Properly drafted written contracts are typically enforceable as against the parties thereto, with few exceptions – fraud being one of them. The manner in which written contracts are treated upon the allegation of fraud is highly dependent on the type of fraud alleged. In short, it is a question of whether the party claiming fraud alleges that they were defrauded as to the terms or nature of the contract or as to the facts and representations underlying the contract.

Void and Voidability

One of the most common scenarios in which this question arises is relative to settlement agreements and/or “releases,” where one party gives some consideration (e.g., money) in exchange for the settlement and release of actual or potential legal claims. The type of fraud being alleged determines whether the contract or agreement is automatically void (void ab initio) or merely voidable. “A release obtained by fraud in the factum is void ab initio, while a release obtained by fraud in the inducement is merely voidable upon proof of fraud.” Haller v. Borror Corp., 50 Ohio St. 3d 10, 13 (1990). “Whether a release was procured through fraud of either type is a question for the trier of fact [such as a jury]. Whether the fraud as alleged is in the factum or in the inducement is an issue of law for the court.” Id., at 14-15.

Fraud in the Factum

“A release is obtained by fraud in the factum where an intentional act or misrepresentation of one party precludes a meeting of the minds concerning the nature or character of the purported agreement.” Id. Imagine a grandchild telling her grandmother that she is signing a letter for school when it is really a change to her estate plan. “Where device, trick, or want of capacity produces ‘no knowledge on the part of the releasor of the nature of the instrument, or no intention on his part to sign a release or such a release as the one executed,’ there has been no meeting of the minds.” Id., quoting Picklesimer v. Baltimore & O. R. Co., 151 Ohio St. 1, 5 (1949).

Fraud in the Inducement

As the title would suggest, “[c]ases of fraud in the inducement. . . are those in which the plaintiff, while admitting that he released his claim for damages and received a consideration therefor, asserts that he was induced to do so by the defendant’s fraud or misrepresentation.” Haller, at 14. In Haller, the alleged fraud involved the financial solvency of a defendant company. In essence, a representative of the company allegedly represented to the plaintiffs that the company would soon be closed and, therefore, if Plaintiffs did not accept the offered settlement, they would likely receive nothing with respect to their claim(s). Id., at 11-12. The plaintiffs apparently later learned that this was not true. The Ohio Supreme Court found these allegations consistent with a claim of fraud in the inducement.

Practical Considerations

“A release of liability procured through fraud in the inducement is voidable only, and can be contested only after a return or tender of consideration.” Haller v. Borror Corp., 50 Ohio St. 3d 10, 14 (1990); see also Berry v. Javitch, Block & Rathbone, L.L.P., 127 Ohio St. 3d 480, 483 (2010) (“[A]n action for fraud in the inducement of a settlement of a tort claim is prohibited unless the plaintiff tenders back the consideration received and rescinds the release.”); Manhattan Life Ins. Co. v. Burke, 69 Ohio St. 294 (1903).

While it may seem obvious, one cannot seek to void a contract while retaining the consideration they received for the same. In Haller, the plaintiffs received $50,000 in exchange for a release of their prior claims. The Court, finding their allegations of fraud to be consistent with fraud in the inducement, held that the plaintiffs were required to tender back the $50,000 to the defendants before they could seek to void the settlement agreement and release. Because they had not done so, the release they signed remained valid and enforceable, and their claims (including those released under the settlement agreement and that of fraud in the inducement) were dismissed. This is consistent with the idea that one cannot “cherry-pick” which parts of a contract to enforce; they cannot denounce their obligations under a contract while retaining the benefits thereof.

When it comes to contract negotiations, these cases demonstrate how important it is to (a) start from a properly drafted contract, and (b) do your due diligence in order to mitigate the risk of later disputes and litigation. Our transactional team is uniquely positioned to help in these negotiations, having significant experience in contract drafting, negotiation, and disputes.

For assistance with contractual matters, contact Casey Jones (513.943.5673 )

Earnest Money vs. Liquidated Damages

As Chris Finney has addressed extensively in prior blog entries, “a common misunderstanding of parties to a purchase contract is that the escrow money is some sort of measure of or limitation on damages for the buyer’s breach, or, conversely, that the return of the earnest money ‘cures’ the seller’s breach and is the limitation on his damages as well. However, unless the real estate purchase contract specifically calls out either of those limitations, neither of those propositions is true.” In other words, an earnest money deposit is in no way representative of the amount of “damages” caused by a breach of the contract unless the parties to that contract say it is.

