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									                                                                            07-9780 November 5,2007
                                    Attorney for Amicus Curiae Ohio Association of Civil Trial Attorneys


                   IN THE SUPREME COURT OF OHIO

LEONARD MAYNARD,                                Case No. 2007-1069

              Plaintiff-Appellee

      V.                                        On Appeal from the
                                                Third Appellate District
EATON CORPORATION,
                                                Third District No. 9-06-33
              Defendant-Appellant




  MERIT BRIEF OF AMICUS CURIAE OHIO ASSOCIATION OF CIVIL
    TRIAL ATTORNEYS IN SUPPORT OF APPELLANT EATON
                      CORPORATION


                                         Thomas F. Glassman, Esq. .(0061466)
                                         SMITH, ROLFES & SKAVDAHL
                                         COMPANY, L.P.A.
                                         1014 Vine Street, Suite 2350
                                         Cincinnati, Ohio 45202-1119
                                         (513) 579-0080
                                         (513) 579-0222 - Facsimile
                                         Counsel for Amicus Curiae
                                         Ohio Association of Civil Trial Attorneys

Laren E. Knoll, Esq. (0070594)            Harry T. Quick, Esq. (0031239)
98 Hamilton Park                          Matthew L. Snyder (0079703)
Columbus, Ohio 43203                      BRZYTWA, QUICK & McCRYSTAL, LLC
(614) 228-2050                            900 Skylight Office Tower
(614) 228-3320 - Facsimile                1660 West Second Street
Counsel for Plaintiff-Appellee,           Cleveland, Ohio 44113-1411
Leonard Maynard                           (216) 664-6900
                                          (216) 664-6901 - Facsimile
                                          Counsel for Defendant-Appellant
                                          Eaton Corporation



              NOV 05 2007
            CLERK OF COURT
       SUPREME COURT OF OHIO
                                           TABLE OF CONTENTS

1. TABLE OF AUTHORITIES ...............................................................................iii

11. INTRODUCTION ..................................................................................................1

III. STATEMENT OF THE CASE AND FACTS .................................................... 1

IV. ARGUMENT .........................................................................................................2

               First Proposition of Law : ...........................................................................2

               R.C. 1343.03, as amended by H.B. 212 in 2004, was expressly intended by the
               legislature to apply to judgments entered prior to the amendment's effective
               date, so long as the subject action was pending on the statute's effective
               date . ................................................................................................................... 2

               Second Proposition of Law :....................................................................10

               The annual interest rate on a judgment governed by R.C. 1343.03, as amended
               by H. B. 212, must change each year to comply with the fluctuating statutory
               interest rates imposed by R.C. 5703.47 . ......................................................... 10

V. CONCLUSION ....................................................................................................11

VI. CERTIFICATE OF SERVICE ........................................................................... 13

VII. APPENDIX ..........................................................................................................14

               H.B. 212 Legislative Analysis ........................................................................ 14




                                                                   11
                                    I. TABLE OF AUTHORITIES
Cases
Bielat v. Bielat, 87 Ohio St.3d 350, 2000-Ohio-451, 721 N.E.2d 28 . ................................ 9

Cleveland Heights Fire Fighter Assn. v. Cleveland Heights (July 12, 1984), Cuyahoga
  App. No. 47727 ............................................................................................................... 5

Conway v. Dravenstott, Crawford App. No. 3-07-05, 2007-Ohio-4933 ................. ........... 8

Goddard v. Children's Hospital Medical Center (2000), 141 Ohio App.3d 467, 673
 N.E.2d 138 . ................................................................................................................... 11

Hardiman v. Zep. Mfg. Co. (1984), 14 Ohio App.3d 222,470 N.E.2d 941 . ...................... 2

Hausser & Taylor, L.L.P. v. Accelerated Sys. Integration, Inc., Cuyahoga App. No.
  86547, 2006-Ohio-1582 .................................................................................................. 4

Highlands Business Park, LLC v. Grubb & Ellis Co., Cuyahoga App. No. 85225, 2005-
  Ohio-3139 ............. ........... .............. ................................................................................. 4

Hilliard v. First Indus., L.P., 165 Ohio App.3d 335, 2005-Ohio-6469, 822 N.E.2d 441... 4

Kilbane v. Indus. Comm., 91 Ohio St.3d 258, 2001-Ohio-34, 744 N.E.2d 708 .................. 6

Kunkler v. Goodyear Tire & Rubber Co. ( 1988), 36 Ohio St.3d 135, 522, N.E.2d 477 .... 7

Lovewell v. Physicians Ins. Co. of Ohio (1997), 79 Ohio St.3d 143, 679 N.E.2d 1119... 11

Maynard v. Eaton Corp., Marion App. No. 9-03-48, 2004-Ohio-3025 . ............................ 8

McKinnon (1984), 16 Ohio Misc.2d 4, 476 N.E.2d 1101 ................................................... 6

Prepaki Concrete Co. v. Koski Construction Co. (1989), 60 Ohio App.3d 28, 573 N.E.2d
  209 ................................................................................................................................... 2

Roberts v. Treasurer, 147 Ohio App.3d 403, 411, 2001-Ohio-8867, 770 N.E.2d 1085.... 9

Scibelli v. Pannuzio, Mahoning App. No. 05-MA-150, 2006-Ohio-5652 .......................... 8

Sheets v. Sheets (Dec. 30, 1994), Gallia App. No. 94CA17 . .............................................. 4

Snowberger v. Wesley, Summit App. No. 22955, 2006-Ohio-3343 ................................... 7


Tony Zumbo & Son Construction Co. v. Transportation Dept. (1989), 22 Ohio App.3d
  141, 489 N.E.2d 621 ....................................................................................................... 5


                                                                    rn
Van Fossen v. Babcock & Wilcox Co. (1988), 36 Ohio St.3d. 100, 522 N.E.2d. 489........ 6

