When Funds Remain After Principal of Company's Debts Has Been Repaid
Hudson v. Petrosurance, Inc., Slip Opinion No. 2010-Ohio-4505.
Franklin App. No. 08AP-1030, 2009-Ohio-4307. Judgment of the court of appeals affirmed, and cause remanded to the trial court.
Pfeifer, Lundberg Stratton, O'Connor, O'Donnell, Lanzinger, and Cupp, JJ., concur.
Brown, C.J., concurs separately.
Opinion: http://www.supremecourt.ohio.gov/rod/docs/pdf/0/2010/2010-Ohio-4505.pdf
(Sept. 29, 2010) The Supreme Court of Ohio held unanimously today that the Ohio statutes governing liquidation of an insolvent insurance company do not authorize the Superintendent of Insurance to pay interest to an insurer’s creditors and other preferred claimants on allowed claims before paying the funds remaining in the estate to the insurer’s shareholders.
In an opinion authored by Justice Terrence O’Donnell, the Court affirmed a decision by the 10th District Court of Appeals, and held that R.C. Chapter 3903 establishes nine prioritized classes of claims that can be filed against an insolvent insurer’s estate by preferred claimants and creditors during the liquidation process, but no provision in the statute expressly authorizes the payment of interest to any claimant.
In 1990, the Franklin County Court of Common Pleas declared the Ohio-based Oil & Gas Insurance Company (OGICO) insolvent and ordered the state’s Superintendent of Insurance to assemble and liquidate the company’s assets and distribute the proceeds according to a schedule of priorities set forth in the statute. The sole shareholder of OGICO was a separate business entity, Petrosurance, Inc.
After extended federal and state proceedings and negotiations with various groups of claimants, the Superintendent paid and obtained releases for all approved claims that had been asserted against OGICO by the first eight classes of claims, and was in possession of approximately $13 million in funds remaining in OGICO’s liquidation estate.
In April 2007, the Superintendent filed a complaint in the Franklin County Court of Common Pleas seeking a declaratory judgment that Petrosurance had no right to the assets remaining in her possession, and that those assets should be distributed as interest on a pro-rata basis to the preferred claimants and other creditors whose claims had been allowed. Petrosurance filed a counterclaim asserting entitlement to the remaining funds as the sole shareholder in OGICO, and therefore the sole Class Nine claimant under the liquidation statute. The trial court granted summary judgment in favor of the Superintendent, finding that interest could be paid to creditors and preferred claimants on the principal of their claims. Petrosurance appealed. On review, the 10th District Court of Appeals reversed the trial court’s grant of summary judgment in favor of the Superintendent, held that the liquidation scheme set forth in R.C. Chapter 3903 does not authorize the payment of interest to creditors and preferred claimants of an insolvent insurer, and ordered the trial court to undertake new proceedings to determine whether Petrosurance was entitled to recover the funds remaining in the Superintendent’s possession under the provisions of the insurance liquidation statute. The Superintendent sought and was granted Supreme Court review of the 10th District’s ruling.
In today’s decision, Justice O’Donnell wrote: “R.C. 3903.42 establishes nine prioritized classes of claimants and provides that ‘[e]very claim in each class shall be paid in full or adequate funds retained for such payment before the members of the next class may receive any payment.’ … The Liquidation Act is silent as to the payment of interest, but the General Assembly could have expressly provided for payment of interest on claims against an insurer’s estate, if it had chosen to do so. We decline to add words to the statute or interpret the legislative silence as authorization to pay interest, as such a construction would materially affect the priority of payments to claimants as set forth in R.C. 3903.42.”
“In other statutory contexts, the legislature has indicated its intent to authorize payment of interest to claimants with plain, direct, and express language. For example, R.C. 1125.24, the statute establishing the priority of distribution of the assets of an insolvent bank, provides that ‘[i]nterest shall be given the same priority as the claim on which it is based, but no interest shall be paid on any claim until the principal of all claims within the same class has been paid or provided for in full.’ (Emphasis added.) In contrast, the legislative silence in R.C. 3903.42 cannot fairly be read to authorize payment of interest in insurer liquidations. Our role as a court is to apply statutes as written, and we conclude that the General Assembly did not intend to authorize the Superintendent of Insurance, acting as liquidator of an insurance company, to pay interest to creditors and other preferred claimants of an insolvent insurance company before paying remaining funds to company shareholders.”
“(W)e reject the superintendent’s proposition of law that interest should be paid to creditors and other preferred claimants to make them whole before the owners of the company may recover from assets of the liquidation estate. Also, because the plain meaning of the statute directs payment of these remaining funds to shareholders, we decline to follow the practice in other jurisdictions of distributing assets remaining after principal claims have been paid to creditors. … Accordingly, we affirm the judgment of the court of appeals, which reversed the grant of summary judgment to the superintendent and held that R.C. Chapter 3903 does not permit the payment of interest in an insurer liquidation, and that the superintendent erroneously refused to file Petrosurance’s proof of claim. …
We further recognize, as did the appellate court that, the trial court, based on its erroneous conclusion that the superintendent could pay interest to creditors before making any payment to Petrosurance, never considered Petrosurance’s entitlement to the remaining funds held by the superintendent. Accordingly, the matter is remanded to the trial court to permit Petrosurance an opportunity to submit its proof of claim and for the trial court to determine its entitlement to the remaining funds in accordance with R.C. Chapter 3903 and its disposition of this matter in accordance with our opinion.”
Justice O’Donnell’s opinion was joined by Justices Paul E. Pfeifer, Evelyn Lundberg Stratton, Maureen O’Connor, Judith Ann Lanzinger and Robert R. Cupp.
Chief Justice Eric Brown entered a concurring opinion stating that in his view “(t)he superintendent has presented an appealing policy argument” that she should be permitted to pay interest on amounts previously paid to creditors and other claimants, when adequate funds remain after satisfaction of their original claims, before distributing any remaining funds to shareholders of the defunct company. He observed that the National Association of Insurance Commissioners, in an amicus brief, had stated that “The Ohio Liquidation statutes are designed and should be implemented to protect the interests of injured claimants over the interests of shareholders and owners whose actions likely caused the insolvency.” Chief Justice Brown concluded, however, that “it is within the province of the legislative branch, rather than the judicial branch, to determine public policy relative to the liquidation of insurance companies.” He therefore wrote separately “to urge the members of the General Assembly to consider amending R.C. Chapter 3903 to expressly authorize the liquidator of an insurance company to pay interest on previously allowed claims, when surplus funds exist, prior to distributing funds to shareholders.”
Contacts
Benjamin C. Mizer, 614.446.8980, for Mary Jo Hudson, Superintendent of Insurance and Liquidator of OGICO.
Peter L. Cassady, 513.621.2100, for Petrosurance, Inc.
Please note: Opinion summaries are prepared by the Office of Public Information for the general public and news media. Opinion summaries are not prepared for every opinion released by the Court, but only for those cases considered noteworthy or of great public interest. Opinion summaries are not to be considered as official headnotes or syllabi of Court opinions. The full text of this and other Court opinions from 1992 to the present are available online from the Reporter of Decisions. In the Full Text search box, enter the eight-digit case number at the top of this summary and click "Submit."
Showing posts with label Justice Terrence O’Donnell. Show all posts
Showing posts with label Justice Terrence O’Donnell. Show all posts
Tuesday, October 05, 2010
Tuesday, September 28, 2010
Court Recognizes Common Law 'Self Protection' Exception to Statutory Attorney-Client Privilege
In Litigation Involving Dispute Between Client and Lawyer or Law Firm
Squire, Sanders & Dempsey, L.L.P. v. Givaudan Flavors Corp., Slip Opinion No. 2010-Ohio-4469.
Cuyahoga App. No. 92366, 2009-Ohio-2490. Judgment of the court of appeals reversed, and cause remanded to the trial court.
Pfeifer, Lundberg Stratton, O'Connor, O'Donnell, and Cupp, JJ., concur.
Lanzinger, J., concurs in judgment only.
Brown, C.J., not participating.
Opinion: http://www.supremecourt.ohio.gov/rod/docs/pdf/0/2010/2010-Ohio-4469.pdf
(Sept. 28, 2010) The Supreme Court of Ohio held today that Ohio recognizes a common law “self protection” exception to attorney-client privilege that permits an attorney to testify concerning attorney-client communications where such testimony is necessary to establish a claim for legal fees on behalf of the attorney or to allow an attorney to defend against a charge of malpractice or other wrongdoing in litigation between the attorney and a client.
The Court held further that attorney work product including mental impressions, theories and legal conclusions are subject to discovery upon a showing of good cause if the information sought to be discovered is directly at issue in the case, the need for the information is compelling, and the evidence cannot be obtained elsewhere.
The Court’s 6-0 decision, authored by Justice Terrence O’Donnell, reversed a ruling by the 8th District Court of Appeals.
From 2003 to 2007, the Cleveland-based law firm of Squire, Sanders & Dempsey (SSD) represented Givaudan Flavors Corporation in product liability litigation. In 2007, Givaudan severed its relationship with SSD and retained new outside counsel. SSD billed Givaudan for $1.8 million in unpaid legal fees. When Givaudan refused to pay, SSD filed suit. Givaudan filed a counterclaim alleging that SSD had overbilled for services it had performed, had billed Givaudan for services that were never performed, and had engaged in other false, deceptive and unethical business practices during the period of representation.
During the pretrial discovery process, Givaudan refused to produce any of the billing records or other documents relating to the legal services SSD had provided during its representation, or to answer most of the questions posed to company officials by SSD during depositions. Givaudan also asserted that because communications between itself and the law firm during the period of representation were exempt from disclosure under the attorney-client privilege, SSD was barred from disclosing documents in its own files that included communications between the law firm and Givaudan. SSD asked the trial court to order Givaudan to comply with its discovery requests and respond fully during depositions in the case.
