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Wilton S. Sogg, Executor of the Estate of Julia Sogg, Individually, et al. v. Director, Ohio Department of Commerce, Case no. 2007-1452
10th District Court of Appeals (Franklin County)
State of Ohio v. Jose A. Rivas, Case no. 2007-1611
2nd District Cout of Appeals (Greene County)
The State of Ohio ex rel. The Toledo Blade Co. v. Seneca County Board of Commissioners, Case no. 2007-1964
Michael Martin et al. v. Design Construction Services, Inc., Case nos. 2007-2023 and 2007-2024
9th District Court of Appeals (Summit County)
Suit Challenges Law That Allows State to Keep, Spend Interest Earned on Unclaimed Funds
Wilton S. Sogg, Executor of the Estate of Julia Sogg, Individually, et al. v. Director, Ohio Department of Commerce, Case no. 2007-1452
10th District Court of Appeals (Franklin County)
ISSUE: Does an Ohio law that allows the state to keep and spend the interest that accumulates on unclaimed funds overseen by the Ohio Department of Commerce authorize an unconstitutional “taking” of private property from the owners without compensation or due process of law?
BACKGROUND: Chapter 169 of the Ohio Revised Code, generally referred to as the “Unclaimed Funds Act,” creates a legal process whereby financial institutions and other public and private agencies that have possession of funds belonging to private parties who have taken no action with regard to those funds and have made no contact with the holder for a minimum statutory period (generally five years), may relinquish possession and legal responsibility for that property to the Ohio Department of Commerce. The statute requires the state to hold such funds in custody for the owners’ benefit, and to take prescribed actions including regular publication of legal notices in newspapers listing the names of owners of unclaimed property and explaining how they can file a claim to recover those funds from the Commerce Department.
Once funds have been identified as unclaimed, the statute requires that holders forward them to a state trust fund or deposit them in an interest-bearing account, and specifies that all interest on unclaimed funds in such accounts must be forwarded to the Commerce Department. The department is authorized to invest unclaimed funds in its possession and the interest those funds accrue. The law also specifies that the state may expend earnings from those investments to cover expenses of the unclaimed funds program and for other public purposes.
While the original language of the Unclaimed Funds Act made provision for the state to pay interest to owners for the period during which the state had possession of their funds, legislative amendments adopted in 1991 eliminated the payment of interest to owners.
This case involves a class action lawsuit filed by Wilton Sogg and other owners of unclaimed funds in which they challenge the constitutionality of R.C. 169.08(D), the current statutory provision that authorizes the state to retain interest earned on unclaimed funds rather than paying it to owners. The Franklin County Court of Common Pleas ruled the statute unconstitutional and certified the plaintiffs’ standing as a class to seek recovery from the state for interest that they should have received from the Commerce Department. On review, the 10th District Court of Appeals reversed the trial court, holding that the owners forfeited their right to recover interest when they left their accounts inactive for so long that the contents qualified under the law as “unclaimed funds”
The plaintiffs now ask the Supreme Court to reinstate the trial court’s ruling that R.C. 169.08 violates prohibitions in the U.S. and Ohio constitutions against any governmental “taking” of private property without fair compensation or due process. They point out that all property identified as “unclaimed” under the statute and moved to interest-bearing accounts remains titled in the name of the owner, and cite prior court decisions holding that when identifiable interest accrues on private property held by the state, there is a presumption that the legal owner of the property is entitled to that interest.
Attorneys for the state urge the Court to affirm the ruling of the 10th District and uphold the challenged statute as constitutional. They argue that private funds only become “unclaimed” by virtue of the owners’ failure to make contact with the holder or to take other minimal actions to assert or preserve their ownership interest in those funds for an extended time period. Under similar circumstances, they assert, Ohio courts have upheld state laws that terminate private ownership rights to “abandoned” property and authorize the state to take custody and dispose of it. They contend that the state’s retention of interest earned on unclaimed funds cannot be an unconstitutional “taking” of the owner’s property because the state has legal authority to retain not only the interest but also the property itself. They also assert that the legislature intended the interest earned on unclaimed funds to be retained by the state as a means of reimbursing the public treasury for the costs of administering the program.
Contacts
William C. Wilkinson, 614.469.3266, for Wilton Sogg and other owners of unclaimed funds.
Benjamin C. Mizer, 614.466.8980, for the Ohio Department of Commerce.
Must Court Allow Examination of Police Computer When Transcript of Online Conversation Challenged?