Consider the following example: A Buyer contracts to purchase a home for a purchase price of $350,000. Buyer deposits $5,000 in earnest money. Buyer decides to buy a different home instead and breaches the contract to purchase the first home. The Seller of the first home has a tough time selling it after Buyer backs out but, eventually, finds someone else to buy the home. However, the new buyer will only pay $320,000. Seller can typically seek damages from Buyer based on the difference in the purchase price, i.e., $30,000, because that is the amount that places Seller in the position he would have been but for Buyer’s breach. Seller is NOT limited to merely collecting the $5,000 earnest money.

So then what does the phrase “unless the parties to the contract say it is” really mean? How can the parties to a contract predetermine what the damages will be if one of them breaches?

A liquidated damages clause is a contractual vehicle through which the parties can stipulate – in advance – the amount of damages due and owing should one of them breach the contract. It can be a fixed amount or a percentage of the total contract price. Relative to real estate contracts, particularly in the commercial context, parties will sometimes agree, in the purchase contract, that the earnest money will act as liquidated damages in the event of breach. Thus, while liquidated damages are not necessarily equal to the amount of earnest money deposited, they can be if the parties so agree.

Are liquidated damages clauses enforceable?

As the Ohio Supreme Court has long held, “parties are free to enter into contracts that contain provisions which apportion damages in the event of default.Lake Ridge Academy v. Carney, 66 Ohio St. 3d 376, 381 (1993). However, many parties who later breach a contract after having agreed to such a provision unsurprisingly attempt to defeat the same by arguing that the provision to which they agreed is somehow unenforceable – most often, by arguing that the clause operates a “penalty.”

Ohio courts utilize a three-part test to evaluate whether a liquidated damages clause is, indeed, enforceable.

Where the parties have agreed on the amount of damages, ascertained by estimation and adjustment, and have expressed this agreement in clear and unambiguous terms, the amount so fixed should be treated as liquidated damages and not as a penalty, if the damages would be (1) uncertain as to amount and difficult of proof, and if (2) the contract as a whole is not so manifestly unconscionable, unreasonable, and disproportionate in amount as to justify the conclusion that it does not express the true intention of the parties, and if (3) the contract is consistent with the conclusion that it was the intention of the parties that damages in the amount stated should follow the breach thereof.

Samson Sales, Inc. v. Honeywell, Inc., 12 Ohio St. 3d 27, Paragraph 2 of the Syllabus (1984).

Courts routinely uphold these clauses in the real estate context, in large part due to the unpredictability of the market. See, e.g., Cochran v. Schwartz, 120 Ohio App. 3d 59, 62 (2d Dist. 1997); Kurtz v. Western Prop., L.L.C., 2011-Ohio-6726 (10th Dist. 2011); Ottenstein v. Western Reserve Academy, 54 Ohio App. 2d 1, 4 (9th Dist. 1977); Schottenstein v. Devoe, 83 Ohio App. 193, 198 (1st Dist. 1948); Curtin v. Ogborn, 75 Ill. App. 3d 549, 555 (Ill. App. 1979) (outlining a general rule that liquidated damages are appropriate in amount where ten percent or less of the purchase price). This is because “although the contract price is easily ascertainable, the fair market value of real estate fluctuates, in some cases dramatically, and these fluctuations, based upon numerous independent variables, are unpredictable.” Kurtz, at ¶ 30 (relative to the first prong in the Samson test). “Difficulties inherent in assessing the fair market value of property due to the volatility of the real estate market have been the impetus for Ohio courts giving effect to liquidated damages provisions in real estate transactions.” Id., at ¶ 31.

Who does a “liquidated damages” clause benefit?

While it is perhaps easier to envision how liquidated damages provisions tend to benefit the non-breaching party, they can be just as advantageous to a breaching party. For example, consider a situation where Buyer is under contract to purchase a $1 million retail center with a $100,000 liquidated damages clause. Buyer elects not to purchase the property and breaches the contract. A week after Buyer’s breach, there is a down-turn in the real estate market and, now, Seller can only get $800,000 for the property. Rather than potentially being on the hook for the $200,000 difference between the contract price and ultimate sale price, Buyer’s liability is capped at the fixed liquidated damages amount of $100,000 because that is what the parties agreed to in the contract.

Liquated damages clauses can also be mutually advantageous inasmuch as it allows the parties to know what to expect. Circumstances may arise that require a party to choose between breaching the contract or incurring some other loss. In such a situation, the clause helps that party weigh their options and explore all possible outcomes in order to make an informed decision.

Is a liquidated damages clause a good idea?

