Tuesday, March 21, 2023
The Scott Fetzer Company v. American Home Assurance Company Inc. et al., Case No. 2022-0595
Eighth District Court of Appeals (Cuyahoga County)
State of Ohio v. Tyree K. Daniel, Case No. 2022-0603
Sixth District Court of Appeals (Lucas County)
State of Ohio v. Glen Stalder, Case No. 2022-0707
Fifth District Court of Appeals (Fairfield County)
Kathleen McCarthy et al. v. Peter K. Lee, MD, et al., Case No. 2022-0732
Tenth District Court of Appeals (Franklin County)
How Do Courts Decide Which State’s Law Applies in Insurance Dispute?
The Scott Fetzer Company v. American Home Assurance Company Inc. et al., Case No. 2022-0595
Eighth District Court of Appeals (Cuyahoga County)
ISSUE: In cases with issues connected to more than one state, what principles determine which state’s laws to apply for a lawsuit against an insurance company alleging breach of contract and bad faith?
BACKGROUND:
Two hazardous waste sites in Michigan were identified by the U.S. Environmental Protection Agency in 1986 as needing remediation. Kingston Products, which operated a manufacturing facility on a site, was named as a potentially responsible party for part of the environmental contamination.
The Scott Fetzer Company, headquartered in Westlake, Ohio, is involved in the cleanup work because it acquired Kingston decades earlier, in 1968. Fetzer contacted its insurance companies and Kingston’s insurers for coverage of the remediation costs and legal expenses incurred since 1986.
In October 2019, the Fetzer Company sued four insurance companies, including American Home Assurance Company and Travelers Casualty and Surety Company. The lawsuit, filed in Ohio, alleges the insurers breached the insurance contracts by not covering costs Fetzer has paid over 36 years in addressing the environmental contamination. Travelers settled with Fetzer regarding one contaminated area in 2002 but hasn’t resolved the remaining insurance claims. The suit also argues the insurers acted in bad faith when handling the claims and by not paying them.
Requests Made About Discovery and Considering Claims Separately
In February 2020, Travelers asked the Cuyahoga County Common Pleas Court to separate the contract dispute from the bad faith claim and to stay discovery on the bad faith allegations, which were moving forward in court. The court split the claims but declined to put a hold on the discovery request related to the bad faith portion of the lawsuit.
Fetzer filed a motion in August 2020 to force Travelers to produce documents that the insurer argued were related to the bad faith allegations and shouldn’t be released. Travelers maintained that Michigan or Indiana law should be applied because the contamination site is in Michigan and Kingston Products was located in Indiana. Travelers argued the documents requested wouldn’t be subject to discovery under Michigan or Indiana law. Travelers also alleged that Fetzer was trying to gain information that could be used in the separate contract coverage dispute.
The court reviewed the documents in camera and ordered Travelers in March 2021 to provide several documents to Fetzer. The court stated that the documents were relevant to the insurer’s attempts to investigate Fetzer’s claims and to locate policies that the insurer has asserted don’t exist.
Travelers appealed to the Eighth District Court of Appeals, which found that Ohio law applied and upheld the order for Travelers to comply with discovery. Travelers appealed to the Supreme Court of Ohio, which accepted the case.
Insurance Contract Principles Guide Which State’s Law Governs, Insurer Contends
The dispute centers on identifying the type of legal claim in order to select the legal principles to follow for deciding which state’s laws to apply in the case. The arguments refer to sections of a legal publication called “Restatement of the Laws Second, Conflict of Laws.”
With insurance matters, Travelers contends, a claim of bad faith cannot be separated from the insurance contract. Travelers argues that an insurer’s duty of good faith and fair dealing derives from the contractual relationship. Section 193 of the Conflict of Laws publication addresses insurance contracts and describes the factors that pertain to this case, Travelers maintains. It is the correct section to follow regardless of whether the basis for a lawsuit is a contract or a tort, the insurer argues.
The key factor in Section 193 for determining which state’s laws apply in the case is the “principal location of the insured risk,” Travelers states in its brief . Under either Michigan or Indiana law, though, a court wouldn’t be allowed to order the production of the documents, Travelers maintains.
