Jack C McGowan, LLC

Bad Faith

Case: Flynn v. Fairview Village Retirement Community, Ltd, 2012-Ohio-2582 (Bifurcation) – June 14, 2012

The Ohio Supreme Court held that a trial court’s decision not to grant a motion for bifurcation in violation of the protections in R.C. 2315.21(B) mandating bifurcation at trial of the presentation of punitive damages from compensatory damages was a final appealable order under R.C. 2505.02(B)(6), reversing the 8th District Court of Appeals’ dismissal of the appeal for lack of a final appealable order. This decision clarifies and extends the Court’s recent decision in Havel v. Villa St. Joseph that R.C. 2315.21(B) supercedes Civ. R. 42(B).

Case: Havel v. Villa St. Joseph, 131 Ohio St. 3d 235, 2012-Ohio-552 (Bifurcation) – February 15, 2012

The Supreme Court of Ohio held R.C. 2315.21(B) is constitutional, takes precedence of Civ. R. 42(B) which allowed discretion in permitting bifurcation and creates a substantive enforceable right to separate stages of trial relating to the presentation of evidence for compensatory and punitive damages in tort actions.

Construction Defect Litigation

Case: Torchik v. Boyce, 121 Ohio St.3d 440, 2009-Ohio-1248 (Fireman’s rule) – March 25, 2009

Plaintiff/Appellant Ricky Torchik, a Ross County Deputy Sheriff, appealed a ruling of the Court of Appeals holding the “fireman’s rule” barred his ability to recover from an independent contractor for injuries he suffered as a result of steps collapsing when he was approaching a residence to investigate a burglar alarm. The Ohio Supreme Court held the “fireman’s rule” does not apply to bar suit against an independent contractor whose negligence is alleged to have caused injury to police officers or firefighters acting in the scope of their official duties.
Prior to the Court’s decision in Torchik, there had been no Ohio case holding the “fireman’s rule” did not apply to independent contractors.

Contracts

Case: Building Industry Consultants, Inc. v. 2M Parkway, Inc., 2009-Ohio-1910 (Breach of contract versus quantum meruit/unjust enrichment) – April 27, 2009

In this case, Building Industry Consultants, Inc. (BIC) sent 2M Parkway, Inc. (2M) proposals for services as a construction manager. 2M Parkway, Inc. never got government approval for its project. BIC sued 2M claiming 2M owed it for the unjust enrichment it received for the work done by BIC despite no formal contract between the parties. The Court of Appeals reversed the trial court’s grant of summary judgment in favor of 2M holding no express contract had been formed on the basis of the various proposals as none had ever been accepted by 2M. It also reversed the trial court’s decision that BIC could not recover in quantum meruit since it ruled that no express contract existed.

Case: Complete General Construction Co. v. Kard Welding, Inc., 2009-Ohio-1861 (Contract formation – firm offers) – April 21, 2009

The Court held where a firm offer was not accepted within the period the offer was firm, the offeror was not bound by the offer and was not liable for cover damages. Kard had attempted to withdraw its original firm offer based on a mistake in price, but Complete General somehow had been unaware of the attempted withdrawal. Negotiations went past the date of the firm offer on terms other than price which Kard had made part of its original proposal. After the expiration of the firm offer, Kard refused to enter into a contract with Complete General on the original terms. Complete General hired another subcontractor and sued for cover damages and claimed the firm offer was illusory. The Court explained Complete General could have accepted Kard’s original offer any time within the period it was firm but failed to do so.

Employment

Case: Meyer v. United Parcel Serv., Inc., 122 Ohio St.3d 104, 2009-Ohio-2463 (Grievance procedures) – June 2, 2009

The Ohio Supreme Court held proceeding before the Ohio Joint State Committee equivalent to an arbitration and barred plaintiff’s claim pursuant to R.C. 4112.14(C). Plaintiff was terminated from his employment. Plaintiff had filed a grievance with his employer. The grievance was heard before the Ohio Joint State Committee and was upheld as being for just cause. He then brought suit under Chapter 4112 of the Revised Code alleging age discrimination. The Ohio Supreme Court reasoned the grievance process of the employer afforded sufficient protections to the employee and was impartial; therefore, it was the functional equivalent of arbitration.

Governmental

Case: Sullivan v. Anderson Township, 122 Ohio St.3d 83, 2009-Ohio-1971 (Political subdivision immunity) – May 5, 2009

The Ohio Supreme Court held under R.C. 2744.02(C) any order denying the benefit of an immunity to a political subdivision is a final appealable order despite the lack of compliance with Civ.R. 54(B). Plaintiff sued Anderson Township and an alleged subcontractor for damage to his property as a result of a road widening project. The township moved for judgment on the pleadings on the basis that, even if true, plaintiff’s allegations would not give rise to liability due to the immunity provided in Chapter 2744 of the Revised Code. The trial court granted the motion in part and denied it in part. The township took an immediate appeal. The appellate court held the order appealed from was not a final appealable order as it did not dispose of all claims against all parties and there was no certification that there was no just reason for delay pursuant to Civ.R. 54(B). The Ohio Supreme Court also ruled no analysis of whether the order affected a substantial right and whether it in effect determines an action and prevents a judgment was necessary.

Case: Stoll v. Gardner, 2009-Ohio-1865 (Public employee & private citizen immunity) – April 22, 2009

After a grand jury declined to indict her for tampering with records, Medicaid fraud and theft, Stoll filed a civil suit for defamation, malicious prosecution, false arrest, false imprisonment, and intentional and negligent infliction of emotional distress against several individual involved in the investigation of her alleged Medicaid benefits fraud. The Court of Appeals held there was not sufficient evidence to create genuine issues of material fact to defeat the immunities afforded the defendants, public employees and a private citizen, involved in the investigation. Thus, despite a lack of an indictment, the defendants were entitled to immunity. This case illustrates the rather high burden of showing actual malice, even where one of the defendants had a history with the plaintiff.