Like so many legal questions, the answer is unfortunately the rather frustrating “it depends.” Ultimately, whether to include a liquidated damages clause in your contract or whether to agree to such a clause being proposed by the other side, is a decision that should be made on a case-by-case basis after considering all of the potential factors that may come into play.

Our firm has significant experience in dealing with these types of provisions – from drafting, to review, and to enforcement – and we can help you explore how including such a provision in your real estate contract may impact you, as well as answer any other real estate contract questions you may have.

While the real estate market seems to have slowed slightly, our title company, Ivy Pointe Title, continues to close a record-breaking number of transactions. Perhaps due to challenges that buyers are facing in making competitive offers and having those offers accepted, our firm has also noticed an uptick in the number of (actual or attempted) contract terminations prior to closing – this phenomenon, when unjustified under the terms of the contract, is often referred to as an “anticipatory repudiation.”

An anticipatory repudiation is “‘a repudiation of the promisor’s contractual duty before the time fixed for performance has arrived.’” Sunesis Trucking Co. v. Thistledown Racetrack, L.L.C., 2014-Ohio-3333, ¶ 29 (8th Dist. 2014), quoting McDonald v. Bedford Datsun, 59 Ohio App.3d 38, 40, 570 N.E.2d 299 (8th Dist.1989). For example, if you have a contract to sell your property to a buyer, and the buyer backs out three days before the closing for any reason not justified under the terms of the contract – or for no reason at all – an anticipatory repudiation of the contract has likely occurred. It is akin to a breach of the contract; however, because it occurs before “the time fixed for performance” (i.e., the closing), it is considered “anticipatory.”


“If an anticipatory breach of contract is found to occur, the injured party has the option of (1) terminating the contract and suing the breaching party immediately, or (2) continuing the contract and suing the breaching party for damages after the time for performance has passed.” Sunesis, at ¶ 33, citing 18 Ohio Jurisprudence 3d Contracts, Section 238 (2011). It is worth noting that the “repudiation” must be unequivocal. If you are unsure whether a party’s statement amounts to a repudiation or whether they intend to still fulfill their obligations under the contract, you should seek “adequate assurances” as to whether they intend to comply.

An anticipatory repudiation may stem from a buyer submitting offers on multiple listings to increase the odds of one of their offers being accepted (certainly plausible in this market) or a seller receiving a higher back-up offer and having remorse over having accepted a previous, lower offer. In either event, the non-repudiating party has a right to enforce the contract or sue for their damages. For instance, in the above hypothetical, the seller could re-list the property and, if the property sells for lower than the contract price with the original buyer, sue for the difference.

Affidavit of Title

An additional mechanism that is often helpful for a buyer (where the seller repudiates) is an affidavit of title. Pursuant to Ohio R.C. 5301.252, a person having an interest in real estate by virtue of a contract may assert his or her interests via an affidavit recorded in the real property records. This effectively encumbers the real estate such that most title companies will not close a transaction on the property while the affidavit is pending. In other words, it prevents the seller from being able to sell the property to someone else where you have a valid and enforceable contract to purchase that same property – it forces them to “deal with” you and your contractual interest in the property. Importantly, the affidavit of title has various technical requirements and, if containing any untrue statements, could serve as the basis for a slander of title claim. Therefore, it is important to consult with an experienced attorney before utilizing this mechanism to make sure that it is properly prepared and recorded.

If you would like to know more about your rights relative to a real estate contract, please don’t hesitate to contact us. We would be happy to meet with you and explore your options.


The Basics

As a basic principle, every citizen in the United States (and even non-citizens) are entitled to due process under the law. In simpler terms, everyone has the right to have their legal disputes treated fairly based on established laws and principles. With certain exceptions, this includes a right to bring an action in court to hold accountable those who have committed a wrong.

So what are those exceptions, and what do they mean?

One of the most notable exceptions to the right of a person to have their matter heard in court is where the parties have agreed to a process known as “arbitration.” Arbitration is “a method of dispute resolution involving one or more neutral third parties who are [usually] agreed to by the disputing parties and whose decision is binding.”  Black’s Law Dictionary 119 (9th ed. 2009). Practically speaking, arbitrators are usually practicing or retired attorneys and/or judges who essentially serve as the trier of fact in an expedited proceeding held in lieu of a court trial. Arbitration can be particularly appealing to large companies that often face high volumes of threatened or actual legal claims for a multitude of reasons – for one, arbitration is generally more expedient and cost effective than in-court litigation. Employers frequently require them as a condition of employment so that various employment claims are handled confidentially.

