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Tuesday, September 23, 2014

Hospice of Southwest Ohio, Inc., Joseph Killian, and Brookdale Senior Living, Inc.v. Patricia Hulsmeyer, Case nos. 2013-1766 and 2013-1644
First District Court of Appeals (Hamilton County)

Disciplinary Counsel v. Harland H. Hale, Case no. 2013-1622
Franklin County

Hope Academy Broadway Campus et al. v. White Hat Management, LLC, et al., Case no. 2013-2050
Tenth District Court of Appeals (Franklin County)

Must Former Employee Make Report to Director of Health to Sue for Retaliatory Termination?

Hospice of Southwest Ohio, Inc., Joseph Killian, and Brookdale Senior Living, Inc.v. Patricia Hulsmeyer, Case nos. 2013-1766 and 2013-1644
First District Court of Appeals (Hamilton County)

ISSUE: Must an employee report suspected abuse or neglect of a nursing home resident to the Ohio director of health before the employee can bring a claim of retaliation under R.C. 3721.24(A)?  

Patricia Hulsmeyer is a registered nurse and formerly served as a team manager for Hospice of Southwest Ohio. Her duties included overseeing the care of Hospice patients who resided at one of Brookdale Senior Living’s facilities in Cincinnati, and supervising nurses at that facility.

On October 19, 2011, a Hospice nurse brought to Hulsmeyer’s attention suspected abuse by Brookdale staff of a patient in the Brookdale nursing home. At the patient’s request, photographs of the bruising were taken.

Hulsmeyer notified the director of nursing at Brookdale of the suspected abuse. She also reported the abuse to her own supervisor accompanied by a written report. She contacted the patient’s daughter to report the alleged abuse as well.

The patient’s daughter contacted Brookdale’s executive director seeking more information about the injuries. As a result, on November 4, 2011, a meeting was held to discuss the patient’s care; the patient’s son and daughter as well as Hulsmeyer attended the meeting.

On November 30, Hospice fired Hulsmeyer. The termination letter, signed by Joseph Killian, chief executive officer of Hospice, criticized Hulsmeyer for notifying the patient’s daughter about the suspected abuse. The letter specifically indicated the notification as the justification for termination. Hulsmeyer sued Hospice, Brookdale, and Killian for several claims, including retaliation under R.C. 3721.24 for reporting suspected abuse of a Brookdale patient. The trial court dismissed most of her claims, and stated that an employee must report suspected abuse or neglect to the Ohio director of health to sue for retaliatory termination of employment.

On appeal, the First District Court of Appeals ruled that an employee does not have to report suspected abuse to the Ohio director of health to later bring a statutory claim of retaliation. The court decided the statute does not require a specific report to the Ohio director of health. The court then notified the Supreme Court of Ohio that its decision was in conflict with another appellate court’s judgment.

Hospice, Brookdale, and Killian also appealed to the Supreme Court. Hulsmeyer filed a cross appeal against Hospice, Brookdale, and Killian. The Supreme Court certified the conflict and accepted the appeals.

The Ohio statute in question (R.C. 3721.24) is silent as to whom a report of suspected resident abuse or neglect must be made. Attorneys for Hospice, Brookdale, and Killian argue that the statute should be construed in pari materia, which means that related statutes should be read together as a whole. Looking at the related statutes, the attorneys contend that the laws require a report of suspected abuse or neglect to be reported to the director of health.

They contend that when the statutes are read together it is clear that Hulsmeyer was required to make a report to the director of health. They point to R.C. 3721.22(A), which indicates that health professionals must report suspected abuse to the director of health. They argue that because R.C. 3721.22(A) specifically mentions reports made to the director of the health, then R.C. 3721.24 must also require a report to the director of health even though not specifically stated. Thus, because Hulsmeyer did not submit a report to the director of health, the attorneys argue that she cannot file a claim for retaliation.

Attorneys for Hulsmeyer argue that the statutory framework should be interpreted in the opposite way. They contend that the statute is not ambiguous and only requires a report of abuse or neglect, which does not have to be made to the director of health.

They argue that the statute should not be read in pari materia, because it is not ambiguous. They say that a statute can be broad without being ambiguous, which is the case for R.C. 3721.24. They also state that if the legislature had intended that a report be made to the director of health the legislature would have put the phrase “director of health” in the statute or cited to R.C. 3721.22, neither of which was done. Therefore, Hulsmeyer may bring a claim of retaliation for her employment termination against the facilities.

An amicus curiae brief supporting the position of Hulsmeyer has been submitted collectively by:

The Ohio Employment Lawyers Association also has filed an amicus brief in support of Hulsmeyer.

- Miriah Lee

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket (2013-1766 and 2013-1644).

