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Tuesday, Nov. 1, 2011

State of Ohio v. Paul E. Palmer, Case no. 2010-1660
10th District Court of Appeals (Franklin County)

State of Ohio v. Carl M. Morris, Jr., Case no. 2010-1842
9th District Court of Appeals (Medina County)

Kimberly A. Zurz [David Goodman], Director, Ohio Department of Commerce v. Kimberly Mayhew, Esq. [Robert G. Hanseman], Administrator of the Estate of Roy D. Dillabaugh, et al., Case no. 2010-2159
2nd District Court of Appeals (Montgomery County)

State of Ohio v. Jason T. Carrick, Case no. 2011-0230
9th District Court of Appeals (Wayne County)

In re: Application of Jeffrey Vincent Gueli, Case no. 2011-1323

Did Trial Court Have Authority to Dismiss 'Adam Walsh Act' Indictment, Order Deleting Offender from Registries?

State of Ohio v. Paul E. Palmer, Case no. 2010-1660
10th District Court of Appeals (Franklin County)

ISSUE:  Did a trial court exceed its authority by granting a defendant’s pretrial motion to dismiss an indictment for failure to register as a sex offender pursuant to the Ohio Adam Walsh Act (AWA), and by ordering that the defendant’s name be removed from all federal, state and local lists of sex offenders, based on the court’s finding that the defendant was not subject to the registration requirements of the AWA?

BACKGROUND:  This case involves a former sex offender, Paul Palmer of Columbus, who was released from prison prior to the July 1, 1997 effective date of Ohio’s first sex offender registration statute, referred to as Megan’s Law.  Under the provisions of Megan’s Law, because of the date of his release from prison, Palmer was not among past offenders who were required to register and periodically update their current addresses with their local sheriff.

In 2007, the legislature enacted a new and more stringent set of sex offender registration requirements in a bill identified as the Ohio Adam Walsh Act. The AWA replaced the former Megan’s Law language mandating registration of offenders who were convicted of a sex crime or released from a prison term for a sex offense after July 1, 1997 with a requirement that all former sex offenders must register and maintain a current record of their home address and other information “regardless of when the sexually oriented offense was committed.” The amended law instructed the attorney general to assign all past offenders to one of three new “tiers” based exclusively on the crime for which they were convicted, with each tier imposing successively more frequent and more extensive registration and community notification requirements on the offender.

After Palmer received a letter from the attorney general’s office advising him that he had been classified as a Tier III (most dangerous) offender and therefore would be subject to lifetime registration every 90 days. Palmer filed suit in the Franklin County Court of Common Pleas contesting his classification. While that challenge was pending, the Franklin County prosecutor’s office obtained an indictment charging Palmer with failure to report a change of address and failure to register his current address pursuant the AWA. Palmer filed a motion to dismiss the indictment and asked the trial court to consolidate consideration of that motion with his classification challenge.

In September 2009, after a hearing on his pretrial motions, the trial court granted Palmer’s challenge to his classification and dismissed the state’s indictment against him, holding that he “cannot properly be classified under the Adam Walsh Act,” and “is not under any statutory duty to verify his current address or to register as required under R.C. 2950.04 through 2950.06.” Lastly, the court ordered that Palmer’s name be removed from all lists of sexually oriented offenders that the local, state or federal governments maintain.

The state appealed the trial court’s orders. On review, the 10th District Court of Appeals reversed all three rulings and remanded the case to the trial court for further proceedings. The appellate panel held that:
1) Under Criminal Rule 12(C), a trial court may grant pretrial dismissal of an indictment only if it determines that the language of the indictment did not properly charge an offense. In this case, the court of appeals held that the trial judge apparently based his dismissal on a finding that the state could not prove that Palmer had a duty to register – a finding that could only properly be made at trial.
2) Even though Palmer had not been subject to sex offender  registration under Megan’s Law, the amended language adopted by the legislature in enacting the AWA authorized the attorney general to classify him and required him to register.
3)  Because the removal of Palmer’s name from offender lists was based on the trial court’s incorrrect finding that the law did not require him to register, that portion of the trial court’s  decision  also was subject to reversal.

