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Ohio Employment Law: Supreme Court to Decide Whether to Limit Class Action Suits in Employment Cases

Author By Stephen E. ImmPosted on

In recent decades, a great many employers – especially larger companies – have moved to require their employees to sign arbitration agreements as a condition of employment. The agreements are typically included in a big stack of papers employees are given – and never read – on their first day. They usually sign the agreements without thinking.

Courts have historically favored these agreements as a way to limit the cost and duration of litigation. (Arbitration is normally a more limited process than litigation.) Employers like them because they believe arbitrators are more likely to be sympathetic to them than juries are. Employee advocates don’t like them for the same reason.

Some employers have recently taken to using these agreements as a way to accomplish another goal – eliminating class action suits brought by large groups of employees. Employers strongly dislike class action suits, and some have put clauses in their arbitration agreements that say the employee will not bring or join in any class actions. The employee thus agrees that any claims he or she has against the employer will be brought individually – rather than as part of a class – and that they will be brought in arbitration rather than in court.

The question has arisen, however, as to whether such “no class action” clauses are legal and enforceable. The reason this is an issue is that federal labor law guarantees employees the right to engage in “concerted activity” with one another about the terms and conditions of their employment. A class action brought by multiple employees is by definition a form of “concerted activity.” So a clause prohibiting class action participation by employees arguably violates federal law, and should not be enforced.

Different courts and agencies have reached different conclusions about this, and the U.S. Supreme Court has now taken up three cases raising the issue. We should know in the coming months whether employers will be permitted to avoid class action suits through the use of these arbitration clauses. Advocates for both employers and employees are watching very closely.

Homebuyers Beware – Is the Seller Current on the Water Bill?

Author By Finney Law FirmPosted on

If you are purchasing a home in a county with a countywide water system (e.g. Butler County), you should be aware of a little known wrinkle in the law that could leave you on the hook for your seller’s water bill.

R.C. 6103.02(G) gives a county water works three options to collect unpaid water bills: create a lien against the property; collect against the owner or tenant; or even terminate the water service until the outstanding bill is paid.

These methods of collection apply not only to the tenant or owner who incurred the water bill, but subsequent purchasers as well.

This has become an issue in recent years as Butler County Ohio has become aggressive in its collection efforts, often ensnaring unwitting homebuyers.

Protect Yourself

One thing every homebuyer can do is simply ask the question: Are there any outstanding water bills?

State law gives buyers another option, R.C. 6103.02(G) allows a buyer, or her agent, to request that the county have the meter read and to provide a final bill for the property before the closing. Such request must be made at least fourteen days prior to the closing date, and the county has ten days to read the meter and provide the final bill.

Make sure any unpaid balance is paid prior to closing.

Those steps will help you avoid an unpleasant water bill as you settle into your new home.

Learn more about important questions to ask when you buy a home here.

Ohio Budget Bill Includes Changes to Tax Appeals Procedure

Author By Finney Law FirmPosted on

A recent change to Ohio Revised Code Section 5717.04 will remove the option to file an appeal from a Board of Tax Appeals decision directly to the Ohio Supreme Court.

Starting September 29, 2017, Ohioan’s unhappy with a Board of Tax Appeals decision will now have to file their appeal with the local Court of Appeals. Under the previous law, appellants had the choice of filing directly with the Ohio Supreme Court.

However,  a party to the appeal can file a petition with the Ohio Supreme Court requesting that the Court take jurisdiction over the appeal. The Supreme Court may do so if the appeal involves a substantial constitutional question or a question of great general or public interest. In order to attempt to bypass the Court of Appeals, one must still first file the appeal with the Court of Appeals and then file a petition with the Supreme Court within thirty days after the appeal is filed with the Court of Appeals.

Passed as part of the state budget, this change will add additional litigation, time, and expense to obtaining finality in tax disputes.

Finney Law Firm practices extensively before the Board of Tax Appeals in property valuation measures. Click here to learn how we can help you navigate through the property valuation process.

Enquirer reports on developments in Tea Party v. IRS litigation

Author By Christopher P. FinneyPosted on

It has been four long years of litigation, class certification, motions, discovery, an interlocutory appeal to the 6th Circuit, and more motions, but the only certified class action against the IRS arising from Tea Party targeting is approaching trial in 2018, if the Plaintiffs survive the IRS’ motion to have the case preemptively disposed of on summary judgment.

Those motions are being briefed right now before U.S. District Court Judge Michael Barrett, and today’s Cincinnati Enquirer has the story on those briefings here.

