Chris Finney appeared on 550 AM WKRC radio last week to address our new litigation against the University of Cincinnati arising from their practice of segregating male students from female students in physics labs.

We have filed suit on behalf of 19-year-old student Casey Helmicki who was subject to that discrimination, alleging that the same violates the Fourteenth amendment to the US Constitution and Title IX of the US Code, which prohibits discrimination against women in the provision of educational opportunities.

Listen here starting at 1:04 until 1:13.

You may read more about this suit here.

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Our own Chris Finney participated in a panel discussion today on Topics in New Construction at the Cincinnati Area Board of Realtors.  Also on the panel were Mike Hoffmaster of Hoffmaster Properties and former President of the Greater Cincinnati Home Builders Association and Jeff Rosa of Sibcy Cline, Realtors.  The course was designed to train lawyers and Realtors on new construction issues to better assist them in serving buyers and builders.

Thanks to Cindy Henninger and Amanda Wilson at the Board for making this happen!

Friday of last week, the Federal Elections Commission issued a series of decisions on Complaints we prepared and filed for our client David Krikorian five years ago.

Those decisions found that former Congressman Jean Schmidt, and the Turkish Coalition of America violated federal campaign finance laws in accepting payment of her legal fees in legal proceedings against our client, and fined then respectively $2,500 and $25,000 for those violations.

You may read those decisions here, here, here and here.

Making a Difference

These decisions — which sat on the desks of bureaucrats in Washington, D.C. for an inexcusable years and years — capped a tremendous and frequently disappointing journey through the halls of power of Washington and the highest Court in the land.

In the end, we overcame a system of justice that is carefully designed to protect the wealthy, the powerful, and the well-connected, veiled in secrecy, and hidebound by bureaucratic inaction– although not in the manner that the proper administration of justice would provide.

Our firm — through the fine research and writing, and tremendous patience and persistence — saw through to a successful end a complex, tortured and unfair series of legal processes to the advantage of our client.

This journey, perhaps better than any story we can tell, describes the commitment we hold to “making a difference” for our client in each and every assignment.

Ohio Elections Commission action and more

We originally were retained to represent former and future Congressional candidate David Krikorian in the defense of several “false claims” allegations brought by Congressman Jean Schmidt before the Ohio Elections Commission (“OEC”).  She claimed that in the course of the 2010 Congressional campaign, David Krikorian made certain false statements about her, essentially that she was on the payroll of the Turkish lobby in America.

Ironically, through the course of these proceedings and otherwise, she herself proved the basic premise of these allegations.

But tangential to those proceedings, we became curious that Jean Schmidt appears to have unlimited access to “free” legal services from two expensive attorneys from Washington, D.C. and a second in Columbus, Ohio.

Our lead counsel in representing Krikorian was famous Los Angeles attorney Mark Garagos, who was simply fun to work with, and inspired in his legal strategy.

That original OEC action then led to an appeal, a First Amendment challenge to the jurisdiction of the Ohio Elections Commission, and then a defamation case brought by Schmidt.  These were incredibly expensive proceedings that came at us in waves from the Schmidt camp.

The legal actions were unprecedented in that they made no economic sense, and were outside the scope of our experience with clients who have to make practical decisions about proceeding with litigation in the face of daunting obstacles of time, expense, and the difficulty of legal recovery.

Who was paying our Congressman’s legal fees?

As the matter progressed over a period of years — with depositions across the country, two days of trial before the Ohio Elections Commission and endless motions — it dawned on us that something was terribly wrong here, that Jean Schmidt was pursuing this matter because she was accepting an illegal gratuity as a Congressman and as a candidate.

Garagos had the ground-breaking idea to take the deposition of Jean Schmidt’s attorney, Bruce Fein.  In all our years of litigation, it never occurred to us to take the deposition of the opposing attorney.  Schmidt’s attorneys opposed the motion, but the OEC ruled that it would proceed.

In that deposition, we asked Schmidt’s attorney “who was paying all these legal fees?” and he admitted that at the commencement of the relationship he met personally with her and her Chief of Staff and told them both that the Turkish Coalition of America (“TCA”) would foot the whole legal bill for the proceedings.

[This sworn testimony would prove key thereafter, as Schmidt steadfastly denied through multiple proceedings thereafter that she had no idea how her legal bills were being paid, over a period of years, but only that she was never invoiced for the work.]

We estimated — correctly as it turns out — that Schmidt had received more than $500,000 in legal fees from the TCA.