The trial court granted the motion to compel discovery, holding that a common law exception to the statutory attorney-client privilege set forth in R.C. 2317.02 allows disclosure of otherwise confidential communications when such disclosure is necessary to the fair adjudication of a lawsuit between a lawyer or law firm and a client arising from their business relationship. Givaudan appealed that ruling.
On review, the 8th District Court of Appeals reversed the trial court’s order compelling Givaudan to comply with SSD’s discovery requests. In its opinion, the court of appeals held that the trial court erred in recognizing a self-protection exception to attorney-client privilege, and that communications between SSD and Givaudan during the period of representation were privileged under R.C. 2317.02(A) and were not subject to discovery or disclosure at trial unless SSD could show that Givaudan had waived the privilege either by giving express consent to disclosure or by voluntarily testifying about those communications. SSD sought and was granted Supreme Court review of the 8th District’s decision.
In today’s decision, the Supreme Court reversed the 8th District and reinstated the trial court’s order compelling discovery of communications between Givaudan and SSD during the period of representation. Justice O’Donnell noted that Ohio courts have recognized several exceptions to the attorney-client privilege codified by R.C. 2317.02(A) notwithstanding their absence from the text of the statute. As examples, he pointed to the “crime-fraud” exception that bars use of attorney-client privilege to conceal an attorney’s cooperation with a client’s wrongdoing; the lack-of-good-faith exception that prevents an insurer from using attorney-client privilege to conceal its bad-faith denial of a claim pursuant to state insurance statutes; and the joint-representation exception that prevents one co-litigant from using attorney-client privilege to conceal information from another party represented by the same attorney in the same case.
With regard to the “self-protection” exception at issue in this case, Justice O’Donnell wrote: “The self-protection exception dates back over 150 years to its articulation by Justice Selden in Rochester City Bank v. Suydam, Sage & Co. (N.Y.Sup.Ct.1851) … There, he wrote, ‘[w]here the attorney or counsel has an interest in the facts communicated to him, and when their disclosure becomes necessary to protect his own personal rights, he must of necessity and in reason be exempted from the obligation of secrecy [sic].’ (emphasis added in part.) Since that time, this exception has become firmly rooted in American jurisprudence. The Supreme Court of the United States recognized it in Hunt v. Blackburn (1888) … and courts and commentators have accepted the self-protection exception as black-letter law defining which communications are subject to the attorney-client privilege.”
“Notably, Ohio courts, including this court, have recognized the self-protection exception. In Estate of Butler (1939) the beneficiaries of the estate of Henry V. Butler challenged the administrator’s payment of legal fees to Butler’s attorney, Grover C. Brown. The probate court struck Brown’s testimony regarding the services he rendered to Butler as privileged pursuant to G.C. 11494, the predecessor to R.C. 2317.02(A). The court of appeals reversed, holding that ‘an attorney in matters pertaining to his interest has a right to testify and is not precluded from doing so by virtue of [G.C.] 11494. The rule is very broad which permits testimony of an attorney in support of his claim for fees.’ …We affirmed that decision, explaining that ‘[s]ince the administrator was charged with maladministration in the allowance and payment of Brown’s claim against the estate, the defense of the administrator was dependent upon establishing the correctness of the claim by showing the amount and value of the services which Brown had rendered to Butler. … We noted that ‘the testimony of Brown (should not) have been wholly excluded on the ground that he had been counsel and attorney for Butler.’”
“Further, the self-protection exception to the attorney-client privilege permitting the attorney to testify also applies when the client puts the representation at issue by charging the attorney with a breach of duty or other wrongdoing … (A) client may not rely on attorney-client communications to establish a claim against the attorney while asserting the attorney-client privilege to prevent the attorney from rebutting that claim. Rather, ‘the attorney-client privilege exists to aid in the administration of justice and must yield in circumstances where justice so requires,’ … The same considerations of justice and fairness that undergird the attorney client privilege prevent a client from employing it in litigation against a lawyer to the lawyer’s disadvantage.”
The Court also rejected Givaudan’s claim that SSD was barred by the privilege conferred on attorney work product from deposing Givaudan’s in-house corporate counsel, Frederick King and Jane Garfinkel, regarding the basis for their judgments that SSD was not providing effective legal representation and had overcharged for its services.
Justice O’Donnell wrote: “When the attorney-client relationship has been put at issue by a claim for legal fees or by a claim that the attorney breached a duty owed to the client, good cause exists for the production of attorney work product to the extent necessary to collect those fees or to defend against the client’s claim. … Thus, attorney work product, including but not limited to mental impressions, theories, and legal conclusions, may be discovered upon a showing of good cause if they are directly at issue in the case, the need for the information is compelling, and the evidence cannot be obtained elsewhere. Here, attorney work product, including information sought from King and Garfinkel regarding the staffing of the butter-flavor litigation, trial strategy, resources committed, and views that the firm provided inadequate representation through counsel lacking sufficient leadership, qualification, and experience, is directly at issue, as the reasonable value of the legal services performed by Squire Sanders and the quality of its legal work are the pivotal issues in this lawsuit, and the need for this evidence is compelling.”
“ … This information is otherwise unavailable to Squire Sanders because it is within the exclusive possession and knowledge of Givaudan, King, and Garfinkel. Accordingly, testimony of King and Garfinkel and documents related to the value and quality of the legal services rendered by Squire Sanders are not protected from discovery in this case by the work-product doctrine.”
Justice O’Donnell’s opinion was joined by Justices Paul E. Pfeifer, Evelyn Lundberg Stratton, Maureen O’Connor and Robert R. Cupp.
Justice Judith Ann Lanzinger entered a separate opinion concurring with the Court’s judgment but disagreeing with the distinction drawn by the majority between exceptions to and waivers of the attorney client privilege. She wrote: “(I)n its attempt to distinguish waiver from exception, the majority uses overly broad language and declares that an exception ‘falls into the category of situations in which the privilege does not attach to the communications in the first instance and is therefore excluded from the operation of [R.C. 2317.02.]’ What the majority fails to recognize is that an exception, like a waiver, arises because of some action taken by the client. It is only when the client puts the attorney’s representation at issue that the privilege no longer applies. The majority, however, would retroactively apply that action and hold that the privilege never existed. Because I believe that common-law exceptions are really no different than common-law waivers, I concur in judgment only.”
Chief Justice Eric Brown did not participate in the court’s deliberations or decision in the case.
Contacts
John M. Newman, 216.586.7207, for Squire, Sanders & Dempsey LLP.
Anthony J. Hartman, 216.781.5515, for Givaudan Flavors Corp.
Please note: Opinion summaries are prepared by the Office of Public Information for the general public and news media. Opinion summaries are not prepared for every opinion released by the Court, but only for those cases considered noteworthy or of great public interest. Opinion summaries are not to be considered as official headnotes or syllabi of Court opinions. The full text of this and other Court opinions from 1992 to the present are available online from the Reporter of Decisions. In the Full Text search box, enter the eight-digit case number at the top of this summary and click "Submit."
Squire, Sanders & Dempsey, L.L.P. v. Givaudan Flavors Corp., Slip Opinion No. 2010-Ohio-4469.
Cuyahoga App. No. 92366, 2009-Ohio-2490. Judgment of the court of appeals reversed, and cause remanded to the trial court.
Pfeifer, Lundberg Stratton, O'Connor, O'Donnell, and Cupp, JJ., concur.
Lanzinger, J., concurs in judgment only.
Brown, C.J., not participating.
Opinion: http://www.supremecourt.ohio.gov/rod/docs/pdf/0/2010/2010-Ohio-4469.pdf
(Sept. 28, 2010) The Supreme Court of Ohio held today that Ohio recognizes a common law “self protection” exception to attorney-client privilege that permits an attorney to testify concerning attorney-client communications where such testimony is necessary to establish a claim for legal fees on behalf of the attorney or to allow an attorney to defend against a charge of malpractice or other wrongdoing in litigation between the attorney and a client.
The Court held further that attorney work product including mental impressions, theories and legal conclusions are subject to discovery upon a showing of good cause if the information sought to be discovered is directly at issue in the case, the need for the information is compelling, and the evidence cannot be obtained elsewhere.
The Court’s 6-0 decision, authored by Justice Terrence O’Donnell, reversed a ruling by the 8th District Court of Appeals.
From 2003 to 2007, the Cleveland-based law firm of Squire, Sanders & Dempsey (SSD) represented Givaudan Flavors Corporation in product liability litigation. In 2007, Givaudan severed its relationship with SSD and retained new outside counsel. SSD billed Givaudan for $1.8 million in unpaid legal fees. When Givaudan refused to pay, SSD filed suit. Givaudan filed a counterclaim alleging that SSD had overbilled for services it had performed, had billed Givaudan for services that were never performed, and had engaged in other false, deceptive and unethical business practices during the period of representation.
During the pretrial discovery process, Givaudan refused to produce any of the billing records or other documents relating to the legal services SSD had provided during its representation, or to answer most of the questions posed to company officials by SSD during depositions. Givaudan also asserted that because communications between itself and the law firm during the period of representation were exempt from disclosure under the attorney-client privilege, SSD was barred from disclosing documents in its own files that included communications between the law firm and Givaudan. SSD asked the trial court to order Givaudan to comply with its discovery requests and respond fully during depositions in the case.
The trial court granted the motion to compel discovery, holding that a common law exception to the statutory attorney-client privilege set forth in R.C. 2317.02 allows disclosure of otherwise confidential communications when such disclosure is necessary to the fair adjudication of a lawsuit between a lawyer or law firm and a client arising from their business relationship. Givaudan appealed that ruling.
