Court News Ohio
Court News Ohio
Court News Ohio

Tuesday, Feb. 27, 2018

Ohio Bureau of Workers’ Compensation v. Michael Cirino et al., Case no. 2017-0179
Eighth District Court of Appeals (Cuyahoga County

Columbus Bar Association v. Bradley D. Keating, Case no. 2017-1740
Franklin County

State of Ohio v. Anthony Carnes, Case no. 2017-0087
First District Court of Appeals (Hamilton County)

Must Court of Claims Hear Challenge to Workers’ Compensation Fee Dispute?

Ohio Bureau of Workers’ Compensation v. Michael Cirino et al., Case no. 2017-0179
Eighth District Court of Appeals (Cuyahoga County

ISSUE: Must a lawsuit to recover funds from the Ohio Bureau of Workers’ Compensation — for fees charged by a bank contracted to provide injured worker benefits through debit cards — be filed in the Ohio Court of Claims?

The Ohio Bureau of Workers’ Compensation (BWC) challenges the right of a group of injured workers to file a class-action lawsuit against the bureau in Cuyahoga County Common Pleas Court. BWC maintains such cases must be filed in the Ohio Court of Claims. In its briefs to the Supreme Court, the bureau urges the Court to provide more clarity regarding the types of lawsuits that can be brought against the state outside of the court of claims. BWC notes that millions of dollars are at issue in at least two other BWC cases and a third case against another state agency filed in Cuyahoga County, which the state contends belong in the court of claims.

Bureau Switches to Electronic Benefit Payments
Historically, BWC distributed payments to injured workers by paper checks. In 2006, the Ohio General Assembly enacted R.C. 4123.311, which implemented a mandatory electronic payment system. Under the system, injured workers have two options for receiving benefits. They can opt for direct deposit into their own bank accounts with their financial institutions, or they can receive a debit card from BWC. In 2007, BWC selected JP Morgan Chase to implement the Chase Direct Payment Card Program, in which Chase established an individual account for each workers’ compensation benefit recipient. Two times a month, BWC distributes benefits to the Chase accounts, and the injured workers can use the debit card to access the money.

Fee Schedule Included
The agreement between Chase and BWC included a fee schedule, stating the fees Chase is authorized to charge benefit recipients. While Chase provided the injured workers with options to access their benefits without fees, it charged for 10 different types of activities. The bank allowed recipients one free teller transaction per month at a Chase or participating bank. There was a $5 charge per transaction charge for a second and any subsequent teller transaction each month.

Injured Worker Given Debit Card
Michael Cirino became eligible for workers’ compensation benefits in 2009. He was awarded $443 in weekly benefits and was paid $886 every two weeks. Cirino refused to provide BWC his personal bank account information and was issued a Chase debit card. He received notice from BWC about the program and a flier touting the card’s benefits, including the statement: “Pay no more check cashing fees. Receive 100 percent of your benefit.” Cirino didn’t recall signing an attached card agreement and BWC officials were unsure whether they closely tracked the collection of card agreements when the program began. Electronic payment was mandatory, and the injured workers had to agree with the terms.

Cirino activated his card and went to a Chase bank, where he withdrew his $886 in cash through a transaction with a teller. Later that month, he attempted to withdraw his second monthly payment, which a teller initially refused. He was told his account had only $881, which he was eventually paid. He then learned that about the $5 fee for a second teller visit, yet he continued to make cash withdrawals twice a month.

Cirino initiated the class-action lawsuit against BWC in Cuyahoga County Common Pleas Court. At the time of his deposition for the case, he estimated he lost about $150 in fees from the teller visits. BWC requested summary judgment, arguing the court lacked jurisdiction because Cirino was seeking “monetary damages” from the bureau, and those types of suits can only be filed against a state agency in the court of claims. Shortly after the 2012 deposition, Chase changed its terms, allowing a free teller visit after every BWC deposit.

The trial court ruled that Cirino was seeking “monetary relief,” in the form of the rest of his benefit payment and not as a penalty against the bureau. Those types of cases can be heard in common pleas court, the court stated. Over BWC’s objections, the court also certified the case as a class action and scheduled further proceedings to determine how many other injured workers were impacted by fees. The bureau appealed to the Eighth District Court of Appeals, which affirmed the trial court’s decision, and the bureau appealed that ruling to the Supreme Court. The Court agreed to hear only the claim that the common pleas court lacked jurisdiction to hear the case.

