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Ohio Legal Malpractice Law and Statute of Limitations

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Ohio Legal Malpractice Law and Statute of Limitations Powered By Docstoc
					                                                   SUMMARY OF

                 OHIO SUPREME COURT OPINIONS FROM 2002
                               RELATED TO LITIGATION, INSURANCE AND TORTS


                                                  PREPARED BY THE

                                       INSURANCE LAW COMMITTEE
                                                       AND THE

                                      NEGLIGENCE LAW COMMITTEE
                                    OF THE OHIO STATE BAR ASSOCIATION




               This material is prepared for the reference of members of the Ohio State Bar Association.
                             The full text of the opinion should be read to insure accuracy.




                                                    Contents
        Civil Procedure                               Insurance                                    Torts
Commencement of action                    Notice of loss                             Negligence: breach of duty
Statute of limitations                    Stacking auto liability limits             Proximate cause
Savings statute                           Motor carrier coverage                     Insurance bad faith
Subject matter jurisdiction               Allocating continuous loss                 Telephone consumer protection
Standing                                  Pollution liability insurance              Nuisance and trespass
Arbitration                                                                          Medical malpractice
Juries                                        Uninsured-Underinsured                 Public roads and sidewalks
Pre-judgment interest                                                                Railroads
                                          Offer of UM coverage
Post-judgment interest                                                               Employer’s intentional tort
                                          UM coverage in non-auto policies
Reconsideration                                                                      Wrongful discharge
                                          Exhaustion of liability coverage
Injunction                                                                           Product liability
                                          Consortium and derivative claims
Writ of mandamus                                                                     Defense: independent contractor
                                          Consent to settle and subrogation
Writ of prohibition                                                                  Immunity: recreational user
                                          Pre-judgment in UM claims
Writ of quo warranto                                                                 Immunity: statutory immunity
Attorney fees, sanctions and
                                                      Settlement
     frivolous conduct                                                                           Damages
Disqualification of judge                 Enforcement of settlement
                                                                                     Nominal damages
Disqualification of attorney
                                                                                     Punitive damages
                                           Subrogation and Contribution
            Evidence
                                          Subrogation by government
Unavailable witness                       Inter-insurer contribution
Hearsay: Spontaneous statement            Medical payments subrogation in
                                               UM claims




                                                           1
                                        Civil Procedure                  

COMMENCEMENT OF ACTION
Maria Bright sued “Thomas Rardin Family Practice Center.” TRFPC did not answer or appear. The trial
court granted a default judgment for Bright and awarded damages after a hearing. Bright then filed a motion
for judgment debtor’s hearing against Family Medicine Foundation Inc (which does business under the
fictitious name TRFPC). FMF then moved to intervene and to vacate the judgment, arguing that the
judgment was void since it was rendered against a non-entity. The trial court overruled the motions. FMF
then filed this action for an injunction to prohibit execution against FMF. The trial court denied the relief but
the court of appeals reversed, ruling that an action cannot be commenced or maintained against a party
named only by its fictitious name, §1329.10 ORC. The question was certified to the Supreme Court on a
conflict, which ruled that under §1329.10 ORC a plaintiff may commence or maintain an action against a
party named only by a fictitious name. [The court noted that Bright was not able to discover and did not
know the actual corporate name, and that FMF was aware of the lawsuit.] (Opinion by Sweeney; Moyer,
Douglas, Resnick, Pfeifer and Harsha concur; Stratton dissents.)
     Family Medicine Foundation Inc vs Bright, 96 Ohio St 3d 183, 2002-Ohio-4034, certified by Franklin
App


STATUTE OF LIMITATIONS
Larry Pytlinski complained to his employer Brocar several times alleging employee health and safety
problems. Pytlinski was demoted. He gave OSHA a list of the complaints and was discharged that day. He
sued for wrongful discharge. The trial court granted summary judgment for Brocar based on the 180-day
statute of limitations in the Whistleblower Act, §4113.52 ORC and the court of appeals affirmed. The
Supreme Court reversed. An at-will employee who is discharged or disciplined for filing a complaint with
OSHA concerning matters of health and safety in the workplace is entitled to maintain a common law action
against his employer for wrongful discharge or discipline in violation of public policy, regardless of
compliance with §4113.52 ORC, and a four year limitation applies, §2305.09 (D) ORC. (Opinion by
Douglas; Resnick, Sweeney, and Pfeifer concur; Moyer, Cook and Stratton dissent.)
    Pytlinski v Brocar Prod Inc, 94 Ohio St 3d 77 (2002), appeal from Hamilton App

Mary Vaccariello had a pedicle screw manufactured by SNR surgically installed in her spine to relieve back
pain. The pain continued, Vaccariello suspected that the screw might be causing the pain and she sued SNR
more than two years later. The trial court ruled that the statute of limitations began to run when Vaccariello
suspected the problem, but that the time was tolled during the time between the filing in 1994 of a putative
federal class action against SNR and denial of the class in 1995. The court of appeals reversed, ruling that
cross-jurisdictional class action tolling of statutes of limitations is not recognized in Ohio. The Supreme
Court reinstated the trial court’s decision. When the class action was denied, the Ohio Savings Statute,
§2305.19 ORC, allowed Vaccariello an additional year to file. (Opinion by Pfeifer; Douglas, Resnick and
Sweeney concur; Moyer, Cook and Stratton dissent.)
    Vaccariello vs Smith & Nephew Richards Inc, 94 Ohio St 3d 380 (2002), appeal from Cuyahoga App

David Norgard began working for BW in 1981 as a fluoride furnace operator at its beryllium plant. Shortly
after beginning work Norgard began suffering obvious physical problems. He was consistently treated at the
plant dispensary and told not to worry. Unknown to Norgard, BW suspected he had a heightened sensitivity
to beryllium, periodically sent his blood samples to the National Institute of Health, and filed a workers
compensation claim on his behalf. He was reassigned to another part of the plant but was still exposed to and
had severe reactions to beryllium. In 1992 he was diagnosed with chronic beryllium disease and placed on
disability leave. In 1995 he discovered lawsuits had been filed by other BW employees for this condition.
Within two years he sued BW for a substantially certain to occur intentional act tort. The trial court granted


                                                       2
summary judgment based on the statute of limitations, the court of appeals affirmed but the Supreme Court
reversed. The statute of limitations begins to run once the plaintiff acquires additional information of the
defendant’s wrongful conduct; a cause of action for an intentional tort accrues when the employee discovers
or should have discovered the workplace injury and wrongful conduct. (Opinion by Sweeney; Douglas,
Resnick and Pfeifer concur; Moyer, Cook and Stratton dissent.)
    Norgard vs Brush Wellman Inc, 95 Ohio St 3d 165, 2002-Ohio-2007, appeal from Cuyahoga App


SAVINGS STATUTE
Mary Vaccariello had a pedicle screw manufactured by SNR surgically installed in her spine in 1993 to
relieve back pain. The pain continued, Vaccariello suspected that the screw might be causing the pain and
she sued SNR more than two years later. The trial court ruled that the statute of limitations began to run
when Vaccariello suspected the problem, but that the time was tolled during the time between the filing in
1994 of a putative federal class action against SNR and denial of the class in 1995. The court of appeals
reversed, ruling that cross-jurisdictional class action tolling of statutes of limitations is not recognized in
Ohio. The Supreme Court reinstated the trial court’s decision. When the class action was denied, the Ohio
Savings Statute, §2305.19 ORC, allowed Vaccariello an additional year to file. (Opinion by Pfeifer;
Douglas, Resnick and Sweeney concur; Moyer, Cook and Stratton dissent.)
     Vaccariello vs Smith & Nephew Richards Inc, 94 Ohio St 3d 380 (2002), appeal from Cuyahoga App

In 1995 IPD sued Bizmart in contract for amounts due from 1991 to 1993 for magazines sold by IPD to
Bizmart. IPD dismissed the action in 1996 and re-filed within one year. The trial court granted Bizmart’s
motion for summary judgment based on the four-year statute of limitations, §1302.98 (A) ORC, and the six-
month savings provision, §1302.98 (C). The court of appeals and the Supreme Court affirmed. The general
savings statute, §2305.19 ORC does not apply to this UCC action. (Opinion by Moyer; Resnick, Sweeney,
Pfeifer, Cook and Stratton concur; Douglas dissents.)
    Internatl Periodical Distrib vs Bizmart, 95 Ohio St 3d 452, 2002-Ohio-2488, appeal from Cuyahoga
App

Suzanne Osborne sued her former employer AK Steel for wrongful discharge in federal court. The federal
court dismissed the action without prejudice. One year later Osborne filed her claim in state court. The trial
court ruled that the Savings Statute, §2305.19 ORC, did not apply and dismissed her case. The court of
appeals affirmed but the Supreme Court reversed, ruling the Savings Statute was available. (Opinion by
Pfeifer; Moyer, Douglas, Resnick, Sweeney, Cook and Stratton concur.)
    Osborne vs AK Steel/Armco Steel Co, 96 Ohio St 3d 368, 2002-Ohio-4846, appeal from Hamilton App


