Oral Argument Previews

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Wednesday, June 6, 2007

Gordon Proctor, Director, Ohio Department of Transportation v. Kathy Kardassilaris et al. and Richard L. Blank et al., Case nos. 2006-1242 and 2006-1243
11th District Court of Appeals (Trumbull County)

State of Ohio v. Paul Fairbanks, Case no. 2006-1529
4th District Court of Appeals (Ross County)

James Sinnott et al. v. Aqua-Chem, Inc., et al., Case no. 2006-1604
8th District Court of Appeals (Cuyahoga County)

Minister Farmer's Cooperative Exchange Company, Inc. v. Roger H. Meyer and Minister Farmer's Cooperative Exchange Company, Inc. v. Robert H. Dues, Case nos. 2006-1061 and 2006-1069
3rd District Court of Appeals (Shelby County)

Paul Fisher v. Emma Hasenjager, Case nos. 2006-1815 and 2006-1853
3rd District Court of Appeals (Mercer County)


May Property Owner File Counterclaim Against ODOT as Part of Local Appropriation Action?

Gordon Proctor, Director, Ohio Department of Transportation v. Kathy Kardassilaris et al. and Richard L. Blank et al., Case nos. 2006-1242 and 2006-1243
11th District Court of Appeals (Trumbull County)

ISSUE: When the Director of the Ohio Department of Transportation has filed petitions in a court outside of Franklin County appropriating private property for a highway improvement project, and those appropriation actions are still pending, may property owners who are parties to the appropriation actions file counterclaims in their respective cases seeking additional compensation from the state for additional takings and damage to their property that occurred during the actual performance of the highway improvement project but are not provided for in the director's pending petitions?

BACKGROUND: Acting under the Ohio statutes that authorize the state to appropriate private property and infringe property rights in order to build and maintain public roads, the Director of the Ohio Department of Transportation filed petitions in the Trumbull County Court of Common Pleas appropriating certain property rights of two Cortland residents, Kathy Kardassilaris and Richard Blank, who owned properties fronting on State Rt. 5.

While the state's appropriation actions, in which a judge or jury determines the compensation payable to an owner for the property rights taken by the state, were still pending, construction contractors working on the Route 5 project occupied portions of Kardassilaris' and Blank's properties beyond the areas appropriated in the original ODOT petitions, and also caused various types of damage to the owners' properties for which the state's pending appropriation petitions made no provision. Kardassilaris and Blank attempted to file counterclaims in the pending appropriation proceedings, asking the common pleas court to issue writs of mandamus ordering ODOT to add the additional property incursions and damage claims to the appropriation actions that the court already had under consideration.

The state moved to dismiss the property owners' counterclaims, citing a specific provision of state law, R.C. 5501.22, which bars the filing of a lawsuit seeking damages against the Director of Transportation “in any court outside Franklin County.” The trial court granted the state's motion and dismissed the owners' counterclaims, ruling that it lacked jurisdiction to hear those claims. On review, the 11th District Court of Appeals affirmed the trial court's ruling.

The property owners now ask the Supreme Court to reverse the trial and appellate court decisions and direct the Trumbull County common pleas court to consider their counterclaims along with ODOT's original appropriation petition. They argue that the language in 5501.22 cited by the 11th District bars only the filing of an original action against the ODOT Director outside of Franklin County, but makes no mention of entering a counterclaim in an ongoing court case of which ODOT was the instigator. They assert that, under Ohio Rules of Civil Procedure, when there is an ongoing court case involving the same parties, supplemental claims asserted by a party arising from the same cause of action should be joined to the existing case rather than pursued through a separate lawsuit.

Attorneys for ODOT respond that the Rules of Civil Procedure do not take precedence over a specific statutory limitation such as the unequivocal requirement in R.C. 5501.22 that suits against the Director of Transportation may not be initiated in any court outside of Franklin County. They argue that while ODOT is required to file an appropriation action in the county where the department seeks to appropriate property, the legislature has not given jurisdiction to trial courts in the 88 counties to hear and award damage claims against the state, but has rather limited such actions to the exclusive jurisdiction of the Ohio Court of Claims.

