Our firm sometimes receives inquiries about areas of the law that few even consider until they are facing a potential lawsuit. Recently, one of those inquiries was whether one can be responsible for his or her tree falling and harming another or their property.

Generally, land owners do not owe a duty with regard to harm caused to another as a result of some natural condition of the land, provided that the harm occurs outside of the land. Heckert. V. Patrick, 473 N.E.2d 1204, 1206 (Ohio 1984). However, there are some exceptions with regard to injuries resulting from falling trees and/or branches. Id. at 1207.

“[A]n owner of land abutting a highway may be held liable on negligence principles under certain circumstances for injuries or damages resulting from a tree or limb falling onto the highway from such property.” Id. For example, “a possessor of land in an urban area is subject to liability to persons using a public highway for physical harm arising from the condition of trees near the highway.” This duty of an urban landowner includes a duty to inspect the tree to make sure that it is safe. Id. This is because urban landowners are thought to have fewer trees – thus, it is not too great of a burden to do so. See id.

However, for rural landowners, who potentially own entire forests of trees, an affirmative duty to inspect the trees would likely amount to a very heavy burden. Id. Therefore, the Ohio Supreme Court has adopted a distinction between rural and urban landowners in this respect. Id. As such, rural landowners have no duty to inspect trees growing on their property adjacent to rural highways, or to ascertain defects that may result in injury to someone travelling on the highway, but, to the extent a rural landowner has “knowledge, actual or constructive, of a patently defective condition of a tree,” that landowner must exercise reasonable care to prevent harm. Id. Constructive knowledge can result from the appearance of the tree, thereby giving notice to an owner that the tree is not in good shape and could fall. In recognition that the distinction between rural and urban areas may not always be an easy one to make as suburbia continues to grow and expand, the Court also provided a list of factors to be considered when making such determination, including “the location of the highway, its size and type, as well as the number of people utilizing it.” Id. at 1208.

Courts have generally applied the law as it relates to rural landowners to cases involving trees falling onto neighbors’ property (i.e., the landowner will be liable to the neighbor where the landowner has actual or constructive knowledge that the tree is defective. See Johnston v. Filson, 2014-Ohio-4758 (12th Dist. 2014) (granting summary judgment to a landowner upon finding that the landowner did not have actual or constructive notice of the tree’s condition); Motorists Mut. Ins. Co. v. Flynn, 2013-Ohio-1501 (4th Dist. 2013) (finding that photographs of a tree significantly leaning toward the neighbor’s house presented a genuine issue of material fact as to whether a reasonable person should have known that the tree posed a danger); Wertz v. Cooper, 2006-Ohio-6844 (4th Dist. 2006) (granting summary judgment in favor of landowner for damage resulting from the landowner’s tree falling onto its neighbor’s property because the neighbor failed to establish that the landowner had either actual or constructive knowledge of a patent dangerous condition of the tree).

So while, in most cases, you will not have an affirmative duty to go out and inspect every single tree on your property, actual or constructive (visible) notice that the tree is not in good shape could create liability if that tree were to fall and cause harm. The lesson? Don’t ignore unhealthy or potentially problematic trees/limbs.

When purchasing a home, most buyers take advantage of the common “home inspection contingency,” affording them the opportunity to have the property professionally inspected in order to reveal potential defects before moving forward with the purchase. For their own protection, many home inspectors have begun including clauses limiting their liability to the price paid for the inspection in their contracts. In essence, this means that, if an inspector charges $500 for the inspection but misses a defect that costs the buyer/homeowner $2,000, the inspector is only liable (if at all) up to the $500 amount, not the full cost of remedying the defect. But are these clauses actually enforceable?

Ohio courts seem to say “Yes.” Home buyers have argued that the clauses are unconscionable (or unfair). However, courts have noted that the clauses appear on the face of the contract, that buyers are able to read the contract and ask questions before signing, and that buyers are permitted to decline the clause or the contract or hire another inspector altogether if they do not agree to the clause. See Barto v. Boardman Home Inspection, Inc., 2015-Ohio-5210, ¶19 (11th Dist. 2015).  Therefore, such clauses are generally not considered unconscionable, and courts have continued to enforce them.

