Court News Ohio
Court News Ohio
Court News Ohio

Tuesday, Feb. 23, 2016

Patton R. Corrigan v. Joseph W. Testa, Tax Commissioner of Ohio, Case no. 2014-1836
Ohio Board of Tax Appeals

Douglas V. Link and Diane Link v. The Cleveland Electric Illuminating Company and FirstEnergy Service Company, Case no. 2015-0132
Eighth District Court of Appeals (Cuyahoga County)

State of Ohio v. (J.M.), Case no. 2015-1221
Tenth District Court of Appeals (Franklin County)

Roetzel & Andress, LPA, et al. v. Lorna B. Ratonel, et al., Case no. 2015-0724
Second District Court of Appeals (Montgomery County)


Does Nonresident Investor Owe Tax on Capital Gains from Sale of Ohio Company?

Patton R. Corrigan v. Joseph W. Testa, Tax Commissioner of Ohio, Case no. 2014-1836
Ohio Board of Tax Appeals

ISSUES:

  • Do the due process and commerce clauses of the U.S. Constitution bar Ohio from levying an apportioned income tax on the financial gains earned by a nonresident from a closely held Ohio corporation?
  • Does Ohio law violate the due process and commerce clauses of the U.S. Constitution because it apportions gains recognized by residents and nonresidents?

BACKGROUND:
In April 2000, Patton R. Corrigan and four other investors purchased Mansfield Plumbing, LLC, whose company headquarters is in Perrysville, Ohio. Though there were five investors in the company, Corrigan held a majority interest of 79.29 percent. In 2004, all five investors sold their respective interests in Mansfield. Corrigan, who resides in Connecticut and has never been an Ohio resident, reported his gain from the sale on his 2004 federal personal income tax filing as $27,563,977.

Following an audit, the Ohio tax commissioner assessed $847,000 in Ohio personal income tax against Corrigan for the gains he made from the sale of the business. Corrigan paid $100,000 toward the balance. Then, in April 2010, he requested a refund for the amount paid, contending R.C. 5747.212, which taxes certain nonresidents on capital gains earned in a business sale, is unconstitutional under the Ohio and U.S. constitutions.

Due Process Clause, U.S. Constitution

All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

Commerce Clause, U.S. Constitution

The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States; …
To regulate commerce with foreign nations, and among the several states, and with the Indian tribes ….

Due Process Clause, U.S. Constitution

All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

Commerce Clause, U.S. Constitution

The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States; …
To regulate commerce with foreign nations, and among the several states, and with the Indian tribes ….

$100,000 Refund Is Denied
The tax commissioner concluded that under R.C. 5747.212 Corrigan wasn’t legally entitled to the refund because the statute requires Ohio income tax to be paid by certain nonresidents on a share of their capital gain from the sale of a business if it is subject to Ohio income tax. The commissioner also determined he didn’t have jurisdiction to decide the constitutional issues raised by Corrigan, further explaining the state’s laws are presumed constitutional.

Corrigan appealed to the Ohio Board of Tax Appeals, which affirmed the commissioner’s final determination. Corrigan then submitted an appeal to the Ohio Supreme Court.

Corrigan’s Positions
Corrigan argues in his brief to the Court, “A state takes property contrary to the Due Process Clause of the Fourteenth Amendment if it purports to levy a tax ‘where there is no power or jurisdiction to tax.’”

He agrees taxing a resident’s income where it is earned is constitutional. However, he is a Connecticut resident and, he maintains, the actual sale of Mansfield occurred in Connecticut. That is why he contends he doesn’t owe Ohio income tax, reasoning R.C. 5747.212 is constitutional only to the extent that the gain was earned in Ohio. It is also asserted that Corrigan’s capital gain was realized not in a transaction with Mansfield, but from the sale to another nonresident thus not producing income from property located in Ohio.

Corrigan argues that R.C. 5747.212 unconstitutionally attempts to tax income not earned in Ohio, therefore depriving nonresidents of their property without affording them due process. He maintains that for a nonresident’s income to be within the state’s taxing jurisdiction, the income must be attributable to property located in the state or to events or transactions occurring there. He argues that he didn’t have property or any other connection to Ohio making it unconstitutional to require him to pay taxes on Mansfield’s sale.

Tax Commissioner’s Responses
The state tax commissioner argues that Corrigan’s claim fails because through his ownership and control of Mansfield, the state provided substantial benefits, protections, and opportunities to him, which is the crux of due process and commerce clause requirements set out in the Ohio and U.S. constitutions. Since Corrigan received benefits from the state through his company, the tax commissioner counters the requirements of the due process and commerce clauses are satisfied resulting in no violation of federal or state constitutional rights.