Palmer sought and was granted Supreme Court review of the 10th District’s decision.

Attorneys for Palmer argue that the trial court properly dismissed his indictment based on the Supreme Court of Ohio’s 2005 holding in State v. Champion that a former offender who was released from prison prior to the July 1, 1997 effective date of Megan’s Law was not subject to classification or registration requirements.  In this case, they assert, the trial court found that the provisions of the AWA that took effect in 2008 applied only to offenders who had previously been required to register under Megan’s Law, and did not extend registration requirements to persons like Palmer who were not required to register under the prior version of the statute.

They also point out that, since the 10th District’s decision in this case, the Supreme Court has announced three decisions, State v. Bodyke, State v. Gingell and State v. Williams, holding that the provisions of the AWA that authorized the attorney general to reclassify sex offenders, including the provision under which Palmer was ordered to register, are unconstitutional and may not be enforced.
Based on those rulings, they assert, the trial court’s findings that Palmer was not subject to registration or prosecution for failure to register, and its dismissal of the charges against him were legally correct and should be affirmed.

Attorneys for the state urge the Court to affirm the 10th District’s holding that the trial judge exceeded his authority by dismissing Palmer’s indictment based not on any defect in the indictment itself but rather on a premature determination that the state would fail to prove its case at trial.  They also point out that the Bodyke decision was limited to cases in which the attorney general changed sex offender classifications originally set by judges  − a factor not present in this case – and argue that nothing in any of this Court’s decisions to date supports the trial court’s order to delete Palmer’s name from all state, local and federal lists of sex offenders regardless of whether those lists were compiled pursuant to the AWA.

Steven L. Taylor, 614.462.3555, for the state and Franklin County prosecutor's office.

David L. Strait, 614.525.8872, for Paul Palmer.

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What Is Proper Appellate Standard of Review for Trial Court Ruling that 'Other Acts' Evidence was Admissible?

Must Appeals Court Conduct ‘Abuse of Discretion’ or ‘De Novo’ Review?

State of Ohio v. Carl M. Morris, Jr., Case no. 2010-1842
9th District Court of Appeals (Medina County)

ISSUE: In reviewing a trial court’s decision to admit evidence of a criminal defendant’s prior wrongful acts under Ohio Evidence Rule 404(B), is a court of appeals required to apply a deferential “abuse of discretion” standard, or should the appellate court conduct its own independent “de novo” analysis of whether the evidence was admissible under the rule?

BACKGROUND: In general, when a court of appeals reviews the ruling of a trial court regarding a question of fact, including the admissibility of evidence, the appellate court does so under a deferential “abuse of discretion” standard in which the trial court’s rulings must be affirmed unless the appellate court finds that the trial court’s ruling was “unreasonable, arbitrary or unconscionable.” On the other hand, when an issue raised on appeal is based on a question of law, i.e. how a statutory provision or controlling court decisions should be interpreted or applied to the facts, appellate courts are required to undertake a “de novo” review in which the court of appeals conducts its own independent analysis of the legal question at issue, and is free to substitute its judgment for that of the trial court.

When the prosecutor in a criminal case attempts to introduce evidence of a defendant’s past wrongful acts that were not committed as part of the crime with which he is currently charged, Ohio Evid.R. 404(B) bars the trial court from admitting such evidence if it finds that the primary purpose or effect of the evidence is to suggest to jurors that the defendant’s character is consistent with the commission of the current offense. The rule contains a list of exceptions, however, that allow a trial court to admit proffered “other acts” evidence if the court finds that the evidence provides proof of the defendant’s identity, motive  or  intent, or demonstrates a common scheme, plan or method of operation that was also employed in the commission of the current offense.

In this case, Carl Morris Jr. of Medina County was indicted on two counts of child rape and sentenced to life in prison for engaging in  a multi-year pattern of sexual abuse of the younger of his two step-daughters.  Morris appealed his convictions to the 9th District Court of Appeals.  Among other issues, Morris argued that the trial court erred in admitting “other acts” testimony by the victim’s mother in which she testified that Morris became abusive and kicked the family dog when his wife declined to have sex with him, and testimony by the victim’s older sister in which she described an incident in which Morris grabbed her around the waist in his bedroom and suggested that he would like to “do things” with her, but it would make her mother angry.

