In the important case of Bank of America, N.A. v. Caulkett, 135 S. Ct. 674 – 2014, the US Supreme Court has held that debtors in a Chapter 7 bankruptcy proceeding may not void a wholly unsecured junior mortgage lien under 11 U.S.C  §506(d) when the debt owed on a senior mortgage lien exceeds the current value of the collateral if the credi­tor’s claim is both secured by a lien and allowed under §502 of the Bankruptcy Code.   The Court overruled and reversed the Eleventh Circuit decision  rendered in McNeal v GMAC Mortgage, LLC, 735 F.3d 1263 (11th Cir. 2012) which allowed wholly unsecured liens to be stripped.

The Supreme Court ruled that  §506(d) does not permit bankruptcy courts to “strip off” completely unsecured junior mortgage liens on the property even if the value of the property acting as collateral is less than the amount the Chapter 7 debtor owes to the first (senior) mortgage holder.   In making its decision the Court extended on its ruling in Dewsnup v. Timm, 502 U.S. 410 (1992), which held that §506(d) does not allow a Chapter 7 debtor to “strip down” a partially mortgage lien to the current value of the collateral.

Chapter 7 Debtors are now left to look to filing for Chapter 13 or Chapter 11 reorganization plan to obtain the partial or complete lien strip that Dewsnup and Caulkett denies to a homeowner.

Read the complete decision here.

Lis Pendens, Latin for “suit pending,” means that any interest in real property acquired while a case is pending relating to that property is subject to the final determination of the case.

As set forth in R.C. 2703.26: “When a complaint is filed, the action is pending so as to charge a third person with notice of its pendency. While pending, no interest can be acquired by third persons in the subject of the action, as against the plaintiff’s title.”  Under this doctrine, the outcome of the litigation applies to, and is binding upon, any person who acquires an interest in the property; whether a party to the lawsuit or not. Indeed the purpose of the doctrine is to bind non-parties.

“The effect of lis pendens is that if a third party acquires an interest in the property while the lawsuit is pending, the third party takes the property subject to the final outcome of the suit.” Gunlock v. Z.B.P. Partnership, 1997 WL 598394, at *1 (Ohio App. 12 Dist., 1997). Indeed, “if the trial court awards the plaintiff rights in the property, the plaintiff takes free of any interest acquired by third parties during the lawsuit.” Martin, Rochford & Durr v. Lawyer’s Title Ins. Corp., 619 N.E.2d 1130, 1131, 86 Ohio App.3d 20, 22 (Ohio App. 9 Dist., 1993).

“In order for the plaintiff to utilize the doctrine of lis pendens, the property that is described for the purpose of invoking lis pendens must be at the very essence of the controversy between the litigants.” Levin v. George Fraam & Sons, Inc., 585 N.E.2d 527, 530, 65 Ohio App.3d 841, 846 (Ohio App. 9 Dist., 1990).

If the property is Unregistered Land, and the lawsuit is filed in the same county in which all of the property is located, Lis Pendens attaches upon the initial filing of a complaint relating to the ownership of real property and a description of the property in the complaint. Any interest in the property that is recorded after the filing of the lawsuit is subject to the Judge’s final ruling. If the suit is brought in a county other than that in which the property is located, a certified copy of the complaint must be filed with the Common Pleas Court in which the property is located (this also applies to property that straddles two or more county lines). See Civil Rule 3(F).

In a recent case we represented a buyer in a specific performance case.  Our client was under contract to purchase a parcel of unregistered land in Hamilton County. The seller informed our client that the seller would not complete the sale; rather he would sell to another buyer for a higher price. Our client was insistent on completing the purchase and forcing the sale.

Before the seller recorded the deed transferring the property to the third party, we filed suit for specific performance and included a notice of Lis Pendens in the complaint. After we filed the complaint, not only did the third party record a deed, that third party then sold the property to another third party who also recorded a deed. Bear in mind though, that each of these deeds were recorded after the lawsuit had been initiated, and thus those purchasers’ interests were subject to the outcome of our lawsuit.