SUBJECT MATTER JURISDICTION
Cleveland Electric Illuminating Co sued its customer in the common pleas court for unpaid electric bills.
The customer made a complaint to PUCO against CEI alleging regulatory violations, and also raised the
same allegations in a counterclaim in the lawsuit. The trial court overruled CEI’s motion to dismiss the
counterclaim for lack of subject matter jurisdiction. CEI filed an action in the Supreme Court for a writ of
prohibition against the common pleas court exercising jurisdiction. The Supreme Court granted the writ.
PUCO has exclusive jurisdiction over these regulatory complaints, §4905.26 ORC. (Per curiam; Moyer,
Douglas, Resnick, Sweeney and Stratton concur; Pfeifer dissents; Cook not participating.)
    State ex rel The Illuminating Co vs Cuyahoga Cty Court of Common Pleas, 97 Ohio St 2d 69, 2002-
Ohio-5312, in prohibition




                                                      3
STANDING
The OBWC announced a one-time premium reduction credit for employers. The relator filed a complaint in
mandamus in the court of appeals, asserting that OBWC did not follow rule-making requirements, §4123.32
ORC and §119.01 ORC. The court granted the writ and the Supreme Court affirmed. The court found that
since the relator was attempting to compel a public figure to obey the law, it had standing. [Apparently
extending State ex rel Ohio Academy of Trial Lawyers v Sheward, 86 Ohio St 3d 451 (1999), beyond
legislative usurpation of judicial power.] (Opinion by Douglas; Resnick, Sweeney and Pfeifer concur;
Moyer, Cook and Stratton dissent.)
    State ex rel United Auto (etc) Workers of Am vs Ohio Bur of Workers Comp, 95 Ohio St 3d 408, 2002-
Ohio-2491, appeal from Franklin App

Lee Bernasek, with a power of attorney from Daria Dean, filed a petition for a writ of habeas corpus in the
court of appeals. Bernasek, who is not a lawyer, signed the petition as Dean’s “next best friend.” Mark
Spurlock, who is not a lawyer, filed a similar petition in the Supreme Court, signing the petition as Dean’s
“next best friend.” Both petitions were dismissed. The Board of Commissioners on UPL investigated, and
the Supreme Court accepted its recommendation that this was the unauthorized practice of law, and enjoined
it. A petition for a writ of habeas corpus must be signed by the person seeking relief or some “person” for
him, §2725.04 ORC and 28 USC §2242, and this “person” does not need to be an attorney at law. However,
“next friend” standing is not granted automatically to whomever seeks to pursue an action on behalf of
another. The next friend must provide an adequate explanation (such as disability, inaccessibility or
incompetence) why the real party in interest cannot appear on his own behalf, and the next friend must show
that he is truly dedicated to the interests of the principal. (Per curiam; Moyer, Douglas, Resnick, Sweeney,
Pfeifer, Cook and Stratton concur.)
    Cuyahoga Cty Bar Assn vs Spurlock, 96 Ohio St 3d 18, 2002-Ohio-2580, on report of Comm on UPL


ARBITRATION
Columbus firefighters Donald Sherrod and William Russell developed bilateral carpal tunnel syndrome
during the course of their duties. The Collective Bargaining Agreement allowed paid injury leave for
employees only for injuries or other disabilities. Columbus denied their requests for paid medical leave for
doctors’ visits. The arbitrator denied their claim, ruling that they had not sustained a disability, and the court
of common pleas and the court of appeals affirmed. The Supreme Court reversed. The arbitrator relied on
city rules limiting “injury” and “disability” to conditions caused by “an” incident, and carpal tunnel
syndrome is not caused by a single traumatic incident. An arbitrator is confined to interpreting the
provisions of the CBA as written and construing thee terms used according to their plain and ordinary
meanings. §2711.10 (D) ORC provides that an award shall be vacated if the arbitrator exceeds his powers, or
so imperfectly executed them that a mutual, final and definite award was not made. (Opinion by Sweeney;
Moyer, Douglas, Resnick, Pfeifer and Stratton concur; Cook dissents.)
    Internatl Assn Firefighters Loc 67 vs Columbus, 95 Ohio St 3d 101 (2002), appeal from Franklin App

Gary Kahn MD and St Vincent Mercy Medical Center had an affiliation agreement, including medical
malpractice coverage obligations, and an arbitration clause. After a medical malpractice lawsuit was filed,
SVMMC’s insurer became insolvent. The tort plaintiffs, Kahn and the Ohio Insurance Guaranty Association
requested declaratory judgment regarding SVMMC’s obligations to Kahn. SVMMC moved the court to stay
the proceedings and compel arbitration. The trial court overruled the motion but the court of appeals
reversed, and the Supreme Court affirmed the reversal. Although the plaintiffs and OIGA assert they were
not parties, insureds or third-party beneficiaries to the contract, they admit they are “incidental” beneficiaries
with standing to bring a declaratory judgment action, §2721.03 ORC. Since their interest is derivative to
Kahn’s, they can have no greater right than Kahn to a judicial interpretation of the contract. A signatory to a
contract may enforce arbitration provisions against a non-signatory seeking a declaration of the signatories’



                                                        4
rights and obligations under the contract. (Opinion by Douglas; Moyer, Deshler, Sweeney, Pfeifer, Cook and
Stratton concur.)
    Gerig vs Kahn, 95 Ohio St 3d 478, 2002-Ohio-2518, appeal from Lucas App

Allen Miller was crossing the street and was struck by Kevin Gunckle, an uninsured motorist. He made a
claim to his auto insurer State Auto Mutual. The parties agreed to binding court-ordered arbitration. The
award included pre-judgment interest from the date of loss. The Supreme Court ruled that (a) an arbitration
panel has authority to award pre-judgment interest since the arbitrator’s authority was not limited by the
parties, (b) the panel had no authority to reconsider its award, and (c) the trial court had no basis to vacate or
modify the award, §2711.10 ORC. (Opinion by Douglas; Moyer, Resnick, Sweeney, Pfeifer and Cook
concur; Stratton dissents.)
    Miller vs Gunckle, 96 Ohio St 3d 359, 2002-Ohio-4932, appeal from Butler App


JURIES
Susan Soler sued her former attorney Robert St Clair for legal malpractice and demanded a jury. St Clair
filed a counter-claim for attorney fees but did not demand a jury. Soler dismissed her action. The court tried
St Clair’s claim, despite Soler’s motion for a jury. The court of appeals affirmed the denial of a jury but the
Supreme Court reversed. CR 38 (B) provides that any party may demand a jury trial on any issue triable of
right by a jury. CR 38 (C) states that in a jury demand unless the party specifies particular issues for the jury,
he is deemed to have requested a jury on all issues triable by a jury. Once a jury demand is made, dismissal
of the complaint does not withdraw the demand. The jury demand may be withdrawn only pursuant to CR
39 (A). (Opinion by Sweeney; Moyer, Douglas, Blackmon, Pfeifer, Cook and Stratton concur.)
     Soler vs Evans, St Clair & Kelsey, 94 Ohio St 3d 432 (2002), certified by Franklin App


PRE-JUDGMENT INTEREST (contractual)
Allen Miller was crossing the street and was struck by Kevin Gunckle, an uninsured motorist. He made a
claim to his auto insurer State Auto Mutual. The parties agreed to binding court-ordered arbitration. The
award included pre-judgment interest from the date of loss. The Supreme Court ruled that an arbitration
panel has authority to award pre-judgment interest, and that the amount of interest may cause the award to
exceed the UM policy limits. (Opinion by Douglas; Moyer, Resnick, Sweeney, Pfeifer and Cook concur;
Stratton dissents.)
    Miller vs Gunckle, 96 Ohio St 3d 359, 2002-Ohio-4932, appeal from Butler App


POST-JUDGMENT INTEREST
The parties in this medical malpractice action reached a confidential settlement on the first day of trial and
the case was dismissed without a formal judgment entry. The settlement check was delivered about three
weeks later. The trial court overruled Hartmann’s motion for interest, the court of appeals affirmed but the
Supreme Court reversed. §1343.03 (A) ORC states that when money becomes due and payable upon any
settlement between the parties, the creditor is entitled to interest. §1343.03 (B) ORC states that interest on a
judgment, decree or order for the payment of money rendered in a tort action shall be computed from the
date the judgment, decree or order is rendered until the date of payment. Since there was no judgment,
section (B) does not apply, but since there was a settlement, section (A) does apply. (Opinion by Sweeney;
Moyer, Douglas, Resnick and Pfeifer concur; Cook and Stratton dissent.)
     Hartmann vs Duffey, 95 Ohio St 3d 456, 2002-Ohio-2486, appeal from Stark App




                                                        5
RECONSIDERATION
Allen Miller was crossing the street and was struck by Kevin Gunckle, an uninsured motorist. He made a
claim to his auto insurer State Auto Mutual. The parties agreed to binding court-ordered arbitration. State
Farm requested the panel to reconsider its award. The Supreme Court ruled that an arbitration panel has no
authority to reconsider its award; only a trial court may review the award to vacate, modify or correct it,
§2711.10 et seq ORC. (Opinion by Douglas; Moyer, Resnick, Sweeney, Pfeifer and Cook concur; Stratton
dissents.)
    Miller vs Gunckle, 96 Ohio St 3d 359, 2002-Ohio-4932, appeal from Butler App


