Doug Holthus: FMLA Leave Must Run Concurrently With Other Forms of Paid Leave

Doug’s article was recently featured in Ohio Association of Civil Trial Attorneys (OACTA’s) 2019 Spring Quarterly Review :

U.S. Department of Labor: Opinion Letter / March 18, 2019: FMLA Leave Must Run Concurrently With Other Forms of Paid Leave.

Ah, the halcyon days of youth:

“I’m just a bill; yes, I’m only a bill, and if they vote for me on Capitol Hill, well then I’m off to the White House where I’ll wait in a line with a lot of other bills for the president to sign; and if he signs me, then I’ll be a law. How I hope and pray that he will, but today I am still just a bill.”

However, with the benefit of twelve years of primary education, four years of undergraduate studies (unless you were one of those fortunate few who permitted themselves a “Victory Lap”), six semesters of law school, a tedious, three day exam and so many years of practice, we realize the lyricist may have missed at least one additional stanza … unless, of course, that stanza was sacrificed as a compromise during Committee hearings:

“I’m now a law, yes I’m finally a law, and I thought I held the power of voice. But no one cared to tell me I’d be subject to interpretation and caprice and now there’s a letter from the Department Secretary; and if he decides what it is I’m really s’posed to mean then the winds of change may carry my voice away” …

Click here to enjoy the full article – Holthus ~ OACTA 2019 Spring Quarterly Review

MRR’s June 2019 Employment Law Bulletin: Are Your Websites ADA Compliant?

Check out MRR’s June 2019 Employment Law Bulletin, including:

  • Are Your Websites ADA Compliant?
  • Understanding Volunteers
  • Start Gathering Your EEO-1 Component 2 Data!
  • New MRR Attorney – Cynthia Sands spotlight

Employment Attorney Cynthia L. Sands joins MRR’s Cleveland Office

MRR is pleased to announce that Cynthia L. Sands has joined the firm’s Cleveland office, where she will work as Senior Attorney in the Employment & Labor Law group. Ms. Sands has over 25 years of experience in employment and public sector law.

Cynthia’s primary area of focus is on labor and employment law, and civil rights and governmental liability, with an emphasis on litigation and counseling. She has successfully represented public entities and big and small companies in federal and state courts and before administrative tribunals. She defends employers against claims for wrongful termination, gender, race and disability discrimination, retaliation, harassment, and wage and hour and civil rights violations. Ms. Sands has extensive trial experience, as well as experience resolving cases before trial, either by prevailing on dispositive motions or by negotiating settlements.

Prior to joining MRR, Cynthia served as Senior Trial & Litigation Counsel at a handful of insurance defense laws firm in Los Angeles, California, where she lived for the past 20 years. A graduate of Capital University Law School, she is admitted to the bar in Ohio and California. Additionally, she earned her undergrad from The Ohio State University.

Ohio Adds New Exceptions to the Definition of “Public Records” Relating to Dash-Cam and Body-Cam Recordings

By: Ami Imbrogno

In this day and age, it seems that not a week goes by without turning on the evening news, logging onto Facebook, or firing up a YouTube application and seeing videos depicting police encounters with civilians.  Many of these videos are recorded on private cell phones and released by private citizens; however, some of these videos have been obtained by individuals, news sources, or other entities via public record request, the laws surrounding which are changing.

On January 7, 2019 Governor Kasich signed into law HB 425, “Declare police body camera recordings not to be public records,” to be effective April 8, 2019.  The law does not declare that all dash-cam and body-cam recordings are not public record, but instead declares that “restricted portions” of the recordings are not included in the definition of public record.  The law defines “restricted portions as the following:

  • The image or identity of a child or information that could lead to the identification of a child who is a primary subject of the recording when the law enforcement agency knows or has reason to know the person is a child based on the law enforcement agency’s records or the content of the recording;
  • The death of a person or a deceased person’s body, unless the death was caused by a peace officer or the consent of the decedent’s executor or administrator has been obtained;
  • The death of a peace officer, firefighter, paramedic, or other first responder, occurring while the decedent was engaged in the performance of official duties, unless consent of the decedent’s executor or administrator has been obtained;
  • Grievous bodily harm, unless the injury was effected by a peace officer or the consent of the injured person or the injured person’s guardian has been obtained;
  • An act of severe violence against a person that results in serious physical harm to the person, unless the act and injury was effected by a peace officer or the consent of the injured person or the injured person’s guardian has been obtained;
  • Grievous bodily harm to a peace officer, firefighter, paramedic, or other first responder, occurring while the injured person was engaged in the performance of official duties, unless the consent of the injured person or the injured person’s guardian has been obtained;
  • An act of severe violence resulting in serious physical harm against a peace officer, firefighter, paramedic, or other first responder, occurring while the injured person was engaged in the performance of official duties, unless the consent of the injured person or the injured person’s guardian has been obtained;
  • A person’s nude body, unless the person’s consent has been obtained;
  • Protected health information, the identity of a person in a health care facility who is not the subject of a law enforcement encounter, or any other information in a health care facility that could identify a person who is not the subject of a law enforcement encounter;
  • Information that could identify the alleged victim of a sex offense, menacing by stalking, or domestic violence;
  • Information, that does not constitute a confidential law enforcement investigatory record, that could identify a person who provides sensitive or confidential information to a law enforcement agency when the disclosure of the person’s identity or the information provided could reasonably be expected to threaten or endanger the safety or property of the person or another person;
  • Personal information of a person who is not arrested, cited, charged, or issued a written warning by a peace officer;
  • Proprietary police contingency plans or tactics that are intended to prevent crime and maintain public order and safety;
  • A personal conversation unrelated to work between peace officers or between a peace officer and an employee of a law enforcement agency;
  • A conversation between a peace officer and a member of the public that does not concern law enforcement activities;
  • The interior of a residence, unless the interior of a residence is the location of an adversarial encounter with, or a use of force by, a peace officer; and,
  • Any portion of the interior of a private business that is not open to the public, unless an adversarial encounter with, or a use of force by, a peace officer occurs in that location.

Those exceptions that allow disclosure upon receipt of consent of the subject may only be released with the consent if one of the following apply:

  • The recording will not be used in connection with probable or pending criminal proceedings; or,
  • The recording was used in connection with a criminal proceeding that has been dismissed or for which a judgment has been issued, and will not be used again in connection with any probable or pending criminal proceedings.

 The law also provides that if a public office denies a request to release a restricted portion of a recording, the requestor may file a complaint for mandamus with the court of claims, which will allow the release if it determines by clear and convincing evidence that public interest substantially outweighs privacy interests and other interests asserted to deny release.

Many of these components of the definition fall within other exceptions to public records and government entities are probably already withholding or redacting recordings that contain those components, such as confidential law enforcement investigatory records or information pertaining to the recreational activities of a person under the age of eighteen. However, government employees who handle the release and redaction of records should familiarize themselves with the new definition and continue to follow all other laws relating to public records.  For example, records should be redacted where possible and only fully withheld if redaction would create a substantial burden or would remove all value from the recording.

Government entities should also review their records retention schedules to make certain it addresses this type of footage.  They should remember that even if these materials are no longer public record, they could be relevant to future litigation.

Finally, the new law does not make it clear what procedures are required to be followed in obtaining “consent” to release records; it does not prescribe what lengths the government entity needs to go to in order to obtain consent or in which form the consent must be.  Those who obtain consent to release records should in the minimum ensure that consent is given knowingly and in writing.


For more information on this matter or any other civil rights and government liability questions, contact Ami at aimbrogno@mrrlaw.com or 440.505.2713.

Ami is an Attorney in MRR’s Cleveland office and focuses her practice on civil rights and government liability defense, employment and labor defense, public sector law, and education law.

 

George Pilat Of Mazanec, Raskin & Ryder Elected To Chair The Solon Chamber Of Commerce Board Of Directors For 2019

Mazanec, Raskin & Ryder Co., LPA (MRR) is proud to announce that attorney George V. Pilat has been elected Chair of the Solon Chamber of Commerce Board of Directors. Voting took place in December with officers beginning their term on January 1, 2019. The Solon Chamber serves as advocates for the business community by supporting and fostering vibrant economic growth. George has been a member of the Chamber’s Board of Directors since 2015, a Vice Chair since 2017, and has served on the Membership, Finance, and Governance Committees.

Mr. Pilat, a Partner at the firm’s Cleveland office, focuses his practice on business and commercial law, and insurance defense. He is Chair of the firm’s Business & Commercial Law Practice Group and Co-Chair of the Insurance Agents & Brokers Practice Group. He represents small and medium-size businesses and business owners as well as national and regional insurance companies, agencies, and agents, in all forms of transactional and litigation matters. George has also been selected as one of the “Best Lawyers in America” for 2018 and 2019 in the field of insurance law.

