Lawyers for the City of Cincinnati filed a motion to dismiss the John Doe complaint regarding the Gang of Five Texts messages. The Gang of Five is the name Cincinnati City Councilmembers PG Sittenfeld, Wendell Young, Tamaya Dennard, Chris Seelbach, and Greg Landsman gave themselves when they were conducting city business via email, text message, and conference call.

Politics and apparently, litigation, makes strange bedfellows as the anonymous plaintiffs are suing not only the City, but also, a Finney Law Firm attorney, who sought public records on behalf of clients. And, curiously, the Plaintiffs, who in their filings with the Court claim to be personal friends of the Gang of Five, chose not to name the councilmembers themselves as defendants in the litigation.

The anonymous plaintiffs seek to have the Gang of Five’s text messages destroyed to avoid further public access to what are clearly public records.

If successful, the Plaintiffs will undo decades of public records law in Ohio and create a new avenue of litigation to prevent disclosure of public records. In short, efforts at government accountability would be stifled for years to come.

Read the Complaint here

Read the City’s Motion to Dismiss here.

Our firm prides itself on being full-service. That is, we create value for our clients in matters ranging from routine contract drafting to complex litigation. However, our representation of clients in litigation isn’t just limited to the trial level – we also handle appeals (click here for more on our trips to the Supreme Court of the United Statesand Ohio Supreme Court). After all, if judges always got it right, the rate of overturned decisions would be zero.

Appellate practice is procedurally complex

Appealing a judgment requires adherence to an entirely new set of rules, separate from those involved in lower-court litigation. These rules often involve strict deadlines and harsh penalties for non-compliance. One common though rarely-discussed aspect of the appellate process is the post-judgment bond. Ohio Civ.R. 62 gives courts discretion to impose a bond on a non-prevailing party in litigation pending appeal. That is, if you are a party to litigation and you lose, you may be required to secure a bond in the full amount of the judgment (or more) to prevent the other side from seizing your assets while you pursue an appeal.

One case requiring a post-judgement bond to stay collections pending appeal

Although a rather extreme illustration, one such example of the post-judgment bond scenario is the Gibson’s Bakery v. Oberlin College case. There, Gibson’s Bakery sued Oberlin College alleging that Oberlin officials supported the narrative that the Bakery had a long history of racism and discrimination after a shoplifting incident involving an Oberlin student and, ultimately, suspended their long-standing business relationship. The loss of this business was paralyzing to the Bakery, and a jury returned a verdict in favor of the Bakery for more than $30 million, including compensatory and punitive damages, as well as attorneys’ fees. Oberlin sought a stay of execution of the judgment amount under Civ.R. 62 (so as to prevent Gibson’s Bakery from seizing their bank accounts, equipment, etc. in satisfaction of the judgment) while they pursued an appeal. The court ultimately granted Oberlin’s motion, but conditioned the stay on Oberlin obtaining a bond in excess of $36 million, the full amount of the judgment plus three years’ interest.

Why are post-judgment bonds required?

“The purpose of a stay pending appeal is to preserve the status quo.” Monarch Constr. Co. v. Ohio Sch. Facilities Comm’n, Franklin C.P. No. 02CVH04-4222, 2002-Ohio-2957, ¶14. The idea is that, if the losing party pursues an appeal, they at least believe that the court made an error and that they should not be held responsible for the full amount of the judgment or at all. Accordingly, they would be prejudiced if, for instance, the prevailing party was permitted to execute the judgment against them and then the decision was ultimately overturned (i.e., the appellate court, for whatever reason, finds that the prevailing party was not entitled to the judgment in the first place).

But what about the prevailing party, who would otherwise be forced to wait (potentially, several years) to collect on a judgment that will likely be upheld, at which time the losing party may no longer have assets to cover the amount of the judgment? Enter Civ.R. 62(B)”

When an appeal is taken the appellant may obtain a stay of execution of a judgment or any proceedings to enforce a judgment by giving an adequate supersedeas bond. The bond may be given at or after the time of filing the notice of appeal. The stay is effective when the supersedeas bond is approved by the court.

