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Wednesday, October 9, 2013

Oaktree Condominium Association v. Hallmark Building Company, Case no. 2012-1722
Eleventh District Court of Appeals (Lake County)

State of Ohio v. Jason Romage, Case nos. 2012-1958 and 2012-2042
Tenth District Court of Appeals (Franklin County)

Estate of Timothy J. Oeding, et al. v. David Fraley d.b.a. Fraley Trucking, Case no. 2012-1994
Twelfth District Court of Appeals (Butler County)

In re: I.A., a minor child, Case no. 2012-2122
Second District Court of Appeals (Mongtomery County)


Does a Law Enacted After Property Damage Is Found but Before a Claim Is Filed Violate a Condominium Association’s Constitutional Right to a Remedy?

Oaktree Condominium Association v. Hallmark Building Company, Case no. 2012-1722
Eleventh District Court of Appeals (Lake County)

ISSUES:

BACKGROUND:
Hallmark Building Company completed construction of Oaktree Condominiums, a seven-unit project in Willoughby, in 1990. In 2003, owners of several units noticed interior wall cracks and misaligned doors. Investigations and repair work showed that six units had insufficient reinforcements under them.

At a condominium association meeting in October 2003, a structural engineer for Oaktree told the group that footers under the condos weren’t placed deep enough and violated the city’s building code. The engineer, also a lawyer, said that the clock for bringing a lawsuit against the builder had at that point started running.

In December 2005, Oaktree filed suit against Hallmark. After a voluntary dismissal, Oaktree refiled the lawsuit in August 2007. A jury found in favor of Oaktree. The trial court had found that R.C. 2305.131, which provides time limits on actions to recover damages for injury to real property, among other things, didn’t apply in this case because, the court said, construction of a building wasn’t what the statute describes as an “improvement to real property.” Hallmark appealed to the Eleventh District Court of Appeals.

The statute states: “… no cause of action to recover damages for … an injury to real or personal property … shall accrue against a person who performed services for the improvement to real property or a person who furnished the design, planning, supervision of construction, or construction of the improvement to real property later than ten years from the date of substantial completion of such improvement.” This version of the statute became effective April 7, 2005, before Oaktree filed its lawsuit.

The appeals court reversed the trial court’s decision, holding that an improvement to real property included the initial construction of a building. However, the appeals court sent the case back to the trial court to determine whether the statute’s application in this case was constitutional. The trial court found there was no constitutional violation, so the statute time-barred Oaktree’s claims because the 10-year limit had passed. This time, Oaktree appealed to the Eleventh District Court of Appeals.

The appeals court affirmed the trial court’s decision. Citing Groch v. Gen. Motors Corp. (2008) and other Ohio Supreme Court cases, the appeals court stated: “As the case law from the Supreme Court of Ohio indicates, the current statute of repose cannot be retroactively applied to a plaintiff in Oaktree’s situation, where the damage occurred beyond the ten-year statutory period, but before April 7, 2005, the effective date of the current statute of repose. The Supreme Court of Ohio has decided that such a plaintiff must be given a ‘reasonable’ time to commence an action. We find that Oaktree untimely commenced its action, more than two years after it was placed on notice of the likely cause of its damage. Therefore, following Supreme Court of Ohio precedent addressing this issue, we must conclude its claim is barred.”

Oaktree Condominium Association appealed to the Ohio Supreme Court.

Attorneys for Oaktree argue that the association’s constitutional right to a remedy in this case is violated by R.C. 2305.131. The statute, they assert, prevents Oaktree from pursuing a substantive right. They contend that the statute is substantive law, regardless of the statute’s language, because it takes away Oaktree’s right to sue. They also contend that the law is impermissibly retroactive because it applies to a claim filed on or after the statute’s effective date, even when the claim arises before the law went into effect. They assert that it’s unconstitutional for the General Assembly to enact a law that retroactively impairs or abolishes a substantive right.

Citing Groch, a product liability case, Oaktree’s attorneys also argue that they must be given a reasonable time to file their claim. They note that the Groch court relied on the analysis in Ohio Supreme Court case Adams v. Sherk (1983) to determine a reasonable amount of time, which they say was based on the least amount of time the plaintiff would have had under a separate, applicable statute of limitations. They assert that the Eleventh District in the current case used a mistaken analysis when looking at Groch. Oaktree’s attorneys argue that “[i]nstead of conducting its own inquiry into the reasonableness of Oaktree’s time to file a claim based on the applicable statute of limitations for a construction tort claim – and not a product liability claim – [the court of appeals] illogically applied the same two-year time limit that was used in Groch.”

