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Sharon Wilborn et al. v. Bank One Corporation et al., Case no. 2007-0558
7th District Court of Appeals (Mahoning County)
State of Ohio v. William Nucklos, Case no. 2007-0754
2nd District Court of Appeals (Clark County)
Donald D. Howard v. Miami Township Fire Division, Case no. 2007-0873
2nd District Court of Appeals (Montgomery County)
State of Ohio v. Ralph E. Clark, Case nos. 2007-0983 and 2007-1047
11th District Court of Appeals (Ashtabula County)
Gasper Township Board of Trustees v. Preble County Budget Commission et al., Case nos. 2007-1282 and 2007-1047
State Board of Tax Appeals
Sharon Wilborn et al. v. Bank One Corporation et al., Case no. 2007-0558
7th District Court of Appeals (Mahoning County)
ISSUE: Does Ohio law bar the enforcement of a clause in a preprinted residential mortgage contract that allows a homeowner who defaults by missing one or more payments to forestall a foreclosure action and reinstate the mortgage only by paying the lender not only the delinquent payments and late fees, but also an additional amount to cover the lender’s attorney fees incurred in initiating the foreclosure action?
BACKGROUND: This case involves a lawsuit filed by Sharon Wilborn of Youngstown and 10 other homeowners whose lenders filed foreclosure actions against them after they were declared “in default” of their residential mortgages. The plaintiffs sought to recover amounts they were charged by their lenders to cover the lender’s attorney fees as a mandatory precondition of terminating the foreclosure proceedings and reinstating the original terms of their mortgages. They urge the Court to reverse the lower court rulings in this case and instead follow earlier court decisions holding that any contract provision requiring a debtor to pay a creditor’s legal fees for enforcement of the contract is void and unenforceable under Ohio law.
In response to the filing of the homeowners’ suit in the Mahoning County Court of Common Pleas, the lenders filed a motion to dismiss on the basis that Ohio law does not prohibit the enforcement of a contractual agreement to pay “reinstatement fees” that the plaintiffs agreed to pay if they fell into default. The trial court agreed and dismissed the homeowners’ claims. On review, the 7th District Court of Appeals affirmed the trial court’s ruling.
The homeowners now ask the Supreme Court to hold that the trial and appellate courts erred in failing to follow this Court’s 1911 decision in Miller v. Kyle, which held that a contract provision requiring a debtor to pay his creditor’s attorney fees “upon default in payment” is against the public policy of the state and therefore unenforceable. They also point to the language of R.C. 1301.21, which they say specifically excludes “indebtedness incurred for purposes that are primarily personal, family, or household” from the types of “contracts of indebtedness” in which an agreement to pay the opposing side’s legal fees is enforceable. They argue that the “reinstatement fees” collected from the homeowners in this case were a mandatory precondition for the lenders to dismiss foreclosure actions against them, and contend that the trial court and court of appeals were clearly mistaken in ruling that such charges were not “obligations to pay attorney fees that arise in connection with the enforcement of a contract of indebtedness.”
Attorneys for the lenders point to several state and federal court cases decided since Miller that they say have substantially expanded the range of contracts in which the parties may legally agree that a debtor will reimburse a creditor for its legal expenses if the debtor defaults on the terms of the contract. They argue that Miller and R.C. 1301.21 bar enforcement of a debtor’s contractual obligation to pay his creditor’s attorney fees incurred in the creditors’ pursuit of a foreclosure action. They assert that the legal costs assessed against the defaulting homeowners in this case were incurred in connection with the borrowers’ voluntary exercise of their contractual option to reinstate their mortgage agreements.
NOTE: The Ohio Attorney General’s Office has entered an amicus curiae (friend of the court) brief supporting the position of the homeowners. The attorney general argues that, if upheld, the shifting of lenders’ legal costs to borrowers who are already in default of their mortgages will encourage the filing of foreclosure actions and worsen the state’s present residential mortgage foreclosure crisis. A separate amicus brief supporting the plaintiffs has also been entered by a coalition of Ohio legal aid societies and homelessness and housing agencies. A joint amicus brief supporting the lenders’ legal arguments has been filed by a group of banking and home mortgage industry groups including the American Bankers’ Association and Ohio Mortgage Bankers Association.
Contacts
Michael S. Miller, 614.221.4400, for Sharon Wilborn and other mortgage debtors.
James C. Martin, 412.288.3131, for Bank One Corp. and other mortgage lenders.