On review, the 8th District Court of Appeals reversed the trial court’s order compelling Givaudan to comply with SSD’s discovery requests. In its opinion, the court of appeals held that the trial court erred in recognizing a self-protection exception to attorney-client privilege, and that communications between SSD and Givaudan during the period of representation were privileged under R.C. 2317.02(A) and were not subject to discovery or disclosure at trial unless SSD could show that Givaudan had waived the privilege either by giving express consent to disclosure or by voluntarily testifying about those communications. SSD sought and was granted Supreme Court review of the 8th District’s decision.
In today’s decision, the Supreme Court reversed the 8th District and reinstated the trial court’s order compelling discovery of communications between Givaudan and SSD during the period of representation. Justice O’Donnell noted that Ohio courts have recognized several exceptions to the attorney-client privilege codified by R.C. 2317.02(A) notwithstanding their absence from the text of the statute. As examples, he pointed to the “crime-fraud” exception that bars use of attorney-client privilege to conceal an attorney’s cooperation with a client’s wrongdoing; the lack-of-good-faith exception that prevents an insurer from using attorney-client privilege to conceal its bad-faith denial of a claim pursuant to state insurance statutes; and the joint-representation exception that prevents one co-litigant from using attorney-client privilege to conceal information from another party represented by the same attorney in the same case.
With regard to the “self-protection” exception at issue in this case, Justice O’Donnell wrote: “The self-protection exception dates back over 150 years to its articulation by Justice Selden in Rochester City Bank v. Suydam, Sage & Co. (N.Y.Sup.Ct.1851) … There, he wrote, ‘[w]here the attorney or counsel has an interest in the facts communicated to him, and when their disclosure becomes necessary to protect his own personal rights, he must of necessity and in reason be exempted from the obligation of secrecy [sic].’ (emphasis added in part.) Since that time, this exception has become firmly rooted in American jurisprudence. The Supreme Court of the United States recognized it in Hunt v. Blackburn (1888) … and courts and commentators have accepted the self-protection exception as black-letter law defining which communications are subject to the attorney-client privilege.”
“Notably, Ohio courts, including this court, have recognized the self-protection exception. In Estate of Butler (1939) the beneficiaries of the estate of Henry V. Butler challenged the administrator’s payment of legal fees to Butler’s attorney, Grover C. Brown. The probate court struck Brown’s testimony regarding the services he rendered to Butler as privileged pursuant to G.C. 11494, the predecessor to R.C. 2317.02(A). The court of appeals reversed, holding that ‘an attorney in matters pertaining to his interest has a right to testify and is not precluded from doing so by virtue of [G.C.] 11494. The rule is very broad which permits testimony of an attorney in support of his claim for fees.’ …We affirmed that decision, explaining that ‘[s]ince the administrator was charged with maladministration in the allowance and payment of Brown’s claim against the estate, the defense of the administrator was dependent upon establishing the correctness of the claim by showing the amount and value of the services which Brown had rendered to Butler. … We noted that ‘the testimony of Brown (should not) have been wholly excluded on the ground that he had been counsel and attorney for Butler.’”
“Further, the self-protection exception to the attorney-client privilege permitting the attorney to testify also applies when the client puts the representation at issue by charging the attorney with a breach of duty or other wrongdoing … (A) client may not rely on attorney-client communications to establish a claim against the attorney while asserting the attorney-client privilege to prevent the attorney from rebutting that claim. Rather, ‘the attorney-client privilege exists to aid in the administration of justice and must yield in circumstances where justice so requires,’ … The same considerations of justice and fairness that undergird the attorney client privilege prevent a client from employing it in litigation against a lawyer to the lawyer’s disadvantage.”
The Court also rejected Givaudan’s claim that SSD was barred by the privilege conferred on attorney work product from deposing Givaudan’s in-house corporate counsel, Frederick King and Jane Garfinkel, regarding the basis for their judgments that SSD was not providing effective legal representation and had overcharged for its services.
Justice O’Donnell wrote: “When the attorney-client relationship has been put at issue by a claim for legal fees or by a claim that the attorney breached a duty owed to the client, good cause exists for the production of attorney work product to the extent necessary to collect those fees or to defend against the client’s claim. … Thus, attorney work product, including but not limited to mental impressions, theories, and legal conclusions, may be discovered upon a showing of good cause if they are directly at issue in the case, the need for the information is compelling, and the evidence cannot be obtained elsewhere. Here, attorney work product, including information sought from King and Garfinkel regarding the staffing of the butter-flavor litigation, trial strategy, resources committed, and views that the firm provided inadequate representation through counsel lacking sufficient leadership, qualification, and experience, is directly at issue, as the reasonable value of the legal services performed by Squire Sanders and the quality of its legal work are the pivotal issues in this lawsuit, and the need for this evidence is compelling.”
“ … This information is otherwise unavailable to Squire Sanders because it is within the exclusive possession and knowledge of Givaudan, King, and Garfinkel. Accordingly, testimony of King and Garfinkel and documents related to the value and quality of the legal services rendered by Squire Sanders are not protected from discovery in this case by the work-product doctrine.”
Justice O’Donnell’s opinion was joined by Justices Paul E. Pfeifer, Evelyn Lundberg Stratton, Maureen O’Connor and Robert R. Cupp.
Justice Judith Ann Lanzinger entered a separate opinion concurring with the Court’s judgment but disagreeing with the distinction drawn by the majority between exceptions to and waivers of the attorney client privilege. She wrote: “(I)n its attempt to distinguish waiver from exception, the majority uses overly broad language and declares that an exception ‘falls into the category of situations in which the privilege does not attach to the communications in the first instance and is therefore excluded from the operation of [R.C. 2317.02.]’ What the majority fails to recognize is that an exception, like a waiver, arises because of some action taken by the client. It is only when the client puts the attorney’s representation at issue that the privilege no longer applies. The majority, however, would retroactively apply that action and hold that the privilege never existed. Because I believe that common-law exceptions are really no different than common-law waivers, I concur in judgment only.”
Chief Justice Eric Brown did not participate in the court’s deliberations or decision in the case.
Contacts
John M. Newman, 216.586.7207, for Squire, Sanders & Dempsey LLP.
Anthony J. Hartman, 216.781.5515, for Givaudan Flavors Corp.
Please note: Opinion summaries are prepared by the Office of Public Information for the general public and news media. Opinion summaries are not prepared for every opinion released by the Court, but only for those cases considered noteworthy or of great public interest. Opinion summaries are not to be considered as official headnotes or syllabi of Court opinions. The full text of this and other Court opinions from 1992 to the present are available online from the Reporter of Decisions. In the Full Text search box, enter the eight-digit case number at the top of this summary and click "Submit."
Saturday, July 24, 2010
Flight to Avoid Prosecution Stops Running of Legal Time Limit for Prosecuting All Crimes by Defendant
Not Just Crimes For Which Accused Had Been Charged at Time of Flight
State v. Bess, Slip Opinion No. 2010-Ohio-3292.
Cuyahoga App. No. 91429, 182 Ohio App.3d 364, 2009-Ohio-2254. Judgment of the court of appeals reversed, and cause remanded to the trial court.
Lundberg Stratton, O'Connor, O'Donnell, and Cupp, JJ., concur.
Pfeifer and Lanzinger, JJ., dissent.
Brown, C.J., not participating.
Opinion: http://www.supremecourt.ohio.gov/rod/docs/pdf/0/2010/2010-Ohio-3292.pdf
(July 20, 2010) The Supreme Court of Ohio ruled today that a state law that “tolls” (stops the running of) statutes of limitations for prosecuting a criminal defendant during a period in which the accused purposely avoids prosecution applies to all crimes committed by the accused, regardless of whether an indictment for those crimes had been returned or the underlying criminal activity had been discovered at the time the accused fled.
The Court’s 4-2 majority opinion, which reversed a decision of the 8th District Court of Appeals, was written by Justice Terrence O’Donnell.
In the early 1980s, Larry Bess began living with Theresa Ogden, and the couple married in 1986. Theresa had two children from a prior relationship: a son and a daughter. In 1989, Bess learned that he was under investigation for the alleged sexual abuse of Theresa’s daughter. Before he was charged, Bess fled to Georgia and assumed a false identity in order to escape prosecution. In November 1989, Bess was indicted by a Cuyahoga County grand jury on three counts of rape and seven counts of gross sexual imposition involving Theresa’s daughter. He remained in Georgia and avoided prosecution until 2007, when he was apprehended and returned to Ohio. In the course of preparing its 2007 case against Bess for the sexual abuse of Theresa’s daughter, the Cuyahoga County prosecutor’s office interviewed Theresa’s son, who disclosed for the first time that he also had been sexually molested by Bess between 1982 and 1989. Based on his statements, the state sought and obtained a second indictment charging Bess with additional counts of rape and other criminal offenses for his sexual conduct with Theresa’s son.
The trial court tried Bess for the offenses committed against Theresa’s daughter, which were not time-barred by the statutes of limitations applicable to those offenses because of a provision of state law, R.C. 2901.13(G) that tolls the running of a limitations period for any period of time during which a defendant flees the court’s jurisdiction or otherwise “purposely avoids prosecution.” A jury subsequently found Bess guilty of those charges, and the court of appeals affirmed his convictions.
Bess moved to dismiss the indictment that charged crimes against Theresa’s son, arguing that the six-year statute of limitations applicable to those charges had expired. The state objected, contending that R.C. 2901.13(G) had tolled the statute of limitations during the period when Bess had purposely avoided prosecution. The trial court granted Bess’s motion and dismissed the indictment relating to charges involving crimes against Theresa’s son, finding that Bess had not purposely avoided prosecution for those alleged crimes.
On appeal, the 8th District Court of Appeals affirmed the judgment of the trial court. Relying on the 8th District’s 1994 ruling in State v. McGraw, the author of the appellate court’s decision concluded that Bess’s flight and his concealment from prosecution for the sexual abuse of Theresa’s daughter tolled the statute of limitations for those crimes, but did not toll the statute of limitations for charges related to the sexual abuse of Theresa’s son, which the state learned about after Bess’s apprehension.