Citing Agley v. Tracy (1999), an Ohio Supreme Court case, the tax commissioner asserts that the determination of state taxing power involves the flexible application of several factors including the benefits, protections, and opportunities afforded by the state. It is further argued that when the state’s taxing power is challenged, as it is here, the critical question is whether the state has given anything for which it can ask in return, citing another Ohio Supreme Court decision, Couchot v. State Lottery Comm’n (1996).

Mansfield’s headquarters and principal manufacturing plant were located in Perrysville throughout the five years Corrigan had controlling ownership of the company. The tax commissioner contends that based on its location, the state provided the business substantial benefits, protections, and opportunities, and Corrigan availed himself of those same things.

The tax commissioner reasons that the benefits it provided Mansfield, and accordingly to Corrigan himself, made his net gain of more than $27 million possible and notes this is in addition to the annual profits he made as controlling owner. During the five years Corrigan owned the majority of the company, the state wrote that it provided Mansfield “…with continuous governmental services and protections for which Ohio incurred substantial social and governmental costs.” The tax commissioner adds that, under Agley, the benefits this state provided to Corrigan’s Ohio-based business is the minimum connection required to justify taxing his financial gains in Ohio.

Friend-of-the-Court Brief
An amicus curiae brief supporting Corrigan’s position has been submitted by the Ohio Chamber of Commerce.

- Rachael S. Ingram

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.

Contacts
Representing Patton R. Corrigan: J. Donald Mottley, 614.221.2838

Representing Joseph W. Testa, Tax Commissioner of Ohio, from the Ohio Attorney General’s Office: Barton Hubbard, 614.466.2941

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Is Utility Company Liable for Motorcyclist Injured Hitting Utility Pole After Being Struck by Deer?

Douglas V. Link and Diane Link v. The Cleveland Electric Illuminating Company and FirstEnergy Service Company, Case no. 2015-0132
Eighth District Court of Appeals (Cuyahoga County)

ISSUES:

  • Can an electric utility company be liable to a motorist injured when striking a pole alongside the road that the utility wasn’t required to move by “any applicable law”?
  • Does a county engineer’s directive to move a pole revoke a utility company’s permission to leave the pole in place, and leave the company open to a liability claim from a motorist who struck the pole?

BACKGROUND:
In 2008, the Bainbridge Township Board of Trustees approved a plan to widen Savage Road throughout the unincorporated township in Geauga County. The Geauga County engineer assisted with the plan. As part of the project, Cleveland Electric Illuminating Co. (CEI) was responsible for moving more than 40 utility poles along Savage Road. CEI prepared a plan and divided the project into two phases. It moved several poles, but determined that eight poles weren’t required for relocation. The township trustees and county engineer informed CEI that they wanted the eight poles moved, but didn’t take any legislative action to force the company to move them.

The road re-opened in 2009, and in October 2010, Douglas V. Link consumed several beers at a tavern in Bainbridge Township then departed on his motorcycle to drive home. While on Savage Road, a deer dashed into his left side, causing him to lose control of the motorcycle and strike a CEI utility pole. Link suffered damage to his leg and pelvis, and filed a lawsuit against CEI, FirstEnergy Service Company, which advises CEI, and others, arguing the pole was too close to the roadway. A jury found that CEI was a qualified nuisance and that Link’s wife, Diane, suffered a loss of support. The jury found CEI not negligent and didn’t owe Link any punitive damages, but it awarded the Links a total $798,532. It also ruled in favor of FirstEnergy, which is no longer a party in the case.

Both CEI and the Links appealed the decision to the Eighth District Court of Appeals. The Eighth District noted its 2012 Bidar v. Cleveland Electric Illum. Co. decision where the facts were similar to Links’ case. In that case, David Bidar was driving on Savage Road when a deer darted in front of his car and he swerved striking a CEI utility pole that was one of the eight CEI didn’t move after the widening project. The appellate court ruled, as it did in Bidar, that CEI didn’t have the permission to leave the pole in the current spot, and the court affirmed the trial court’s verdict for Link. CEI appealed to the Ohio Supreme Court, which agreed to hear the case.