Tort Principles Determine State Law to Use, Business Owner Asserts
Fetzer maintains that a bad faith allegation is a tort, which is covered in Section 145 of Conflict of Laws. The company contends that Ohio courts routinely draw a distinction between bad faith torts against insurance companies and breach of contract claims involving insurance policies. The same logic should apply to deciding which state’s law should be followed in this lawsuit, Fetzer argues.
Fetzer also argues the factors in Section 145 support the application of Ohio law because Ohio has the most significant relationship to the parties and to the “occurrence” – the lack of a timely decision regarding coverage. Fetzer asserts that the law of the state where the bad faith conduct is directed has the most significant relationship to the claims in the lawsuit, and that is Ohio in this case. The company notes that neither it nor Travelers are located in Indiana or Michigan. Fetzer also states that insureds expect their insurance disputes to the handled in the state where the policyholder is located.
– Kathleen Maloney
Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.
Contacts
Representing Travelers Casualty and Surety Company, formerly known as Aetna Casualty and Surety Company: Christina Corl, ccorl@plunkettcooney.com
Representing the Scott Fetzer Company: Amanda Leffler, aleffler@brouse.com
Is Method to Reduce Arson Registration Requirement Unconstitutional?
State of Ohio v. Tyree K. Daniel, Case No. 2022-0603
Sixth District Court of Appeals (Lucas County)
ISSUE: Does R.C. 2909.15(D)(2)(b) violate the separation of powers doctrine by permitting a trial judge to reduce the number of years a defendant must register with the Arson Offender Registry only after receiving a request from the prosecutor and investigating law enforcement agency?
BACKGROUND:
In October 2019, Tyree Daniel and others set fire to a commercial building in Toledo. At a hearing, prosecutors stated that Daniel was seen earlier at a local gas station buying a lighter and lighter fluid. Video surveillance caught him spraying the lighter fluid on the building.
Daniel was charged with two counts of aggravated arson. As part of a plea agreement, he pleaded guilty to one count of arson. He was sentenced to 60 days in jail and three years of community control. At his initial sentencing hearing, Daniel’s attorney objected to his client’s obligation to register with the Arson Offender Registry, stating that the law creating the registry, R.C. 2909.15(D)(2)(b), was unconstitutional. He maintained the law violated the separation of powers in the Ohio Constitution.
The trial court rejected the argument and ordered Daniel to register for the rest of his life as an arson offender. Daniel appealed the registration requirement to the Sixth District Court of Appeals. The Sixth District affirmed the trial court’s ruling, and also certified that its decision conflicts with the Fourth District Court of Appeals 2017 State v. Dingus decision, which found some of the registration law’s provisions unconstitutional.
The Supreme Court of Ohio agreed to consider the conflict among appellate districts.
Registry Allows Executive Branch to Encroach on Judicial Powers, Defendant Maintains
As of July 2013, anyone who is an arson offender according to the definition in state law must register annually for life with the Arson Offender Registry, pay a $50 registration fee, and pay an annual $25 renewal fee. The failure to register or renew a registration is a felony. The registry isn’t accessible to the public, and only limited law enforcement and firefighting officials can review it. R.C. 2909.15(D)(2)(b) allows a judge to lower the lifetime registration to 10 years or more only after receiving a request from the prosecutor and the investigating law enforcement agency involved in the arson offender’s case.
Daniel explains that the separation of powers is not explicitly stated in the Ohio Constitution, but the state recognizes the concept as part of the constitutional framework of government, similarly to the U.S. Constitution. Each division of government is protected from encroachment by the others, and the legislative branch has no right to limit the powers of the judicial branch, he argues. He notes that the Supreme Court of Ohio has ruled in similar cases that laws restricting a court’s power to determine guilt and to sentence a defendant are unconstitutional violations of the separation of powers.