For over 30 years George has built up his role as the “Legal Business Advisor” to all his clients, helping them to properly structure their organizations and operations, identify and address risks and challenges they face, provide sound counsel advice, and develop and implement cost-effective solutions to run their organizations better.

In addition to his service with the Solon Chamber of Commerce, Mr. Pilat is also a member of the Cleveland Metropolitan Bar Association, Great Lakes Funding Network, and the Insurance Board of Northern Ohio (IBNO). George was also presented the “Friend of the Insurance Industry” award by the IBNO in 2013.

MRR announces 2019 Ohio Super Lawyers & Rising Stars

Mazanec, Raskin & Ryder Co., L.P.A., today announced that eleven of its Ohio-based attorneys have been selected to the 2019 Ohio Super Lawyers and Rising Stars lists. In the firm’s Cleveland office, Tom Mazanec, Todd Raskin, John McLandrich, Frank Scialdone, and Jeffrey Kay were named to the Super Lawyers list. Tami Hannon and Cara Wright were included in the ranks of Rising Stars. In the Columbus office, Doug Holthus and Paul-Michael La Fayette earned Super Lawyers honors, while Stacy Pollock and Chenee Castruita were named Rising Stars. Each year, no more than five percent of lawyers in the state are named to the Super Lawyers list, and no more 2.5 percent are selected to the Rising Stars list.

 

Tom Mazanec  is a founding partner of MRR and has played an essential role in establishing many of the firm’s practice specialties, since 1980. He serves as a lead trial attorney in both MRR’s Cleveland and Columbus offices. Mr. Mazanec has a diverse legal practice, with a special emphasis on liquor liability, professional liability, product liability, construction and wrongful death claims. He has handled liquor liability cases for more than 30 years and has tried numerous matters to verdict. He also has considerable experience in trying catastrophic injury and wrongful death cases as well as cases involving seven and eight figure exposure for his clients. He has tried cases in virtually every county in the State of Ohio with a special emphasis on catastrophic injury and wrongful death cases involving seven and eight figure exposures for his clients. In the area of professional liability, Tom defends doctors, lawyers, insurance agents, accountants, appraisers, home inspectors and other professionals against malpractice claims. He is a life-long resident of Ohio and has practiced in all 88 counties. Tom earned his Super Lawyer rating for his work on Product Liability, Construction, Liquor Liability and Wrongful Death: Defense.

 

Todd M. Raskin is a founding partner of Mazanec, Raskin & Ryder, Co., L.P.A., and is based in the firm’s Cleveland office. He has a diverse legal practice with an emphasis on civil rights and government liability defense, as well as the defense of employers, both public and private. He has tried more than 100 cases to conclusion in 35 years of private practice in many courts throughout Ohio and the Midwest and is a member of a number of professional organizations, including the American Board of Trial Advocates, the Association of Defense Trial Attorneys, the Federation of Defense and Corporate Counsel, and the Litigation Counsel of America. Todd has earned his Super Lawyer rating for 8 years in a row, beginning in 2012, for his work in State, Local & Municipal Law, Employment Litigation: Defense, and Professional Liability: Defense.

 

 

 

 

John T. McLandrich is a partner and Chairman of the Board. John’s practice focuses on the representation of municipalities, including defending cases on behalf of police and public entities accused of violations of civil rights and in employment matters. For over 30 years he has handled matters including claims of jail suicide, police pursuit, false arrest, excessive force by police officers, and failure to properly train police officers. He has represented civil defendants in federal and state courts throughout Ohio, serving as lead trial counsel. He has represented clients in class action matters, including municipalities relating to class action sewer cases. His appellate experience consists of handling and arguing matters before the Sixth Circuit Court of Appeals, where he has argued over 100 cases, as well as hundreds of cases before many of Ohio’s Courts of Appeal, including the Ohio Supreme Court, where he has won eight favorable decisions. John earned his Super Lawyer rating for his work in Appellate Law, State, Local & Municipal Law, and Civil Rights Law.