A few things to note about the case:

  • The Jeff Sessions Justice Department continues to defend the suit under President Donald Trump in much the same vigorous fashion as it did under Loretta Lynch and President Obama.
  • IRS Commissioner John Koskinen, whom Congressional Investigators accused of stonewalling investigators and covering up for Lois Lerner’s and the IRS’ excesses, remains in his role.
  • Judge Barrett has for now sealed the deposition transcripts of Lois Lerner and Holly Paz, the architects of the IRS targeting.  The sealing was at the request of Lerner and Paz who claimed to fear harassment if their testimony were revealed.

This firm is pleased to serve as local counsel, along with David Langdon, to the Tea Party groups in this important litigation.

A sad and funny story for Constitution Day

Author By Christopher P. FinneyPosted on

We love celebrating September 17 each year at the Finney Law Firm, in part because we — as should all Americans — celebrate the document that brought lasting freedom and prosperty to our shores through recognition and respect to property rights, respect of natural rights, and acknowledgement of the failings of man through the checks and balances it contains.  These virtures are as a general proposition underappreciated by the populace and the foundation of the liberties we depend upon, I would humbly submit.

We also love celebrating this day because many of our attorneys have been able to successfully utilize constitutional theories, in some cases cutting-edge constitutional theories, to right the wrongs of our society and the excesses of our government leaders.

Finally, one of the blessings we remember on Constitution Day each year was a special and ironic story of the distinct failure of our elected officials to understand the rights granted by the U.S. Constitution and the corresponding limitations on their powers.

[I’ll update this story when I get a chance to check the docket, but as I recall, the year was around 2011 and the offending goverment was the City of Astabula.]

The facts read like a law school exam question hypothetical.  But, it went like this:

The Ashtabula County Tea Party desired to hold a rally on Constitutuon Day in something in town they called the “Public Square.”  This was a typical town commons or “public square” in the middle of town.  For constitutional novices, it would be what the Courts commonly refer to as a “quintessential public forum,” the type of property where First Amendment liberties are given their greatest latitude.

At first, the City approved their application for the use of the square, later explaining that they thought the “Tea Party” was a group of little old ladies serving tea.  (Yes, the Tea Party was at its zenith at this time, so the City fathers simply must have been living under a rock to think this.)

But, when they learned that the topic of a Constitutuion Day rally in the Public Square was to discuss public policy and rally the faithful towards civic action, the City fathers demurred, and revoked their assembly permit.  In other words, based solely on the content of what was to be discussed and addressed that day (“pass the crumpets” versus “vote the bums out”), the City decided to prohibit the assembly and the attendant speech.

This would be a textbook example of impermissible content-based discrimination in a public forum, a violation of the First Amendment to the United States Constitution.

We, of course, immediately brought suit on behalf of the Tea Party.  Once City officials were staring at a hearing before a Federal Judge to explain themselves, they quickly “got religion” and a newfound understanding of the U.S. Constitution, and allowed the rally.

So, Constitution Day, September 17, has a special meaning for me and our firm, and the fine organizers of the Ashtabula County Tea Party.

Ohio Tax Law: Is your county starting a new tax triennial?

Author By Finney Law FirmPosted on

Finney Law Firm Property TaxEvery parcel of real property in Ohio undergoes a major “reappraisal” by the County Auditor’s office every six years and then a minor “update” in the three years in the middle of that six-year cycle.  Different counties in Ohio are on a different six year and three year cycle.

Below is a list of the counties going through either a major “Reappraisal” or a minor “update” this year. These values will appear on your January 2018 tax bill.

In Southwest Ohio, Hamilton County is undergoing a full reappraisal this year. Butler and Clermont Counties are update counties.

It is important to note that because these counties will be starting new triennials, property owners may bring a complaint before the Board of Revision regardless of whether a prior challenge has been brought. Every property owner has a right to challenge her property assessment before the Board of Revision in the new triennial.

While property owners in Hamilton and Clermont Counties have already received notices of the tentative values for the new triennial, the official notice of the 2017 value will come with your January 2018 tax bill. Remember you will have until the end of March 2018 to challenge the 2017 valuation.

Finney Law Firm will be giving presentations on the Board of Revision process later this year. If you are interested in attending  a presentation, contact us here. Learn more about Finney Law Firm’s property tax practice here.

