Litigation is expensive; however, the cost of failing to retain experienced counsel may be devastating to your case. The 8th District Court of Appeals in Cuyahoga County recently issued a decision that provides a cautionary tale for litigants who proceed with inexperienced counsel or decide to represent their own interests.

In Provident Funding Associates, LP v. Turner, 2014-Ohio-2529, homeowners appealed the trial court’s decision of foreclosure in favor of the bank. While the appeal was pending the foreclosed property was sold at a sheriff’s sale, and the court entered a decree of confirmation of the sale. The homeowners then filed a timely notice of appeal of the court’s judgment confirming the sale.

Although the homeowners had two valid appeals pending before the appellate court, they never filed a separate motion to stay the foreclosure proceedings, nor did they file a motion to stay the distribution of the proceeds from the sheriff’s sale. Before their appeal was heard, the property was sold and the proceeds of the sale were disbursed pursuant to court order.

When the appellate court reviewed the homeowners’ appeal, it determined that the case was “moot.” In other words, the appellate court determined that there was no remedy it could provide to the homeowners regardless of whether their appeal had merit, because the property was already sold to a third party and the sale proceeds were disbursed. As a result, the appellate court dismissed the appeal.

At first blush this seems like a harsh result. The homeowners timely appealed the trial court decisions and were set to present arguments to an appellate court in an effort to reverse the decree of foreclosure. Despite complying with the requirements for appealing a decision to the district court, however, the homeowners failed to preserve their potential remedies by failing to file separate motions to stay the foreclosure proceedings and to stay the distribution of the sale proceeds. By failing to file these simple motions, the homeowners rendered their appeal “moot” meaning there was no basis for the appellate court to review the merits of the appeal, regardless of whether the homeowners’ claims were valid.

The world of litigation is complex and detailed. If the homeowners had retained qualified counsel they would have at least had their day in court before the 8th District. The attorneys at the Finney Law Firm are experienced litigators who will guide you through the difficult litigation process. Please do not hesitate to contact our firm if you are in need of legal representation.

Christopher Finney appeared yesterday with Brian Thomas of 55 WKRC to discuss his twin wins at the United States Supreme Court against the Ohio Elections Commission challenging the constitutionality of the Ohio False Claims statute.

The link is below. Listen in starting at 80:35.

Many of our clients have experienced the frustrations of dealing with the local zoning codes and zoning authorities. A recent case out of the Second District Court of Appeals in Montgomery County underscores the complexities of the zoning process and the importance of understanding how your local zoning code restricts the use of your commercial or residential property.

In Dayton Properties, LLC v. Jefferson Twp. Bd. Of Zoning Appeals, 2014-Ohio-2209, a property owner purchased an auto salvage business that had been in operation for over 60 years. At some point during the prior operation of the business, the township had changed the zoning classification of the property to “light industrial,” which did not permit the operation of an auto salvage business under the township’s zoning code. However, the business was permitted to continue as a nonconforming prior use.

When the owner purchased the property and business, he met with the township’s zoning director and disclosed his intent to add a scrap metal line of business to the auto salvage business already established at the property. The zoning officials told the property owner that his proposed line of business would comply with the zoning code based on the continuation of the property’s nonconforming use.

One year later, the property owner received a Legal Notice of Violation for operating the business outside the scope of allowable uses. The property owner appealed the Notice to the Board of Zoning Appeals, the Montgomery County Common Pleas Court, and finally to the Second District Court of Appeals, losing his case at each stop.

In reviewing the appeal, the Second District noted that the right to continue a nonconforming use is based upon the concept that one should not be deprived of a substantial investment which existed prior to the enactment of the zoning ordinance. However, the rights of a nonconforming user are limited, and the clear intent and purpose is to eliminate such uses as rapidly as possible. With respect to the subject property, the Second District found that the original nonconforming use of the property was only for the sale of parts from junked automobiles, and that to extend the nonconforming use to include the purchase of scrap metal is prohibited under the township’s zoning resolutions.

The Second District’s Decision highlights the importance of fully vetting any property you intend to purchase. It is imperative that you understand how the zoning resolutions will limit the use of your property. In the case discussed above, the property owner was found to be in violation of the zoning code despite the fact that the zoning officials advised him that his scrap metal business would be acceptable under the code.

The Finney Law Firm has years of experience advising clients on zoning issues. We represent clients in zoning hearings and we have appealed adverse decisions through the courts.  Our firm has also been successful in defeating zoning provisions on both First and Fifth Amendment grounds. If you need help navigating the complexities of the zoning code or the appeals process, please do not hesitate to contact one of our qualified attorneys.

The Finney Law Firm has joined with Maurice Thompson of the 1851 Center for Constitutional Law in filing suit to challenge the rental housing inspection program in the City of Portsmouth, Ohio.  The suit alleges that the program mandates warrantless searches of rental property in violation of the 4th Amendment to the United States Constitution.

The Finney law Firm is representing eight Plaintiffs owning 82 properties in the City of Portsmouth in challenging the program.

In Portsmouth, the City has targeted more than 2,100 properties under the program, although City fathers have acknowledged in media reports that problem properties are fewer than 10 in the entire City.

You can read the Complaint and Motion for Temporary Restraining Order below.

Portsmouth Complaint by Finney Law Firm, LLC

Motion for TRO and Preliminary Injunction against City of Portsmouth by Finney Law Firm, LLC

It has been simply remarkable month for the Finney Law Firm.

