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Tuesday, May 22, 2012

Mr. Robert Coleman, et al. v. Portage County Engineer, Case no. 2011-0199
Eleventh District Court of Appeals (Portage County)

JNT Properties, LLC v. Keybank, National Association, Case no. 2011-1392
Eighth District Court of Appeals (Cuyahoga County)

State of Ohio v. Emmanuel Hampton, Case no. 2011-1473
Tenth District Court of Appeals (Franklin County)

State of Ohio v. Donald Billiter (aka Billeter), Case no. 2011-1501
Fifth District Court of Appeals (Stark County)

Disciplinary Counsel v. Michael Brian Dockry, Case no. 2012-0287
Mahoning County


Is Upgrading Inadequate Storm Sewer System a 'Proprietary' Or a 'Governmental' Function of County Engineer's Office?

Property Owners Challenge County's Claim of Immunity for Damages Caused by Flooding

Mr. Robert Coleman, et al. v. Portage County Engineer, Case no. 2011-0199
Eleventh District Court of Appeals (Portage County)

ISSUE:  Where repeated damage to private property results from a county’s failure to upgrade an inadequate storm sewer system, may the county be held liable for that damage because it resulted from a failure to properly “maintain” the sewer system, or is the county immune from liability under a state law that bars civil claims against a political subdivision for damage arising from the “planning, design, construction or reconstruction” of  public improvements, including sewer systems?

BACKGROUND: Robert and Barbara Coleman, who own a home and adjoining property in Rootstown, filed a civil lawsuit against the Portage County Engineer alleging that their property had been flooded on five separate occasions over the preceding 27 years because a county storm sewer pipe had not been updated  to accommodate increased  runoff  from the surrounding area after heavy rains.

The Colemans’ suit alleged that the county had done nothing to abate the flooding hazard by upgrading its sewer line despite their repeated complaints, and sought a court order directing the county to remedy the flooding problem and pay them money damages for “negligent design, planning, construction and maintenance” of the storm sewer system.

The county filed a motion to dismiss the Colemans’ complaint on the basis that the county was immune from civil liability for their damages under R.C. Chapter 2477, which confers general immunity on political subdivisions for injury or property damage arising from the exercise of their governmental duties to “design, construct or reconstruct” public improvements, including sewer systems.

The trial court granted dismissal of the claims based on the county’s alleged negligent design, planning  and construction under the political subdivision immunity statute.  The court found that the Colemans’ claims based on alleged negligent maintenance of the sewer system were not barred by the immunity statute,  but dismissed them without prejudice based on a finding that the plaintiffs’ had not exhausted their administrative remedies before filing suit against the county.

The Colemans appealed.   On review, the Eleventh District Court of Appeals upheld dismissal of the negligent design and construction claims based on immunity, but reversed the trial court and reinstated the plaintiffs’ claims based on the county’s failure to upgrade the sewer. The court of appeals held that the Colemans were not required to first seek administrative relief, and that the county’s failure to maintain the sewer in a condition adequate to prevent flooding amounted to a failure of “upkeep,” a proprietary function for which the county was not immune from civil liability.

The county sought and was granted Supreme Court review of the Eleventh District’s decision.

Attorneys for the Portage County engineer argue that the court of appeals erred in holding that a political subdivision’s failure to replace an existing sewer line or other public improvement with a larger or more advanced facility falls under the legal definition of “upkeep” or “maintenance.” They urge the court to instead find that such structural improvements fall within the legal definition of “redesign” or “reconstruction” of public infrastructure for which a political subdivision is immune from civil liability.

Attorneys for the Colemans urge the court to affirm the Eleventh District’s holding that, once a city or county has installed and operated a public improvement like a sewer system, keeping that system in sound operating condition and performing periodic upgrades as necessary to provide the service it was designed to provide falls within the proprietary duties for which a political subdivision is not immune from liability.  In this case, they assert, Portage County’s failure to upgrade its storm sewer after being made aware of repeated incidents of flooding over a period of more than two decades constitutes a failure to maintain the sewer system in proper operating condition, a type of claim that is specifically excluded from the sovereign immunity statute.