The 9th District reversed Morris’ convictions and remanded the case for a new trial.  In its decision, the court of appeals conducted a de novo review of the mother’s and older stepdaughter’s testimony, and held that the trial court had committed reversible error in admitting that other-acts evidence because it prejudiced the jury against Morris and did not fall under any of the “non-character” exceptions set forth in Evid.R. 404(B). 

The state sought and was granted Supreme Court review of the 9th District’s decision.

Representing the state, attorneys for the Medina County prosecutor’s office argue that the 9th District failed to follow a line of prior court decisions, including several decisions of the Supreme Court of Ohio, holding that courts of appeals must apply an abuse-of-discretion standard in reviewing  a trial court’s rulings on the admissibility of evidence, including other acts evidence. Instead of properly evaluating the trial court’s ruling admitting the disputed evidence solely to determine if it was “unreasonable, arbitrary or unconscionable,” they assert, the 9th District improperly conducted its own independent analysis of the evidence under the Crim. R. 404(B) criteria, and substituted its judgment for that of the trial judge.  Even if a “de novo” review was proper, they argue further that the 9th District erred by holding that the other-acts testimony of the mother and older sister of the victim should have been excluded, because that testimony suggested a motive (sexual frustration) for the criminal conduct with which Morris was charged, and also showed an intent or plan to seek sexual gratification through his step-daughters.

Attorneys for Morris respond that while most trial court evidentiary rulings are factual in nature and therefore subject to an abuse-of-discretion standard of review, the admissibility of other-acts evidence such as the disputed testimony in this case required the trial court to interpret and apply the language  of Crim. R. 404(B) and a specific statute that preceded the rule, R.C. 2945.59. Because Morris’ appeal alleged that the trial court’s admission of the other-acts testimony resulted from a misinterpretation of these provisions, they assert, the 9th District was effectively addressing a legal rather than a factual issue, and the court therefore acted properly in conducting a de novo review.  They also note that, even if the Court rules that an abuse-of-discretion standard should have been applied, the 9th District has already indicated that it would have granted Morris a new trial under that standard as well, so the only practical effect of remanding the case to the court of appeals would be to unnecessarily delay the beginning of a new trial for Morris.

NOTE:  The Cuyahoga County prosecutor’s office and Ohio Prosecuting Attorneys Association have entered amicus curiae (friend of the court) briefs supporting the position of the state.

Matthew Kern, 330.723.9536, for the state and Medina County prosecutor's office.

David Sheldon, 330.723.8788, for Carl Morris.

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Does Law Allow State Securities Division to Freeze Fraud Proceeds That Accused Has Passed On to Third Parties?

Or Is Director’s Authority to Seek Injunctions Limited to Persons Involved in Fraud Scheme?

Kimberly A. Zurz [David Goodman], Director, Ohio Department of Commerce v. Kimberly Mayhew, Esq. [Robert G. Hanseman], Administrator of the Estate of Roy D. Dillabaugh, et al., Case no. 2010-2159
2nd District Court of Appeals (Montgomery County)

ISSUE: Does a provision of state securities law that empowers the Director of the Ohio Department of Commerce to seek court injunctions freezing the assets of  persons accused of securities fraud, and to seek “such other equitable relief as the facts warrant,” allow the director to seek injunctions that temporarily freeze proceeds from a fraud scheme that have been transferred to the possession of an innocent third party?

BACKGROUND:  In this case, the Director of the Ohio Department of Commerce, who oversees regulation of the financial securities industry within the state through the department’s Division of Securities, asks the Supreme Court to vacate or reverse a decision of the 2nd District Court of Appeals interpreting R.C. 1707.26, a provision of state law that sets forth the Division’s enforcement powers.