Contacts
Elise Porter, 614.466.2872, for Gordon Proctor, Director, Ohio Department of Transportation.

Frank R. Bodor, 330.399.2233, for Kathy Kardassilaris and Richard Blank.

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Does Reckless Driving Conviction Bar Later Charge of ‘Failure to Comply’ for Same Conduct?

State of Ohio v. Paul Fairbanks, Case no. 2006-1529
4th District Court of Appeals (Ross County)

ISSUE: Under the principle of “double jeopardy,” does a driver's prior guilty plea and payment of a fine for a misdemeanor count of reckless driving bar the state from later indicting him on a felony count of failing to comply with a police officer's directive to stop when the felony charge is based on the same conduct cited in the reckless driving offense?

BACKGROUND: A car driven by Paul Fairbanks was pursued by Ross County sheriff's deputies until Fairbanks lost control of his vehicle and crashed. Fairbanks was issued a citation on the date of the incident for misdemeanor reckless operation, speeding and driving left of center. Fairbanks exercised the option of waiving a trial and paid the “waiver” fine specified on his citation for each of the misdemeanor offenses with which he was charged.

Several weeks later, the Ross County prosecutor obtained a felony indictment against Fairbanks for failing to comply with a police officer's directive to stop his vehicle during the incident that resulted in his misdemeanor citations. The indictment charged Fairbanks under a specific subsection of R.C. 2921.33 that makes it a third-degree felony for a driver to “cause a substantial risk of serious physical harm to persons or property” while in the act of fleeing an officer.

Fairbanks entered a plea of not guilty, and filed a motion asking the trial court to dismiss the felony count on the ground that he had already been charged, pleaded guilty and fined for driving recklessly during the incident in question, and the felony indictment therefore violated his “double jeopardy” right to be prosecuted only once for the same illegal conduct. The trial judge denied Fairbanks' motion, and he subsequently changed his plea to no contest and was found guilty of the felony charge. Fairbanks appealed. The 4th District Court of Appeals reversed the trial court and vacated his felony conviction. The court of appeals held that a conviction under the subsection of R.C. 2921.33 under which Fairbanks was charged required a finding that he acted with the guilty mental state of “recklessly,” and therefore essentially charged him with a second crime based on the same conduct for which he had already been convicted of reckless operation.

The 4th District acknowledged that its decision on the double jeopardy issue was in conflict with rulings on the same question by the 8th and 12th district courts of appeals. The Supreme Court agreed to hear arguments in the case.

Arguing for the state, the Ross County prosecutor's office asserts that the court of appeals based its decision on an incorrect finding that the subsection of the failure-to-comply statute under which Fairbanks was charged requires a guilty mental state of “recklessly.” They argue that under prior Supreme Court decisions, the statute in question should be read to impose “strict liability” on an offender (i.e., criminal liability without proof of any guilty mental state ), and therefore did not constitute a second prosecution for reckless conduct.

Attorneys for Fairbanks urge the Court to affirm the 4th District's holding that, because the statutory subsection on which his felony charge was based does not list a required guilty mental state and does not clearly impose strict liability, the trial court was required to apply the default standard and find that Fairbanks acted “recklessly” in failing to comply with the officers' signals to stop.

Contacts
Judith Heimerl Brown, 740.702.3115, for the State of Ohio and Ross County prosecutor's office.

James T. Boulger, 740.775.5312, for Paul Fairbanks.

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Is Pre-Trial Evidence Ruling Allowing Asbestos Claim to Proceed a ‘Final Appealable Order?’

James Sinnott et al. v. Aqua-Chem, Inc., et al., Case no. 2006-1604
8th District Court of Appeals (Cuyahoga County)

ISSUE: When a trial court denies a defendant's pretrial motion to dismiss an asbestos-related personal injury case based on the court's finding that the plaintiff has made a sufficient prima facie showing of current asbestos-related disease or physical impairment, does that ruling qualify as a “final order” subject to immediate review by a court of appeals?

