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Wednesday, April 23, 2008

Kenneth D. McFadden v. Cleveland State University, Case no. 2007-0705
10th District Court of Appeals (Franklin County)

UBS Financial Services, Inc., f.k.a. PaineWebber, Inc. v. Thomas M. Zaino [Richard A. Levin], Tax Commissioner of Ohio, Case no. 2007-1129
State Board of Tax Appeals

John C. Grundy, Administrator of the Estate of Susanne Cheryl Sumner, Deceased v. Jagprit Singh Dhillon, M.D., et al, Case no. 2007-1292
11th District Court of Appeals (Trumbull County)

Jane Doe et al. v. Massillon City School District et al., Case no. 2007-1311
5th District Court of Appeals (Stark County)

Barry R. Tenney v. General Electric Company et al., Case no. 2007-1490
11th District Court of Appeals (Trumbull County)


Are Courts of Appeals Authorized to Conduct ‘En Banc’ Sessions to Resolve Intra-District Conflicts?

Kenneth D. McFadden v. Cleveland State University, Case no. 2007-0705
10th District Court of Appeals (Franklin County)

ISSUES:  

BACKGROUND:  This case involves an unsuccessful attempt by Kenneth McFadden of Cleveland to sue his former employer, Cleveland State University (CSU), for racial discrimination. McFadden was fired from his position with the CSU athletics department on June 11, 2003. He filed a discrimination suit against the university in the Cuyahoga County Court of Common Pleas in October 2005, but subsequently dismissed that suit without prejudice.

In January 2006, he re-filed his complaint in the Ohio Court of Claims. CSU entered a motion for summary judgment dismissing McFadden’s complaint on the basis that it had not been filed within the two-year statute of limitations (time limit) for commencing a discrimination action in the Court of Claims. McFadden opposed the motion to dismiss, citing the 10th District Court of Appeals’ 1994 ruling in Senegal v. Ohio Dept. of Rehab. & Corrections that discrimination claims brought against the state under R.C. 4112.99 were subject to a six-year statute of limitations. The Court of Claims granted summary judgment to CSU and dismissed McFadden’s complaint as not timely filed. The court cited a more recent decision, McCoy v. Toledo Correctional Institution (2005), in which the 10th District had disregarded its earlier ruling in Senegal and held that a two-year time limit applied to discrimination suits filed in the Court of Claims.

McFadden appealed. A three-judge panel of the 10th District affirmed the Court of Claims decision. In its opinion, the 10th District panel acknowledged that the McCoy and Senegal decisions were in conflict with each other, and announced that it was resolving that conflict by formally overruling Senegaland affirming McCoy.  McFadden filed a motion for reconsideration in which he cited In Re J.J., a 2006 decision in which, after different panels in the same appellate district had issued conflicting rulings on a disputed issue, the Supreme Court of Ohio held that the judges of the court of appeals were “duty bound” to conduct an en banc (involving all judges of the court) review of the case in order to resolve the intra-district conflict. The 10th District denied the motion for reconsideration, asserting that an en banc review of McFadden’s case would violate Section 3(A), Article IV of the Ohio Constitution, which provides that, in court of appeals districts employing more than the minimum of three judges, “three judges shall participate in the hearing and disposition of each case.”  

Attorneys for McFadden now ask the Supreme Court to reverse the 10th District’s ruling and hold that:
a) the use of en banc proceedings by courts of appeals to resolve intra-district conflicts is not unconstitutional; and
b) Under this Court’s holding in In Re J.J., an appellate district in which two or more different three-judge panels have issued conflicting decisions on a legal issue has a duty to conduct an en banc review of the disputed issue and make a majority ruling that resolves the conflict and establishes a single, coherent interpretation of the law that can be relied upon by lower courts in that district.

Arguing for CSU, the state attorney general’s office agrees with McFadden’s argument that the constitutional language cited by the 10th District can reasonably be interpreted as setting the minimum number of judges who must sit on an appellate panel, and does not prohibit en banc proceedings involving more than three judges if they are necessary to resolve an intra-district conflict. They go on to assert, however, that in the absence of constitutional language or a Supreme Court rule specifically authorizing en banc proceedings, they are permissible only where a local rule of court has been adopted expressly allowing and setting procedural guidelines for such sessions.  They argue that, where such rules are adopted, the judges of a court of  appeals should retain broad discretion to grant or deny en banc review based on their analysis of alleged conflicts, and should not be compelled to conduct what amounts to an entire new level of appellate  review every time a litigant alleges that a ruling in its case differs from a prior decision of the court.

