Selling Your Home? Be Sure to Disclose Any Known Issues.

In Markel v. Wright, 2013-Ohio-5274, Brooke Markel, the Plaintiff, sued the former owners of her home after encountering moisture in her basement.  To remedy the wet basement, the Plaintiff spent $16,500 to waterproof the basement. 

Prior to selling the home, the Wrights, the former owners and Defendants, properly disclosed they had previously encountered moisture in the basement, but had remedied the issue through regularly running a dehumidifier and emptying it every 24-36 hours.

In her lawsuit against the former owners, Markel alleged that Wrights failed to disclose the defective basement and fraudulently induced her into purchasing the home.

The court disagreed, finding that the sellers absolved any liability on this issue through properly disclosing the issue on Residential Property Disclosure Form prior to sale. 

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Attachment of GPS Device Without Warrant Violates 4th Amendment

In State v. Sullivan, 2013-Ohio-5276, the Fifth District Court of Appeals tackles whether it is constitutional for law enforcement to attach a GPS monitoring device to a suspects car without a search warrant.  In short, law enforcement believed the suspect, Montie Sullivan, was involved in a series of home invasions. 

Due to limited government resources, law enforcement was without the manpower to constantly monitor the suspect’s movement through physical surveillance.  Instead, law enforcement, without a warrant, attached a GPS monitoring device to the suspect’s vehicle to track his whereabouts.  His vehicle was subsequently monitored to be in the vicinity of another home invasion.  Following the invasion, law enforcement obtained a search warrant to search the suspect’s home where they found a number of items that were taken during the home invasion.

On appeal, the appellate court ruled that the evidence related to the suspect’s whereabouts through the GPS monitoring device on his vehicle should be excluded from consideration.

As an interesting twist, in addition to installing a GPS monitoring device on the suspects car, law enforcement did properly obtain a search warrant to track the suspect’s whereabouts through tracking the suspect’s mobile telephone.  With regard to the evidence obtained through tracking the suspect’s mobile telephone, the appellate court ruled this evidence was admissible because law enforcement had obtained the proper warrant.

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Court of Appeals Upholds Contractual Rate of Interest

The Fifth District Court of Appeals has rendered its decision in Phoenix Fin. Solutions, Inc. v. Jackson, 2013-Ohio-5280. In this case, the Defendant entered into a promissory note for the purchase of a motor vehicle. The Defendant defaulted on his payments resulting in the automobile being repossessed and a deficiency on the promissory note. The promissory note provided for a 21% APR to accrue in the event of default.

Phoenix Financial Services, Inc., the Plaintiff, brought an action to recover the deficiency balance. The Plaintiff and Defendant entered into a consent judgment for the Plaintiff to recover the balance due on the loan. The consent judgment provided that the Defendant was to make monthly payments of $75.00 with the contractual interest rate of 21% continuing to accrue.

The trial court, on its own, struck the interest term from the consent judgment. In its place, the court permitted interest to accrue at the statutory rate of 3% per annum.

On appeal, the Plaintiff challenged the trial court’s decision to change the interest term. Citing R.C. 1343.03, the Fifth District Court of Appeals agreed with the Plaintiff. The appellate court remanded the matter back to the trial court for disposition consistent with the appellate court’s decision.

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“But I’m the power of attorney” — “Good for you”

I am not sure who to blame for this.  Perhaps it is the fault of lawyers who fail to properly advise clients when a power of attorney is signed.  Or, maybe what I am seeing is the result of the information age where forms and documents are readily available and people do not realize they don’t have all of the information.  Regardless of the cause, it’s happening.  What’s happening?  Folks continuing to act under the guise of a power of attorney when the principal is dead.  Whoops?  Yeah, that’s a big, big whoops.

A power of attorney is a document signed by a principal empowering an “attorney-in-fact” to act on the principal’s behalf.  The document itself delineates the duties and powers of the appointed “attorney-in-fact.”  The foundation of this legal relationship is based upon agency law.  In fact, let’s look at Section 1.01 of the Restatement Third (literally, this is rule 1):

Agency is the fiduciary relationship that arises when one person (a “principal”) manifests assent to another person (an “agent”) that the agent shall act on the principal’s behalf and subject to the principal’s control, and the agent manifests assent or otherwise consents so to act.

In layman’s term, for the relationship to exist, you need an agent (the attorney-in-fact) to act on behalf of and subject to the control of the principal.  

So this brings us back to step one.  If the principal is dead (unable to control the agent), how could an agent possibly act under the authority of a power of attorney?  The person can’t.  He or she simply doesn’t know any better.  And, depending upon what he or she has done, there may be some liability there. 

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Changes to Ohio’s Statute of Limitation for Written Contracts

The Ohio Legislature was busy this year bringing about many changes to the Ohio Revised Code; however, few changes are more important to service providers and lenders than the changes brought about by S.B. 224.

Historically, R.C. 2305.06 provided a fifteen (15) year statute of limitation for the commencement of a legal action on a written contract. However, when the 129th General Assembly passed S.B. 224, R.C. 2305.06 was amended and changes took effect on September 28, 2012.

R.C. 2305.06 now provides, “[A]n action upon a specialty or an agreement, contract, or promise in writing shall be brought within eight years after the cause of action accrued.”

To make sure you are not sleeping on your rights, it will be important to review outstanding legal obligations and take steps to commence civil action within this new timeframe where approriate.

If you have questions regarding how this change in law impacts a specific situation, please feel free to contact our office to discuss your matter.