Furthermore,

. . . an appeal does not operate as a stay of execution until a stay of execution has been obtained pursuant to the Rules of Appellate Procedure or in another applicable manner, and a supersedeas bond is executed by the appellant to the appellee, with sufficient sureties and in a sum that is not less than, if applicable, the cumulative total for all claims covered by the final order, judgment, or decree and interest[.]

Exceptions to the rule

The requirement of a post-judgment bond (or “supersedeas” bond) should not be taken for granted. Courts have found that, in some cases, no bond is required at all if there is adequate security for the prevailing party. See, e.g., Irvine v. Akron Beacon Journal, 147 Ohio App. 3d 428, 451-52 (9th Dist. 2002) (upholding the trial court’s finding that “the Plaintiffs are adequately secured by the Defendant’s solvency and well-established ties to Akron, Ohio and that, therefore, the Defendants are not required to post a bond at this time.”); Lomas & Nettleton Co. v. Warren, 11th Dist. No. 89-G-1519, 1990 Ohio App. LEXIS 2720 (June 29, 1990) (holding that “the posting of a supersedeas bond is not mandatory to stay an execution in all cases”); Whitlatch & Co. v. Stern, 9th Dist. No. 15345, 1992 Ohio App. LEXIS 4218, at *25 (Aug. 19, 1992) (“[U]nder appropriate circumstances, the trial court may exercise its discretion and stay the execution of judgment without requiring the appellant to post a supersedeas bond.”).

Additionally, the government is never required to post a bond. Civ.R. 62(C) (“When an appeal is taken by this state or political subdivision, or administrative agency of either, or by any officer thereof acting in his representative capacity and the operation or enforcement of the judgment is stayed, no bond, obligation or other security shall be required from the appellant.”).

Finally, no bond may be required where the appeal arises out of an administrative decision wherein no money damages are at issue (for instance, a zoning appeal). Trademark Homes v. Avon Lake Bd. of Zoning Appeals, 92 Ohio App. 3d 214, 634 N.E.2d 685, 1993 Ohio App. LEXIS 6239 (Ohio Ct. App., Lorain County 1993) (finding that a supersedeas bond under R.C. 2505.06 is required only where a judgment was rendered for money damages), dismissed, 69 Ohio St. 3d 1449, (1994).

What if the losing party does not or cannot post the bond?

Unfortunately, indigence is often not an excuse recognized by courts. Instead, “R.C. 2505.11 provides a mechanism for substituting the supersedeas bond requirement in connection with an appeal.”GPI Distribs. v. Northeast Ohio Reg’l Sewer Dist., 8th Dist. Cuyahoga No. 106806, 2018-Ohio-4871, ¶ 27 (rejecting appellant’s argument that it could not post bond because it was indigent). That is, “[a] conveyance of property may be ordered by a court instead of a supersedeas bond in connection with an appeal” (i.e., in lieu of money). R.C. 2505.11.

If the movant/appellant fails to post a bond, when required, no stay of execution is perfected and the trial court retains jurisdiction, thus, rendering dismissal of the appeal appropriate.See generallyDennisonv. Talmage, 29 Ohio St. 433 (1876) (dismissing appeal for failure to pay bond); Collins v. Millen, 57 Ohio St. 289 (dismissing appeal for failure to pay bond). See alsoHoward v. Howard, 2d Dist., 1989 Ohio App. LEXIS 3643, *5-6 (Sept. 19, 1989), citing State ex rel. Klein v. Chorpening, 6 Ohio St. 3d 3 (1983) (“Until and unless a supersedeas bond is posted the trial court retains jurisdiction over its judgment as well as proceedings in aid of the same.”).

Let us help in your appellate matter

We are proud of our appellate success in Ohio, Kentucky and Federal Courts, including important against-the-odds victories at:

  • the United States Supreme Court (we had lost the issue three times in the trial courts of Southern Ohio and twice in the 6th Circuit Court of Appeals, and yet won 9-0 at the Supreme Court on an important First Amendment issue) and
  • Ohio Supreme Court (we lost at the trial court and then lost 3-0 in the appeals court, but won 7-0 at the Ohio Supreme Court on an open meetings issue).