The case involves the division’s attempt to recover the proceeds of  a Ponzi scheme in which Roy Dillabaugh of Dayton, doing business as The Dillabaugh Group, ostensibly invested approximately $12.5 million he obtained from 146 investors in Ohio and Indiana between 1994 and 2007. The scheme was not discovered until after Dillabaugh’s death in November 2007. In an ensuing investigation, the division determined that Dillabaugh had not invested the funds his clients entrusted to him in any business or commercial activity, but instead had used new investments to pay purported “earnings” to earlier investors, and to support a personal lifestyle that included multiple homes and six timeshares in different vacation locales. 

Dillabaugh also used some of the proceeds from his fraudulent activities to purchase 34 life insurance policies that were payable to his wife, Alice Dillabaugh, his son, Lorne, and his secretary, Mary Long. Following his death, Mrs. Dillabaugh received over $6.5 million from those policies, Lorne collected approximately $310,000 and Long received $100,000. After the fraud was discovered, in an effort to preserve what remained of the investors’ funds until a receiver could be appointed to oversee the disposition of Dillabaugh’s assets, the division filed suit in the Montgomery County Court of Common Pleas and obtained temporary injunctions barring The Dillabaugh Group, Dillabaugh’s estate and the beneficiaries of his insurance policies from disposing of or disbursing funds in their possession. 

Mrs. Dillabaugh, Lorne and Long filed motions for summary judgment dissolving the injunctions against them. They argued that the division’s authority to seek court injunctions seizing or freezing funds under R.C. 1707.26 extends only to funds that are in the possession of a person or entity accused of securities fraud and such persons’ “agents, employees, partners, officers, directors or shareholders.”  Because they had not held any position in the Dillabaugh Group and were not accused of involvement in the fraud scheme, the insurance beneficiaries asserted that the division had no authority under R.C. 1707.26 to file suit against them or constrain their use of funds that were legally theirs. The beneficiaries also argued that neither the division nor a court-appointed receiver could attach the proceeds of Dillabaugh’s insurance policies under R.C. 3911.10, a provision of state law that generally bars a decedent’s creditors from asserting claims against his family members or dependents for the proceeds of the debtor’s life insurance policies.

After issuing several intermediary rulings, in December 2009 the trial court issued a final order that found Dillabaugh had committed securities fraud, issued a permanent injunction barring the Dillabaugh Group and Dillabaugh’s estate from making any use or disbursement of funds in their possession, ordered the Dillabaugh Group and the estate to make restitution to all of the investors, and appointed a receiver to sue and collect on behalf of the investors. With regard to the insurance beneficiaries, the final order stated that the receiver would be able to pursue recovery from them for the amounts Dillabaugh paid in premiums for the policies, but pursuant to R.C. 3911.10 could not seek recovery of the proceeds of the policies themselves.

The division of Securities appealed the final order to the 2nd District Court of Appeals. Mrs. Dillabaugh and Long cross-appealed.  Among other conclusions of law in its decision, the 2nd District held that the division had no authority under R.C. 1707.26 to seek even temporary injunctions freezing the funds of the insurance beneficiaries. The division sought and was granted Supreme Court review of the 2nd District’s ruling with regard to its powers under R.C. 1707.26.

In urging the Court to overturn the 2nd District’s ruling, attorneys for the division advance two separate arguments.  They argue first that the 2nd District did not have jurisdiction to consider or rule on the issue of the division’s authority under R.C. 1707.26, because nothing in the trial court’s final order interpreted or was based on that statute. They point out that while the trial court order from which the state appealed and the beneficiaries cross-appealed did address the recoverability of insurance premiums from the beneficiaries, that ruling addressed the receiver’s authority under a different provision of state securities law, and did not authorize any action by the division against the beneficiaries under R.C. 1707.26.  Because the issues presented to the 2nd District on appeal did not include any live controversy between the division and the insurance beneficiaries relative to R.C. 1707.26, they contend, the portion of the 2nd District’s ruling interpreting that statute was merely advisory in nature, and should therefore be vacated. The division asserts that if the 2nd District’s opinion is not vacated but allowed to stand as precedent, other courts may rely on it to bar the division from taking swift action to prevent criminals like Dillabaugh from keeping the proceeds of their crimes by transferring funds to the fraudster’s family members or other third parties before a receiver can be appointed.