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Home Builder’s Duty to Construct Home in a ‘Workmanlike Manner’ Can’t Be Waived

The Ohio Supreme Court issued a decision in Jones v. Centex Homes this week and concluded that a home builder’s obligation to construct a home in a workmanlike manner cannot be waived in contract.

The facts underlying the suit center around metal joists that were used in construction of the home that emitted a magnetic field.  The magnetic field from the metal joists interfered with the home buyer’s electronics and caused several electronic devices to fail.

The home builder argued that the warranties included on the home were contained in the contract, and if the defect was not specifically warranted in the contract, the home builder owed the home buyer no legal obligation.  The Ohio Supreme Court disagreed, ruling “a home builder’s duty to construct a house in a workmanlike manner using ordinary care is a duty imposed by law, and a home buyer’s right to enforce that duty cannot be waived.”

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Government Attachment of GPS Unit to Car is Violation of Fourth Amendment

The United States Supreme Court just issued its opinion on United States v. Jones in January of 2012.  The issue before the Court was whether or not law enforcement’s attachment of a GPS unit to a suspect’s vehicle was a violation of the suspect’s Fourth Amendment rights.  The Fourth Amendment protects the “right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures.”

Here, the Court ruled that the Government’s physical intrusion on an “effect” — the automobile — for the purpose of obtaining information constituted a “search.”  The Court stated “[t]his type of encroachment on an area enumerated in the Amendment would have been considered a search within the meaning of the Amendment at the time it was adopted.”

Scalia delivered the opinion of the Court and was jointed by Roberts, Kennedy, Thomas and Sotomayor.  The remaining justices concurred in judgment but filed separate opinions.

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Should These Children Receive Social Security Benefits?

After a quick review of the United State Supreme Court’s docket for upcoming oral arguments, a case with a peculiar fact pattern caught my eye.  Astrue v. Capato is set for oral argument in March of 2012, and the fact pattern seems to be something more likely to be seen in a Soap Opera than real life.

Mrs. Capato is the surviving widow whose husband died of cancer.  After being diagnosed with cancer, Mr. Capato had some of his sperm frozen because his doctors advised that treating his condition could result in him becoming sterile.  Mr. Capato subsequently passed away from his medical condition.

After Mr. Capato’s death, Mrs. Capato went through in vitro fertilization and eighteen months following her husband’s death, she gave birth to twins.  Mrs. Capato applied for social security benefits on behalf of her twins.  The Social Security Administration denied the request for benefits and the Third Circuit Court of Appeals reversed.

The U.S. Supreme Court will determine whether or not the children are eligible for Social Security benefits and I expect the decision to be issued sometime during the summer of 2012.

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Power of Attorney Does Not Permit Self-Dealing

A power of attorney is a document signed by a principal that empowers another person, an agent or attorney-in-fact, to perform acts on behalf of the principal.  There are some key limitations to what an agent or attorney-in-fact may do on behalf of the principal.

First and foremost, a power of attorney is only valid as long as the principal is alive.  That is to say, if the principal dies, the attorney-in-fact has no power or right to continue to act on behalf of the principal.

Second, an attorney-in-fact is prohibited from any act of self-dealing.  In Tewksbury v. Tewksbury, a court invalidated a number of property transfers an attorney-in-fact made because the attorney-in-fact was self-dealing.  In that case, a father signed a power of attorney nominating his son to serve as his attorney-in-fact.  After the power of attorney was signed, the son proceeded to transfer all of his father’s property into his own name.  Whenever an attorney-in-fact performs any act whereby the attorney-in-fact benefits financially, it will likely be seen as self-dealing and is void.

If you are serving as an attorney-in-fact, it is important that you have a clear understanding of what you may do and what you are prohibited from doing.  Failing to abide by the law may result in your actions being invalidated.

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Officer’s Illegal Seizure Results in Suppression of Evidence

On October 7, 2009, two police officers pulled into a Walgreens parking lot and noticed a pickup truck that was poorly parked leaving the rear of the vehicle hanging approximately four feet into the thoroughfare of the parking lot. The officers stopped their cruiser, got out and walked around the vehicle.  Moments later, two men came out of the Walgreens and approached the truck. 

One officer stopped the driver of the truck and began to speak with him about how the vehicle was parked.  The second officer attempted to stop the passenger, but the passenger just walked past the officer and opened the door to the truck and began to climb inside the vehicle.  The officer came up behind the passenger, grabbed him by the shoulders, and pulled him out of the truck.  At that time, the officer observed a small bag which contained between one and four grams of heroin.  The passenger was arrested for possession of illegal substances.

Prior to trial, the passenger’s attorney argued the evidence (the bag of heroin) should be suppressed (thrown out) because the officer finding it occurred after an illegal seizure (grabbing the passenger).  The trial court disagreed and found the heroin to be admissible evidence.

The matter was appealed to the Second District Court of Appeals.  On appeal, the court found that the passenger was under no obligation to speak with the officer.  Further, the passenger had not committed any illegal act in front of the officer or done anything which could give the officer a reasonable suspicion that a crime was occurring or would occur.  Accordingly, the court found the officer violated the passenger’s Fourth Amendment rights by illegally seizing the passenger.  Because the seizure was illegal and the officer’s discovery of the drugs occurred because of the seizure, the court ruled the drugs could not be used as evidence against the passenger.

If you have been charged with a crime and you believe the charges are the result of an illegal search or seizure, it is important to seek the advice of legal counsel.  Fourth Amendment rights are a nuanced area of the law, and if your rights were violated, it could result in the State’s evidence being thrown out.

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