The above authorities provide just a glimpse of how the appellate process can be tricky.

If you’d like to discuss your rights and responsibilities on appeal, please don’t hesitate to contact Casey Taylor ((513) 943-5673 ) or Brad Gibson ((513) 943-6661).

A cashier’s check is better than an ordinary personal check, right?  You can rely on it and turn around the cash quickly, right?

Well, no.

Not only is a bad or fraudulent cashier’s check no better than a bad personal check, there is raging fraud involving cashier’s checks on the internet: Craigslist, Facebook marketplace, etc.

Read this article on the topic.

It is common practice for employers who are considering a new hire to conduct reference checks on prospective candidates for the position. Obtaining information from a candidate’s former employer obviously can be a useful tool in making a good hiring decision. So why is it often so hard to get references from previous employers?

Many former employers are very reluctant to provide anything but the most basic and minimal information about their former employees. Most will take the “name, rank, and serial number” approach to reference requests. They will state only (1) whether the personal actually worked there or not, (2) if so, what the person’s job was, and (3) their dates of employment.

Unnecessary exposure to a “chatty” employer

Employers often take this approach because they are concerned about legal liability. They worry that if they give a bad reference about a former employee, they will be sued for defamation of character by that employee. They also worry that if they give a good reference about a former employee, and the employee gets hired into a new position because of it, but turns out to be a terrible worker, they will be blamed by the new employer for causing the hire of a terrible employee.

Does this really makes sense? Are employers right to be concerned about giving references? Should they really be reluctant to provide honest references about their former employees? I’ve heard from many people that they actually think it is illegal for an employer to give any information about a former employee other than “name, rank, and serial number” type of information. Is this correct?

Specific statutory protection for employers

Actually no. At least not in Ohio. In fact, the opposite is true. Ohio law explicitly protects employers from liability for giving out references on former employees – good or bad. The theory behind the law is that the flow of accurate information about employee performance should not be inhibited. That information allows employers to make good hiring decisions, and the dissemination of that information should therefore be encouraged – not discouraged.

There are two exceptions to Ohio’s law that provides for employer immunity in the giving of references. First, an employer is not immune from liability if it gives out information that it knows to be false, or that it gives out with a malicious purpose, in bad faith, or with an intent to mislead. Second, it may not engage in unlawful discrimination – on the basis of race, sex, age, etc. – in the giving of references.

Conclusion

But as long as the employer is not being unlawfully discriminatory, and does not knowingly or maliciously give out false information, it cannot be subject to any legal liability in the giving of references.

If you have any questions – as an employer or an employee – about how reference requests should be made or handled, be sure to contact a competent employment attorney.

In a recent case, we defended a couple who were being sued by the buyers of their former home; alleging that my clients had engaged in fraud in completing the residential disclosure form. As has been discussed in previous blog posts here and here, Ohio law requires that the seller of residential property complete a disclosure form relating to potentially issues – chief among them water intrusion.

Our clients completed the disclosure form noting that they had experienced a water intrusion event when the sump pump failed; and that they hired a local water remediation firm for the clean-up.

Shortly after closing, Greater Cincinnati experienced record precipitation, and the basement flooded. The buyers filed suit claiming that the sellers had lied on the disclosure form.

Necessity of Justifiable Reliance

A claim for fraud requires that the plaintiff actually relied on the supposedly fraudulent misrepresentation, and that she was justified in so doing. This means that for instance, if the buyers were skeptical of the sellers’ disclosure form, or found their own evidence that contradicted the disclosure form, the buyers cannot be said to be “relying” or that their reliance is “justified.”

Additionally, in this instance our clients did disclose what they knew and therefore did not make any fraudulent misrepresentations at all. But simply disputing the allegations is not enough to win the day in court. We sought evidence to undercut all of the allegations.