Ultimately, we prevailed and the property was re-titled in the name of our client and the interests of the two third party purchasers were extinguished.  The third party purchasers now have to look to the original seller to recoup their money.

For Registered Land, Lis Pendens does not attach until after the complaint is filed with the Court and a Notice of Lis Pendens is filed with the County Recorder. Civil Rule 3(F) also applies where the suit is brought in county other than that in which all of the property is located.  What this means for purchasers of Unregistered Land is that certainty of your interest requires not only that you search the title, but that you also search the court filings for any litigation involving the property.

For a party seeking to invoke Lis Pendens over registered land, the process is slightly more complex. The party must first file the complaint with the court, then present a certified certificate of the pendency of the suit with the county recorder and a memorial of the suit entered on the certificate of title by the county recorder.

While the road to Lis Pendens against registered land is more cumbersome for the plaintiff, the third party buyer can rest easy that he has good title by simply looking at the county recorder’s certificate of title for the property to see if there is a memorial of a lawsuit on the certificate. Simply stated with registered land, the certificate of title tells the whole story.

SoccerWe’ve heard it from television commentators and even youth league coaches, “injuries are part of the game.” Nearly every game; from football to soccer, baseball, basketball, cycling, and running; whatever the sport, there comes with it a chance of injury.

And it’s not just sports commentators and coaches who understand the risk of injury. Ohio’s courts recognize the old maxim as well. Ohio law protects against liability for injuries sustained during recreational activity, where that injury was the result of mere negligence.

As enunciated by Ohio’s Supreme Court: “Where individuals engage in recreational or sports activities, they assume the ordinary risks of the activity and cannot recover for any injury unless it can be shown that the other participant’s actions were either ‘reckless’ or ‘intentional’” Marchetti v. Kalish.

Underlying this rule is the assumption that by voluntarily participating in a recreational activity, one has consented to the ordinary risks inherent in that activity.

This rule has been applied not only on the field of traditional sports, but even in some rather unusual “recreational activities.” In Konrad v. Morant, the “recreational activity” involved two children and one BB gun. They took turns chasing each other and shooting at each other, all very fair and sportsmanlike. Likewise, in Marcum v. Zerkle, there was no liability for injuries sustained in a paintball game.

This same rule has also been applied to injuries sustained by spectators.

In Ohio, whether you’re on the field or in the stands, you’ve assumed the ordinary risks associated with the activity you’re engaged in or even merely watching.

While Ohio law allows individuals to represent themselves in court (pro se), non-lawyers may not represent others. This prohibition extends to non-lawyers who are the sole member of a limited liability company or sole shareholder of a corporation.

While for many small businesses there may seem to be no distinction between the sole shareholder/member and the entity itself, the law recognizes the distinction – indeed such recognition is the foundation of corporate existence – and it is important to recognize and respect that same distinction.

We recently handled a case involving two defendants, both of which were limited liability companies. The statutory agents for both defendant entities were non-lawyer members of the respective companies (perfectly legal and acceptable); and the statutory agents for both companies attempted to make “pro se” filings in the case. These filings were stricken by the Court, and treated as if neither defendant had appeared or answered the complaint in the case. Ultimately, the judge entered default judgment in our client’s favor and against the defendants.

Further, the Ohio Supreme Court has held that such attempted “pro se” representation warrants civil fines and sanctions for “unauthorized practice of law.” See Disciplinary Counsel v. Kafele, 843 N.E.2d 169, 174, 108 Ohio St.3d 283, 288, 2006 -Ohio- 904, ¶ 20 (Ohio,2006), finding a $1,000.00 fine appropriate where a non-lawyer member of an LLC made filings and attempted to represent the LLC in a lawsuit, and  Cleveland Metro. Bar Assn. v. McGinnis, 137 Ohio St.3d 166 (Ohio,2013) assessing a $6,000.00 fine for such unauthorized practice of law.