Contacts
Timothy J. Fitzgerald, 216.241.5310, for Kenneth McFadden.

State Solicitor General P. William Marshall, 614.466.8980, for Cleveland State University.

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Broker Disputes Tax Commissioner’s Method of Calculating ‘Gross Revenues’ from Securities Sales

UBS Financial Services, Inc., f.k.a. PaineWebber, Inc. v. Thomas M. Zaino [Richard A. Levin], Tax Commissioner of Ohio, Case no. 2007-1129
State Board of Tax Appeals

ISSUE: Did the State Tax Commissioner impose excessive Ohio Dealer in Intangibles tax liability on a securities broker by using an incorrect formula to calculate the “gross revenues” from the broker’s sales of securities on its own account?

BACKGROUND: UBS Financial Services, Inc. disputes rulings by the State Tax Commissioner and Board of Tax Appeals’ (BTA) that denied UBS’s application for a refund of alleged overpayments of the firm’s Dealer in Intangibles taxes for several prior tax years.

The dispute focuses on the correct interpretation of statutory language assessing Ohio tax on securities brokers that do business in multiple states according to an apportionment formula that compares the firm’s gross receipts earned in Ohio to its total corporate gross receipts. Gross receipts is defined in the statute as “commissions charged plus one percent of all other receipts.” 

UBS argues that the commissioner and the BTA erred by denying the firm’s claim that it overestimated and overpaid its Ohio tax for the disputed tax years by mistakenly using a figure it refers to as the firm’s “net trading profits” to calculate its tax liability when it should have used a lower figure that more accurately meets the statutory definition of “gross revenues.” 

Attorneys for the tax commissioner respond that the formula used by UBS to calculate its “net trading profits” is the same formula that Ohio securities brokers have used for more than 50 years in calculating their “gross receipts” for Ohio tax purposes.  They assert that UBS’ claim that it is owed a refund because it used this “incorrect” formula is actually an attempt to have the Court overturn a long-established and accepted interpretation of what constitutes “gross revenues” under the applicable Ohio tax statute, and substitute in its place a new formula that reinterprets the law in a way that dramatically reduces brokers’ tax liability.   

Contacts
Joel L. Levin, 216.928.0600, for the Environmental Network Corp. et al.

Richard A. Simpson, 202.662.2000, for Goodman Weiss Miller LLP.

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Was Juror’s Failure To Disclose Information During Voir Dire ‘Misconduct’ Requiring a New Trial?

John C. Grundy, Administrator of the Estate of Susanne Cheryl Sumner, Deceased v. Jagprit Singh Dhillon, M.D., et al, Case no. 2007-1292
11th District Court of Appeals (Trumbull County)

ISSUE: Did a juror’s failure to volunteer information about a previous visit to a hospital emergency room during pretrial voir dire (questioning of prospective jurors) constitute “misconduct” sufficient to require that the jury’s subsequent verdict be overturned and a new trial be conducted?

BACKGROUND: This case challenges a ruling in which the 11th District Court of Appeals vacated a jury verdict in favor of the defendants in a Trumbull County medical malpractice case and remanded the case for a new trial. The court of appeals based its decision on a finding that one of the jurors engaged in misconduct that fatally tainted the outcome of the first trial when he failed to respond accurately to a question posed by the plaintiff’s attorney during voir dire

The case involved a malpractice claim filed against Dr. Jagprit Singh Dhillon, an emergency room physician, and his employer, Emergency Professional Services Inc. (EPS), by John Grundy, acting administrator of the estate of Susanne Sumner. Sumner, 22, died of a severe infection two days after coming to the Trumbull Memorial Hospital emergency room, which is operated by Emergency Professional Services, complaining of severe mouth and jaw pain and uncontrollable vomiting. Sumner was examined by Dr. Dhillon, who diagnosed her with a dental inflammation and administered pain medication and an anti-nausea drug that reduced her symptoms. Sumner was evaluated again several hours later and was discharged after her vital signs were improved and she insisted on going home. She was readmitted to the emergency room approximately 10 hours later with a rash covering her upper body, and diagnosed with an acute meningococcal infection. Sumner was subsequently transferred to the Cleveland Clinic, where she died.