Oaktree’s attorneys conclude that a reasonable time to file this construction liability claim after discovery of the problem in October 2003 was four years, based on the four-year general tort statute of limitations for construction liability.

Hallmark’s attorneys argue that if a claimant has a reasonable time to file its claim, then the Ohio Constitution is not violated by the statute’s retroactive application to claims that arise before the law’s effective date. They assert that the two-year timeframe used by the court of appeals in this case was reasonable because it upholds the General Assembly’s intent when enacting R.C. 2305.131 to “promote a greater interest than the interest underlying the general four-year statute of limitations.”

In addition, Oaktree filed its lawsuit 15 years after construction was completed, and Hallmark’s attorneys argue that this is exactly the type of case the General Assembly intended to address when it enacted the statute. They contend that the statute was designed to prevent parties from having to produce evidence and defend against claims initiated years after work is finished and after they had control or responsibility for the structures.

An amicus curiae (friend of the court) brief supporting the position of the Hallmark Building Company has been submitted by the Ohio Alliance for Civil Justice. (Copies of the amicus briefs and all other filings in the case can be accessed by going to the following link: http://www.supremecourt.ohio.gov/Clerk/ecms/searchbycasenumber.asp and entering the case number, 2012-1722, in the search box.)

Contacts
Representing Oaktree Condominium Association: Steven Ott, 216.771.2600

Representing the Hallmark Building Company: Patrick Roche, 216.348.1700

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Does Ohio’s Child Enticement Statute Sweep Constitutionally Protected Behavior Into Its Scope?

State of Ohio v. Jason Romage, Case nos. 2012-1958 and 2012-2042
Tenth District Court of Appeals (Franklin County)

Note: Two appeals have been consolidated by the Supreme Court of Ohio, and the court ordered each side to also consolidate their briefs in the cases.

ISSUE: Is R.C. 2905.05(A), the statute that prohibits criminal child enticement, unconstitutionally overbroad?

BACKGROUND:
Jason Romage was moving his possessions from his old residence in Pickerington to a new one in Clintonville. Romage saw some kids playing in the street, and he offered them a couple of quarters to help him move boxes and some groceries from his car to his apartment. The kids declined, and Romage moved the items himself.

One of the kid’s mothers contacted the police. Romage was later charged with criminal child enticement under R.C. 2905.05(A). Before his trial began, the trial court granted Romage’s motion to dismiss the complaint, agreeing with him that the statute is unconstitutionally overbroad. The state appealed to the Tenth District Court of Appeals, but the appellate court agreed with the trial court. On the state’s subsequent motion to certify a conflict among Ohio’s appeals courts regarding whether the statute is unconstitutionally overbroad, the Tenth District granted the motion. The Ohio Supreme Court agreed to review the case to resolve the conflict between appellate districts.

The state argues that it “has a compelling interest in protecting children from harm and exploitation at the hands of persons who would employ methods of speech, not to communicate and express ideas, but for other unjustifiable motives.” They assert that the statute enables them to prevent the removal of a child from one area to another, which is critical because, once a child is taken into a vehicle or removed from an area by someone who may have a criminal motive, it becomes very difficult for law enforcement to intervene to protect the child.

R.C. 2905.05(A) begins: “No person, by any means and without privilege to do so, shall knowingly solicit, coax, entice, or lure any child under fourteen years of age to accompany the person in any manner ... .”

Because the statute prohibits certain conduct as well as speech, the state contends that for the statute to be too broad, it must “sweep within its gambit a substantial amount of protected activity.” They note that the lower court found the statute criminalizes many innocent scenarios because of the word “solicit.” The other verbs – “coax,” “entice,” and “lure” – connote something more than merely asking because they imply the “use of artifice, deceit and/or promises to induce compliance,” the state adds. “Solicit” on its own, they acknowledge, can have more meanings, such as “to ask.” If the term “solicit” is narrowed so the statute’s scope is limited only to conduct that rises to the level of tempting or luring a child, instead of simply asking or inviting him or her, the state argues that otherwise innocent citizens wouldn’t be swept up by this law. They assert that the trial court erred when it didn’t apply this type of limiting construction to the statute to allow it to operate lawfully and constitutionally.