The state sought and was granted Supreme Court review of the 8th District’s decision.
Writing for the majority in today’s decision, Justice O’Donnell observed that there are alternative definitions of the term “prosecution” that the legislature could have intended in drafting the statute: a narrow definition referring to the trial and punishment of a specific criminal offense, and a broader definition encompassing the general process of bringing those who commit crimes to justice. In this case, he wrote: “The context in which the word ‘prosecution’ is used in R.C. 2901.13(G) reveals that the word refers to the more general process by which an accused is tried and punished for alleged criminal activity, not a specific proceeding against an accused, and the statute of limitations is tolled when an accused acts to purposely avoid being prosecuted for any offense.”
While he noted the absence of prior Ohio case law interpreting the disputed statutory language, Justice O’Donnell cited decisions of three different U.S. circuit courts of appeals interpreting a similar federal statute, all of which he said applied a general definition of the term “prosecution.” He wrote: “These courts have explained that Section 1073, which criminalizes crossing state lines with the intent to avoid prosecution, does not require the existence of a pending prosecution, but rather ‘[i]t is sufficient if the fleeing felon is ‘subject to prosecution.’”
“Notably, R.C. 2901.13(G) contains no language suggesting that its application should be limited only to those cases where the accused sought to avoid a particular prosecution. Nor is there language suggesting a limitation to only those prosecutions that had been commenced before the accused absconded or to those cases where the state can prove that the accused intended to avoid prosecution for a specific crime. The lack of any qualifying or limiting language reveals the legislature’s intent to toll the statute of limitations with respect to all offenses during the time when an accused purposely avoids prosecution for any offense. Moreover, the manifest purpose of R.C. 2901.13(G) is to prevent the accused from benefitting from the statute of limitations when he or she has purposely acted to avoid being prosecuted, thereby causing the state to fail to commence a timely prosecution. Importantly, it is the actions of the accused in avoiding prosecution, not the actions of the state in commencing a prosecution, that triggers the tolling of the statute of limitations. Thus, the General Assembly did not intend to limit tolling to only those offenses that authorities knew about at the time the accused absconded while allowing the statute of limitations to run on undiscovered crimes.”
“ ... The legislature has mandated that the period of limitations shall not run during any time when the accused purposely avoids prosecution. The word ‘prosecution’ means the process of bringing those who commit crimes to justice, and in the context of the statute, that definition is not limited to the crimes of which the authorities are aware or which have been indicted. In this case, if Bess committed the alleged crimes against Theresa’s son, then he knew that when he fled, but his motivations in fleeing the jurisdiction are known only to him. The General Assembly, however, did not intend to require the state to prove the accused’s specific intent in absconding, nor did it intend to toll the statute of limitations as to crimes known to the state but not toll it as to crimes unknown to the state. ... Because the court of appeals concluded that the statute of limitations had expired in this case notwithstanding Bess’s conduct in avoiding prosecution, that judgment is reversed and the cause is remanded to the trial court for further proceedings.”
Justice O’Donnell’s opinion was joined by Justices Evelyn Lundberg Stratton, Maureen O’Connor and Robert R. Cupp.
Justice Judith Ann Lanzinger entered a dissent, joined by Justice Paul E. Pfeifer, stating that in her view the majority’s broad reading of R.C. 2901.13(G) violates the “rule of lenity” set forth in R.C. 2901.04(A), which requires that when courts interpret criminal statutes, the language chosen by the legislature must be strictly construed against the state and liberally construed in favor of defendants.
In this case, she wrote: “R.C. 2901.13(G) tolls the statute of limitations when ‘the accused purposely avoids prosecution.’ The word ‘accused’ implies that the person already has been implicated in a crime by someone. The mental state of ‘purposely’ is defined in R.C. 2901.22(A): ‘A person acts purposely when it is his specific intention to cause a certain result ... ’. The statute of limitations also explains when a ‘prosecution’ begins: ‘A prosecution is commenced on the date an indictment is returned or an information filed, or on the date a lawful arrest without a warrant is made, or on the date a warrant, summons, citation, or other process is issued, whichever occurs first. ...’”
“This language chosen by the General Assembly comports with the position advanced by the defense: tolling occurs when a person avoids prosecution for specific charges. Although a case may be, and has been, made for the state’s alternative theory, I cannot subscribe to the idea that the limitations period is tolled for all crimes that an accused may have committed before the period that an accused avoids prosecution for a specific charge.”
Contacts
T. Allan Regas, 216.443.7800, for the state and Cuyahoga County Prosecutor.
David L. Doughten, 216.361.1112, for Larry Bess.
Please note: Opinion summaries are prepared by the Office of Public Information for the general public and news media. Opinion summaries are not prepared for every opinion released by the Court, but only for those cases considered noteworthy or of great public interest. Opinion summaries are not to be considered as official headnotes or syllabi of Court opinions. The full text of this and other Court opinions from 1992 to the present are available online from the Reporter of Decisions. In the Full Text search box, enter the eight-digit case number at the top of this summary and click "Submit."
State v. Bess, Slip Opinion No. 2010-Ohio-3292.
Cuyahoga App. No. 91429, 182 Ohio App.3d 364, 2009-Ohio-2254. Judgment of the court of appeals reversed, and cause remanded to the trial court.
Lundberg Stratton, O'Connor, O'Donnell, and Cupp, JJ., concur.
Pfeifer and Lanzinger, JJ., dissent.
Brown, C.J., not participating.
Opinion: http://www.supremecourt.ohio.gov/rod/docs/pdf/0/2010/2010-Ohio-3292.pdf
(July 20, 2010) The Supreme Court of Ohio ruled today that a state law that “tolls” (stops the running of) statutes of limitations for prosecuting a criminal defendant during a period in which the accused purposely avoids prosecution applies to all crimes committed by the accused, regardless of whether an indictment for those crimes had been returned or the underlying criminal activity had been discovered at the time the accused fled.
The Court’s 4-2 majority opinion, which reversed a decision of the 8th District Court of Appeals, was written by Justice Terrence O’Donnell.
In the early 1980s, Larry Bess began living with Theresa Ogden, and the couple married in 1986. Theresa had two children from a prior relationship: a son and a daughter. In 1989, Bess learned that he was under investigation for the alleged sexual abuse of Theresa’s daughter. Before he was charged, Bess fled to Georgia and assumed a false identity in order to escape prosecution. In November 1989, Bess was indicted by a Cuyahoga County grand jury on three counts of rape and seven counts of gross sexual imposition involving Theresa’s daughter. He remained in Georgia and avoided prosecution until 2007, when he was apprehended and returned to Ohio. In the course of preparing its 2007 case against Bess for the sexual abuse of Theresa’s daughter, the Cuyahoga County prosecutor’s office interviewed Theresa’s son, who disclosed for the first time that he also had been sexually molested by Bess between 1982 and 1989. Based on his statements, the state sought and obtained a second indictment charging Bess with additional counts of rape and other criminal offenses for his sexual conduct with Theresa’s son.
The trial court tried Bess for the offenses committed against Theresa’s daughter, which were not time-barred by the statutes of limitations applicable to those offenses because of a provision of state law, R.C. 2901.13(G) that tolls the running of a limitations period for any period of time during which a defendant flees the court’s jurisdiction or otherwise “purposely avoids prosecution.” A jury subsequently found Bess guilty of those charges, and the court of appeals affirmed his convictions.
Bess moved to dismiss the indictment that charged crimes against Theresa’s son, arguing that the six-year statute of limitations applicable to those charges had expired. The state objected, contending that R.C. 2901.13(G) had tolled the statute of limitations during the period when Bess had purposely avoided prosecution. The trial court granted Bess’s motion and dismissed the indictment relating to charges involving crimes against Theresa’s son, finding that Bess had not purposely avoided prosecution for those alleged crimes.
On appeal, the 8th District Court of Appeals affirmed the judgment of the trial court. Relying on the 8th District’s 1994 ruling in State v. McGraw, the author of the appellate court’s decision concluded that Bess’s flight and his concealment from prosecution for the sexual abuse of Theresa’s daughter tolled the statute of limitations for those crimes, but did not toll the statute of limitations for charges related to the sexual abuse of Theresa’s son, which the state learned about after Bess’s apprehension.
The state sought and was granted Supreme Court review of the 8th District’s decision.
Writing for the majority in today’s decision, Justice O’Donnell observed that there are alternative definitions of the term “prosecution” that the legislature could have intended in drafting the statute: a narrow definition referring to the trial and punishment of a specific criminal offense, and a broader definition encompassing the general process of bringing those who commit crimes to justice. In this case, he wrote: “The context in which the word ‘prosecution’ is used in R.C. 2901.13(G) reveals that the word refers to the more general process by which an accused is tried and punished for alleged criminal activity, not a specific proceeding against an accused, and the statute of limitations is tolled when an accused acts to purposely avoid being prosecuted for any offense.”
While he noted the absence of prior Ohio case law interpreting the disputed statutory language, Justice O’Donnell cited decisions of three different U.S. circuit courts of appeals interpreting a similar federal statute, all of which he said applied a general definition of the term “prosecution.” He wrote: “These courts have explained that Section 1073, which criminalizes crossing state lines with the intent to avoid prosecution, does not require the existence of a pending prosecution, but rather ‘[i]t is sufficient if the fleeing felon is ‘subject to prosecution.’”