Weil v. Taxicabs ofCincinnatd, Inc. (1942), 139 Ohio St. 198, 39 N.E.2d 148 .................. 9

Wessell v. Timberlake (1916), 95 Ohio St.21, 35, 116 N.E. 43 .......................................... 9

Wilson v. AC&S, Inc., 169 Ohio App.3d 720, 736, 2006-Ohio-6704, 864 N.E.2d 682...... 9


Statutes

R.C. 1.48 .............................................................................................................................6

R.C. 1343.03 . ...................................................................................................................... 2

R.C. 5703.47 ....................................................................................................................... 3

Ohio Const. Art. IV ............................................................................................................. 6




                                                                  iv
                                    II. INTRODUCTION
       This amicus curiae represents the interests of the Ohio Association of Civil Trial

Attorneys ("OACTA"), an organization of attorneys, corporate executives, and managers,

devoted to the defense of civil lawsuits and claims against individuals, corporations, and

governmental entities in Ohio.

       OACTA is appearing in this appeal on behalf of appellant, the Eaton Corporation, to

insure fairness and uniformity in how post-judgment interest is calculated and assessed by

Ohio's courts.




                  III. STATEMENT OF THE CASE AND FACTS

       Amicus curiae Ohio Association of Civil Trial Attorneys adopts by reference the

Statement of the Case and Facts set forth in the appellant's Merit Brief.
                                            IV. ARGUMENT
         First Proposition of Law:

         R.C. 1343.03, as amended by H.B. 212 in 2004, was expressly intended by the legislature
         to apply to judgments entered prior to the amendment's effective date, so long as the
         subject action was pending on the statute's effective date.


                           A. A History of Post-Judgment Interest in Ohio

         Although Ohio has recognized post-judgment interest since at least 17991, it was not until

the June 2, 2004 amendments to R.C. 1343.03, brought about by H.B. 212, that the methodology

for determining the rate of post-judgment interest changed to its current format. For over forty

years previously, the legislature rarely addressed or changed the applicable interest rate.

         From 1962 until 1980, the statutory interest.rate for judgments was 6% annually.2 From

1980 until 1982, the annual rate was 8%.3 From 1982 until the 2004 changes, the annual rate

was 10%.4

         With the 2004 amendments, the legislature directly linked R.C. 1343.03's rate to the

federal short term interest rate, providing:

                 (A) In cases other than those provided for in sections 1343.01 and
                  1343.02 of the Revised Code, when money becomes due and
                 payable upon any bond, bill, note, or other instrument of writing,
                 upon any book account, upon any settlement between parties, upon
                 all verbal contracts entered into, and upon all judgments, decrees,
                 and orders of any judicial tribunal for the payment of money
                 arising out of tortious conduct or a contract or other transaction,
                 the creditor is entitled to interest at the rate per annum determined
                 pursuant to section 5703.47 of the Revised Code, unless a written
                 contract provides a different rate of interest in relation to the
                 money that becomes due and payable, in which case the creditor is
                 entitled to interest at the rate provided in that contract. Notification
                 of the interest rate per annum shall be provided pursuant to

'Prepakt Concrete Co. v. Koski Construction Co. (1989), 60 Ohio App.3d 28, 573 N.E.2d 209.
Z R.C. 1343.03, See Hardiman v. Zep. Mfg. Co. ( 1984), 14 Ohio App.3d 222, fn.4, 470 N.E.2d 941.
' Id
4 Id


                                                       2
                  sections 319.19, 1901.313, 1907.202, 2303.25, and 5703.47 of the
                  Revised Code.


         With the 2004 legislative changes, and in conjunction with R.C. 5703.47, the Ohio Tax

Commissioner annually determines the interest rate for the following year on October 15a'. In

that regard, R.C. 5703.47 (A) and ( B) provide:

                  (A) As used in this section, "federal short-term rate" means the rate
                  of the average market yield on outstanding marketable obligations
                  of the United States with remaining periods to maturity of three
                  years or less, as determined under section 1274 of the "Internal
                  Revenue Code of 1986," 100 Stat. 2085, 26 U.S.C.A. 1274, for
                  July of the current year.

                  (B) On the fifteenth day of October of each year, the tax
                  commissioner shall detennine the federal short-term rate. For
                  purposes of any section of the Revised Code requiring interest to
                  be computed at the rate per annum required by this section, the rate
                  determined by the commissioner under this section, rounded to the
                  nearest whole number per cent, plus three per cent, shall be the
                  interest rate per annum used in making the computation for interest
                  that accrues during the following calendar year. For the purposes
                  of sections 571.9.041 and 5731.23 of the Revised Code, references
                  to the "federal short-term rate" are references to the federal short-
                  term rate as determined by the tax commissioner under this section
                  rounded to the nearest whole number per cent.



         Thus, Ohio progressed from a system where the statutory rate was simply 10% per year,

to a variable rate, taking into consideration the econoniic climate and the value of money. For

instance, in 2004 the rate was 4.0%; in 2005 the rate became 5.0%; in 2006 the rate changed to

6.0%; and in 2007 the rate is 8.0%.5

         Since the 2004 amendments, Ohio's courts have routinely asked to determine which rate

applies. In the instant case, the appellate court did not provide an explanation for their holding




5 http://tax.ohio.gov/divisions/ohio individuaUindividuaUinterest rates.stm


                                                         3
that the former 10% rate applied, even though their decision was admittedly in conflict with at

least two other appellate districts.

         The first case in conflict is Hilliard v. First Indus., L.P., 165 Ohio App.3d 335, 2005-

Ohio-6469, 822 N.E.2d 441. The issue there involved the regulatory taking of private property.

The Tenth District found that the creditor was entitled to interest from the date of the taking,

February 16, 2002, until the debtor paid the judgment. Since the interest rate spanned the period

during which the rate changed, the court applied a rate of 10% from the date of the taking,

through the statute's effective date. After the effective date, the new variable rate was applied.