 

 

Frank H. Scialdone is a partner in the firm’s Cleveland office and focuses his practice on appellate advocacy in state and federal courts with an emphasis on employment law, constitutional torts (Section 1983), public entity defense, and insurance defense. He has handled more than 200 appellate cases in the Ohio Supreme Court, Ohio’s intermediate appellate district courts, and the Sixth Circuit Court of Appeals. He routinely consults with trial attorneys on error preservation and pre-appeal strategy. Frank has prosecuted and defended original actions (e.g., mandamus, prohibition, etc.) and has submitted amicus curiae (friend of the court) briefs on behalf of clients and organizations. He is one of the first attorneys to be certified as a specialist in appellate law by the Ohio State Bar Association. Frank has earned his 2019 Super Lawyer rating for his work in Appellate Law.

 

 

 

Jeffrey Kay is a partner in the firm’s Cleveland office and focuses his practice on civil rights and governmental liability, business and commercial law, and appellate law, with a concentration on civil litigation defense. He represents insurance companies/risk pools and their insureds with respect to both first and third-party claims, including employment discrimination, professional liability, municipal liability, automobile negligence claims, general commercial matters, bad faith claims, uninsured/underinsured claims, products liability, wrongful death claims, commercial premises liability claims, and property and casualty claims. He also has significant experience counseling clients in insurance coverage matters, including the securing of declaratory judgments on policy interpretations. Mr. Kay has successfully handled cases before state and federal administrative agencies, with a focus on representing clients before the Equal Opportunity Employment Commission (EEOC) and the Ohio Civil Rights Commission (OCRC). He has achieved success on behalf of his clients before state and federal appellate courts, having successfully argued cases before most of the Ohio Appellate Circuit Courts.

 

Tami Zupkow Hannon is a partner in the firm’s Cleveland office and is a listed Rising Star in State, Local & Municipal Law, Employment Litigation: Defense, and Civil Litigation: Defense. She focuses her practice on defending governmental entities, their employees and elected and appointed officials, particularly those in law enforcement and corrections. Tami also practices extensively in the field of employment law, providing personalized and comprehensive guidance to address not only the direct employment issue at hand but also the larger civil liability context. In addition to providing guidance during the critical decision making process, Ms. Hannon assists in later defending decisions should they be challenged before the courts or an administrative agency. She also provides timely and personalized training in various employment matters, and has experience under the ADA, ADEA, FMLA, FLSA, Title VII, and their state-law counterparts.

 

 

Cara M. Wright, a Columbus associate, represents counties, municipalities, and their employees in a variety of cases, including claims related to alleged violations of the United States Constitution, violations of Ohio’s public record laws, and state law tort claims. She has successfully defended clients in cases involving the use of deadly force, jail suicides, and claims that inmates were provided inadequate medical care while incarcerated in county jails. Cara also represents public and private employers in cases alleging employment discrimination.  Additionally, her experience includes representing professionals, including physicians, nurse practitioners, nurses, behavioral health specialists, accountants and attorneys, in claims of professional negligence. In addition to her representation of clients in state and federal court, she has also appeared in cases before the Ohio Civil Rights Commission and the U.S. Equal Employment Opportunity Commission. Cara earned the designation of Rising Star for State, Local & Municipal Law.

 

 

Doug Holthus, Administrative Partner for the firm’s Columbus office, is listed as a Super Lawyer for his work in Civil Litigation: Defense, Employment Litigation: Defense, Construction Litigation, and Civil Rights Law. His primary areas of focus are professional negligence defense, employment, civil rights and government liability, construction claims litigation and general liability matters. He has tried, advocated and or arbitrated nearly one hundred cases before civil juries, administrative licensing (and other) boards and arbitration panels in Ohio, Illinois and California, in both state and federal court. Among other professional and civic activities, Doug is actively involved as a volunteer for The Miracle League of Central Ohio, serves as a coach/advisor for the Bishop Watterson High School / Ohio High School Mock Trial Teams, is a Columbus Bar Foundation Fellow, is past-Chair of the Columbus Bar Association’s Professionalism Committee, and previously served as a Member of the Board of Directors of the Professional Liability Defense Federation.

 

 

Paul-Michael La Fayette is a partner in the firm’s Columbus office andconcentrates his practice on professional liability defense, including the defense of dentists, physicians, real estate agents and attorneys. He represents professionals in administrative licensure proceedings before their professional Boards. In addition to professional liability, Paul regularly represents governmental entities in litigation and as general counsel. He has extensive experience in representing clients in lawsuits involving professional malpractice, premises liability, contracts, employment, construction, civil rights, zoning, wrongful death and products liability.