Contacts
John T. McLandrich, 440.248.7906, for the Portage County Engineer.

Darrell D. Maddock, 330.799.7711, for Robert and Barbara Coleman.

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Class Action Alleges Conflict Between 'Per Annum' Interest Stated in Promissory Note and Method Used to Compute Interest

JNT Properties, LLC v. Keybank, National Association, Case no. 2011-1392
Eighth District Court of Appeals (Cuyahoga County)

ISSUE:  Is there a conflict between language in a commercial loan contract stating that interest will be assessed at a specified rate “per annum” and later language stating that interest charges will be calculated on a “365/360 basis” that creates ambiguity in the terms of the contract?

background:  In 2007, JNT Properties, a Cleveland company, obtained a $370,000 commercial loan from Keybank to partially finance the purchase of a Dairy Queen restaurant in Mayfield Heights.  At the closing, JNT’s attorney approved and the company’s principal owner signed a promissory note agreeing to pay “per annum” interest on the unpaid balance of the note at the rate of 8.93 percent.  A separate  provision included in the note stated that the amount of interest payable for each day the note remained outstanding would be computed on a “365/360 basis.”

In 2009, a different attorney retained by JNT filed a class action lawsuit against Keybank in the Cuyahoga County Court of Common Pleas alleging that the bank had breached the terms of the promissory note by charging interest during the preceding year that was in excess of 8.93 percent “per annum.”  The bank moved to dismiss the complaint, asserting that it had calculated and billed the interest charged to JNT by using a “365/360” computation method, as stated in the note.  After initially denying the motion to dismiss and reviewing evidence submitted by the parties to verify their intent when the note was executed, the trial court granted summary judgment in favor of Keybank.

JNT appealed.  On review, the Eighth District Court of Appeals reversed and remanded the case to the trial court for further proceedings. In its decision, the Eighth District held that the provision in the note explaining the 365/360 interest computation method was “unintelligible,” and that use of that formula as explained by the bank during discovery was in conflict with other contract language setting the agreed interest rate at 8.93 percent “per annum.”  Applying the rule of law that when the terms of a contract can be interpreted in more than one way, they must be interpreted against the party that drew up the contract (in this case, the bank), the court of appeals ruled that JNT was entitled to a refund of interest Keybank had collected on the note that was in excess of an annual rate of 8.93 percent.

Keybank sought and was granted Supreme Court review of the Eighth District’s ruling.

Attorneys for the bank assert that the “365/360” computation method set forth in its loan agreement with JNT is one of three generally accepted methods of computing daily interest on a loan, and the method most often used in commercial loan transactions. While they acknowledge that the explanation set forth in the note at issue in this case is not as clear as it could be, they argue that loan agreements routinely set forth both an annual interest rate and a separate statement of what method will be used to compute the amount of interest will be due on a per-day basis.

They cite court decisions from multiple other states and the federal courts holding that there is no “conflict” or ambiguity created by separate provisions of a loan agreement that set forth a “per annum” interest rate and a method of computing interest at that rate on a day-by-day basis.  They also point out that JNT and its attorney agreed to the terms and conditions of the promissory note, which clearly stated that a 365/360 interest computation method would apply, and JNT had the opportunity to question or object to that provision prior to signing the note, but did not do so.

Attorneys for JNT argue that Keybank agreed to lend it an amount of money at a quoted  interest rate of “8.93 percent per annum,” which clearly means every 365 or 366 days,  but actually charged a rate of 8.93 percent every 360 days, in breach of the stated annual interest rate.  While acknowledging that other lending institutions make use of the same daily interest calculation method, they urge the court to uphold the Eighth District’s decision, which they say correctly held  that the fact that  a number of parties engage in a deceptive business practice does not legitimize that practice, or allow individual lenders to escape responsibility for breaching their contractual duty to borrowers on the basis that other lenders are doing the same thing.

Contacts
Hugh M. Stanley, 216.696.3934, for Keybank National Association.

Steven M. Weiss, 216.348.1800, for JNT Properties, LLC.

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Is Court's Acquittal Order Based on Improper Venue a 'Final Verdict' That Bars Further Prosecution of Defendant?