On behalf of Sumner’s estate and her surviving family members, Grundy filed a wrongful death and survival action against Dhillon and EPS in the Trumbull County Court of Common Pleas. The complaint alleged that the defendants had been negligent in their diagnosis and treatment of her symptoms and in discharging her from the hospital. During voir dire of a group of prospective jurors including Anthony Krusely, the plaintiff’s attorney asked if any of the candidates had ever personally been treated in the emergency room at Trumbull Memorial Hospital.  Krusely and two other persons indicated that they had been treated in the emergency room. After asking follow-up questions about their experiences to each of the three, the attorney then asked whether any candidates had taken a family member to the Trumbull Memorial emergency room.  After one panelist answered “yes” to that question, but without following up on that response, the attorney began a series of statements explaining the operation of emergency rooms and the contractual relationship between Trumbull Memorial and EPS. Counsel engaged in subsequent exchanges with Krusely on other issues, but neither the attorney nor Krusely again mentioned the subject of prior visits to the emergency room with a family member. Krusely was seated on the jury, which subsequently returned a verdict in favor of Dhillon and EPS on all issues.

After the jury had been dismissed, the plaintiff’s attorney engaged several jurors including Krusely in a conversation on the courthouse steps. In that conversation Krusely stated that he had previously taken his son to the Trumbull Memorial emergency room, which he found to have a “low standard of care,” and stated that if his son’s symptoms had been as severe as Sumner’s in this case, he would not have accepted Dr. Dhillon’s diagnosis and would have sought a second opinion from another physician. Based on those statements, Grundy filed a motion for a new trial, arguing that Krusely had not responded honestly to the voir dire question about prior experiences with the emergency room, and that his presence on the jury had therefore tainted the verdict. The trial court conducted a hearing at which the judge questioned Krusely and other jurors, and denied the new trial motion based on the court’s conclusion that Krusely’s actions did not constitute intentional deception or demonstrate a bias against the plaintiff that affected the outcome of the case. 

On review, however, the 11th District Court of Appeals voted 2-1 to overturn the jury verdict and remand the case for a new trial. In its opinion, the appellate majority held that the trial transcript of voir dire indicated that plaintiff’s counsel had directly asked Krusely to disclose any prior visits to the emergency room with a family member, and Krusely had failed to disclose exactly such a visit. The opinion went on to hold that proper disclosure by Krusely, and follow-up questioning that uncovered the opinions he had expressed after the verdict was announced, would have justified in the plaintiff’s exercise of a peremptory challenge to exclude Krusely from the jury based on bias. Because Krusely’s improper conduct affected Grundy’s due process right to try his claim to an unbiased jury, the court of appeals held that the trial court abused its discretion in denying Grundy’s motion for a new trial.

Attorneys for Dhillon and EPS now ask the Supreme Court to reverse the 11th District’s ruling and reinstate the jury verdict in their favor. They urge the Court to adopt a two-part test established in the U.S. Supreme Court’s 1984 decision in McDonough Power Equipment v. Greenwood for evaluating motions for a new trial based on alleged juror concealment of a material fact during voir dire. Under the McDonough standard, they note, a motion for new trial may be granted only upon a showing that 1) a juror failed to honestly answer a material question on voir dire; and 2) an accurate answer to the question would have provided a valid basis for the disqualification of that juror for cause. 

In this case, they assert, it appears from the transcript of voir dire that counsel’s question about emergency room visits with a family member was not directed toward Krusely personally but rather to the whole group of jury candidates being examined, and it also appears that plaintiff’s counsel did not pursue the issue with the unidentified juror who answered “yes,” but instead chose to drop that line of inquiry and go off in another direction. In any case, they contend, the trial court made a careful inquiry and concluded that Krusely had not deliberately attempted to mislead or withhold information from the plaintiff, and that, if he had disclosed the hospital visit with his son, that information would not have been a sufficient basis to exclude him from the jury for bias. They also argue that the 11th District did not make findings sufficient to reverse the trial court based on an abuse of discretion, and assert that the appellate majority improperly substituted its own judgment for that of the trial judge on an issue where the trial judge was in a much better position to evaluate Krusely’s conduct during voir dire and the validity of the plaintiff’s claim of resulting bias.