 

 

 

 

 

Stacy V. Pollock, a partner in the firm’s Columbus office, focuses her practice on employment and labor law. She is a certified specialist in Labor and Employment and is a certified Professional in Human Resources. She advises public and private employers in matters involving leave and discipline issues, personnel policy matters, and labor negotiations and arbitrations. She has experience representing clients before various governmental administrative agencies including the Equal Employment Opportunity Commission, the Ohio Civil Rights Commission, the State Personnel Board of Review, the State Employment Relations Board, and the Ohio Department of Education. Stacy also has considerable experience in education law, representing schools and school administrators in matters involving employee and student discipline.

 

 

 

Chenee Castruita is an associate in the firm’s Columbus office and focuses her practice in the areas of Civil Rights and Government Liability, Employment and Labor Law, and Insurance Coverage and Bad Faith claims. Prior to joining MRR, Chenee worked at a plaintiff’s personal injury firm where she gained extensive experience representing plaintiffs in medical negligence matters as well as experience representing injured workers in their workers’ compensation claims. In addition to her administrative experience representing clients at workers’ compensation hearings and appeals, Ms. Castruita has appeared before various Common Pleas courts in Central and Southern Ohio and has argued before the Tenth District Court of Appeals. Chenee earned the designation of Rising Star for her work in Personal Injury: Defense

 

 

 

Super Lawyers and Rising Stars have attained a high-degree of peer recognition and professional achievement. The patented selection process includes independent research, peer nominations and peer evaluations. For more information about Super Lawyers, visit SuperLawyers.com.

MRR School Alert: Teacher’s Failure to Enter Grades Constitutes Good and Just Cause for Termination

By: Stacy V. Pollock

Ever since the Ohio General Assembly amended the state’s teacher termination statute (R.C. §3319.16) years ago to reference a “good and just cause” standard, school boards have struggled to understand what constitutes “good and just cause.” Last week, an Ohio state court of appeals confirmed that a teacher’s failure to enter her student’s final grades constitutes “good and just cause”, and thus is a terminable offense under R.C. §3319.16.

In Thomas v. Dayton Pub. Schools Bd. of Edn., 2018-Ohio-4231 (2nd Dist., Oct. 19, 2018), the Board of Education initiated termination proceedings against a teacher on four counts including a count of failure to enter final grades for her students. Pursuant to her statutory rights, the teacher demanded an administrative hearing. A Referee took three days of testimony and evidence, and ultimately recommended no termination on all counts except on the charge that the teacher failed to enter final grades for her students.

The Board reviewed the hearing transcript and evidence, rejected the recommendation on the first three counts, and found that all counts were sufficiently supported so as to constitute good and just cause for termination under R.C. §3319.16. As she was permitted to do, the teacher appealed the Board’s decision to the common pleas court. The teacher argued, in part, that the intent of §3319.16 is not served if the Board can reject the Referee’s findings without an explanation.   The trial court may only reverse a board’s order of termination of a teacher’s contract where it finds that the board’s termination order is not supported by or is against the weight of the evidence. The trial court vacated the Board’s Order as to each of the charges except the charge relating to the teacher’s failure to enter final grades.

The trial court affirmed the Board’s decision to terminate based upon the charge of her failure to enter her students’ final grades. The Ohio Second Appellate District reviewed the trial court’s decision to ensure that the trial court had not abused its discretion. The Second District held that the trial court had not abused its discretion.

Like the Referee, the Board and the trial court, the Second District determined that the teacher’s failure to enter final grades into the school’s electronic grading system was sufficiently good and just cause for termination. The evidence did not support the teacher’s explanation that she was unfamiliar with the electronic system used for grades and was therefore unable to submit the grades. The teacher knew that the grades were due, knew that the final grades were critical to students, and she knew that the grades would be due a month before their due date.  Yet, she made scant effort to input the grades on time.

While this matter ultimately was determined in favor of the Board (pending any possible appeal by the teacher to the Ohio Supreme Court), the Board spent over two years of energy and possibly significant financial resources defending the termination. Boards are encouraged to stay apprised of court decisions that assist in defining the §3319.16 “good and just cause” standard.  Mazanec, Raskin & Ryder (MRR) will continue to keep an eye on any other noteworthy cases and report them, accordingly.