A thicket of confusing rules and multiple whitewashes

Our firm then began to research whether it was legal and appropriate for a sitting member of Congress to accept the payment of her legal fees, to the tune of hundreds of thousands of dollars, from a lobbying group in D.C., dedicated to influencing legislation  before Congress and policy in the administration.

The rules were complex, but the answer was pretty clearly “no” for a host of reasons:

  1.  It violated House Ethics rules to accept the gift.
  2. It was a felony to fail to report the gift on federal financial disclosure forms.
  3. It violated federal elections law to accept the gift.
  4. The gift constituted taxable income to the Congressman, which must be reported to the IRS and on which income taxes must be paid.

Thus, following the key depositions, we waited for the Congressman to file her federal financial disclosure forms for 2011, and then filed Complaints with the Office of Congressional Ethics and the Public Integrity section of the U.S. Attorney’s office.

After waiting more than a year, we learned that the Office of Congressional Ethics had properly examined the gift and referred the matter for further action to the House Ethics Committee.

But in a curious move, the House Ethics Committee ruled that the gift was illegal, and had to be paid back, but found that because Schmidt did not know who was paying her fees (in direct conflict with her own lawyer’s sworn testimony) that she would not be disciplined by the House.  It was, very simply a whitewash.

We then filed a Complaint with the IRS over the unclaimed income.  They also saw nothing untoward.  Another whitewash.

A challenge to the OEC False Claims statute and a trip to the U.S. Supreme Court

As a result of the tortured and unconstitutional proceeding before the Ohio Elections Commission, Finney Law Firm attorneys then decided to challenge the false claims statute in Federal Court.  That commenced in two other actions in 2011 and 2012,

We lost those twin law suits in the U.S. District Court, in the U.S. Court of Appeals for the Sixth Circuit, and en banc before the Sixth Circuit.  Ultimately, not a single trial or appellate Judge saw any merit to our arguments.

But then in January of 2014, the U.S. Supreme Court accepted our case for review, and the tide quickly turned.  We had oral argument in April of 2014  and a decision by June of that year.

In a Clarence Thomas-authored opinion, we won 9-0, sending the cases back to the trial Courts in Cincinnati.  It then took two more yeas of hearing and appeals, but we have prevailed in those actions and the OEC False Claims statute has been struck down as unconstitutional, a tremendous victory for justice against an entrenched bureaucracy in Columbus.

Waiting for the Federal Elections Commission

That left one more decision, a decision that curiously sat for years, and years and years in Washington.  For normal people, what in God’s name takes five years — five years — to decide.  Month after month and year after year, the FEC, shrouded in secrecy, sat and sat and sat on the Complaint that alleged that the $650,000 gift violated federal campaign finance laws.

Last week’s letter to our client from the FEC ended that waiting.  They concluded that Schmidt deserved more than a $2,500 penalty but because her campaign committee had no money and she was no longer a candidate for federal office the pithy sanctions was appropriate.  They fined the TCA more, but not nearly enough.

A Congressman loses her seat

To understand the hubris that would lead to this type of abusive conduct by a member of Congress, one needs to understand two things: (i) members of Congress simply never (almost never) lose their seats, with reelection rates reliably above 95% (read here) and (ii) they know that the House Ethics Committee and federal prosecutors won’t lay a glove on them.

Thus, it was sweet justice in May of 2012 when the voters resoundingly turned Schmidt out of office, in part because of her record of corruption as revealed by the House Ethics Committee and media reports of her mendacity.  Chris Finney even gave a series of speeches to expose the incredible tale.  (see here, here, here and here).

Making a difference

We would have preferred that the path of justice in this matter had taken several different turns — that prosecutors would have recognized the multiple felonies committed by these actors in giving and receiving the illegal gift.  The House Ethics Committee, the U.S. Attorneys’ office, the IRS, and ultimately the FEC failed in discharging their duties to punish these overt and incontrovertible misdeeds.

But the voters had the final say, and the slow, weak and intellectually dishonest bureaucrats, in a strange way, both exposed Jean Schmidt’s corruption, and their own inability to administer justice.

Read more here>> Enquirer: FEC settles Jean Schmidt ethics case

 

Last week, the Ohio Supreme Court issued a landmark decision on Ohio’s Open Meetings law, O.R.C. Section 121.22 in the case of White v. King.

Ohio’s Open Meetings law prohibits closed-door deliberations of public business when a majority of the public body is present, subject to host of exceptions.  But the question was confronted in the King case of whether deliberations via email among that same majority of public officials is also prohibited.