State of Ohio v. Jose A. Rivas, Case no. 2007-1611
2nd District Cout of Appeals (Greene County)
ISSUE: When the primary evidence against a criminal defendant is a police-generated transcript of an online conversation the defendant conducted via computer, and the defendant files a discovery motion to inspect the hard drive of the police computer from which that transcript was taken, does a trial court violate the defendant’s due process rights by failing to require an in-camera examination of the hard drive to verify the completeness and accuracy of the police transcript?
BACKGROUND: In January 2005, Xenia police arrested Jose Rivas of Cincinnati at a Xenia hotel after Rivas had engaged in two online chat room conversations with a police officer posing as a 14-year-old girl named “Molly.” During those conversations, Rivas made repeated and graphic sexual comments, offered “Molly” $200 to have sex with him, and arranged to meet her at the hotel. He was arrested when he showed up at the appointed place and time with condoms and $200 in cash.
Rivas was charged with felony counts of importuning for sex and attempted unlawful sexual conduct with a minor. During pretrial proceedings, Rivas filed a discovery motion seeking access to the computer hard drive on which his online conversations had been recorded. The state provided Rivas with a printed transcript of the chat room conversations, but refused to allow a defense expert to inspect or make a “mirror image” copy of the hard drive, asserting that the hard drive was a confidential investigative record not subject to discovery because it included evidence in multiple other cases including a number that were still ongoing.
Rivas asserted that the police transcript was incomplete, and asked the trial court to compel the state to allow a defense expert to examine and/or copy the contents of the hard drive. After a hearing, the court denied Rivas’ motion to compel discovery. He was convicted by a jury on both felony counts and sentenced to six months in prison. On review, the Second District Court of Appeals vacated Rivas’ convictions and sentence and remanded his case for a new trial. The appellate panel held that the trial court violated Rivas’ due process rights when the judge failed to at least conduct an in-camera inspection of the computer hard drive to determine whether the transcript provided by the state was in fact a complete and accurate record of the conversation on which the charges against the defendant were based.
The state, represented by the Greene County prosecutor’s office, sought and was granted Supreme Court review of the Second District’s ruling. The state argues that the contents of the police hard drive qualify as confidential law enforcement documents, and that prior court decisions have held that such records are not subject to discovery absent a showing of “particularized need” by a defendant. In this case, they contend, the trial court properly held that Rivas was not entitled to access or copy the actual hard drive because he did not allege that the transcript left out some specific content that would have exonerated him of the charges, and because disclosure of other information on the hard drive would have jeopardized other ongoing child endangerment cases and disclosed undercover police investigative techniques.
Attorneys for Rivas urge the Court to affirm the Second District’s holding that a defendant has a fundamental right to confront the evidence against him, and that the trial court abused its discretion when it denied Rivas any reasonable opportunity to authenticate or verify the completeness and accuracy of the transcript of his conversation, which had been prepared by the state, his adversary in the case.
Contacts
Elizabeth A. Ellis, 937.562.5250, for the state and Greene County prosecutor’s office.
Marc D. Mezibov, 513.723.1600, for Jose Rivas.
Does Public Records Law Require County to Conduct Forensic Search, Retrieve Deleted E-Mails?
The State of Ohio ex rel. The Toledo Blade Co. v. Seneca County Board of Commissioners, Case no. 2007-1694
ISSUE: Does Ohio’s Public Records Act require that a government agency conduct and pay for a forensic search of agency computers to retrieve deleted email messages when a party pursuing a public records request alleges that the deleted files are likely to include communications covered by its records request that were wrongfully deleted?
BACKGROUND: In this case the Toledo Blade newspaper asks the Supreme Court to issue a writ of mandamus which would, among other things, order the Seneca County Commissioners to undertake a forensic search of its computers to restore and make available copies of any recoverable deleted emails that were sent or received by any of the commissioners during a time period in which the Blade contends they took part in improper non-public discussions regarding the proposed demolition of the county’s historic 1884 courthouse. The newspaper‘s petition also asks the Court to award it attorney’s fees for its costs of pursuing the writ based on the commissioners’ alleged unlawful delay in producing the requested records, and to include in the writ an order that the commissioners must respond to future records requests promptly.
Attorneys for the Blade allege that the commissioners violated the Public Records Act and Seneca County’s records retention policy by deleting all or most of their email communications during the time period covered by the records request, and engaged in a “pattern of delay” in sending the emails that were forwarded to the newspaper, and only produced an additional 700 printed pages of email documents after the Blade filed this mandamus action. They ask the Court to compel the commissioners to engage the services of computer experts to retrieve and make available for inspection all of the deleted email files from the requested time period that are still recoverable.