BACKGROUND: Under H.B. 292, legislation which became effective Sept. 2, 2004, all plaintiffs bringing asbestos-related lawsuits in Ohio trial courts are required to produce medical reports making a prima facie showing of current malignant lung disease or other specified medical impairment attributable to asbestos exposure. In cases where the plaintiff does not make such a showing, the court before which the plaintiff's suit is pending is required to “administratively dismiss” his case, with the proviso that the plaintiff's claim may be refiled without prejudice at a later date if and when the plaintiff makes a showing of the required medical symptoms.

H.B. 292 also amended R.C. 2505.02, the state law defining what types of trial court rulings are “final orders” eligible for immediate review by a court of appeals. The amendment included specific language classifying trial court rulings affirming or denying the medical eligibility of an asbestos case for administrative dismissal as “provisional remedies,” a class of legal matters the grant or denial of which qualify as “final orders” subject to immediate appellate review under specified conditions.

In this case, James and Freda Sinnott of Cleveland filed suit against several defendants including American Optical Corporation (AOC) alleging that James had contracted lung cancer as a result of prolonged exposure to asbestos in his work environment over a period of 40 years. Sinnott has since died, but his wife has continued to pursue recovery for herself and her husband's estate.

Following the enactment of H.B. 292, Sinnott filed medical records from a Veterans Administration hospital documenting his diagnosis for malignant lung disease. Attorneys for AOC and the other defendants filed a motion with the trial court seeking administrative dismissal of his claim based on the alleged insufficiency of the VA documents as prima facie evidence of the claimed condition. The trial court denied the motion to dismiss, finding that Sinnott had made a legally sufficient prima facie showing of asbestos-related illness. The defendants attempted to appeal the trial court's ruling, but the 8th District Court of Appeals refused to accept jurisdiction in the case, holding that the trial court's ruling denying administrative dismissal was not a “final order” subject to immediate appellate review. AOC petitioned the Supreme Court to review the 8th District's ruling, and the Court has agreed to hear arguments in the case.

Attorneys for the defendants assert that the 8th District ignored the legislative intent underlying H.B. 292, which they say was to prevent the limited resources of defendants from being depleted by forcing them to go through costly and time-consuming litigation of unmeritorious claims. They say that under R.C. 2505.02 as amended in 2004, any trial court ruling granting or denying pretrial administrative dismissal of an asbestos claim based on a prima facie showing of medical impairment is a “final order” subject to immediate appellate review. They say such a ruling meets both of the statutory conditions necessary to make it final order because it 1) determines the action relative to the provisional remedy (i.e. denies administrative dismissal), and 2) leaves the losing party with no meaningful or effective way to avoid the exact “harm” the legislature sought to prevent (i.e. the time and expense of a trial on a claim that may not be meritorious).

Attorneys for Sinnott argue that the trial court's ruling denying administrative dismissal of his asbestos claim does not meet either of the statutory requirements that qualify the grant or denial of a “provisional remedy” as a “final order” that is immediately appealable. They say the trial court's ruling did not dispose of the defendants right to appeal the sufficiency of Sinnott's medical evidence, it simply required the defense to wait until his claim was decided on its merits to pursue that appeal. They also point to prior court decisions holding that denial of a party's right to immediately appeal the outcome of a pretrial motion does not “deny a meaningful remedy” unless the movant can show that denial of an immediate appeal will cause “irretrievable loss.”

As examples of such a loss, they cite cases allowing immediate appeal of an order compelling an inmate to take psychotropic drugs that would restore his competence to stand trial, and immediate appeal of an order compelling a business to disclose valuable trade secrets that would lose their value upon being disclosed at trial. They argue that the loss faced by the asbestos appellants in this case is no more “irretrievable” than that faced by defendants in non-asbestos cases who generally have no right to appeal adverse pretrial rulings until their cases have been decided on the merits.

Contacts
Susan M. Audey, 216.696.3715, for Defendants American Optical Corporation et al.