If your small business has a legal issue, hire an attorney to make sure you and your business are protected.

At the Volokh Conspiracy, Jonathan Adler draws a parallel between the activist litigation challenge to the Tellico Dam project, Tennessee Valley Authority v. Hill, insisting on a strict reading of the Endangered Species Act, and the activist litigation challenge to Obamacare, King v. Burwell, insisting on a strict reading of the ACA’s provision for state exchanges.

Adler points to the TVA decision to suggest that Court will apply a strict reading to Obamacare and undo the federal exchange that has taken the place of state exchanges in states that have not created their own. Read Adler’s analysis here.

In NDHMD, Inc. v. Cuyahoga County Board of Revision, et al., 2015-Ohio-174, the Eighth District Court of Appeals reviewed the finding by the Cuyahoga County Common Pleas Court that the surplus land auction conducted by the Cuyahoga County Auditor constituted an arm’s length transaction.

In 2009, the County Treasurer foreclosed on a property for delinquent taxes. Two attempts at auction failed, resulting in the property being turned over to the state. In March, 2010, the County Auditor placed the property for sale as part of a surplus land auction. The auction was conducted on March 24. One week later (but prior to the filing of the executed deed) the winning bidder (at $1,500) filed a challenge to the property valuation with the Board of Revision.

At the Board of Revision, the value was reduced from $963,300 to $444,720. The owner appealed that decision to the Cuyahoga County Court of Common Pleas, which upheld the BOR decision. The owner then appealed to the Court of Appeals, which ruled that because the challenge to the BOR was filed prior to the recording of the deed, the owner did not have standing to bring the challenge and dismissed the complaint (returning the value back to $963,300).

During the same triennial, the owner filed a new challenge for tax year 2011. Having satisfied the jurisdictional requirement of recorded ownership, the owner now faced the statutory prohibition against bringing two challenges in the same triennial absent an exception (one of which is an intervening arm’s length sale).

The Auditor argued that the surplus auction sale is not an arm’s length transaction.

Relying on the Ohio Supreme Court ruling in Olentangy Local Schools Bd. of Edn. v. Delaware Cty. Bd. of Revision, Slip Opinion No.2014–Ohio–4723, the Cuyahoga Court of Appeals found that, while an auction sales price is presumably not a voluntary, arm’s length transaction, this presumption can be rebutted.

Supporting the finding that the transaction was arm’s length was the fact that the county auditor had not been compelled to auction the property; that two prior auctions had failed, resulting in the property being transferred to the state; that the auction had been advertised; and that there were multiple bidders.

The finding that the auction constituted an arm’s length transaction was crucial for two reasons in this case. First, because NDHMD had filed a prior challenge to the value of the property (that had been dismissed on jurisdictional grounds), the sale provided an opportunity to bring the challenge at all. Second, as an arm’s length transaction, under the applicable law (since amended) the County Auditor was required to use the sale price as the true value of the property.

The final result is that a property that the County Auditor had valued at $963,300.00 was given a new value of $1,500.00, at least for the remainder of that triennial (in the most recent triennial, 2012, the value was adjusted to $170,100).

Notwithstanding the results in this case, the Court was clear that the general presumption remains that an auction price is not the true value for tax purposes.

Have a question about the County Auditor and Board of Revision Valuation Process? Contact Anna Ausman at (513) 943-6651.


How long will it be until I can buy a house again? This is one of the first questions many people ask when filing for bankruptcy and/or after losing a house to foreclosure. The common misconception, often perpetuated by creditors, is that you will never be able to buy another house or that you will not be able to for ten years. This is just not true. New programs allow debtors to purchase a home much faster than they usually think is possible.

The mandatory waiting periods to apply for mortgages backed by Fannie Mae, United States Department of Agriculture (“USDA”), or the Federal Housing Administration (“FHA”) is between one and four years depending on your situation and the type of loan you apply for.

