that the Bakery had a long history of racism and discrimination after a shoplifting incident involving an Oberlin student and, ultimately, suspended their long-standing business relationship. The loss of this business was paralyzing to the Bakery, and a jury returned a verdict in favor of the Bakery for more than $30 million, including compensatory and punitive damages, as well as attorneys’ fees. Oberlin sought a stay of execution of the judgment amount under Civ.R. 62 (so as to prevent Gibson’s Bakery from seizing their bank accounts, equipment, etc. in satisfaction of the judgment) while they pursued an appeal. The court ultimately granted Oberlin’s motion, but conditioned the stay on Oberlin obtaining a bond in excess of $36 million, the full amount of the judgment plus three years’ interest.

Why are post-judgment bonds required?

“The purpose of a stay pending appeal is to preserve the status quo.” Monarch Constr. Co. v. Ohio Sch. Facilities Comm’n, Franklin C.P. No. 02CVH04-4222, 2002-Ohio-2957, ¶14. The idea is that, if the losing party pursues an appeal, they at least believe that the court made an error and that they should not be held responsible for the full amount of the judgment or at all. Accordingly, they would be prejudiced if, for instance, the prevailing party was permitted to execute the judgment against them and then the decision was ultimately overturned (i.e., the appellate court, for whatever reason, finds that the prevailing party was not entitled to the judgment in the first place).

But what about the prevailing party, who would otherwise be forced to wait (potentially, several years) to collect on a judgment that will likely be upheld, at which time the losing party may no longer have assets to cover the amount of the judgment? Enter Civ.R. 62(B)”

When an appeal is taken the appellant may obtain a stay of execution of a judgment or any proceedings to enforce a judgment by giving an adequate supersedeas bond. The bond may be given at or after the time of filing the notice of appeal. The stay is effective when the supersedeas bond is approved by the court.

Furthermore,

. . . an appeal does not operate as a stay of execution until a stay of execution has been obtained pursuant to the Rules of Appellate Procedure or in another applicable manner, and a supersedeas bond is executed by the appellant to the appellee, with sufficient sureties and in a sum that is not less than, if applicable, the cumulative total for all claims covered by the final order, judgment, or decree and interest[.]

Exceptions to the rule

The requirement of a post-judgment bond (or “supersedeas” bond) should not be taken for granted. Courts have found that, in some cases, no bond is required at all if there is adequate security for the prevailing party. See, e.g., Irvine v. Akron Beacon Journal, 147 Ohio App. 3d 428, 451-52 (9th Dist. 2002) (upholding the trial court’s finding that “the Plaintiffs are adequately secured by the Defendant’s solvency and well-established ties to Akron, Ohio and that, therefore, the Defendants are not required to post a bond at this time.”); Lomas & Nettleton Co. v. Warren, 11th Dist. No. 89-G-1519, 1990 Ohio App. LEXIS 2720 (June 29, 1990) (holding that “the posting of a supersedeas bond is not mandatory to stay an execution in all cases”); Whitlatch & Co. v. Stern, 9th Dist. No. 15345, 1992 Ohio App. LEXIS 4218, at *25 (Aug. 19, 1992) (“[U]nder appropriate circumstances, the trial court may exercise its discretion and stay the execution of judgment without requiring the appellant to post a supersedeas bond.”).

Additionally, the government is never required to post a bond. Civ.R. 62(C) (“When an appeal is taken by this state or political subdivision, or administrative agency of either, or by any officer thereof acting in his representative capacity and the operation or enforcement of the judgment is stayed, no bond, obligation or other security shall be required from the appellant.”).

Finally, no bond may be required where the appeal arises out of an administrative decision wherein no money damages are at issue (for instance, a zoning appeal). Trademark Homes v. Avon Lake Bd. of Zoning Appeals, 92 Ohio App. 3d 214, 634 N.E.2d 685, 1993 Ohio App. LEXIS 6239 (Ohio Ct. App., Lorain County 1993) (finding that a supersedeas bond under R.C. 2505.06 is required only where a judgment was rendered for money damages), dismissed, 69 Ohio St. 3d 1449, (1994).

What if the losing party does not or cannot post the bond?