If the court cannot limit “solicit” to exclude “merely asking,” then the state argues the appropriate remedy is to remove “solicit” from the statute to prevent the entire statute from being found unconstitutional. They assert that severing the word “solicit” from the statute meets the requirements of the standards set in Geiger v. Geiger, a 1927 Ohio Supreme Court case: The statute would still stand by itself without the word; the statute isn’t ineffectual without the word; its removal doesn’t detract from the General Assembly’s intent in enacting the legislation; and the insertion of no additional words are necessary.

The state concludes that the statute’s goal is to prevent harm to children before it’s too late. They contend that a different statute, such as one that requires the state to prove the person had an unlawful motivation, wouldn’t achieve the legislative goal to prevent children from being moved to a location not known to their parents or guardians under circumstances that may be dangerous.

Attorneys for Romage first ask the Supreme Court to affirm the reasoning of the Second, Eighth, Ninth, and Tenth District courts of appeals, which found that R.C. 2905.05(A) unconstitutionally encompasses a substantial amount of protected conduct.

The attorneys agree with the state that “solicit” creates the possibility of criminalizing protected conduct, and they offer examples such as parents who ask their child’s friend if he or she needs a ride home or a child who asks another child to come over to stuff envelopes for a school levy without first asking the child’s parents. They assert that removing the word, as the state suggests, doesn’t solve the constitutionality issue because they also view “coax, entice, or lure” as too broad. The attorneys also raise concerns about the phrase “to accompany … in any manner.” The act of an elderly woman offering $10 to a 13-year-old neighbor to rake the leaves in her yard may be considered enticement, they contend, as would a 13-year-old inviting another 13-year-old to his yard to have a glass of lemonade from a lemonade stand.

The Ohio Prosecuting Attorneys Association and the Franklin County Prosecutor argue in an amicus curiae (friend of the court) brief that the state could determine “implied permission,” which would prevent liability for innocent citizens. Romage’s attorneys assert that just creates more problems. If the police need to decide who has implied permission from a child’s parent, Romage’s attorneys contend that other issues arise, such as the possibility of discriminatory enforcement. Ultimately, they assert the statute is still unconstitutional.

They also argue that other state supreme courts, such as those in Massachusetts and Florida, have found that child enticement statutes need to include an element requiring illicit intent to be constitutional. They note that such legislation has been introduced in Ohio’s General Assembly.

Editor’s note: The Ohio General Assembly recently enacted S.B. 64, which modified the criminal child enticement statute. The legislation went into effect immediately on July 13, 2013. This information was not contained in the briefs for this case because the briefs were filed before the bill was enacted.

The Office of the Ohio Public Defender has filed an amicus brief supporting Jason Romage. (Copies of the amicus briefs and all other filings in the case can be accessed by going to the following link: http://www.supremecourt.ohio.gov/Clerk/ecms/searchbycasenumber.asp and entering either of the case numbers, 2012-1958 or 2012-2042, in the search box.)

Contacts
Representing the State of Ohio: Melanie Tobias, 614.645.8876

Representing Jason Romage: Douglas Riddell, 614.361.2804

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Do Ohio Courts Have Jurisdiction When an Ohio Business Suffers an Economic Loss Following an Auto Accident in Indiana?

Estate of Timothy J. Oeding, et al. v. David Fraley d.b.a. Fraley Trucking, Case no. 2012-1994
Twelfth District Court of Appeals (Butler County)

ISSUES:

BACKGROUND:
In 2008, Timothy Oeding was driving a motor vehicle in Indiana and hit a tractor-trailer owned by David Fraley, whose company Fraley Trucking is located in Middletown, Ohio. Oeding, who died as a result of the accident, was an Indiana resident driving as part of his job with J&R Equipment and Storing, located in Indiana. The man driving Fraley’s truck was injured, and the truck was damaged. J&R’s insurance company, Auto-Owners Insurance, placed a hold on Fraley’s truck for five months while they investigated the accident to determine liability.

Auto-Owners determined that its insured, Oeding, was responsible for the accident and made payment to Fraley for his driver’s injuries and the damages to his tractor-trailer. However, Auto-Owners and Fraley couldn’t reach an agreement about compensation for Fraley’s economic loss resulting from not having use of his truck for five months during the investigation.

In November 2010, Fraley filed suit in the common pleas court in Butler County, Ohio. The court dismissed the complaint for lack of personal jurisdiction, which is the authority of a court to consider a claim against a person. The trial court said it could not bring an out-of-state defendant into its proceedings solely because its insurance company does business in Ohio. They also found that Fraley was prevented by Ohio law from pursuing a direct action against Auto-Owners because the trucking company had to first obtain a judgment against its insureds, J&R and Oeding.