Representing Hospice of Southwest Ohio and Joseph Killian: Michael W. Hawkins, 513.977.8270

Representing Brookdale Senior Living: Susan M. Audey, 216.696.3715

Representing Patricia Hulsmeyer: Robert A. Klingler, 513.665.9500

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Attorney Discipline

Disciplinary Counsel v. Harland H. Hale, Case no. 2013-1622
Franklin County

The Board of Commissioners on Grievances and Discipline has recommended that former Franklin County Judge Harland H. Hale be suspended from the practice of law for six months for dismissing his lawyer’s speeding ticket and attempting to cover up the actions.

The disciplinary matter began on May 1, 2013, when the board certified a one-count complaint against Hale. The board and Hale agreed to a sanction of a six-month suspension from the practice of law in September 2013. However, the Supreme Court of Ohio rejected the agreement and asked the board to consider a more severe sanction.

As the sole judge in the environmental division of the Franklin County Municipal Court, Hale had jurisdiction to hear traffic matters, criminal arraignments, and other routine judicial matters.

Patrick Quinn, Hale’s personal attorney, received a speeding ticket on November 21, 2011. Quinn later failed to appear at the arraignment for his ticket, which resulted in a warrant for his arrest. He called Hale about his ticket and warrant. Hale then falsely filled out a judgment entry form indicating that the prosecutor had dismissed the case against Quinn. After the media brought attention to Quinn’s traffic case, Hale tried to cover up the dismissal. Hale resigned from the bench on May 24, 2013.

After the Supreme Court rejected the first suspension agreement, a second hearing was held. At that hearing, Hale testified that after resigning from the bench, he did not act as an attorney on legal matters until late November 2013. However, after the hearing, Hale corrected his testimony, stating that he had represented at least five clients who had cases pending in the court in which he had recently resigned.

The board found that Hale violated four judicial conduct rules and three professional conduct rules, including acting in a way that does not promote public confidence in the integrity of the judiciary. Because Hale’s conduct involved a single one-time event of ticket fixing, the board still recommends a six-month suspension, the same sanction it first recommended.

The board reviewed cases concerning ticket fixing from other jurisdictions that resulted in public reprimands to term suspensions and cases involving other types of misconduct for guidance on an appropriate suspension for Hale. The board concluded that this case was less egregious than others, which is why it is recommending the same suspension term as before. The board also relied on the following factors: Hale voluntarily resigned, he has no prior disciplinary record, and he was cooperative with the disciplinary process.

The Disciplinary Counsel, which filed the complaint against Hale, objects to the board’s recommendation of a six-month suspension. The Disciplinary Counsel asserts that the board is not providing any consequences for lying under oath about the number of clients he represented after his resignation. The Disciplinary Counsel points to the fact that it took two months for Hale to come forward after his hearing to correct his previous statement regarding when he began to represent clients. Counsel argues that due to his misrepresentation during his hearing his suspension should be increased from the original six-month suspension the board has recommended.

Hale filed a response, stating that his misrepresentation was an honest mistake and that six months is an appropriate suspension. He maintains he did not intentionally make a misrepresentation during the hearing. He also notes that he was not compensated for work done before late November 2013.

- Miriah Lee

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.

Representing the Office of Disciplinary Counsel: Joseph Caligiuri, 614.461.0256

Representing Harland H. Hale: George Jonson, 513.241.4722

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Who Owns Property Bought by Private Entity to Operate Charter Schools?

Hope Academy Broadway Campus et al. v. White Hat Management, LLC, et al., Case no. 2013-2050
Tenth District Court of Appeals (Franklin County)


In November 2005, ten community, or charter, schools entered into similar agreements with separate education management organizations, all owned by WHLS of Ohio, to manage and operate the schools. The organizations running the schools receive assistance from White Hat Management.

Each school received a “continuing fee,” per-student funding from the state to educate students. White Hat was paid about 95 percent of those state funds to operate the schools. The company also received all state and federal grant money awarded to the schools. In return, White Hat ran the day-to-day operations of the schools, including locating a building, hiring staff, and buying furniture, computers, software, supplies, and other equipment.

The ten involved schools are Hope Academy Broadway Campus, Hope Academy Cathedral Campus, Hope Academy Lincoln Park Campus, Hope Academy Chapelside Campus, Hope Academy University Campus, Hope Academy Brown Street Campus, Hope Academy West Campus, Life Skills Center of Cleveland, Life Skills Center of Akron, and Life Skills Center of Lake Erie. According to the briefs, two of the Hope academies have shut down, while the other eight schools have changed names. The Hope academies served students from kindergarten through eighth grade, and the Life Skills Centers helped students who had dropped out of high schools a chance to get their high school diplomas.