“Notably, R.C. 2901.13(G) contains no language suggesting that its application should be limited only to those cases where the accused sought to avoid a particular prosecution. Nor is there language suggesting a limitation to only those prosecutions that had been commenced before the accused absconded or to those cases where the state can prove that the accused intended to avoid prosecution for a specific crime. The lack of any qualifying or limiting language reveals the legislature’s intent to toll the statute of limitations with respect to all offenses during the time when an accused purposely avoids prosecution for any offense. Moreover, the manifest purpose of R.C. 2901.13(G) is to prevent the accused from benefitting from the statute of limitations when he or she has purposely acted to avoid being prosecuted, thereby causing the state to fail to commence a timely prosecution. Importantly, it is the actions of the accused in avoiding prosecution, not the actions of the state in commencing a prosecution, that triggers the tolling of the statute of limitations. Thus, the General Assembly did not intend to limit tolling to only those offenses that authorities knew about at the time the accused absconded while allowing the statute of limitations to run on undiscovered crimes.”
“ ... The legislature has mandated that the period of limitations shall not run during any time when the accused purposely avoids prosecution. The word ‘prosecution’ means the process of bringing those who commit crimes to justice, and in the context of the statute, that definition is not limited to the crimes of which the authorities are aware or which have been indicted. In this case, if Bess committed the alleged crimes against Theresa’s son, then he knew that when he fled, but his motivations in fleeing the jurisdiction are known only to him. The General Assembly, however, did not intend to require the state to prove the accused’s specific intent in absconding, nor did it intend to toll the statute of limitations as to crimes known to the state but not toll it as to crimes unknown to the state. ... Because the court of appeals concluded that the statute of limitations had expired in this case notwithstanding Bess’s conduct in avoiding prosecution, that judgment is reversed and the cause is remanded to the trial court for further proceedings.”
Justice O’Donnell’s opinion was joined by Justices Evelyn Lundberg Stratton, Maureen O’Connor and Robert R. Cupp.
Justice Judith Ann Lanzinger entered a dissent, joined by Justice Paul E. Pfeifer, stating that in her view the majority’s broad reading of R.C. 2901.13(G) violates the “rule of lenity” set forth in R.C. 2901.04(A), which requires that when courts interpret criminal statutes, the language chosen by the legislature must be strictly construed against the state and liberally construed in favor of defendants.
In this case, she wrote: “R.C. 2901.13(G) tolls the statute of limitations when ‘the accused purposely avoids prosecution.’ The word ‘accused’ implies that the person already has been implicated in a crime by someone. The mental state of ‘purposely’ is defined in R.C. 2901.22(A): ‘A person acts purposely when it is his specific intention to cause a certain result ... ’. The statute of limitations also explains when a ‘prosecution’ begins: ‘A prosecution is commenced on the date an indictment is returned or an information filed, or on the date a lawful arrest without a warrant is made, or on the date a warrant, summons, citation, or other process is issued, whichever occurs first. ...’”
“This language chosen by the General Assembly comports with the position advanced by the defense: tolling occurs when a person avoids prosecution for specific charges. Although a case may be, and has been, made for the state’s alternative theory, I cannot subscribe to the idea that the limitations period is tolled for all crimes that an accused may have committed before the period that an accused avoids prosecution for a specific charge.”
Contacts
T. Allan Regas, 216.443.7800, for the state and Cuyahoga County Prosecutor.
David L. Doughten, 216.361.1112, for Larry Bess.
Please note: Opinion summaries are prepared by the Office of Public Information for the general public and news media. Opinion summaries are not prepared for every opinion released by the Court, but only for those cases considered noteworthy or of great public interest. Opinion summaries are not to be considered as official headnotes or syllabi of Court opinions. The full text of this and other Court opinions from 1992 to the present are available online from the Reporter of Decisions. In the Full Text search box, enter the eight-digit case number at the top of this summary and click "Submit."
Thursday, June 10, 2010
Law Bars Tort Claim Based on ‘Take Home’ Exposure to Asbestos from Workplace
Where Exposure Takes Place Away from Property Owner’s Premises
Boley v. Goodyear Tire & Rubber Co., Slip Opinion No. 2010-Ohio-2550.
Cuyahoga App. No. 91404, 2009-Ohio-491. Judgment of the court of appeals affirmed.
Lundberg Stratton, O'Connor, O'Donnell, Lanzinger, and Cupp, JJ., concur.
Pfeifer, J., dissents.
Brown, C.J., not participating.
Opinion: http://www.supremecourt.ohio.gov/rod/docs/pdf/0/2010/2010-Ohio-2550.pdf
(June 10, 2010) The Supreme Court of Ohio ruled today that a premises owner is not liable for tort claims arising from exposure to asbestos located on the owner’s property, unless the exposure occurred at the owner’s property. The Court’s 5-1 decision, which affirmed a judgment of the 8th District Court of Appeals, was authored by Justice Terrence O’Donnell.
Clayton Adams of Cleveland was exposed to workplace asbestos while he was employed by the Goodyear Tire & Rubber company between 1973 and 1983. During that period Clayton’s wife, Mary Adams, routinely shook asbestos-bearing dust from his work clothes in the course of doing her husband’s laundry. In March 2007, Mary was diagnosed with malignant mesothelioma, a lung disease linked to inhalation of asbestos fibers. She died of the disease four months later.
Clayton Adams and the administratrix of Mary’s estate, Cheryl Boley, filed a lawsuit against multiple defendants including Goodyear in the Cuyahoga County Court of Common Pleas, asserting among other claims that Goodyear had been negligent in exposing its workers’ family members to the risk of asbestos-related illness arising from asbestos dust the workers brought home on their persons and clothing.
Goodyear moved for summary judgment dismissing Boley and Adams’ claims against the company. They cited R.C. 2307.941(A)(1), a “tort reform” provision enacted by the General Assembly in 2005, which exempts property owners from liability “for any injury to any individual resulting from asbestos exposure unless that individual’s alleged exposure occurred while the individual was at the premises owner’s property.” The trial court granted summary judgment in favor of Goodyear, ruling that claims based on “second-hand” exposure of workers’ family members to asbestos the employee brought home from the workplace were explicitly barred by R.C. 2307.941(A)(1). On review, the 8th District Court of Appeals affirmed the trial court’s judgment. Clayton Adams and Boley sought and were granted Supreme Court review of the 8th District’s decision.
In today’s lead opinion, Justice O’Donnell wrote: “Clayton and Boley contend that R.C. 2307.941(A), which provides that subdivisions (A)(1), (2), and (3) are applicable only to tort actions for asbestos claims against a premises owner for ‘exposure to asbestos on the premises owner’s property’ (emphasis added), does not apply to their claims because Mary’s ‘exposure to asbestos’ occurred at her home rather than on Goodyear’s property. Therefore, they assert that R.C. 2307.941(A)(1) does not bar Goodyear’s liability, and they urge that a contrary interpretation would violate their rights to due process.”
“When the statute is read in its entirety, the legislative intent behind R.C. 2307.941(A) is apparent – R.C. 2307.941(A)(1) bars tort liability for asbestos claims stemming from exposure that does not occur at the premises owner’s property. ... Were we to apply the interpretation offered by Clayton and Boley, which is to read the phrase ‘exposure to asbestos’ in R.C. 2307.941(A) as modifying ‘on the premises owner’s property,’ we would be giving no meaning to subdivision (A)(1). Specifically, the event that would prohibit liability pursuant to subdivision (A)(1) – asbestos exposure away from the premises owner’s property – would also preclude R.C. 2307.941(A)(1) from barring such claims.”
“The better view is to read the statute to give effect to all of its parts. ... The only interpretation of R.C. 2307.941 that gives effect to the language employed by the General Assembly in subdivision (A)(1) is that which interprets the phrase ‘on the premises owner’s property’ to modify the word ‘asbestos.’ Moreover, when read together, R.C. 2307.941(A)(1), (2), and (3) further reveal the General Assembly’s intent to limit the liability of a premises owner to instances where the exposure occurred at its property. Specifically, subdivisions (A)(1), (2), and (3) each restrict the owner’s liability to exposure that occurred at the premises owner’s property. Subdivision (A)(1) provides a general exception from liability for a premises owner when the asbestos exposure does not occur at the owner’s property; subdivisions (2) and (3) further limit that liability by precluding liability in certain circumstances where exposure occurred at the owner’s property.”
“Thus, the General Assembly has manifested its intent to preclude liability for premises owners from claims for asbestos exposure that occurs away from the owner’s premises. ... Because Mary’s exposure did not occur at Goodyear’s property, R.C. 2307.941(A)(1) precludes Goodyear’s liability as to this claim.”
Justice O’Donnell’s opinion was joined by Justices Evelyn Lundberg Stratton, Maureen O’Connor, Judith Ann Lanzinger and Robert R. Cupp.
Justice O’Connor also entered a separate opinion, joined by Justice Lanzinger, in which she responded to the appellants’ argument that the statute’s preclusion of employer liability for “take home” asbestos exposure of employees’ family members left them without legal recourse for Mary Adams’ asbestos-related illness and death.
Justice O’Connor observed that a different provision in the 2005 asbestos litigation reform bill, R.C. 2307.92(D)(2), provides a legal basis for asserting wrongful death claims against defendants other than the premises owner for take-home exposure of family members to occupational asbestos. She also noted that Clayton Adams and Boley had named more than 200 defendants other than Goodyear in their complaint, and that their attorneys had indicated during oral argument that they had proceeded to trial against at least one other defendant and had resolved and/or settled claims against others. While acknowledging the plaintiffs’ dissatisfaction with a statutory scheme that bars any recovery from Goodyear for Mary’s asbestos-related illness and death, Justice O’Connor wrote that the Ohio Constitution precludes courts and judges from usurping the power of the legislative branch to adopt or amend statutes that set the public policy of the state.