Fraley appealed to the Twelfth District Court of Appeals. Because J&R and Oeding seemed to have no contact with Ohio, the court considered whether Auto-Owners’s actions could be imputed (attributed) to its insureds, so the court could find it had jurisdiction in the case. Noting that this appeared to be a case with an issue of law that previously hasn’t been decided in Ohio, the court determined that Auto-Owners’s actions could be attributed to its insureds because J&R chose Auto-Owners as its insurance company, Auto-Owners conducted negotiations on behalf of J&R and Oeding’s estate, and it assumed an obligation to Fraley as a third party. The court then found that Auto-Owners’s conduct fell within Ohio’s long-arm statute and didn’t deprive the insurance company and connected parties of due process. These findings established the court’s jurisdiction in the case, and the court reversed the trial court’s dismissal of the case.

Auto-Owners, J&R, and Oeding’s estate appealed the decision to the Ohio Supreme Court.

Attorneys for Auto-Owners and their insureds argue that Ohio’s long-arm statute would only confer personal jurisdiction over J&R if J&R regularly does or solicits business in Ohio, which it does not. They further assert that the appeals court erred by imputing Auto-Owners’s actions to those of J&R in order to establish jurisdiction, and they cite to a Florida Supreme Court case (Georgia Insurers Insolvency Pool v. Brewer) to support its argument.

The attorneys assert that a court can exercise jurisdiction over an out-of-state defendant only if it has “sufficient minimum contacts” in Ohio so that summoning the party to Ohio would not violate “traditional notions of fair play and substantial justice.” They state that neither J&R nor Oeding’s estate have transacted business in Ohio or did anything to create a substantial connection with Ohio. As far as Auto-Owners, their attorneys argue the insurance company only made telephone calls about the settlement negotiations and exchanged correspondence with Fraley or his attorneys, but Ohio courts have determined that phone calls and correspondence don’t establish sufficient minimum contact. They also contend that Auto-Owners acted independently in its settlement negotiations, so it is improper to find J&R responsible for the insurance company’s actions. They argue that the appeals court’s decision would result in a violation of J&R’s due process rights.

Attorneys for Fraley Trucking assert that Ohio’s long-arm statute establishes jurisdiction over not only a person but also that person’s agents or other personal representatives. If a court cannot impute the actions of an agent or representative to a non-resident defendant under the statute, they contend that the defendant would wrongly be provided with immunity for its acts. They argue that Auto-Owners, as J&R’s agent or representative, acted for J&R when it caused an economic loss in Ohio to an Ohio company by placing a five-month hold on Fraley’s truck. Given that Ohio law protects insurers from direct lawsuits, Fraley Trucking’s attorneys instead assert that the insurer acted for its insured, so its conduct in an insurance matter must be attributed to the insured for any injuries it causes.

Fraley Trucking’s attorneys also contend that Auto-Owners’s conduct falls under Ohio’s long-arm statute because the company holds an Ohio insurance license, it called and corresponded with Fraley’s attorneys to work on the claim, it tried to invoke Ohio’s law barring direct tort actions against insurers, and it held Fraley’s truck in Indiana knowing that the action would cause an economic loss to Fraley’s business in Ohio. For these same reasons, Auto-Owners has also established minimum contact in Ohio, Fraley’s attorneys argue. In addition, they assert that jurisdiction in Ohio is appropriate because Fraley lost business in Ohio, so Auto-Owners’s actions harmed an Ohio citizen, an Ohio business, and Ohio’s tax base. The attorneys conclude that no due process rights have been violated by establishing Ohio’s jurisdiction in this case.

An amicus curiae (friend of the court) brief supporting the position of the Estate of Timothy Oeding et al. has been submitted by Ohio Association of Civil Trial Attorneys. Copies of the amicus briefs and all other filings in the case can be accessed by going to the following link: http://www.supremecourt.ohio.gov/Clerk/ecms/searchbycasenumber.asp and entering the case number, 2012-1994, in the search box.

Contacts
Representing Estate of Timothy Oeding, J&R Equipment and Storing, and Auto-Owners Insurance Company: James Nolan, 513.579.0080

Representing David Fraley d.b.a. Fraley Trucking: Christopher Pagan, 513.424.1823

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Does the Law Allow a Court to Classify a 14- or 15-Year-Old as a Sex Offender During the Child’s Disposition Hearing?