Conventional loans backed by Fannie Mae backed loans have a longer waiting period than those backed by the FHA. Individuals who receive a discharge in a Chapter 7 bankruptcy have to wait four years from their discharge date. Those who filed Chapter 13 bankruptcy have a two year waiting period from the date of discharge. If your Chapter 13 bankruptcy was dismissed you must wait four years from the date of dismissal.

USDA loans carry a three year waiting period for a Chapter 7 discharge. During a Chapter 13, you can receive a USDA loan as quickly as 12 months after filing. You must have both court approval and evidence 12 consecutive Chapter 13 Plan payments. You are also eligible for a USDA loan one year after your Chapter 13 discharge.

The FHA’s new programs may offer the best possible solution for those who have filed for bankruptcy or lost their home to foreclosure. The FHA’s Back to Work – Extenuating Circumstances program allows borrowers to qualify for a new FHA loan just one year after a foreclosure, short sale, deed in lieu of foreclosure, or bankruptcy. This program began on August 15, 2013 and is set to expire September 30, 2016. Not everybody will qualify for this new program but it may be very beneficial for many borrowers.
Individuals can also receive an FHA loan during a Chapter 13 bankruptcy as long as that individual has made 12 months of satisfactory Chapter 13 plan payments and has the Court’s approval.

Your credit score will affect the rates you receive on post-bankruptcy mortgage loans. Your credit score will be low immediately after you file but should consistently rise as you maintain your monthly payments and do not have any further delinquent payments.

As always, please discuss any and all programs with your bankruptcy attorney before deciding on a certain course of action.

Real EstateA recent Enquirer article highlighted Specific Performance as a remedy in real estate contracts. Specific Performance, as opposed to money damages, means that the judge will order the parties to a
contract to complete the contract. This is a rarely used remedy. In the case covered by the Enquirer, the seller is seeking an order from the Judge to force the buyers to go through with the sale and purchase his property.

Finney Law Firm recently represented buyers in seeking specific performance after the woman they contracted to purchase a home from informed the buyers that the she would not go through with the sale.

Our clients were beside themselves. They had hunted throughout the area for the perfect home and finally found it, negotiated and executed a contract for the home, and sold their home in reliance on that contract. Their dreams of settling into their new home were dashed in an instant.

The seller had gotten cold feet and found an attorney who suggested that there never was a valid contract because she hadn’t returned the accepted contract until a few hours after the time for acceptance set forth in the contract.

After reviewing the case law we determined that the contract was a valid notwithstanding the seller’s argument.

Explaining the costs and risks of litigation, we worked with our clients to weigh their options. They could walk away from the purchase and begin the house-hunt anew; they could offer more money in the hopes of warming the seller’s cold feet; or they could bring suit for specific performance on the contract. As with almost every case, litigation was offered as a last resort.

Ultimately, believing that the seller would not negotiate and they could not find a comparable home, our clients decided to sue to enforce the contract.

It took thirteen months to get to summary judgment, but eventually we prevailed and Judge Nadel ordered specific performance of the contract (for the first time in his judicial career).

After Judge Nadel ordered specific performance we were able to negotiate a settlement payment for damages and attorney fees and finally close on the sale. We’ve never seen two people happier to sign mortgage documents.

Let us know how we can make a difference for you and your real estate needs.

In 2008 two firefighters perished while answering an emergency call to a house fire in Colerain Township.

Investigators determined the source of the fire was a fan used in a basement orchid cultivation room. In another part of the basement was a marijuana cultivation room. The family of one of the firefighters brought a wrongful death suit against the homeowner alleging that the orchids were being used as a subterfuge to camouflage the illegal marijuana operation. The suit also included claims against the manufacturers of the radio and other equipment used by the firefighters.

In Ohio, property owners are generally immune from liability for such suits. The “Firefighter’s Rule” is a judicial rule that provides a general immunity to property owners from liability to injuries or death to firefighters incurred in the call of duty.

Imagine if a property owner was afraid to call 911 to report a fire for fear of being sued if the firefighters were injured. As a society, we want to encourage people to report fires and utilize our emergency services to combat fire. Indeed, we spend a great deal of money to provide those services and make sure that firefighters are prepared to fight fires. We teach our children to dial 911.