State of Ohio v. Emmanuel Hampton, Case no. 2011-1473
Tenth District Court of Appeals (Franklin County)

ISSUES:

BACKGROUND:  Emmanuel Hampton of Columbus was charged with attempted murder and multiple other felony counts arising from the shooting of Byron Woods during an attempted home invasion robbery of Woods’ apartment. The apartment was located in an area of southeastern Columbus that straddles the boundary line separating Franklin and Fairfield counties.

Hampton’s DNA was found on a jacket left at the crime scene by a masked intruder, who escaped after struggling with Woods and then shooting him four times when Woods resisted the robbery attempt.  Woods identified Hampton as the person who shot him by height and body build, but not facial characteristics. Hampton was indicted by a Franklin County grand jury, and the case was scheduled for a  bench trial in the Franklin County Court of Common Pleas.

During the presentation of the state’s evidence at trial, prosecutors became aware for the first time that Woods’ apartment was actually located in Fairfield, rather than Franklin County.  After notifying the judge of that fact, the state rested.  Defense counsel moved the court to enter an order of acquittal under Criminal Rule 29 based on: 1) a claimed failure by the state to produce sufficient evidence to support conviction on the charged offenses, and 2) the lack of venue of a Franklin County court to prosecute Hampton for crimes that were committed in Fairfield County.

The state opposed the motion, arguing that Hampton had waived the issue of venue by failing to object to his indictment in Franklin County or to file a motion before trial commenced challenging the court’s venue.  If the court rejected that argument, the state asked the judge to resolve the venue issue by declaring a mistrial rather than issuing a judgment of acquittal. 

The court journalized a four-part judgment entry in which it held that: 1) Hampton had not waived the issue of venue; 2) the state’s motion for a mistrial was denied; 3) Hampton’s motion for a Rule 29 judgment of acquittal based on the sufficiency of the evidence was denied; 4) Hampton’s motion for a Rule 29 judgment of acquittal “based strictly on the issue of venue” was granted.

The state filed a notice of appeal in the Tenth District Court of Appeals, arguing in its petition that: 1) the trial court had erred by holding that Hampton had not waived the issue of venue, and 2) if the issue of venue had been preserved, the trial court erred by issuing a Rule 29 “judgment of acquittal” when the only proper remedy for the court’s finding that it lacked venue to try the case was to declare a mistrial.

After reviewing written pleadings by the parties and considering oral arguments, the Tenth District ruled that because the trial court had invoked Criminal Rule 29 and journalized its decision as a “judgment of acquittal,” its decision constituted a “final verdict” from which the state could not appeal. The state sought and was granted Supreme Court review of the Tenth District’s decision.

Arguing on behalf of the state, attorneys for the Franklin County prosecutor’s office contend that the Tenth District erred by relying on the words the trial judge used to “label” his journal entry rather than the actual nature of the action taken by the court. They assert that the plain language of Criminal Rule 29(A) authorizes a trial court to grant a defense motion for a “judgment of acquittal” only when the court specifically finds that the state’s evidence “is insufficient to sustain a conviction” for a charged offense.  While Hampton moved for a Rule 29 acquittal based on such a claim, they point out that the trial court explicitly overruled that motion, and instead dismissed the charges against him on the sole basis that he was being prosecuted in the wrong county.

The state cites Ohio and federal court decisions holding that the venue of a trial court is not an “element” of a crime that must be proved in order to support a conviction, but is rather a procedural issue that must be raised and resolved before a trial commences. They argue that it defies logic for a court to be able to rule that it lacks authority even to consider criminal charges against a defendant based on a lack of venue, and then purport to issue a binding “final verdict” acquitting the defendant of those charges.  When a court determines that it is not a proper venue to adjudicate charges against a defendant after a trial has begun, as occurred in this case, they say the only permissible remedy is for the court to declare a mistrial, an action that they say does not invoke the defendant’s right against double jeopardy because he was never “in jeopardy” of a valid conviction by a court that never had authority to prosecute him.

