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Tuesday, April 3, 2012

Sugarcreek Township v. City of Centerville, Case no. 2011-0926
Second District Court of Appeals (Greene County)

Ernest Hollingsworth v. Deb Timmerman-Cooper, Warden, Case no. 2011-1095
U.S. District Court for the Southern District of Ohio

Donald P. Troyer et al. v. Leonard J. Janis, DPM, Case no. 2011-1162
Tenth District Court of Appeals (Franklin County)

Disciplinary Counsel v. Marc Edward Dann, Case no. 2011-2026
Board of Commissioners on Grievances & Discipline


Does Law Entitling Township to Taxes from Annexed Land Bar City from Granting Post-Annexation 'TIF' Deferral?

Where City Seeks Tax Increment Financing to Encourage Development

Sugarcreek Township v. City of Centerville, Case no. 2011-0926
Second District Court of Appeals (Greene County)

ISSUE: Does a provision of state law that entitles townships to continue receiving property tax revenue from land that has been annexed to a municipality through an “expedited type-2” annexation prevent the annexing municipality from later adopting municipal tax-incentive financing (TIF) that temporarily defers city and township taxes payable on the annexed property to pay for public improvements that support economic development of the land?

BACKGROUND:  This case involves the interplay between two state laws. 

One statute, R.C. 5709.40, authorizes political subdivisions to encourage economic development of land within their borders by temporarily deferring most of the increase in  property taxes generated by land development into a special fund called a TIF.  Revenues diverted to a TIF are used to pay off the public debt incurred by local governments in making  public improvements (new or improved streets, traffic lights, storm sewers, etc.) that were needed to support the development project.

The second statute, R.C. 709.023, provides several different procedures that owners of property in a township may employ to expedite the annexation of their land into a municipality. One provision of that law, R.C. 709.023(E), creates  an “expedited type-2” annexation process through which township land can be annexed into a municipality in a relatively short time and with minimal administrative review if 100 percent of the property owners in the affected area support the annexation. That provision specifies, however, that land annexed into a municipality via the expedited type-2 process “remains subject to the township’s real property taxes.”

In this case, the owners of 220 acres of land in Greene County near the intersection of Wilmington Pike and I-675 in Sugarcreek Township sought and obtained expedited type-2 annexation of their property into the city of Centerville.  Centerville subsequently sought approval by the Greene County commissioners of a TIF that would set aside 75 percent of the increased property taxes on the annexed properties over a 10-year period to pay for public improvements necessary for the development of  a proposed mixed-use commercial, office, medical and residential development on that land. The commissioners approved the requested TIF in 2006, despite objections by Sugarcreek Township.

The township then filed suit against Centerville in the Greene County Court of Common Pleas seeking a court order that would a) prohibit  the city from establishing a TIF in the annexed territory, or b) if the court found TIF financing could be used by Centerville, declare that the township’s tax revenues would be exempt from any municipal TIF, meaning that the township would be entitled to  immediately collect from the property owners all of the township taxes payable on the increased value of the developed property, and that none of those tax revenues could be diverted to the TIF to pay off the costs of the public improvements that made the development possible.

After prolonged litigation that resulted in two separate trial court judgments that were reviewed by the Second District Court of Appeals, the second district held that because the property at issue had been annexed through expedited type-2 proceedings under R.C. 709.023(E), and the language of that statute guaranteed that the annexed property would “remain subject to the township’s real property taxes,” the township must be excluded from any municipal TIF that would reduce or delay the township’s immediate collection of  taxes on the increased value of the annexed land.

Although the developer of the proposed project had abandoned it during the six years of intervening litigation, Centerville sought and was granted Supreme Court review of the second district’s decision.

Attorneys for Centerville argue that the state laws authorizing political subdivisions to adopt TIFs imposes no restriction on the use of a TIF to defer taxes in annexed areas of joint city/township jurisdiction, and grants that authority regardless of which type of proceeding was used to accomplish the annexation. They point out that the TIF approved by the Greene County commissioners would have allowed Sugarcreek Township to continue collecting all of the taxes payable on the annexed land at its pre-annexation value, and to immediately collect 25 percent of the increase in taxes resulting from post-annexation development made possible by public improvements funded by the TIF.

The city also contends that the legislative intent underlying R.C. 709.023 was to permit property owners to act quickly in seeking annexation of their land to facilitate economic development, and to prevent townships from effectively killing development projects − as they say occurred in this case −  by obstructing and delaying the annexation process. They argue that R.C. 709.023(E) was intended to preserve the right of townships to continue receiving current property tax revenues from land within their borders after its expedited annexation, not to guarantee townships a tax windfall made possible by TIF-funded public improvements while at the same time exempting them from the tax deferrals necessary to fund the TIF.