Attorneys for Grundy urge the Court to affirm the 11th District’s decision granting a new trial. They argue that Krusely’s comments only minutes after the verdict was announced demonstrated a preconceived attitude that disfavored the plaintiff’s claims based on an unreasonably low expectation of professional performance by Dr. Dhillon, and an apparent belief that it was Sumner’s responsibility to second-guess a physician’s diagnosis of her symptoms and go looking for a second opinion. Because these biases could have been detected and Krusely excluded from the jury for cause if he had honestly responded to several questions put to him during voir dire, they assert, the trial court erred in denying Grundy’s motion for a new trial.  With regard to the McDonough test, plaintiff’s counsel argues that the 11th District specifically did cite and correctly apply McDonough in arriving at its decision.

Contacts
Martin F. White, 330.394.9692, for John Grundy, Administrator.

William E. Pfau III, 330.702.9700, for Dr. Jagrit Dhillon and Emergency Professional Services, Inc.

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Is School District Immune From Liability for Actions of Volunteer That Occurred Off School Property?

Jane Doe et al. v. Massillon City School District et al., Case no. 2007-1311
5th District Court of Appeals (Stark County)

ISSUE:  Under a former version of Ohio’s sovereign immunity statute, is a school district immune from civil liability for injuries to students caused by the actions of a volunteer in the course of running an after-school activity when the students’ injuries occurred outside of school property?

BACKGROUND: John Smith, an unpaid volunteer, ran an after-school chess club for students at the Franklin Elementary School in Massillon for several years with the knowledge and permission of the school’s principal. During a spring break trip in which Smith and a school guidance counselor took several students to participate in an out-of-state chess tournament, Smith sexually assaulted two of the students, ages 9 and 10.  Both victims were the children of Jane and Jenny Doe. After the assault, it was determined that Smith had a prior felony conviction for sexually molesting young children.

The Does filed suit against the Massillon City School District, alleging negligence for the district’s failure to investigate Smith’s background and to supervise his contacts with children in connection with the chess club, which held twice-weekly after-school meetings in the Franklin Elementary School building. The school district sought and obtained summary judgment dismissing the Does’ claims. The trial court held that the district was a “political subdivision” protected by the state’s sovereign immunity statute, and that the injuries suffered by the Does’ children did not fit within an exception in the statute for injuries “that occur within or on the grounds of buildings that are used in connection with the performance of a governmental function.”  On review, the 5th District Court of Appeals upheld the ruling of the trial court.

The Does now ask the Supreme Court to reverse the lower court rulings and reinstate their claims against the school district. They argue that:

Attorneys for the school district respond that the plain language of former R.C. 2744.02(B)(4) imposes two requirements for a political subdivision to forfeit its immunity for injuries: (1) the injury must be caused by the negligence of an employee of the political subdivision; and (2) the injury must occur on the grounds of the political subdivision. In this case, they argue, there is no dispute that the injury suffered by the Does’ children took place away from school property, and therefore the exception to immunity does not apply.

They also note that the definitions section of the sovereign immunity statute, R.C. 2744.01, specifically includes under the definition of “governmental functions” “ ... (t)he provision of a system of public education” and “the regulation of the use of ... public grounds.” They cite prior court decisions holding  that providing after-school extracurricular activities for students, such as the chess club in this case, qualifies as a “governmental function” and therefore falls under the statutory provision imposing liability on a school district only for injuries that occur on school property. Finally, they point out that school districts are obliged by law to conduct background checks only on persons being hired as employees, and that at the time Smith volunteered to run the chess club the principal had no legal authority to require him to undergo a background check. In light of those facts, they assert, the principal cannot have acted “recklessly” or wantonly” by failing to do something she was not  required or even authorized to do.

Contacts
Brian R. Wilson, 330.452.8831, for Jane and Jenny Doe et al.

