Hi, How Can We Help You?

Category Archives: Business & Civil Litigation

May I “stay” collections of a judgment pending the outcome of an appeal?

Author By Christopher P. FinneyPosted on

As clients “play out” the path of their litigation, they may plan on delaying the consequences of a possible loss at trial court for a year or two by “appealing all the way to the Supreme Court.”  Comfortable that they can postpone payment of any possible judgment 24 to 36 months into the future, they continue with the path of defending a suit, they have figured out — before we ever speak about it.

“Stay” typically requires a supersedeas bond; otherwise judgment collections may proceed

However, it’s not that simple.  As a fairly firm proposition of law, there is no “stay of execution” pending the outcome of an appeal unless and until the party against whom judgment is obtained has posed a supersedeas bond in the full amount of the “cumulative total for all claims covered by the final order.” R.C. §2505.09.

… an appeal does not operate as a stay of execution until a stay of execution has been obtained pursuant to the Rules of Appellate Procedure or in another applicable manner, and a supersedeas bond is executed by the appellant to the appellee, with sufficient sureties and in a sum that is not less than, if applicable, the cumulative total for all claims covered by the final order, judgment, or decree and interest involved, except that the bond shall not exceed fifty million dollars excluding interest and costs, as directed by the court that rendered the final order, judgment, or decree that is sought to be superseded or by the court to which the appeal is taken.

In other words, after a party to a case obtains a monetary judgment against another party (typically, but not always, a plaintiff obtains a judgment against a defendant), absent a “stay” issued by the Court, the party holding the judgment may pursue collections against the party against whom judgment has been rendered while the appeal is being briefed, argued and decided.  This means that the prevailing party may pursue foreclosure against real property, garnishment of bank accounts, attachment of wages and other collections actions, notwithstanding the slow process of a pending appeal that the opposing party believes will reverse the trial court judgment.

How a supersedeas bond is obtained

The bond can be issued by a private surety, such as an insurance company.  But the insurance company wants to take zero risk in the issuance of that bond, so they will do so only upon posting of proper security such as cash, accounts containing stocks and bonds, or real estate with sufficient equity.  And the outcome of this is that the eventual bankruptcy of the losing party, hiding of assets, dissipation of assets, death of the losing party, and other intervening events will not impair the collectability of the judgment by the prevailing party.

Posting of real estate as security

Another avenue to a “stay” order is the conveyance of property of adequate value with the Clerk of Courts, R.C. § 2505.11.  And, under 2505.12, exempt from the bond-posting provisions are (i) fiduciaries who already have posted bonds, with surety in accordance with law, (ii) the state of Ohio and its political subdivisions, and (iii) public officers of the state and its political subdivisions who were sued only in their official capacity.

How it really plays out

How does this, then, typically play out?  First, I find that losing defendants don’t just want to “write a check” to pay the judgment.  Rather, they ignore it until collections actions are taken.  Second, I have found that losing parties willfully ignore the plain language of Revised Code §2505.09 and ask for a bond amount less than the “cumulative total for all claims covered by the final order.”  This request, in our experience, is routinely denied.

Then, there are circumstances in which the losing party simply can’t pay the judgment amount and therefore also can’t post a bond in that amount.  In that circumstance, the losing defendant has the option to declare bankruptcy.  In other circumstances, the losing party has no identifiable assets, but he must honestly submit to a judgment debtor examination and tell the prevailing party’s attorney the location of his assets.  It is a bad idea — one we routinely reject — for a losing party to transfer assets to avoid collections upon loss in litigation.  What this means, for example, is moving around assets for the purpose of avoiding the prevailing party from collecting is as bad of an idea as it is appealing.

So, when Gibson Bakery sued Oberlin College for defamation and obtained a $25 million judgment, the Judged ordered a stay of execution pending appeal only upon the posting of a $36 million bond.  Last week, a $1.8 billion judgment was rendered against the National Association of Realtors and two other defendants.  Because the matter litigated is under the Sherman Antitrust Act, the damages are to be tripled, likely bringing the judgment amount to $5.4 billion.  One of the Defendants is a Berkshire-Hathaway company, which certainly has the cash sitting around for that, but will they post that for just one of their subsidiaries and to pay the freight for all of the defendants?  For most parties, including the other two defendants, they simply would not have the assets available to them to post a supersedeas bond of that magnitude.

