Every parcel of real property in Ohio undergoes a major “reappraisal” by the County Auditor’s office every six years and then a minor “update” in the three years in the middle of that six-year cycle.  Different counties in Ohio are on a different six year and three year cycle.

Below are listed the counties that went through a major “Reappraisal” in 2016 (that new value first appearing on the January 2017 tax bill) and a minor “update” in 2016 (that new value also first appearing on the January 2017 tax bill).

The other thing important about the valuation cycle is that regardless of whether another tax complaint was brought previously, every property owner has the right to challenge his property’s assessment before the Board of Revision in the new triennial.

The schedule of counties starting a new triennial this year follows:

Reappraisal Counties
Adams
Columbiana
Hancock
Hocking
Holmes
Lawrence
Meigs
Monroe
Paulding
Scioto
Tuscarawas
Washington

Update Counties
Carroll
Champaign
Clark
Fairfield
Logan
Marion
Medina
Miami
Ross
Union
Wyandot

If you’d like our assistance with a property valuation, use our secure contact page, or contact Christopher P. Finney at 513-943-6655.

Hamilton County Common Pleas Judge Steven E. Martin

In a case expected to be appealed to Ohio’s Supreme Court, Hamilton County’s First District Court of Appeals upheld the ruling of Common Pleas Judge Steven Martin in Vontz v. Miller, et al., 2016-Ohio-8477, that the fifty percent owner of a closely held corporation owes her co-owner a heightened fiduciary duty of “utmost good faith.”

Two siblings share ownership of a beer and wine distributorship – both owning fifty percent of the shares of the company. Thus, argued Miller, neither has a controlling ownership. However, in this instance, the company’s board consisted of Vontz, Miller, and Miller’s husband and two children. Thus, while Vontz is a fifty percent shareholder, the board is dominated by Miller.

Vontz, in an effort to balance control of the company, had sought to call a shareholder meeting to elect a new board. Miller refused. Vontz then brought suit against his sister and her family.

Judge Martin issued an injunction to force a shareholder meeting. Miller and her family appealed. Arguing, in part that Miller, as a fifty percent owner (i.e. less than a majority owner) did not owe a fiduciary duty to her brother who also owned exactly fifty percent of the company. Absent a fiduciary duty to her brother, Miller should not be required to attend or otherwise acquiesce to a shareholder meeting.

The court found that where, as here, one owner dominated the board and refused to adhere to corporate formalities (e.g. holding shareholder meetings where that owner’s family could be removed from the board), then the heightened fiduciary does attach – despite the semantic arguments over whether there can ever be a “controlling shareholder” where two owners each hold fifty percent ownership:

Because Miller so dominated the corporation that she was in control to the exclusion of Vontz, the unusual facts of this case demonstrated that Miller was the controlling shareholder, even though she owned only 50 percent of the voting shares.

…

Under her heightened duty of good faith and loyalty, she had an obligation of fairness to Vontz. Her duty required her to act for his benefit by protecting his right to vote for the election of new directors. She breached that duty because, as Vontz clearly demonstrated, he was unable to exercise his voting power due to a freeze-out by Miller.

The Court of Appeals, while ordering modifications to some of the particulars of Judge Martin’s ruling, upheld the substance of Martin’s ruling.

Closely held corporations bring with them unique challenges, particularly when the owners are family as well as business partners. Finney Law Firm, can help you avoid these pitfalls ahead of time and navigate through them if a challenge has already arisen.

Preble County Common Pleas Court Judge David Abruzzo

It is a common maxim that you are always liable for your own torts. Meaning, if someone is injured as the result of your own negligence, you will be liable, even when acting through a corporation or limited liability company.

A recent 12th District Court of Appeals case out of Preble County (Whitson v. One Stop Rental Tool and Party, et al. CA 2016-03-004) illustrates one major caveat to the maxim: parties to a contract can agree to hold the other party harmless for negligence, nonetheless, “contract clauses that relieve a party from its own negligence, while generally upheld, are not favored by the law and are to be strictly construed.”

Richard rented a bounce house from One Stop Rental Tool and Party. While Richard was unloading the bounce house from his pickup truck, the strap he was pulling broke and Richard fell out of the truck, onto the ground, suffering serious injuries.

Richard and his wife sued One Stop alleging negligence, loss of consortium, and malicious conduct (alleging that One Stop disregarded the probability that Richard would be injured in such a manner).