INJUNCTION
Buyer of tires requested an injunction against its bank from honoring a letter of credit, alleging fraud by the
seller. The trial court granted a permanent injunction, the court of appeals reversed, and the Supreme Court
allowed the injunction. An injunction is not allowed where the plaintiff has an adequate remedy at law,
§1305.08 (B) ORC. The Supreme Court ruled that the legal remedy here would require multiple lawsuits in
foreign countries, and this would be inadequate. (Opinion by Resnick; Moyer, Douglas, Sweeney and
Stratton concur; Douglas and Cook dissent.)
     Mid-America Tire Inc vs PTZ Trading Ltd, 95 Ohio St 3d 367, 2002-Ohio-2427, appeal from
Clermont App


WRIT OF MANDAMUS
Richard Cunningham left the law firm Amer Cunningham Co LPA. AC refused his request to cease using
his name in its title. Cunningham filed a complaint in the court of appeals for a writ of mandamus, the court
dismissed the complaint and the Supreme Court affirmed. Cunningham has adequate remedies at law in a
tort action for invasion of privacy, or declaratory judgment and injunctive relief. (Opinion per curiam;
Moyer, Douglas, Resnick, Sweeney, Pfeifer and Stratton concur; Cook not participating.)
     State ex rel Cunningham vs Amer Cunningham Co LPA, 94 Ohio St 3d 323 (2002), appeal from
Summit App

The OBWC announced a one-time premium reduction credit for employers. The relator filed a complaint in
mandamus and/or prohibition in the court of appeals, asserting that OBWC did not follow rule-making
requirements, §4123.32 ORC and §119.01 ORC. A magistrate recommended that mandamus was
inapplicable because there was no affirmative relief available, and prohibition was inapplicable because
OBWC’s actions were not judicial or quasi-judicial. The court granted a writ of mandamus, finding the rule
was not properly adopted and that the reduction was not of future premiums. The Supreme Court affirmed
the merits of the case but did not comment on the procedure. The dissent noted that mandamus requires that
(a) the relator has a clear legal right to relief, (b) the respondent has a clear legal duty to perform, and (c) the
relator suffers an injury for which there is no plain and adequate remedy in the ordinary course of law; and
that mandamus compels an act. The dissent concluded that the complaint was for injunction, not mandamus.
(Opinion by Douglas; Resnick, Sweeney and Pfeifer concur; Moyer, Cook and Stratton dissent.)
     State ex rel United Auto (etc) Workers of Am vs Ohio Bur of Workers Comp, 95 Ohio St 3d 408, 2002-
Ohio-2491, appeal from Franklin App

Nationwide terminated an agency relationship with Hamilton Insurance Services Inc. Hamilton sued
Nationwide for breach of contract. The jury returned a verdict for Hamilton, the court of appeals affirmed
but the Supreme Court reversed. On remand, Hamilton filed a CR 60 (B) motion for relief from judgment, in
which it sought to reform the contract. The trial court granted the motion but the court of appeals reversed,
ruling that CR 60 (B) could not be used to vacate or modify a judgment of a superior court, and in this case
the matter was res judicata; the Supreme Court did not accept an appeal. Hamilton filed a separate action in


                                                         6
the same county to litigate the contract reformation. Nationwide moved for summary judgment based on res
judicata but the trial court overruled the motion ruling that the issue had not been ruled on. Nationwide then
filed this petition in the court of appeals for a writ of mandamus to compel the trial court to comply with the
rulings in the prior decisions. The court of appeals dismissed the petition, noting that Nationwide had an
adequate remedy at law through appeal, and the Supreme Court affirmed. (Per curiam; Moyer, Douglas,
Resnick, Sweeney, Pfeifer, Cook and Stratton concur.)
     State ex rel Nationwide Mut Ins Co vs Henson, 96 Ohio St 3d 33, 2002-Ohio-2851, appeal from
Richland App


WRIT OF PROHIBITION
Nationwide terminated an agency relationship with Hamilton Insurance Services Inc. Hamilton sued
Nationwide for breach of contract. The jury returned a verdict for Hamilton, the court of appeals affirmed
but the Supreme Court reversed. On remand, Hamilton filed a CR 60 (B) motion for relief from judgment, in
which it sought to reform the contract. The trial court granted the motion but the court of appeals reversed,
ruling that CR 60 (B) could not be used to vacate or modify a judgment of a superior court, and in this case
the matter was res judicata; the Supreme Court did not accept an appeal. Hamilton filed a separate action in
the same county to litigate the contract reformation. Nationwide moved for summary judgment based on res
judicata but the trial court overruled the motion ruling that the issue had not been ruled on. Nationwide then
filed this petition in the court of appeals for a writ of prohibition to prevent the trial court from exercising
jurisdiction. The court of appeals dismissed the petition, noting that Nationwide had an adequate remedy at
law through appeal, and the Supreme Court affirmed. (Per curiam; Moyer, Douglas, Resnick, Sweeney,
Pfeifer, Cook and Stratton concur.)
     State ex rel Nationwide Mut Ins Co vs Henson, 96 Ohio St 3d 33, 2002-Ohio-2851, appeal from
Richland App


WRIT OF QUO WARRANTO
The firefighters union, in a dispute with the city over promotions and testing, filed a petition in the court of
appeals for a writ of quo warranto to remove the current fire chief from office. The court dismissed the
action based on standing and the Supreme Court affirmed. A quo warranto action may be brought by the
Attorney General, the prosecuting attorney or a person claiming the public office in question, §2733.01 ORC,
and the union is none of these. Further, the action has a three-year statute of limitations, §2733.35 ORC.
(Per curiam; Moyer, Douglas, Resnick, Sweeney, Pfeifer, Cook and Stratton concur.)
    State ex rel E Cleveland Fire Fighters Assn vs Jenkins, 96 Ohio St 3d 68, 2002-Ohio-3527, appeal
from Cuyahoga App


ATTPRNEY FEES, SANCTIONS and FRIVOLOUS CONDUCT
Susan Soler thought her brother was misappropriating assets from their real estate partnership. Soler retained
attorney Robert St Clair to seek an accounting and audit. Soler became dissatisfied with St Clair and retained
attorney James Connor to sue St Clair and his firm for legal malpractice. Soler dismissed her action. The
trial court sustained the defendants’ motion for sanctions against Soler and Evans. The court of appeals
reversed for some defendants as untimely but certified the case on a conflict. The Supreme Court ruled that
§2323.51 (B) ORC allows an aggrieved party the option of filing a motion for sanctions at any time prior to
the commencement of trial or within twenty-one days of a final judgment. (Opinion by Sweeney; Moyer,
Douglas, Blackmon, Pfeifer, Cook and Stratton concur.)
     Soler vs Evans, St Clair & Kelsey, 94 Ohio St 3d 432 (2002), certified by Franklin App




                                                       7
DISQUALIFICATION OF JUDGE
Cynthia Kline sued the city of Parma, and requested all judges of the Parma Municipal Court to recuse
themselves from a related criminal case against her, but did not file a motion to disqualify, former §2937.20
ORC [now §2701.031 ORC]. The municipal court judge, to avoid an appearance of impropriety, referred the
criminal case to the Court of Common Pleas for reassignment to another municipal court. The case was
reassigned to the Lakewood Municipal Court. Kline was convicted and the conviction was affirmed on
appeal. On remand, she moved to vacate her conviction based on lack of jurisdiction, and filed this petition
in the court of appeals for a writ of prohibition. The writ was granted, and the Supreme Court affirmed. The
transfer to Lakewood was unauthorized by the statute for several reasons, including the absence of a motion
to disqualify. (Per curiam; Moyer, Douglas, Resnick, Sweeney, Pfeifer, Cook and Stratton concur.)
     State ex rel Kline vs Carroll, 96 Ohio St 3d 404, 2002-Ohio-4849, appeal from Cuyahoga App


DISQUALIFICATION OF ATTORNEY
Donald Costello died and his estate retained attorney E. J. Leizerman to sue Harold Stevens MD for medical
malpractice. During the litigation Leizeran’s secretary Penelope Kreps was hired by Stevens’ attorney’s
firm. The estate moved to disqualify Stevens’ attorney. After a hearing, including testimony from Kreps and
Leizerman, the trial court overruled the motion, and the court of appeals and Supreme Court affirmed. The
questions for disqualification where an attorney changes firms include (a) is there a substantial relationship
between the matter at issue and the matter of the former firm’s prior representation, (b) if there is a
substantial relationship, is the presumption of shared confidences within the prior firm rebutted by evidence
that the attorney had no personal contact with or knowledge of the related matter, and (c) if the attorney did
have personal contact with or knowledge of the related matter, did the new firm erect timely and adequate
screens to rebut a presumption of shared confidences. The presumption of shared confidences is
inappropriate for non-attorneys, and the questions include (a) is there a substantial relationship between the
matter at issue and the matter of the prior firm’s representation, (b) did the moving party present credible
evidence that the non-attorney was exposed to confidential information relating to the matter at issue, and (c)
if such evidence was presented was it rebutted by evidence that the employee either had no contact with the
matter at the old firm, or that the new firm erected adequate and timely screens. (Opinion by Pfeifer; Moyer,
Douglas, Edwards, Sweeney, Cook and Stratton concur.)
     Green vs Toledo Hosp, 94 Ohio St 3d 480 (2002), appeal from and certified by Lucas App