 

Text Messages Undo the Buyers’ Claims

After the filing of the lawsuit, we conducted discovery, including requesting copies of text messages and emails between the buyers and their real estate agent. The text messages revealed that prior to even making an offer on the home, the buyers told their agent that they knew that water intrusion and mold was an issue. Indeed, the buyers “priced the risk into their offer.” In one text message the buyer stated: “A little concerned with the basement and flooding. They have had issues. Not sure it isn’t why these people are selling.” and “We love it. Just not for $300k . . . Especially with water damage . . . Don’t want to end up upside down or having to fix water damage etc.” And, true to their word, the buyers did not pay $300,000; they paid $275,000 for the home, pricing the potential cost of the anticipated water damage.

At one point the buyers asked their agent for a copy of the documents from the water remediation company the sellers had used. Unfortunately, the buyers’ agent never followed up and asked the sellers for those documents.

After signing the contract, the buyers hired an inspector and instructed him to conduct a mold test. For whatever reason, the inspector did not conduct a mold test, and the buyers did not follow up.

Summary Judgment

Armed with the buyers’ communications with their agent, and the disclosure form, we filed a motion for summary judgment. We argued that the disclosure form was accurate and put the buyers were on notice of water intrusion. Additionally we argued that the buyers’ communications with their agent proved that they were skeptical about the information the sellers provided (meaning they were not relying on the disclosure form) and priced the question into the purchase price.

The court agreed with our argument; “The [buyers’] personal notes and text messages with their real estate agent evince that they had ongoing, multiple concerns about water damage and mold based on the Disclosure Form and their own observations in inspecting the basement.” “Accordingly, the court finds that the [buyers] could not have justifiably relied on any fraudulent misrepresentation or concealment by the [sellers]. As such, their claim for fraud must fail, and summary judgment is appropriate as a matter of law.”

The Lessons

For attorneys defending these cases the lesson is clear, make ample use of discovery. Turn over every stone.

For the plaintiff’s attorney, ask more questions up front. Conduct your own “discovery” on your client, ask for those text messages before the defense attorney does. Don’t let your client waste your time litigating a bad claim.

For home sellers, make sure you complete the disclosure form to the best of your ability; knowing that there are brazen people out there who will file suit even though you disclosed issues and even when the are going to have to turn over the evidence that sinks their own case.

For buyers, remember in Ohio caveat emptor is the law. Make sure you get all the information you asked your agent to get you. Make sure your inspector conducts all of the inspections you asked for. And, when trouble arises in your new home (as it inevitably will) be honest with yourself about what you knew when you bought the house. Don’t bring lawsuits that are doomed to fail hoping the other side will roll over. Our civil litigation system only works when people do not abuse it.

Contact Christopher P. Finney at 513-943-6655 or using this form if you’ve sold a home and the buyer is now claiming that you did not disclose an issue.

We’ve heard it said a million times (and said it ourselves a million more), “the recent sale price of a piece of real estate is the best evidence of its value.” And the concept of sales price as value is so ingrained in our minds that we sometimes forget that this is just shorthand, that the actual language of the statute is what matters; and, ultimately, what must be proven before the board of revision or the board of tax appeals.

“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 may consider the sale price of such tract, lot, or parcel to be the true value for taxation purposes.” R.C. 5713.03

 

What is “Arm’s-Length”

What the actual language of the statute means is that the sale has to be arm’s-length: “A transaction between unrelated parties under no duress.” (Appraisal Institute). Boards of Revision and the Board of Tax Appeals look for the following factors when determining whether a sale price should be adopted as the true value:

  1. Buyer and Seller are typically motivated.
  2. Both parties are well informed or well advised and each is acting in his/her own best interest.
  3. A reasonable time is allowed for exposure in the open market.
  4. Payment is made in terms of case in U.S. dollars or financial arrangements comparable thereto and
  5. The price represents normal consideration for the property sold, unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.
The Board of Revision

Recently Ohio’s Ninth District Court of Appeals upheld a decision by the Board of Tax Appeals to reverse the decision of the Summit County Board of Revision to adopt the online auction price as the true value.