Firefighting is a dangerous job; that danger is accounted for via financial compensation and benefits, as well as life insurance for the firefighter’s family.

The Firefighter’s Rule provides four exceptions to the broad immunity for property owners: (1) where the injury resulted from the owner’s willful or wanton misconduct or affirmative negligent act; (2) where the injury is a result of a hidden trap on the premises; (3) where the injury resulted from the owner’s violation of a duty imposed by law enacted for the benefit of firefighters; or (4) where the owner knew of the firefighter’s presence on the premises but failed to warn the firefighter of a known, hidden danger on the premises. Hack v. Gillespie, 74 Ohio St.3d 362, 365, 658 N.E.2d 1046, 1049 (Ohio, 1996) quoting Scheurer v. Trustees of Open Bible Church (1963), 175 Ohio St. 163, 23 O.O.2d 453, 192 N.E.2d 38.

In this case, the firefighter’s family alleged that the marijuana growing constituted willful or wanton misconduct, but failed to establish (a) that cultivating marijuana is per se willful or wanton conduct or (b) that the marijuana cultivation caused the firefighter’s death.

In reviewing the facts of the case and the above exceptions to the Firefighter’s Rule, the trial court found that none of the exceptions applied and granted summary judgment to the homeowners.

While the trial court’s decision may seem like harsh justice, the Firefighter’s Rule represents a public policy choice that recognizes that Firefighters have dangerous jobs, and as such, the cost of that risk is spread across the entire community and in effect “prepaid” in the form of salaries and benefits, rather than assessed against individual property owners via lawsuits after the fact.

The case is currently before the Hamilton County Court of Appeals, Case No. C 1400274.



The residential landlord-tenant relationship is among the most regulated areas of commerce in Ohio. From remedies for breach by both parties to statutory provisions for making rent payments into an escrow account, it is crucial for both residential landlords and tenants to understand the legal implications of each phase of the landlord-tenant relationship.

The attorneys of Finney Law Firm have represented both landlords and tenants in disputes under Ohio’s Landlord Tenant Law (O.R.C. § 5321).

RentalWhile there is a common belief that the Landlord Tenant Law tilts in favor of the tenant and against the landlord, to the extent that this is true, the “tilt” reflects a policy choice that recognizes the unequal bargaining power that generally exists between landlords and tenants.

Recently, we represented a tenant who was having difficulty recovering his security deposit. Ohio law requires the landlord return the deposit (or an itemized list of deductions for damages made by the tenant or use for payment of rent) within thirty days of the termination of the leasehold. If the landlord fails to refund the security deposit (or provide the itemized list) within the thirty-day period, the tenant is entitled to double damages and reasonable attorney fees.

However, before the tenant can recover he must have provided the landlord with a forwarding address. Additionally, tenants should consider whether they caused damages to the home beyond “normal wear and tear.” If you left holes in the walls, damaged the appliances, or have unpaid rent, the security deposit may not be enough to cover those damages – leaving you exposed to a claim by the landlord for those repairs.

In our case, our client had fully complied with his lease, had proof of payment for every month of his tenancy (four years!), and proof that he had provided a forwarding address.

The security deposit in this case was $725.00. Perhaps a small amount to some; but for our client, a new homeowner, every dollar counts. Utilizing Ohio’s landlord tenant law, we were able to secure a judgment of $1,450.00 for our client. The only question left for the judge was the amount of attorney fees to award. We negotiated a full settlement for $4,500.00. Meaning the landlord’s failure to comply with the statute cost him an additional $3,775 (plus his own attorney fees) and our client was made whole without incurring any legal expenses.

Not every case is as straightforward as this client’s. Whether you are a landlord or a tenant, Finney Law Firm can help you understand your responsibilities and secure your rights under Ohio’s Landlord Tenant Law. Read about potential landlord liability for the safety of tenants’ guests here.