                                              Evidence             

UNAVAILABLE WITNESS
Donald Costello died and his estate retained attorney E. J. Leizerman to sue Harold Stevens MD for medical
malpractice. Plaintiff’s expert Phillip Fyman MD and defendant’s expert Michael Nugent MD each testified
live. The jury returned a defense verdict, but the court of appeals reversed. At re-trial, the estate read into
evidence Fyman’s prior testimony without objection from the defense, by the estate objected to the defense
reading into evidence Nugent’s prior testimony without a showing of unavailability, Evid R 804 (B). The
defense argued that CR 32 (A)(3) provided an exception for doctors. The trial court applied CR 32 and
allowed the testimony. The jury returned a defense verdict, the court of appeals reversed but the Supreme
Court reinstated the verdict. §4123.519 ORC and CR 32 demonstrate a conscious awareness of the difficulty
and problems associated with obtaining live testimony of attending physicians and expert medical witnesses.
(Opinion by Pfeifer; Moyer, Edwards, Cook and Stratton concur; Douglas and Sweeney dissent.)
     Green vs Toledo Hosp, 94 Ohio St 3d 480 (2002), appeal from and certified by Lucas App


                                                      8
HEARSAY: SPONTANEOUS STATEMENTS
Jeffrey Miller was convicted of killing his wife Lisa. At trial, the court allowed testimony from Lisa’s
coworker that a few hours before her death, she said “if I come up shot in the head, [Miller] did it.” The
court of appeals reversed, finding the statement inadmissible hearsay. The Supreme Court reinstated the
verdict. Evid R 803 (3) allows a statement of the declarant’s then existing state of mind, emotion, sensation
or physical condition. Out-of-court statements about a declarant’s then-existing mental condition are
considered trustworthy because of their spontaneity. (Opinion by Stratton; Moyer, Douglas, Resnick,
Sweeney, Pfeifer and Cook concur.)
    State vs Miller, 96 Ohio St 3d 384, 2002-Ohio-4931, appeal from Ashtabula App




                                      Insurance Coverage                      

NOTICE OF LOSS
Seven corporations filed this declaratory judgment action against thirty-one insurers and reinsurers regarding
coverage for environmental cleanup at twenty-two sites. In a sample claim, Goodyear was potentially on
notice of pollution as early as 1970, gave notice to its insurers of a possible occurrence in 1983, and notified
its insurers of a potential claim in 1992 when some clean-up began. The trial court granted a directed verdict
for the plaintiffs’ failure to make a timely notice of the loss and the court of appeals affirmed. The Supreme
Court reversed, finding late notice here was a fact question. (Opinion by Sweeney; Resnick, Pfeifer and
Stratton concur; Moyer, Douglas and Young dissent.)
     Goodyear Tire & Rubber Co vs Aetna Cas & Sur Co, 95 Ohio St 3d 512, 2002-Ohio-2842, appeal from
Summit App

Ashtabula’s city employee Isler Ferrando was injured in a 1994 collision while driving a truck owned by
Ashtabula. Ferrando made a claim to his own auto insurer Auto-Owners (AO) for UM benefits, and AO
allowed him to settle with the tortfeasor in return for his $12,500 liability limit. Thirty months after the loss,
Ferrando and AO later discovered that Personal Service Insurance (PSI) had issued an auto policy on the city
truck, including UM coverage. PSI denied coverage based on late notice. The trial court granted summary
judgment for Ferrando, ruling that the notice to PSI was not late under the circumstances (that Ferrando was
not aware of the coverage) and that PSI had not been prejudiced by the late notice. The court of appeals
reversed the summary judgment, ruling that the delay was unreasonable and that Ferrando had not rebutted
the presumption of prejudice. The Supreme Court affirmed the court of appeals’ decision and remanded. An
insurer may deny UM coverage premised on breach of a prompt notice provision if the insurer is prejudiced
by the insured’s unreasonable delay in giving notice; an insured’s unreasonable delay in giving notice is
presumed prejudicial to the insurer absent evidence to the contrary. (Opinion by Resnick; Moyer, Douglas,
Sweeney, Pfeifer and Stratton concur; Cook dissents.)
    Ferrando v Auto-Owners Mut Ins, -- Ohio St 3d ---, 2002-Ohio-7217, appeal from Ashtabula App


STACKING AUTO LIABILITY LIMITS
James Wallace was killed when his motorcycle collided with a car driven by Dennis Balint. Wallace’s estate
and family members filed a wrongful death action against Balint. Balint’s insurer, State Farm, paid $25,000
from its 25/50 policy. The plaintiffs asserted that the per occurrence limit was available. The trial court
granted summary judgment to State Farm, and the court of appeals and Supreme Court affirmed. §3937.44
ORC. (Opinion by Douglas; Moyer, Resnick, Gorman, Pfeifer, Cook and Stratton concur.)
    Wallace vs Balint, 94 Ohio St 3d 182 (2001), appeal from Cuyahoga App


                                                        9
MOTOR CARRIER COVERAGE
Bath Transport’s semi-tractor was used to pull a trailer owned by GIS Leasco, which had a $2.5 million
liability policy. Bath and its drivers are not “insureds” in this policy. The trailer’s policy had the MCS-90
form with $2.5 million limits. While Bath’s employee Lawrence Yob was operating the tractor-trailer, he
caused an accident killing two persons. The estates filed a declaratory judgment on coverage. The trial court
ruled that the MCS-90 form applied to Yob’s liability, the court of appeals reversed but the Supreme Court
reinstated the ruling. The federal Motor Carrier Act of 1980 requires that certain interstate commercial
motor carriers must register with the DOT and comply with minimum financial responsibility requirements,
including the MSC-90 form (which is construed under federal law). The Supreme Court ruled that (a) the
federal law stresses recovery by injured persons, and (b) the MCS-90 form should be read to eliminate any
limiting clauses in the underlying policy restricting the scope of coverage in the MCS-90 form. (Opinion by
Resnick; Douglas, Sweeney and Pfeifer concur; Moyer, Bryant and Stratton dissent.)
    Lynch vs Yob, 95 Ohio St 3d 441, 2002-Ohio-2485, appeal from Trumbull App


ALLOCATING CONTINUOUS LOSSES
Seven corporations filed this declaratory judgment action against thirty-one insurers and reinsurers regarding
coverage for environmental cleanup at twenty-two sites. The plaintiffs asserted that the policyholder could
seek coverage from any policy in effect during the time period of injury or damage. This “all sums”
approach, allowing an insured to seek full coverage for its claims from any single policy, up to that policy’s
coverage limit, out of the group of policies that has been triggered. The defendants asserted that each insurer
should pay only a portion of a claim based on the duration of the occurrence during its policy period in
relation to the entire duration of the occurrence. This “pro rata” approach divides a loss horizontally among
all triggered policies, with each insurer paying only a share of the total damages. The trial court granted a
directed verdict for the defendants on the issue of allocation, the court of appeals affirmed but the Supreme
Court reversed. The policies provide that the insurer shall pay all sums for property damage to which the
insurance applies, and defines property damage as injury which occurs during the policy period. The
policyholder expected complete security from each policy, and no policy provided for a reduction of the
insurer’s exposure if an injury occurs only in part during a policy period. The insurer chosen to pay the
claim may seek contribution from other applicable insurers. In the event one policy is inadequate, the
policyholder may pursue coverage under other primary or excess policies. (Opinion by Sweeney; Resnick,
Pfeifer and Stratton concur; Moyer, Douglas and Young dissent.)
     Goodyear Tire & Rubber Co vs Aetna Cas & Sur Co, 95 Ohio St 3d 512, 2002-Ohio-2842, appeal from
Summit App


POLLUTION LIABILITY COVERAGE
Seven corporations filed this declaratory judgment action against thirty-one insurers and reinsurers regarding
coverage for environmental cleanup at twenty-two sites. The policies exclude property damage arising out of
any “emission, discharge, seepage, release or escape” of a pollutant if this was either expected or intended
from the standpoint of any insured. The trial court granted a directed verdict for the defendants on the
expected-intended issue and the court of appeals affirmed but the Supreme Court reversed. The terms used
are not defined, but all imply and require some movement by a contaminant from one location to another.
The facts indicate that the policyholder did not anticipate the pollutants would migrate from the landfill, or
(at the time of deposit) that they were even pollutants. (Opinion by Sweeney; Resnick, Pfeifer and Stratton
concur; Moyer, Douglas and Young dissent.)
     Goodyear Tire & Rubber Co vs Aetna Cas & Sur Co, 95 Ohio St 3d 512, 2002-Ohio-2842, appeal from
Summit App




                                                      10
                Uninsured / Underinsured Motorist Coverage                                     

OFFER OF UM COVERAGE
The USDC ND Ohio, Western Division, certified the following questions and the Supreme Court gave the
following answers. (1) Question: Are the requirements of Linko v Indemnity Ins Co, 90 Ohio St 3d 445
(2000), applicable to a policy of insurance written after the 1997 enactment of HB 261 and before the 2001
enactment of SB 97? Answer: Yes. (2) If the Linko requirements are applicable, does, under HB 261, a
signed rejection act as an effective declination of UM/UIM coverage, where there is no other evidence, oral
or documentary, of an offer of coverage? Answer: No. (Douglas, Resnick, Sweeney and Pfeifer concur;
Moyer and Stratton dissent; Cook not participating.)
    Kemper vs Michigan Millers Ins Co, 97 Ohio St 3d ---, 2002-Ohio-7101, certified question from USDC
ND Ohio