The King case strongly answered that question in the affirmative:

serial e-mail communications by a majority of board members regarding a response to public criticism of the board may constitute a private, prearranged discussion of public business in violation of R.C. 121.22 if they meet the requirements of the statute.

The decision is linked here.

We hear a lot of misinformation from prospective sellers and Realtors on when a Residential Property Disclosure Form must be used in Ohio:

  • “I’ve never lived in the house, and thus I am exempt from filling out the form.”
  • “I’m just an investor.  I don’t have to complete the form.”

Neither of these statements is true, so let’s bust these myths and in the process really dig into why a residential property disclosure form is “required” and when it is “required.”

What is the “requirement”?

As an opening proposition, Ohio law does not actually require the use of the Residential Property Disclosure statement. And by this I mean that no one is going to go to jail for failure to use the form, and the civil consequences are generally limited to termination of the contract before closing, if any.

The law in question is Ohio Revised Code Section 5302.30.  It is indeed entitled “Property disclosure form required for all residential real estate transfers.”  But when reading the statute it becomes apparent that the penalty for non compliance is: rescission of the contract, but only prior to the earlier of thirty days after the contract is signed or the date of closing (ORC § 5302.30 (K)(4)):

If a transferee of residential real property subject to this section does not receive a property disclosure form from the transferor after the transferee has submitted to the transferor or the transferor’s agent or subagent a transfer offer and has entered into a transfer agreement with respect to the property, the transferee may rescind the transfer agreement in a written, signed, and dated document that is delivered to the transferor or the transferor’s agent or subagent in accordance with division (K)(4) of this section without incurring any legal liability to the transferor because of the rescission, including, but not limited to, a civil action for specific performance of the transfer agreement.

Ohio Revised Code §5302.30 (K)(2) also provides for rescission if the seller amends the Residential Property Disclosure Form after the contract is signed.

It is always advisable to disclose

Before we get to the question of whether Ohio law requires disclosure, there is another question of whether disclosure is advisable.  The answer is almost always “of course.”

The basis of property defects fraud claims is either (a) a material misrepresentation as to a known defect (i.e., lying about the basement leaking or the presence of termites) or (b) non-disclosure of a known material defect that is not readily open to observation by a buyer.

A full and proper written disclosure inoculates a seller from both of these claims and this is advisable even if the law does not require full disclosure.

What types of transactions are covered?

Section (B)(1) of the statute tells us what types of transactions are covered by the “requirement”:

  1. transfers by sale;
  2. transfers by land installment contract;
  3. transfers by lease with option to purchase;
  4. an exchange of property; or
  5. a lease for a term of ninety-nine years and renewable forever.

Who must provide the form and who is exempt?

So, then, on to the question of who must provide the disclosure and when must it be provided:

The statute provides that it covers all “transferors ” of properties containing one to four dwelling units.  So, this would seem to include otherwise commercial properties that contain under four dwelling units, such as a bar or restaurant with apartments above.

And then the statute contains an extensive list of exemptions from its requirements detailed below, but the exemptions do include:

  • New construction;
  • Transfers from an estate; and
  • Transfers among family members and co-owners or pursuant to a divorce;

The statute does not exempt investors or simply owners who did not live in the property.

Waiver by buyer

Finally, a buyer can waive his right of rescission for a Residential Property Disclosure Form (O.R.C §5302.30 ((K)(3)(c).  And, since this is the only remedy for the failure to deliver the Residential Property Disclosure Form, it is essentially a waiver of rights of the buyer under the entire statute.

Conclusion

So, the myth is busted.  Investors and other owners who did not live in the house (except those administering an estate of a seller) are not exempt from the requirements of the statute.

Appendix

A more complete list of exemptions is below:

(1) A transfer pursuant to court order;

(2) A transfer to a mortgagee by a mortgagor by deed in lieu of foreclosure or in satisfaction of the mortgage debt;

(3) A transfer by a mortgagee, or a beneficiary under a deed of trust, who has acquired the residential real property at a sale conducted pursuant to a power of sale under a mortgage or a deed of trust or who has acquired the residential real property by a deed in lieu of foreclosure;

(4) A transfer by a fiduciary in the course of the administration of a decedent’s estate, a guardianship, a conservatorship, or a trust;

(5) A transfer from one co-owner to one or more other co-owners;

(6) transfer to immediate family members and transfers as a part of a divorce;

(7) A transfer to or from the state, a political subdivision of the state, or another governmental entity;

((8) A transfer that involves newly constructed residential real property that previously has not been inhabited;

(9) A transfer to a transferee who has occupied the property as a personal residence for one or more years immediately prior to the transfer;

(10) A transfer from a transferor who both has not occupied the property as a personal residence within one year immediately prior to the transfer and has acquired the property through inheritance or devise.

