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Maxine F. Spiller v. Sky Bank - Ohio Bank Region, n.k.a. Sky Bank, Case no. 2008-0900
3rd District Court of Appeals (Logan County)
State of Ohio ex rel. Northwestern Ohio Building & Construction Trades Council et al. v. Ottawa County Improvement Corp. et al., Case no. 2008-1069
6th District Court of Appeals (Ottawa County)
Cincinnati Bar Association v. Eric Lamar Emerson, Case no. 2009-0042
Hamilton County
Disciplinary Counsel v. Merrie Maurine Frost, Case no. 2009-0069
Cuyahoga County
Does Bank’s Destruction of Record of Deposit Certificate Bar Owner from Suing to Recover Proceeds?
Maxine F. Spiller v. Sky Bank - Ohio Bank Region, n.k.a. Sky Bank, Case no. 2008-0900
3rd District Court of Appeals (Logan County)
ISSUE: If a bank issues an “automatically renewing” 30-month certificate of deposit that requires no action by the account owner to continually roll over the proceeds at the end of each succeeding 30-month period, may the bank lawfully destroy its record of the account six years after the issuance of the certificate pursuant to Ohio’s bank records retention statute, and thereafter refuse to redeem the certificate on the basis that it has no record of the account?
BACKGROUND: Under R.C. 1109.69(B), unless a bank record falls under a different retention schedule set forth in R.C. 1109.69 (A), a bank is authorized to destroy its records of any account or transaction six years after the “date of completion of the transaction to which the record relates” or six years after the “date of the last entry” relating to that transaction or account. A subsequent section of the same statute, R.C. 1109.69(F), requires that if a customer wishes to pursue a legal claim against a bank and that claim depends on the content of a bank record that is covered by the records retention schedule, the customer must file suit “within the time for which the record must be retained or reserved.”
In this case, while disposing of the personal effects of her recently deceased friend and long time housemate, Roberta Stayrook, former Bellefontaine resident Maxine Spiller found a hidden envelope containing $2,500 in cash and four 30-month certificates of deposit that Stayrook had purchased from the former Bellefontaine Federal Savings and Loan Association between 1974 and 1979. (Through a series of mergers and acquisitions, Sky Bank has become the legal successor to Bellefontaine Federal.)
Three of the certificates were issued in the name of Stayrook with notation that they were “payable on death” to Spiller. The fourth certificate was issued in the name of Spiller, with “payable on death” assignment to Stayrook. Each certificate indicated that it was “automatically renewing” for subsequent 30-month periods without any required action on the part of the owner. The certificates stated that they would continue to renew until redeemed by the owner, or until the bank gave written notice to the owner that it was declining to renew the certificate or had converted the proceeds to a passbook savings account.
Spiller presented the certificates to Sky Bank for payment. The bank declined to honor them on the basis that it had no records showing that they remained open, active and unpaid. Spiller filed suit in the Logan County Court of Common Pleas to force Sky Bank to redeem the certificates for their face value plus accumulated interest dating back to their issuance dates. The bank moved for summary judgment, arguing that its predecessor’s records relating to the certificates had long since been lawfully destroyed pursuant to the records retention statute, and Spiller’s suit could not be adjudicated because it had not been brought within the six-year retention period applicable to her account under R.C. 1109.69(F).
The trial court denied the bank’s motion, ruling that documents recording automatically renewing deposit certificates were not subject to the six-year retention limit set forth in R.C. 1109.69(B). The judge subsequently ruled that Spiller had not proven her entitlement to the proceeds of the three certificates that were issued to Stayrook, but had presented evidence sufficient to establish that she was entitled to the proceeds of the $3,000 certificate issued in her own name, which amounted to more than $26,000 with the interest that had accrued from the date of issue. Spiller and Sky Bank appealed the portions of the trial court judgment that were unfavorable to them. On review, the 3rd District Court of Appeals affirmed the rulings of the trial court. The Supreme Court subsequently agreed to review the issue of whether Spiller’s claims against the bank are barred as untimely under R.C. 1109.69(F).
Attorneys for the bank argue that the catch-all six-year retention limit imposed by R.C. 1109.69(B) applies to “all records” not specifically described in another part of the statute, and makes no exception for account records of certificates of deposit whether or not those certificates renew automatically. They assert that the legislature’s purpose in setting a uniform timetable for the lawful destruction of bank records, and requiring lawsuits based on those records to be filed within that timetable, was to prevent exactly the kind of stale claims advanced by Spiller. They argue that if the statutory time limits are not enforced, banks will be required to retain voluminous records of long-closed accounts virtually forever in order to protect themselves against claims based on the discovery of decades-old passbooks or investment certificates for which the bank no longer has documentation.