As litigants want to be on the “offense” in collections, as the defense — against a diligent prevailing party — is no fun and there are few places to turn to avoid “paying up.”

Conclusion

In your business affairs as well as your litigation, be prepared to accept the accept the consequences of your decisions.  In litigation, those consequences can be both unexpected and expensive.  If your plan is to postpone collections until appeals are exhausted, that may mean posting a bond for the value of the judgment.

Big Finney Law Firm “Tree Case” win upheld by 1st District Court of Appeals

Author By Christopher P. FinneyPosted on

On November 3, 2023, we won a big victory for our client, a humble carpenter who lives in Clifton, at the First District Court of Appeals of Ohio.  In the decision, the Appeals Court affirmed a verdict in our client’s favor for the removal of a large tree from his property without his permission.

At trial, our firm not only proved the trespass and actual damages but also proved malice by the Defendant by “clear and convincing evidence,” entitling the client to receive as part of his award reasonable attorneys fees and expenses for taking the case to trial.

A copy of Friday’s appellate court decision is here.

Background

We regularly counsel our clients on the time, expense and sometimes disappointing outcomes in civil litigation.  It is a major part of the challenges our firm and our clients face in court.  And typically small dollar cases — regardless of how just the cause may be — are just not worth pursuing.

Nonetheless,  in 2019 we met with client William Chapel at his property and discussed the removal of his 50+ foot black walnut tree by his neighbor without permission.  He came home from work one day, and the tree was gone, it was taken down, along with an old wood screening fence that had been on his property, all without his permission.  We believed in the case and in the client, so we accepted the case.

Scorched earth strategy of defendants

It is typical in litigation that opposing counsel does not intend to win on the merits of their case, but rather by running out the clock and running the bill to heights that the amount in dispute will not justify, hoping our firm and our clients will “just go away.”   Well, we never “go away.”

Victory at trial court

We here wrote about the $222,836.53 verdict that was rendered in our client’s favor last December before the trial court for the removal of that tree, the majority of that verdict being punitive damages, attorneys fees and out-of-pocket expenses associated with the exhaustive litigation path chosen by the Defendants.

Conclusion

In addition to the $222,836.53 award at the trial court, the Court indicated that attorneys fees and expenses incurred in collections matters and in appellate work would supplement the award, so this week we will be preparing a supplemental fee application,  hoping to finalize the significant win for our client, and the delivery of justice to our community.

Thanks to our able and persistent team of Christopher Finney, Julie Gugino, and Jessica Gibson who saw this case through to the end.

Protective Orders –> No thank you (or at least be cautious)

Author By Christopher P. FinneyPosted on

In litigation, parties may exchange thousands of documents, some of which may contain sensitive information about personal matters, privileged documents and documents containing sensitive financial and tax information.  As a result, many times parties want to enter a “Protective Order” from the Court that allows for such documents to be produced with varying levels of agreed confidentiality protection.  In this blog entry, we explore (a) the true and fundamental need for such protections (usually most of it it is just a waste of time) and (b) some of the abuses we have experienced under such Orders.

In short, (a) they should not be entered casually — but carefully and thoughtfully, (b) there needs to be escape or corrective clauses for inappropriate unnecessary designation of documents as confidential, and (c) there should be penalties on counsel for abusing the Protective Order privileges.

What is a Protective Order?

Typically, a Protective Order allows one party or the other to designate documents as “confidential,” and those documents so designated are protected from public release.  Further, when sharing them with expert witnesses and other third parties (such as a technical consultant for organizing electronic discovery).  That makes sense.  The parties should not post on social media or circulate to competitors truly confidential business plans, financial documents and tax documents.