Id. at ¶ 47. Citing Sheets v. Sheets (Dec. 30, 1994), Gallia App. No. 94CA17, the court reasoned

that since R.C. 1343.03(A) was not expressly made retroactive, the statute could only operate

prospectively. Id.

         A similar result was reached more recently in Hausser & Taylor, L.L.P. v. Accelerated

Sys. Integration, Inc., Cuyahoga App. No. 86547, 2006-Ohio-1582. However, in Hausser, the

focus of the Eighth District was not on the issue of retroactive or prospective application of the

statute, but solely on the plain intent of the legislature. Section 3 of H.B. 212 is the uncodified

portion of R.C. 1343.03, as amended, and provides:

                 In the calculation of interest due under section 1343.03 of the
                 Revised Code, in actions pending on the effective date of this act,
                 the interest rate provided for in section 1343.03 of the Revised
                 Code prior to the amendment of that section by this act shall apply
                 up to the effective date of this act, and the interest rate provided for
                 in section 1343.03 of the Revised Code as amended by this act
                 shall apply on and after that effective date.6


        In Hausser, the court relying on its previous holding in Highlands Business Parlc, LLC v.

Grubb & Ellis Co., Cuyahoga App. No. 85225, 2005-Ohio-3139, determined Section 3 of H.B.


6 Appendix A contains the complete legislative analysis for H.B. 212, including the uncodified language.


                                                         4
212 spoke plainly to the issue of the legislature's intent, and resolved any doubt of how R.C.

1343.03 is to be applied. The trial court rendered judgment on Apri130, 2004, only a few months

prior to the statute's amendment. On appeal, relying on Section 3 of H.B. 212, the court modified

the post-judgment interest to accrue at the rate of "10% from April 30, 2004 to June 1, 2004; 4%

from June 2, 2004 to December 31, 2004; and 5% from January 1, 2005 until the judgment is

satisfied." Id. at ¶12.

        Prior to 2004, Ohio's statutory interest rate changed infrequently. Obviously, whenever

the rates changed, the courts were in turn forced to respond to those cases caught up in the rate

change. That is to say, there was no timely way to impose a rate change under prior versions of

R.C. 1343.03. Prior to the 2004 amendments, the clarifying language of Section 3 of H.B. 212

did not exist in the statute. No guidance was previously provided by legislature to iron out the

effects of a rate change on cases already pending in Ohio's courts.

        Ohio's courts were faced with the arduous task of finding the legislative intent in the

myriad of cases dealing with anything other than pre-judgment or post-judgment interest. Others

simply chose the practical and equitable approach. What they both found was the interest rate

prior to the 2004 amendments applies up to the effective date of the amendments and then the

new interest rate is to apply.7

        It is not surprising then that Section 3 of H.B. 212 was included among the amendments

to R.C. 1343.03. What is unknown, but not germane to this appeal, is whether Section 3 of H.B.

212 is a legislatively-created response to the precedents set by the courts, or simply the express

will of the legislature. In any event, the bed has been made for both, as indicated in the holdings




7 See Tony Zumbo & Son Construction Co. v. Transportation Dept. (1989), 22 Ohio App.3d 141, 489 N.E.2d 621;
Cleveland Heights Fire Fighter Assn. v. Cleveland Heights (July 12, 1984), Cuyahoga App. No, 47727; Hardiman v.
Zep. Mfg. Co., supra; Prepakt Concrete Co. v. Koski Constr. Co., supra; Sheets v. Sheets, supra.


                                                      5
of Hilliard and Hausser: two cases, same issue, different approaches and yet finding the same

result.

                              B. Retroactive Application of H.B. 212

          This amicus curiae fully acknowledges it seeks the retroactive application of R.C.

1343.03, as amended in 2004. Such an application is entirely harmonious with the express intent

of the legislature, and the underlying philosophy of the 2004 legislative changes. This

retroactive application is limited to the mechanism of determining interest. As will be discussed

in the second proposition of law, the interest rates themselves are to be applied prospectively, as

determined each year.

          A two-step analysis is employed to determine whether a legislative change is to be

applied retroactively.   Van Fossen v. Babcock & Wilcox Co. (1988), 36 Ohio St.3d. 100, 522

N.E.2d. 489. Under that test, the initial inquiry is whether the legislature expressly intended it to

be retroactive. The second step involves a determination of whether the legislative change is

substantive, or is remedial or procedural.




                                             Step 1 Analysis

          R.C. 1.48 provides statutes are presumed to apply retrospectively, unless they contain

express verbiage indicating an intent to apply retroactively. "A codified statute may be made

expressly retrospective within the meaning of R.C. 1.48 by language that appears only in

uncodified sections of an act." Ohio Const. Art. IV § 1(Baldwin 2004), p. 798, citing In re

McKinnon ( 1984), 16 Ohio Misc.2d 4, 476 N.E.2d I 101. See also, State ex rel. Kilbane v. Indus.

Comm., 91 Ohio St.3d 258, 2001-Ohio-34, 744 N.E.2d 708.




                                                   6
       Section 3 of H.B. 212 clearly expresses the legislature's intent to apply the changes to

                                                                                e
R.C. 1343.03(A) retroactively, and states that the new rate applies "to actions p nding on the

effective date of this act" [emphasis added]. Had the legislature intended these changes to apply

only to judgments entered after the effective date, they could have done so. Instead, the

legislature expressly chose to have the amendments apply more broadly, and made the

determining point whether the action was pending on the effective date of the statute - i.e. June

2, 2004. That then leads to the question of whether this action was pending on that date.