UM COVERAGE IN NON-AUTO POLICIES
Christine Hillyer was killed in an auto accident in 1994. Her father Martin Hillyer made an underinsured
motorist claim to State Farm under his homeowners policy. The policy generally excluded automobile
liability but had an exception for liability to residence employees arising out of and in the course of the
residence employee’s employment by an insured. State Farm denied the claim, the trial court granted
summary judgment to State Farm and the court of appeals affirmed. The Supreme Court affirmed,
interpreting former §3937.18 ORC (prior to enactment of HB 261 in 1997). In Selander v Erie Ins, 85 Ohio
St 3d 541 (1999), the commercial general liability policy involved provided some liability coverage for hired
and non-owned autos, and the Court found that the UM statute was applicable. In Davidson v Motorists Mut,
91 Ohio St 3d 262 (2001), the homeowners liability policy provided remote and incidental motor vehicle
liability coverage and the Court found that the UM statute was not applicable. In this case, the residence
employee exception allows liability coverage based on the employee’s employment status, not because a
motor vehicle is involved. The Court noted that this result was consistent with the application of proof of
motor vehicle financial responsibility in §4509.01 et seq ORC. [The Ohio Department of Insurance filed an
amicus brief supporting this result.] (Opinion by Stratton; Moyer, Douglas, Resnick, Sweeney, Pfeifer and
Cook concur.)
    Hillyer vs State Farm, 97 Ohio St 3d 411, 2002-Ohio-6662, appeal from and certified by Cuyahoga
App


EXHAUSTION OF LIABILITY COVERAGE
Catherine Fulmer was injured by Albert Kulics in an auto accident. Kulics had 50/100 liability coverage.
Fulmer’s UM policy from Insura had an exhaustion of liability limits clause. Fulmer accepted Kulics’
insurer’s $37,500 settlement after Insura refused to advance this amount. Fulmer then made a UM claim.
The trial court granted summary judgment to Insura. The court of appeals affirmed, ruling that Fulmer failed
to present evidence that the $12,500 discount represented a genuine saving in litigation expenses. The
Supreme Court reversed. The discount might represent a litigation saving, but more importantly it hastens
payment to the injured party who needs prompt compensation when medical expenses and anxiety are
increasing. An insured satisfies the UM policy’s exhaustion requirement when she receives from the liability
insurer a commitment to pay any amount, and she retains a right to receive UM benefits only for those
amounts in excess of the available liability limits. (Opinion by Douglas; Resnick, Sweeney and Pfeifer
concur; Moyer, Cook and Stratton dissent.)
    Fulmer vs Insura Prop & Cas Co, 94 Ohio St 3d 85 (2002), appeal from Seneca App




                                                     11
CONSORTIUM and DERIVATIVE CLAIMS
James Wallace Jr was killed when his motorcycle collided with a car driven by Dennis Balint. Wallace’s
estate and family members (ie, parents James and Wanda, brother Christopher and sister Katrina) filed a
wrongful death action against Balint and State Farm. Balint’s liability insurer paid its $25,000 per person
limit. State Farm had issued 50/100 UM policies to James Jr, four 50/100 UM policies to James and Wanda,
a 50/100 UM policy to Christopher, and a 25/50 UM policy to Katrina. State Farm paid $25,000 under one
UM policy ($50,000 per person limit less the liability payment), but the plaintiffs claimed the per occurrence
limit under each policy. The trial court granted summary judgment for State Farm and the court of appeals
affirmed. Former §3937.18 (G) ORC (SB 20). The Supreme Court ruled that the policies had valid anti-
stacking language, but interpreted the clause to mean that the estate could make a single per person claim
from the two policies issued to James Jr, James and Wanda together could make a per person claim from
their four policies, and Christopher and Katrina could each make a per person claim under his or her own
policy (a total of five per person claims from eight policies). (Opinion by Douglas; Resnick, Gorman and
Pfeifer concur; Cook concurs in part and dissents in part; Moyer and Stratton dissent.) )
     Wallace vs Balint, 94 Ohio St 3d 182 (2001), appeal from Cuyahoga App


CONSENT TO SETTLE and SUBROGATION
Catherine Fulmer was injured by Albert Kulics in an auto accident. Kulics had 50/100 liability coverage, and
Fulmer had 100/300 UM coverage from Insura. Insura’s policy had a subrogation clause. Kulics’ insurer
offered $37,500, and Fulmer requested that Insura either advance this amount or consent to her settlement,
but Insura refused to do either. Fulmer then settled for $37,500, giving Kulics a full release, and made a UM
claim. The trial court granted summary judgment to Insura and the court of appeals affirmed. The Supreme
Court reversed and overruled the fifth paragraph of the syllabus in Bogan v Progressive Cas Ins Co, 36 Ohio
St 3d 22 (1988), and extended McDonald v Republic-Franklin Ins Co, 45 Ohio St 3d 27 (1989). When an
insured has given her UM insurer notice of a tentative settlement with the tortfeasor and his liability insurer
prior to release, and the UM insurer has a reasonable opportunity to protect its subrogation rights by paying
the insured the amount of the settlement offer, but does not do so, the release will not preclude recovery of
UM benefits. (Opinion by Douglas; Resnick, Sweeney and Pfeifer concur; Moyer, Cook and Stratton
dissent.)
    Fulmer vs Insura Prop & Cas Co, 94 Ohio St 3d 85 (2002), appeal from Seneca App

Ashtabula’s city employee Isler Ferrando was injured in a 1994 collision while driving a truck owned by
Ashtabula. Ferrando made a claim to his own auto insurer Auto-Owners (AO) for UM benefits, and AO
allowed him to settle with the tortfeasor in return for his $12,500 liability limit. Thirty months after the loss,
Ferrando and AO later discovered that Personal Service Insurance (PSI) had issued an auto policy on the city
truck, including UM coverage. PSI denied coverage based on breach of the consent-to-settle clause. The
trial court granted summary judgment for Ferrando, ruling that PSI was not prejudiced since the tortfeasor
was not collectable. The court of appeals reversed the summary judgment, finding that regardless of actual
prejudice to PSI, compliance with the consent to settle clause was a condition to UM coverage. The
Supreme Court reversed the court of appeals decision and remanded for a hearing on whether PSI was
prejudiced. Subrogation clauses and consent to settle clauses in UM policies are valid and enforceable. A
presumption of prejudice to the insurer applies when the insured has breached the consent to settle clause,
and the burden is on the insured to show that there was no prejudice. Bogan v Progressive Cas Ins, 36 Ohio
St 3d 22 (1988), paragraph four of the syllabus, overruled; Bogan and McDonald v Republic-Franklin Ins
Co, 45 Ohio St 3d 27 (1989) and Ruby v Midwestern Indem Co, 40 Ohio St 3d 159 (1988), modified.
(Opinion by Resnick; Douglas, Sweeney, and Pfeifer concur; Moyer, Cook and Stratton dissent.)
     Ferrando v Auto-Owners Mut Ins, -- Ohio St 3d ---, 2002-Ohio-7217, appeal from Ashtabula App




                                                       12
PRE-JUDGMENT INTEREST IN UM CLAIMS
Allen Miller was crossing the street and was struck by Kevin Gunckle, an uninsured motorist. He made a
claim to his auto insurer State Auto Mutual. The parties agreed to binding court-ordered arbitration. The
award included pre-judgment interest from the date of loss. The Supreme Court ruled that an arbitration
panel has authority to award pre-judgment interest, and that the amount of interest may cause the award to
exceed the UM policy limits. (Opinion by Douglas; Moyer, Resnick, Sweeney, Pfeifer and Cook concur;
Stratton dissents.)
    Miller vs Gunckle, 96 Ohio St 3d 359, 2002-Ohio-4932, appeal from Butler App




                                             Settlement              

ENFORCEMENT OF SETTLEMENT
Jacqueline Kostelnik’s estate sued Stephen Helper MD and Meridia Hillcrest Hospital for medical
malpractice. The executor, in the Court’s presence, agreed to settle, the case was dismissed, the settlement
was approved by the Probate Court and releases were signed. MHH agreed to pay $100,000 and Helper to
pay $1.1 million. That week, Helper’s malpractice insurer PIE was suspended and the case was stayed
pending liquidation of PIE. When this was completed, the estate moved the court to reduce the settlement to
a judgment jointly and severally against Helper and MHH. MHH moved to enforce the settlement as
$100,000 from MHH and $1.1 million from Helper. The trial court overruled both motions and the court of
appeals affirmed. The Supreme Court affirmed regarding the estate’s motion but reversed and granted
MHH’s motion, finding an enforceable settlement agreement. Helper did not participate in the appeal, and
his argument that his contribution was contingent upon payment by PIE was abandoned. It is preferable that
settlement agreements be written, but oral agreements are enforceable if there is sufficient particularity to
form a binding contract. Terms of an oral contract may be determined from words, deeds, acts and silence of
the parties. Essential elements of a contract include an offer, acceptance, contractual capacity, consideration,
manifestation of mutual consent, and legality of the object and consideration. (Opinion by Stratton; Moyer,
Pfeifer and Cook concur; Douglas, Resnick and Sweeney concur in part and dissent in part.)
     Kostelnik vs Helper, 96 Ohio St 3d 1, 2002-Ohio-2985, appeal from Cuyahoga App