That’s fine as far as it goes, but then the Protective Order typically provides that filing any such document with the Court must be under seal.  To me, this runs contrary to the principle that trials in the U.S.A are to be held in the public.  Shielding the truth from public view should be done with caution, sparingly.  But beyond that is the hassle of carefully making sure you follow the correct procedures.  It drives up the cost of litigation, and the penalties for making an innocent mistake.

And then, beyond all of those protections, are production “for attorney eyes only.”  Huh?  We can’t share certain documents with our clients?  Ridiculous in 99.997% of instances.  What is so confidential that our own clients can’t be part of information sharing to develop their claims or defenses?  Really?

Further many times Protective Orders contain “claw back” provisions wherein documents that are privileged from disclosure (such as attorney-client or spousal privilege documents) can be (or must be) returned as if unseen, and copies not retained.

Digging your own grave.

There is nothing so deadly in the law as concessions and admissions you yourself make, and a Protective Order is of the type that the Judge will say: “Well, you agreed to this.”  Thus, a Protective Order is a grave you have dug for yourself.  Sign on with great caution.

Judges hate discovery disputes.

Judges are busy with other things, criminal trials, search warrants, temporary restraining orders, and on and on.  The rules of discovery are fairly clear and the parties should play fair.  But they don’t.  And then we must burden a Judge — who might have a murder trial in front of us — with playground disputes about non-production. It’s tedious and unproductive, but sometimes necessary.  But this is complicated when a party thoughtlessly agrees to handle documents in a certain way that later becomes impractical or burdensome.  Asking the Judge to unwind a dispute over the designation and use of documents as defined and prescribed by a Protective Order is more burden for the Court, a burden with which they don’t want to deal, and may simply refuse to address.

Judges are mixed on requiring Protective Orders.

As a result, I generally oppose the use of most protective orders — it just increases the cost and time for litigation.  We are talking tens of thousands of wasted dollars and years of wasted time. So, the request for a Protective Order then ends up before a Judge.

In one active case I have now, we are litigating against a “pay lake” operator.  He has five small lakes, and charges the public to fish in them, and charges for works, beer, coke and chips.  That’s about the level of privacy and complexity of his finances.  “He sells worms, for God’s sake, I say.”  He insisted that his financials and tax returns be disclosed under a Protective Order.  Huh?  What is secret and confidential about selling worms and renting the right to fish in stocked lates at $15 per day?  But sure enough, the issue of a protective order was pursued through the Magistrate and further into the Common Pleas Court with Objections to Magistrate’s decision – attorneys can and will fight over everything.  Fortunately, in this already expensive litigation, the Court rejected the requirement for a Protective Order, allowing us to access the documents sought without restrictions.

In a second case, a personal injury case against a major public utility, the utility sought and obtained (and as discussed below, abused) the Protective Order, complicating already overly-expensive litigation.

Discovery abuse.

Then, once a Protective Order is in place, invariably opposing counsel will abuse his privileges under the Protective Order:

  • In the case of the public utility defendant noted above, they designated 1,500 pages of materials that they themselves previously had posted on line.
  • In another case, the Defendants marked more than 200 entirely blank pages as “Confidential.”
  • In a recent case, the Protective Order had been entered that included the right to designate hyper-sensitive documents as “For Attorneys Eyes Only.”  The case was about residential (Single Family Home) property management.  The opposing attorney designated Quick Books records of the financials of the properties as “for attorneys eyes only.”  Now, this was ridiculous.  What is so hyper-sensitive that we could not share property management financial details with our own client?  It was ridiculous.

Confusion about use at trial.

Then, the funniest thing we had recently in a case with a Protective Order: The Order allowed use of the documents marked as “confidential” for “litigation purposes,” which to me means using them as Exhibits at depositions and at trial.

Well, opposing counsel threw a fit about me using a document — a second purchase contract that came after the one being contested at trial — as an Exhibit at Trial.  Huh?  If that’s not “litigation purposes,” I don’t know what is.

Well, the Judge agreed with me and we were able to use it at trial, but not after significant (15+ minutes) or discussion before the Judge and the Judge slobbering all over himself apologizing that this super-secret document had to come into the record.

One more thing to argue about.