Unfortunately, indigence is often not an excuse recognized by courts. Instead, “R.C. 2505.11 provides a mechanism for substituting the supersedeas bond requirement in connection with an appeal.”GPI Distribs. v. Northeast Ohio Reg’l Sewer Dist., 8th Dist. Cuyahoga No. 106806, 2018-Ohio-4871, ¶ 27 (rejecting appellant’s argument that it could not post bond because it was indigent). That is, “[a] conveyance of property may be ordered by a court instead of a supersedeas bond in connection with an appeal” (i.e., in lieu of money). R.C. 2505.11.

If the movant/appellant fails to post a bond, when required, no stay of execution is perfected and the trial court retains jurisdiction, thus, rendering dismissal of the appeal appropriate.See generallyDennisonv. Talmage, 29 Ohio St. 433 (1876) (dismissing appeal for failure to pay bond); Collins v. Millen, 57 Ohio St. 289 (dismissing appeal for failure to pay bond). See alsoHoward v. Howard, 2d Dist., 1989 Ohio App. LEXIS 3643, *5-6 (Sept. 19, 1989), citing State ex rel. Klein v. Chorpening, 6 Ohio St. 3d 3 (1983) (“Until and unless a supersedeas bond is posted the trial court retains jurisdiction over its judgment as well as proceedings in aid of the same.”).

Let us help in your appellate matter

We are proud of our appellate success in Ohio, Kentucky and Federal Courts, including important against-the-odds victories at:

  • the United States Supreme Court (we had lost the issue three times in the trial courts of Southern Ohio and twice in the 6th Circuit Court of Appeals, and yet won 9-0 at the Supreme Court on an important First Amendment issue) and
  • Ohio Supreme Court (we lost at the trial court and then lost 3-0 in the appeals court, but won 7-0 at the Ohio Supreme Court on an open meetings issue).

The above authorities provide just a glimpse of how the appellate process can be tricky.

If you’d like to discuss your rights and responsibilities on appeal, please don’t hesitate to contact Casey Taylor ((513) 943-5673 ) or Brad Gibson ((513) 943-6661).

Attorney Casey A. Taylor

We’ve all heard of bankruptcy being used as a shield to protect against creditors’ attempts at debt collection. However, in the practice of law especially, the automatic stay is no longer an issue reserved for those who file bankruptcy, nor does it exist solely within the confines of the bankruptcy courts. Sure, the bankruptcy court generally governs matters involving the “stay” but, particularly in our increasingly adversarial society, these issues tend to bleed over into other legal proceedings as well, such that every litigator (and perhaps every litigant) should be apprised of the ways in which the automatic stay could impact them and their claims.

The bankruptcy petition triggers the automatic stay – imaginary armor that then cloaks the debtor (the person who files bankruptcy), halting all collection efforts by creditors (those seeking to collect money from the debtor).  Uponfiling bankruptcy, a debtor is immediately protected by the automatic stay which prohibits, among other things, “any act to collect, assess, or recover a claim against the debtor that arose before the commencement of the case. . . .” 11 U.S.C. § 362(a)(6). The automatic stay imposes on creditors an affirmative dutyof compliance. Sternberg v. Johnston, 595 F.3d 937, 943 (9th Cir. 2010).

In other words, once you file bankruptcy, your creditors (whether that be the telephone company merely seeking to collect a past-due bill, or someone intending to sue you on a $1 million tort claim) are no longer allowed to take any steps toward recovering that which they think you owe them, in court or otherwise. They cannot call you, they cannot send you a letter threatening action against you if you refuse to pay, they cannot file a lawsuit against you, and they cannot continue to pursue claims that are already pending against you without explicit relief from the bankruptcy court in which your petition is filed. Violating the automatic stay is a very serious offense that often results in an award of damages and attorney’s fees against the violating party.  11 U.S.C. 362(k).

Perhaps you represent a defendant in a contract case, your client filed for bankruptcy (invoking the stay), and the plaintiff’s attorney then serves you with discovery request asking your client to admit that he owes the money sought in the lawsuit. The automatic stay protects your client. Or, maybe you are a passenger who was injured in a car accident, and you are preparing to sue the at-fault driver (a debtor in bankruptcy) for reimbursement of medical expenses. The automatic stay likely prevents you from doing so.

In a practical sense, the affirmative duty of compliance placed on creditors even goes beyond just monitoring their own conduct to ensure that they are not violating the stay – it imposes a duty to police against others, namely courts, violating the stay, as well. This may seem a harsh result, but the Sixth Circuit has explicitly held that creditors cannot sit idly by and allow stay violations occur. See generally Wohleber v. Skurko, 2019 Bankr. LEXIS 653 (6th Cir. March 4, 2019).