State of Ohio v. William Nucklos, Case no. 2007-0754
2nd District Court of Appeals (Clark County)
ISSUE: The state law that defines and prohibits the crime of drug trafficking includes an exception for licensed health professionals who prescribe and dispense drugs according to approved standards of medical practice spelled out in other sections of the Ohio Revised Code. This case asks the Court to decide whether, when a licensed health professional is charged with illegal trafficking in prescription drugs: a) the state bears the burden of proving as an element of the charged offense that the defendant was not acting within minimal standards of medical care; or b) the defendant bears the burden of proving as an affirmative defense to the trafficking charge that he was acting within minimal medical standards.
BACKGROUND: In 2006, Dr. William Nucklos was charged with 20 felony counts of drug trafficking and illegally processing drug documents after a two-year investigation of his Springfield medical office where he prescribed OxyContin for cash payments of $75 to $200. During his trial, the judge instructed jurors that they should regard the licensed health professional exception in the drug trafficking statute as an “affirmative defense,” i.e., that in order to find Nucklos not guilty based on that exception, they must find that he proved by a preponderance of the evidence that he acted within minimal medical standards. Nucklos was found guilty on all counts and sentenced to 20 years in prison and $100,000 in fines.
In 2007, the 2nd District Court of Appeals reversed Nucklos’ conviction, holding that the trial court’s jury instruction was in error because the health professional exception in the drug trafficking statute is not an affirmative defense that the defendant must prove, but is rather an additional element that the state must prove in cases where a health professional is charged with trafficking (i.e., that the defendant did not follow approved medical standards).
The state now asks the Supreme Court to reverse the 2nd District’s ruling. They argue that the portion of the drug trafficking statute that creates an exception for licensed health professionals, R.C. 2925.03(B)(1), meets all the criteria for an affirmative defense set forth in a 1983 Supreme Court of Ohio decision, State v. Doran, because it creates “an excuse or justification” that “(is) peculiarly within the knowledge of the accused” and “(is) of such a nature that the accused can fairly be required to adduce supporting evidence.”
Accordingly, they assert, the trial judge properly instructed the jury that it was Nucklos’ burden to prove by a preponderance of the evidence that his practices in prescribing OxyContin were consistent with the minimum standards applicable to all Ohio physicians.
Dr. Nucklos did not submit a responsive brief within the deadline imposed by the Supreme Court’s Rules of Practice and Procedure, and therefore will not participate in oral argument before the Court.
Contacts
Larry W. Zukerman, 216.696.0900, for
William Nucklos.
William P. Marshall, 614.466.8980, for the State of Ohio.
Donald D. Howard v. Miami Township Fire Division, Case no. 2007-0873
2nd District Court of Appeals (Montgomery County)
ISSUE: Does a township’s alleged failure to prevent or remove ice from a roadway near the scene of an earlier fire training exercise expose the township to civil liability under an exception to sovereign immunity for “negligent failure to remove obstructions from public roads?”
BACKGROUND: In January 2004, the Miami Township Division of Fire conducted a controlled-burn training exercise on a property in Miamisburg. Some of the water deployed by firefighters during the exercise ran off from the burn site onto and across a nearby road. Because of freezing temperatures, salt was applied to wet spots in the roadway by the Division of Fire in the late afternoon, after completion of the exercise. Firefighters dispatched to double-check the burn site and roadway at approximately 7:30 p.m. that evening reported that they saw no ice or unsalted wet pavement, and therefore did not apply a second round of salt. Approximately 90 minutes later, 16-year-old Christopher Howard lost control of his car while rounding a curve near the burn site, crashed into a tree and was killed.
The victim’s father, Donald Howard, subsequently filed a wrongful death and survivorship action against the township in Montgomery County Common Pleas Court. The township entered a motion for summary judgment dismissing Howard’s claims on the basis that, under the state’s sovereign immunity statute, R.C. Chapter 2477, political subdivisions are immune from civil liability for injuries arising from their performance of a governmental function. Howard opposed the motion, arguing that his son’s accident fell under a statutory exception to sovereign immunity that applies when a political subdivision has “negligently failed to remove obstructions from public roads.” The trial court granted summary judgment in favor of the township, ruling that the water and ice at issue in this case did not constitute an “obstruction” under the usual and ordinary meaning of that term.
Howard appealed to the 2nd District Court of Appeals, which reversed the trial court’s grant of summary judgment and remanded the case for further proceedings. The court of appeals ruled that the definition of an “obstruction” applied by the trial court was too narrow, and that a broader definition including “any object that has the potential of interfering with the safe passage of motorists” should have been applied. Under the latter definition, the 2nd District held, a trial court could find that the ice and water allegedly left on the road by the firefighters qualified as an “obstruction” sufficient to defeat the township’s assertion of sovereign immunity.