In Green Local Schools Board of Education v. Manolakis, et al. 2019-Ohio-4250, the property owners initially filed a complaint with the Summit County Board of Revision seeking to lower the value of their home from $1,498,350.00 to $836,300 – the owners’ purchase price in an online auction. Before the Board of Revision, the owners explained that the property had been subject of a sheriff’s sale and that the foreclosing bank had purchased the property at that sale. A few months later, the bank placed the property for sale via an online auction site, hubzu. The owner’s put in a bid and won.

The Board of Revision accepted the owner’s testimony and adopted the sale price. However, the school board appealed to the Board of Tax Appeals and pointed to a lack of evidence supporting a finding that the auction was “arm’s-length.”

The Board of Tax Appeals

After the property owners prevailed at the Board of Revision, the local school board (which typically receive 60-70% of the property tax collections) filed an appeal arguing that the owners did not meet their burden to show that the sale was “arm’s-length.”

The owners testified at the Board of Revision that they had no relationship with the seller but were unable to provide any information about the bank’s motivation in selling. Notably, the owners were unable to show that the property had been marketed for sale other than via a sign in the yard of the property one week before the auction, or whether there was a minimum bid for the auction, or any other bidders.

Another problem for the owners is that they agreed to let the Board of Tax Appeals decide the case without putting on any additional evidence. So the owners forfeited the right to supplement the evidence to bolster their claim that the sale was arm’s-length.

The Board of Tax Appeals, looking only at what was before the Board of Revision found that there was not enough evidence in the record to show that the sale was arm’s-length. And, once the sale price was disregarded, the only evidence of value was the auditor’s original value. So the Board of Tax Appeals reinstated the auditor’s value $1,498,350.00.

The Court of Appeals affirmed the decision of the Board of Tax Appeals, finding that “we cannot say that the BTA was unreasonable in concluding that the evidence of value presented by Mr. and Mrs. Manolakis to the BOR was not sufficient.”

The Lesson

Don’t take the Board of Revision process lightly. This is a serious endeavor – particularly when you are seeking a substantial  reduction in value. Remember, when you bring a challenge to the Board of Revision it is your burden to prove that your proposed value is right and that the auditor’s value is wrong. Bring everything you can think of to prove your case. And if there is an appeal, take the opportunity to bring in additional evidence to bolster your case.

Your Case

Finney Law Firm has represented commercial and residential property owners (and one school board) before the Boards of Revision throughout Ohio and before the Ohio Board of Tax Appeals in property tax valuation challenges.

Every case should be evaluated based on its own unique set of circumstances. The time to file a challenge begins January 1 of each year and ends March 31. If you have questions about the value of your property, or if you recently purchased property at a price less than the auditor’s value, we can help. More information about the property tax valuation process is available here.

Contact Christopher P. Finney at 513-943-6655 or contact us here.

In June 2019, Cincinnati City Solicitor Paula Boggs Muething filed suit against the state of Ohio, arguing that a state law provision prohibiting cities from enacting their own firearms regulations violates the Ohio Constitution. Unfortunately, it seems, she went off “half-cocked.”  We say this because, while the suit was brought in the name of the City of Cincinnati, the Cincinnati City Council never voted to authorize the lawsuit.

State Representative Tom Brinkman

On July 19, 2019, State Representative, and Cincinnati resident, Tom Brinkman sent a letter to Ms. Boggs Muething demanding that she seek an injunction to restrain the abuse of corporate powers (in essence to sue herself to keep her from bringing suit in the City’s name without specific authorization from the City Council).

Ms. Boggs Muething rejected Mr. Brinkman’s demand, thus permitting Brinkman to file suit himself on behalf of the City. Brinkman filed suit on August 13, 2019, and a few days later, the court ordered Brinkman’s suit consolidated with the original lawsuit against the State of Ohio.

While the lawsuit has been presented as an attack on the City’s efforts to regulate firearms, the lawsuit simply seeks to have the City Solicitor live within the bounds of her authority. If the Cincinnati City Council wishes to authorize the Solicitor to bring suit, she would be authorized to do so. But, to date, the council has not authorized such a suit and it is improper to have the solicitor deciding on her own to bring suit in the City’s name. This is an abuse of her power and everyone concerned about transparency and accountability should agree that Council’s authority should not be usurped.