Daniel maintains that the lifetime registry requirement meets the definition of “punishment” and is part of his criminal sentence. Because only the judiciary has the power to sentence a defendant and impose the punishment, the law violates the separation of powers because the prosecutor and law enforcement agency have the power to limit the judge’s discretion, he maintains. Neither the judge nor the defendant may request or initiate a lowering of the lifetime registration because the law only permits such action at the direction of the prosecutor and the investigating agency, Daniel explains. That compromises the independence of the judiciary, he argues.
Registration requirements imposed by state law can be either a punishment or an additional civil obligation that coincides with a conviction, Daniel notes. The Supreme Court in its 2011 State v. Williams decision presented a series of factors to determine whether a registration obligation is a punishment. Based on the factors, Daniel argues the arson registry is punitive and any limits by the executive branch on the judge’s ability to impose the punishment isn’t permitted. Daniel maintains he has a right to request a lower registration requirement, and a judge should have the discretion to grant the request without the authorization of the prosecutor and investigating agency.
Registration Not Punishment, Prosecutor Asserts
The Lucas County Prosecutor’s Office maintains that the registration is a collateral, or additional, civil obligation placed on an arson offender and doesn’t constitute punishment. Although the registration requirement is imposed during sentencing, it isn’t part of the criminal sentence, the office explains. The executive branch isn’t encroaching on judicial branch authority by imposing additional civil obligations once a court finds a defendant guilty and a judge sentences the defendant to sanctions prescribed by state law, the prosecutor argues. The factors outlined in Williams lean toward not classifying the registration requirement as punishment, and the law isn’t a separation of powers violation, the office asserts.
The prosecutor describes R.C. 2909.15(D)(2)(b) as a “trigger” that allows the trial court to consider a lesser registration requirement, but has no effect on the court’s role to determine guilt. The judge also isn’t bound by any recommendation of the executive branch and can reduce the registration requirements in the law or ignore them, the prosecutor notes.
The office maintains the legislature permits the executive branch’s exercise of discretion in a number of ways that trigger the trial court to act. For instance, the prosecutor notes, it is the prosecutor’s role to decide whether to pursue a case and present charges. What charges the prosecutor seeks ultimately controls what penalties the trial court can impose, and such authority isn’t an unconstitutional encroachment on the judiciary, the office asserts.
The office explains that the concept of separation of powers involves both an “interdependence and independence” of the three branches, which must work collectively. The constitution permits each branch to influence the other branches, the prosecutor argues, and the doctrine isn’t violated unless one branch attempts to “completely and directly” administer the duties assigned to another branch. The registry requirement isn’t an impermissible restriction on the court’s duty to impose criminal sentences, the office concludes.
Court Permits Attorney General to Participate in Case
The Ohio Attorney General’s Office submitted an amicus curiae brief supporting the prosecutor’s position. The Court also approved the attorney general’s request to share the prosecutor’s allotted oral argument time.
Other Friend-of-Court Briefs Submitted
In addition to the attorney general, a brief supporting the prosecutor’s position was submitted by the Ohio Prosecuting Attorneys Association.
– Dan Trevas
Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.
Contacts
Representing Tyree K. Daniel: Edward Stechschulte, estechschulte@iorolegal.com
Representing the State of Ohio from the Lucas County Prosecutor’s Office: Evy Jarrett, EJarrett@co.lucas.oh.us
Representing the Ohio Attorney General’s Office: Benjamin Flowers, Benjamin.flowers@ohioago.gov
Were Jurors Improperly Excused Because They Are Men?
State of Ohio v. Glen Stalder, Case No. 2022-0707
Fifth District Court of Appeals (Fairfield County)
ISSUES:
- When alleging that the peremptory challenge of a potential juror was based on gender discrimination, must the party objecting to the potential juror present facts and relevant circumstances to indicate intentional discrimination?
- When the objecting party shows facts and circumstances indicating intentional discrimination led to a juror’s removal, and the trial court doesn’t allow the other side to offer a gender-neutral reason, is the proper remedy to return the case to the trial court for a hearing on the issue?
BACKGROUND:
Glen Stalder was charged in February 2021 with sexual imposition based on an allegation of sexual contact that was offensive or reckless. An employee of a convenience store in Amanda, Ohio, said that Stalder grabbed her sexually while she was working at the store.