The point of this blog entry is that I don’t like to use Protective Orders and they only should be requested — and permission granted — when they really are needed.  Otherwise, they become one more thing the client pays to draft, negotiate and then endlessly argue over as the litigation progresses.

Just say “no.”

 

 

U.S. District Court Judge Douglas Cole certifies RICO and fiduciary breach class action against Build Realty, Gary Bailey, George Triantafilou and First Title Agency, LLC

Author By Christopher P. FinneyPosted on

We will write more on this later, but we are pleased to announce that — six years after we first filed in State Court, and nearly four years after we moved the case to Federal Court — on Tuesday of this week Federal U.S. District Court Judge Douglas R. Cole certified our firm’s RICO and breach of fiduciary duty claims against the following Defendants as a class action:

  • Build Realty, Inc.
  • Edgar Construction, LLC
  • Cincy Construction, LLC
  • McGregor Construction, LLC
  • Cowtown Holdings, LLC
  • Build NKY, LLC
  • Greenleaf Support Services, LLC
  • Build SWO, LLC
  • Gary Bailey (as trustee and individually)
  • George Triantafilou (as trustee and individually)
  • G2 Technologies, LLC
  • GT Financial, LLC
  • Five Mile Capital Partners, LLC
  • First Title Agency, LLC

In doing so, Judge Cole certified all victims of the alleged RICO and breach of fiduciary duty scheme as class members and certified a sub-class of investors who had their properties improperly taken away by scheme participants.

A class notice is being negotiated and should be sent to class members within the coming month or so.  If you have an updated physical address or email address please email it to Chris@FinneyLawFirm.Com and we will try to keep you updated on developments.

This is a major victory for victims of this scheme, but we have many miles to trial to achieve final justice in this matter.  We will endeavor to keep the public updated through this blog.

For more background on this case, read here, here, here, here and here.

Our able co-counsel in this case is Bill Markovits and the firm of Markovits, Stock and DeMarco.

We are pleased to be “Making a Difference” for our now many clients in this long and very complex litigation.

You may read the Class Certification Order below.

 

Judge Robert Ruehlman

The case of the $222,836.53 tree — yet another win, this one with punitive damages and attorneys fees!

Author By Christopher P. FinneyPosted on

Today brought to a Finney Law Firm client a judgment for $222,836.53 for trespass onto his residential property and the removal of a tree and a portion of a wooden fence.

It’s been a big week for the Finney Law Firm in many ways, closing out yet another record year for the law firm.  And today we got our second huge, years-in-the-works victory in one week.  The Cincinnati/Alarms Registration case (final entry linked here) was five years in the making and this new “tree” case took 39 months to bring to conclusion.

The win was significant for several reasons.  First, this was the last civil trial for Hamilton County, Ohio Common Pleas Judge Judge Robert Ruehlman, the longest-ever serving Judge on the Hamilton County Common Pleas bench.  He retires from the bench January 2, 2023.    Second, awards of punitive damages and attorneys fees are fairly uncommon (either cases settle or the requisite legal standard is not met for punitive damages).  But, the Judge ruled that such standard for proof of the case and an award of attorneys fees was met by Plaintiffs, and was met by “clear and convincing evidence.”

A copy of this “tree case” order is here.  Congratulations to our client, William Chapel, and to our team consisting of Christopher Finney, Julie Gugino, Jessica Gibson and Kimi Richards, along with our expert witnesses and A/V consultant (Kevin Lewis and Media Stew!) for a wonderfully executed case from intake and filing to trial and judgment.

Now on to collections!

 

Judge Wende Cross issues Order granting final Class Action Settlement in Cincinnati Alarms Case

Author By Christopher P. FinneyPosted on

A big win was had today in Court for two classes of Cincinnati taxpayers.

After more than four years of litigation — through Common Pleas Court, the Court of Appeals, an attempt for Ohio Supreme Court review and back — today Hamilton County Common Pleas Court Judge Wende Cross signed the Order Approving Class Action Settlement in the case of Andrew White et al. v. City of Cincinnati, Ohio, Hamilton County, Ohio Common Pleas Court Case No. A1804206 (known as the “Alarms Tax Case”).