Attorneys for Sugarcreek Township urge the court to affirm the ruling of the second district.  They assert that in adopting 2001 legislation allowing various types of expedited annexation, the legislature struck a balance between the rights of townships and municipalities. They point out that R.C. 709.023 allows a municipality to quickly annex territory within a township without the township’s consent through expedited type-2 proceedings, but in exchange RC. 709.023(E) requires that the township retain its real property taxes from the annexed territory.  

In this case, they argue, Centerville wants to enjoy the benefits of the expedited annexation process but then avoid the statutory trade-off by immediately adopting a TIF that would defer most of the township’s property tax revenues from the annexed property for 10 years.

Contacts
Catherine A. Cunningham, 614.228.2030, for the City of Centerville.

Matthew C. Blickensderfer, 513.651.6162, for Sugarcreek Township.

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May State Cite Defendant's No-Contest Plea In Opposing Later Claim That His Conviction Was Unconstitutional?

If Defendant Pursues Ohio Postconviction or Federal Habeas Corpus Lawsuit

Ernest Hollingsworth v. Deb Timmerman-Cooper, Warden, Case no. 2011-1095
U.S. District Court for the Southern District of Ohio

ISSUE:  Do the Ohio rules of evidence and criminal procedure that bar the use of a defendant’s plea of no contest to a criminal charge as evidence “in any subsequent civil or criminal proceeding” preclude the state from citing a defendant’s no-contest plea as evidence that he waived his right to later challenge the validity of that same conviction through a state postconviction action or federal habeas corpus action?
 
BACKGROUND: Ernest Hollingsworth was charged with possession and trafficking of more than 20,000 grams (approximately 700 pounds) of marijuana. During pretrial proceedings in the case, Hollingsworth’s attorney moved to suppress evidence obtained through the search of a vehicle that had been rented by Hollingsworth. The motion to suppress was denied, and Hollingsworth subsequently entered a plea of no contest and was sentenced to a mandatory minimum prison term of eight years.

Hollingsworth later retained a different attorney who turned up information regarding the police officer and drug-sniffing dog involved in the vehicle search that had not been obtained or presented  by his original attorney during the suppression hearing. Hollingsworth filed a petition in state court under R.C. 2953.21, Ohio’s post-conviction relief statute, asking that his conviction be vacated on the basis that he had not received effective assistance of counsel during the suppression hearing.  The trial court and First District Court of Appeals denied that petition.

Hollingsworth then filed a habeas corpus petition in federal court, naming the warden of the prison in which he was incarcerated, Deb Timmerman-Cooper, as nominal defendant. In that complaint, Hollingsworth again asserted a constitutional claim of ineffective assistance of counsel.

The state opposed his petition, arguing that by entering into a plea agreement with the prosecutor and pleading no-contest to the drug possession and trafficking charges, Hollingsworth had waived his right to later assert claims challenging the validity of his convictions, including constitutional claims asserted in a state post-conviction or federal habeas corpus action. Hollingsworth responded by citing language in Ohio Criminal Rule 11(B)(2) and Evidence Rule 410(A)(2) that bar the use of a defendant’s no-contest plea to a criminal charge “in any subsequent civil or criminal proceeding against the defendant who made the plea.”  

Finding that there was no Ohio case law addressing the applicability of Crim.R. 11(B)(2) or Evid.R. 410(A)(2) to state postconviction or federal habeas corpus actions, the Federal District Court for the Southern District of Ohio asked the Supreme Court of Ohio to address that issue by answering a certified question of state law.

Attorneys for Hollingsworth argue that the plain language of the rules at issue bars the use of a defendant’s no-contest plea against him “in any subsequent civil or criminal court proceeding.”  They point out that federal habeas corpus actions are conducted as civil proceedings, and argue that because the ineffective representation of counsel was not discovered and his habeas corpus petition was not filed until after the conclusion of his criminal trial, the current federal court proceeding is a “subsequent civil action” in which the state is barred from using his no-contest plea as evidence that he waived any future challenge to his conviction.

Attorneys for the state respond that post-conviction and habeas corpus petitions seeking to vacate a defendant’s conviction are not “subsequent” or distinct  legal actions, but rather collateral attacks that continue the defendant’s original criminal case. They point out that Ohio postconviction actions must be filed through the original trial court, are identified by the same case number as the defendant’s original case, and are heard by the same judge who presided over the original trial.