The rental agreement included a Release that read in relevant portion:

I understand and acknowledge that the activity to be engaged in through my rental of an inflatable, interactive amusement device, brings with it both known and unanticipated risks to guests, my invitees, and myself. Those risks include, but are not limited to fallings, slipping, crashing, and colliding and could result in injury, illness, disease, emotional distress, death and/or property damage to myself or my guests and invitees. I voluntarily release, indemnify, hold harmless and discharge One Stop Tool Rental, Inc. from any and all liability claims, demands, actions or rights of actions, whether personal to me or to a third party which are related to[,] arise out of or are in any way connected with my rental of the unit, including those allegedly attribute[d] to negligent acts or omissions. I agree to reimburse any reasonable attorney’s fees and costs which may be incurred by One Stop Rental Tool Rental, Inc. in the defense of any such liability claim, demand, action or right of action.

And a Hold Harmless Clause:

HOLD HARMLESS AGREEMENT. Customer agrees to assume the risks of, and hold Dealer harmless for, property damage and personal injuries, including death and dismemberment, caused by the equipment and/or arising out of Dealer’s negligence.

Preble County Common Pleas Judge David NAbruzzo, a no nonsense judge whom we have had the pleasure of appearing before, granted summary judgment against Richard, finding that the release and hold harmless clauses barred his claims, but allowing the wife’s loss of consortium claim to proceed.

The Court of Appeals noted that, “Richard did not read either document before signing them.”

Business owners should take this opportunity to review your contracts to determine if a hold harmless clause or mutual release clause are necessary; and make sure that such clauses will survive being “strictly construed” by the court. For consumers, this should serve as a reminder to read and understand the contract before signing.

A dispute is brewing in Philadelphia that will test the shield of the Catholic Church against government intrusion into its affairs.  On February 7th, the Commonwealth Court of Pennsylvania heard arguments in Chestnut Hill College v. Pennsylvania Human Relations Commission.  The case examined the core of Chestnut Hill College’s character as an educational institution.  The Court will determine whether the school founded in 1924 by the Sisters of Saint Joseph is a religious college whose internal decisions are beyond the reach of governmental review, or rather a secular place of learning, subject to all sovereign scrutiny.

The case arises from Chestnut Hill’s decision to expel a senior in 2012.  The student produced a play.   The proceeds were to be donated to the Lupus Foundation.  The student was told to deposit the proceeds in the Student Activities Safe so that the money could later be donated as promised.  Instead, the student deposited nothing, donated $500 to Lupus, and spent $800 on a cast party where alcohol was served to minors in violation of school policy and Pennsylvania law.

A disinterested professor conducted a hearing and, on the basis of the facts presented, recommended that the student be expelled.  The student appealed to the College Appeals Board.  The four Board members—one of whom was a student—unanimously supported the expulsion recommendation.   The recommendation was ultimately adopted by the Chestnut Hill president.  Mr. Meads then appealed to the Commission, charging that his expulsion violated the Pennsylvania Human Relations Act because it was the product of religious discrimination.

Chestnut Hill asked the Commission to dismiss the charge on grounds that, as a religious institution, the Act was inapplicable to it.  The Commission denied Chestnut Hill’s request last May and the College brought an appeal in state court.  Chestnut Hill wants Mr. Meads’ case dismissed.  The Commission wants the Court to allow the case to proceed so it may determine whether Mr. Meads’ claim has validity.  The Court will make its own decision, without regard to the Commission’s initial ruling.

Both sides have raised procedural arguments in hopes of winning on a technicality.  For example, Chestnut Hill argues that Mr. Meads did not file his discrimination claim in a timely manner.  The Commission, on the other hand, argues that Chestnut Hill failed to follow the steps to obtain judicial review and has waived its rights.

The key issue, however, is whether Chestnut Hill is a “public accommodation” under the Act.  The Act defines “public accommodation” as an “accommodation, resort, or amusement which is open to, accepts or solicits the patronage of the general public, including . . . colleges and universities . . . but shall not include any accommodations which are in their nature distinctly private.”

Chestnut Hill seems to have prior court decisions on its side.  In 1988, a Pennsylvania Court decided that a Catholic parochial school in Philadelphia was not a “public accommodation” because it was “distinctly private.”  Roman Catholic Archdiocese of Philadelphia v. Pennsylvania Human Relations Commission.   The Court found that Catholic schools are an “integral part of the religious mission of the Catholic church” and the “raison d’etre of parochial schools is the propagation of religious faith.”  For those reasons, the Act was held to be inapplicable.

