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Tuesday, April 19, 2011

State ex rel. Northern Ohio Chapter of Associated Builders & Contractors, Inc., et al. v. Barberton City School Board of Education et al., Case no. 2010-0943
9th District Court of Appeals (Summit County)

Cincinnati Bar Association v. Vlad Sigalov, Case no. 2011-0120
Hamilton County


Does Individual Taxpayer Have 'Special Interest' That Confers Standing to Sue School District Over Construction Contract?

Suit Challenges Prevailing Wage Requirement in Barberton Construction Bids

State ex rel. Northern Ohio Chapter of Associated Builders & Contractors, Inc., et al. v. Barberton City School Board of Education et al., Case no. 2010-0943
9th District Court of Appeals (Summit County)

ISSUE:  Do individual residents of a school district who pay local taxes pursuant to a bond levy that funds school construction have a “special interest” in local school construction contracts that gives them standing to file a common law taxpayer lawsuit against the school district to bar execution of a construction contract? 

BACKGROUND:  In March 2008, Barberton voters approved a 5.2 mill bond levy to fund various school construction projects, including partial funding for a new middle school.  Under an agreement between the school district and the Ohio School Facilities Commission (OSFC), 40 percent of the middle school project was to be paid for through the local bond levy and the remaining 60 percent was to be funded by state tax revenues obtained through OSFC.

In March 2009, the Barberton School Board requested bids for the first phase of the middle school construction project, which involved site preparation work. In its bid request, the board specified that bidders were to pay their workers at state prevailing wage rates as provided for in R.C. 4115.  On April 1, 2009, the board awarded the site preparation contract to a company called Mr. Excavator, which had submitted the lowest bid.

Two days later, a lawsuit against the school district was filed in the Summit County Court of Common Pleas by parties including Fechko, an unsuccessful bidder for the site preparation contract; two individuals who resided and paid property taxes in the Barberton School District; and the Northern Ohio Chapter of Associated Builders and Contractors Inc. In their complaint, the plaintiffs  sought a judgment declaring that the school district had exceeded its legal authority by requiring bids for the site preparation contract to include payment of prevailing wages, and asked the court to invalidate the contract between the district and Mr. Excavator and to enjoin the school district from taking any action to implement the site preparation contract. The complaint was later amended to add OSFC and Mr. Excavator as co-defendants.

The school district filed a motion seeking dismissal of the complaint on the bases that 1) the plaintiffs did not have legal standing to pursue a lawsuit challenging the validity of the site preparation contract, and 2) their complaint failed to state a claim that would entitle them to relief.  The trial court granted the motion to dismiss, holding that none of the plaintiffs had standing to file a common law “taxpayer”  suit challenging the contract because they had not sustained damages that were different in kind  from those suffered by every other Barberton resident and property owner whose tax dollars would be spent on the construction project.

The plaintiffs appealed the trial court’s ruling to the 9th District Court of Appeals, which affirmed the dismissal of their complaint based on lack of standing. The plaintiffs then sought and were granted Supreme Court review of the 9th District’s decision.

Attorneys for the plaintiffs contend that under earlier Supreme Court of Ohio decisions, a taxpayer has been held to have standing to challenge an action of a government agency in court if the taxpayer has made payments into a “special fund” and the proceeds of that fund will be impaired or depleted by an unauthorized action of the agency.  In this case, they say, a distinct portion of the property tax payments made by the individual taxpayer plaintiffs since 2008 have been made pursuant to the March 2008 Barberton bond levy that was specifically earmarked for local school construction projects, including the middle school project.  Because of those local tax payments, which are directly impacted by the Barberton middle school project and are not common to all taxpayers across the state, they argue, the taxpayers in this case have a “special interest” in the site preparation contract that gives them standing to challenge it in court.

Attorneys for the school district and OSFC respond that no prior decisions of this Court or any other Ohio court have held that an individual taxpayer’s mere payment of local property tax gives that person private standing to challenge a local government agency’s contract in court simply because the contract expends local tax dollars. They assert that if the plaintiffs’ reading of the law were adopted, any person who pays property tax in any of the state’s 613 school districts would have individual standing to file suit to challenge any term of any contract that their local district entered into. They argue that the correct standard is the one applied by the trial court and 9th District in this case, which is that an individual has standing to file a taxpayer action only where a government contract or order causes a particularized injury or impact on that individual that is different in character from the impact sustained by the general public.

Contacts
Alan G. Ross, 216.447.1551, for the Northern Ohio Chapter, Associated Builders & Contractors et al.

Tamzin Kelley O'Neil, 330.670.0005, for the Barberton City Schools Board of Education.

Alexandra T. Schimmer, 614.995.2273, for the Ohio School Facilities Commission.

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Attorney Discipline

Cincinnati Bar Association v. Vlad Sigalov, Case no. 2011-0120
Hamilton County

The Board of Commissioners on Grievances & Discipline has recommended that Cincinnati attorney Vlad Sigalov be permanently disbarred for engaging in a pattern of misconduct that included neglect and haphazard representation of clients in multiple immigration cases that caused vulnerable clients to be arrested when they should not have been and one client to needlessly spend nine months in jail.

The board also found that Sigalov improperly accepted settlement offers on behalf of clients in several personal injury cases without consulting the clients, cashed the settlement checks without the client’s knowledge or permission, withdrew legal fees from the proceeds, and subsequently made false statements to the clients and engaged in other dishonest and misleading conduct to cover up the fact that he had settled their cases without their permission.

In recommending disbarment as the appropriate sanction for his misconduct the board noted the aggravating factors that Sigalov engaged in a pattern of misconduct involving multiple offenses, acted with a dishonest or selfish motive, refused to acknowledge the wrongful nature of his conduct, caused significant harm to vulnerable clients who relied on his professional representation, and submitted false evidence and false statements and engaged in other deceptive practices during the disciplinary process.

Sigalov has filed objections to the board’s report and recommended sanction. His attorneys argue that  the hearing panel that heard his case violated Sigalov’s due process rights by allowing the Cincinnati Bar Association, which prosecuted the complaint against him, to reopen its case and introduce new evidence after the prosecution had closed its case and Sigalov had testified in response. They also assert that the evidence presented by the bar association did not support the hearing panel’s findings that the charges in the complaint had been proved by clear and convincing evidence. Even if the Court finds that Sigalov violated one or more disciplinary rules, they assert that the recommended sanction of disbarment be reduced as disproportionate to his conduct and excessive compared to the penalties imposed in similar cases.

Counsel for the bar association respond that the reopening of its case was permitted specifically to respond to a letter introduced by Sigalov during his testimony before the hearing panel to show that the letter was an after-the-fact fabrication that could not have been sent to his client on the date he claimed to have sent it. They argue that the hearing panel and full disciplinary board carefully assessed the evidence presented, and note that a number of additional violations asserted in the complaint against Sigalov were dismissed where the panel or full board had any reasonable doubt that the charged violation had been proved. They also assert that the board acted within its discretion in determining that the harm done to clients, Sigalov’s deceptive conduct during the disciplinary process and other aggravating factors enumerated in the board’s report were sufficient to support his permanent  disbarment.

Contacts
John B. Pinney, 513.621.6464, for the Cincinnati Bar Association.

Mark A. VanderLaan, 513.977.8200, for Vlad Sigalov.

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