Justice Paul E. Pfeifer entered a dissent noting that the plain language of R.C. 2307.941 limits the application of that statute to claims brought against a premises owner “for exposure to asbestos on the premises owner’s property.” He wrote: “Boley does not claim that Adams was exposed to asbestos on Goodyear's property, and yet she is being told by this court that she can’t bring a claim for ‘exposure to asbestos on [Goodyear's] property.’ ... Boley has a completely different claim. She claims that Adams was exposed to asbestos in Adams’s own home, not on Goodyear’s property. She claims that the asbestos Adams was exposed to was brought to the home by Adams’s husband, who worked at Goodyear. Boley is not seeking relief pursuant to R.C 2307.941. She cannot because she never entered upon Goodyear's property. It seems mean-spirited to deny her claim while so obviously misconstruing it.”
Chief Justice Eric Brown did not participate in the Court’s deliberations or decision in this case.
Contacts
Thomas W. Bevan, 330.467.8571, for Clayton Adams and Cheryl Boley, Administratrix of Estate of Mary Adams.
Richard D. Schuster, 614.464.5475, for Goodyear Tire and Rubber Company.
Please note: Opinion summaries are prepared by the Office of Public Information for the general public and news media. Opinion summaries are not prepared for every opinion released by the Court, but only for those cases considered noteworthy or of great public interest. Opinion summaries are not to be considered as official headnotes or syllabi of Court opinions. The full text of this and other Court opinions from 1992 to the present are available online from the Reporter of Decisions. In the Full Text search box, enter the eight-digit case number at the top of this summary and click "Submit."
Boley v. Goodyear Tire & Rubber Co., Slip Opinion No. 2010-Ohio-2550.
Cuyahoga App. No. 91404, 2009-Ohio-491. Judgment of the court of appeals affirmed.
Lundberg Stratton, O'Connor, O'Donnell, Lanzinger, and Cupp, JJ., concur.
Pfeifer, J., dissents.
Brown, C.J., not participating.
Opinion: http://www.supremecourt.ohio.gov/rod/docs/pdf/0/2010/2010-Ohio-2550.pdf
(June 10, 2010) The Supreme Court of Ohio ruled today that a premises owner is not liable for tort claims arising from exposure to asbestos located on the owner’s property, unless the exposure occurred at the owner’s property. The Court’s 5-1 decision, which affirmed a judgment of the 8th District Court of Appeals, was authored by Justice Terrence O’Donnell.
Clayton Adams of Cleveland was exposed to workplace asbestos while he was employed by the Goodyear Tire & Rubber company between 1973 and 1983. During that period Clayton’s wife, Mary Adams, routinely shook asbestos-bearing dust from his work clothes in the course of doing her husband’s laundry. In March 2007, Mary was diagnosed with malignant mesothelioma, a lung disease linked to inhalation of asbestos fibers. She died of the disease four months later.
Clayton Adams and the administratrix of Mary’s estate, Cheryl Boley, filed a lawsuit against multiple defendants including Goodyear in the Cuyahoga County Court of Common Pleas, asserting among other claims that Goodyear had been negligent in exposing its workers’ family members to the risk of asbestos-related illness arising from asbestos dust the workers brought home on their persons and clothing.
Goodyear moved for summary judgment dismissing Boley and Adams’ claims against the company. They cited R.C. 2307.941(A)(1), a “tort reform” provision enacted by the General Assembly in 2005, which exempts property owners from liability “for any injury to any individual resulting from asbestos exposure unless that individual’s alleged exposure occurred while the individual was at the premises owner’s property.” The trial court granted summary judgment in favor of Goodyear, ruling that claims based on “second-hand” exposure of workers’ family members to asbestos the employee brought home from the workplace were explicitly barred by R.C. 2307.941(A)(1). On review, the 8th District Court of Appeals affirmed the trial court’s judgment. Clayton Adams and Boley sought and were granted Supreme Court review of the 8th District’s decision.
In today’s lead opinion, Justice O’Donnell wrote: “Clayton and Boley contend that R.C. 2307.941(A), which provides that subdivisions (A)(1), (2), and (3) are applicable only to tort actions for asbestos claims against a premises owner for ‘exposure to asbestos on the premises owner’s property’ (emphasis added), does not apply to their claims because Mary’s ‘exposure to asbestos’ occurred at her home rather than on Goodyear’s property. Therefore, they assert that R.C. 2307.941(A)(1) does not bar Goodyear’s liability, and they urge that a contrary interpretation would violate their rights to due process.”
“When the statute is read in its entirety, the legislative intent behind R.C. 2307.941(A) is apparent – R.C. 2307.941(A)(1) bars tort liability for asbestos claims stemming from exposure that does not occur at the premises owner’s property. ... Were we to apply the interpretation offered by Clayton and Boley, which is to read the phrase ‘exposure to asbestos’ in R.C. 2307.941(A) as modifying ‘on the premises owner’s property,’ we would be giving no meaning to subdivision (A)(1). Specifically, the event that would prohibit liability pursuant to subdivision (A)(1) – asbestos exposure away from the premises owner’s property – would also preclude R.C. 2307.941(A)(1) from barring such claims.”
“The better view is to read the statute to give effect to all of its parts. ... The only interpretation of R.C. 2307.941 that gives effect to the language employed by the General Assembly in subdivision (A)(1) is that which interprets the phrase ‘on the premises owner’s property’ to modify the word ‘asbestos.’ Moreover, when read together, R.C. 2307.941(A)(1), (2), and (3) further reveal the General Assembly’s intent to limit the liability of a premises owner to instances where the exposure occurred at its property. Specifically, subdivisions (A)(1), (2), and (3) each restrict the owner’s liability to exposure that occurred at the premises owner’s property. Subdivision (A)(1) provides a general exception from liability for a premises owner when the asbestos exposure does not occur at the owner’s property; subdivisions (2) and (3) further limit that liability by precluding liability in certain circumstances where exposure occurred at the owner’s property.”
“Thus, the General Assembly has manifested its intent to preclude liability for premises owners from claims for asbestos exposure that occurs away from the owner’s premises. ... Because Mary’s exposure did not occur at Goodyear’s property, R.C. 2307.941(A)(1) precludes Goodyear’s liability as to this claim.”
Justice O’Donnell’s opinion was joined by Justices Evelyn Lundberg Stratton, Maureen O’Connor, Judith Ann Lanzinger and Robert R. Cupp.
Justice O’Connor also entered a separate opinion, joined by Justice Lanzinger, in which she responded to the appellants’ argument that the statute’s preclusion of employer liability for “take home” asbestos exposure of employees’ family members left them without legal recourse for Mary Adams’ asbestos-related illness and death.
Justice O’Connor observed that a different provision in the 2005 asbestos litigation reform bill, R.C. 2307.92(D)(2), provides a legal basis for asserting wrongful death claims against defendants other than the premises owner for take-home exposure of family members to occupational asbestos. She also noted that Clayton Adams and Boley had named more than 200 defendants other than Goodyear in their complaint, and that their attorneys had indicated during oral argument that they had proceeded to trial against at least one other defendant and had resolved and/or settled claims against others. While acknowledging the plaintiffs’ dissatisfaction with a statutory scheme that bars any recovery from Goodyear for Mary’s asbestos-related illness and death, Justice O’Connor wrote that the Ohio Constitution precludes courts and judges from usurping the power of the legislative branch to adopt or amend statutes that set the public policy of the state.
Justice Paul E. Pfeifer entered a dissent noting that the plain language of R.C. 2307.941 limits the application of that statute to claims brought against a premises owner “for exposure to asbestos on the premises owner’s property.” He wrote: “Boley does not claim that Adams was exposed to asbestos on Goodyear's property, and yet she is being told by this court that she can’t bring a claim for ‘exposure to asbestos on [Goodyear's] property.’ ... Boley has a completely different claim. She claims that Adams was exposed to asbestos in Adams’s own home, not on Goodyear’s property. She claims that the asbestos Adams was exposed to was brought to the home by Adams’s husband, who worked at Goodyear. Boley is not seeking relief pursuant to R.C 2307.941. She cannot because she never entered upon Goodyear's property. It seems mean-spirited to deny her claim while so obviously misconstruing it.”
Chief Justice Eric Brown did not participate in the Court’s deliberations or decision in this case.
Contacts
Thomas W. Bevan, 330.467.8571, for Clayton Adams and Cheryl Boley, Administratrix of Estate of Mary Adams.
Richard D. Schuster, 614.464.5475, for Goodyear Tire and Rubber Company.
Please note: Opinion summaries are prepared by the Office of Public Information for the general public and news media. Opinion summaries are not prepared for every opinion released by the Court, but only for those cases considered noteworthy or of great public interest. Opinion summaries are not to be considered as official headnotes or syllabi of Court opinions. The full text of this and other Court opinions from 1992 to the present are available online from the Reporter of Decisions. In the Full Text search box, enter the eight-digit case number at the top of this summary and click "Submit."
Major Drug Offender Penalty May Be Imposed if Substance Offered for Sale Never Recovered
Garr v. Warden, Madison Corr. Inst., Slip Opinion No. 2010-Ohio-2449.
Certified Question of State Law, United States District Court, Southern District of Ohio, Western Division, No. 1:08cv293. Certified question answered in the negative.
Pfeifer, Lundberg Stratton, O'Connor, O'Donnell, Lanzinger, and Cupp, JJ., concur.
Brown, C.J., not participating.
Opinion: http://www.supremecourt.ohio.gov/rod/docs/pdf/0/2010/2010-Ohio-2449.pdf
(June 8, 2010) The Supreme Court of Ohio today ruled 6-0 that a decision in State v. Chandler, a 2006 Supreme Court case where the Supreme Court held that a detectable amount of the controlled substance must be present before a court may impose an enhanced major drug offender penalty, does not apply to trafficking cases where no drugs are recovered and therefore the major drug offender penalty may be imposed in those cases.
A federal judge submitted a certified question of state law to the Supreme Court inquiring whether its holding in Chandler extends to an offer-to-sell drug-trafficking case where no drugs are recovered during investigation of the crime.