Precedent Directs Suit to Court of Claims, Bureau Asserts
The bureau presents three arguments on why the suit belongs in the court of claims, arguing the most direct way for the Supreme Court to reach that conclusion is by relying on recent precedent. BWC points to the Court’s 2011 Measles v. Indus. Comm’n of Ohio decision, in which injured workers were seeking more benefits than they were paid. The injured workers labeled their lawsuit in common pleas court as a “complaint for equitable relief only,” seeking a declaratory judgment from the court stating that the bureau wasn’t following state law; an injunction was needed to prevent the bureau from continuing the practice that the workers claimed denied them money; and requesting an order directing BWC to “disgorge” the benefits into the workers’ compensation fund that should be paid to the workers.

BWC explains the Court determined the claim was for the money, and that the workers were seeking restitution. That meant the workers weren’t seeking equity, but rather a “remedy at law,” and that type of case must be pursued in the court of claims. The bureau claims the same reasoning applies to Cirino. It argues that Cirino made the choice to take the Chase debit card rather than have the benefits paid directly to his bank account. When he made that decision, he entered into a contract with Chase to retrieve his benefits, and Chase offered options to Cirino and the other injured workers that allowed them access to all their benefits for free. Chase’s terms and conditions in their contracts controlled the issue of whether Cirino had to pay the $5 charge.

BWC notes that it didn’t pay Chase anything to administer the program, and Chase testified that it earned more than $1.4 million in fees from charges it imposed on the workers. BWC maintains that the state law requires BWC to pay all “administrative costs” when issuing injured workers’ benefits. The Measles decision found that if a Court had to interpret a contract in order to determine the liability of the bureau, then it is a lawsuit seeking damages, not a lawsuit seeking reimbursement. Those kinds of suits must be filed in the court of claims, BWC states.

BWC notes that a 1975 law opened up the state to more lawsuits, but directed that those suits generally seeking money damages must be initiated in the court of claims. The law usually allows “equity” lawsuits to continue in a common pleas court. In its brief, the bureau cites cases, such as one declaratory judgment claiming that a state liquor law was invalid could be filed against a state agency in common pleas court.

The bureau notes there are important reasons that cases against the state are heard in the court of claims, including limits on the state’s liability for mistakes and shorter statutes of limitations for filing a claim. BWC argues the state legislature made a deliberate decision on jurisdiction when it opened the state to more lawsuits.

“Respecting the separation of powers means that this Court must respect the General Assembly’s choice to channel most suits to the Court of Claims,” the BWC brief states.

Bureau Can’t Shift Blame to Bank, Worker Argues
Cirino argues that none of the injured workers were made aware of the fee charges when the debit card and the card agreements were sent to them. He maintains that under R.C. 4121.39, the bureau must pay injured workers their full benefits and that the bureau is obligated to pay the administrative costs of operating its programs. He argues his claim isn’t a contract dispute with Chase, but rather a disagreement with BWC, which set up a method to benefit from the savings of switching from paper checks to electronic payments. Then the bureau placed all the costs of that switch onto the injured workers in the form of fees to use the debit cards, he claims.

The purpose of the lawsuit isn’t based on the contract agreement with Chase, but rather for “the sole purpose of collecting the remainder of the full benefits due under the Act,” Cirino’s brief stated. And a case to collect the remaining portion of the benefit isn’t an effort to seek “money damages” from the BWC, but one seeking “monetary relief,” which is a type of case that can be filed in common pleas court, Cirino argues.

While the BWC maintains Cirino’s issue is with Chase, Cirino notes a provision in the legislation authorizing the electronic payment program, R.C. 4123.311(A)(3), allowed the bureau to retain Chase as its “agent” for the purpose of administering the program. Because Chase is the bureau’s agent, the bureau is responsible for paying the fee back to the workers, Cirino contends.

Cirino urges the Court to look at the precedent set by the Court’s 2004 Santos v. Ohio Bur. of Workers’ Comp. decision, which found that a BWC program recovering some funds from injured workers was unconstitutional. The Court ruled the workers weren’t seeking damages as a “substitute” for money lost, but to claim money they were entitled to receive. That decision permitted the lawsuit to be filed in common pleas court and should apply to his case, he concludes.