Attorneys for Spiller respond that, given the automatic renewal provision of the savings certificates in question, the bank cannot identify any “date of completion” or “date of last entry” that would serve as a starting point for the six-year records retention period that the bank claims has expired. They argue that the legislature cannot have intended the date of issuance of a renewing 30-month savings certificate to trigger the six-year time limit for retaining a record of such an account, and since there was no other “transaction” between Spiller or Stayrook and the bank, and no notice by the bank that it was terminating or converting the certificate, the six-year retention period imposed by R.C. 1109.69(B) cannot be invoked to prevent Spiller from suing to recover the proceeds of the savings certificate issued in her name.
Contacts
Matthew D. Harper, 419.247.1822, for Sky Bank.
Steven R. Fansler, 937.465.5056, for Maxine Spiller.
Does State ‘Prevailing Wage’ Law Apply to Private Development Partially Funded by Government Grants?
State of Ohio ex rel. Northwestern Ohio Building & Construction Trades Council et al. v. Ottawa County Improvement Corp. et al., Case no. 2008-1069
6th District Court of Appeals (Ottawa County)
ISSUE: Ohio Revised Code Chapter 4115, referred to as the state’s “Prevailing Wage Law,” requires that workers on government construction projects must be paid at the prevailing wage for local union workers doing similar jobs. In this case, the Court is asked to determine whether the prevailing wage law applies to a private company’s purchase and renovation of its previously leased headquarters building when that project is partially funded by loans from a federally funded Community Development Block Grant and from a County Improvement Corporation funded by county revenues.
BACKGROUND: Fellhauer Mechanical Systems is a private, for-profit company in Ottawa County that provides plumbing, heating and electrical services and also sells audio-visual and security systems. The company, which operated its business out of a leased facility in Port Clinton, had an opportunity in 2006 to purchase and renovate that facility and expand company operations by adding an audio-visual products showroom. Fellhauer applied to Ottawa County for a loan from the block grant program. The block grant program, administered by the Ohio Department of Development, makes federal dollars available to communities across the state to support local economic development projects. A $305,000 loan was approved, with the specification that all of the loan proceeds would be used for acquisition of the land and building.
Fellhauer also applied for a loan from the Ottawa County Improvement Corporation (OCIC), a local economic development program funded by the county through the conveyance fees it collects from property owners when real estate transfers are recorded. OCIC approved a loan for $36,750, which was designated as further financing for the purchase of the land and building and the acquisition of new equipment.
When the loan approvals and plans for the project were announced, the Northwestern Ohio Building Trades Council sought and obtained a temporary restraining order to prevent Fellhauer from moving forward with the project. The council, which represents area building trades unions, claimed that all work performed as part of the Fellhauer project was subject to the state prevailing wage law, because it involved the “expenditure of public funds on a construction project.” In a subsequent court action, the Ottawa County Court of Common Pleas denied an injunction requiring that bid specifications and other elements of the project be conducted under the requirements of the prevailing wage law. The court ruled that the prevailing wage statute was applicable only to the construction of “public improvements,” and the Fellhauer project did not fall under the statutory definition of a public improvement because it did not represent construction “by” or “for” a public authority.
The Building Trades Council appealed. On review, the 6th District Court of Appeals affirmed the action of the trial court. In its decision, the court of appeals held that, because all of the money provided to Fellhauer through its block grant and OCIC loans was earmarked either for purchase of the land and property or for procurement of new equipment, and none of those funds were authorized to be spent on “construction,” the project did not qualify as a construction project partially or fully funded by a political subdivision -- and therefore did not fall within the provisions of the prevailing wage law. The Council sought and was granted Supreme Court review of the lower court decisions.
Attorneys for the Council assert that the lower courts erred by applying too narrow a definition of “construction” in analyzing the Fellhauer project. They argue that when any part of a “project” financed in whole or in part by public funds involves construction, the entire project is covered by the prevailing wage statute and all work on that project including materials acquisition, renovation of existing facilities and new construction at the site must be paid at the prevailing wage. They also contend that the provision of the prevailing wage statute limiting its application to “public improvements” addresses only projects funded by the state or a political subdivision, and argue that the project at issue in this case is covered by a different section of the law that addresses projects paid for in whole or in part with public funds administered by an “institution” other than the state or a political subdivision. In this case, they say, OCIC qualifies as such an institution, and Fellhauer’s loan from OCIC brings the entire project within the scope of the prevailing wage law.