In fact, clauses limiting the liability of inspectors have even been enforced where they effectively preclude enforcement of arbitration clauses contained within the same contract. In McDonough v. Thompson, the parties were required under their contract to resolve any disputes through arbitration. 2004-Ohio-6647, ¶¶2-3 (8th Dist. 2004).  However, because the filing fee for arbitration exceeded the inspector’s maximum liability under the contract (i.e., the price of the inspection), the court declined to enforce the arbitration clause, but did enforce the limitation of liability. See generally id. The court found that “an arbitration clause is not enforceable when the clause, in conjunction with a limitation of liability clause, effectively denies a claimant any redress.” Id. at ¶13. Thus, not only are these clauses enforceable, but they seem to be enforceable even to the preclusion of other clauses carrying a general presumption of enforceability (as arbitration clauses do).

In light of the courts’ eagerness to enforce limitation of liability clauses in this context, a buyer’s best remedy might actually be against the seller of the home (to the extent the seller may have concealed or lied about the defect), and those cases can often be tenuous.

Read more here about home defects and residential property disclosure forms:

 

President Trump’s SCOTUS Nominee Neil Gorsuch

Our firm practices extensively in the First Amendment arena.  Thus, it was with great interest that we saw this article on the SCOTUS Blog on U.S. Supreme Court nominee Neil Gorsuch’s First Amendment jurisprudence.

A quick summary:

In many ways, Gorsuch’s opinions in this area are similar to those of the late Justice Antonin Scalia – with the possible exception that Gorsuch has been more willing to find not only that the First Amendment has been violated, but also that defendants were not entitled to qualified immunity in those cases.

It appears the First Amendment will continue to have solid backing from SCOTUS with Justice Gorsuch on the Court.

Soon-to-be-Judge Curt C. Hartman

We are pleased to pass along this press release from the office of Governor John Kasich that was just posted a few minutes ago.  It tells us that our very own Curt C. Hartman — “of counsel” to this firm since its inception — is being appointed to the Hamilton County Common Pleas Court.

Mr. Hartman is an extraordinary litigator.  He primarily has handled this firm’s appellate practice, including convincing the United States Supreme Court three times to accept cases of this firm, and winning each 9-0.  He also has handled numerous cases before the Ohio Supreme Court, Ohio’s many appellate Courts, and 6th Circuit Court of Appeals.

“We are sad to lose such a capable litigator from our ranks,” said Finney Law Firm owner Christopher P. Finney.  “But we are thrilled for the people of Hamilton County to have such a capable judge on the bench.  It is to the considerable credit of Governor Kasich that he recognized the talent of Curt Hartman and elevated him to this important position.  Congratulations to our own Curt C. Hartman!”

Mr. Hartman will be sworn in before month’s end.  Stay tuned for details of the ceremony.

Every 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 are listed the counties that went through a major “Reappraisal” in 2016 (that new value first appearing on the January 2017 tax bill) and a minor “update” in 2016 (that new value also first appearing on the January 2017 tax bill).

The other thing important about the valuation cycle is that regardless of whether another tax complaint was brought previously, every property owner has the right to challenge his property’s assessment before the Board of Revision in the new triennial.

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

Reappraisal Counties
Adams
Columbiana
Hancock
Hocking
Holmes
Lawrence
Meigs
Monroe
Paulding
Scioto
Tuscarawas
Washington

Update Counties
Carroll
Champaign
Clark
Fairfield
Logan
Marion
Medina
Miami
Ross
Union
Wyandot

If you’d like our assistance with a property valuation, use our secure contact page, or contact Christopher P. Finney at 513-943-6655.

A common question I get is whether an employer must pay an employee for their accrued but unused vacation when they leave employment. If an employee has left under difficult circumstances, such as an involuntary discharge, there can easily be a dispute about post-employment issues like this.

Under Ohio law, accrued vacation is considered an earned benefit that the employee has a legal entitlement to. Therefore, an employee’s right to pay for vacation that was not used during employment will normally survive the employee’s termination or resignation, and payment will be owed.

I say “normally” because an employer can change this through a written policy that is clearly communicated to employees, in an employee handbook or otherwise. If the employer promulgates a policy stating that any unused vacation pay is forfeited when employment ends, that policy is legally enforceable, notwithstanding the general rule.

Employers should carefully consider whether to have a blanket policy like that, however, as it can lead to some harsh results. And some employees who are planning to quit, being aware that their vacation pay will be lost when they leave, will simply take their vacation right before they resign – and quit without notice as soon as they return.

For some employers, a sensible middle ground may be to have a policy stating that vacation pay is forfeited only under certain circumstances – such as if an employee is discharged “for cause,” or if she or he leaves without giving two weeks notice.

Please contact us to discuss what makes the most sense for your business, or if you have questions about you right to vacation pay.