The schedule of counties starting a new triennial this year follows:

Reappraisal Counties
Auglaize
Clinton
Darke
Defiance
Delaware
Franklin
Gallia
Geauga
Hamilton
Hardin
Harrison
Henry
Jackson
Licking
Mahoning
Mercer
Morrow
Perry
Pickaway
Pike
Preble
Putnam
Richland
Seneca
Shelby
Trumbull
Vanwert
Wood

Update Counties
Ashland
Ashtabula
Athens
Butler
Clermont
Fulton
Greene
Knox
Madison
Montgomery
Noble
Summit
Wayne

Ohio Supreme Court: Sale and Leasebacks are not Arm’s-Length Transactions

Author By Finney Law FirmPosted on

In a widely anticipated decision that will have major implications for Ohio businesses, the Ohio Supreme Court today ruled that, for purposes of property tax valuation, sale-leaseback transactions are not “arm’s-length.” Meaning that county auditors and boards of revision should not simply adopt the sale price in such transactions as the “true value” when valuing real estate.

Writing separately, but concurring in the judgment, Justice Pat DeWine wrote to clarify that this  same reasoning should apply when a third party purchases a property that was subject to an earlier sale-leaseback transaction, “if the initial sale does not reflect the true value of the property because for the leaseback arrangement, then neither should a subsequent sale of the same property subject to the same lease.” The majority opinion leaves some question on that issue.

Today’s ruling in Columbus City Schools Bd. of Edn. v. Franklin Cty. Bd. of Revision, Slip Opinion No. 2017-Ohio-7578, follows the ruling in Terraza 8, L.L.C. v. Franklin Cty. Bd. of Revision, ___ Ohio St.3d ___, 2017-Ohio-4415, ___ N.E.3d ___., clarifying that indeed, the legislature meant what it said when it amended R.C. 5713.03.

Click here to read about the Terraza 8 decision.

For more information on sale and leaseback transactions generally, click here.

Ohio Real Estate Law: Constructive and Resulting Trusts: Little-Known Exceptions to a Well-Known Rule

Author By Casey A. JonesPosted on

As first-year law students and many even outside of the legal community know, the “statute of frauds,” codified in Ohio R.C. 1335.04, requires that any interest in land be evidenced by a writing.

Principle of Part Performance

But this general principle is not without exception. One of the more commonly referenced exceptions is part performance. Sites v. Keller, 6 Ohio St. 483, 489-490 (1834) (“Whenever an agreement has been partly performed, and the terms of it are satisfactorily found, it will be enforced notwithstanding the statute.”); Shahan v. Swan, 48 Ohio St. 25, 37, 26 N.E. 222 (1891) (“[I]f the acts of part performance clearly refer to some contract in relation to the subject matter in dispute; its terms may then be established by parol.”).

Other exceptions

However, lesser-known exceptions exist, as well, and are frequently neglected in the statute of frauds discussion. This has resulted in a misunderstanding among many as to the scope of the statute of frauds and when it precludes a claimed interest in land. Specifically, there are two types of equitable trusts that effectively circumvent the harsh consequences of requiring strict compliance with the statute of frauds: a constructive trust and a resulting trust.

Ohio Constructive Trust

“A constructive trust arises by operation of law against one who through any form of unconscionable conduct holds legal title to property where equity and good conscience demands that he should not hold such title.” Dixon v. Smith, 119 Ohio App.3d 308, 319, 695 N.E.2d 284 (3d Dist. 1997). Where one “who, by fraud, actual or constructive, by duress or abuse of confidence, by commission of wrong, or by any form of unconscionable conduct, artifice, concealment, or questionable means . . . either has obtained or holds the legal right to property which he ought not, in equity and good conscience, hold and enjoy,” equity will create a constructive trust. Ferguson v. Owens, 9 Ohio St.3d 223, 225, 459 N.E.2d 1293 (1984).

Additionally, at least one Ohio court has suggested that, “[d]espite the above cited language . . . a constructive trust may exist even where there is no evidence that the title to the property was obtained by improper means.” McGrew v. Popham, 5th Dist. No. 05 CA 129, 2007-Ohio-428. ¶¶ 17-19, citing Groza-Vance v. Vance, 162 Ohio App. 3d 510, 520 (10th Dist. 2005). The creation of a constructive trust is premised upon the unjust enrichment that would result if the person holding legal title to the property were allowed to retain it. Ferguson, at 226.