                   Subrogation, Collection and Contribution                                    

INTER-INSURER CONTRIBUTION
Seven corporations filed this declaratory judgment action against thirty-one insurers and reinsurers regarding
coverage for environmental cleanup at twenty-two sites. The plaintiffs asserted that a policyholder could
seek full coverage, up to limits, from any policy in effect during the time period of injury or damage. The
defendants asserted that each insurer should pay only a portion of a claim based on the duration of the
occurrence during its policy period in relation to the entire duration of the occurrence. The trial court granted
a directed verdict for the defendants on the issue of allocation, the court of appeals affirmed but the Supreme
Court reversed and adopted the plaintiffs’ position. The insurer chosen to pay the claim may seek
contribution from other applicable insurers. (Opinion by Sweeney; Resnick, Pfeifer and Stratton concur;
Moyer, Douglas and Young dissent.)
    Goodyear Tire & Rubber Co vs Aetna Cas & Sur Co, 95 Ohio St 3d 512, 2002-Ohio-2842, appeal from
Summit App


                                                       13
SUBROGATION BY GOVERNMENT
Cincinnati sued fifteen handgun manufacturers, three trade associations and one distributor, seeking to hold
them responsible for the harm caused by the firearms, under nuisance, negligence and product liability. The
trial court granted a motion to dismiss, ruling that Cincinnati could not recoup expenditures for public
services. The court of appeals affirmed but the Supreme Court reversed. There is little risk of double
recovery since Cincinnati is seeking recovery for damage to itself only. The cost of public services for
protection from fire or safety hazards is to be borne by the public as a whole, not assessed against the
tortfeasor whose negligence creates the need for the service. Where such services are provided by the
government and the costs spread by taxes, the tortfeasor does not expect a demand for reimbursement. A
municipality cannot reasonably expect to recover the costs of city services whenever a tortfeasor causes harm
to the public. But this case involves persistent and ongoing conduct. (Opinion by Sweeney; Douglas,
Resnick and Pfeifer concur; Moyer, Cook and Stratton dissent.)
     Cincinnati vs Beretta USA Corp, 95 Ohio St 3d 416, 2002-Ohio-2480, appeal from Hamilton App


MEDICAL PAYMENTS SUBROGATION IN UM CLAIMS
Master Berrios had auto liability insurance from State Farm, with medical payments and UM coverage, and
subrogation language for each coverage. After an accident, Berrios received medical payments from State
Farm, settled with the tortfeasor for payment of his liability limit (with State Farm’s permission), and
received underinsured motorist benefits from State Farm. Berrios and State Farm acknowledged that State
Farm had waived its right of subrogation for UM, but not for medical payments. State Farm asserted a
medical payments subrogation claim against the liability payment. The trial court granted summary
judgment for State Farm, the court of appeals affirmed but the Supreme Court reversed. An insurer may not
reduce UM benefits by amounts paid under medical payments by use of a set-off clause, Shearer v Motorists
Mut Ins, 53 Ohio St 2d 1 (1978), or use of a subrogation clause, Grange Mut Cas Co v Lindsey, 22 Ohio St
3d 153 (1986), even though this allows a double recovery by the insured, where the insured has paid a
separate premium for each coverage. Insurers who are not party to the policy providing the UM coverage
may assert subrogation claims, Blue Cross & Blue Shield Mut of Ohio v Hrenko, 72 Ohio St 3d 120 (1995).
(Opinion by Pfeifer; Douglas, Resnick and Sweeney concur; Moyer, Cook and Stratton dissent.)
    Berrios vs State Farm, 97 Ohio St 3d ---, 2002-Ohio-7115, appeal from Franklin App




                                                  Torts          

NEGLIGENCE: BREACH OF DUTY
Cincinnati sued fifteen handgun manufacturers, three trade associations and one distributor, seeking to hold
them responsible in negligence for the harm caused by the firearms. The trial court granted a motion to
dismiss, ruling that Cincinnati could not establish a “duty” since a duty to control the actions of a third party
(illegal users of firearms and the secondary market) arises only is a “special relationship” exists between the
parties. The court of appeals affirmed but the Supreme Court reversed. The defendants have engaged in
affirmative acts by failing to exercise adequate control over the distribution of their firearms. (Opinion by
Sweeney; Douglas, Resnick and Pfeifer concur; Moyer, Cook and Stratton dissent.)
     Cincinnati vs Beretta USA Corp, 95 Ohio St 3d 416, 2002-Ohio-2480, appeal from Hamilton App




                                                       14
PROXIMATE CAUSE
Cincinnati sued fifteen handgun manufacturers, three trade associations and one distributor, seeking to hold
them responsible for the harm caused by the firearms, under nuisance, negligence and product liability. The
trial court granted a motion to dismiss, ruling that the claims were barred by the doctrine of remoteness. The
court of appeals affirmed but the Supreme Court reversed. Remoteness is not an independent legal doctrine
but is related to proximate causation or standing. A complaint will fail on remoteness if the harm alleged is
the remote consequence of the defendant’s conduct (causation) or is wholly derivative of the harm suffered
by a third person (standing). (Opinion by Sweeney; Douglas, Resnick and Pfeifer concur; Moyer, Cook and
Stratton dissent.)
     Cincinnati vs Beretta USA Corp, 95 Ohio St 3d 416, 2002-Ohio-2480, appeal from Hamilton App


INSURANCE BAD FAITH
Esther Dardinger was diagnosed with metastatic brain tumors. Intravenous chemotherapy stabilized but did
not reduce the brain tumors. Her neuro-oncologist Herbert Newton MD recommended intra-arterial
chemotherapy (IAC). Dardinger’s health insurer Anthem approved three of twelve treatments (which
resulted in tumor reduction), then denied coverage based on a medical opinion that IAC delivery was
experimental for brain metastases. Dardinger appealed; after four months another (but incomplete) Anthem
medical review came to the same conclusion. Intravenous chemotherapy was unsuccessful and Dardindger
died two weeks later. Her estate sued Anthem (and its parent company AICI) for insurance bad faith. The
jury returned a verdict for the estate for breach of contract and bad faith, and the trial court allowed attorney
fees. [The issue of punitive damages is discussed in the topic “Punitive Damages.”] The court of appeals
concluded that AICI was not a proper party and reversed. The Supreme Court ruled that AICI had waived its
defenses by not timely raising them, and reinstated the verdict. (Opinion by Pfeifer; Moyer, Douglas,
Resnick, Sweeney, Pfeifer, Cook and Stratton concur.)
    Dardinger vs Anthem Blue Cross & Blue Shield, 97 Ohio St 3d ---, 2002-Ohio-7113, appeal from
Licking App


TELEPHONE CONSUMER PROTECTION ACT
Philip Charvat subscribed to the Columbus Dispatch on a Sunday-only basis. Charvat sued CD, alleging that
its solicitors had called him to subscribe on a weekly basis, that he requested CD cease making telemarketing
calls to him, and the calls continued. CD asserted that the Telephone Consumer Protection Act (TCPA), 47
USC §227, did not apply because CD and Charvat had an “established business relationship” (EBR) and was
exempted from the TCPA. The trial court granted CD a motion for summary judgment and the court of
appeals affirmed, but the Supreme Court reversed. The exemption exists only if the EBR has not been
previously terminated by either party. FCC interpretation of the TCPA states that a customer’s request to be
placed on the do-not-call list terminates the EBR for purposes of future solicitation. (Opinion by Pfeifer;
Moyer, Resnick, Sweeney, Cook and Stratton concur; Douglas dissents.)
     Charvat vs Dispatch Consumer Services Inc, 95 Ohio St 3d 505, 2002-Ohio-2838, appeal from
Franklin App


NUISANCE and TRESPASS
Cincinnati sued fifteen handgun manufacturers, three trade associations and one distributor, seeking to hold
them responsible under nuisance for the harm caused by the firearms. The trial court granted a motion to
dismiss, the court of appeals affirmed but the Supreme Court reversed. A public nuisance is an unreasonable
interference with a right common to the general public, and does not require injury to real property.
(Opinion by Sweeney; Douglas, Resnick and Pfeifer concur; Moyer, Cook and Stratton dissent.)
    Cincinnati vs Beretta USA Corp, 95 Ohio St 3d 416, 2002-Ohio-2480, appeal from Hamilton App


                                                       15
MEDICAL MALPRACTICE
Four days before Rebecca Lownsbury’s birth, her pregnant mother was given an amniotic fluid index test and
nonstress test at Akron City Hospital. George Van Buren MD then ordered that labor be induced. Instead
the obstetric residents administered a contraction stress test, reviewed eighteen minutes of the two hour
twenty minute test, and discharged the mother. Rebecca was born severely brain damaged and sued the on-
call physician Thomas Stover MD for having inadequately supervised the residents. The trial court granted
summary judgment for Stover, the court of appeals affirmed but the Supreme Court reversed, finding that a
duty may have been owed and that summary judgment was error. (Opinion by Resnick; Moyer, Douglas,
Sweeney, Pfeifer, Cook and Stratton concur.)
     Lownsbury vs Van Buren, 94 Ohio St 3d 231 (2002), appeal from Summit App