Stalder pled not guilty to the misdemeanor in Fairfield County Municipal Court, and the case moved to a trial before a jury. Thirteen women and ten men made up the initial jury pool.
The Lancaster prosecutor made a peremptory challenge to remove one of the men from the jury pool. Peremptory challenges allow a juror to be excused without explanation, but a juror cannot be excused for discriminatory reasons based on gender or race. Stalder’s attorney objected to the removal of the juror, arguing the prosecutor was trying to exclude male jurors because men would sympathize with Stalder in the trial. The trial court overruled the objection, and the juror was excused.
The prosecutor’s second peremptory challenge was to remove another male juror. Stalder’s attorney objected, stating that the juror was being excused because of his gender. Although the trial judge didn’t ask for an explanation, the prosecutor offered that the juror was being excused because of his response about how he would react in a stressful situation. The judge excused the juror.
The prosecutor made no other peremptory challenges. Stalder’s attorney challenged four women in the jury pool, and they were excused. The final jury consisted of six women and three men.
The jury found Stalder guilty of sexual imposition. The court sentenced him to seven days in jail, $500, and community control.
Defendant Disputes Trial Court Rulings on Excusing Male Jurors
Stalder appealed to the Fifth District Court of Appeals, which reversed the trial court, vacated his conviction, and ordered a new trial. The Fifth District determined that Stalder’s attorney met the first step – called establishing a prima facie case – for showing that the prosecutor was intentionally discriminating based on juror gender. The appeals court decision added that “the bigger issue” was the failure consider the merits of Stalder’s objections or juror responses to questions because trial court concluded that the test for gender discrimination in jury selection doesn’t apply to white men.
The Lancaster prosecutor appealed to the Supreme Court of Ohio, which agreed to review the issues.
Batson Challenges Central to Case
The three-part test for determining whether a juror is improperly excluded based on race or gender was described in Batson v. Kentucky, a 1986 U.S. Supreme Court decision. The case involved racial discrimination in jury selection. The test was extended in a 1994 ruling to allegations of gender discrimination in choosing jurors.
The first step requires the objecting party to present facts or other relevant circumstances adequate enough to show that the other side intentionally attempted to remove a juror based on race or gender. In the second step, the other side presents a race-neutral or gender-neutral explanation for requesting the juror’s removal. The third step is the trial court determination whether intentional discrimination has been shown.
Defendant Didn’t Meet First Baston Requirement, State Contends
The Lancaster Law Director’s Office maintains that Stalder didn’t establish a prima facie case that gender was the reason for the peremptory challenges of two men for the jury. The only reasoning Stalder gave to support the Batson challenge was that the jurors were removed because men would likely side with him, the prosecutor notes. But Stalder presented no facts or circumstances, nor any statements the jurors made, to support his objection to their removal, the prosecutor argues. Stalder offered no evidence of historical gender discrimination in jury selection by the prosecutor’s office or a pattern of eliminating male jurors in this case, the office contends. It points out that it didn’t use its third peremptory challenge and three men served on the jury.
The prosecutor also contends that the correct remedy when a trial court doesn’t follow the three Batson steps is to return the case to the trial court for a decision whether a prima facie case of intentional discrimination was presented and to consider the state’s response. If the trial court finds intentional discrimination in removing the jurors, then the conviction is reversed and a new trial is ordered, the prosecutor concludes.
Prosecutor Removed Men as Jurors Based on Gender, Man Asserts
Stadler responds that the trial court was wrong in finding that Batson concerns don’t apply to men. Excluding white men from juries in cases involving white male defendants denies their constitutional right to equal protection under the law, Stadler argues.
In his case, he maintains, the trial court arbitrarily dismissed his objections to the prosecutor’s gender-based peremptory challenges to two men. The state based its case for sexual imposition on the view that he should have known that the woman, who was in her 20s, would not be interested in him given the age difference, Stadler states. He was in his 70s at the time of his arrest. He contends that the prosecutor purposely tried to exclude men from the jury to tilt the scales toward a win for the state.