Today’s 6-0 decision, authored by Justice Terrence O’Donnell, answered the certified question in the negative and clarified “that our holding in Chandler does not extend to cases where a substance offered for sale is not recovered or tested in order to ascertain whether it contains a detectable amount of controlled substance.”
Oliver Garr was arrested and charged with first-degree felony drug trafficking and a major drug offender specification based on his offer to sell an informant two kilograms of cocaine. Police never recovered any amount of cocaine or any other substance that had been offered for sale by Garr. The trial court convicted him and sentenced him to 10 years in prison as a major drug offender. He lost on appeal before the 1st District Court of Appeals, and the Supreme Court declined to hear his case. He then filed a federal habeas corpus action in the U.S. District Court for the Southern District of Ohio.
Justice O’Donnell noted that: “Our decision in Chandler that a substance offered for sale must contain ‘some detectable amount’ of the relevant controlled substance before a person can be sentenced as a major drug offender is limited to those cases where the substance offered for sale is recovered and subjected to testing to determine whether it contains a detectable amount of the drug offered for sale.”
“It does not apply to situations where no drug is recovered and no testing is performed. Hence, where an offender offers to sell a controlled substance in a quantity which would implicate the MDO specification, and where no substance is ever recovered or tested, Chandler is factually distinguishable, as it is a counterfeit drug case where the alleged drug was recovered and tested. Therefore, Chandler does not apply to the situation as presented here where Garr offered to sell a drug which was not recovered. In such a case, the offender may be convicted of an MDO specification in a properly proven case.”
Justice O’Donnell’s opinion was joined by Justices Paul E. Pfeifer, Evelyn Lundberg Stratton, Maureen O’Connor, Judith Ann Lanzinger and Robert R. Cupp.
Chief Justice Eric Brown did not participate in the Court’s deliberations or decision in the case.
Contacts
Benjamin C. Mizer, 614.466.8980, for the warden of the Madison Correctional Institution.
Kristopher A. Haines, 614.466.5394, for Oliver Garr.
Please note: Opinion summaries are prepared by the Office of Public Information for the general public and news media. Opinion summaries are not prepared for every opinion released by the Court, but only for those cases considered noteworthy or of great public interest. Opinion summaries are not to be considered as official headnotes or syllabi of Court opinions. The full text of this and other Court opinions from 1992 to the present are available online from the Reporter of Decisions. In the Full Text search box, enter the eight-digit case number at the top of this summary and click "Submit."
Certified Question of State Law, United States District Court, Southern District of Ohio, Western Division, No. 1:08cv293. Certified question answered in the negative.
Pfeifer, Lundberg Stratton, O'Connor, O'Donnell, Lanzinger, and Cupp, JJ., concur.
Brown, C.J., not participating.
Opinion: http://www.supremecourt.ohio.gov/rod/docs/pdf/0/2010/2010-Ohio-2449.pdf
(June 8, 2010) The Supreme Court of Ohio today ruled 6-0 that a decision in State v. Chandler, a 2006 Supreme Court case where the Supreme Court held that a detectable amount of the controlled substance must be present before a court may impose an enhanced major drug offender penalty, does not apply to trafficking cases where no drugs are recovered and therefore the major drug offender penalty may be imposed in those cases.
A federal judge submitted a certified question of state law to the Supreme Court inquiring whether its holding in Chandler extends to an offer-to-sell drug-trafficking case where no drugs are recovered during investigation of the crime.
Today’s 6-0 decision, authored by Justice Terrence O’Donnell, answered the certified question in the negative and clarified “that our holding in Chandler does not extend to cases where a substance offered for sale is not recovered or tested in order to ascertain whether it contains a detectable amount of controlled substance.”
Oliver Garr was arrested and charged with first-degree felony drug trafficking and a major drug offender specification based on his offer to sell an informant two kilograms of cocaine. Police never recovered any amount of cocaine or any other substance that had been offered for sale by Garr. The trial court convicted him and sentenced him to 10 years in prison as a major drug offender. He lost on appeal before the 1st District Court of Appeals, and the Supreme Court declined to hear his case. He then filed a federal habeas corpus action in the U.S. District Court for the Southern District of Ohio.
Justice O’Donnell noted that: “Our decision in Chandler that a substance offered for sale must contain ‘some detectable amount’ of the relevant controlled substance before a person can be sentenced as a major drug offender is limited to those cases where the substance offered for sale is recovered and subjected to testing to determine whether it contains a detectable amount of the drug offered for sale.”
“It does not apply to situations where no drug is recovered and no testing is performed. Hence, where an offender offers to sell a controlled substance in a quantity which would implicate the MDO specification, and where no substance is ever recovered or tested, Chandler is factually distinguishable, as it is a counterfeit drug case where the alleged drug was recovered and tested. Therefore, Chandler does not apply to the situation as presented here where Garr offered to sell a drug which was not recovered. In such a case, the offender may be convicted of an MDO specification in a properly proven case.”
Justice O’Donnell’s opinion was joined by Justices Paul E. Pfeifer, Evelyn Lundberg Stratton, Maureen O’Connor, Judith Ann Lanzinger and Robert R. Cupp.
Chief Justice Eric Brown did not participate in the Court’s deliberations or decision in the case.
Contacts
Benjamin C. Mizer, 614.466.8980, for the warden of the Madison Correctional Institution.
Kristopher A. Haines, 614.466.5394, for Oliver Garr.
Please note: Opinion summaries are prepared by the Office of Public Information for the general public and news media. Opinion summaries are not prepared for every opinion released by the Court, but only for those cases considered noteworthy or of great public interest. Opinion summaries are not to be considered as official headnotes or syllabi of Court opinions. The full text of this and other Court opinions from 1992 to the present are available online from the Reporter of Decisions. In the Full Text search box, enter the eight-digit case number at the top of this summary and click "Submit."
Sunday, March 07, 2010
Court Rules Sale Closest to Tax Lien Date Determines Property’s Value for Tax Purposes
When Property Sold Twice Within Reasonable Time Before/After Lien Date
HIN, L.L.C. v. Cuyahoga Cty. Bd. of Revision, Slip Opinion No. 2010-Ohio-687.
Board of Tax Appeals, No. 2006-A-712. Decision affirmed.
Moyer, C.J., and Pfeifer, O'Connor, O'Donnell, Lanzinger, and Cupp, JJ., concur.
Lundberg Stratton, J., concurs separately.
Opinion: http://www.supremecourt.ohio.gov/rod/docs/pdf/0/2010/2010-Ohio-687.pdf
(March 4, 2010) In a decision announced today, the Supreme Court of Ohio ruled that when a property has been the subject of two arm’s length sales between a willing buyer and seller within a reasonable length of time before or after the tax-lien date, the sale occurring closer in time to the tax lien date establishes the true value of the property for taxation purposes.
In a 7-0 ruling authored by Justice Terrence O’Donnell, the Court also held that, only for purposes of establishing the taxable value of property under R.C. 5713.03, the date a real property conveyance fee statement is filed with the county auditor should be considered the “sale date” of the property.
The case involved a dispute over the tax valuation for calendar year 2004 of a 34-acre parcel of land and an office building on that land, which is located in the Cuyahoga County community of Bedford and the Bedford School District. In December 2003, the land and building were purchased from a previous owner by JBK Properties for $4.9 million. JBK subsequently executed a 15-year lease agreement with U.S. Bank for full occupancy of the office building. In April 2004, JBK sold the property, including its ownership interest in the lease agreement, to another company, HIN, for $7.4 million.
In assessing the property for the 2004 tax year, the Cuyahoga County Auditor estimated its taxable market value at $7,848,400 based on the April 2004 sale price. HIN appealed that valuation to the Cuyahoga County Board of Tax Revision, seeking a reduction of the auditor’s valuation to $5 million based on the December 2003 sale price. The Bedford School District filed a counter-complaint urging affirmance of the auditor’s valuation. The board of revision upheld the auditor’s valuation of the property. HIN then exercised its right to appeal the board of revision’s ruling to the Ohio Board of Tax Appeals (BTA). The BTA reversed the board of revision, and ruled that the true value of the property on Jan. 1, 2004 was the December 2003 sale price of $4.9 million.
The school district exercised its right to appeal the BTA’s ruling to the Supreme Court.
In today’s decision upholding the BTA’s valuation, Justice O’Donnell wrote: “R.C. 5713.03 sets forth how real estate is to be valued for tax purposes: ‘In determining the true value of any tract, lot, or parcel of real estate under this section, if such tract, lot, or parcel has been the subject of an arm’s length sale between a willing seller and a willing buyer within a reasonable length of time, either before or after the tax lien date, the auditor shall consider the sale price of such tract, lot, or parcel to be the true value for taxation purposes.’ (Emphasis added.) ... In this case, January 1, 2004, is the relevant valuation date, and the parties do not differ on this point.”
“However, this case involves two sales, one occurring prior to the tax-lien date and one occurring subsequent to the tax-lien date, and we are called upon to determine which sale should be used as evidence of the true value. When a property has been the subject of two arm’s-length sales between a willing seller and a willing buyer within a reasonable length of time either before or after the tax-lien date, the sale occurring closer in time to the tax-lien date establishes the true value of the property for taxation purposes. This principle emanates from R.C. 5713.03, which presupposes that an arm’s-length sale close in time to the tax-lien date accurately indicates the value of property as of that date. It follows that when a property has been the subject of two arm’s-length sales between willing sellers and willing buyers, the sale occurring closer in time to the tax-lien date provides a more accurate indication of the true value of the property as of the tax-lien date than does a sale occurring more remotely in time from that date.”
Justice O’Donnell rejected arguments by the school district that the date on which the parties agreed on a sale price or the date on which the buyer and seller entered into a contract to purchase the property should be considered the “sale date” for tax valuation purposes.
