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Tuesday, June 3, 2008
Carroll E. Newman, Adams County Auditor v. William W. Wilkins [Richard A. Levin], Tax Commissioner of Ohio, et al., Case no. 2007-1054
State Board of Tax Appeals (Adams County)
In the Matter of the Guardianship of Alice I. Richardson, An Incompetent, Case no. 2007-1546
2nd District Court of Appeals (Montgomery County)
Disciplinary Counsel v. Thomas H. Vogtsberger, Case no. 2008-0397
Fred L. Lager, Administrator of the Estate of Sara E. Lager, deceased v. Ryan Miller-Gonzalez et al. and Nationwide Mutual Fire Insurance Co., Case nos. 2007-1760 and 2007-1762
6th District Court of Appeals (Lucas County)
County Auditor Challenges Tax Exemption of Power Plant Heat-Recovery Equipment
Carroll E. Newman, Adams County Auditor v. William W. Wilkins [Richard A. Levin], Tax Commissioner of Ohio, et al., Case no. 2007-1054
State Board of Tax Appeals (Adams County)
ISSUE: Did the State Board of Tax Appeals (BTA) err in granting tax exemptions to the owners of an Adams County electric generating plant for built-in equipment at the plant based on the board’s finding that this equipment is used to capture and utilize “waste heat” that is generated but not initially used in the process of generating electric power via coal-fired steam turbines?
BACKGROUND: The J.M. Stuart Electric Generating Plant, located on the Ohio River in Adams County approximately 30 miles east of Cincinnati, uses coal-powered boilers to heat water into steam that drives power-generating turbines. The plant is jointly owned and operated by Cincinnati Gas & Electric Company, Dayton Power & Light Company and Columbus Southern Power Company.
In December 2001, the state tax commissioner granted the plant’s owners Thermal Efficiency Improvement Certificates that exempted certain equipment at the plant valued at approximately $37 million from property tax assessment on the basis that the specified equipment was used to increase the efficiency of the facility by recapturing and recirculating “waste steam” from the basic generation process to generate additional electric power. The Adams County Auditor appealed to the BTA, challenging the legality of the commissioner’s ruling granting the tax exemptions. After extensive hearings at which both the auditor and plant owners presented expert testimony, the BTA affirmed the award of tax exemptions for approximately 95 percent of the equipment identified in the commissioner’s 2001 order, and reversed the exemption for the remainder. The auditor exercised his right to appeal the BTA’s ruling to the Supreme Court. The plant owners filed a cross-appeal challenging the portion of the board’s decision that was unfavorable to them.
Attorneys for the auditor urge the Court to nullify the exemptions granted by the tax commissioner and BTA. They point to language in the statute authorizing tax exemptions for thermal efficiency equipment that specifically bars any application relating to facilities “for which construction was completed on or before Dec. 31, 1974.” They argue that the commissioner lacked jurisdiction to grant the exemptions at issue because the Stuart plant was constructed and in operation before the end of 1974, and the current equipment for which exemptions were granted in 2001 merely replaced the plant’s original equipment without any demonstrated improvement in its thermal efficiency. They also assert that the steam recirculation technology for which exemptions were granted is built in to the plant’s boiler system, and functions as an integral part of the basic power generation process – not as a secondary or add-on system to recapture “waste heat” that would otherwise be vented outside the plant.
Attorneys for the plant owners respond that the BTA was correct in rejecting the auditor’s narrow reading of the tax exemption statute. They assert that the Dec. 1, 1974, threshold date in the law does not refer to the date an entire factory or power plant began operating, but rather to the date on which current machinery that improves thermal efficiency was installed. They contend that while the equipment for which they received exemptions is “built in” to their boiler system, it meets the statutory criteria for tax exemption because it captures and re-uses heat not exhausted in the initial combustion process, and by doing so dramatically reduces the amount of coal the plant needs to burn in order to generate the same amount of electricity as plants without similar equipment.
Contacts
David C. DiMuzio, 513.621.2888, for the Adams County Auditor’s Office.