Ohio Resulting Trust

The Ohio Supreme Court has also recognized “a resulting trust as one that the court of equity declares to exist where the legal estate in property is transferred or acquired by one under circumstances indicating that the beneficial interest is not intended to be enjoyed by the holder of the legal title.” Univ. Hosps. of Cleveland, Inc. v. Lynch, 96 Ohio St.3d 118, 772 N.E.2d 105, 2002-Ohio-3748, at ¶ 56, citing First Natl. Bank of Cincinnati v. Tenney, 165 Ohio St. 513, 515, 138 N.E.2d 15 (1956). This concept is easily understood in the purchase-money context – “where property is transferred to one person but another pays the purchase price, the law presumes a resulting trust exists in favor of the person paying for the property.” Hollon v. Abner, 1st Dist. No. C960182, 1997 Ohio App. LEXIS 3814, at *5 (Aug. 29, 1997); Perich-Varie v. Varie, 11th Dist. No. 98-T-0029, 1999 Ohio App. LEXIS 3990, at *7-*8 (Aug. 27, 1999).

For example, in the Perich-Varie case, the court found that where an individual had been making the mortgage payments on property legally held in his former in-laws’ names, he had a full ownership interest in the property. This was true even though the in-laws argued that the mortgage payments were merely “rent” and even though he had only paid $12,000 of the $33,000 mortgage on the property. Perich-Varie, at * 4-5, * 10-11. To eliminate any inequity (after all, that’s what a resulting trust is all about), the Eleventh District required the lower court to order that the mortgage first be satisfied so that the in-laws were not obligated under a mortgage on a property in which they had no interest. Id., at * 14.

Conclusion

As you can see, constructive and resulting trusts represent some pretty significant departures from the rigid statute of frauds in the name of “equity.”  While a lot of confusion, disagreement, and, ultimately, litigation can be avoided by putting matters involving real property in writing, those who find themselves in a situation where their interest has not been reduced to writing are not necessarily without recourse if one of these equitable remedies applies.

 

Subrogation liens for medical bills paid by insurers in personal injury and medical malpractice cases

Author By Casey A. JonesPosted on

Many are surprised to learn that, if they receive a settlement or reward on a personal injury or medical malpractice claim, they are required to essentially “pay back” any party that paid medical bills on their behalf. This is called subrogation, and insurers may have both a contractual and an equitable right to it. Blue Cross & Blue Shield Mut. of Ohio v. Hrenko, 72 Ohio St. 3d 120, 647 N.E.2d 1358 (1995); Warmack v. Arnold, 195 Ohio App. 3d 760, 765 (1st Dist. 2011).

For example, if Joe gets rear-ended and suffers $10,000 worth of medical expenses (note: this is separate and apart from any property claim he may have for damage to his vehicle), $5,000 of which are paid by his auto insurance, $4,000 of which are paid by his health insurance, and $1,000 of which he pays out of pocket, Joe is required to pay his auto insurance and health insurance companies back for any amounts they paid on his behalf (here, $5,000 and $4,000 respectively).

This information often leads to a certain degree of panic to the tune of “What if I don’t get any settlement or I lose my case? Do I still have to pay them back?!” The answer is no. If you haven’t signed any sort of release interfering with the insurer’s rights, the insurer is free to pursue payment from the at-fault party. If there is a lawsuit filed, the insurer should be put on notice of that action and can protect their own interests accordingly.

The idea is just that an insured generally cannot interfere with the insurer’s right to subrogation, so any settlement ultimately needs to be approved by the insurer. See generally Chemtrol Adhesives, Inc. v. American Mfgrs. Mut. Ins. Co., 42 Ohio St. 3d 40, 537 N.E.2d 624 (1989) (explaining that where an insured releases his rights to claim injury under a settlement agreement, the subrogation rights of the insurer are effectively barred).  Perhaps the most common instance where an insurer refuses to consent to a settlement is where the settlement amount is less than what the insurer paid and, thus, would not compensate it. See, e.g., Erie Ins. Co. v. Kaltenbach, 130 Ohio App. 3d 542 (10th Dist. 1998) (requiring the insured to pay back the insurer in the full amount of the settlement where the insured accepted settlement of $4,462 despite subrogation liens totaling $5,000).

However, in many cases, insurance companies are actually willing to reduce the amount they will accept in satisfaction of their subrogation lien if it will help to inspire a settlement. This sometimes results in the injured/insured walking away with more money in his or her pocket.

Navigating the waters of insurance settlements, releases, subrogation liens, subrogation reductions, etc. can be tricky. This is where having an attorney with knowledge and experience in these matters can create immense value. Our firm has successfully handled various types of personal injury and medical malpractice claims. I would be happy to discuss with you any claims you believe you may have to determine if we can create value for you.

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