Hamilton County Common Pleas Judge Steven E. Martin

In a case expected to be appealed to Ohio’s Supreme Court, Hamilton County’s First District Court of Appeals upheld the ruling of Common Pleas Judge Steven Martin in Vontz v. Miller, et al., 2016-Ohio-8477, that the fifty percent owner of a closely held corporation owes her co-owner a heightened fiduciary duty of “utmost good faith.”

Two siblings share ownership of a beer and wine distributorship – both owning fifty percent of the shares of the company. Thus, argued Miller, neither has a controlling ownership. However, in this instance, the company’s board consisted of Vontz, Miller, and Miller’s husband and two children. Thus, while Vontz is a fifty percent shareholder, the board is dominated by Miller.

Vontz, in an effort to balance control of the company, had sought to call a shareholder meeting to elect a new board. Miller refused. Vontz then brought suit against his sister and her family.

Judge Martin issued an injunction to force a shareholder meeting. Miller and her family appealed. Arguing, in part that Miller, as a fifty percent owner (i.e. less than a majority owner) did not owe a fiduciary duty to her brother who also owned exactly fifty percent of the company. Absent a fiduciary duty to her brother, Miller should not be required to attend or otherwise acquiesce to a shareholder meeting.

The court found that where, as here, one owner dominated the board and refused to adhere to corporate formalities (e.g. holding shareholder meetings where that owner’s family could be removed from the board), then the heightened fiduciary does attach – despite the semantic arguments over whether there can ever be a “controlling shareholder” where two owners each hold fifty percent ownership:

Because Miller so dominated the corporation that she was in control to the exclusion of Vontz, the unusual facts of this case demonstrated that Miller was the controlling shareholder, even though she owned only 50 percent of the voting shares.

Under her heightened duty of good faith and loyalty, she had an obligation of fairness to Vontz. Her duty required her to act for his benefit by protecting his right to vote for the election of new directors. She breached that duty because, as Vontz clearly demonstrated, he was unable to exercise his voting power due to a freeze-out by Miller.

The Court of Appeals, while ordering modifications to some of the particulars of Judge Martin’s ruling, upheld the substance of Martin’s ruling.

Closely held corporations bring with them unique challenges, particularly when the owners are family as well as business partners. Finney Law Firm, can help you avoid these pitfalls ahead of time and navigate through them if a challenge has already arisen.

Preble County Common Pleas Court Judge David Abruzzo

It is a common maxim that you are always liable for your own torts. Meaning, if someone is injured as the result of your own negligence, you will be liable, even when acting through a corporation or limited liability company.

A recent 12th District Court of Appeals case out of Preble County (Whitson v. One Stop Rental Tool and Party, et al. CA 2016-03-004) illustrates one major caveat to the maxim: parties to a contract can agree to hold the other party harmless for negligence, nonetheless, “contract clauses that relieve a party from its own negligence, while generally upheld, are not favored by the law and are to be strictly construed.”

Richard rented a bounce house from One Stop Rental Tool and Party. While Richard was unloading the bounce house from his pickup truck, the strap he was pulling broke and Richard fell out of the truck, onto the ground, suffering serious injuries.

Richard and his wife sued One Stop alleging negligence, loss of consortium, and malicious conduct (alleging that One Stop disregarded the probability that Richard would be injured in such a manner).

The rental agreement included a Release that read in relevant portion:

I understand and acknowledge that the activity to be engaged in through my rental of an inflatable, interactive amusement device, brings with it both known and unanticipated risks to guests, my invitees, and myself. Those risks include, but are not limited to fallings, slipping, crashing, and colliding and could result in injury, illness, disease, emotional distress, death and/or property damage to myself or my guests and invitees. I voluntarily release, indemnify, hold harmless and discharge One Stop Tool Rental, Inc. from any and all liability claims, demands, actions or rights of actions, whether personal to me or to a third party which are related to[,] arise out of or are in any way connected with my rental of the unit, including those allegedly attribute[d] to negligent acts or omissions. I agree to reimburse any reasonable attorney’s fees and costs which may be incurred by One Stop Rental Tool Rental, Inc. in the defense of any such liability claim, demand, action or right of action.

And a Hold Harmless Clause:

HOLD HARMLESS AGREEMENT. Customer agrees to assume the risks of, and hold Dealer harmless for, property damage and personal injuries, including death and dismemberment, caused by the equipment and/or arising out of Dealer’s negligence.

Preble County Common Pleas Judge David NAbruzzo, a no nonsense judge whom we have had the pleasure of appearing before, granted summary judgment against Richard, finding that the release and hold harmless clauses barred his claims, but allowing the wife’s loss of consortium claim to proceed.

The Court of Appeals noted that, “Richard did not read either document before signing them.”