       That date of the judgment entry by itself, is not dispositive of this inquiry. It has

consistently been recognized that an action is still considered pending even if it is no longer

before the trial court and is upon appeal. Kunkler v. Goodyear Tire & Rubber Co. (1988), 36

Ohio St.3d 135, 522, N.E.2d 477; VanFossen v. Babcock & Wilson Co. (1988), 36 Ohio St.3d

100, 522 N.E.2d 489; Snowberger v. Wesley, Summit App. No. 22955, 2006-Ohio-3343. Until

such time as the appeal is decided with finality, the matter remains pending. Id.

       The judgment in question was entered on April 4, 2003, admittedly prior to the effective

date of H.B. 212. Post-judgment proceedings occurred at the trial court level, leading to an

appeal preceding the instant appeal.8 The earlier appellate ruling led to the case being reversed

and remanded, and further proceedings occurred at the trial court level, leading ultimately to the

subject appeal.

       The legislature's intent is quite clear. Since this action was still pending at the time of the

2004 amendment, the modified rate applies. The reality is that Section 3 of H.B. 212 could not

operate any other way. If the argument is that at the time of the trial court's judgment the

statutory interest is automatically frozen, Section 3 of H.B. 212 would not have its place in

uncodified law. In other words, what purpose or function does Section 3 of H.B. 212 have in




                                                  7
R.C. 1343.03 if the legislature intended the statutory rate to be static upon a rate change? The

very definition of post-judgment interest anticipates events occurring after judgment, or the

failure to timely pay a judgment once rendered. Section 3 of H.B.212 allows for the modification

of the interest rate post-judgment and post-amendment to accommodate changing economy

conditions and forces.

         Moreover, as the court noted in Scibelli v. Pannuzio, Mahoning App. No. 05-MA-150,

2006-Ohio-5652, Section 3 of H.B. 212 only applies to R.C. 1343.03(A), the post-judgment

interest provision of the statute, and not R.C. 1343.03(C), the section in the statute dealing with

pre-judgment interest. The court held that because of Section 3 of H.B. 212, only R.C.

1343.03(A) was "partially retroactive to pending cases" unlike any other sections in the statute.

Id. at ¶146.

        Utilizing the logic of the Seventh District, since the uncodified law only applies to post-

judgment interest, an action is still pending post-judgment and therefore subject to the modified

rate upon the statute's amendment. It is worth noting, the Third District likewise followed the

rationale of Scibelli in Conway v. Dravenstott, Crawford App. No. 3-07-05, 2007-Ohio-4933,

holding that the amended version of R.C. 1343.03 only applied retroactively to section (A), and

not (C) of the statute based upon Section 3 of H.B. 212.




                                             Step 2 Analysis

        The applicable portion of H.B. 212 is remedial and not substantive, and therefore must be

applied retroactively as the criteria in the first step have been satisfied. In order for a statute to

be deemed substantive, one of the following factors must apply: it impairs or takes away a vested

right; it affects an accrued substantive right; it imposes new or additional burdens, duties,


a Maynard v. Eaton Corp., Marion App. No. 9-03-48, 2004-Ohio-3025.

                                                     8
obligations or liabilities to a past transaction; it creates a new right or takes away an existing one.

Van Fossen, supra, 36 Ohio St.3d at 107.

        In contrast, a statute is remedial if it simply modifies an existing remedy, as compared to

creating one or taking one away. Van Fossen, supra. If only a method or procedure is affected,

as opposed to a right itself, then the statute is considered remedial.      Bielat v. Bielat, 87 Ohio

St.3d 350, 2000-Ohio-451, 721 N.E.2d 28. The key inquiry is whether the law affects the actual

right, or merely how that right is protected or enforced.       Weil v. Taxicabs of Cincinnati, Inc.

(1942), 139 Ohio St. 198, 39 N.E.2d 148. If it is the latter, then it is remedial.

       All H.B. 212 does is change how the annual interest rate is to be determined. It does not

change whether or when interest can and cannot be awarded. Therefore, one cannot have a

vested right in statutory interest. "One of the primary purposes of the retroactivity clause in

Section 28, Article II of the Ohio Constitution is to prevent the legislature for invading or

interfering with the "vested rights" of individuals." Wilson v. AC&S, Inc., 169 Ohio App.3d 720,

736, 2006-Ohio-6704, 864 N.E.2d 682, citing Bielat, supra.

       Furthermore, "[a] right cannot be considered "vested" unless it amounts to something

more than a mere expectation of future benefit or interest founded upon an anticipated

continuance of existing laws." Id., citing Roberts v. Treasurer, 147 Ohio App.3d 403, 411, 2001-

Ohio-8867, 770 N.E.2d 1085. It has long been held that "[t]he right to regulate the rate of interest

is as old as government itself." Wessell v. Timberlake (1916), 95 Ohio St.21, 35, 116 N.E. 43. As

such, one cannot claim a vested right in a particular statutory rate when it is subject to the

province of the legislature.




                                                   9
       Second Proposition of Law:

       The annual interest rate on a judgment govemed by R.C. 1343.03, as amended by H. B.
       212, must change each year to comply with the fluctuating statutory interest rates
       imposed by R.C. 5703.47.


       H.B. 212 only makes retroactive the mechanism for determining the applicable interest

rate. The rates themselves are to be applied prospectively. For example, for any interest on the

judgment accruing prior to June 2, 2004, 10% is the proper interest rate. For all subsequent

interest, the annual rate will vary as dictated annually by statute. Since this appeal is not the first

time the statutory interest rate has ever changed over the life of a judgment, it bears noting how

this issue has been addressed by Ohio courts in the past.

       There has been consistency over the decades by the Ohio courts in situations such as this

that the applicable interest rate will not remain static, and instead will change to conform with

R.C. 1343.03. Prepakt Concrete Co., supra, at 30 and 31. Prepakt, Concrete involved an issue

of pre-judgment interest spanning a period from 1974 through 1982. That appellate court

refused to apply one sole interest rate for that eight year time period, noting three different

statutory rates were applicable over the time period in question, and that therefore all three rates

were applicable for their respective time periods.