Background

The Order established a common fund of $3,277,802.25 from illegal alarms registration fees  (NOTE: not false alarm fees) collected by the City of Cincinnati from 2014 to present.  That nearly $3.3 million fund is to pay refunds to those who paid the illegal tax and attorneys fees incurred in the litigation.  The litigation in this matter was led by Maurice Thompson of the 1851 Center for Constitutional Law.  Finney Law Firm and attorneys Christopher Finney and Julie Gugino served as co-counsel.

As we explain in more detail here, Judge Cross certified two classes to receive refunds (a) residential and (b) non-residential payors of the Cincinnati alarms tax.  The City charged residential alarm-system-owners $50 per year to register their systems and commercial owners $100 per year to register their systems.  Last fall, the 1st District Court of Appeals unanimously ruled the tax illegal under Ohio law and unconstitutional, overruling a trial Court ruling on the same subject.  In March of this year, the Ohio Supreme Court preserved that victory for Cincinnati property owners when it refused to accept discretionary review of the case.

Making a difference

“Making a difference” for our clients is the mission of Finney Law Firm and its capable attorneys.  In this case, we successfully enjoined the enforcement of the illegal tax and achieved more than seven years of refunds for payors.  The victory was won under both state law (the assessment was an illegal tax) and the U.S. Constitution (the tax was an infringement on free speech rights by preventing or making more difficult reporting of crimes to the police).

How to get your refund

If you were a Cincinnati alarm registration payor at any time from 2014 to today, you should already have received a postcard, email or voicemail about the refund.  If we have a current address for you (i.e., you received the postcard), you should be receiving a refund by by February 21, 2023.

If you have not gotten a mailed postcard, please make sure we have your name and current address (and the address for which the alarm tax was paid) (will post information shortly of where to write with this info).  Write to Info@OhioConstitution.Org with this information: your name, the payor’s name, your address, and the property for which the alarm registration fee was paid.

 

 

 

 

 

Knowing who to sue: Pre-Suit Discovery vs. John Doe Defendants in Ohio

Author By Casey A. JonesPosted on

It’s easy to assume that, in order to file a lawsuit, you must necessarily know who you are suing and what you are suing for. This is only partially true.

It is actually not at all uncommon for a party to know that they have been wronged in some manner and know that they have viable legal claims as a result of that wrong, yet not know the identity of the party from whom to seek redress. When this situation arises, there are a couple of options.

Doe Defendants

Civ.R. 15(D) states:

“When the plaintiff does not know the name of a defendant, that defendant may be designated in a pleading or proceeding by any name and description. When the name is discovered, the pleading or proceeding must be amended accordingly. The plaintiff, in such case, must aver in the complaint the fact that he could not discover the name. The summons must contain the words ‘name unknown,’ and a copy thereof must be served personally upon the defendant.”

These unknown defendants will often be identified as “John Doe” or “Jane Doe.”

Petition for Pre-Suit Discovery

On the other hand, Ohio law provides with a process by which they can file a “Petition for Discovery,” which is filed like a complaint but, practically speaking, is more akin to a motion asking the court to order another party to produce certain documents or divulge certain information in response to an interrogatory.

The pre-suit discovery process is governed by R.C. 2317.48, which states:

When a person claiming to have a cause of action or a defense to an action commenced against him, without the discovery of a fact from the adverse party, is unable to file his complaint or answer, he may bring an action for discovery, setting forth in his complaint in the action for discovery the necessity and the grounds for the action, with any interrogatories relating to the subject matter of the discovery that are necessary to procure the discovery sought.

Ohio courts have clarified that “R.C. 2317.48 is available to obtain facts required for pleading, not to obtain evidence for purposes of proof.” Marsalis v. Wilson, 149 Ohio App. 3d 637, 642 (2d Dist. 2002). In other words, this is not a free pass for a party to determine whether he or she has a claim or weigh how strong it may be; it is a limited opportunity to ascertain facts that must be alleged in a proper pleading relative to a claim for which the party already has a good faith basis. In nearly every instance, the missing information being sought is the identity of a potential party.