Attorneys for Hampton urge the court to affirm the Tenth District’s holding that the state was barred by law from appealing the trial court’s final judgment, which was accurately recorded in its journal as a “judgment of acquittal” pursuant Criminal Rule 29. They urge the court to follow its 1985 holding in State v. Keeton that when a trial court enters a judgment of acquittal under Rule 29, that decision constitutes a “final verdict” that the state may not appeal pursuant to R.C. 2945.67(A).

NOTE:  The Ohio Attorney General’s office has entered an amicus curiae (friend of the court) brief supporting the position of the state.  The Cuyahoga County Public Defender’s office has entered an amicus brief  supporting the legal arguments advanced by Hampton.

Contacts
Steven L. Taylor, 614.525.3555, for the state and Franklin County prosecutor's office.

Jonathan T. Tyack, 614.221.1341, for Emmanuel Hampton.

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Does 'Res Judicata' Bar Withdrawal of Guilty Plea After Court Holds Sentence Underlying Escape Charge Was Invalid?

State of Ohio v. Donald Billiter (aka Billeter), Case no. 2011-1501
Fifth District Court of Appeals (Stark County)

ISSUE:  When a criminal defendant enters a guilty plea to a charge of escape based on a violation of postrelease control, and a subsequent court decision holds that the postrelease control order he was charged with violating was void and unenforceable, does the doctrine of “res judicata” bar the defendant from withdrawing his guilty plea and seeking to have his conviction vacated based on a claim of actual innocence?

BACKGROUND: In 1998, Donald Billiter was convicted of aggravated burglary and domestic violence and sentenced to three years in prison.  In its sentencing entry, the trial court mistakenly imposed an additional term of postrelease control of “up to three years” when Billiter’s aggravated burglary conviction actually required a mandatory five-year term of postrelease control.  Neither the state nor Billiter appealed his sentence, including the incorrect term of postrelease control.

In May 2001, after serving his prison term and being released, Billiter began serving the three-year term of postrelease control imposed at the time of his 1998 conviction.  In March 2004, prior to the completion of that term, Billiter violated the conditions of his postrelease control and pleaded guilty to the crime of escape. As the sanction for that offense, he was sentenced to a new three-year term of probation and informed that any subsequent violation would result in his being sent back to prison. Billiter did not appeal his conviction for escape or the imposition of a new period of postrelease control.  Billiter subsequently committed a new probation violation, for which the court revoked his probation and sentenced him to prison for six years. Billiter did not appeal the parole revocation or his new prison sentence.

In 2008, Billiter filed a pro se (self-prepared) motion to suspend further execution of his sentence based on a claim that his escape conviction should be vacated under a 2006 Ohio Supreme Court decision, Hernandez v. Kelly.  In that case, he argued, the court held that if a defendant’s postrelease control sentence was defective, and that sentence had not been corrected before his release from prison, the state did not have legal authority to impose postrelease control on him.  Since Billiter’s defective sentence was not corrected before his 2001 release from prison, he argued that he could not have committed escape from postrelease control because he had never been subject to a term of postrelease control. The Stark County Common Pleas Court and Fifth District Court of Appeals rejected Billiter’s motion, pointing out that Hernandez involved a case in which the trial court had not imposed any term of postrelease control when it sentenced a defendant, while Billiter had actually (if incorrectly) been sentenced to three years of postrelease control and had committed his probation violation within that time frame. Billiter did not move for reconsideration of the Fifth District’s ruling or seek to appeal it to the Supreme Court.

In 2010, Billiter filed a new action in common pleas court, this time citing a 2009 decision, State v. Bloomer, in which the Supreme Court held that a sentence imposing an incorrect term of postrelease control was void. He  moved the court to allow him to withdraw his guilty plea to the escape charge on the ground that he was actually innocent of escape because he had never been validly sentenced to serve a term of postrelease control. The trial court and Fifth District rejected Billiter’s claims that he had not committed escape, citing the doctrine of res judicata (which bars a party from relitigating a legal claim that has already been the subject of a final judgment). The Fifth District certified, however, that its denial of Billiter’s motion to withdraw his guilty plea to escape based on a defective sentence of postrelease control was in conflict with three decisions of the Second District in similar cases.

The Supreme Court has agreed to review the case to resolve the conflict between appellate districts.