They cite prior court decisions holding that the purpose of Crim.R. 11(B)(2) and Evid. R. 410(A)(2) is to encourage the state and criminal defendants to enter into plea agreements rather than engage in protracted trials by assuring a defendant that if he pleads no contest to a current charge, that plea will not be admissible against him in some future criminal case, and may not be cited as proof of liability in any future civil lawsuit that may be brought against him by someone claiming to have been injured by his conduct.

They assert that no state or federal court has ever held these or similar rules, which refer only to “subsequent” civil or criminal proceedings against a defendant, bar the state from citing a defendant’s no-contest plea in responding to a postconviction lawsuit that was brought by the defendant seeking to overturn the very conviction in which that plea was entered.

Contacts
Christopher J. Pagan, 513.424.1823, for Ernest Hollingsworth.

Alexandra T. Schimmer, 614.995.2273, for Deb Timmerman-Cooper, Warden.

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Is Dismissal of Medical Malpractice Suit 'With Prejudice' If Dismissal Entry Fails to State That It Is Without Prejudice?

When Dismissal Is Based on Failure to Include Affidavit of Merit

Donald P. Troyer et al. v. Leonard J. Janis, DPM, Case no. 2011-1162
Tenth District Court of Appeals (Franklin County)

ISSUE:  When a trial court grants a defense motion to dismiss the plaintiff’s complaint in a medical malpractice case because it was not accompanied by a required affidavit of merit, and the entry recording that action fails to indicate that such a dismissal is “without prejudice,” does the plaintiff’s failure to timely appeal the defect in the dismissal notice convert the dismissal to a “dismissal on the merits,” and therefore waive the plaintiff’s right to later refile his or her complaint?

BACKGROUND: Ohio Civil Rule 10(D)(2) requires that in every lawsuit asserting a claim of medical malpractice, the plaintiff must submit to the court along with his or her complaint an “affidavit of merit” signed by a qualified physician attesting that the doctor has examined the medical evidence, is familiar with the standard of care the plaintiff should have received, and believes that that standard of care was not met in the plaintiff’s case. The rule goes on to state that failure to include an affidavit of merit is grounds for the court to dismiss the plaintiff’s complaint, and specifies that a dismissal for that reason is a dismissal “other than on the merits,” which means the dismissal does not bar the plaintiff from refiling the complaint with the required affidavit of merit, so long as the refiling is accomplished within the statutory time limit for doing so.

In this case, Donald Troyer of Columbus underwent an ankle replacement surgery and several follow-up procedures performed by Dr. Leonard Janis. Troyer continued to suffer pain in the ankle and consulted another surgeon, who told Troyer that the implant had been improperly positioned. After other treatment and another surgery, in which the ankle joint was fused, failed to relieve his pain, Troyer’s leg was amputated below the knee.

Troyer and his wife filed a medical malpractice suit against Dr. Janis in the Franklin County Court of Common Pleas. Janis moved for dismissal on the basis that Troyer had not submitted a physician’s affidavit of merit to the court along with his complaint. The trial court granted dismissal on that basis, and asked Janis’ attorney to prepare a recommended journal entry recording the ruling. The proposed entry did not include a statement that the dismissal was “without prejudice.” In reviewing the entry, counsel for the Troyers asked that those words be added. Counsel for Janis declined to add that language on the basis that in granting the motion to dismiss the judge had not stated that dismissal was without prejudice. The entry was forwarded to the court without the requested change, with a notation that it had been “reviewed but not approved” by Troyer’s attorney. The court adopted the proposed entry as drafted and entered it in the court’s journal. The Troyers appealed the judgment of dismissal, but subsequently dismissed that appeal.

Three weeks after the original  dismissal entry was recorded, and before the statutory time limit for refiling had expired, the Troyers refiled a virtually identical complaint, this time with a physician’s affidavit attached. Janis moved for summary judgment dismissing the refiled complaint, citing a provision of the Ohio Rules of Civil Procedure, Civ.R. 41(B)(3), which states that when a court’s dismissal of a complaint does not expressly state that the dismissal was “without prejudice,” the dismissal is presumptively with prejudice, and therefore acts as a judgment on the merits of the case that permanently bars the plaintiff from refiling his complaint. The trial court granted summary judgment in favor of Janis.

The Troyers appealed that ruling, pointing out that Civ.R.10(D)(2) plainly states that any dismissal of a medical malpractice claim based on the absence of a physician’s affidavit of merit is a dismissal “other than on the merits” that does not prejudice the plaintiff’s right to refile his complaint.