In May 2010, the schools sued White Hat making various claims, including that White Hat had refused to detail how it used the public funds it had been given. Relevant to this appeal, the trial court found in part that White Hat was not acting as a purchasing agent for the schools when it used the state funds to buy supplies and equipment for the schools.

The schools appealed to the Tenth District Court of Appeals, which affirmed the trial court decision. The schools then filed an appeal with the Ohio Supreme Court, which agreed to hear the case.

Public funds
Attorneys for the schools assert that operating a community school for public school students is a government function, so White Hat is accountable for how it uses the public funds it was given to run the schools. A private entity that receives and controls public funds has a duty to account for how it manages that money, they contend, citing a 2006 Ohio Supreme Court decision.

“The General Assembly enacted a policy that allows community schools to contract with private, for-profit companies to conduct schools’ daily operations,” the attorneys write in the schools’ brief to the court. “Nothing suggests that the legislature, in doing so, intended to relieve private management companies of the obligations that uniformly go with the receipt of public funds.”

White Hat can make a profit, but only after it meets its obligations under the contract and the law, the schools’ attorneys conclude.

Attorneys for White Hat respond that the company is required to submit detailed numbers about its operations and that its accounting is reviewed by the state auditor. They further argue, though, that the funds were no longer public once paid to White Hat. They contend that the state attorney general has held that public funds paid to a private entity for a service are private once payment is made.

Purchasing agent
The schools’ attorneys maintain that funds designated for educating public school students must be used for the benefit of the schools. When management organizations use funds to purchase materials and property for operating a school, they are acting as a purchasing agent for the schools and those purchases are school property, regardless of in whose name the property is titled, the attorneys conclude. Otherwise, they argue, schools would be left with few resources for students if a management organization could keep all the property after a contract ends.

They claim that the General Assembly could not have intended this result, and that the view conflicts with a statute (R.C. 3314.074) that provides for redistributing assets from one school to other schools when a community school closes.

White Hat’s attorneys counter that the company took on all costs and financial risk to run the schools, and the contracts indicate that White Hat owns the property it purchased. The exception is property purchased with grant money, which is owned by the schools and titled in their names, they note.

Having non-grant purchases in White Hat’s name allowed the company to move equipment, furniture, and other property to different schools based on the schools’ changing needs, the attorneys contend, allowing for efficient operations. They also claim the contracts state the schools may buy the property if they pay a certain “reasonable cost.”

Fiduciary relationship
A private entity that operates a community school has a fiduciary relationship with the school, the schools’ attorneys argue. They contend that White Hat acted as an agent for the schools by acting primarily for the schools’ benefit in their operation, which in their view makes White Hat a fiduciary.

They assert that White Hat met the three elements required to establish an agency relationship: White Hat could alter the schools’ relationships with third parties by running the schools, making purchases, and applying for grants; White Hat agreed to act on behalf of the schools to carry out the schools’ statutory purpose; and the schools had the right to control and supervise White Hat’s conduct in entrusted matters, such as connecting with the state education department, changing the size or location of a school, and drafting handbooks and procedures.

In addition, the schools’ attorneys contend that the schools are public offices because they perform a government function (education), and that White Hat is a “public official” because it is an agent of the schools. And, as public officials, White Hat owes a fiduciary duty to the public, they argue.

White Hat’s attorneys counter that the company is an independent contractor, and the schools cannot unilaterally create a fiduciary relationship. No evidence shows that White Hat intended to enter a fiduciary relationship with the schools, they maintain.

They note that White Hat bought all of the equipment, furniture, and property to start the schools before it received any funding. In addition, the attorneys argue, White Hat was not an agent because it did not have the authority to bind the schools to third parties as the purchaser in the transactions.

They also dispute the idea that White Hat is a public official. Based on the statutes, the school boards were the governing authority of the schools, and the schools functioned based on agreements with their sponsor.

“While White Hat remained a private entity providing services under the Management Agreements, the Schools at all times were governed by public officials – the Department of Education, the Boards and the sponsors, who established the creation, mission, academic standards and teacher qualifications for the Schools,” they argue in White Hat’s brief to the court.

An amicus curiae brief supporting the position of Hope Academy Broadway Campus et al. has been submitted by the Ohio School Boards Association.

The following organizations have filed a collective amicus brief supporting White Hat Management, et al.:

The Ohio Coalition for Quality Education and Summit Academy Management have each filed separate amicus briefs in support of White Hat.

- Kathleen Maloney

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.

Representing Hope Academy Broadway Campus et al.: Karen Hockstad, 614.628.6880

Representing White Hat Management, LLC, et al.: Conrado Paragas, 614.628.0096

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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.

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