       A similar approach was taken by the appellate courts in Tony Zumbo & Son Construction

Co. v. Ohio Dept. of Transportation, supra, and Sheets v. Sheets, supra.          Those decisions all

stand, for the proposition that the statutory interest rate on a judgment will change

contemporaneously with any legislative changes to the rate.

       Awards of prejudgment and post-judgment interest serve very different functions,

particularly in tort actions. The former, is somewhat punitive in nature and is limited to tort

actions where it has found a defendant did not negotiate in good faith, or in actions on a contract.



                                                  10
In contrast, absent a contractual provision or agreement to the contrary, entitlement to post-

judgment interest is unconditional.    Lovewell v. Physicians Ins. Co. of Ohio (1997), 79 Ohio

St.3d 143, 679 N.E.2d 1119. Lovewell noted the purposes of post-judgment interest were to

insure prompt payment of the judgment, and to prevent the judgment debtor from benefiting

while holding onto funds to be paid to the prevailing party.

        One of the core reasons behind post-judgment interest is recognizing which party had use

of the money until such time as the judgment was paid. Goddard v. Children's Hospital Medical

Center (2000), 141 Ohio App.3d 467, 673 N.E.2d 138. Prior to 2004, there was no apparent

nexus between the statutory rate and the current economic climate. Hypothetically speaking,

there was nothing to deter a judgment debtor from trying to avoid paying the judgment for as

long as possible, if they felt their return on the use of the funds would exceed the statutory

interest rate. The 2004 amendments to R.C. 1343.03 simply confirm the compensatory nature of

post-judgment interest by tying it directly to current economic conditions on an ongoing basis.




                                    V. CONCLUSION

       Statutory interest is inherently compensatory in nature. It does not exist to serve as a

windfall or a penalty. By interjecting the uncodified language into H.B. 212, the legislature took

an emphatic step it had never before taken - it expressed a clear intent to apply the changes to

the statute, without reservation or qualification to all pending cases. There is no limiting

language restricting its scope to only cases which had not yet gone to judgment. The legislature

chose its words carefully and clearly, and now they must be given their intended effect.

       If the legislature's clear intent is not carried out, there will be disparate treatment among

debtors and creditors who had cases pending at the same time. History has shown us how




                                                11
interest rates change based upon economic conditions. Allowing the interest rate to vary

annually is the only way to fairly ensure for both debtors and creditors that the fundamental

purpose of statutory interest is protected and respected.




                                                 Respectfully submitted,




                                                   hoinas F. Glassman, Esq. (0061466)
                                                 SMITH, ROLFES & SKAVDAHL CO., LPA
                                                 1014 Vine Street, Suite 2350
                                                 Cincinnati, Ohio 45202-1119
                                                 (513) 579-0080
                                                 (513) 579-0222 - fax

                                                 ATTORNEY FOR. AMICUS CURIAE OHIO
                                                 ASSOCIATION OF CIVIL TRIAL
                                                 ATTORNEYS




                                                 12
                          VI. CERTIFICATE OF SERVICE
       I hereby certify a true and accurate copy of the foregoing was forwarded by regular U.S.
mail, postage prepaid, this 5`h day of November, 2007 to:

Laren E. Knoll, Esq.
98 Hamilton Park
Columbus, Ohio 43203
COUNSEL FOR PLAINTIFF-APPELLEE,
LEONARD MAYNARD

Harry T. Quick, Esq.
Matthew L. Snyder, Esq.
BRZYTWA, QUICK & McCRYSTAL, LLC
900 Skylight Office Tower
1660 West Second Street
Cleveland, Ohio 44113-1411
COUNSEL FOR DEFENDANT-APPELLANT,
EATON CORPORATION




                                                   4"v^fff"fw-
                                                   Thomas F. Glassman




                                              13
                                VII. APPENDIX


H.B. 212 Legislative Analysis




                                     14
                                                               Final Analysis
                   Virginia Mclnerney            Legislative Service Commission




                                Sub. H.B. 212
                             125th General Assembly
                      (As Passed by the General Assembly)

   Reps. Seitz, McGregor, Setaer, Cates, C. Evans, Wagner, Schmidt, Gilb,
          Husted, Williams, Blasdel, Wolpert, Schneider, Faber, Driehaus,
          Webster, Gibbs, Reidelbach, Raussen, Collier, G. Smith, Latta,
          Widener, Harwood, Book, Allen, Aslanides, Barrett, Brown, Buehrer,
          Calvert, Carmichael, Clancy, Core, Daniels, Domenick, Flowers,
          Hartnett, Hoops, Hughes, Jolivette, Key, Niehaus, Otterman, Perry,
          Price, Schlichter, S. Smith, J. Stewart, Taylor, Woodard
   Sena. Spada, Austria, Nein
   Effective date: June 6, 2004

ACT SUMIVIARY

• Modifies the statutory rate of interest to which a creditor is entitled when
   money becomes due and payable upon instruments in writing, book
   accounts, settlements between parties, verbal contracts, and judgments,
   decrees, and orders for the payment of money arising out of tortious
   conduct or a contract or other transaction, unless a written contract
   provides a different rate of interest.

• Provides that the statutory rate of interest to which a creditor is entitled as
   described in the preceding dot point is to be determined by the Tax
   Commissioner based upon the federal short-term rate, instead of ten per
   cent per annum, unless a written contract provides a different rate of
   interest, and requires the Tax Connnissioner to notify in writing each
   county auditor of the rate of interest per annum as determined.

• Requires a county auditor to notify in writing the clerk of the court of
   common pleas of the county and the clerk of each municipal and county
   court in the county of the rate of interest per annum and requires the clerk
   of each of those courts to post the rate of interest in or near the clerk's
   office.
     • Specifies that the applicable postjudgment rate of interest is the rate as
        detennined that is in effect on the date the judgment, decree, or order is
        rendered and that that rate remains in effect until the judgment, decree, or
        order is satisfied.