Civ.R. 34(D) further governs this process with regard to requests for documentation. See generally Huge v. Ford Motor Co., 155 Ohio App. 3d 730 (2004). “R.C. 2317.48 and Civ.R. 34(D) work in tandem to govern discovery actions.” Id., at 734. In order to take advantage of this Rule, the party must first make reasonable efforts to obtain the discovery voluntarily. The petition must include:

(a) A statement of the subject matter of the petitioner’s potential cause of action and the petitioner’s interest in the potential cause of action;

(b) A statement of the efforts made by the petitioner to obtain voluntarily the information from the person from whom the discovery is sought;

(c) A statement or description of the information sought to be discovered with reasonable particularity;

(d) The names and addresses, if known, of any person the petitioner expects will be an adverse party in the potential action;

(e) A request that the court issue an order authorizing the petitioner to obtain the discovery.

Civ.R. 34(D)(1). The court will issue an order for the discovery if it finds:

(a) The discovery is necessary to ascertain the identity of a potential adverse party;

(b) The petitioner is otherwise unable to bring the contemplated action;

(c) The petitioner made reasonable efforts to obtain voluntarily the information from the person from whom the discovery is sought.

Civ.R. 34(D)(3). Note that, under Civ.R. 34(D), that the discovery is needed “to ascertain the identity of a potentially adverse party” is not just a practical effect but, rather, a requirement of the Rule.

Which is best?

If a party can reasonably identify and is merely missing the name of the adverse party or parties or believes they can obtain information from the unnamed parties via discovery once the action is filed, naming a “Doe Defendant” under Civ.R. 15(D) is likely the most efficient route. However, if additional information or documentation is necessary to even begin to identify the adverse party, an action for pre-suit discovery may be warranted.

Statute of Limitations Implications

One common misconception is that an action for pre-suit discovery under R.C. 2317.48 and/or Civ.R. 34(D) or, alternatively, naming a Doe Defendant somehow preserves or tolls the statute of limitations until the party can be identified and the ultimate action (or amended action) brought against them. This is not the case. In 2010, the Supreme Court of Ohio issued its decision in Erwin v. Bryan, holding that it could not, “through a court rule, alter the General Assembly’s policy preferences on matters of substantive law, and Civ.R. 15(D) therefore may not be construed to extend the statute of limitations beyond the time period established by the General Assembly.” 125 Ohio St. 3d 519, 525 (2010). “Civ.R. 15(D) does not authorize a claimant to designate defendants using fictitious names as placeholders in a complaint filed within the statute-of-limitations period and then identify, name, and personally serve those defendants after the limitations period has elapsed.” Id., at 526.

While Erwin does not make as explicit of a finding as to R.C. 2317.48 and/or Civ.R. 34(D), its inclusion of these rules in the same discussion, as well as the nature of such rules (contemplating an action exclusively for discovery and not naming the adverse party or parties, as they cannot be ascertained without the same) strongly suggests an identical result. Indeed, the statute of limitations is intended to encourage parties to be diligent in investigating their claims and, if the identity of an adverse party is in question, the spirit (and, likely, the letter) of the law would require such party to initiate a discovery action with sufficient time to obtain the discovery and then bring the ultimate action.

 

 

Pins and needles

Author By Christopher P. FinneyPosted on

In pre-litigation and litigation, we frequently have clients who are understandably anxious to resolve their disputes.  They typically are concerned with the open-ended liability that can result from a claimed breach of real estate contract or a business deal gone bad — and the legal fees that inevitably will come from them.  And as a result of that unknown exposure, they want swift finality to the matter.  They are constantly on pins and needles to close this small chapter of their life.

A good settlement versus a quick settlement

Unfortunately, getting a good resolution frequently is inconsistent with the desire for a quick resolution.  Patience, many times, is a virtue that pays good dividends.  This does not mean we typically recommend litigation as a solution.  Litigation is lengthy, unpredictable and terribly expensive, and is accompanied by the same sense of unease until that long course to resolution.  But the other side can sense when you are anxious to put a dispute behind you — attorneys are especially good at dragging things out to achieve a more favorable resolution than the courts would provide to them precisely because of that desire of the opposing party for quick closure.  Showing that insistence on a quick and final settlement can drive up the cost of a resolution exponentially.  So, slow down.  Relax.