If the Court should decide to waive the purported  jurisdictional defect and address the merits of the 2nd District’s ruling interpreting R.C. 1707.26, the division urges the Court to reverse the court of appeals and hold that the statute not only authorizes the Director to sue parties actually involved in securities fraud, but also to seek “such other equitable relief as the facts warrant.”  In cases like this one, they say, that broad language can and should be read to permit the division to pursue the “equitable relief” of a restraining order or injunction temporarily freezing the assets of a third party to whom a wrongdoer has transmitted proceeds of the fraud scheme, at least until a receiver can be appointed to protect the victims and oversee the proper disposition of those funds.

Attorneys for Mrs. Dillabaugh assert that the 2nd District was correct in its holding that R.C. 1707.26 authorizes the division to pursue legal action only against parties who are accused of actual involvement in securities fraud and their agents, and does not authorize the state to seek injunctions, temporary or otherwise, that would freeze the funds of a third party not connected to the fraud. They agree, however, that there is no longer a live controversy between the parties in this case, and say that therefore any decision by this Court on the merits would be contrary to the Court’s policy of declining to issue advisory opinions.

NOTE: Mrs. Dillabaugh has waived oral argument. Therefore only attorneys for the Ohio Department of Commerce will appear and argue before the Court.

Alexandra T. Schimmer, 614.995.2273, for David Goodman, Director, Ohio Department of Commerce.

Ralph W. Kohnen, 513.357.9618, for Alice Dillabaugh.

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Is Prohibition Against 'Unreasonable Noise' in State Disorderly Conduct Statute Void for Vagueness?

State of Ohio v. Jason T. Carrick, Case no. 2011-0230
9th District Court of Appeals (Wayne County)

ISSUE: Is the provision in Ohio’s disorderly conduct statute that makes it a criminal offense to cause inconvenience, annoyance or alarm to another by “ ... making unreasonable noise,” unconstitutionally vague and therefore unenforceable?

BACKGROUND: Jason Carrick of Wayne County was cited by sheriff’s deputies for a minor misdemeanor count of disorderly conduct based on an incident in which neighbors complained about loud music and particularly “booming” bass coming from a building owned by Carrick at which he was hosting  a Halloween party. Carrick initially complied with the officers’ request  that he reduce the volume of the music, but later increased the volume again after the officers departed.  After obtaining signed complaints from the neighbors, the deputies returned to Carrick’s property and cited him for violating  the state disorderly conduct statute, R.C. 2917.11. Specifically, Carrick was charged with a violation of 2917.11(A)(2), which prohibits recklessly causing “inconvenience, annoyance or alarm to another by ... making excessive noise.”

Carrick contested the citation in Wayne County Municipal Court. During pretrial proceedings and again at trial, Carrick moved the court to dismiss the disorderly conduct charge on the basis that the “unreasonable noise” provision he was accused of violating was unconstitutionally vague because it failed to describe the prohibited conduct with enough specificity that a person of ordinary intelligence would know what the law required. The trial court denied the motion to dismiss, holding that the statute was not unconstitutionally vague. After hearing testimony by the sheriff’s officers, the complaining neighbors and Carrick and several of his party guests, the court found Carrick guilty of disorderly conduct and fined him $150.

Carrick appealed, asserting among other assignments of error that the trial court erred by failing to find that R.C. 2917.11(A)(2) is unconstitutionally vague. The 9th District Court of Appeals affirmed the judgment of the trial court. In its decision, the court of appeals cited the Supreme Court of Ohio’s 1983 ruling in State v. Dorso, in which the Court upheld a Cincinnati noise ordinance based on a  finding that the ordinance imposed a “reasonable person” standard under which the state must show that music or other noise caused by a defendant was loud enough that it would cause annoyance or alarm to a person of average sensibilities under similar circumstances.  The 9th District found that a similar “reasonable person” standard was implicit in the language of R.C. 2917(A)(2), and therefore the statute was sufficiently specific to meet the requirements of the constitution.   

Pursuant to a motion by Carrick, the 9th District certified that its ruling affirming the constitutionality of  R.C. 2917.11(A)(2) was in conflict with a 1985 decision, State v. Compher, in which the 4th District found that identical language in an earlier version of the disorderly conduct statute was unconstitutionally vague. The Supreme Court agreed to review the case to resolve the conflict between appellate districts.