In the Wohleber case, the husband-debtor was subjected to a post-petition sentencing hearing arising out of a pre-petition contempt proceeding (i.e., he failed to pay a property settlement previously ordered by a domestic relations court and the hearing was to determine his consequences). At the hearing, the debtor was put in jail until he paid the amount ordered by the domestic relations court (also pre-petition). The husband-debtor later argued that the wife-creditor and her attorney violated the automatic stay by allowing the sentencing to proceed. The bankruptcy court, initially, rejected this argument on the grounds that neither the wife-creditor, nor her attorney took any affirmative action to collect the debt post-petition. However, the Sixth Circuit reversed, holding that the wife-creditor and her attorney had an affirmative duty to “prevent the use of the sentencing hearing and [subsequent confinement] of the [debtor-husband] to coerce payment of the dischargeable property settlement.” Id., at *44.

In sum, the automatic stay is not a concept reserved for bankruptcy courts and the attorneys who practice primarily within it. Instead, it intersects with nearly every area of the law and, frequently, in litigation.  Because the stakes are so high for stay violations and missteps can be costly, it is important that creditors (or potential creditors, or their counsel) are in-tune with what the stay means and the type of conduct it prohibits. It is likewise important for debtors to know their rights so that they can recognize improper conduct if and when it occurs to their detriment.

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For assistance with all of your commercial litigation needs, contact Casey A. Taylor at 513.943.5673 or Bradley M. Gibson at 513.943-6661.

Many times, liability in car accidents is not in question. For example, in Ohio, if someone rear ends you, they are almost always cited for failure to maintain an assured clear distance ahead (often abbreviated as “ACDA”) codified in O.R.C. 4511.21(A). Liability is much easier to prove where the allegedly at-fault driver has been cited. That proof may come even easier where the at-fault driver has admitted to the charges or paid the fines associated therewith. In cases where liability is not at issue, the claim becomes primarily a question of damages (i.e., medical bills, lost wages, pain and suffering, etc.), which can often (though not in every case) be resolved with the at-fault driver’s insurance company without the need for litigation. See (LINK TO PI/MED MAL CONSIDERATIONS ENTRY) for more information on statutes of limitation and other considerations.

However, there are instances where liability is in question, especially where no citations have been issued.  The other driver and/or his or her insurance company may dispute that it was his or her actions that caused the accident. Or, perhaps more often, they may argue that you were “comparatively negligent” (i.e., partially at fault). Ohio exercises a Modified Comparative Fault rule, meaning if the plaintiff’s liability exceeds that of the defendant, he or she may be barred from recovery. See O.R.C. 2513.33. Stated simply, if you are deemed to be 51% or more negligent, you can be absolutely barred from recovery – you get nothing. See Power v. Boles, 110 Ohio App. 3d 29, 44-45 (10th Dist. 1996). If you are deemed to be 50% or less negligent, you can still recover, but your recovery is determined according to your percentage of fault. See id.  For example, if you are in an accident and suffer $100,000.00 of damages, but you are deemed to be 40% liable, you may only receive $60,000.00.

Because the percentage by which you are deemed to have been comparatively at fault may operate to bar any recovery or drastically reduce your recovery, this is often a factor to which we give significant weight when evaluating your claims and negotiating with the other driver’s insurance company. In the foregoing example, you may not be thrilled with the idea of only recovering 60% of your damages, and understandably so. However, this exposes you to some risk because, if a jury ultimately determines that you are even more at fault and, thus, assigns to you 55% of the liability, you could end up receiving nothing. Accordingly, any possibility that you could be assigned a portion of the fault may likely warrant some serious consideration.

Attorney Casey A. Taylor

Consider this scenario:

You were recently involved in a car accident that was not your fault. You were injured and have, therefore, incurred some medical expenses and had to take some time off of work, resulting in lost wages. Your injuries have hindered you from engaging in your normal day-to-day activities. You’ve started to receive medical/ambulance bills, letters from insurance companies, etc.

Or perhaps you think you may have a claim for medical or dental malpractice…

What do you do next? How do you go about getting compensated for your injuries?