Janyce C. Katz, 614.466.5967, for the State Tax Commissioner.
Anthony L. Ehler, 614.464.8282, for the owners of the Stuart Electric Generating Plant.
Does ‘Next of Kin’ Who Did Not Seek Guardianship Have Standing to Appeal Appointment of Guardian?
In the Matter of the Guardianship of Alice I. Richardson, An Incompetent, Case no. 2007-1546
2nd District Court of Appeals (Montgomery County)
ISSUE: Under the Ohio statutes that govern the appointment of a guardian for an adult who has been adjudged incompetent, does a “next of kin” who is legally entitled to be notified when another person applies for guardianship of her mother, but who did not enter a competing application to be appointed guardian, have legal standing to appeal a court order appointing another person as guardian for the mother?
BACKGROUND: This case involves a legal dispute between the adult children of an elderly woman, Alice Richardson, over where their mother should live and which of them should serve as her guardian.
While a number of legal issues have been raised in the case, the Supreme Court has agreed to review only a specific ruling by the 2nd District Court of Appeals holding that one of Mrs. Richardson’s daughters, Norma Leach, had legal standing to file an appeal of an order of the Montgomery County Probate Court awarding guardianship of her mother to Leach’s sister, Alice Ledford. Leach’s appeal was accepted and subsequently granted by the 2nd District Court of Appeals, with the result that the probate court’s order appointing Ledford as Mrs. Richardson’s guardian was overturned.
Attorneys for Ledford urge the Court to reverse the ruling of the 2nd District and reinstate the probate court order naming Ledford as guardian of Mrs. Richardson. They argue that the court of appeals did not have jurisdiction to hear Leach’s appeal because Leach did not file a competing application in the probate court to become their mother’s guardian, and therefore was not a “party” to that proceeding with legal standing to appeal the probate court’s decision. They point to a 2002 decision, In Re Guardianship of Lee, in which the 2nd District held that a next-of-kin who had not filed a competing application for guardianship did not have standing to appeal the appointment of another person as guardian of a family member because the appellant “suffered no consequences adverse to his interests” as a result of the probate court’s order.
Attorneys for Leach urge the Court to affirm the 2nd District’s ruling that she had standing to file an appeal of the probate court’s guardianship order because, as a “next of kin” legally entitled to receive notice from the probate court of the filing Ledford’s guardianship action under R.C. 2111.04(A)(2)(b), Leach had “an interest in the proceeding concerning her mother that confers on (Leach) that status of a ‘party’ for purposes of Appellate Rule 4(A).”
Contacts
John E. Breidenbach, 937.224.0963, for Alice Ledford.
Lee C. Falke, 937.222.3000, for Norma Leach.
Attorney Discipline
Disciplinary Counsel v. Thomas H. Vogtsberger, Case no. 2008-0397
The Board of Commissioners on Grievances & Discipline has recommended that the law license of Bowling Green attorney Thomas H. Vogtsberger be suspended for two years, with the second year stayed on conditions, for violations of state attorney discipline rules arising from Vogtsberger’s improper use of his law office’s client trust account to conceal his own personal funds from creditors.
The Office of Disciplinary Counsel, which prosecuted the complaint against Vogtsberger before the board of commissioners, agrees with the sanction recommended by the board but has filed an objection urging the Court to overrule the board’s conclusions that Vogtsberger’s improper use of his client trust account did not constitute a violation of the disciplinary rule that prohibits an attorney from engaging in “conduct involving fraud, deceit, dishonesty or misrepresentation,” or a violation of the rule barring attorney conduct that is “prejudicial to the administration of justice.”
Vogtsberger did not file a merit brief within the time limit set by the Court’s rules of practice and procedure, and therefore will not participate in oral argument of the case.
Contacts
Jonathan Coughlan, 614.461.0256, for the Office of Disciplinary Counsel.
Thomas H. Vogtsberger, pro se: 419.352.2535.
Does Policy Exclusion of Coverage ‘For Bodily Injury’ of Relative Bar Parents’ Wrongful Death Claim?