     • Modifies the computation of the period for which prejudement interest is
        due on a judgment, decree, or order for the payment of money in a civil
        action based on tortious conduct that has not been settled by agreement of
        the parties if the court determines that the party required to pay failed to
        make a good faith effort to settle the case and the party to whom the
        payment is to be made did not fail to make a good faith effort to settle the
        case.

     • Precludes a court from awarding interest on future damages that are
        found by the trier of fact.

     • In any tort action to which the existing statutes on payment of certain
        amounts of future damages do not apply, if a plaintiff makes a good faith
        claim against a defendant for future damages and if the verdict is in favor
        of the plaintiff, requires the trier of fact to speoify in the written
        interrogatories or findings of fact both the past damages and future
        damages recoverable by the plaintiff.

      • Shortens the period of limitations for bringing an action to revive a
         dormant judgment and precludes the accrual of interest from the date a
         judgment becomes dormant to the date the judgment is revived.

      CONTENT AND OPERATION

     Statutory rate ofinterest

            Under prior law, in cases other than those provided for in R.C. 1343.01 and
      1343.02 (see COMMENT 1), when money became due and payable upon any
     bond, bill, note, or other instrument of writing, any book account, or any
     settlement between parties, upon all verbal contracts entered into, and upon all
     judgments, decrees, and orders of any judicial tribunal for the payment of money
     arising out of tortious conduct or a contract or other transaction, the creditor was
     entitled to interest at the rate of ten per cent per annum, and no more, unless a
     written contract provided a different rate of interest in relation to the money that
     became due and payable, in which case the creditor was entitled to interest at the
     rate provided in that contract (R.C. 1343.03(A)).



M Legislative Service Commission              -2- Sub. .HB. 212
            The act modifies the statutory rate of interest per annum that a creditor is
     entitled to as described in the preceding paragraph. Under the act, in cases other
     than those provided for as described in COMMENT 1, when money becomes due
     and payable upon any bond, bill, note, or other instrument of writing, any book
     account, or any settlement between parties, upon all verbal contracts entered into,
     and upon all judgments, decrees, and orders of any judicial tribunal for the
     payment of money arising out of tortious conduct or a contract or other
     transaction, the creditor is entitled to interest at the rate per annum determined
     pursuant to R.C. 5703.47 (calculation of interest at the federal short-term rate as
     described in the following paragraph), unless a written contract provides a
     different rate of interest in relation to the money that becomes due and payable, in
     which case the creditor is entitled to interest at the rate provided in tltat contract.
     Notification of the interest rate per annum must be provided as described in the
     second succeeding paragraph. (R.C. 1343.03(A).)

            R.C. 5703.47 requires the Tax Commissioner, on October 15 of each year,
     to determine the "federal short-term rate" (defined as the rate of the average
     market yield on outstanding marketable obligations of the United States with
     remaining periods to maturity of three years or less, as determined under section
     1274 of the Internal Revenue Code of 1986, 26 U.S.C.A. 1274, for July of the
     current year). R.C. 5703.47 fnrther provides that for purposes of any section of
     the Revised Code requiring interest to be computed at the rate per annum required
     by that section, the rate determined by the Tax Commissioner, rounded to the
     nearest whole number per cent, plus three per cent must be the interest rate per
     annum used in making the computation for interest that accrues during the
     following calendar year.

            The act requires the Tax Commissioner, within ten days after the interest
     rate per annum is determinel as described in the preceding paragraph, to notify the
     auditor of each county in writing of that rate of interest. Within ten days after
     receiving that notification, the auditor must notify in writing the clerk of the court
     of common pleas and the clerk of each municipal court and county court in the
     county of that rate of interest. Upon receiving the notification from the county
     auditor, the clerk of a municipal court, a county court, or the court of common
     pleas, as the case may be, must post or cause to be posted notice of the interest rate
     per annum in a conspicuous and public location in or near the offce of the clerk of
     the particular court in the courthouse or building in which that court is located.
     (R.C. 319.19, 1901.313, 1907.202, 2303.25, and 5703.47(C).)

      Computation of nostiudoment interest

            Under former law, generally, interest on a judgment, decree, or order for
     the payment of money in a civil action based on tortious conduct, including, but
     not limited to a civil action based on tortious conduct that had been settled by


Et LegtslativeServtceCommisston                -3- Sub.liB.212
     agreement of the parties, had to be computed from the date the judgment, decree,
     or order was rendered to the date on which the money was paid. This provision
     did not apply if the p-ejudgment interest provisions as described below applied.
     The provision also did not apply to a judgment, decree, or order rendered in a civil
     action based on tortious conduct if a different period for computing interest on it is
     specified by law, or if it is rendered in an action against the state in the Court of
     Claims, or in an action under R.C. Chapter 4123. (Workers' Compensation Law).
     (R.C. 1343.03(B) and (D).)

             The act provides that except as described in the following paragraph and
     the act's provisions on prejudgment interest as described below, and subject to the
     computation of interest on a revived judgment as described below under 'Revivor
     of ju ment," interest on a judgment, decree, or order for the payment of money
     in a civil action based on tortious conduct or a contract or other transaction,
     including, but not limited to a civil action based on tortious conduct or a contract
     or other transaction that has been settled by agreement of the parties, must be
     computed from the date the judgment, decree, or order is rendered to the date on
     which the money is paid and must be at the rate determined by the Tax
     Commissioner, as described above, that is in effect on the date the judgment,
     decree, or order is rendered. That rate remains in effect until the judgment,
     decree, or order is satisfied (R.C. 1343.03(B).)

               The preceding paragraph does not apply to a judgment, decree, or order
     rendered in a civil action based on tortious conduct or a contract or other
     transaction if a different period for computing interest on it is specified by law, or
     if it is rendered in an action against the state in the Court of Claims, or in an action
     under the Workers' Compensation Law (R.C. 1343.03(D)).