 The Tenth District Court of Appeals agreed that the trial court erred by issuing a dismissal entry that (by omitting the words “without prejudice”) effectively dismissed the Troyer’s complaint with prejudice. But the court of appeals went on to hold that the only remedy for that error was for the Troyers to have raised on direct appeal and pursued to judgment the issue of the impropriety of the trial court’s dismissal entry. Because the Troyers had dismissed their direct appeal of the trial court’s dismissal order, and the deadline for filing such an appeal had now passed, the Tenth District held that the trial court’s dismissal with prejudice, even though legally incorrect, had become “res judicata” (a final judgment that is no longer appealable) and therefore permanently barred the Troyers from refiling their complaint. Accordingly, the Tenth District affirmed the trial court’s award of summary judgment in favor of Janis.

The Troyers sought and were granted Supreme Court review of the Tenth District’s decision.

They argue that the Tenth District ignored the Supreme Court of Ohio’s 2008 decision in Fletcher v. University Hospitals of Cleveland, in which the court held that the “default” rule set forth in Civ.R. 41(B)(3) (i.e., that a dismissal is “with prejudice” unless the court specifically states otherwise) is preempted by a specific exception to that rule for medical malpractice cases that is set forth in Civ.R. 10(D)(2) (i.e., that any dismissal of a malpractice action based on the absence of an affidavit of merit is a dismissal “without prejudice”).

They cite prior court decisions holding that under R.C. 1.51, when there is a conflict between a general statute or procedural rule and a specific rule or statute, and the conflict is such that those provisions cannot be read in a way that allows both to be applied, the specific provision must be given precedence over the general rule. In this case, they assert, both the Supreme Court’s holding in  Fletcher and application of R.C. 1.51 require that the lower courts’ rulings be reversed and the Troyers be permitted to refile their complaint pursuant to Civ.R. 10(D)(2).

Attorneys for Dr. Janis argue that this case is distinguishable from Fletcher because the plaintiff in Fletcher challenged the dismissal of his medical malpractice claim with prejudice on direct appeal, and therefore the challenged dismissal never became a final judgment.  They urge the court to affirm the ruling of the Tenth District that, by failing to pursue a timely appeal of the trial court’s dismissal of their complaint with prejudice, the Troyers waived their right to later challenge the finality of that dismissal because such a challenge was barred by the doctrine of res judicata.

Contacts
Anne M. Valentine, 614.221.2223, for Donald and Tamara Troyer.

Gregory D. Rankin, 614.228.6885, for Dr. Leonard Janis.

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Attorney Discipline

Disciplinary Counsel v. Marc Edward Dann, Case no. 2011-2026
Board of Commissioners on Grievances & Discipline

The Board of Commissioners on Grievances & Discipline has recommended that the law license of former Ohio Attorney General Marc Dann be suspended for six months.  The recommendation is based on findings that Dann was convicted of two misdemeanor offenses and violated state attorney discipline rules by improperly using funds from his political campaign account to provide extra compensation to two senior members of his staff, and by filing inaccurate financial disclosure statements while he held public office.

The board found that Dann engaged in conduct that adversely reflected on his fitness to practice law by using campaign funds to cover the Columbus living expenses of two senior aides while they were employed by the Attorney General’s Office. In a separate count, the board also found that Dann failed  to report in his 2006 and 2007 financial disclosure statements checks he received from his campaign account or his use of a private jet leased by a campaign contributor to fly himself, family members and guests to a conference in Scottsdale, Arizona.

Dann has stipulated to (admitted) the charged rule violations, but has filed objections to the board’s recommendation of an actual suspension of his law license.  In his objections, Dann asserts that the sanction recommended in his case is disproportionate to the penalties the court imposed for similar ethics violations committed by former Governor Bob Taft, who received a public reprimand,  and former Cleveland City Council President George Forbes, who received a fully stayed license suspension. 

Dann notes that the Office of Disciplinary Counsel, which prosecuted the complaint against him, has twice stipulated that a stayed license suspension would be an appropriate penalty for his misconduct, but has been overruled on both occasions by the disciplinary board. He urges the court to consider his extensive provision of pro bono (free) legal services to numerous low-income clients of the Cleveland Legal Aid Society since his resignation from office, and other mitigating factors, and impose a stayed rather than an actual license suspension as the appropriate penalty for his rule violations 

In a brief responding to Dann’s objections, disciplinary counsel points out that the board’s report took note of Dann’s pro bono work and other mitigating factors, but also pointed out that his illegal actions while serving as the state’s chief law officer, and the negative public attention brought to bear on the attorney general’s office and the legal system in general as a result of his conduct, justify the board’s recommended sanction of an actual suspension from practice.

Contacts
Jonathan E. Coughlan, 614.461.0256, for the Office of Disciplinary Counsel.

Alvin E. Mathews Jr., 614.227.2312, for Marc Dann.

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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.