Business owners should take this opportunity to review your contracts to determine if a hold harmless clause or mutual release clause are necessary; and make sure that such clauses will survive being “strictly construed” by the court. For consumers, this should serve as a reminder to read and understand the contract before signing.

Often the lease will provide the answer to this question, but in Ohio, absent a provision in the lease, R.C 5301.11 provides the default rule:

The lessee of a building which, without fault or neglect on his part, is destroyed or so injured as to be unfit for occupancy, is not liable to pay rent to the lessor or owner thereof, after such destruction or injury, unless otherwise expressly provided by written agreement or covenant. The lessee thereupon must surrender possession of such premises.

The first sentence of the statute provides that if the fire was not the fault of the lessee (tenant), the tenant is freed of her obligation to pay rent. However, the second sentence provides one condition, in order to be freed of her obligation to pay rent, the tenant must surrender possession of the premises.

Case law in Ohio on this point goes back to 1890, “[b]ut, to secure the benefit of the statute, the tenant must surrender or yield up all that remains of the premises embraced in the lease, without any purpose or intention of resuming possession thereof. The legislature has absolved the tenant from an onerous obligation, but the burden is removed only upon his compliance with the statutory condition.” Gay v. Davey, 47 Ohio St. 396, 402, 25 N.E. 425 (1890).

This makes perfect sense. The tenant is given the power to decide how to proceed, either maintain the lease while the necessary repairs are made and returning to the home, or unilaterally decide to terminate the lease – with the requirement that the tenant fully surrender possession of the premises (i.e. remove her belongings and with the understanding that she will not have a right to return after the repairs are made).

But the law does not allow the tenant to have it both ways. She cannot for example, stop paying rent but leave her personal property at the home, expecting to “restart” the lease once the repairs are made.

As noted above, R.C. 5311.01 is the default rule for both residential and commercial lease in Ohio, but the lease may provide a different provision. As always, read the lease.

Finney Law Firm can assist in drafting and enforcing your residential and commercial leases. Click here to contact us online or call (513) 943-6655 to speak with attorney Christopher P. Finney.

As a recent Wall Street Journal article pointed out, for any number of reasons, both legitimate and otherwise, we have seen a proliferation of service and assistance animals. From miniature horses as therapy animals to small dogs carried by airline passengers, to the more common seeing eye dog, Americans are ever more empowered to assert their entitlement to service and assistance animals.

Landlords are reporting questionable claims of disability that they suspect are aimed at getting around no pet clauses and pet deposits in leases. What is a landlord to do in the face of a suspicious claim of disability?

As part of the effort to protect people with disabilities from discrimination, the Fair Housing Act and the Americans with Disabilities Act limit a landlord’s ability to investigate requests for accommodations for service and assistance animals, but not all questions are foreclosed. This is a good thing and reflects our shared values because we want to encourage people with disabilities to get the necessary treatment and services; we want to open the opportunity for a full life to all. But we also don’t want people to make false claims of disability to obtain an improper benefit or unnecessary accommodation. To do so only serves to detract from those who truly suffer.

Recently a client called us needing help. The client owns a single family rental property and does not allow her tenants to keep animals. The tenant called in October about relaxing the no pets rule because he wanted to get his daughter a puppy for Christmas. The landlord declined. One week later, the tenant called again, this time to claim a need for an assistance animal and to request an accommodation.

The landlord had no prior knowledge of any disability and was obviously suspicious that this sudden need for an accommodation was simply a ruse to get around the no pets rule. She turned to us to determine what she should do. The landlord wanted to do the right thing, she wanted to comply with the law. But she also did not want to be taken advantage of.

After discussing the facts with the client and reviewing relevant statutory and case law, we sent a letter to the tenant explaining that the landlord had no prior knowledge that any member of the tenant’s family suffered from any disability, and asked for some documentation to establish (i) the existence of the disability and (ii) how the animal will provide a service or alleviate some symptom of the disability. We also asked for information about the specific animal they intended to bring into the home.

Not so surprisingly, the tenant never responded to our request for information, and no animal (service or otherwise) was brought into the home.

Note that landlords can be found in violation of the Fair Housing Act and Americans with Disabilities Act for even seemingly innocuous questions. If your tenant requests a disability related accommodation, you should consult an attorney about your specific facts and circumstances before making any investigation into the request for an accommodation. More information from the Department of Housing and Urban Development, Office of Fair Housing and Equal Opportunity can be found here.

If you have questions about your obligations under the Americans with Disabilities Act and the Fair Housing Act, use our secure contact page, or call Julie Gugino at 513-943-5669.