Nicole Donovsky, 614.485.2010, for the Massillon City School District.

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Does Defendant’s Intent Determine When Touching Is Basis for ‘Battery’ or ‘Emotional Distress’ Claim?

Barry R. Tenney v. General Electric Company et al., Case no. 2007-1490
11th District Court of Appeals (Trumbull County)

ISSUE:  When a civil lawsuit is based on unwanted physical contact with the plaintiff by a defendant, does the intent of the defendant in initiating that contact determine whether the lawsuit is grounded on a claim of battery, which is subject to a one-year statute of limitations, or on a claim of intentional infliction of emotional distress, which is subject to a four-year statute of limitations?

BACKGROUND: Barry Tenney filed a civil lawsuit against his employer, General Motors, and several co-workers in September 2000 alleging abuse and harassment based on his sexual orientation. The suit included a claim of intentional infliction of emotional distress against GE and a company nurse, Joanne O’Neil, arising from an August 1999 incident in which O’Neil said she wanted to apologize for past unpleasant statements she had made to Tenney, and then proceeded to engage him in a prolonged, full-body “hug” from which she refused to release him despite his verbal objection and attempt to pull away.

GE filed a motion for summary judgment, alleging among other arguments that Tenney’s claim should be dismissed because he had not filed it within one year of the O’Neil incident. Tenney asserted that his suit was based on a pattern of  harassing conduct by his co-workers intended to cause him emotional distress, a legal claim which may be asserted within four years after an alleged injurious act. The court rejected that argument, and held instead that the only “outrageous” act sufficient to support Tenney’s emotional distress claim was the inappropriate and unwanted physical contact initiated by O’Neil – an act that fell under the legal definition of “battery.”  Because Ohio’s statute of limitations for filing a tort action based on battery is one year from the date of injury, and Tenney’s suit had not been filed within that time limit, the trial court granted summary judgment to GE and dismissed Tenney’s claim.

On review, the 11th District Court of Appeals voted 2-1 to reverse the trial court’s ruling and remanded the case for further proceedings. The appellate majority held that while O’Neil’s conduct may have been an act of battery, that conduct was committed with the intent to humiliate and inflict emotional distress on Tenney.  Based on that interpretation, the court of appeals ruled that Tenney’s complaint was subject to the four-year statute of limitations applicable to intentional emotional distress cases, and the trial court erred in dismissing Tenney’s suit as untimely.

Attorneys for GE now ask the Supreme Court to overturn the court of appeals’ decision and reinstate the summary judgment in its favor. They argue that the 11th District ignored established case law including the Supreme Court’s 1994 decision in Doe v. First United Methodist Church, in which this Court held that when a claim for intentional infliction of emotional distress is premised on actions that constitute another tort (civil wrong), “the applicable statute of limitations is the one that applies to action based upon the other tort.” In Doe, they point out, the plaintiff asserted a claim for intentional infliction of emotional distress based on intentional touching of a sexual nature by the defendant, and the Court specifically ruled that “Where the essential character of an alleged tort is intentional, offensive touching, the statute of limitations for assault and battery governs.”

GE also argues that, if the 11th District’s ruling in this case is upheld, the one-year time limit for filing tort claims based on alleged sexual battery established by the legislature will become meaningless, because every plaintiff asserting such a claim will be able to extend that time limit to four years simply by asserting that the real basis for his or her claim isn’t the actual battery ... but the emotional distress arising from that conduct.

Attorneys for Tenney urge the Court to affirm the ruling of the 11th District and allow his suit to go forward.  They point to language in the Doe decision that directs a trial court to “determine the true nature or subject matter of the acts giving rise to the complaint” in deciding which of alternative statutes of limitations should apply. In this case, they contend, the 11th District did exactly that by citing numerous other incidents of harassment of Tenney by his co-workers over a period of many years, including prior acts and statements by O’Neil, and determining that the act of sexual battery that triggered his lawsuit was specifically intended to humiliate Tenney and cause him emotional distress ... and therefore the trial court was required to apply the four-year statute of limitations applicable to emotional distress claims.

Contacts
Gregory V. Mersol, 216.696.1100, for the General Electric Company.

Thomas A. Sobecki, 419.242.9908, for Barry Tenney.

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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.