The above headline — a great headline — greeted us from today’s Washington Post, for an article describing a decision issued today from the 6th Circuit Court of Appeals on the case in which we are local counsel — NorCal Tea Party v. United States of America.

That case addresses the abuses at the IRS over the segregation and targeting of conservative groups for slowed consideration of their tax exemption applications, and harassment in the form of illegal and over-burdening questioning and extra reviews of their applications.  It is the only case addressing the abuses at the IRS that is still proceeding and the only case to achieve class certification status.

In that case, the Plaintiffs are seeking the spreadsheets showing the list of the targeted groups, and certain details of the extra scrutiny they endured.  Federal District Court Judge Susan J. Dlott had ordered that the IRS produce that list.  The IRS first asked her to reconsider that decision and then appealed the decision to the 6th Circuit Court of Appeals.

Today’s opinion upheld that decision of Judge Dlott.  The decision is here.

Nominally, the decision was a detailed analysis of the taxpayer confidentiality statute, 26 USC Section §6103.  But the unanimous 6th Circuit panel decision authored by Judge Kethledge, did so much more than that.

  • First, it provided a detailed recitation of the alleged abuses of the IRS in targeting and discriminating against tea party groups;
  • It also laid out a scorching criticism of the IRS and its counsel for fighting every issue in the litigation, including discovery, beyond reason.

The opinion has garnered widespread media coverage as well:

Our firm is proud to participate in this historic and important litigation.

 

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I recently was asked by a commercial real estate salesman desiring to refer to Ivy Pointe Title: “Who is your underwriter and what is the quality of their paper?”

Who is our underwriter?

We are proud to have been accepted as an agent for First American Title Insurance Co.  We write exclusively with First American as our title underwriter.

Who is First American?  

From their web site:

  • First American is the title insurance industry’s largest single brand name;
  • First American has been issuing title insurance for more than 120 years.

What are First American’s financial strength ratings?

  • Moody’s Investors Services: A3
  • AM Best: A Excellent
  • Fitch Ratings: A

Our firm obtains great support from the underwriting staff of First American and have a high degree of confidence in the coverage they provide to our clients and customers.

 

 

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For the past two years Finney Law Firm and Ivy Pointe Title have expanded their service to clients with the addition of attorneys paralegals staff and technology.

We are pleased to enhance our service delivery with the addition of a second office in Mt. Adams. The new office has a gorgeous panoramic view of downtown, Over-the-Rhine and Northern Kentucky.

Our second location is:
1077 Celestial, Suite 10 Cincinnati
Ohio 45202

It is “Open for Business” for real estate closings depositions and confidential client conferences. Our team of transactional litigation and public interest attorneys is here to serve your legal needs … from both of our offices: Eastgate and Mt. Adams!

The Finney Law Firm is pleased to announce the addition of three new attorneys to our transactional practice group, focusing on real estate, estate planning and corporate law:

 

FLF_DylanSizemore_5x7_lowW. Z. “Dylan” Sizemore
Dylan is a 2014 graduate of the University of Cincinnati College of Law, where he was awarded the Tyler Short Award for Entrepreneurial Excellence.

He earned his bachelor’s degree from the University of Kentucky, Summa Cum Laude. Dylan is an Iraq War Veteran, having served as Company Commander and platoon leader. Dylan’s practice will focus on real estate and corporate law.  Read more >

 

FLF_JulieMGugino_lowJulie M. Gugino
Julie is a 2001 cum laude graduate of Salmon P. Chase College of Law and a 1995 graduate of the University of Cincinnati, Summa Cum Laude.

Julie has extensive experience in all three practice areas of our firm, transactions, litigation and public interest litigation.  Julie re-joins our team after seven years apart. Julie’s practice will focus on real estate and real estate-based litigation.  Read more >

 

FLF_PaulSian_5x7_lowPaul S. Sian
Paul is a 1997 graduate of the University of Detroit School of Law and earned his MBA from Wayne State University in 2001.

Paul previously worked as a tax law specialist for the IRS and as a Claims Judge Advocate for the U.S. Army Reserve.  He is licensed in Ohio and Michigan. Paul has joined the firm “of counsel” and his practice will focus on real estate and estate planning law. Read more >

 

We are pleased to expand the services we provide with these three new professionals.  Let us know how we can help you seize a business opportunity or unravel a litigation knot.