Carolyn Kaye Ranke, 216.575.7660, for Plaintiffs Freda Sinnott and the Estate of James Sinnott.

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Does Notice of Interest Charge on Invoice Create ‘Contract Between Merchants’?

Minister Farmer's Cooperative Exchange Company, Inc. v. Roger H. Meyer and Minister Farmer's Cooperative Exchange Company, Inc. v. Robert H. Dues, Case nos. 2006-1061 and 2006-1069
3rd District Court of Appeals (Shelby County)

ISSUE : When the invoices and monthly account statements sent by a farmers cooperative exchange to its members include a notice that interest will be assessed at “2 percent per month / 24 percent per annum” on account balances that remain unpaid after 30 days, does that notice and a member's continued purchases and payments after finance charges have been assessed on his account establish a “contract between merchants” under the Ohio Uniform Commercial Code, obliging the member to pay finance charges to the co-op at the stated interest rate?

BACKGROUND: This case consolidates separate lawsuits filed against two Shelby County farmers, Roger Meyer and Robert Dues, by the Minster Farmers Cooperative Exchange Company, a farm cooperative from which both defendants purchased feed, fertilizer, fuel and other farming supplies on a regular basis over a period of more than 10 years.

Both Meyer and Dues developed overdue balances in their accounts with the cooperative, and were assessed monthly finance charges on those balances. Both continued to make purchases and payments after interest charges were assessed against their accounts, but eventually stopped doing business with the co-op without paying off their accounts. The co-op continued to assess monthly interest charges on the overdue account balances. In 2005, the cooperative filed suits seeking recovery of more than $55,000 from Meyer and more than $40,000 from Dues, with a significant portion of those amounts resulting from the monthly compounding of interest charges on the defendants' unpaid balances.

Meyer and Dues sought dismissal or reduction of the co-op's claims, arguing that the interest charges assessed against their accounts violated Ohio usury laws that limit the assessment of interest on an unpaid obligation to a statutory rate of 10 percent unless the creditor and debtor have entered into “a written contract” agreeing to a higher interest rate. The Shelby County Court of Common Pleas rejected their argument and granted summary judgment in favor of the cooperative for the full amounts they sought to recover.

The trial court ruled that the co-op and its members had a business-to-business relationship that was governed by provisions of the Ohio Uniform Commercial Code (UCC) rather than the state's usury laws. Under the UCC, the trial court held, the printed notice included in the co-op's invoices and monthly statements stating that interest would be assessed on overdue balances at 2 percent per month / 24 percent per year, combined with the defendants' continuing purchases and payments after interest was assessed against their accounts at that rate, constituted acceptance of the interest rate and created an enforceable “contract between merchants.”

On review, the 3rd District Court of Appeals affirmed the trial court's holding that the interest charge notice provided by the co-op and Meyer and Dues actions had created an enforceable contract. However, the court of appeals reversed the trial court's money award to the co-op and remanded the case for recalculation of damages, holding that the co-op had not assessed interest against the defendants at the stated 24 percent annual percentage rate, but at a significantly higher effective rate that resulted from monthly compounding.

The parties now ask the Supreme Court to reverse the respective portions of the 3rd District's decision that were unfavorable to them. Attorneys for Meyer and Dues assert that the trial and appellate courts erred by failing to apply Ohio's usury statute to the dispute, and by ignoring plain language in that law that allows assessment of a non-statutory interest rate on a legal obligation only where that higher rate has been expressly agreed to by the creditor and debtor in “a written contract.” They argue that the co-op's unilateral notice of an interest assessment at the bottom of its invoices, which were not signed by either party, did not meet the legal requirement of a written contract agreed to by both parties. Therefore, they assert, if the Court finds that interest is owed, the co-op should be limited to recovery of simple interest at the statutory rate of 10 percent.

Attorneys for the cooperative urge the Court to affirm that their written notice to members of the interest charges that would be assessed on overdue balances was legal and binding under the UCC. They also argue that, under the contract terms stated in their invoice, interest on a member's account was to be added to the unpaid balance on a month-to-month basis, with each new 2 percent assessment calculated on the new balance, including the latest interest charges.