Unfortunately, these situations are all too common. The underlying incident itself is a continuous source of stress, and trying to navigate the process of submitting an insurance claim or filing a lawsuit becomes even more overwhelming. Most people, understandably, don’t know the statute of limitations on a personal injury or medical/dental malpractice claim, nor do they understand how subrogation interests work or what “subrogation” even means (LINK TO SUBROGATION BLOG ENTRY). This is where having an experienced and knowledgeable attorney to represent your interests and help you navigate these processes can truly be invaluable.

Statute of Limitations

First, the law requires you to bring any claims you have within a certain period of time, referred to as a “statute of limitations.” For personal injury and medical/dental malpractice claims, the statutes of limitations are relatively short. If you aren’t aware of this, it is easy to miss out on your opportunity to bring your claims. In Ohio, you have two years for personal injury and only one year for medical/dental malpractice. O.R.C. 2305.10(A); O.R.C. 2305.113(A).

When Time Starts to Accrue and the Discovery Rule

For personal injury claims, such as a car accident, the clock generally starts to run the moment that the incident occurs.  However, for medical/dental malpractice, the law recognizes a “discovery rule.”  The discovery rule operates to toll the statute of limitations so that it does not begin to run until you “discover” the negligence that gives rise to the claim. See Oliver v. Kaiser Cmty. Health Found., 5 Ohio St. 3d 111, 113 (1983). The discovery rule is justified in these types of cases because “[t]hat [the plaintiff] has been injured in fact may be unknown or unknowable until the injury manifests itself; and the facts about causation may be in the control of the putative defendant, unavailable to the plaintiff or at least very difficult to obtain.” Rotella v. Wood, 528 U.S. 549, 556 (2000). In simpler terms, you may not even know something is wrong (for example, that your doctor missed a diagnosis or left a surgical instrument inside of you during an operation) until months or even years later – the law does not hold that time during which you didn’t know anything was wrong against you.  However, the discovery rule does not extend to “a plaintiff’s ignorance of his legal rights,” but only “his ignorance of the fact of his injury or its cause.” Id. at 555-56. Accordingly, courts will not recognize “I didn’t know about the statute of limitations” as an excuse for failing to bring your claim(s) within that allotted time period.

Okay, so you’re still within the statute of limitations… now what?

Creating Value for Our Personal Injury and Medical/Dental Malpractice Clients

Depending on the extent of your injuries, the amount of damages, whether liability is at issue, the current level of evidentiary support, etc., our firm often recommends varying and dynamic approaches to these situations. In some cases, a demand letter sent to the negligent party and/or its insurance provider is often the best first route. In a demand letter, we outline your claims, your evidence, your damages, etc., and offer to release that party from the viable claims you have against it in exchange for a certain amount (which we can help you reasonably determine based on somewhat universal methodology often used by legal professionals and insurance companies alike). However, in some cases, a demand letter is not feasible or would likely be futile. In this instance, or in the event that the at-fault party fails to respond to the demand letter (which sometimes happens), we may suggest moving forward with litigation. We can also help you determine whether your claims will require the testimony of an expert witness (some cases require expert physician testimony, an accident reconstructionist, an economist, etc. to prove your claims and/or damages), as well as discuss other strategic considerations. In any event, we are able to shift the burden and stress off of you (the client) and assume that burden for you.

We take over the preliminary steps, such as contacting insurance companies, requesting and reviewing medical records and billing statements, etc.  If we are able to successfully negotiate a settlement on your behalf, we can also handle drafting or reviewing settlement offers/releases and take care of paying any subrogation liens you may have against you.  Perhaps most significantly, we are often able to do so on a contingency basis (meaning that you pay little to nothing out of pocket – our legal fees come out of the amount we recover on your behalf and only in the event that we are successful in getting you something). If you have been involved in an accident or think you may have a claim similar to those discussed in this entry, please do not hesitate to reach out to us.

Attorney Casey A. Taylor

 

We have previously written on the different types of deeds (Real Estate 101: Different Types of Deeds in Ohio, Kentucky, and Indiana), as well as how costly it can be to breach your covenants under a general warranty deed (Real Estate 101: Breach of General Warranty Covenants Can Be Costly Mistake).  Perhaps the most common breach occurs when you transfer property that is encumbered in some way, such as by an easement or lien, and that easement or lien is not excepted from the deed. However, one of the less discussed components of a general warranty deed is the covenant to defend. Whether you are the grantor or grantee with respect to a general warranty deed, you should be aware of when this duty arises, and what it means, in order to protect yourself, your rights, and your checkbook.