We won two separate cases for our client, COAST at the United States Supreme Court, Susan B. Anthony List and COAST v. Ohio Elections Commission announced on June 16th and COAST Candidates PAC v. Ohio Elections Commission announced on June 23.

They are two cases brought one year apart, dealing with two separate “False Claims” statutes of the state of Ohio.  The Supreme Court’s decisions did not strike the offending statutes, but rather simply ruled that COAST had “standing” to be in Court raise the constitutional arguments.

The first case is now back in front of U.S. District Court Judge Timothy Black and the second is in front of U.S. District Court Judge Michael Barrett.  We expect both will take an additional two-to-three years to fully adjudicate.

The United States Supreme Court today again unanimously ruled in favor of Finney Law Firm client, COAST Candidates PAC, in a second case against the Ohio Elections Commission.  You can read the docket entry here.

Our firm presently has three cases pending against the Ohio Elections Commission, and is about to bring a fourth, challenging the Ohio statutes that empower the Commission to sit in judgment of the truth or falsity of statements made during the course of political campaigns.

To date, the Ohio Elections Commission has avoided judicial scrutiny of the statutes using “standing arguments, saying essentially that litigants are always in court at the wrong time, and that there is no time at which an action is proper to challenge the constitutionality of the statute and OEC’s enforcement procedures.

With these two rulings from the United States Supreme Court, they have found that COAST in each case does in fact have legal standing to raise the constitutional challenges and the matters proceed to full determination at the trial court.

The third case remains pending in Franklin County Common Pleas Court, Magda v. Ohio Elections Commission, where it has been for more than a year and a half.  The fourth case will be filed in Federal District Court shortly.

When closing a real estate transaction, every state requires that one or both parties report to the local taxing authority the sales price of the property.  This report is used for two primary reasons: (i) to establish the amount of the transfer tax or conveyance fee for the transaction and (ii) to establish the taxable value of the property for real estate taxation purposes going forward.

In Ohio the sale price is signed by the grantee under the deed, and is reported on a state-mandated conveyance fee form.  In Kentucky, the grantor and grantee must sign an affidavit of consideration attesting to the sales price.  Both forms are prerequisites to getting a deed of record.

Now, before we go any further with this post, it is important to note that the amount reported is not discretionary and not to be treated lightly.  In both Ohio and Kentucky, the reporting form is a sworn statement (i.e., under oath), the falsification of which is a felony.  So we are not suggesting misrepresenting anything on those forms.  But  an honest approach to the consideration question can yield different results depending on the circumstances.

With those items as background, many considerations drive the reported sales price on the conveyance fee form or consideration affidavit: (i) the stated contract price, (ii) federal tax considerations (e.g. basis and capital gains), (iii) the value to be “booked” for a sale, and (iv) appearances for banks and equity partners.  But frequently overlooked by the dealmakers is one of the most significant consequences of the price reported: the real estate taxes for years and years going forward will either be dictated by or strongly influenced by the number appearing on that form.

Many times we find in our property tax valuation work that buyers and sellers thoughtlessly put a high value on those forms, which may include the value of the business operating inside the property, furniture, fixtures and equipment, and other factors unrelated to the actual value of the real estate acquired.

With annual rates of taxation in Ohio ranging between 1.7% to 3.2% of the valuation and annual rates of taxation in Kentucky being around 1.1% annually, the consequence of unnecessarily over-reporting the sales price can be costly year after year after year.

Thus, we carefully counsel buyers to consider stripping  from the reported sales price the FF&E, the goodwill, cash and A/Rs of a business being acquired, and other factors that are unrelated to the real estate transaction.  The net effect can be an annualized savings going forward of 1.1 to 3.2 percent of the excised property’s value going forward.

The meat of the SBA List case is clarification or revision of the federal court’s standing doctrine in First Amendment cases. No matter how the Court slices it, it’s decision is invariably precedential as to future cases.

On the one hand, they were clear in the United States v. Alvarez and SBA List oral arguments that they wanted someone to have standing to challenge state speech restrictions like those present in our case. The Sixth Circuit’s too-restrictive approach was obviously unacceptable to the Justices.  On the other hand, they want to be restrained in establishing a standard that would throw open the courthouse doors to entirely new categories of litigation.

This SCOTUS Blog commentary explores Clarence Thomas’ approach to this issue in his unanimous opinion, being the rule going forward for pre-enforcement standing due to a “credible threat of enforcement” in First Amendment actions.

When a client is being sued, it is important to fully explore all defenses available to them, but many times litigants and their counsel fail to come to the table with clean hands.  And in the right circumstances, that’s when you can turn the tables on your opponent.

Indeed, the law requires that certain counterclaims claims are compulsory, and the failure to bring them in the context of the litigation presented could be a bar to recovery in the future.

When exploring commercial disputes, the tools available to litigants are:

  1. Meritorious counterclaims;
  2. Actions for frivolous conduct against the party and his attorney under O.R.C. §2323.51, a statute designed to protect against being false dragged into court; and
  3. Actions for frivolous conduct against the party and his attorney under Civil Rule 11.

These tools are all too frequently used imprudently, which can either unnecessarily increase the length and expense of litigation or even expose the client to claims of frivolous conduct, but when carefully considered can change the calculus of litigation in favor of the client.

Please contact us to learn how we can help you with your litigation challenges, either defending against a business or personal claim, or prosecuting a meritorious claim you hold.

Read below four related topics:

Navigating turbulent waters: Very early settlement discussions

Navigating turbulent waters: The litigation end game

Navigating turbulent waters: Economics of litigating low-dollar claims

Navigating turbulent waters: It’s not all black and white for Judges