Attorneys for Carrick urge the Court to follow the U.S. Supreme Court’s holding in Grayned v. City of Rockford (1972) that a law is void for vagueness if it fails to provide an explicit standard of conduct that an average citizen can understand and follow, and requires police and courts that apply the law to act “on an ad hoc and subjective basis, with the attendant dangers of arbitrary and discriminatory application.” 

They point out that, unlike R.C. 2917.11(A)(2), the Cincinnati noise ordinance upheld in this Court’s Dorso decision included language that explicitly prohibited noises that were: 1) produced by persons in or around restaurants, hotels, bars or similar establishments; 2) loud; 3) consisted of music, singing, loud talking, or other amplified sound; 4) were disturbing to the peace of the neighborhood; and 5) did not reflect due regard for the proximity of nearby residences or facilities such as hospitals.  They argue that by including these specific details, the ordinance affirmed in Dorso arguably met the Grayned requirement of explicit standards, while the bare prohibition against “unreasonable noise” in R.C. 2917.11(A)(2) provides no guidance at all for citizens − and leaves the police and courts to enforce the law by applying what may be widely differing subjective and arbitrary standards of “reasonableness” on a case by case basis.

Attorneys for the Wayne County prosecutor’s office cite multiple court decisions upholding various state laws and local ordinances as constitutional even though they do not provide extensive details describing prohibited conduct so long as it prescribes a standard of conduct that is understandable to a person of ordinary intelligence.  They point out that courts reviewing the constitutionality of statutes enacted by the legislature  are required to begin with a strong presumption of constitutionality, and only invalidate a law where no reasonable construction of its terms meets constitutional requirements. In this case, they argue, the 9th District correctly held that the evidence presented at Carrick’s trial showed that the music from his late-night party was excessively loud and disturbing to other neighborhood residents, and therefore constituted “unreasonable noise” under the reasonable-person standard that is implicit in R.C. 2917.11(A)(2).

Clarke W. Owens, 330.262.2667, for Jason Carrick.

Latecia E. Wiles, 330.262.3030, for Wayne County prosecutor's office.

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Application to Take Bar Examination

In re: Application of Jeffrey Vincent Gueli, Case no. 2011-1323

The Supreme Court of Ohio’s Board on Character and Fitness has recommended that the pending application of Jeffrey V. Gueli of Cleveland to take the Ohio Bar Examination be disapproved and that Gueli be permitted to register as a candidate for admission to the practice of law no sooner than  Nov. 1, 2013, prior to applying to take the July 2014 bar examination. That recommendation was based on a report to the board by the Cleveland Metropolitan Bar Association indicating that Gueli does not currently meet the fitness requirements for admission to the practice of law in Ohio.

Gueli, who was previously admitted to the practice of law in Florida, has filed objections to the board’s recommendations, which include a requirement that he complete a three-year contract with the Ohio Lawyers Assistance Program (OLAP) to address mental health and substance abuse issues as a condition of being  permitted to seek admission to practice in this state.  Gueli argues that he has received and is continuing to receive effective treatment for the former mental health and substance abuse issues addressed in the board’s report, and asserts that the recommended delay in his eligibility for admission to practice in Ohio and the OLAP contract requirements are unnecessary and unfair.

The Cleveland Metropolitan Bar Association has filed an answer to Gueli’s objections, documenting examples of  what the association believes is a failure by Gueli to recognize or admit his continuing issues or to comply with the mental health treatment and substance abuse recovery steps recommended by his treating physician and counselor.

NOTE: Gueli has waived oral argument. Therefore only attorneys for the Cleveland Metropolitan Bar Association will appear to argue before the Court.

Susan M. Audey, 216.696.3715, for the Cleveland Metropolitan Bar Association.

Jeffrey V. Gueli, pro se, no current contact Information available.

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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.

Parties interested in receiving additional information are encouraged to review the case file available in the Supreme Court Clerk's Office (614.387.9530), or to contact counsel of record.