CEI Argues Company Had Permission to Keep Pole in Place
CEI notes the pole Link hit was installed in 1952 (replaced in 1975) and has been in the same spot without incident for nearly 60 years. The pole was 8 feet from the edge of the road before the widening and after the project, it was 6 feet, 3.6 inches from the road. The company asserts that in state law, R.C. 4931.03 and 4933.14, Ohio utilities are permitted to construct poles along public roads within unincorporated areas of townships as long as they are constructed in a way that doesn’t inconvenience the public’s use of the road and that complies with “any other applicable law.” CEI argues the pole wasn’t interfering with the public’s use of the road and wasn’t out of compliance with any other law.

CEI relies on the Ohio Supreme Court’s 2008 Turner v. Ohio Bell Telephone Co. decision finding that a utility cannot be held liable if the utility obtained “any necessary permission to install the pole” where the pole was placed. It argues that its compliance with R.C. 4931.03(A) is all that’s required unless Bainbridge Township or Geauga County passed an ordinance or rule requiring CEI to move the pole or get permission to place the pole. The company argues the trial and appellate court decisions were in error by considering the township’s request to move the pole and the county engineer’s expression of disapproval that CEI didn’t move the remaining eight pole to be an “applicable law.”

“Indeed, no governmental entity – including the Trustees, the Geauga County Commissioners, and the Geauga County Engineer – ever enacted any law, passed any ordinance, or approved any resolution ordering CEI to relocate the pole. The attempts made by individual members of those entities or the Geauga County Engineer to persuade CEI to relocate the pole lack the force of a ‘law’ with which CEI had to comply in accordance with R.C. 4931.03(B)(2),” stated the reply brief filed by CEI.

Plan Called for CEI Moving All the Poles, Link Contends
The Links recount that CEI was informed in 2006 by the county engineer of the future plan to widen the road and that CEI was asked to provide a plan to relocate the poles. After the township approved the plan to widen the road in 2008, CEI submitted a plan to move the utility poles including the one Link hit. CEI moved most of the poles before the winter and sent the county engineer a revised plan that it wouldn’t return in 2009 to move the remaining eight after determining the poles didn’t “conflict” with the road project. The engineer at the time responded in a letter to CEI that leaving the poles in place would expose the company and the township to liability for any accidents, but CEI didn’t move the poles.

After the Bidar accident in May 2010, the township’s highway superintendent met with a CEI representative and demanded the poles be moved, and in June 2010 the township trustees sent the utility a letter asking it to provide a schedule for relocating the poles. CEI responded in September that it wouldn’t move the poles, and any relocation would be at the township’s expense. Link then struck the pole less than a month later. The Links also cite the Turner decision deeming it as inapplicable to this situation because the ruling states a utility is “required to obtain approval from the owner of the right-of-way,” and CEI didn’t have approval.

The Links cite the disapproval expressed by the county engineer, the highway superintendent, and the trustees as clear expressions of the road owner’s desire to move the poles, and that a resolution from the township isn’t required. Those expressions, they argue, met the requirement of R.C. 4931.03(B)(2), which call for the township’s or the county engineer’s approval, but doesn’t specify it has to be granted through legislation.

“Requiring the township to pass a separate resolution providing that the locations of certain poles were impermissible after CEI has already agreed to relocate such poles is unreasonable,” states the brief the Links filed.

The Links also state the Turner decision doesn’t apply because in that case the utility had a permit from the state to locate the pole that was struck, and the driver who hit the pole was speeding. While Link’s consumption of alcohol is a disputed issue in this case, the Links note he wasn’t charged with any traffic or criminal offense, and conclude that CEI isn’t shielded from liability by the Turner decision.

Friend-of-the-Court Briefs
An amicus curiae brief supporting CEI’s position has been submitted by Ohio Bell Telephone Company, which does business as AT&T Ohio, and advocates that the Court apply the Turner decision to Links’ case. Among AT&T’s arguments in its brief is that the permission to place the pole along the township road is granted to CEI by state law until a local government takes an official act to require its relocation, and statements by officials aren’t the same as official acts. The company also notes in Turner that a utility company is liable if a motorist is traveling lawfully in the “usual and ordinary course of travel.” AT&T suggests Link’s alleged alcohol impairment rendered him “unprivileged” to be on the road, and that the utility company can’t be responsible for accidents involving an impaired driver who loses control of his vehicle when a deer jumps in the road.

The County Commissioners Association of Ohio and the Ohio Township Association have jointly filed an amicus brief supporting the Links. The local government groups argue that R.C. 5543.09(A) and R.C. 5571.05 grant county engineers the right to supervise road construction in unincorporated townships and the ability to remove obstructions that interfere with road improvements. The groups state that overturning the Eighth District’s ruling would lead to county engineers and townships losing “critical oversight authority over placement of utility poles along roads at the expense of public safety.”