PUBLIC ROADS AND SIDEWALKS
While Trenton-Franklin Road was being repaved, there were drop-offs to the adjacent berm of up to seven
inches. Herbert Haynes was driving his tractor-trailer through the construction zone when his right wheels
went off onto the berm and, in attempting to get back onto the pavement, Haynes drove left of center into a
tree. He sued Franklin. The trial court granted summary judgment for the city, and the court of appeals and
the Supreme Court affirmed. §723.01 ORC imposes an affirmative duty on municipal corporations to keep
roads free from nuisances, and this duty extends to conditions on the right-of-way that directly affect the
road’s safety. The right-of-way includes the roadway, shoulders, berm, ditch and slopes extending to the
right-of-way limits, and the space above the road. An edge drop may constitute an actionable danger to
persons using the road. However, a finding that a particular drop-off may constitute a danger for traffic on
the road is not, itself, determinative that it constitutes a “nuisance,” §2744.02 (B)(2) ORC. Nuisance does
not include design and construction defects, even if dangerous. The plaintiff must show that (a) the condition
creates a danger for traffic on the road, and (b) the cause of the condition was other than a decision regarding
design and construction. (Opinion by Moyer; Resnick, Sweeney and Stratton concur; Douglas, Pfeifer and
Cook dissent.)
     Haynes vs Franklin, 95 Ohio St 3d 344, 2002-Ohio-2334, appeal from and certified by Warren App


RAILROADS
Cris Bonacorsi was injured when his motorcycle collided with a WLE train at a crossing. Bonacorsi had
passed four “passive warning devices,” 23 CFR §646.204. Bonacorsi asserted that foliage blocked his view
until it was too late for him to stop at his speed. WLE asserted that since federal funds had paid for some of
the devices, they were adequate as a matter of federal law, and Bonacorsi’s inadequate warning claim was
preempted by federal law, 49 USC §20106. The trial court ruled that federal funding alone was insufficient
to trigger preemption. The jury found WLE and Bonacorsi equally at fault. The court of appeals reversed,
ruling that funding, itself, supported preemption. The Supreme Court reinstated the verdict, ruling that
WLE’s affidavits used to prove federal funding were not based on personal knowledge and were therefore
insufficient, CR 56 (E). (Opinion by Douglas; Resnick, Sweeney and Pfeifer concur; Moyer, Kline and
Stratton dissent.)
     Bonacorsi vs Wheeling & Lake Erie Ry Co, 95 Ohio St 3d 314, 2002-Ohio-2220, appeal from Stark
App


EMPLOYER’S INTENTIONAL TORT
DPI manufactures corrugated drainage tubing. Its extrusion machine malfunctioned and was stopped for
repairs. Molten plastic unexpectedly sprayed from the machine, burning employee Mike Gibson and causing
his death. Gibson’s estate sued DPI for an employer’s intentional tort. At trial the court granted a directed
verdict, noting that the estate had failed to establish that DPI knew of the existence of a danger that was


                                                      16
substantially certain to cause harm to an employee, the second part of the test in Fyffe v Jeno’s Inc, 59 Ohio
St 3d 115 (1991). The court of appeals affirmed on other grounds, noting that under the third part of the
Fyffe test the employee must show that the employer required the employee to perform the dangerous task,
noting that Gibson had not been assigned such work. The Supreme Court reversed the directed verdict.
Since evidence indicated that once Gibson completed his assigned task, he was required to seek additional
work assignments and assist fellow employees, or that Gibson’s supervisor may have been near the extruder,
a jury might find the third part of the test was met. (Opinion by Douglas; Moyer, Resnick, Sweeney and
Pfeifer concur; Cook and Stratton dissent.)
    Gibson vs Drainage Products Inc, 95 Ohio St 3d 171, 2002-Ohio-2008, appeal from Paulding App


WRONGFUL DISCHARGE
Larry Pytlinski complained to his employer Brocar several times about alleged employee health and safety
problems. Pytlinski was demoted. He gave OSHA a list of the complaints and was discharged that day. He
sued for wrongful discharge. The trial court granted summary judgment for Brocar based on the 180-day
statute of limitations in the Whistleblower Act, §4113.52 ORC. The court of appeals affirmed but the
Supreme Court reversed. An at-will employee who is discharged or disciplined for filing a complaint with
OSHA concerning matters of health and safety in the workplace is entitled to maintain a common law action
against his employer for wrongful discharge or discipline in violation of public policy, regardless of
compliance with §4113.52 ORC. (Opinion by Douglas; Resnick, Sweeney, and Pfeifer concur; Moyer, Cook
and Stratton dissent.)
    Pytlinski v Brocar Prod Inc, 94 Ohio St 3d 77 (2002), appeal from Hamilton App

Herb Wiles was employed by Medina as a store manager making $21.20 hourly. He requested and was
allowed a two-week leave of absence to care for his father, who had been injured in an auto accident. When
Wiles returned he was demoted to counter person at $11 hourly. He sued for wrongful discharge in violation
of the Family and Medical Leave Act (FMLA), 29 USC §2601 et seq. The trial court granted summary
judgment for Medina, and the court of appeals and Supreme Court affirmed. The federal statute prohibits
certain actions by employers and also grants remedies to employees, and further remedy under Ohio common
law for wrongful discharge is not required. The court declined to extend Ohio common law on wrongful
discharge, but noted that the federal statute did not preempt Ohio law. (Opinion by Cook; Moyer, Pfeifer and
Stratton concur; Douglas, Resnick and Sweeney dissent.)
    Wiles vs Medina Auto Parts, 96 Ohio St 3d 241, 2002-Ohio-3994, appeal from Medina App


PRODUCT LIABILITY
Mary Vaccariello had a pedicle screw manufactured by SNR surgically installed in her spine to relieve back
pain. The pain continued and it was determined that the screw was causing the pain. Vaccariello sued SNR.
SNR filed a motion in limine to prevent testimony regarding the FDA regulatory status of the screw. The
trial court granted the motion, and the court of appeals and Supreme Court affirmed. The learned
intermediary doctrine, §2307.76 (C) ORC, does not abrogate common law. The manufacturer of an
unavoidably unsafe ethical (prescription) drug is not strictly liable in tort to a consumer who has suffered
injury as a result of ingesting that drug where the manufacturer has provided adequate warning to the medical
profession of all potential adverse reactions inherent in the use of the drug of which the manufacturer, being
held to the standards of an expert in the field, knew or should have known to exist at the time of the
marketing. This doctrine is extended to prescription medical devices. (Opinion by Pfeifer; Moyer, Sweeney,
Cook and Stratton concur; Douglas and Resnick dissent.)
     Vaccariello vs Smith & Nephew Richards Inc, 94 Ohio St 3d 380 (2002), appeal from Cuyahoga App




                                                     17
Cincinnati sued fifteen handgun manufacturers, three trade associations and one distributor, seeking to hold
them responsible for the harm caused by the firearms, alleging product liability for defective design and
failure to warn. The trial court granted a motion to dismiss, the court of appeals affirmed but the Supreme
Court reversed. Since Cincinnati cannot recover economic damages alone, it may not sue under the Product
Liability Act, §2307.79 ORC and §2307.71 (B) ORC. But it may assert a common law defective design
claim, for failure to incorporate feasible safety devices to prevent foreseeable injuries, and a common law
failure to warn claim. (Opinion by Sweeney; Douglas, Resnick and Pfeifer concur; Moyer, Cook and
Stratton dissent.)
     Cincinnati vs Beretta USA Corp, 95 Ohio St 3d 416, 2002-Ohio-2480, appeal from Hamilton App


INDEPENDENT CONTRACTOR DEFENSE
Greif Brothers Corp hired Youngstown Security Patrol to supply uniformed security guards to deter theft and
vandalism. Greif’s only instructions to YSP were to periodically check the parking lots and building
interiors. Greif was aware that some YSP guards were armed. YSP guard Eric Bator saw Derrell Pusey and
Charles Thomas walking in the Greif parking lot at 1 am, confronted them, became frightened, went in the
building to get his gun (he was not certified as an armed guard) and during a further confrontation shot and
killed Pusey. Pusey’s estate sued Greif. The trial court granted summary judgment for Greif, the court of
appeals affirmed, but the Supreme Court reversed. An employer generally is not liable for the negligent acts
of an independent contractor, with exceptions for non-delegable duties of two kinds: (a) affirmative duties
imposed on the employer by statute, contract, franchise, charter or common law, and (b) duties imposed on
the employer that arise out of the work itself because its performance creates dangers to others (inherently
dangerous work). Work is inherently dangerous when it creates a peculiar risk of harm to others unless
special precautions are taken; it is not necessary that the work cannot be done without risk of harm, or that
there is a high risk of harm, only that there is an inherent risk of harm. But the exception does not apply
where the employer has only a general anticipation that the contractor might be negligent in some way and
thereby injure someone. Employment of armed security guards triggers the inherently dangerous work
exception. (Opinion by Douglas; Resnick, Sweeney and Pfeifer concur; Moyer, Cook and Stratton concur in
the judgment.)
     Pusey vs Bator, 94 Ohio St 3d 275 (2002), appeal from Mahoning App