Why wouldn’t everyone want to participate in arbitration?

Another reason that large companies, such as banks, credit card companies, and other financial institutions, may push arbitration is that it is a significantly more favorable forum for – you guessed it – those companies. Other significant disadvantages for the “Average Joe” consumer in arbitration are: (a) these arbitration clauses often disallow class actions or certain elements of damages, i.e., “punitive” damages, (b) arbitration usually limits the parties’ discovery rights – for example, the consumer may not be able to depose witnesses or seek the production of documents that could help them prove their claims and (c) arbitration is frequently required to be confidential, prohibiting a public discussion of the facts and outcome of the proceeding.

What if I don’t want to be forced into arbitration?

Over the past several decades, the law has been very favorable to companies seeking to force customers/consumers into arbitration. Southland Corp. v. Keating, 465 U.S. 1, 11 (1984) (noting “a national policy favoring arbitration”). However, there has recently been a palpable shift in these principles, especially in Ohio and the Sixth Circuit.

Arbitration Case Law

In March 2021, the Sixth Circuit overturned an Eastern District of Tennessee case wherein the District Court granted a bank’s motion to dismiss litigation filed in court and compel arbitration. See generally, Sevier County Schs. Fed. Credit Union v. Branch Banking & Trust Co., 990 F.3d 470 (6th Cir. 2021). In that case, the bank (after a series of mergers) sent out a new agreement that contained new or updated terms and stated that, by continuing to maintain an account with the bank, the accountholders agreed to those new terms – in other words, continuing to do business with the bank constituted acceptance of the new terms. The new terms included, inter alia, a binding arbitration provision and a waiver of class actions. Id., at 473. The District Court found that, by continuing to do business with the bank, the plaintiffs had accepted such terms and, therefore, must pursue their claims via arbitration. See generally, id. But the Sixth Circuit disagreed. Id.

In rendering its decision, the Sixth Circuit found that determining the existence of a valid arbitration agreement is a question of state-law contract principles. Id., at 475. That is, what are the elements required to create a contract under state law, and were those elements met. Under Tennessee contract law (which is analogous to Ohio contract law), the formation of a contract requires consideration and mutual assent. Id., at 476. Mutual assent can only be found where there is a “meeting of the minds,” meaning “Did both sides assent to be bound by the terms of the contract?” Id. The Sixth Circuit in Sevier County found no mutual assent and, specifically, noted that mere “silence or inaction” is insufficient to bind a party to an arbitration provision. See id., at 477, quoting its prior decision in Lee v. Red Lobster Inns of America, Inc., 92 F. App’x 158, 162 (6th Cir. 2004) (“The flaw in the district court’s analysis is that it places the burden on the [consumers] to . . . object to a company’s unilaterally adopted arbitration policy or risk being found to have agreed to it. This is not how contracts are formed.”).

Ohio courts have begun following suit, even citing directly to Sevier County. On August 5, 2021, the Eighth District Court of Appeals rendered its decision in Gibbs v. Firefighters Community Credit Union, 2021-Ohio-2679, affirming the lower court’s decision denying a defendant’s motion to stay the action pending arbitration. In Gibbs, plaintiffs filed a class action lawsuit, and the defendant credit union moved to compel arbitration, arguing that plaintiffs agreed to a change in the terms and conditions of their account agreements, including an “Arbitration and Waiver of Class Action Relief provision,” by failing to opt out. Id. at ¶¶ 2-3. The credit union purportedly sent notice of these changes to account holders via email, and the email stated that an account holder’s continued use of defendant’s banking services indicated assent to the updated terms. Id. at ¶¶ 3-4. The credit union maintained that because plaintiffs never opted out of the provision, it became effective and controlled the matter. Id. at ¶ 3. However, nothing in the content of the email informed the account holders of the Arbitration and Waiver of Class Action Relief provision or the ability to opt out – this information was, instead, included in an attachment to the email.  Id. at ¶ 5.

Like the court in Sevier County, the Eighth District in Gibbs relied on Ohio contract law principles governing the formation of contracts and found that the credit union failed to meet its burden of establishing the existence of an agreement to arbitrate. Id. at ¶¶ 14, 18. The court held that there was no “meeting of the minds” between plaintiff and the credit union as to the arbitration provision because the content of the email notice gave no indication that the changes involved the addition of the arbitration provision. Id. at ¶¶ 16-17. Instead, “[t]he Plaintiffs were thus lulled into not giving a thought to the unilateral addition of the arbitration provision . . .” Id. at ¶ 17, quoting Sevier County, 990 F.3d at 481.