The associations also assert that the “any applicable law” provisions of R.C. 4931.03(B)(2) includes approval by the county engineer. They state that the Eighth District found the Geauga County engineer’s expressed disapproval of the pole location was enough to find CEI didn’t have permission to keep the pole there.

The Court has granted a request for the associations to share the Links’ allotted time for oral argument.

The Ohio Association of Justice also filed an amicus brief supporting the Links. The group cites rulings in several other states where utility companies are held liable for accidents with poles along roadways, and asked the Court to reject the proposition that the township needed to take separate legislative action to force CEI to remove the remaining eight poles.

- Dan Trevas

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.

Contacts
Representing the Cleveland Electric Illuminating Co.: Thomas Michals, 216.622.8200

Representing Douglas V. and Diane Link: Joseph Triscaro, 440.248.8811

Representing the County Commissioners Association of Ohio and the Ohio Township Association: Frank Reed Jr., 614.559.7213

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Is Failing to Register Vehicle Included as Conviction When Reviewing Whether Earlier Conviction Can Be Sealed?

State of Ohio v. (J.M.), Case no. 2015-1221
Tenth District Court of Appeals (Franklin County)

ISSUE: Must a violation of R.C. 4503.11 for failure to register a motor vehicle, a fourth-degree misdemeanor, be counted when determining whether a person is an offender eligible under R.C. 2953.31 to have the record of an earlier conviction sealed?

BACKGROUND:
A person identified as J.M. pled guilty in a Franklin County court in July 1989 to a count of receiving stolen property, a felony. The court sentenced him to an 18-month suspended prison term with probation. In January 1998, he pled guilty to negligent assault, a third-degree misdemeanor. Fifteen years later, in 2013, J.M. entered a guilty plea for failing to renew his vehicle registration, a fourth-degree misdemeanor.

Two years ago, J.M. applied to the Franklin County Common Pleas Court asking to seal the record of his 1989 conviction for receiving stolen property. The court approved the application. The state appealed to the Tenth District Court of Appeals, which affirmed the lower court’s decision. However, the appeals court notified the Ohio Supreme Court the ruling conflicts with State v. Clark, a 2011 judgment from the Fourth District Court of Appeals.

The Supreme Court agreed to review the conflict.

Offenders Who Are Eligible to Request Sealing of Records
To seal the record of a conviction, a person must be an “eligible offender,” as defined in R.C. 2953.31. The relevant part of the law states, “‘Eligible offender’ means anyone who has been convicted of an offense in this state or any other jurisdiction and who has not more than one felony conviction, not more than two misdemeanor convictions if the convictions are not of the same offense, or not more than one felony conviction and one misdemeanor conviction in this state or any other jurisdiction.”

The statute also provides some exceptions: “For purposes of, and except as otherwise provided in, this division, a conviction for a minor misdemeanor, for a violation of any section in Chapter 4507., 4510., 4511., 4513., or 4549. of the Revised Code, or for a violation of a municipal ordinance that is substantially similar to any section in those chapters is not a conviction. However, a conviction for a violation of section 4511.19, 4511.251, 4549.02, 4549.021, 4549.03, 4549.042, or 4549.62 or sections 4549.41 to 4549.46 of the Revised Code, for a violation of section 4510.11 or 4510.14 of the Revised Code that is based upon the offender’s operation of a vehicle during a suspension imposed under section 4511.191 or 4511.196 of the Revised Code, for a violation of a substantially equivalent municipal ordinance, for a felony violation of Title XLV of the Revised Code, or for a violation of a substantially equivalent former law of this state or former municipal ordinance shall be considered a conviction.”

Failing to Register Vehicle Counts as Conviction, State Argues
The Franklin County prosecutor points out that J.M. is eligible to have his record sealed if he has “not more than one felony conviction and one misdemeanor conviction.” However, the prosecutor asserts, J.M.’s convictions include one felony and two misdemeanors, and neither misdemeanor violation, including failing to renew his vehicle registration under R.C. 4503.11, is an exception listed in the law. As a result, J.M. “did not meet the plain, unambiguous definition of ‘eligible offender,’” the prosecutor writes in the brief to the Court. He contends that, based on the statute, the trial court had no jurisdiction to approve J.M.’s application.