“As the Eighth District properly recognized below, Plaintiffs have never sought money damages as a substitute for a loss,” Cirino’s brief states. “They are seeking the benefits that remain due to them under the Act, which is ‘the very thing’ to which they are entitled.”

- Dan Trevas

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.

Representing the Ohio Bureau of Workers’ Compensation from the Ohio Attorney General’s Office: Eric Murphy, 614.466.8980

Michael Cirino et al.: Paul Flowers, 216.344.9393

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Attorney Discipline

Columbus Bar Association v. Bradley D. Keating, Case no. 2017-1740
Franklin County

The Ohio Board of Professional Conduct recommends that Columbus attorney Bradley Keating receive a six-month suspension, fully stayed on certain conditions, for failing to keep and maintain appropriate financial records.

Attorney Takes Over Law Firm in 2012
From 2003 to 2009, Keating was an associate attorney at Magelaner & Associates. He was made partner in 2009, and his name was added to the firm’s name. In January 2012, Keating became owner of the firm and renamed it The Keating Firm after Thomas L. Magelaner sold his interest. Since that time Keating has had authority over the firm’s financial matters, including its client trust accounts, which are referred to as an Interest on Lawyers’ Trust Account (IOLTA).

The firm employed Rebecca Gee Meyer as an associate attorney from 2006 to 2012. Meyer worked in the Cincinnati office, and Keating’s office was in Columbus. Beginning in 2010, Meyer was suspended from practicing law for varied periods, including an indefinite suspension imposed in February 2015.

Chiropractor Doesn’t Receive Payments from Law Firm
In separate cases, three clients hired the firm through the Cincinnati office in 2011 to represent them after suffering injuries in motor vehicle accidents. Two of the clients and the third client’s child received treatment from a local chiropractor. The firm agreed to pay the chiropractor from any settlement funds. When he wasn’t paid, the chiropractor filed a grievance against Keating. By May 2017, Keating still hadn’t paid the chiropractor, in part because of inaccurate records that indicated checks had been written to the health care professional.

Law Firm Changes Accounting Services
In 2008, Keating and Magelaner noticed accounting discrepancies in work done by the Louisiana company that handled the firm’s bookkeeping. The lawyers hired a new accounting service that year, and the prior accounting firm refused to provide records to help reconcile the prior IOLTA. The lawyers opened a new IOLTA, identified as account 2500, and eventually transferred funds from the old account. In July 2011, the law firm opened another new IOLTA. Because there were unidentified funds in account 2500, Magelaner and Keating left it open. It is unclear who owns the approximately $75,000 in account 2500.

Board Recommends Six-Month Stayed Suspension with Conditions
The professional conduct board concluded that Keating violated various attorney conduct rules, including requirements to perform monthly financial reconciliations and to maintain records of client’s accounts for seven years. There was also a period between December 2015 and July 2017 when Keating didn’t inform clients that he no longer had professional liability insurance, the board noted.

The board report to the Supreme Court points to the multiple offenses as an aggravating factor. The report also states that Keating has now paid the chiropractor in full, has no prior discipline, hasn’t shown a dishonest motive, and has been cooperative during the disciplinary process. The board report also finds as mitigating that the problems with the first accounting firm and the law firm’s transfer of funds from old to new IOLTAs were steps taken in good faith and appeared to be intended to protect clients and third parties.

With Meyer no longer employed by the firm, the board concluded that the public will be protected if Keating’s suspension is completely stayed on certain conditions, including two years of monitored probation, the hiring of someone with accounting expertise during the probation to ensure proper IOLTA management, and completion of three hours of continuing legal education related to client fund management.

Bar Association Argues for Additional Condition
While the Columbus Bar Association doesn’t take issue with the recommended six-month stayed suspension or the conditions, it asks the Supreme Court to impose another condition on Keating’s suspension.

The bar association explains that Keating can’t account for the $74,517.14 that remains in account 2500 as of October 2017. The purpose of financial records required by the attorney conduct rules is to ensure that the lawyer can identify “who owns every penny in the lawyer’s trust account,” the bar association’s objection states. Keating hired a forensic accountant in 2017 to try to sort out this issue, but her report concluded that these funds are “most likely” profits for the firm and “unlikely” to be client funds. Noting that the records don’t exist for clients whose funds may be in the account, the bar association recommends that Keating be required to turn over the money to the state’s division of unclaimed funds to follow certain statutory procedures.