Miami Township now asks the Supreme Court to reverse the 2nd District’s ruling. They point out that in its most recent revision of the sovereign immunity statute, the General Assembly rewrote the specific portion of the law applicable to this case and replaced the word “nuisance” with the word “obstruction.” They argue that this revision indicates the legislature’s intent to narrow the conduct for which a political subdivision may be held civilly liable from failure to remove any kind of “nuisance” from a roadway, to the less-demanding of standard of failure to remove an item the “obstructs” the road.
They cite dictionary definitions and a 2006 decision of the 10th District Court of Appeals holding that the usual and ordinary usage of the word “obstruct”is to block up, stop up, or place obstacles or impediments to passing. They urge the Court to reinstate the trial court’s summary judgment in their favor by holding that the duty of a political subdivision to remove an “obstruction” from a public road extends only to objects which block or close off some portion of the roadway and thereby prevent motorists from using it in an ordinary manner.
Howard argues that the plain, ordinary meaning of “obstruction” includes that which “hinders, interferes with or impedes” passing motorists, in addition to blocking or clogging up. Howard also cites dictionary definition and a 2006 decision of the 7th District Court of Appeals that supports the broader definition of an “obstruction” adopted by the 2nd District in this case.
Contacts
Dawn M. Frick, 937.222.2333, for Miami Township Division of Fire.
John A. Smalley, 937.222.8888, for Donald Howard.
State of Ohio v. Ralph E. Clark, Case nos. 2007-0983 and 2007-1047
11th District Court of Appeals (Ashtabula County)
ISSUE: Was a defendant’s guilty plea to an offense that carries a life sentence “knowing, intelligent and voluntary” when the sentencing court misinformed the defendant that upon release from prison he would be subject to a maximum of five years of post-release control and subject to reincarceration for a maximum of nine months for any violation of post-release control when, in fact, the defendant was eligible only for lifetime parole during which any parole violation would result in his reincarceration for life?
BACKGROUND: Under Ohio’s Rules of Criminal Procedure, a trial court may not accept a guilty plea from a criminal defendant without personally addressing the defendant and determining, among other things, that he/she “is making the plea voluntarily, with understanding of the nature of the charges and the maximum penalty involved ... ”
In January 2006, Ralph Clark of Ashtabula County entered a plea of guilty to one count of aggravated murder for the killing of his estranged wife, Carolyn Clark. He was sentenced to life imprisonment with parole eligibility after 25 years, plus a consecutive three-year term for using a firearm in the commission of the crime.
In a written plea agreement signed by Clark and the prosecutor, again in the judge’s dialogue with Clark prior to accepting his guilty plea, at again the time sentence was pronounced, the trial court mistakenly advised Clark that, if he were granted parole after serving 28 years in prison, he would be subject to a maximum of five years of community control, and that any violation of his community control during that period would result in his reimprisonment for a maximum of nine months. In fact, under Ohio’s criminal sentencing statutes a person paroled after serving a term of life imprisonment for aggravated murder is not eligible for the standard “community control” sanctions imposed on other felony offenders after they are released, but is rather subject to lifetime probation, with any violation of the terms of probation punishable by reimprisonment for the rest of his life. The trial court’s written entry journalizing Clark’s conviction and sentence removed the prior references to community control and stated that, if released, he would be subject to indefinite probation.
Clark subsequently appealed his convictions and sentence, arguing that because he was erroneously told he would be eligible for a limited term of community control and a limited penalty for violating the terms of community control after serving his prison term, his guilty plea to aggravated murder must be vacated because it was not “knowingly, intelligently and voluntarily made,” as required by Crim.R. 11(C)(2). The 11th District Court of Appeals upheld the validity of Clark’s guilty plea and sentence, but certified that its decision was in conflict with a 2003 ruling by the 12th District in a similar case, State v. Prom. The Supreme Court has agreed to hear arguments to resolve the conflict between appellate districts.
Attorneys for Clark urge the Court to follow the reasoning of the 12th District in Prom and the justices’ own very recent ruling in State v. Sarkozy (decided Feb. 14, 2008). They claim those decisions held that a trial court’s failure to inform a defendant about a mandatory term of post-release control that will be included in his sentence prior to accepting his guilty plea fails to accurately inform the defendant about the “maximum penalty” to which he is subjecting himself, and therefore renders his plea less than “knowing, intelligent and voluntary.”