Attorneys for Fellhauer and OCIC urge the Court to affirm the trial and appellate court rulings that the prevailing wage law applies only to the construction of “public improvements,” which are defined as structures or facilities paid for with public funds and intended for use by or for a governmental entity. They point out that the purpose of the project at issue in this case is to enable a private, for-profit company to gain ownership of and expand its physical facilities in order to expand business operations and create new jobs in Port Clinton. They note that the cost of acquiring the land and building at the Fellhauer site was approximately $500,000 – considerably more than the total of the block grant and OCIC loans – and emphasize that under the binding terms of the government-supported loans obtained by Fellhauer, none of those moneys could be used for “construction” purposes.
Contacts
Joseph M. D’Angelo, 419.244.8989, for Northwestern Ohio Building and Construction Trades Council.
Vincent Atriano, 614.365.2783, for Ottawa County Improvement Corp. and Ottawa County Bd. of Commissioners.
Alan G. Ross, 216.447.1551, for Fellhauer Mechanical Systems, Inc.
Attorney Discipline
Cincinnati Bar Association v. Eric Lamar Emerson, Case no. 2009-0042
Hamilton County
The Board of Commissioners on Grievances & Discipline has recommended that Cincinnati attorney Eric L. Emerson be suspended from practice for two years, with the second year of that term stayed on conditions, for neglecting the cases of four different clients, failing to return case files or make an accounting to those clients for legal fees they advanced to him, and failing to cooperate with disciplinary authorities investigating his misconduct. Emerson has not filed objections to the board’s findings or recommended sanction.
The Cincinnati Bar Association (CBA), which prosecuted the disciplinary complaint against Emerson based on grievances filed by his clients, has entered objections to the board’s recommended sanction. Attorneys for the CBA point out that the hearing panel that reviewed the facts of the case in depth and heard testimony by witnesses including Emerson unanimously recommended an indefinite license suspension as the appropriate sanction for his misconduct. They cite several recent attorney discipline cases in which the Court has held that an indefinite suspension is the presumptive penalty for an attorney who neglects the entrusted legal matters of multiple clients and then fails to respond to inquiries or otherwise cooperate with disciplinary authorities. They urge the court to apply the same rationale in this case, and impose an indefinite suspension against Emerson.
Because Emerson did not file a written brief responding to the CBA’s objections, he will not participate in oral argument before the Court.
Contacts
Robert J. Gehring, 513.784.1525, for the Cincinnati Bar Association.
Eric L. Emerson, pro se: 859.491.3399.
Attorney Discipline
Disciplinary Counsel v. Merrie Maurine Frost, Case no. 2009-0069
Cuyahoga County
The Board of Commissioners on Grievances & Discipline has recommended that the Supreme Court indefinitely suspend that license of Cleveland attorney Merrie M. Frost for multiple violations of state attorney discipline rules including the rules that prohibit making false accusations of misconduct against a judge; filing a lawsuit that serves merely to harass or maliciously injure another; engaging in conduct involving fraud, deceit, dishonesty or misrepresentation; engaging in conduct prejudicial to the administration of justice; and intentionally causing harm to vulnerable clients.
The board found these and other rule violations arising from Frost’s conduct in three separate incidents in which she:
- Included in an affidavit purportedly seeking disqualification of a judge before whom she had a pending case irrelevant and unsupported accusations of illegal and unethical conduct by that judge and by multiple other Cuyahoga County judges and other elected officials.
- Filed multiple unsupported accusations of illegal and unethical conduct against a federal district court judge after he issued rulings unfavorable to her clients, including false claims that the FBI had “sworn out a complaint” against the judge for “possible criminal conduct” and that the judge had made campaign contributions to Ohio’s incumbent U.S. Senators while his nomination to the federal bench was pending before the Senate.
- Filed an unsupported slander and defamation lawsuit against opposing legal counsel in a Lake County sexual harassment case. After Frost dismissed her defamation claim, the trial court sanctioned her for frivolous conduct and ordered her to pay civil damages to the defendants and reimburse their attorney fees.
Frost has filed objections to the board’s findings of fact and conclusions of law. She asserts that the accusations of judicial misconduct included in her affidavit of prejudice in the Cuyahoga County case and motions to force recusal of the judge in the federal court case were not knowingly false, and were necessary because the rules of civil procedure require that she “state with particularity” the grounds on which she sought disqualification of those judges. She argues that charging an attorney with professional misconduct for alleging judicial misconduct in the context of seeking a judge’s disqualification creates an unconstitutional conflict between a client’s right to aggressive representation and the rules of professional conduct. While she denies violating any disciplinary rules, Frost argues that if the Court should find a sanction is justified, a public reprimand at most would be the appropriate penalty in light of her lack of any prior disciplinary infractions.
Contacts
Jonathan Coughlan, 614.461.0256, for the Office of Disciplinary Counsel.
Merrie M. Frost, pro se: 216.509.6945.
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