Attorneys for the commissioners respond that they did not violate either state law or the county’s records retention rules by routinely deleting day-to-day email messages that did not involve any “significant administrative, fiscal, legal or historical value,” and assert that the Blade’s mandamus petition offers no evidence that any such records were destroyed beyond the newspaper’s speculation that improper non-public communications among the commissioners “must have taken place.” They argue that the Blade is asking the Court to judicially expand the requirements of the public records law by mandating that public agencies either must maintain exhaustive archives of thousands of non-substantive email communications or be forced to pay for costly and time-consuming forensic examinations of their computers in response to any public records request alleging that some previously deleted communication should not have been deleted.
Contacts
Fritz Byers, 419.241.8013, for the Toledo Blade.
Mark Landes, 614.221.2121, for the Seneca County Board of Commissioners.
Must Owner Prove Damage Caused Reduction in Home’s Market Value To Recover Repair Costs?
Michael Martin et al. v. Design Construction Services, Inc., Case nos. 2007-2023 and 2007-2024
9th District Court of Appeals (Summit County)
ISSUE: When a homeowner chooses to remain in his home after making structural repairs to correct damage resulting from faulty workmanship by the builder, and the owner seeks to recover from the builder for the actual costs of the repairs, is the owner barred from such recovery if he does not establish at trial that the cost of the repairs was no greater than the reduction in the fair market value of the property resulting from the damage?
BACKGROUND: In 2006, a Summit County jury awarded homeowners Michael and Jennifer Martin of Uniontown damages of $11,777 to cover the costs of substantial repairs to the foundation of their 8-year-old home, which was built by Design Construction Services Inc. (DCS). The jury found that the faulty foundation resulted from the builder’s negligence and failure to perform in a workmanlike manner. After the verdict was returned, DCS moved the trial court to enter judgment in its favor notwithstanding the verdict, based on an alleged failure to the Martins to establish their legal entitlement to the amount of damages awarded by the jury. The trial court denied the builder’s motion and entered judgment in favor of the Martins.
On review, the Ninth District Court of Appeals reversed and vacated the trial court’s judgment. The appellate panel cited a 1923 decision of the Supreme Court of Ohio, Ohio Collieries Co. v. Cocke and subsequent decisions by the Ninth District applying Ohio Collieries, which held that a property owner may recover his actual costs of repairing damage to his property only if the owner establishes at trial that the repair costs are no greater than the diminution in the fair market value of the property caused by the damage. Because the Martins failed to prove at trial that the damage to their foundation reduced the resale value of their home by at least $11,777, the court of appeals ruled that the trial court should have granted the builder’s motion for judgment notwithstanding the jury verdict.
The Ninth District subsequently granted a motion by the Martins certifying that its ruling in this case was in conflict with decisions by several other Ohio courts of appeals on the same legal issue. The Supreme Court agreed to hear arguments to resolve the conflict among appellate districts.
Attorneys for the Martins urge the Supreme Court to adopt the reasoning of the First, Fourth, Sixth and Eighth District Courts of Appeals, all of which they say have held that when a noncommercial property can reasonably be restored to acceptable condition, and the owner has personal reasons to retain the property rather than sell it, trial courts should recognize an exception to the Ohio Collieries rule and allow the owner to be compensated for its reasonable restoration costs without a showing that the repair costs were less than the reduction in fair market value of the property. They argue that it is often difficult or impossible to establish the “fair market value” of a property that has suffered structural damage, and that Ohio courts have recognized a homeowner’s right to have his damaged property restored to safe and habitable condition. They also point out that in this case the damage caused by the builder’s faulty workmanship took place during the original construction of the house, and that the undetected damage had thus always been present but not reflected in the “market” prices paid by either the original purchaser or by the Martins.
Attorneys for Design Construction respond that the rule of law established in the Supreme Court’s Ohio Collieries decision, which the Court has never abandoned or overruled, still requires a plaintiff to prove that damage repair costs he seeks to recover do not exceed the reduction in market value of the property resulting from the damage. They contend that most of the “conflict” cases from other appellate districts cited by the Martins are not germane to this case because the damaged property in those cases had no separate “market value” or because the type of damage involved in those cases, while costly to repair, had virtually no impact on the overall valuation of the property. In this case, they point out, the Martins specifically alleged that the faulty foundation they had to repair reduced the value of their property by $18,000, and the jury specifically found that they had not proved the claimed diminution of value.
Contacts
Kristen E. Campbell, 330.305.6400, for Design Construction Services Inc.
James R. Russell, 330.376.8336, for Michael and Jennifer Martin.
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Parties interested in receiving additional information are encouraged to review the case file available in the Supreme Court Clerk's Office (614.387.9530), or to contact counsel of record.