Chestnut Hill also argues that allowing the Commission to review its disciplinary decisions would violate its First Amendment rights.  In 1998, a Court held that the freedom of religion clause prevented courts from reviewing the disciplinary decisions of a Catholic parochial school in Allentown, saying: “whenever the question of discipline, or of faith, or ecclesiastical rule, custom, or law [has] been decided by the . . . church . . ., the legal tribunals must accept such decisions as final . . . .” Gaston v. Diocese of Allentown.

For its part, the Commission argues that those Court decisions—which involved elementary and high schools—should not apply to Catholic colleges.  The Commission offers no cases to support this view.  Nor does the Commission explain why a Catholic high school would be “a powerful vehicle for transmitting the Catholic faith to the next generation” but a Catholic college somehow would not.

The Commission also emphasized that Chestnut Hill admits non-Catholic students.  This factor is unlikely to carry much weight because it was present in the 1988 Philadelphia case but did not prevent the Court from ruling in the school’s favor.  Finally, the Commission stresses that Chestnut Hill receives state and federal money.  No court, however, has held that the receipt of governmental aid somehow strips an institution of its character as a private, religious institution.

The Philadelphia Commission on Human Relations also submitted a brief as an “amicus curiae.”  This “friend of the court” brief was more sensational than legal and attributed positions to Chestnut Hill that the College never asserted.  Bold-face assertions—such as “Chestnut Hill College Should Not Be Allowed to Pick and Choose When and How It Will Discriminate on the Basis of Race”—are unlikely to persuade the judges on the merits.  The Philadelphia Commission almost argued “the sky is falling” when it predicted a decision in Chestnut Hill’s favor would enable 51 colleges, 12 hospitals and 5 health centers to discriminate on the basis of race with impunity.  These assertions seem to border on desperation and make Chestnut Hill’s arguments seem even stronger in comparison.

In its brief, Chestnut Hill quoted a 1985 decision in which a court wrote: “When Caesar enters the Temple to decide what the Temple believes, he can leave behind only his own views.”  This case will test that philosophy and decide whether the deference that Pennsylvania courts have shown to religious educational institutions for nearly three decades should continue.

If you would like more information about these issues, please contact Scott Thomas.   He welcomes the opportunity to work with you.  Scott’s direct line is 859.578.3862.  You can email him at [email protected].  If there is a particular topic you would like to see addressed in a blog, please send Scott an email with your ideas.

 

Often the lease will provide the answer to this question, but in Ohio, absent a provision in the lease, R.C 5301.11 provides the default rule:

The lessee of a building which, without fault or neglect on his part, is destroyed or so injured as to be unfit for occupancy, is not liable to pay rent to the lessor or owner thereof, after such destruction or injury, unless otherwise expressly provided by written agreement or covenant. The lessee thereupon must surrender possession of such premises.

The first sentence of the statute provides that if the fire was not the fault of the lessee (tenant), the tenant is freed of her obligation to pay rent. However, the second sentence provides one condition, in order to be freed of her obligation to pay rent, the tenant must surrender possession of the premises.

Case law in Ohio on this point goes back to 1890, “[b]ut, to secure the benefit of the statute, the tenant must surrender or yield up all that remains of the premises embraced in the lease, without any purpose or intention of resuming possession thereof. The legislature has absolved the tenant from an onerous obligation, but the burden is removed only upon his compliance with the statutory condition.” Gay v. Davey, 47 Ohio St. 396, 402, 25 N.E. 425 (1890).

This makes perfect sense. The tenant is given the power to decide how to proceed, either maintain the lease while the necessary repairs are made and returning to the home, or unilaterally decide to terminate the lease – with the requirement that the tenant fully surrender possession of the premises (i.e. remove her belongings and with the understanding that she will not have a right to return after the repairs are made).

But the law does not allow the tenant to have it both ways. She cannot for example, stop paying rent but leave her personal property at the home, expecting to “restart” the lease once the repairs are made.

As noted above, R.C. 5311.01 is the default rule for both residential and commercial lease in Ohio, but the lease may provide a different provision. As always, read the lease.

Finney Law Firm can assist in drafting and enforcing your residential and commercial leases. Click here to contact us online or call (513) 943-6655 to speak with attorney Christopher P. Finney.

As a recent Wall Street Journal article pointed out, for any number of reasons, both legitimate and otherwise, we have seen a proliferation of service and assistance animals. From miniature horses as therapy animals to small dogs carried by airline passengers, to the more common seeing eye dog, Americans are ever more empowered to assert their entitlement to service and assistance animals.

Landlords are reporting questionable claims of disability that they suspect are aimed at getting around no pet clauses and pet deposits in leases. What is a landlord to do in the face of a suspicious claim of disability?