In addition, the prosecutor challenges the Tenth District’s “long line of cases” holding that some convictions shouldn’t be counted because they’re so similar to the statute’s traffic offenses that aren’t considered convictions for purposes of sealing records. However, the vehicle registration offense in R.C. 4503.11 isn’t specifically listed as an exception in the law so it can’t be added by the courts, he maintains, concluding that J.M. therefore was ineligible to have his record sealed. This view reflects the judgment made by the Fourth District in Clark.

Minor Traffic Offenses Shouldn’t Prevent Sealing, Applicant Contends
J.M. notes the statutes for sealing records treat the array of misdemeanor convictions differently and exempt some from being considered when determining whether a person is eligible to have a conviction sealed. For example, minor misdemeanors aren’t counted as a conviction when evaluating whether to seal a record. J.M. points out that the state legislature amended R.C. 4503.11 in July 2015 to change the offense for not registering a vehicle from a fourth-degree misdemeanor to a minor misdemeanor. Given that adjustment, he argues his 2013 conviction for the offense shouldn’t count as a conviction under the sealing statute because it’s now a minor misdemeanor, one of the exceptions specifically mentioned in the law.

The Fourth District’s decision in Clark involved an earlier, more restrictive version of eligible offender in R.C. 2953.31 that doesn’t apply to this case, he notes and then cites three Tenth District rulings as well as another appeals court opinion – each concluded that driving offenses were administrative in nature and didn’t qualify as convictions for purposes of sealing records. He advocates for a liberal interpretation of the law to promote its purpose to allow some people to have their records sealed.

- Kathleen Maloney

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.

Contacts
Representing the State of Ohio from the Franklin County Prosecutor’s Office: Michael Walton, 614.525.3555

Representing (J.M.) from the Franklin County Public Defender’s Office: David Strait, 614.525.8872

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Can Malpractice Case Be Pursued Against Law Firm for Limiting Its Representation of Client?

Roetzel & Andress, LPA, et al. v. Lorna B. Ratonel, et al., Case no. 2015-0724
Second District Court of Appeals (Montgomery County)

ISSUES:

  • Can a law firm that signs a limited representation agreement with a client be sued for malpractice for failing to pursue claims that aren’t in the written agreement but were discussed between the law firm and the client?
  • Can a law firm be sued for malpractice if it pursues a legal claim sought by the client, but ultimately withdraws it and advises the client to seek other counsel to pursue the claim or represent themselves?

BACKGROUND:
The Dayton offices of Roetzel & Andress, LPA (R&A) and firm attorney Mark Ropchock were sued for malpractice by California resident Lorna Ratonel and Ratonel-family owned businesses. Ropchock and R&A were hired by Ratonel to sue the law firm that represented her in a real estate transaction for malpractice because the legal advice she received from the original firm allegedly cost her more than $1 million in damages.

HUD Properties Purchased
In June 2007, the Ratonels, owners of California gas stations, sold a large portion of commercial property and learned that if they didn’t reinvest the sales proceeds within six month they would face more than $1 million in federal capital gains taxes. Lorna Ratonel engaged the law firm of Keating, Muething & Klekamp PLL (KMK) to represent her in the investigation and acquisition of investment properties. She selected Holden House apartments in Dayton and French Village Apartments in Grand Island, Nebraska, which were both U.S. Housing and Urban Development (HUD) low-income housing projects. The purchases took place in January 2008, just days before the six-month capital gains tax deadline.

Soon after the purchases, potential legal issues arose from the sales. For Holden House in Dayton, there were disputes regarding the payment price after learning the apartments required a long list of repairs and about whether KMK had the proper inspections completed before the sale. For French Village, the dispute centered on whether KMK’s prepared purchase agreement removed a key financing option that resulted in Ratonel gaining lower rent payments from the federal government. That financing change amounted to a nearly $1.2 million reduction in their investment, she claimed.

Engaging R&A to Sue First Law Firm
In a written engagement letter signed by Ratonel in March 2009, R&A wrote it would represent her in connection with the purchase of Holden House. In the 41-paragraph complaint filed by R&A in the trial court against KMK, French Village is only referenced in one paragraph, and in that paragraph, R&A doesn’t assert the KMK committed malpractice when representing Ratonel or was responsible for any damages in connection with the French Village purchase.

In January 2010, in an attempt to settle with KMK, R&A sent a draft letter to Ratonel including accusation of negligence by KMK for French Village, but ultimately the final letter sent to KMK didn’t reference French Village. While Ratonel insisted R&A add claims regarding French Village, the firm refused and advised her that they focus on Holden House. R&A filed an amended complaint against KMK in August 2010 without mentioning French Village.