Attorney Believes Extras Condition Is Unwarranted
Keating responds that no client or third party is making a claim to any of these funds, the last payment from account 2500 was at least six years ago, and the forensic accountant concluded the money is owned by the law firm. He argues that other disciplinary cases have allowed lawyers to collect legal fees once any client disputes or IOLTA discrepancies are resolved. He maintains that the funds in account 2500 aren’t “unclaimed funds” based on the definition in R.C. 169.01, nor is he a “holder” of unclaimed funds. Keating asks the Court to decline to impose the additional condition recommended by the bar association.

- Kathleen Maloney

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.

Representing the Columbus Bar Association: Amy Bostic, 614.221.7663

Representing Bradley D. Keating: Alvin Mathews Jr., 614.460.1619

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Is It Constitutional for Adult To Be Charged for Illegally Possessing Firearms Based on Juvenile Offense?

State of Ohio v. Anthony Carnes, Case no. 2017-0087
First District Court of Appeals (Hamilton County)

ISSUE: May a juvenile adjudication satisfy an element of an offense committed as an adult?

Anthony Carnes was involved in a fist fight at a mall in 1994. The 17-year-old went to juvenile court for an offense that would have been felonious assault had he been an adult. The court found him delinquent.

Twenty years later, in 2014, Carnes was indicted for illegally possessing a gun. The legal charge is described as “having weapons while under a disability,” a third-degree felony under state law, R.C. 2923.13.

Carnes asked the trial court to dismiss the charge because the “disability” was his juvenile adjudication decades earlier. He noted that he wasn’t represented by counsel in the juvenile matter. The court denied the request. Carnes was found guilty and sentenced to 30 months in prison.

On appeal, the First District Court of Appeals upheld the trial court’s decision. Carnes appealed to the Ohio Supreme Court, which accepted the case.

Statute: Illegally Having Firearms

The relevant part of R.C. 2923.13 in 2014 stated “[N]o person shall knowingly acquire, have, carry, or use any firearm or dangerous ordnance, if … [t]he person is under indictment for or has been convicted of any felony offense of violence or has been adjudicated a delinquent child for the commission of an offense that, if committed by an adult, would have been a felony offense of violence.”

Statute: Illegally Having Firearms

The relevant part of R.C. 2923.13 in 2014 stated “[N]o person shall knowingly acquire, have, carry, or use any firearm or dangerous ordnance, if … [t]he person is under indictment for or has been convicted of any felony offense of violence or has been adjudicated a delinquent child for the commission of an offense that, if committed by an adult, would have been a felony offense of violence.”

Juvenile Indiscretion Shouldn’t Be Used as Basis for Adult Crime, Carnes Argues
Carnes points to the Ohio Supreme Court’s ruling in State v. Hand (2016), which stated that “a juvenile adjudication is not a conviction of a crime and should not be treated as one.” In Hand, the Supreme Court determined that a juvenile adjudication may not be used to enhance the degree of, or the sentence for, a later criminal offense committed as an adult. Given that Hand bars a juvenile offense from being used to increase punishment for an adult crime, Carnes questions how a juvenile adjudication can be the essential underlying offense for a crime committed as an adult, especially when the sentence results in the loss of liberty.

Carnes argues it is unconstitutional, based on the reasoning in Hand, for a juvenile adjudication to be used as an element of an offense charged against an adult. He explains that the state’s juvenile justice system is designed to rehabilitate, rather than punish, juvenile offenders because children are different than adults. Ohio’s juvenile system also provides for both the mandatory and discretionary transfer of juvenile offenders accused of the most serious offenses to adult court. Because his offense didn’t rise to that level of seriousness, his case remained in the juvenile court, Carnes notes.

Emphasizing that there is no right to a jury trial in juvenile court and that a juvenile case isn’t a criminal proceeding, Carnes contends that R.C. 2923.13 unconstitutionally equates an adult felony conviction with a juvenile adjudication.