Statutory duty to defend in “short form” general warranty deeds

R.C. 5302.06 states:

In a conveyance of real estate, or any interest therein, the words “general warranty covenants” have the full force, meaning, and effect of the following words: “The grantor covenants with the grantee, his heirs, assigns, and successors, that he is lawfully seized in fee simple of the granted premises; that they are free from all encumbrances; that he has good right to sell and convey the same, and that he does warrant and will defend the same to the grantee and his heirs, assigns, and successors, forever, against the lawful claims and demands of all persons.

(Emphasis added). This means that a grantor who conveys property under a general warranty deed promises to defend the grantee and the grantee’s title against all “lawful claims and demands” of others.

What are “lawful claims and demands”?

Unfortunately, Ohio law does not provide much guidance as to what “lawful claims and demands” encompasses – this is not a defined term under the statute, nor have the courts ventured to define it in this context. A lawsuit is generally defined to be “the lawful demand of one’s right.” Ludlow’s Heirs v. Culbertson Park, 4 OHIO 5 (1829).

Additionally, in various contexts, Ohio courts have provided the following guidance as to each of the terms separately:

  • State ex rel. Grant v. Brown, 39 Ohio St. 2d 112, 116 (1974) (“To say of an act that it is ‘lawful’ implies that it is authorized, sanctioned, or at any rate not forbidden, by law.”);
  • La Fon v. City Nat’l Bank & Trust Co., 3 Ohio App. 3d 221, 223 (10th Dist. 1981) (adopting the definition of “claim” as “to assert . . . to state; to urge; to insist . . . a right or title.”);
  • Crozier, v. First National Bank of Akron, 9th Dist. Summit No. 10140, 1981 Ohio App. LEXIS 13717, *6-7 (defining “claim” as “a ‘broad comprehensive word’ that includes ‘an assertion’ and ‘a cause of suit or cause of action.’”); and
  • Eighth Floor Promotions v. Cincinnati Ins. Cos., 3d Dist. Mercer No. 10-15-19, 2016-Ohio-7259, ¶ 26 (“‘Demand’ is defined as ‘the assertion of a legal right or procedural right.”).

Thus, read collectively, a “lawful claim or demand” can be defined as “an authorized or unforbidden assertion of a right.”

Do we first have to ascertain is a “claim or demand” is lawful before duty to defend arises?

However, courts have found that the term “lawful” does not require the “claim or demand” to be meritorious before the duty to defend is triggered since this would essentially render the covenant meaningless. See Sediqe v. I Make the Weather Prods., 6th Dist. Lucas No. L-15-1250, 2016-Ohio-4902, ¶ 29 (holding that the claim or demand as it relates to the underlying duty, e.g., that the property is not free from encumbrances as warranted, need not be proven or successful before the duty arises, as “such a rule would render the duty to defend ineffective and eliminate the grantor’s right to control the defense against the claim.”). Thus, for example, a party claiming to have a lien on conveyed property need not prove the validity of their lien before the grantor’s duty to defend the grantee against such claim arises. The idea is that the grantor will step in before it gets to that point in order to defend the grantee’s title against such claims.

Does a suit have to be filed to trigger a duty to defend?

Indeed, the party asserting the claim likely isn’t even required to file suit to trigger the grantor and grantee’s respective rights and obligations under the general warranty deed. As discussed (Here), the Court in Hollon v. Abner, 1st Dist. Hamilton No. C960182, 1997 Ohio App. LEXIS 3814 (Aug. 29, 1997) did not require that the party asserting the adverse, “lawful claim or demand” bring suit before the grantor’s duties under the general warranty deed arose. In fact, the Court awarded the grantee attorney’s fees as damages in a suit initiated by the grantee because the grantee would not have incurred those fees had the grantor lived up to his obligations under the general warranty deed.

Conclusion

If you are a grantee under a general warranty deed and someone asserts a claim against your property (even if they haven’t yet filed suit), the first step to getting your grantor to defend your title as warranted is by informing the grantor that someone is asserting such a claim. As a grantor, if you receive notice that someone is asserting a claim against property that you conveyed by general warranty deed, proven or not, you will want to step up sooner rather than later. A delay in honoring your covenant to defend likely only exacerbates your grantee’s attorney’s fees (especially if your grantee has to file suit to defend his or her own title), for which you will ultimately be responsible.