Case: State v. Jones, 121 Ohio St.3d 103, 2009-Ohio-316 (Extraterritorial traffic stop/4th Amendment) – February 4, 2009

The Ohio Supreme Court held when an officer has probable cause to initiate a stop for a personally observed traffic violation, the stop, even though outside his jurisdiction, does not violate the Fourth Amendment. This decision follows State v. Weideman (2002), 94 Ohio St.3d 501 and Virginia v. Moore (2008), ____ U.S. ____, 128 S.Ct. 1598.

Case: State v. Certain, 180 Ohio App.3d 457, 2009-Ohio-148 (Obstruction – failure to comply with demand for Terry stop) – January 8, 2009

The Court of Appeals held flight from a request for a Terry stop may constitute a violation of R.C. 2921.31 and permit a charge of obstruction. This case overrules State v. Gillenwater (Apr. 2, 1998), Highland App. No. 97CA0935, 1998 WL 150354.

Insurance

Case: Dutch Maid Logistics, Inc v. Acuity, 2009-Ohio-1783 (Bad faith) – April 16, 2009

In an appeal of a case involving alleged bad faith, the Eighth District Court of Appeals held, in Dutch Maid Logistics, Inc. v. Acuity, 2009-Ohio-1783, that a denial of discovery of certain claims file documents was not an abuse of discretion when the case was one of simple policy interpretation, a purely legal issue for the court to decide, and the bad faith claim hinged upon the initial determination of coverage issues. The court reasoned that since coverage was resolved in favor of the insurer, discovery on the bad faith claim was not necessary.

Insurance Defense

Case: Jaques v. Manton, 2009-Ohio-1468 (Collateral source rule) – March 20, 2009

The 6th District Court of Appeals held R.C. 2315.20 prohibited the introduction of the amount a medical provider accepted as payment where it was from a collateral source which had a right of subrogation. The Court distinguished Robinson v. Bates, 112 Ohio St.3d 17, 2006-Ohio-6362, explaining Bates dealt with an accident and case filed prior to the effective date of R.C. 2315.20 which made it inapplicable.

Insurance Fraud Investigations

Case: W. Broad Chiropractic v. Am. Family Ins., 2009-Ohio-3506 (assignments of proceeds of prospective settlements) – July 23, 2009

The Ohio Supreme Court held there is no “right in being” if a victim has not sued the tortfeasor and had liability and damages determined; therefore, any assignment of proceeds of a prospective settlement, whether paid by the tortfeasor or its insurer is not enforceable against anyone other than the victim. It also held R.C. 3929.06 prohibits enforcement of the assignment against the tortfeasor’s insurer. The fact that American Family had been given notice by West Broad Chiropractic of its assignment prior to American Family settling with the victim was of no consequence.

Case: Elevators Mut. Ins. Co. v. J. Patrick O’Flaherty’s, Inc., 2008-Ohio-6946 (Arson – inadmissibility of no contest plea) – December 31, 2008

The Court of Appeals held a no contest plea to arson and insurance fraud by a co-owner of the insured entity could not be used by the insurer to recover money advanced to its insured for a fire loss under a reservation of rights.

Subrogation Torts

Case: Lang v. Holly Hill Motel, Inc., 122 Ohio St.3d 120, 2009-Ohio-2495 (Slip and fall, building code violation, open and obvious doctrine) – June 3, 2009

The Ohio Supreme Court held that the open-and-obvious doctrine remains applicable in cases where defendant violated the Ohio Basic Building Code and such violations do not preclude summary judgment. The room which Mr. and Mrs. Lang rented had two steps each higher than allowed and no handrails, all in violation of the building code. While attempting to climb the stairs with Mrs. Lang’s assistance, Mr. Lang fell, broke his hip and later died. The Court followed Chambers v. St. Mary’s School (1998), 82 Ohio St.3d 563 (holding violations of building code are not negligence per se) and Armstrong v. Best Buy Co., Inc., 99 Ohio St.3d 79, 2003-Ohio-2573 (holding where a danger is open and obvious a land owner owes no duty of care to individuals lawfully on the premises) and distinguished Robinson v. Bates, 112 Ohio St.3d 17, 2006-Ohio-6362 (holding the open and obvious doctrine inapplicable to protect a defendant who has violated a statutory duty).

Zoning

Case: Willoughby v. Taylor, 180 Ohio App.3d 606, 2009-Ohio-183 (Anti-blight ordinance – vagueness – sufficiency of evidence) – January 16, 2009

The Court of Appeals upheld a conviction based upon a city ordinance prohibiting “blighting factors” as sufficiently supported by the evidence and held the statute was not void for vagueness. The statute did not define “blighting factors”, but gave nonlimiting examples including storage of commercial and industrial materials within public view, unsightly or overgrown landscaping, and ill-kept dwellings. The ordinance also required a “level of maintenance in keeping with the residential standards of the immediate neighborhood,” prohibiting any “element leading to the progressive deterioration and downgrading of the immediate neighborhood with the accompanying diminution of property values.” The evidence of violations included a large volume of “junk” spilling out of a ramshackle shed and strewn around a privacy fenced back yard and a disabled vehicle on a utility trailer in the front yard. The rationale the Court provided for why the ordinance was not void for vagueness was the contextual based standard in the statute which provided a restraint on possible investigator discretion and would help prevent arbitrary or discriminatory enforcement.