The State of Ohio filed a motion to dismiss the City’s original complaint, the city’s response to that motion is due August 19, 2019.

Read Brinkman’s Complaint here  and Motion for an Injunction here. Fox 19’s coverage of the suit is available here.

The Ohio standard for “marketable title”

The standard for real estate title is, without putting too fine a point on it, pristine.  This is true not only in Ohio, but but in every state.

Indeed, one really could put a fine point on it.  Nearly any title defect can be a “cloud” on title that impairs its marketability.

Some minor title defects are OK

As is addressed here, some title defects can be “papered over” with title insurance; others are made acceptable under the marketable title act or standards and customs that allow title attorneys and title insurance companies to ignore minor defects.  Both of these solutions can allow a transaction to close.

But the standard in title is, essentially, perfection.  A buyer is not going to buy, a lender is not going accept a mortgage to secure a loan, and a title insurance company is not going to insure matters that are a “cloud” to title to real estate.

An unreleased Land Installment Contact “clouds” title

I recently helped a client who had “sold” their home on Land Installment Contract.  After three years of payments, the buyer was to pay the balance of the Land Installment Contract, a “balloon payment,” and then get a deed conveying title to the property.  Unfortunately, the buyer defaulted and moved out of the property at the end of the term.

[Is the buyer liable for monetary damages in such circumstance?  Probably.  But the cost to pursue those claims many times exceeds the recovery.  Many sellers are wise to just pack their bags and move on to the next opportunity.]

The seller was able to quickly re-sell the property to another buyer, but the recorded land installment contract constituted a “cloud” on title, making title unmarketable.  When the closing was set to occur, the title insurance company for the lender and buyer refused to pass on the title.

How do you clear title “clouds”

There are two ways to clear a “cloud” of this type: (a) buyer and seller jointly execute a notarized document in recordable form voluntarily terminating the Land Installment Contract or (b) a signature of a Common Pleas Court Judge in an appropriate proceeding extinguishing the Land Installment Contract and then the passage of an additional 30 days to avoid an appeal of that decision (or the exhaustion of appellate rights all the way through the Ohio Supreme Court).

Other than these two alternate steps, there is no “shortcut” to clear and marketable title to defeat a Land Installment Contract that is of record.

And the judicial proceedings could take 12 to 36 months, or even longer, to clear the title problems.

Many title problems can only be addressed in the same way: Either the party who has a colorable claim must sign a recordable instrument releasing the claim or a Judge, after appropriate due process of judicial proceedings, signs an Order wiping away the title claim.  This can be an extended and expensive undertaking.

How can an owner avoid the fate of a “clouded” title?

How can a seller avoid the fate of an impaired title?

First, buy property only after a title examination and with a proper owner’s policy of title insurance.

Second, once you own property that has clear title, don’t sign and record a Land Installment Contract clouding the title.  (Or, get a significant enough up-front down payment make it worth the while of judicially extinguishing the buyer’s interest at a later date if he defaults.)

Similarly, granting voluntary but poorly-thought-through covenants, easements, mortgages and other instruments can foul one’s real estate title and make the title either unmarketable or less valuable than otherwise might be the case.

Involuntary “clouds”

This blog entry addresses problems that an owner causes by his own signature.  But other title problems can arise from, for example, mechanics liens arising from unpaid claims of a contractor on real property, defects that existed when an owner took title to property, and affidavits that another party places of record unilaterally declaring an interest in your land.  These, too, may require one of the two steps noted above to clear, but they are not as easily avoided as ones created by the owner’s own hand.

Conclusion

The essential message of this blog entry is that title is a delicate thing, and can be “clouded” or impaired easily.  Thus, don’t voluntarily sign documents — even if they might initially seem like a good idea — that will constitute a cloud on title, at least not without careful consideration.  Cautiously think through the impact of documents that you voluntarily elect to place of record.