Why the anxiety?

The nature of our legal system is that we frequently need to give “lawyerly” answers to what seem to be simple questions:

  • Am I liable?
  • What is the extent of my financial exposure?

These vague answers are so because many times the answer from a review of the documents and a review of the correspondence and oral exchanges leave a conclusion unclear.  Many times — most times — clients don’t tell us the whole story.  Sometimes, we are wrong.  And even if we as attorneys can give a clear anticipated outcome and we are correct in our analysis, the Judge (or Arbitrator) may in the end not agree with us.

We read the documents and do our best to understand the facts, and conclude: “Your exposure should be limited to ‘X,'” but the Judge may later conclude it is “X” times 3.5.  And that is so because we can be wrong or the Judge can decide the case incorrectly (in our opinion).  Further, we conclude “the fees and expenses to get to that conclusion should be ‘Y,'” but opposing counsel and judges can make the odyssey much more expensive.

Perhaps my bedside manner makes clients uneasy because I do have and share “worst case scenario” war stories where liability and legal fees well exceed that which should reasonably be anticipated.  But for every one of those legal calamities, we have 20 or 40 cases that resolve quickly and fairly, if not inexpensively.

So, relax

I recently was consulted by a physician who had contracted to purchase a small investment property, and he had decided he contractually  agreed to pay too much and wanted to back out of the deal.  He was more or less crawling out of his skin to have resolution of the matter — and his total exposure if he was in fact found to be in breach of the contract was on the order of maybe $20,000.  And this was the worst case for him.

But he was anxious, and called me four or five times in a two-day period stressing about this “what if” and that “maybe” scenario.

I asked him: “You are a doctor.  What kind of doctor?”  He responded: “I am an oncologist.”  So I said: “OK, let me understand.  Every day you have to tell someone — and their family — that they or their loved one has cancer.  Is that right?”  He says: “Correct.”  And, I further inquired: “Yet you are stressed about a simple contract claim that might cost you $10,000 or $20,000 if you ultimately are sued, is that right?”  “That’s right,” he responds,  “But I see your point.”

Another case I have my client terminated a residential purchase contract because the strict terms of the financing contingency were not met — the bank had a higher interest rate and a higher down payment than the contingency contemplated. The buyer sent a contract termination letter and the seller responded with a rejection of that — but then just sat and sat and did not place the house back on the market — at least not right away.

I explained to the client that “these almost all work themselves out without litigation.”  Further, he has an appraisal of the property at the purchase price.  If that is the value that would be adopted by a court in litigation, then the seller has no damages anyway.  Further, if they refuse to place the home back on the market, the seller will have violated his duty to “mitigate his damages,” weakening the seller’s claim in court.

Still, the client and his wife are anxious, concerned about the many possible outcomes to the suit.  And we don’t as of this writing know exactly how it will turn out.

Conclusion 

No one has cancer.  No one lost an arm or an eye.  No one is going to die.  You are not going to end up in bankruptcy court as a result of this contract claim.  Be patient and allow the other side to work out their “mad” and realize the cost and time that litigation will take.  It will all be OK.  That does not mean fighting until the last breath and last dollar is the best strategy, but being somewhat patient as a settlement works its way out can be advisable.

As to code enforcement and nuisance actions we strongly recommend “comply”

Author By Christopher P. FinneyPosted on

Friday, our founder Christopher Finney was featured on a panel presentation before the Cincinnati Bar Association on “Code Enforcement from the Municipal Perspective.”  The panel included Erica Faaborg, Deputy City Solicitor of Cincinnati, Kathy Ryan of Wood and Lamping, and Stacey Purcell of Legal Aid of Cincinnati.

The panel discussion covered a wide range of code enforcement and nuisance actions, many of which fall outside the scope of what Finney Law Firm typically would handle such as slum landlords without heat and tenant hoarding.