     Preiudrment interest

            Under prior law, interest on a judgment, decree, or order for the payment of
     money rendered in a civil action based on tortious conduct and not by
     agreement of the parties, had to be computed from the date the cause of action
     accrued to the date on which the money was paid if, upon motion of any party to
     the action, the court determined at a hearing held subsequent to the verdict or
     decision in the action that the party required to pay the money failed to make a
     good faith effort to settle the case and that the party to whom the money had to be
     paid did not fail to make a good faith effort to settle the case. (See COMMENT
     2.) This provision did not apply to a judgment, decree, or order rendered in a civil
     action based on tortious conduct if a different period for computing interest on it
     was specified by law, or if it was rendered in an action against the state in the
     Court of Claims, or in an action under R.C. Chapter 4123. (Workers'
     Compensation Law). (R.C. 1343.03(C) and (D).)



Ot Legislative Service Commission              -4- Sub. H.B. 212
             The act modifies the computation of the period for which interest is due on
     a judgment, decree, or order for the payment of money in a civil action based on
     tortious conduct that has not been settled by agreement of the parties. If, upon
     motion of any party to a civil action that is based on tortious conduct, that has mt
     been settled by agreement of the parties, and in which the court has rendered a
     judgment, decree, or order for the payment of money, the court determines at a
     hearing held subsequent to the verdict or decision in the action that the party
     required to pay the money failed to make a good faith effort to settle the case and
     that the party to whom the money is to be paid did not fail to make a good faith
      effort to settle the case, interest on the judgment, decree, or order must be
      computed as follows (R.C. 1343.03(C)(1)):

             (1) In an action in which the party required to pay the money has admitted
     liability in a pleading, from the date the cause of action accrued to the date on
     which the order, judgment, or decree was rendered;

             (2) In an action in which the prrty required to pay the money engaged in
     the conduct resulting in liability with the deliberate purpose of causing harm to the
     party to whom the money is to be paid, from the date the cause of action accrued
     to the date on which the order, judgment, or decree was rendered;

             (3) In all other actions, for the longer of the following periods:

             (a) From the date on which the party to whom the money is to be paid gave
     the first notice described in this paragraph to the date on which the judgment,
     order, or decree was rendered. This period applies only if the party to whom the
     money is to be paid made a reasonable attempt to determine if the party required
     to pay had insurance coverage for liability for the tortious conduct and gave to the
     party required to pay and to any identified insurer, as nearly simultaneously as
     practicable, written notice in person or by certified mail that the cause of action
     hadaccraed.

            (b) From the date on which the party to whom the money is to be paid filed
     the pleading on which the judgment, decree, or order was based to the date on
     which the judgment, decree, or order was rendered.

              The act precludes any court from awarding interest under the above
      described provisions on future damages that are found by the trier of fact. "Future
      damages" means any damages that result from an injury to person that is a subject
      of a tort action and that will accrue after the verdict or determination of liability by
      the trier of fact is rendered in that tort action. (R.C. 1343.03(C)(2) and R.C.
      2323.56(A)(2)--not in the act.)

             The act further provides that its prejudgment interest provisions do not
      apply to a judgment, decree, or order rendered in a civil action based on tortious

Et Legislative Service Commission               -5- Sub. H.B. 212
    conduct if a different period for computing interest on it is specified by law, or if it
    is rendered in an action against the state in the Court of Claims, or in an action
    under the Workers' Compensation Law (R.C. 1343.03(D)).

    Snecification ofpast and future damaees

            Under the act, in any tort action to which R.C. 2323.55 or 2323.56 does not
    apply (see COIVIMENT 3), if a plaintiff makes a good faith claim against a
    defendant for future damages, the trier of fact must return a general verdict and, if
    that verdict is in favor of the plaintiff, answers to interrogatories or fmdings of fact
    that specify both of the following: (1) the past damages recoverable by that
    plaintiff and (2) the future damages recoverable by that plaintif#: (R.C. 2323.57.)

    Revivor of iudzment

           Former law provided that an action to revive a judgment could only be
    brought within 21 years from the time it became' dormant, unless the party entitled
    to bring that action, at the time the judgment became dormant, was within the age
    of minority, of unsound mind, or imprisoned, in which cases the action could be
    brought within 15 years after the disability was removed (R.C. 2325.18). (See
    COMMENT 4.)

            The act shortens the period within which an action to revive a judgment
    may be brought to ten years (instead of 21 years) from the time the judgment
    became dormant, unless the party entitled to bring that action, at the time the
    judgment became dormant, was within the age of minority, of unsound mind, or
    imprisoned, in which cases the action may be brought within ten years (instead of
     15 years) after the disability is removed. The act provides that for the purpose of
    calculating interest due on a revived judgment, interest cannot accrue and cannot
    be computed from the date the judgment became dormant to the date the judgment
     is revived. (R.C. 2325.18(A) and (B).)

    AnnlicabiHtv

             The act provides that the interest rate change described above under
     "Statutory rate of interest" applies to actions pending on the effeetive date of the
     act. In the calculation of interest due under R.C. 1343.03, in actions pending on
     the effective date of the act, the interest rate provided for in R.C. 1343.03 prior to
     the amendment of that section by the act (see "Statutorv rate- of interest" and
     "Preiudrment interest," above) applies up to the effective date of the act, and the
     interest rate provided for in R.C. 1343.03, as amended by the act applies on and
     after that effective date. (Section 3.)




`^" Legislative Service Commission             -6-                               Sub. H.B. 212
     COMMENT
            1. R.C. 1343.01, not in the act, permits the parties to a bond, bill,
     promissory note, or other instrument of writing for the forbearance or payment of
     money at any fature time, to stipulate in the instrument for the payment of interest
     upon the amount of the money at any rate not exceeding eight per cent per annum
     payable annually, except tbat any party may agree to pay a rate of interest in
     excess of eight per cent per annum if any of specified circumstances exist.