The Ashtabula County prosecutor’s office, representing the state, argues that before accepting his guilty plea, the trial court accurately informed Clark about the “maximum sentence” to which that plea would subject him: life imprisonment. Because Clark’s sentence included only the “possibility of parole” after 28 years, rather than a specified term of imprisonment followed by a known term of post-release control, they assert that the Court should follow a line of cases holding that a trial court does not commit reversible error by failing to address in a plea colloquy the possible length or terms of a speculative period of post-release probation to which a defendant may or may not be subject.
Contacts
Stephen P. Hardwick, 614.266,5394, for Ralph Clark.
Shelley M. Pratt, 440.576.3662, for the State of Ohio and Ashtabula County prosecutor’s office.
Gasper Township Board of Trustees v. Preble County Budget Commission et al., Case nos. 2007-1282 and 2007-1047
State Board of Tax Appeals
ISSUE: Under a state law that allows filing of an appeal of a county budget commission ruling either in person or by certified mail, does the appellant fail to comply with the statute when it sends a timely notice of appeal by certified mail addressed to the budget commission, but the notice is delivered to another county office and never reaches the addressee?
BACKGROUND: The trustees of Gasper Township in Preble County appealed to the Ohio Board of Tax Appeals (BTA) from a decision of the Preble County Budget Commission apportioning the county’s share of state Undivided Local Government Fund (ULGF) monies for the 2005 tax year among the various municipalities and townships within the county. As required by R.C. 5705.37, the township trustees sent a copy of their notice of appeal to both the BTA and the county budget commission, exercising the option to deliver those notices by a certified mail.
The BTA subsequently heard and affirmed the township’s appeal, ruling that the budget commission had not followed required procedures in adopting the formula by which it allocated Preble County’s 2005 ULGF funds. The board scheduled a second hearing to determine what adjustments must be made in the county’s 2005 budget allocations to Gasper Township and other political subdivisions. Before the second hearing was held, however, the county budget commission and several other Preble County communities filed a motion with the BTA asserting that the budget commission had never been served with a copy of the original Gasper Township notice of appeal, and since the statutory time limit for doing so had expired, the BTA had acted outside its jurisdiction in hearing that appeal, and its ruling in favor of the township must be voided.
The BTA conducted a hearing at which the township trustees argued that they had complied with the filing requirements of R.C. 5705.37 by sending a timely copy of their notice of appeal by certified mail addressed to the budget commission at the address printed on its letterhead, which was “2nd Floor, Preble County Courthouse.” Although it was later determined that the notice had been mistakenly delivered to the courthouse office of the County Commissioners, and signed for by their receptionist, the BTA ruled that because the township had not accomplished the actual delivery of its notice of its appeal to the budget commission within the legal time limit, their appeal was not duly “filed” and the BTA’s decision affirming their appeal must be vacated. The township trustees have exercised their right to appeal the BTA’s ruling to the Supreme Court.
Attorneys for the township urge the justices to find that the BTA erred in ruling that their transmission of a timely and properly addressed notice of appeal to the county budget commission by certified mail did not meet the filing requirements of R.C. 5705.37. They argue that a 1936 Supreme Court case cited by the BTA, Fulton v. State ex rel. General Motors Corp., was based on a different statute that made no provision for filing by mail, whereas explicit language in R.C. 5705.37 not only allows for filing by certified mail, but specifies that the date on which such an appeal notice is postmarked by the U.S. Postal Service will be regarded as the official date of filing. They also challenge the BTA’s reliance on two of its own earlier rulings disqualifying appeal notices that were sent by mail. In one of those cases, they note, the appellant could not produce a sender receipt to verify that it had actually sent a certified letter, while in the other case the appellant listed the addressee of its notice as the State Tax Commissioner, but directed the mailing to the office address of the BTA.
In this case, they say, the township produced a copy of its sender receipt proving that the notice was mailed before the deadline, and that receipt also showed that the mailing had been directed to the letterhead address of the budget commission. Therefore, they argue, the township had complied with every requirement of the law, and the BTA erred in denying its appeal based on a mistake made by postal authorities – over whose actions the township had no control.
Attorneys for the Preble County Budget Commission urge the Court to affirm the BTA’s strict application of the threshold procedural requirement that the budget commission must be actually served with notice of an appeal of one of its rulings in order for the BTA to hear and decide that appeal. They point out that the budget commission, like many other county commissions, has no separate physical office at the courthouse, and argue that the township trustees should have known to direct their certified mailing to office of the county auditor, who is designated by law as the secretary of the budget commission.
Contacts
John R. Varanese, 614.220.9440, for the Gasper Township Trustees.
Richard F. Hoffman, 614.559.0605, for the Preble County Budget Commission et al..
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