Contacts
Bryan A. Niemeyer, 937.492.1271, for Roger Meyer and Robert Dues.

Michael A. Burton, 419.738.8165, for the Minster Farmers Cooperative Exchange Co.

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Does Order Changing Parent’s Custody Status Require Finding of ‘Change in Circumstances?’

Paul Fisher v. Emma Hasenjager, Case nos. 2006-1815 and 2006-1853
3rd District Court of Appeals (Mercer County)

ISSUE: When there is a court-approved shared parenting plan in place that grants equal status to a child's mother and father as residential parents and legal custodians, prior to issuing an order that changes the status of the father as a co-residential parent and co-legal custodian, must a trial court first make a finding that there has been a material “change in the circumstances” of the child and/or of the affected parent?

BACKGROUND: Paul Fisher and Emma Hasenjager had a child together in 2002 and in December 2003 entered into a court-approved shared parenting agreement under which both had the status of residential parents or legal custodians of their daughter. Early in 2005, Fisher and Hasenjager filed separate motions asking the Mercer County Court of Common Pleas to modify the co-parenting order, with each asking to be named as sole residential parent and legal custodian. Following a trial, the court issued a judgment that made no determination of a change in the circumstances of the parents, but held that it was in the best interest of the child that Hasenjager be named as the child's sole residential parent and legal custodian.

Fisher appealed that ruling to the 3rd District Court of Appeals, arguing that the trial court judgment was invalid because it had deprived him of his status as co-residential parent and custodian without first making a required factual finding under R.C. 3109.04(E)(1)(a) that there had been a “change in circumstances” of the child or of Fisher's life that materially affected his ability to continue functioning as a suitable residential parent or legal custodian. The 3rd District affirmed the trial court's decision, holding that a different provision of the same statute, R.C. 3109.04(E)(2)(b), authorized the trial court to “modify the terms” of a shared parenting agreement without requiring a finding of changed circumstances, but based solely on its finding that the modification was in the best interest of the child.

The 3rd District certified that its interpretation of the applicable laws in this case was in conflict with decisions of several other appellate districts, and the Supreme Court agreed to hear arguments to resolve the conflict among districts.

Attorneys for Fisher assert that the trial court's ruling depriving him of his prior status as co- residential parent and custodian of his daughter was not merely an order “changing the terms” of a co-parenting agreement covered by R.C. 3109.04(E)(2)(b), but was rather an order “changing the parenting status” of a party to an existing custody order – and was therefore subject to the more demanding requirements of R.C. 3109.04(E)(1)(a). They urge the Court to reverse the 3rd District and remand the case to the trial court for a determination of whether there has been a change in Fisher's circumstances or those of his daughter sufficient to justify stripping him of significant parental rights.

Attorneys for Hasenjager point out that the trial court did not state which subsection of R.C. 3109.04 it used as the basis for its ruling, and assert that the facts set forth in the case showed a number of changes in circumstances that would have supported an order under the more demanding provision cited by Fisher. They argue that the less-demanding “change in terms” provision cited in the 3rd District's opinion is not identified as an “either-or” alternative to the “change in parenting status” provision cited by Fisher, but is rather identified an additional option that trial courts may utilize to adjust the terms of a parenting agreement when the best interest of a child in an individual case is advanced by those changes.

Contacts
Douglas B. Dougherty, 614.798.1933, for Paul Fisher.

James A. Tesno, 419.586.6481, for Emma Hasenjager.

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These informal previews are prepared by the Supreme Court's Office of Public Information to provide the news media and other interested persons with a brief overview of the legal issues and arguments advanced by the parties in upcoming cases scheduled for oral argument. The previews are not part of the case record, and are not considered by the Court during its deliberations.

Parties interested in receiving additional information are encouraged to review the case file available in the Supreme Court Clerk's Office (614.387.9530), or to contact counsel of record.