The trial court’s failure to properly conduct jury selection is a legal error that requires a new trial, Stadler argues. The prosecutor acknowledged to the court that the excused jurors had said they could be “fair and impartial” and had answered questions “satisfactorily.” The prosecutor also said, “It’s just a matter of elimination on which jurors I think are most appropriate for the case.” The prosecutor’s statements show that these jurors were eliminated because of their gender, Stadler maintains, which he contends is a clear Batson violation necessitating a new trial.
– 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 Lancaster Law Director’s Office: Joseph Sabo, jsabo@ci.lancaster.oh.us
Representing Glen Stalder: Andrew Sanderson, asanderson@burkettlaw.net
Did Mother’s Missed Deadline in Medical Injury Case Apply to Claims Filed by Her Children?
Kathleen McCarthy et al. v. Peter K. Lee, MD, et al., Case No. 2022-0732
Tenth District Court of Appeals (Franklin County)
ISSUES:
- Does the medical claim statute of repose, which bars the filing of a lawsuit after four years, apply to a minor’s claim related to a parent’s medical injury?
- Under the medical claim statute of repose, can a minor’s claim for loss of parental consortium proceed even if the parent’s primary medical claim was barred by the statute’s four-year time limit?
BACKGROUND:
In 2010, Kathleen McCarthy, a mother of three, consulted with Dr. Peter Lee, a colon and rectal surgeon. McCarthy expressed concern about rectal bleeding and the possibility of cancer. Lee performed a colonoscopy in 2011 and didn’t detect any signs of cancer. In 2015, McCarthy returned to Lee, reporting that her symptoms had worsened and she had a growing concern of colon cancer. Lee didn’t perform a colonoscopy and didn’t mention the possibility of cancer.
In 2017, McCarthy was diagnosed with colon cancer by another specialist. McCarthy contends that had her cancer been detected with the proper care by Lee in 2015, her survival rate would have been much greater.
In 2018, McCarthy and her husband filed a lawsuit against the doctor claiming medical negligence, wrongful death, and a “derivative” or related claim of loss of consortium on behalf of her husband. Loss of consortium claims allege that a person is harmed when deprived of the benefits of a family relationship. The original lawsuit was filed before the one-year statute of limitations on medical claims.
The case was voluntarily dismissed by the couple in January 2019. At the time, McCarthy’s attorney believed that under a “savings statute,” she had until January 2020 to refile her suit. A state statute of repose law, R.C. 2305.113(C), requires a medical claim to be filed within four years of the occurrence that led to the medical injury. In McCarthy’s case, that injury occurred in April 2015 when she last met with Lee.
Parents’ Suit Barred, Children File Lawsuit
The attorney for McCarthy and her husband sought another extension and refiled the case in October 2020. Two months later, the Supreme Court of Ohio ruled in its Wilson v. Durrani decision that the time extension in a savings statute doesn’t apply to the statute of repose. Since the couple didn’t file its lawsuit by April 2019, it was dismissed.
In April 2021, McCarthy’s three children, who were minors, filed a separate lawsuit against Lee for loss of consortium. McCarthy died in December 2022, just days before her 55th birthday. Lee asked the Franklin County Common Pleas Court to dismiss the case, finding that the claim was a derivative claim related to McCarthy’s medical negligence case. The trial court ruled that because the parents’ lawsuit was barred by the four-year time limit in the statute of repose, the time to file a derivative claim arising from the same injury also expired.
The children appealed to the Tenth District Court of Appeals, which affirmed the trial court’s decision.
The children appealed to the Supreme Court, which agreed to hear the case.
Time Limit Doesn’t Apply to Minors, Children Claim
McCarthy’s children, who were teenagers when their lawsuit was filed, argue there are two reasons their case should continue. They maintain the statute of repose law, by its own terms, doesn’t apply to claims by minors. Second, even if the law did apply, the deadline would only bar their mother’s medical negligence claim and not their separate action for loss of consortium.