Our primary experience falls in two areas: (i) Chronic and acute health and building code violations, with the municipality typically seeking an injunction and a fine against the property owner and (ii) nuisance actions seeking either the forced closure of the nuisance business (usually either a motel or a liquor establishment) or the appointment of a receiver to manage, fix up and sell a property.

In both instances, in nearly every jurisdiction in question, the municipality is simply seeking compliance.  In most instances, they neither want your money nor control of your property. They want the nuisance conduct (underage drinking, violence, drug dealing, prostitution) stopped or the the property fixed up.  Period.

As three starting points, commonly I advise:

  • Maybe our client has a legitimate defense, the nuisance does not exist, is not as exaggerated as the municipality claims, or we have an over-zealous building inspector picking a fight with a single property owner. But (a) this usually can be worked out (as their objective typically is compliance, we universally find they are clear and reasonable when asked to be) and (b) the Judge who will hear the case lives in our community and typically wants zealous code enforcement — we all want to live in a nice community, right?  As to judicial matters, these are “police powers” enforcement and the Judge almost never wants to second guess the City in a code issue. It will be very hard to overcome the presumption that the City is being reasonable in its enforcement.
  • Even if the client is right, the risk of lost and cost of litigation pales in comparison to the cost of fixing up the property or abating the nuisance.
  • And, worst of all, if the City is victorious in seeking the appointment of a receiver for your property, it’s “game over” for the property owner in terms of preserving any value from — any equity in — the property.  Why? Because the lawyers and receiver take over the property, repair it at your expense, charge their professional fees to the project and pay themselves from the income and proceeds, and sell the property quickly for what they see as a fair price to a new operator.  You can kiss your years-developed, hard-earned equity goodbye.  In the case of liquor establishments, if you are ordered closed, your millions of dollars in capital to develop and promote an establishment are out the window if you are forcibly shut down.

As a result, we strongly recommend working with building officials toward a reasonable compromise for enforcement — it can end the dispute, it improves the property or its operation, and it makes our communities stronger.  More importantly, in in the long measure, it saves the client money by investing in his property or business rather than running up a huge — and likely non-productive — legal tab.

Having said all of this — and we do counsel compliance and cooperation — a business owner or property owner does not need to just “lay down” for expensive and over-the-top enforcement.  Our firm has fought and won amazing battles against State and local governments, all the way to the US Supreme Court.  We have successfully challenged entire legislative schemes, including pre-sale and pre-leasing inspections, which are a constitutional overreach, in multiple jurisdictions.  Our firm has made a name for itself fighting and winning against bad government actors.  Our tools include the US and State Constitutions, state statute, the State of Ohio taxpayer statutes against both cities and county commissions, Open Meetings laws, Public Records laws, and other statutory avenues.  But before launching into these battles, we want to make sure we are positioned to win and that the client appreciates the costs and risks for undertaking these fights.

Today’s NYT: Insurance coverage, “You’ve got to provide notice early and often”

Author By Christopher P. FinneyPosted on

Today’s New York Times has an instructive tale in insurance coverage in a high-profile U.S. Supreme Court case.  There, Harvard University is embroiled in expensive and protracted litigation over its affirmative action policies.

For such litigation, it had an initial $2.5 million deductible under its primary carrier, and then $25 million in primary coverage.  It however, failed to notify its “excess coverage” carrier, which provided an additional $15 million in coverage.  Because the litigation lasted so long and cost so much, that failure to timely notify the carrier — a policy requisite — it may have deprived itself of that needed $15 million in coverage.

The lesson, as quoted in the article, is, as to coverage: “you’ve got to provide notice early and often.”  Our position is: “When in doubt, notify.” (Clients are rightly concerned that notice causes increased rates and/or cancelation.  Our experience is different: If you are an overall responsible insured, even with occasional claims, even meritorious claims, it should not impact rates or coverages, or if so not greatly.)

The matter is pending in court, and in the hallowed halls at Harvard the question of whether someone is going to lose their job is open as well.

Our favorite Courts reporter — really focused on the US Supreme Court — Alan Liptak, brings us this report.

1 2 3 … 17