Fred L. Lager, Administrator of the Estate of Sara E. Lager, deceased v. Ryan Miller-Gonzalez et al. and Nationwide Mutual Fire Insurance Co., Case nos. 2007-1760 and 2007-1762
6th District Court of Appeals (Lucas County)
ISSUE: When an auto insurance policy provides uninsured motorist (UM) coverage for damages incurred by a policyholder “because of bodily injury” to an insured or an insured’s relative, does language in the same policy that excludes UM coverage for damages “for bodily injury” to an insured or relative while riding in a non-covered vehicle create ambiguity regarding whether or not the policy covers an insured’s wrongful death claim based on the death of a family member in a non-covered vehicle?
BACKGROUND: This case arises from an insurance claim filed by Fred and Cathy Lager of Toledo seeking recovery under the uninsured/underinsured motorist (UM/UIM) coverage in their auto insurance policy issued by Nationwide Mutual Insurance Co. for their own statutory wrongful death damages arising from the death of their daughter, Sara. Sara was killed in an accident while she was riding as a passenger in her own car, which was being driven by her boyfriend, an underinsured driver. Sara’s car was not covered by the Nationwide policy under which her parents sought to recover.
Nationwide denied coverage, citing an exclusion in the Lagers policy that denied UM/UIM recovery “for bodily injury” of an insured or an insured’s family member while occupying a vehicle owned by an insured or family member that was not a covered vehicle under the Nationwide policy. The Lagers filed suit in the Lucas County Court of Common Pleas, seeking a declaratory judgment that the exclusion in their policy did not bar them from recovering UM/UIM benefits. The trial court entered summary judgment in favor of the Lagers, holding that the language of the Nationwide policy exclusion was ambiguous regarding coverage for a wrongful death claim arising from a family member’s death while riding in a non-covered vehicle. The court cited prior Ohio decisions holding that any ambiguity in the wording of an insurance policy must be interpreted in the manner most favorable to a policyholder.
Nationwide appealed. The 6th District Court of Appeals affirmed the trial court’s holding that the policy language was ambiguous and the Lagers were therefore entitled to coverage. The court of appeals subsequently certified that its ruling was in conflict with a 2007 ruling by the 3rd District in which that court held that very similar policy language was not ambiguous, and that the exclusion in the plaintiffs’ policy applied to bar their wrongful death claim. The Supreme Court has agreed to hear arguments in the case to resolve the conflict between appellate districts.
Attorneys for Nationwide argue that there is “no rational distinction” between the language in its policy generally providing UM/UIM coverage for damages “because of bodily injury” and the language excluding such coverage “for bodily injury” if the injury occurs while an insured person is an occupant of another car owned by the policyholder or a family member that is not covered by the Nationwide policy. They cite dictionary definitions that equate the meanings of the words “for” and “because of,” and assert that those terms are not ambiguous but rather indicate the clear intent in the contract of insurance between Nationwide and the Lagers to exclude UM/UIM coverage arising from the “bodily injuries” that caused Sara’s death while she was riding in a vehicle not covered by the Nationwide policy.Attorneys for the Lagers respond that while it is true that the word “for” can sometimes be substituted for the phrase “because of” in certain contexts, it is also true that in other contexts the words do not have the same meanings. They cite prior court decisions in which several appellate districts have held that the exact policy language at issue in this case was ambiguous, and have therefore held that those policies did provide UM/UIM coverage when a claim did not seek recovery “for bodily injuries” but rather sought to recover for the indirect damages incurred by third parties “because of personal injuries” to a family member. The Lagers contend that, because the language of the Nationwide policy can reasonably be read to preclude direct injury claims that arise from the use of an “other owned vehicle,” but to allow indirect wrongful death claims arising from such use, the policy is ambiguous and therefore must be read in the manner most favorable to them as policyholders.
Contacts
W. Randall Rock, 937.224.7625, for Fred Lager, administrator of the estate of Sara Lager.
Edward T. Mohler, 419.242.7488, for Nationwide Mutual Insurance Co.
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