For more information on this matter or any other school law questions, contact Stacy at spollock@mrrlaw.com or 614.324.0163.

Stacy is a Partner in MRR’s Columbus office and is a certified specialist in employment and labor law, in addition to a certified Professional in Human Resources. She has considerable experience in education law, representing schools and school administrators involving employee and student disciplinary matters. Stacy also advises public and private employers in matters involving leave and discipline issues, personnel policy matters and labor negotiations and arbitrations.

 

MRR Alert ~ Ohio Supreme Court Makes it Clear: Faulty Work is not Fortuitous

By: Chenee M. Castruita

On October 9, 2018, The Ohio Supreme Court issued its anticipated Decision in Ohio Northern University v. Charles Construction Services, Inc., et al., Slip Opinion No. 2018-Ohio-4057 holding that a subcontractor’s faulty work is not an “occurrence” under a commercial general liability (“CGL”) policy. The Court determined that in the commercial construction setting, an insurer underwriting and issuing CGL coverage is not required to defend or indemnify its policyholder or any named insured against claims for property damage caused by a subcontractor’s faulty workmanship.

A Review of Westfield Inc. Co. v. Custom Agri Sys., Inc. (2012) 133 Ohio St.3d 476, 2012-Ohio-4712, 979 N.E.2d 269

In reaching this Decision, the Court re-visited its 2012 holding in Westfield Inc. Co. v. Custom Agri Sys., Inc. In this earlier case, Custom Agri, as a subcontractor, had allegedly faultily constructed a steel grain storage bin. Custom Agri was an insured under a CGL policy issued to it by Westfield Insurance which covered property damage caused by an “occurrence.” Westfield Inc. Co. v. Custom Agri Sys., Inc., 133 Ohio St.3d 476, 2012-Ohio-4712, 979 N.E.2d 269 at ¶ 3.At the trial court level, Westfield intervened, seeking declaratory judgment and a determination that it had no duty to defend or indemnify Custom Agri, inasmuch as all claims were related to Custom Agri’s own work and did not involve “property damage” caused by an “occurrence”, as those terms were defined within the Westfield policy. Ohio N. Univ. v. Charles Constr. Servs., Inc., Slip Opinion No. 2018-Ohio-4057 at ¶¶ 13-15, citing Westfield Inc. Co. v. Custom Agri Sys., Inc., 133 Ohio St.3d 476, 2012-Ohio-4712, 979 N.E.2d 269.

The Ohio Supreme Court ultimately decided that the Westfield’s policy definition of “occurrence” as being an “accident, including continuous or repeated exposure to substantially the same general harmful conditions” did not include property damage caused by the insured contractor’s own faulty work. Ohio N. Univ. v. Charles Constr. Servs., Inc., Slip Opinion No. 2018-Ohio-4057, citing Westfield Inc. Co. v. Custom Agri Sys., Inc., 133 Ohio St.3d 476, 2012-Ohio-4712, 979 N.E.2d 269 at ¶¶ 11-14. The Court reasoned that because an “accident” inherently involves fortuity, and faulty work is not fortuitous, there was no coverage under the Westfield CGL policy related to claims for property damage caused by faulty work. Id. at ¶ 18.

While Custom Agri Sys. was a subcontractor and its policy may have included a products-completed operations-hazard (“PCOH”) clause as well as a subcontractor clause, the Court determined that these separate provisions were not addressed directly. Now, and in its most recent Decision on the issue, the Ohio Supreme Court has directly addressed the effect of PCOH and subcontractor clauses. Id. at ¶ 19.

 

Ohio Northern University v. Charles Construction Services, Inc., et al. (2018)
Slip Opinion No. 2018-Ohio-4057

Factual Background
In Ohio Northern University v. Charles Construction Services, Inc., et al., Ohio Northern University contracted with Charles Construction Services, Inc. to construct the University Inn and Conference Center. The contract required Charles Construction to maintain a CGL policy that included a PCOH clause. Charles Constr. at ¶ 4. Charles Construction obtained a CGL policy with both a PCOH clause as well as a subcontractor clause from Cincinnati Insurance Company. The policy included terms specific to work performed by subcontractors. Charles Construction paid an additional premium for the PCOH coverage. Id. at ¶ 5.