RECREATIONAL USER IMMUNITY
Daniel Ryll was killed by an exploding fireworks shell at the Reynoldsburg July 4th display, while he was
outside the caution tape. His estate sued. The trial court overruled Reynoldsburg’s motion for summary
judgment, but the court of appeals granted summary judgment, holding that recreational user immunity,
§1533.181, applied. The Supreme Court reversed. The statute does not state that no duty is owed to the
recreational user, it states that the property owner has a duty to keep the premises safe. Fireworks shrapnel is
not part of the land or structures. (Opinion by Pfeifer; Douglas, Resnick and Sweeney concur; Moyer, Cook
and Stratton dissent.)
    Ryll vs Columbus Fireworks Display Inc, 95 Ohio St 3d 467, 2002-Ohio-2584, appeal from Franklin
App




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STATUTORY IMMUNITY
Daniel Ryll was killed by an exploding fireworks shell at the Reynoldsburg July 4th display, while he was
outside the caution tape. His estate sued. The trial court overruled Reynoldsburg’s motion for summary
judgment, but the court of appeals granted summary judgment, holding that recreational user immunity,
§1533.181, applied. The Supreme Court reversed regarding recreational user immunity. The court further
ruled that statutory immunity was not available. Fireworks displays are not a governmental function,
§2744.01 (C) ORC. Liability for a proprietary function may apply, §2744.02 (B) ORC, if Reynoldsburg was
negligent, and none of the defenses in §2744.03 ORC apply. Since Reynoldsburg may have been negligent,
summary judgment was in error. (Opinion by Pfeifer; Douglas, Resnick and Sweeney concur; Moyer, Cook
and Stratton dissent.)
    Ryll vs Columbus Fireworks Display Inc, 95 Ohio St 3d 467, 2002-Ohio-2584, appeal from Franklin
App

Daniel Ryll was killed by an exploding fireworks shell at the Reynoldsburg July 4 th display, while he was
outside the caution tape. His estate sued Truro Township, which was required by §3743.54 (C) ORC to
inspect the fireworks site. The trial court overruled Truro’s motion for summary judgment, but the court of
appeals granted summary judgment, holding that the inspection was a governmental function subject to
statutory immunity, and that the park was not in the township. The Supreme Court reversed. While the
inspection was a governmental function, public subdivisions are liable for injury or death caused by failure to
keep public grounds within the political subdivision free from nuisances, §2744.02 (B)(3) ORC. Although
the park is in the City of Reynoldsburg, it might also be in Truro Township, and a former township trustee
believes that the park is in the township. Ownership of the park is not relevant, since there was a fact
question and summary judgment was in error. (Opinion by Pfeifer; Douglas, Resnick and Sweeney concur;
Moyer, Cook and Stratton dissent.)
    Ryll vs Columbus Fireworks Display Inc, 95 Ohio St 3d 467, 2002-Ohio-2584, appeal from Franklin
App

Todd Hall (who had a severe mental disorder) took a lighted cigarette into Flying Dragon Inc’s fireworks
store, where he set off fireworks that caused a fire and killed nine people. The sprinkler system had been
turned off. ODC’s Division of the Fire Marshal had inspected the store nine months earlier, as required by
§3743.16 ORC for a fireworks wholesale license. DFM could also inspect premises at any time, §3743.21
ORC, and instructed its agents to inspect more often. The local DFM agent planned a sting operation for
suspected improper sales, and delayed the inspection. The sting was conducted five days before the fire, but
the three DFM agents did not conduct a safety inspection. The decedents’ estates sued DFM in the Court of
Claims, alleging negligence in failing to inspect at the time of the sting, and for not following DFM rules for
more frequent inspections. After trial the court entered judgment for DFM for three distinct reasons: (a) the
agent had a high degree of discretion, (b) the public duty rule precluded liability, and (c) the proximate cause
was Hall’s criminal arson, unforeseeable by a reasonable person. The court of appeals affirmed based on the
public duty rule. The Supreme Court reversed. Under English and Ohio common law, a public entity owes a
duty to the general public when performing its functions, and is not liable to an individual absent a special
duty. However, the public duty rule is inconsistent with §2743.02 (A) ORC, and therefore does not apply to
actions against the State in the Court of Claims. (Opinion by Cook; Douglas, Sweeney and Pfeifer concur;
Moyer, Resnick and Stratton dissent.)
    Wallace vs Ohio Dept of Commerce, 96 Ohio St 3d 266, 2002-Ohio-4210, appeal from Franklin App




                                                      19
To receive Medicaid funding, a state must comply with federal requirements, but certain requirements may
be waived. Ohio was granted a waiver, provided that Ohio monitor participating managed care providers
(MCPs). One MCP became insolvent. The plaintiff medical providers sued ODHS, alleging negligence in
supervising the failed MCP and resulting damage to the plaintiffs. The Court of Claims dismissed the action,
the court of appeals affirmed, but the Supreme Court reversed, based on Wallace v Ohio Dept of Commerce,
96 Ohio St 3d 266, 2002-Ohio-4210. (Per curiam; Douglas, Sweeney, Pfeifer and Cook concur; Moyer,
Resnick and Stratton dissent.)
    OHA vs Ohio Dept of Human Serv, 96 Ohio St 3d 301, 2002-Ohio-4209, appeal from Franklin App

The plaintiffs alleged that the defendant’s middle school teacher Milton Davis sexually assaulted their
daughter on school premises, and sued the school for negligent retention and supervision. The trial court
granted summary judgment for the school, the court of appeals affirmed but the Supreme Court reversed the
summary judgment. Former §2744.02 (B)(4) ORC provided that the exception to political subdivision
immunity applied in all cases where an injury resulting from the negligence of a subdivision employee
occurred within or on the grounds of a building used in connection with the performance of a governmental
function. (Opinion by Moyer; Douglas, Sweeney, Pfeifer and Cook concur; Resnick and Stratton dissent,)
    Hubbard vs Canton City School Bd of Edn, 97 Ohio St 3d 451, 2002-Ohio-6718, appeal from Stark
App

The plaintiffs alleged that the defendant’s middle school teacher Milton Davis sexually assaulted their
daughter on school premises, and sued the school for intentional infliction of emotional distress. The trial
court granted summary judgment for the school. The court of appeals and Supreme Court affirmed. In the
context of intentional torts there are no exceptions to immunity for the intentional torts of fraud and
intentional infliction of emotional distress in §2744.02 (B)(5) ORC. (Opinion by Moyer; Douglas, Resnick,
Sweeney, Pfeifer, Cook and Stratton concur,)
    Hubbard vs Canton City School Bd of Edn, 97 Ohio St 3d 451, 2002-Ohio-6718, appeal from Stark
App




                                              Damages              
NOMINAL DAMAGES
Mark DeCastro was suspended from school for the last four days of his senior year, based on alleged
misconduct during a teachers’ labor dispute. The labor dispute was settled with a general amnesty which
extended to students’ acts during the strike. DeCastro sued based on violation of the amnesty contract, but
did not request declaratory or injunctive relief or allege a tort claim. The trial court sustained Wellston’s
motion for summary judgment, noting DeCastro had not alleged any economic loss compensable under a
breach of contract claim. The court of appeals reversed, allowing an award for nominal damages, but the
Supreme Court reinstated the judgment. Nominal damages can be recovered where actual monetary damages
cannot be proven in a breach of contract claim. But a court of appeals should not reverse for new trial if only
nominal damages are awardable unless a significant right is involved, including inequitable assessment of
costs. A plaintiff (like DeCastro) who admits he suffered no actual damages may not proceed solely for
nominal damages and thereby cause the defendant the cost of litigation, in contrast to a plaintiff who alleges
such damages but fails to prove them at trial. (Opinion by Moyer; Resnick, Sweeney, Pfeifer and Stratton
concur; Douglas and Cook dissent.)
    DeCastro vs Wellston City School Dist Bd of Edn, 94 Ohio St 3d 197 (2002), appeal from and certified
by Jackson App



                                                      20
21
PUNITIVE DAMAGES
Esther Dardinger’s health insurer disapproved payment for a chemotherapy treatment it determined was
experimental. Her estate sued the insurer for insurance bad faith. The jury returned a $2.5 million verdict
for bad faith and awarded $49 million punitive damages. The Supreme Court ordered a remittitur of the
punitive damages to $30 million, and awarded part of the punitive damages to a public fund. The factors
considered in reviewing the reasonableness of a punitive damage award include (a) whether the defendant
showed indifference to or reckless disregard for the health and safety of others, (b) the punitive award’s ratio
to the actual harm inflicted on the plaintiff, and (c) comparison with the civil or criminal penalties for the
same misconduct. The court ruled that while the punitive damages were excessive under the Ohio, but not
the federal, Constitution. The purpose of punitive damages is not to compensate a plaintiff but to punish and
deter conduct, and is related to the defendant’s behavior, not the plaintiff’s loss, and the trial court’s failure to
allow a remittitur was an abuse of discretion. The court then ordered that of the punitive award (plus post-
judgment interest), $10 million would be paid to the plaintiffs, the agreed contractual amount to their
attorneys, and the court created the “Esther Dardinger Fund” at the Ohio State University James Cancer
Hospital to receive the balance. The purpose of the fund was to result in a societal good to offset the harm
caused by the defendants. (Opinion by Pfeifer; Douglas, Resnick, Sweeney, and Pfeifer concur; Moyer,
Cook and Stratton dissent.)
    Dardinger vs Anthem Blue Cross & Blue Shield, 97 Ohio St 3d ---, 2002-Ohio-7113, appeal from
Licking App




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Description: Ohio Legal Malpractice Law and Statute of Limitations document sample