Attorneys for Billiter point out that the 2009 court of appeals decision cited by the trial and appellate courts in denying his current appeal as res judicata was issued one day before the Supreme Court announced its decision in Bloomer, which widened the range of postrelease control sentencing errors that are now recognized as legally void. They assert that under the law as clarified by Bloomer, the improper sentence of postrelease control pronounced at the time of Billiter’s 1998 convictions, which was never corrected by resentencing him, was a legal nullity that never imposed a duty on Billiter to serve postrelease control, and therefore could not be a valid basis for the charge of escape to which he entered a guilty plea. They also cite the Supreme Court’s post-Bloomer holding in State v. Fischer (2010) that claims by a defendant that an improper postrelease control sentence is void are not barred by res judicata or the law of the case doctrine, and may be raised at any time, including in a collateral attack.

They note that Ohio Criminal Rule 32.1 empowers trial courts to allow a defendant to withdraw a guilty plea to a criminal offense after sentence has been imposed if that action is necessary “to correct (a) manifest injustice.”  In this case, they say, Billiter has shown that he never was legally required to serve a term of postrelease control, and therefore he was innocent of  “escaping” from postrelease control and his conviction for that offense represents a manifest injustice that must be corrected by allowing him to withdraw his guilty plea and freeing him from prison.

Attorneys for the state respond that Billiter’s claim of actual innocence of the crime of escape because  of a defective postrelease control sentence was reviewed and rejected by the trial court in 2008 and the court of appeals in 2009, based on the law in effect at the time he was sentenced and the time those decisions were handed down. They point out that Billiter could have filed a timely direct appeal of the Fifth District’s 2009 ruling based on the Supreme Court’s June 2009 holding in Bloomer but failed to do so, and therefore allowed the denial of his innocence claim to become res judicata as the subject of a final judgment.  

With regard to the impact of the Supreme Court’s subsequent decision in Fischer, the state points out that while the defendant in Fischer was permitted to collaterally attack his original sentence of postrelease control as defective, the court specifically denied the defendant’s attempt to use that defect to do what Billiter is attempting to do in this case − relitigate issues related to his guilt or innocence −  and instead strictly limited the relief it granted to requiring the trial court to conduct a resentencing hearing for the sole purpose of imposing the correct term of postrelease control.

Contacts
Ronald M. Caldwell, 330.451.7897, for the state and Stark County prosecutor's office.

Stephen P. Hardwick, 614.466.5394, for Donald Billiter.

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Attorney Discipline

Disciplinary Counsel v. Michael Brian Dockry, Case no. 2012-0287
Mahoning County

The Board of Commissioners on Grievances & Discipline has recommended that the license of Youngstown attorney Michael B. Dockry be suspended for one year, with the final six months of that term stayed on conditions, for commingling client funds on deposit in his law office trust account with his personal funds, paying personal and business expenses from funds on deposit in his trust account,  failing to maintain current records accounting for funds of individual clients on deposit in his trust account, and improperly borrowing funds from his trust account for personal loans.

Dockry admits the conduct alleged in the disciplinary complaint against him, but urges the court to reduce the board’s recommended sanction to a fully stayed six-month suspension based on the mitigating factors that he has practiced law for 30 years with no prior disciplinary violations, has a reputation for honesty and integrity in the community, cooperated fully with disciplinary authorities and did not cause harm to any of his clients. He asserts that his violations were the result of ignorance of or inattention to his professional obligations with regard to his trust account rather than intentional  misuse of client funds, and cites several prior attorney discipline cases in which the court has imposed a fully stayed suspension as the appropriate penalty for trust-account violations similar to his where there was no harm to clients. 

In response to Dockry’s objections, the Office of Disciplinary Counsel, which prosecuted the charges against him before the board, points out that the board found that Dockry acted with a selfish motive and engaged in conduct involving deceit or dishonesty when he knowingly took personal loans from client funds in his possession.  Based on those aggravating factors, counsel argues that the sanction recommended by the disciplinary board is appropriate and urges the court to adopt it.

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

John B. Juhasz, 330.758.7700, for Michael Dockry.

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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.