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May 27, 2006

The "wet basement" case -- every lawyer's favorite -- is the subject in Zappitelli v. MillerThe plaintiffs had shelled out over half a million dollars for the property, only to find a week later that the basement was flooded and that the land around the house looked like the set of WaterworldTo top it off, the plaintiffs learned that a few days before the sale, the defendants had been told of the presence of active mold in the basement, but kinda forgot to put that on the disclosure form.  The plaintiffs sued, and were awarded $134,000 in damages for fraud, negligence, and breach of contract.  The defendants appealed the verdict, and the plaintiffs cross-appealed on the denial of their request to rescind the contract, and of attorney fees.

The court rejected the defendants' arguments, which challenged the verdict, then turned to the cross-appeal.  It held that rescission wasn't an available remedy because the disclosure statute, RC 5302.30(K), essentially prohibits rescission as long as the seller provides the required disclosure form.


As for attorney fees, the jury had declined to award punitive damages, but asked whether it could grant attorney fees.  The trial judge said no, but the court reversed, holding that the jury was entitled to award attorney fees as part of the compensatory damages.

There's some reason to question that last concusion, though.  Most of the cases the opinion relies upon are 19th century rulings which do not address the key point:  is an award of punitive damages a prerequisite to awarding attorney fees?  In the only Cuyahoga County case the court refers to, punitive damages were also awarded.  The opinion doesn't mention the decision six years ago in Captretta v. Goodsonwhich had concluded that attorney fees couldn't be given without an award of punitive damages.  The language from the Supreme Court's decision in Digital & Analog Design Corp. v. N. Supply Co., 63 Ohio St. 3d 657 (1992) also seems to back that up:

Without a finding of malice and the award of punitive damages, plaintiff cannot justify the award of attorney fees, unless there is a basis for sanctions under Civ. R. 11

To be sure, there are a number of cases which hold that attorney fees can be awarded where punitive damages would be appropriate, which seems to be what the court was driving at, but I haven't found any cases where fees were allowed absent an award of punitives, except where a statute or rule specifically allows them.

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