Take Action

If you wish to pursue claims that the other party maintains are subject to an arbitration provision, and you do not wish to participate in arbitration, you may have some options. For instance, if you dispute the existence or validity of an arbitration clause, Ohio statute provides a process by which you can assert such dispute. See R.C. 2711.03(B) (“If the making of the arbitration agreement or the failure to perform it is in issue in a petition filed under division (A) of this section, the court shall proceed summarily to the trial of that issue.”). That is, if you dispute that an arbitration agreement exists, you may be entitled to have a court determine that threshold issue before the underlying claims proceeds.

We Want to Help

We recently had a case where a financial institution argued that our client’s claims, filed in state court, were subject to an arbitration agreement and, therefore, moved the court to dismiss our claims and compel arbitration. We disputed that our client had ever received proper notice of any arbitration agreement, much less agreed to the same, under facts very similar to the Sevier County and Gibbs cases discussed above (ironically, the financial institution had previously cited to the District Court case in Sevier County, yet failed to notify the Court when it was overturned by the Sixth Circuit). We moved for a trial under R.C. 2711.03(B), which was granted. After an unsuccessful interlocutory appeal by the financial institution and nearly eighteen months of litigation and discovery on this limited arbitration issue, the financial institution eventually agreed to withdraw its motion to compel arbitration.

While it is not always an easy road, we are passionate about protecting our clients’ rights, including the right to have their claims heard in the proper forum. Unfortunately, consumers are too often “railroaded” by big companies with deep pockets in the litigation process, and it is our desire to make sure every client has access to the tools necessary to hold these companies accountable for their conduct. As is evident from our recent case and the long and arduous battle it took to keep our client’s claims in state court where they belong, we don’t say this lightly – we live it every day in our practice.

If you are considering bringing a claim or have concerns regarding whether an arbitration agreement may apply, we can help you evaluate those questions and explore your options.

Please contact Casey Jones (513.943.5673) if we can help with your litigation or arbitration dispute.

There is a significant new development in Ohio property tax challenges directly and narrowly resulting from valuation reduction arising from the COVID-19 pandemic allowing such challenges this year.

As we discussed in a blog entry here, because of the unique timing of real property valuations versus billing, Ohio property owners impacted by COVID-19 rent reductions and closures really could not bring successful COVID-related valuation challenges before Boards of Revision in 2021.

To exacerbate that problem, Hamilton, Clermont, Butler and Montgomery Counties had the first year of the tax triennial in 2020 (for challenges in 2021). Therefore, if a property owner attempted a COVID valuation challenge in 2021 and lost, a property owner would be stuck with a bad (high) valuation for three years (tax years 2020, 2021 and 2022, billed and payable in 2021, 2022 and 2023).

This placed owners of certain properties in significant financial straits: Owners of apartment buildings near a university where student-based occupancy plunged or downtown when nearby office buildings cleared out, owners of large office buildings that could not rent because of COVID-related vacancies, owners of hotels and motels and other properties in the travel and hospitality industry, owners of restaurant properties and owners of malls and retail strip centers.

That all changed two weeks ago when Governor DeWine signed into law S.B. 57 which adds a second challenge period in 2021 narrowly targeted to COVID-related property valuation reduction (i.e., not that of general market conditions).

Here is the quick overview:

  • “Second bite” challenges may be filed with the Auditor only between July 26 and August 25, 2021.
  • “Second bite” challenges must narrowly be tailored to valuation reduction as a result of COVID-19.
  • The target valuation date for “second bite” valuations is October 1, 2020.
  • The “second bite” valuation reduction is retroactive to January 1, 2020 (before the pandemic hit America).
  • The “second bite” valuation reduction will last for the remainder of the triennial (in Hamilton, Clermont, Butler, and Montgomery Counties thru the 2022 tax year, billed and paid in 2023).
  • The bringing, and “win” or “loss,” of a valuation challenge for the “second bite” hearings is in addition to the general challenge filed before March 31, 2021 and does not prejudice non-COVID-related (i.e. general market conditions) challenges in later years.
  • The legal and evidentiary hurdles associated with “second bite” challenges are the same, as we see it, to challenges brought in Ohio, meaning an appraisal (supported by testimony from the appraiser) and presentation by a qualified attorney are strongly recommended.

If you have a “second bite” property that would benefit from a challenge narrowly targeted to COVID-19 economic impact, please quickly contact Chris Finney (513) 943-6655) or Casey Jones (513-943-5673) to allow us to help you secure this tax savings.

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 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 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.


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.


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.