In October 2010, the trial court ruled in favor of KMK arguing Ratonel failed to provide competent evidence of legal malpractice by KMK. The parties entered into a settlement where Ratonel wouldn’t appeal its case against KMK in exchange for KMK dropping its charge that Ratonel owed the firm $93,000 in unpaid legal bills.

Ratonel Then Sues R&A
Ratonel claimed that Ropchock of R&A pressured her into accepting a settlement she didn’t agree with, and Ratonel hired another law firm to sue Ropchock and R&A for malpractice. In May 2014, a Montgomery County Common Pleas Court granted summary judgment to R&A finding the firm didn’t commit malpractice.

Ratonel appealed to the Second District Court of Appeals, which ruled in a 2-1 decision there were questions as to whether R&A committed to expanding its representation beyond what was contained in the original engagement letter to Ratonel. The Second District remanded the case to the trial court to consider evidence that R&A through its emails, proposed settlements, and in other ways implied to Ratonel it would also file claims based on the French Village actions. R&A appealed the decision to the Supreme Court, which agreed to hear the case.

Court Needs to Clarify Ohio’s Limited Scope of Representation Rules, R&A Argues
R&A argues the Second District’s decision leaves Ohio lawyers at risk of facing malpractice lawsuits involving matters they expressly refused to undertake, and that lawyers have the discretion to limit their representation to specific claims or issues. The firm contends in its written agreement it limited its representation of Ratonel to issues regarding the purchase of Holden House, and noted that Ratonel under oath acknowledged the Ropchock “absolutely refused” requests by her to add issues regarding French Village. The firm argues it has rights under the rules of professional conduct for Ohio attorneys to refuse to pursue issues clients suggest if there is time for the clients to get another attorney to handle the matter or represent themselves.

“When Ratonel signed the engagement agreement she had thirty-three months to pursue any claim she might have regarding French Village,” stated the brief filed by R&A. “She still had over thirty months to do so when R&A reiterated its refusal to add a French Village claim to the lawsuit it filed on her behalf.”

R&A also notes it took the case on a contingency fee, and argued that Ratonel refused to pay for an expert witness needed to pursue claims regarding French Village. The firm warns that it would be dangerous public policy if lawyers faced the burden of a malpractice lawsuit for matters outside of the scope of limited representation. They point to the Ohio Supreme Court’s March 2015 Report & Recommendations of the Task Force to Access to Justice, which recommended that state Rule 1.2(c) of the Ohio Rules of Professional Conduct be revised to clarify the rule for providing limited scope representation.

R&A also suggests that while it discussed French Village while developing its case against KMK, it effectively terminated any implied representation of Ratonel on the issue when it sent an April 2010 email that told her the firm could find “no viable claim” against KMK. R&A asserts the legal and public policy issues for discontinuing representation should be the same as refusal to undertake representation, and that it didn’t commit malpractice by failing to pursue the French Village claim.

Ratonel Suggests R&A More Involved in French Village Issue Than It Claims
Ratonel claims that R&A committed malpractice by erroneously advising her that claims about KMK’s handling of French Village weren’t viable; that it allowed the dismissal of valid claims against KMK; and that the firm never suggested she seek other counsel to pursue the claims. Ratonel argues the engagement agreement includes language allowing the terms of R&A representation to be modified to provide services they mutually agreed. In addition, she contends that to represent Ratonel in the lawsuit against KMK, R&A was obligated to include all claims arising from the purchases of the two properties because they were done together to avoid paying the capital gains tax. Ratonel notes that even after the trial court decision, Ropchock continued to state he believed attorneys at KMK committed malpractice that cost Ratonel more than $1 million.

In addition, she argues that R&A removed the complaints regarding French Village because the firm didn’t want to hire an expert to testify to KMK’s mistakes and that R&A failed to read and understand information from HUD experts that could clearly explain the amount of damages Ratonel suffered from KMK’s purchasing agreement. Ratonel describes R&A arguments about the public policy issues regarding limited scope representation as a “tale” conjured up based on one quote from her in a deposition.

“However, this fictional account cannot withstand the indisputable facts of record and applicable, settled Ohio law which holds than an attorney-client relationship is established when a lawyer represents a client in court proceedings, advises a client, and acts on a client’s behalf in connection with the law,” states the brief filed by Ratonel.

- Dan Trevas

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.

Contacts
Representing Roetzel & Andress, et al.: David Greer, 937.322.3277

Representing Lorna Ratonel: Sam Caras, 937.223.7170

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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.