As part of the effort to protect people with disabilities from discrimination, the Fair Housing Act and the Americans with Disabilities Act limit a landlord’s ability to investigate requests for accommodations for service and assistance animals, but not all questions are foreclosed. This is a good thing and reflects our shared values because we want to encourage people with disabilities to get the necessary treatment and services; we want to open the opportunity for a full life to all. But we also don’t want people to make false claims of disability to obtain an improper benefit or unnecessary accommodation. To do so only serves to detract from those who truly suffer.

Recently a client called us needing help. The client owns a single family rental property and does not allow her tenants to keep animals. The tenant called in October about relaxing the no pets rule because he wanted to get his daughter a puppy for Christmas. The landlord declined. One week later, the tenant called again, this time to claim a need for an assistance animal and to request an accommodation.

The landlord had no prior knowledge of any disability and was obviously suspicious that this sudden need for an accommodation was simply a ruse to get around the no pets rule. She turned to us to determine what she should do. The landlord wanted to do the right thing, she wanted to comply with the law. But she also did not want to be taken advantage of.

After discussing the facts with the client and reviewing relevant statutory and case law, we sent a letter to the tenant explaining that the landlord had no prior knowledge that any member of the tenant’s family suffered from any disability, and asked for some documentation to establish (i) the existence of the disability and (ii) how the animal will provide a service or alleviate some symptom of the disability. We also asked for information about the specific animal they intended to bring into the home.

Not so surprisingly, the tenant never responded to our request for information, and no animal (service or otherwise) was brought into the home.

Note that landlords can be found in violation of the Fair Housing Act and Americans with Disabilities Act for even seemingly innocuous questions. If your tenant requests a disability related accommodation, you should consult an attorney about your specific facts and circumstances before making any investigation into the request for an accommodation. More information from the Department of Housing and Urban Development, Office of Fair Housing and Equal Opportunity can be found here.

If you have questions about your obligations under the Americans with Disabilities Act and the Fair Housing Act, use our secure contact page, or call Julie Gugino at 513-943-5669.

The Ohio Supreme Court has ordered oral argument in two cases involving the valuation of real property sold as part of a sale and leaseback transaction. The cases, Terraza 8, LLC v. Franklin County Board of Revision, 2015-2063; and Board of Education of the Columbus City Schools v. Franklin County Board of Revision, 2015-2105 (State Farm) have been fully briefed (including an amicus brief filed by the Institute for Professionals in Taxation supporting the property owner).

As discussed here, Ohio’s legislature has amended the law to reflect the changes in commercial finance involved in sale and leaseback transactions. Simply put, a sale and leaseback involves the sale of commercial real estate at a higher than market value with the seller then leasing back that property at an above market rate lease commensurate with the sale price. The excess of the sale price is used to finance the purchase of the business who originally owned the real estate.

Consider this hypothetical: ABC Restaurant Co. is being purchased by XYZ private equity firm, XYZ arranges to sell ABC’s real estate to 123 Financing company for approximately three times its actual value and use the difference to purchase all of the shares of ABC Restaurant Co. stock, XYZ (now the sole shareholder of ABC) then enters into a 20 year lease for that same real estate back with 123 for an annual rent that is 7% of the sale price (with scheduled increases over the life of the lease).

The pricing of the real estate is based on the income the restaurant operations throws off, it has no relation to the actual value of the property as real estate. At the end of the lease, 123 Financing Co. still owns the real estate and has collected roughly 150% of its purchase price in lease payments.

Under the prior law, the county auditor would automatically adopt that inflated sale price as the “true value” and the property taxes on the restaurant would triple or more.

Under the new law, the auditor should disregard the sale price and determine the “true value” of the property “as if unencumbered” that is as if it was not subject to the non-market based lease. The result should be that the properties’ values remain roughly the same as they were before the sale and leaseback transaction.

Some County Auditors and Boards of Revision, and the Ohio Board of Tax Appeals itself, have thus far been unwilling to appreciate the magnitude of the change in the law and continue to value sale and leaseback properties using the old method. The Ohio Supreme Court has an opportunity to clarify the law for Ohio’s businesses and tax officials.

Oral argument will be held in the Terraza 8 case on April 5, 2017 and in the State Farm case on May 3, 2017. Finney Law Firm will continue to provide updates on these important cases.