After work was completed, Ohio Northern University discovered water damage from leaks believed to be caused by defective work of Charles Construction and its subcontractors. Ohio Northern University filed suit, and Charles Construction answered and filed third-party complaints against its subcontractors. Charles Construction submitted its claim to Cincinnati Insurance Company and asked that it defend and indemnify Charles Construction. In response, Cincinnati Insurance Company intervened at the trial court level, seeking declaratory judgment and a determination that it was not obligated to either defend or indemnify Charles Construction, due to the earlier Decision in Custom Agri. Id. at ¶¶ 7-8.

The particular PCOH clausecovered property damage “occurring away from premises you own or rent and arising out of  *** ‘your work’ except *** work that has not yet been completed or abandoned”. Charles Constr. at ¶ 24. It further excluded coverage for property damage to the policyholder’s work arising out of it or any part of it.  However the Court  specifically stated the exclusion did not apply if the damaged work was performed by a subcontractor. Id. at ¶ 26.

The Ohio Supreme Court’s Analysis
Despite the Cincinnati Insurance Co. CGL policy containing both PCOH language as well as subcontractor-specific language, the Court found there was no coverage for the subcontractor’s faulty work. Specifically, the Court found the PCOH and subcontractor-specific language had no effect, since the damage was not due to an “occurrence” under the Coverage A portion of the Cincinnati Insurance Co. CGL policy:

“The language within the Coverage A portion of the CGL policy is critical to the policy’s overall effect. It states that CIC agrees to pay for property damage under certain circumstances. But the damage must be due to an “occurrence,” which the policy defines as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” Again, there is no question that the water-related damage to the inn was “property damage” and was discovered after the work had been completed. But unless there was an “occurrence,” the PCOH and subcontractor language has no effect, despite the fact that Charles Construction paid additional money for it.

If the subcontractors’ faulty work were fortuitous, the PCOH and subcontractor-specific terms would require coverage. But as we explained in Custom Agri, CGL policies are not intended to protect owners from ordinary “business risks” that are normal, frequent or predictable consequences of doing business that the insured can manage. Here we cannot say that the subcontractors’ faulty work was fortuitous.”

Ohio N. Univ. v. Charles Constr. Servs., Inc., Slip Opinion No. 2018-Ohio-4057 at ¶¶ 28-29, citing Westfield Inc. Co. v. Custom Agri Sys., Inc., 133 Ohio St.3d 476, 2012-Ohio-4712, 979 N.E.2d 269.

The Court acknowledged its decision to be contrary to recent decisions of other courts, and cited its duty to look to the plain and ordinary meaning of the language in the CGL policy to find the intent of the parties. Id. at ¶ 32.

Looking Forward
It seems clear from this Decision that the Court considers faulty construction work to be an anticipated business risk of a contractor or general contractor, and will not require an insurer to defend or indemnify against claims or damages arising out of faulty work, at least in cases where a CGL policy exists limiting covered damages to those caused by an “occurrence.”

Contractor and subcontractors should revisit their current insurance risk plans and coverages, and work directly with their respective brokers, agents and insurers to determine the current status of their risk coverages.

We also recommend those contractors that are either anticipating or presently involved in pending litigation reach out to their insurers, agents and/or brokers, immediately, for further guidance.


For more information on Ohio Northern University v. Charles Construction Services, contact Chenee Castruita at 614.324.1039 or via email at ccastruita@mrrlaw.com.

 

MRR Lexington Proud to Sponsor the Kentucky League of Cities “2018 City Employee of the Year” Award

Mazanec, Raskin & Ryder (MRR) is proud to once again sponsor the Kentucky League of Cities (KLC) “City Employee of the Year Award” which brings recognition to an exceptional city employee who performs at a distinguished level to improve his or her local government and community. KLC represents more than 20,000 municipal employees.

MRR Lexington’s Administrative Partner, Barry Miller, presented Hopkinsville Police Chief Clayton Sumner with the honor on September 18, 2018 during the KLC Conference & Expo.

By sponsoring this award, MRR will provide a $1,000 donation to Hopkinsville/Christian County Boys and Girls Clubs in honor of Chief Sumner.

To view the official KLC press release, click here.

Ohio Safe Harbor for Cybersecurity Compliance Effective this November

Ohio’s Data Protection Act becomes effective November 2, 2018

By: Chenee M. Castruita

Ohio’s incentive for businesses to actively create, maintain and comply with cybersecurity programs becomes effective November 2, 2018. Senate Bill 220, also known as the Data Protection Act, will amend Ohio Revised Code Sections 1306.1 and 3772.01 and enact Chapter 1354, and will encourage businesses to comply with an industry-recognized cybersecurity framework. Those who do, may use such compliance as an affirmative defense to any tort action arising out of an alleged failure to implement reasonable information security controls.