“[The juvenile justice] system, which aims to wipe the slate clean, does not support the retention of future consequences attached to a distant juvenile adjudication. … If it did, then youthful indiscretions, in effect, would lie in wait to negatively impact a rehabilitated youth’s life years later, which this Court has expressly identified as inappropriate,” the brief to the Court states.

Carnes disputes the application to his case of the U.S. Supreme Court’s decision in Lewis v. United States (1980). In Lewis, the U.S. Supreme Court upheld laws enacted “to keep guns out of the hands of those who have demonstrated that they may not be trusted to possess a firearm without becoming a threat to society.”

Carnes states that none of the conduct in Lewis involved a juvenile offense. Carnes stayed in the juvenile system for rehabilitation for his offense, and he argues the concern expressed in Lewis shouldn’t apply to a rehabilitated minor who rightfully has a gun as an adult.

Some Adults with Juvenile Records Shouldn’t Have Firearms, State Asserts
The ruling in Hand doesn’t apply in this case because no increased punishment results for a person with a juvenile offense charged under R.C. 2923.13, the Hamilton County Prosecutor’s Office maintains. The statute imposes a third-degree felony for anyone who illegally carries a firearm or dangerous ordnance, the prosecutor notes. The prosecutor argues the law allows a juvenile adjudication as an element of an offense committed as an adult, and nothing in Hand prohibits that.

The General Assembly decided that it wanted to prevent certain people from possessing firearms, including people who had been found delinquent as minors of felony offenses involving violence or drugs, the prosecutor states.

The prosecutor explains that the U.S. Supreme Court in Lewis rationally found that federal gun laws prohibiting those with a felony conviction, even an unconstitutional conviction, from having or selling firearms because of potential dangers. The prosecutor notes, though, that the federal law included no prohibition based on juvenile offenses.

“[I]t is logical to conclude that if [the U.S. Supreme Court] felt an unconstitutional conviction could be used to create a valid firearm disability that it would likewise feel that a juvenile adjudication could also be used to create one,” the prosecutor’s brief states.

The prosecutor also cites the Ohio Supreme Court’s 1995 decision in State v. Tanaguchi, in which the Court ruled that a conviction for having a weapon while under a disability still stands “when there is an acquittal on, or dismissal of, the indictment which had formed the basis for the charge of having a weapon while under disability.”

A juvenile adjudication is an even more reliable reason to prevent the adult from having or selling firearms than an unconstitutional conviction or an acquittal, the prosecutor contends. R.C. 2923.13 is rationally related to a legitimate government purpose, the prosecutor argues.

Another law, R.C. 2923.14, offers steps to remove a firearms disability by applying to a common pleas court. While contending that this statute play no role in the case, the prosecutor maintains that the possibility for a person to obtain relief from a firearms prohibition only strengthens the state’s position.

Organizations Submit Friend-of-the-Court Briefs
The Buckeye Firearms Association has filed an amicus curiae brief supporting Carnes. Citing the Second Amendment to the U.S. Constitution, the association argues that Ohio is prohibited from criminalizing otherwise legal firearm use and possession based on a juvenile adjudication because the adjudication isn’t a criminal conviction.

Also supporting Carnes in a joint amicus brief is the Juvenile Law Center and National Juvenile Defender Center. The organizations contend that the rehabilitative purpose of the juvenile system in Ohio is in direct conflict with the part of R.C. 2923.13 that makes possession of a firearm illegal and a felony offense only because of an adjudication as a delinquent juvenile.

The Cuyahoga County Prosecutor’s Office has submitted an amicus brief supporting the Hamilton County Prosecutor’s Office. A person who commits a violent felony offense is a “bad risk” and shouldn’t be permitted to legally possess a firearm, and being a juvenile with this record doesn’t make the person any less of a danger, the brief states.

- Kathleen Maloney

Docket entries, memoranda, briefs (including amicus briefs), and other information about this case may be accessed through the case docket.

Representing Anthony Carnes from the Ohio Public Defender’s Office: Peter Galyardt, 614.728.0171

Representing the State of Ohio from the Hamilton County Prosecutor’s Office: Scott Heenan, 513.946.3227

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These informal previews are prepared by the Supreme Court's Office of Public Information to provide the news media and other interested persons with a brief overview of the legal issues and arguments advanced by the parties in upcoming cases scheduled for oral argument. The previews are not part of the case record, and are not considered by the Court during its deliberations.

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.