  • posted: Jan. 17, 2017
  • Hemmer DeFrank Wessels PLLC
  • Uncategorized

Written By: Janie Ratliff-Sweeney

If you (or your organization) provide health care, it is likely that you are considered a “Covered Entity” and must comply with the federal privacy rule more commonly known as “HIPAA”. One component of HIPAA requires covered entities to notify patients in a timely manner if the covered entity experiences a breach of patient data. Examples of a potential breach are discovering that an outside force hacked into your software system containing patient information; an employee opened an email and let loose “ransom ware” to infect your software system and all of your data; a laptop or other device containing patient data is lost or stolen; or, a disgruntled employee removed patient files or other information from your premises — the list goes on.

If a breach occurs, a covered entity has 60 days from when the breach is discovered within which it must notify the affected patients that their protected health information may have been compromised, and the notice must contain other specific information.  Also, in some circumstances, the media must also be notified.  Failure to timely and properly notify affected patients will subject the covered entity to potential fines and other punitive action.

To drive this point home, on January 9, 2017, the agency charged with enforcement of HIPAA — the U.S. Department of Health and Human Services Office of Civil Rights, or “OCR” — announced the first HIPAA settlement based upon an organization’s untimely reporting of a breach to its affected patients.  The organization agreed to settle potential violations of HIPAA by paying $475,000 and implementing a corrective action plan.  The OCR stated that the settlement balanced the need to emphasize the importance of timely breach reporting with the desire not to disincentive breach reporting altogether.

If you are a covered entity, not understanding your obligations under HIPAA can result in catastrophic fines.  Contact Janie M. Ratliff-Sweeney at the law firm of Hemmer DeFrank Wessels, PLLC to consult about HIPAA.  Mrs. Ratliff-Sweeney’s email address is [email protected] and her phone number is (859) 344-1188.

 

Finney Law Firm is a growing firm that strives to make a difference in the greater Cincinnati area through their personal and professional work.  Members of this firm have extensive experience in a broad range of legal services including business formation and development, litigation, real estate, estate planning and administration, commercial dispute resolution, criminal defense, bankruptcy, and public interest law.  The desire is to represent clients, hire employees, and work with vendors who share in the Firm’s key standards of Integrity, Accountability, Communication, and Excellence.

Job Overview

As a growing company with offices in Eastgate and Mt. Adams, the Finney Law Firm seeks to hire a Legal Assistant to contribute to the success of the firm.  The primary functions of this position will be to assist and support team of attorneys through all aspects of their practice.  A desirable candidate will be able to successfully:

  • Support the day to day operational needs of the litigation attorneys
  • Prepare, finalize, and file pleadings and other court documents
  • Prepare and coordinate discovery requests and responses
  • Obtain, review, and analyze documents such as medical records, financial records, or other relevant records necessary for case management
  • Communicate and coordinate with staff, clients, opposing counsel, and other points of contact
  • Oversee and maintain the litigation team’s caseload, progress, and deadline schedule
  • Perform legal assistant responsibilities such as reviewing and preparing letters, mailing documents, organizing files, etc.

Required Skills and Abilities

  • Strong emphasis on being detail oriented
  • Ability to multi-task in a face paced environment
  • Excellent time management, scheduling, and organizational skills
  • Eager to learn and accomplish tasks that are needed
  • Willing to work individually and as part of a team
  • Legal experience preferred, but not required

How to Apply and Additional Information

Interested candidates should email a cover letter, resume, and references to Katherine Fox at [email protected].  A review of applications will begin immediately.  This position is full time and benefits are available.  For more information on the firm, please visit finneylawfirm.com.

Ohio empowers its citizenry in some instances to act on behalf of municipalities “to restrain the misapplication of funds of the municipal corporation, the abuse of its corporate powers, or the execution or performance of any contract made on behalf of the municipal corporation in contravention of the laws of or ordinance governing it.” (R.C. 733.56) And provides that when successful, the taxpayer who initiated the lawsuit is entitled to have the costs of the suit paid by the municipality – including her attorney fees.

In 2014 a North College Hill taxpayer brought suit to enjoin the city from performing on an unlawful contract entered into with XPEX, LLC. The city argued that under Ohio’s political subdivision immunity act (R.C. 2744) it was immune from suit because the taxpayer sought to have her attorney fees paid as provided by the statute.

The trial court rightly denied the city’s argument and city appealed the decision.

Earlier this month, the First District Court of Appeals joined the trial court in rejecting the city’s argument finding that the political subdivision immunity act was not applicable because (i) the case was not a tort case; and (ii) an award for attorney fees under R.C. 733.56 does not constitute “monetary damages.”

Citizen activists should be particularly heartened by this decision as two of the court of appeals judges in this unanimous decision were recently elected to serve on Ohio’s Supreme Court.

The Court of Appeals decision can be read here.

 

Thus, Ohio taxpayers remain empowered to act as watchdogs over their public officials.