The statue of repose law, R.C. 2305.113(C), begins with: “Except as to persons within the age of minority or of unsound mind as provided by section 2305.16 of the Revised Code…,” a medical claim must be filed within four years of the date of the injury, the teens explain. The lower courts interpreted the clause as applying only to cases where a minor or mentally disabled person was injured, the children note. But the law doesn’t explicitly state that it only applies to the primary claim, they argue, and the provision could also apply to derivative claims such as theirs.
They note that loss of consortium is defined in R.C. 2305.113(E)(7) as one of the claims that would be barred by the four-year time limit if it were filed along with a medical negligence claim. However, that section includes “but not limited to, claims by a parent, guardian, custodian, or spouse,” they explain. The teens argue the legislature deliberately intended to omit minors from the list and it points to proof that lawmakers didn’t want to place the time limit on claims by minors for injuries they suffered or when a parent or guardian suffered from medical negligence.
The children also note the lower courts relied on a string of Ohio cases that misinterpreted how the statute of repose impacts derivative claims. Those cases have concluded that when the primary claim is filed more than four years after the injury, the statute of repose not only prevents the filing of the lawsuit, but also extinguishes the claim as if it never existed, they maintain. And if the primary claim ceases to exist, then the derivative claims also cease, according to those decisions, they note.
However, another series of Supreme Court of Ohio cases, beginning in 1936, treat loss of consortium claims as separate and independent from a medical negligence claim because it impacts different people. The bar to McCarthy’s claims should have no impact on their separate, distinct claim, the teens maintain. They argue the statute of repose prevents their mother from pursuing the case, but does not extinguish the claim itself – that she was injured by the doctor’s negligence. The children argue they can still pursue their separate case after the four-year deadline. They assert their clam should be able to continue because the statute of repose acted as a “technical” means of ending their mother’s case, and that the negligence claim wasn’t resolved by the merits of her case or any finding that the doctor wasn’t negligent.
All Claims Expired After Filing Deadline, Doctor Asserts
Lee argues the Tenth District relied on the Supreme Court’s Wilson decision and prior case law, which found that when a primary claim is dismissed because of the statute of repose, the derivative claims are also dismissed. He maintains the children cannot attempt to circumvent the law by filing a separate lawsuit from their mother because the nature of their lawsuit still stems from the alleged medical injury. The law specifically includes loss of consortium as a derivative claim under R.C. 2305.113 and is subject to the four-year deadline, he argues.
Lee notes the lower courts correctly rejected the idea that the claims by minors are exempt. The law lists who can file a derivative claim and states it is “not limited to” only a parent, guardian, custodiam, or spouse, he explains. Lee argues the law lists examples of people who typically file derivative lawsuits when a person is injured, but nothing in the law indicates children are specifically excluded. The doctor also maintains the opening clause of the law excluding minors pertains only to primary medical claims for injuries to minors.
The doctor also asserts the children misinterpret the series of court decisions regarding loss of consortium claims as separate and independent from medical injury claims. In those cases, the courts indicate the damages are separate and independent, he explains. The trial court makes separate assessments of the damages suffered by the individual harmed by the medical negligence and the damages suffered by those claiming loss of consortium. The claims are still related, and the loss of consortium claim is dependent on the existence of the medical negligence claim, he concludes.
Lee notes that all of the exceptions the children pose that would allow their claims to move forward are invalid. The medical statute of repose has a distinct impact on legal claims and grants immunity to a medical provider from liability after four years, he notes. There is no scenario where a minor’s derivative claim can be filed outside of the statute of repose time limit, he concludes.
Friend-of-the-Court Brief Submitted
An amicus curiae brief supporting the Lee’s position was submitted by Ohio Association of Civil Trial Attorneys. A joint amicus brief supporting Lee was filed by the Ohio Hospital Association, the Ohio Osteopathic Association, and the Ohio State Medical Association.
– Dan Trevas
Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.
Contacts
Representing Kathleen McCarthy et al.: T. Jeffrey Beausay, tjb@beausaylaw.com
Representing Peter K. Lee, MD, et al.: Michael Traven, michael.traven@fisherbroyles.com