He wrote: “Legal title to real property transfers from the seller to the buyer with the delivery and acceptance of an executed deed. ... R.C. 317.22 provides that ‘[n]o deed of absolute conveyance of land ... shall be recorded by the county recorder until ... [t]he conveyance presented to the recorder bears the stamp of the county auditor ... [and s]uch conveyance has been presented to the county auditor, and by the county auditor indorsed “transferred” or “transfer not necessary.” ’ Before the deed may be endorsed by the auditor, however, R.C. 319.202 requires the new owner to submit a real property conveyance fee statement to the auditor declaring the value of the real property, and pursuant to R.C. 319.20, the auditor must transfer the parcel into the new owner’s name on the tax list. The purpose of this statutory scheme is to provide the auditor the necessary information to determine the true value of property based on a property sale in accordance with R.C. 5713.03. For this reason, in determining the date a sale of property occurs, only for purposes of establishing the true value of property pursuant to R.C. 5713.03, the auditor should use the date that the real property conveyance fee statement is filed in the auditor’s office as the sale date of the property.”
“Here, the filing of the real property conveyance fee statement for the December 2003 sale on December 30, 2003, occurred in closer proximity to the tax-lien date than the filing of the real property conveyance fee statement for the April 2004 sale on April 30, 2004. Therefore, for purposes of establishing the true value of the property in accordance with R.C. 5713.03, the auditor should use the December 2003 sale price as the true value of the property for tax year 2004.”
Justice O’Donnell’s opinion was joined by Chief Justice Thomas J. Moyer and Justices Paul E. Pfeifer, Maureen O’Connor, Judith Ann Lanzinger and Robert R. Cupp.
Justice Evelyn Lundberg Stratton entered a separate concurring opinion, joined by Justice Cupp, in which she expressed concern that the majority opinion implies that only the conveyance fee date establishes the date of sale for purposes of property valuations by county auditors. She wrote: “I believe that using the date the conveyance fee statement is filed to establish the date of sale is a useful point in assisting the auditor in determining value. However, such a rule should be a rebuttable presumption and an evidentiary tool only. Language fixing the date of the sale does not appear in the statute. The General Assembly did not establish the date of the conveyance fee as the date of sale, and this court should not add such language to the statute. The parties should be allowed to present evidence at hearings before a board of revision and the Board of Tax Appeals to establish that the true date of sale is a different point from the date of the filing of the conveyance fee.”
Contacts
Thomas A. Kondzer, 440.835.1200, for the Bedford School District Board of Education.
Timothy J. Kollin, 216.566.8500, for Cuyahoga County Auditor and Board of Revision.
Jay Siegel, 216.763.1004, for HIN, LLC.
Please note: Opinion summaries are prepared by the Office of Public Information for the general public and news media. Opinion summaries are not prepared for every opinion released by the Court, but only for those cases considered noteworthy or of great public interest. Opinion summaries are not to be considered as official headnotes or syllabi of Court opinions. The full text of this and other Court opinions from 1992 to the present are available online from the Reporter of Decisions.
HIN, L.L.C. v. Cuyahoga Cty. Bd. of Revision, Slip Opinion No. 2010-Ohio-687.
Board of Tax Appeals, No. 2006-A-712. Decision affirmed.
Moyer, C.J., and Pfeifer, O'Connor, O'Donnell, Lanzinger, and Cupp, JJ., concur.
Lundberg Stratton, J., concurs separately.
Opinion: http://www.supremecourt.ohio.gov/rod/docs/pdf/0/2010/2010-Ohio-687.pdf
(March 4, 2010) In a decision announced today, the Supreme Court of Ohio ruled that when a property has been the subject of two arm’s length sales between a willing buyer and seller within a reasonable length of time before or after the tax-lien date, the sale occurring closer in time to the tax lien date establishes the true value of the property for taxation purposes.
In a 7-0 ruling authored by Justice Terrence O’Donnell, the Court also held that, only for purposes of establishing the taxable value of property under R.C. 5713.03, the date a real property conveyance fee statement is filed with the county auditor should be considered the “sale date” of the property.
The case involved a dispute over the tax valuation for calendar year 2004 of a 34-acre parcel of land and an office building on that land, which is located in the Cuyahoga County community of Bedford and the Bedford School District. In December 2003, the land and building were purchased from a previous owner by JBK Properties for $4.9 million. JBK subsequently executed a 15-year lease agreement with U.S. Bank for full occupancy of the office building. In April 2004, JBK sold the property, including its ownership interest in the lease agreement, to another company, HIN, for $7.4 million.
In assessing the property for the 2004 tax year, the Cuyahoga County Auditor estimated its taxable market value at $7,848,400 based on the April 2004 sale price. HIN appealed that valuation to the Cuyahoga County Board of Tax Revision, seeking a reduction of the auditor’s valuation to $5 million based on the December 2003 sale price. The Bedford School District filed a counter-complaint urging affirmance of the auditor’s valuation. The board of revision upheld the auditor’s valuation of the property. HIN then exercised its right to appeal the board of revision’s ruling to the Ohio Board of Tax Appeals (BTA). The BTA reversed the board of revision, and ruled that the true value of the property on Jan. 1, 2004 was the December 2003 sale price of $4.9 million.
The school district exercised its right to appeal the BTA’s ruling to the Supreme Court.
In today’s decision upholding the BTA’s valuation, Justice O’Donnell wrote: “R.C. 5713.03 sets forth how real estate is to be valued for tax purposes: ‘In determining the true value of any tract, lot, or parcel of real estate under this section, if such tract, lot, or parcel has been the subject of an arm’s length sale between a willing seller and a willing buyer within a reasonable length of time, either before or after the tax lien date, the auditor shall consider the sale price of such tract, lot, or parcel to be the true value for taxation purposes.’ (Emphasis added.) ... In this case, January 1, 2004, is the relevant valuation date, and the parties do not differ on this point.”
“However, this case involves two sales, one occurring prior to the tax-lien date and one occurring subsequent to the tax-lien date, and we are called upon to determine which sale should be used as evidence of the true value. When a property has been the subject of two arm’s-length sales between a willing seller and a willing buyer within a reasonable length of time either before or after the tax-lien date, the sale occurring closer in time to the tax-lien date establishes the true value of the property for taxation purposes. This principle emanates from R.C. 5713.03, which presupposes that an arm’s-length sale close in time to the tax-lien date accurately indicates the value of property as of that date. It follows that when a property has been the subject of two arm’s-length sales between willing sellers and willing buyers, the sale occurring closer in time to the tax-lien date provides a more accurate indication of the true value of the property as of the tax-lien date than does a sale occurring more remotely in time from that date.”
Justice O’Donnell rejected arguments by the school district that the date on which the parties agreed on a sale price or the date on which the buyer and seller entered into a contract to purchase the property should be considered the “sale date” for tax valuation purposes.
He wrote: “Legal title to real property transfers from the seller to the buyer with the delivery and acceptance of an executed deed. ... R.C. 317.22 provides that ‘[n]o deed of absolute conveyance of land ... shall be recorded by the county recorder until ... [t]he conveyance presented to the recorder bears the stamp of the county auditor ... [and s]uch conveyance has been presented to the county auditor, and by the county auditor indorsed “transferred” or “transfer not necessary.” ’ Before the deed may be endorsed by the auditor, however, R.C. 319.202 requires the new owner to submit a real property conveyance fee statement to the auditor declaring the value of the real property, and pursuant to R.C. 319.20, the auditor must transfer the parcel into the new owner’s name on the tax list. The purpose of this statutory scheme is to provide the auditor the necessary information to determine the true value of property based on a property sale in accordance with R.C. 5713.03. For this reason, in determining the date a sale of property occurs, only for purposes of establishing the true value of property pursuant to R.C. 5713.03, the auditor should use the date that the real property conveyance fee statement is filed in the auditor’s office as the sale date of the property.”
“Here, the filing of the real property conveyance fee statement for the December 2003 sale on December 30, 2003, occurred in closer proximity to the tax-lien date than the filing of the real property conveyance fee statement for the April 2004 sale on April 30, 2004. Therefore, for purposes of establishing the true value of the property in accordance with R.C. 5713.03, the auditor should use the December 2003 sale price as the true value of the property for tax year 2004.”
Justice O’Donnell’s opinion was joined by Chief Justice Thomas J. Moyer and Justices Paul E. Pfeifer, Maureen O’Connor, Judith Ann Lanzinger and Robert R. Cupp.
Justice Evelyn Lundberg Stratton entered a separate concurring opinion, joined by Justice Cupp, in which she expressed concern that the majority opinion implies that only the conveyance fee date establishes the date of sale for purposes of property valuations by county auditors. She wrote: “I believe that using the date the conveyance fee statement is filed to establish the date of sale is a useful point in assisting the auditor in determining value. However, such a rule should be a rebuttable presumption and an evidentiary tool only. Language fixing the date of the sale does not appear in the statute. The General Assembly did not establish the date of the conveyance fee as the date of sale, and this court should not add such language to the statute. The parties should be allowed to present evidence at hearings before a board of revision and the Board of Tax Appeals to establish that the true date of sale is a different point from the date of the filing of the conveyance fee.”
Contacts
Thomas A. Kondzer, 440.835.1200, for the Bedford School District Board of Education.
Timothy J. Kollin, 216.566.8500, for Cuyahoga County Auditor and Board of Revision.
Jay Siegel, 216.763.1004, for HIN, LLC.
Please note: Opinion summaries are prepared by the Office of Public Information for the general public and news media. Opinion summaries are not prepared for every opinion released by the Court, but only for those cases considered noteworthy or of great public interest. Opinion summaries are not to be considered as official headnotes or syllabi of Court opinions. The full text of this and other Court opinions from 1992 to the present are available online from the Reporter of Decisions.
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