In re: I.A., a minor child, Case no. 2012-2122
Second District Court of Appeals (Mongtomery County)

ISSUE: If a court commits a child to a secure facility, does R.C. 2152.83(B)(1) permit the court to conduct a classification hearing at the time of disposition?

BACKGROUND:
A juvenile court in 2011 found a boy delinquent for committing rape when he was 14 years old. The juvenile, referred to in this case by his initials, I.A., was committed to a secure facility of the Department of Youth Services (DYS) for a minimum period of one year. At the disposition hearing, when I.A.’s sentence was announced and before he was sent to DYS, the court also classified I.A. as a juvenile sex offender registrant.

Attorneys for I.A. appealed to the Second District Court of Appeals, arguing that the juvenile court had no authority to classify him as a juvenile sex offender registrant during his disposition hearing. The Second District found the language in R.C. 2152.83(B)(1) to be unambiguous and said that a juvenile court has discretion to hold a hearing to determine sex offender classification at the juvenile’s disposition, or when the juvenile is released from a secure facility, or at both disposition and upon release, or at neither.

I.A.’s attorneys made a motion to certify that this holding conflicts with a decision in the Fifth District Court of Appeals. The Ohio Supreme Court agreed to review the case to resolve the conflict between appellate districts.

In the Fifth District, the court found that the use of the word “may” in the statute means that the court can decide whether, not when, to classify the juvenile as a sex offender. The court decided that the legislature intended for courts to classify children only after determining whether the disposition and treatment provided in a secure setting was effective.

The language of R.C. 2152.83(B)(1) states: “The court that adjudicates a child a delinquent child … may conduct at the time of disposition of the child or, if the court commits the child for the delinquent act to the custody of a secure facility, may conduct at the time of the child’s release from the secure facility a hearing for the purposes described in division (B)(2) of this section if all of the following apply: …”

Attorneys for I.A. agree with the Fifth District that the statute lets the court decide whether or not to hold a classification hearing. They look to section (A)(1) for an understanding of (B)(1) in this case. While Section (B)(1) applies to offenders who are 14 or 15 years old, Section (A)(1) applies to 16- and 17-year-old offenders but uses the word “shall.” I.A.’s attorneys argue that, when read together, these statutes mean that juveniles who are 16 or 17 are required to be registered as sex offenders (“mandatory registrants”) and those who are 14 or 15 are registered based on the court’s discretion.

The minor’s attorneys also cite section (B)(2) of the statute, which states that a judge is to hold a hearing to review the effectiveness of the child’s disposition and treatment after serving in a secure facility and then determine whether the child should be classified as a juvenile offender registrant. They contend that if the court chooses to conduct a classification hearing, the hearing can only occur when the child is released from the secure facility.

If, however, the Supreme Court finds R.C. 2152.83(B)(1) to be ambiguous, I.A.’s attorneys assert that legislative intent also makes the section’s meaning clear. The Fifth District, they argue, determined that the General Assembly’s intent was that “may” refers to the court’s decision whether, not when, to classify a juvenile as a sex offender registrant. Given that section (A)(1) requires the court to wait until an older juvenile’s release to issue the mandatory classification of the child as a sex offender registrant, the Fifth District reasoned that section (B)(1) also requires the court to wait until a younger juvenile’s release to determine whether the child should be classified as a sex offender. Otherwise, the appeals court said, younger offenders, unlike older juveniles, could be classified before the court could evaluate the benefits of treatment.

Attorneys for the state also argue that the statute is clear, but assert that the Second District’s decision is the correct interpretation. They contend that the language allows the court to 1) decide if a classification hearing should be held and 2) decide when it will be held – either at the disposition hearing or when the juvenile is released. They assert that other Ohio appeals courts have reached this conclusion as well. As a result, the state’s attorneys argue the court was permitted to conduct a classification hearing at I.A.’s disposition.

Juvenile courts, under section (A)(1), must classify older offenders as sex offender registrants. The state’s attorney argue that (B)(1) in fact gives younger offenders more benefits. They assert that juvenile courts can classify younger offenders at disposition and then revisit that classification after treatment, if it chooses, when the child is released.

Attorneys for I.A. counter in their reply brief that no court has ever interpreted this statute the way the state argues it should be interpreted. They assert that section (B)(1) permits only one classification hearing. While other Revised Code sections provide opportunities to change or discontinue a classification order, I.A.’s attorneys assert that the statute at issue does not allow the court to revisit or re-determine a classification order.

Contacts
Representing I.A.: Amanda Powell, 614.466.5394

Representing the State of Ohio: Andrew French, 937.225.5757

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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.