The prosecutor claimed that requesting and obtaining those records through a strawman and using Ohio’s public records statutes trigger reciprocal discovery under Criminal Rule of Procedure 16.  Rule 16 provides that when a criminal defendant makes a request in the criminal case for discovery from the prosecution, that in turn triggers a right in the prosecution for discovery from the defendant.

The City of Cincinnati argued successfully in Municipal Court that the public records request triggered reciprocal criminal discovery (even though the rule provides no such thing).  This week, Hamilton County’s First District Court of Appeals reversed that trial court finding, holding that the use of Ohio’s public records statute to obtain discovery relating to criminal cases does not trigger reciprocal discovery from the defendant, a major win for open records in Ohio.

The case is State of Ohio v. Athon, First Appellate District of Ohio Case No. C-110236 – 110239 (consolidated) and C – 110-290.

Buy-sell agreements serve two functions by (1) restricting transfers of ownership interests in the business, and (2) creating a limited market for the ownership interests. This prevents ownership interests from otherwise falling into the hands of outsiders who aren’t active participants in the business or who lack a long-term commitment to the business. Although few people are interested in purchasing interests in closely held businesses, sales do sometimes occur. In addition, outsiders can acquire interests as a result of involuntary transfers in creditors’ rights or marital dissolution proceedings involving a business owner, and business interests can be transferred by gift or by contribution to the capital of another business entity. Buy-sell agreements typically seek to restrict transfers of all types by giving the business or the other owners the right to purchase any interest that an owner wishes to transfer voluntarily or that has been transferred involuntarily.

The lack of a market for interests in small businesses can create an awkward situation when an owner retires, becomes disabled, or dies. The affected owner will no longer be employed by the business, and the owner, or his or her family, may need to liquidate the business interest to pay living expenses or to seek investments providing a greater current return. At the same time, the other owners may prefer not to have a co-owner who is no longer involved with the business and very likely will be even less interested in having members of the former owner’s family as co-owners. The interests of all parties can be accommodated if a buy-sell agreement requires the business or the other owners to purchase the interest of an owner on retirement, death, or disability. By specifying the price and terms of purchases, the buy-sell agreement can also streamline ownership transitions and avoid costly disputes at times when a business may already be vulnerable as a result of having lost one of its principal owners.

Please contact Jim Keller in our Business Law practice area at 513-533-2983 or

jkeller@fssp-law.com to review and update your buy-sell agreement.

When Michael Bustle started working as a hairstylist at Michael’s in 1995, he signed an agreement which included a one-year non-compete clause. He left in August 2007 and rented a booth at a competing salon. Michaels sued Bustle several months later, after noticing that his clients did not return. The parties agreed to a settlement under which Bustle would not provide any hair styling or hair care treatment for one year — that is, Bustle essentially agreed to abide by his non-compete clause — and the trial court journalized an entry incorporating their agreement.

After Bustle’s customers still did not return, Michaels hired a private investigator to determine whether Bustle was violating the court’s order. After a seven-month investigation the PI determined that Bustle was still providing the prohibited services, and Michaels filed a motion for contempt.

At the contempt hearing, Bustle admitted to providing prohibited services to 180 former Michaels clients and had profited over $37,000 in nine months of doing so. Testimony from Michaels revealted that its lost profits for the same work would have been about twice as much, and that it had incurred about $15,000 in attorney’s fees and about $52,000 in PI fees. The trial court found Bustle in contempt, awarded damages and costs totaling about $140,000 to Michaels, and enjoined Bustle from competing for an additional 11 months.

On appeal, the First District rejected Bustle’s arguments that the agreed order did not comply with Rule 65 (because Bustle agreed to it, he had no cause to complain — somewhat similar to invited error, if any error) and that Michaels waited too long to pursue its contempt motion (the court found the time to be reasonable due to the necessary investigation).

On the issue of whether Michaels was awarded a double recovery by virtue of a disgorgement of profits and an extended non-compete term, the court explained that in a contempt case, the court has power to both coerce compliance with the court’s order, and to compensate the the party injured by the contempt. By disgorging the profits and awarding the costs to Michaels in addition to extending the non-compete term, the First District said, the parties were merely put back in the position that they would have been in if there had been no contempt. As a result, there was no double recovery.

Judge Hendon disagreed on the double recovery issue. Because the non-compete period has now expired, however, and cannot be undone, she concurred in the judgment.

The Court held that the statute does not provide for compound interest, and that therefore only simple interest is available — unless the written instrument or some more specific statute provides otherwise. But the Court also held that interest accrues after default on all sums which were due and payable before the default; if the written agreement called for interest to be paid before the default, then R.C. 1343.02 allows interest to accrue on that prior interest (in addition to any principal, of course).

The case is Fields Excavating, Inc. v. McWane, Inc., 2009-Ohio-5925 [PDF].