            R.C. 1343.02, not in the act, provides that upon all judgments, decrees, or
     orders rendered on any bond, bill, note, or other instrument of writing containing
     stipulations for the payment of interest in accordance with R.C. 1343.01, interest
     must be computed until payment is made at the rate specified in that instrument.
           2. The rate of interest described under "Statutory rate of interest" or
     "PreiudPment interest," above, is the applicable rate of interest prescribed in
     several sections of the Revised Code (sections refer to R.C. 1343.03), among
     which are the following:

            R.C. 1353.02(C)--Repurchase of dealer's inventory; interest rate on the
     current net price of the inventory if the supplier fails to pay the repurchase amount
     within a certain period.

            R.C. 1701.95(A)(2)(c)--Liability of directors for unlawfal loans; interest
     rate on the amount of the loan until the amount has been paid.

           R.C. 2323.55(G)(l)-Future damages in medical, dental, optometric, or
     chiropractic claims; interest on the judgment if a court approves any periodic
     payments plan.'

            R.C. 2323.56(E)(1)(d)--Future damages in tort actions generally; interest on
     the judgment that a court must take into consideration in approving a periodic
     payments p1an.2

           R.C. 2335.19(C)--Entering costs on judgment and on record; rate of interest
     accruing from the date the clerk sends the first notice requesting payment of the
     fees and costs as stated in the itemized bill to the date of collection of the
     judgment.

     1 R.C. 2323.55(G)(1) refers to RC 1343.03, and B.C. 1343.03, as amended by the act,
     precludes a court from awarding interest on future damages.

     a R.C. 2323.56(E) (1)(d) refers to R.C. 1343.03, and B.C. 1343.03, as amended by the act,
     precludes a court from awarding interest on future damages.


PC Legislative Serv7ce Commission               -7- Sub. H.B. 212
            R.C. 2743.18(B)-Court of Claims; prejudgment and postjudgment interest
     on a judgment or determination against the state.

            R.C. 2744.06(B)(2)--Judgment against political subdivision; interest rate on
     a judgment or portion of a judgment payable in annual installments over a period
     not to exceed ten years.

           RC. 3123.17(A)(2)--Determination of default in issuing or modifying a
     support order; rate of interest that may be assessed on arrearage amount.

             RC. 3722.08(D) --Adult care facilities; rate of interest on civil penalty if the
     facility does not request a conference or if, after a conference, it fails to take action
     to correct a violation.

            R.C. 4113.52(E)--Prohibition against employer's disciplinary or retaliatory
     action if employee reports violation of state or federal law; rate of interest may be
     included on award of back pay for deliberate violation.

           3. R.C. 2323.55, not in the act, pertains to civil actions based upon a
     medical, dental, optometric, or chiropractic claim in which a plaintiff makes a
     good faith claim against the defendant for future damages that exceed $50,000.

             R.C. 2323.56, not in the act, pertains to tort actions, generally, that are tried
     to a jury and "vn which a plaintiff makes a good faith claim against the defendant
     for future damages that exceed $200,000.

          A court may approve a periodic payments plan with respect to the future
     damages awarded under either of those sections.

          4. Continuing law provides the following with respect to when a judgment
     becomes donnant (R.C. 2329.07--not in the act):

                    If neither execution on a judgment rendered in a court
                    of record or certified to the clerk of the court of
                    common pleas in the county in which the judgment
                    was rendered is issued, nor a certificate of judgment
                    for obtaining a lien upon lands and tenements is issued
                    and filed, as provided in sections 2329.02 and 2329.04
                    of the Revised Code, within five years from the date of
                    the judgment or within five years from the date of the
                    issuance of the last execution thereon or the issuance
                    and filing of the last such certificate, whichever is
                    later, then, unless the judgment is in favor of the state,
                    the judgment shall be dormant and shall not operate as
                    a lien upon the estate of the judgment debtor.


St LegislariveServiceCommission                 -8- Sub.Ii.B.2/2
                     If the judgment is in favor of the state, the judgment
                     shall not become dormant and shall not cease to
                     operate as a lien against the estate of the judgment
                     debtor unless neither such execution on the judgment
                     is issued nor such a certificate of judgment is issued
                     and filed, as provided in sections 2329.02 and 2329.04
                     of the Revised Code, within ten years from the date of
                     the judgment or within ten years from the date of the
                     issuance of the last execution thereon or the issuance
                     and filing of the last such certificate, whichever is
                     later.

                     If, in any county other than that in which a judgment
                     was rendered, the judgment has become a lien by
                     reason of the filing, in the office of the clerk of the
                     court of common pleas of that county, of a certificate
                     of the judgment as provided in sections 2329.02 and
                     2329.04 of the Revised Code, and if no execution is
                     issued for the enforcement of the judgment within that
                     county, or no further certificate of the judgment is filed
                     in that county, within five years or, if the judgment is
                     in favor of the state, witbin ten years from the date of
                     issuance of the last execution for the enforcement of
                     the judgment within that county or the date of filing of
                     the last certificate in that county, whichever is the
                     later, then the judgment shall cease to operate as a lien
                     upon lands and tenements of the judgment debtor
                     within that county.

                     This section applies to judgments in favor of the state.

      HISTORY

      ACTION                              DATE                         JOURNAL ENTRY

      Introduced                          06-04-03                     p.         537
      Reported, H. Civil &
         Commercial Law                    10-08-03                    p.         1098
      Passed House (96-0)                  10-15-03                    pp.        1121-1122
      Reported,S.insurance,
         Commerce & Labor                 01-29-04                     pp.        1459-1460
      Passed Senate (26-7)                02-04-04                     pp.        1507-1508

      04-hb212-125.doc/k1

PC Legislative ServPce Commission               -9- Sub. H.B. 212

								
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