Personal and Restricted Information

The safe harbor defense is available not only for those actions based on an alleged breach of personal information, but restricted information as well. Personal information is defined as the connection of a person’s name with another identifier such as their Social Security number, driver’s license or state identification number, or a financial account number. Businesses are currently required to disclose data breaches involving personal information under O.R.C. § 1349.19.

Restricted information is much broader in that it includes “any information about an individual, other than personal information, that, alone or in combination with other information, can be used to distinguish or trace the individual’s identity or that is linked or linkable to an individual”. Consider information such as email addresses, member ID numbers, or PINs being released without any connection to the individual’s name. The inclusion of restricted information in O.R.C. Chapter 1354 gives businesses an opportunity to demonstrate compliance even if the information affected is not of a nature which would trigger the disclosure requirements of O.R.C. § 1349.19.

Compliance Requirements

To be eligible for the affirmative defense, the cybersecurity program must 1) protect the security and confidentiality of the information; 2) protect against any anticipated threats or hazards to the security or integrity of the information; and 3) protect against unauthorized access to and acquisition of the information that is likely to result in a material risk of identity theft or other fraud to the individual to whom the information relates.

As this safe harbor provision is available to businesses of all sizes, Ohio legislators have recognized that a “one size fits all” approach is not appropriate when it comes to evaluating a cybersecurity program. Whether the scale and scope of a cybersecurity program is appropriate will depend on a number of factors, including the business’s size and complexity, the nature and scope of its activities, the sensitivity of the information to be protected, the cost and availability of tools to improve information security and vulnerabilities, and the resources available to the business.

An eligible business will create, maintain, and comply with at least one of multiple frameworks identified in the legislation, including frameworks developed by the National Institute of Standards and Technology (NIST), the Center for Internet Security Controls for Effective Cyber Defense, the security requirements of HIPAA, and the Payment Card Industry Data Security Standard (PCI DSS).

These programs contain administrative, technical and physical safeguards as required under O.R.C. Chapter 1354. Administrative safeguards address security and information management, incident procedures, and contingency plans, among other items. Technical safeguards include controls on access, audits, and integrity. Finally, physical safeguards relate to who physically accesses the information and how the information is used.

A business complies with one of the identified frameworks so long as it updates its own program within one year of any revisions to the framework itself.

Implementation and Looking Forward

A compliant cybersecurity program will touch on every aspect of a business and should influence employee training, vendor selection and agreements, and top-to-bottom evaluation of access to information.

Vendors should be able to provide information as to their own cybersecurity measures and policies. Employees should be made aware of your cybersecurity program, and they should be trained in its procedures as much as they are in the day-to-day operations of your business. Finally, there should be an ongoing evaluation as to who should have necessary access to information, what kind of information they should be able to access, and when they should be able to access the information.

Generally, cybersecurity firms differ from IT firms, and as such businesses should feel comfortable having a conversation with their current IT vendors about their ability to assist in implementing and maintaining a cybersecurity program. It may be necessary to retain a cybersecurity firm.

It is important to note that the safe harbor only provides an affirmative defense-not an absolute immunity- to tort actions. This will not apply to actions arising out of breach of contract, and the business will still need to demonstrate its compliance with its chosen framework.

Also noteworthy is the legislation’s allowance of transactions and contracts via blockchain technology, which allows transactions with cryptocurrencies such as Bitcoin to take place. While not all businesses are comfortable using these technologies, currencies like Bitcoin are increasing in use and popularity due in part to the ability to verify the legitimacy of the transaction. Ohio’s Data Protection Act gives some peace of mind to businesses who have been hesitant to participate in blockchain technology.

Ohio’s Data Protection Act encourages businesses to jumpstart their cybersecurity programs and provides them with the frameworks to do so. While there is certainly an up-front cost to implementing a cybersecurity program, the amount of data and privacy breaches in recent years makes it a worthwhile investment.


For more information on Ohio’s Data Protection Act and Ohio Safe Harbor compliance, contact Chenee Castruita at 614.324.1039 or via email at ccastruita@mrrlaw.com.