Vahila v. Hall

[This opinion has been published in Ohio Official Reports at 

77 Ohio St.3d 421

.]




            VAHILA ET AL., APPELLANTS, v. HALL ET AL., APPELLEES.
                       [Cite as Vahila v. Hall, 

1997-Ohio-259

.]
Torts—Legal malpractice—Requirements to establish cause of action for legal
        malpractice based on negligent representation.
To establish a cause of action for legal malpractice based on negligent
        representation, a plaintiff must show (1) that the attorney owed a duty or
        obligation to the plaintiff, (2) that there was a breach of that duty or
        obligation and that the attorney failed to conform to the standard required
        by law, and (3) that there is a causal connection between the conduct
        complained of and the resulting damage or loss. (Krahn v. Kinney [1989],
        

43 Ohio St.3d 103

, 

538 N.E.2d 1058

, followed.)
                                ____________________
  (No. 95-2196—Submitted November 12, 1996—Decided February 12, 1997.)
       APPEAL from the Court of Appeals for Stark County, No. 94CA0184.
                                ____________________
        {¶ 1} On July 1, 1993, appellants, Terry R. Vahila, James G. Vahila, and
Vahila Insurance Agency, filed a legal malpractice action against Charles D. Hall
III, Ralph F. Dublikar, and the law firm of Baker, Meekison & Dublikar, appellees.
Appellants’ malpractice action arose in connection with appellees’ representations
of appellants in several civil matters, appellees’ representations of Terry Vahila
with respect to certain criminal charges that had been brought against her, and
appellees’ representation of Terry during an investigation of her by the Ohio
Department of Insurance. In their complaint, appellants claimed that they had
sustained damages as the direct and proximate result of appellees’ negligent
representations in the various civil, criminal, and administrative matters.
Appellants further set forth claims against appellees for “extreme” emotional
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distress. Additionally, James Vahila sought recovery against appellees for loss of
consortium.
       {¶ 2} Appellees answered appellants’ complaint and denied any negligence
in their prior representations of appellants. Appellees also filed a counterclaim to
recover attorney fees allegedly owed by appellants.         Thereafter, the matter
proceeded to discovery.
       {¶ 3} On April 15, 1994, appellees filed a motion for summary judgment.
In their motion, appellees asserted, among other things, that there was “[a] complete
absence of any evidence of damages proximately caused by the alleged acts and/or
omissions of the defendants[.]” With respect to this assertion, appellees claimed
essentially that they were entitled to summary judgment because appellants were
required to, but could not, prove that they would have been successful in the
underlying civil, criminal, and administrative matters in which the alleged
malpractice had occurred. To support this argument, appellees relied upon certain
evidentiary materials of the type listed in Civ.R. 56(C).
       {¶ 4} Appellants responded to the motion for summary judgment.             In
support of their response, appellants submitted the affidavits of James and Terry
Vahila and the affidavits of two expert witnesses, Bennett J. Wasserman and Eric
A. Mertz. James and Terry Vahila indicated in their affidavits that they had
sustained damages as the direct and proximate result of appellees’ negligence.
James stated that as a result of appellees’ negligence they (appellants) had suffered
damages of $100,000 and that they had lost profits “of at least” $200,000.
Wasserman and Mertz indicated in their affidavits that they had reviewed the events
surrounding the malpractice action, that appellees had breached various duties
owed to appellants in connection with these matters, and that such negligent acts
and/or omissions had been the direct and proximate cause of appellants’ damages.
       {¶ 5} On May 26, 1994, the trial court granted appellees’ motion for
summary judgment. The trial court held that “there are no material issues of fact




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                                January Term, 1997




in controversy as to proximate cause and Plaintiffs have failed to establish the
essential element of damages proximately caused by the Defendants’ alleged
negligence on all of their claims. Further, this Court finds that Plaintiffs have not
demonstrated that, absent the alleged negligent conduct, Plaintiffs would have been
successful at trial.   As such, this case is not an appropriate one for a legal
malpractice claim.”
       {¶ 6} On June 23, 1994, appellants filed a motion with the trial court,
requesting that the court reconsider its May 26, 1994 decision. In support of their
motion, appellants attached supplemental affidavits of Wasserman and Mertz.
Thereafter, on June 24, 1994, appellants filed a notice of appeal with the trial court
regarding the court’s May 26, 1994 decision.
       {¶ 7} On appeal, the Court of Appeals for Stark County affirmed the
judgment of the trial court. The court of appeals, relying on Celotex Corp. v. Catrett
(1986), 

477 U.S. 317

, 

106 S.Ct. 2548

, 

91 L.Ed.2d 265

, held that appellees were
entitled to summary judgment on appellants’ claims because appellants, in response
to appellees’ motion for summary judgment, failed to prove that they sustained
damages proximately caused by the alleged negligence of appellees. The court of
appeals determined that “[t]o establish a genuine issue of material fact regarding
proximate cause, the Vahilas were required to present evidence which, if believed,
would have proved that the outcome of one or more of the matters in which
defendants represented them would have been more favorable to them but for
defendants’ alleged breaches of duty.” Specifically, the court of appeals concluded
that “[i]n their response to defendants’ motion for summary judgment, the Vahilas
did not point to ‘specific facts showing that there [was] a genuine issue for trial’
regarding whether any of the matters in which defendants represented them would
have resulted in a more favorable outcome to them but for defendants’ alleged
breaches of duty. They pointed to no evidence that any judgment entered against
them in the civil matters would have been for a lesser amount, or that those civil




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matters would have been settled on a more favorable basis, but for defendants’
mishandling of them; they pointed to no evidence that any cross-claim or
counterclaim that defendants allegedly failed to assert would have been successful;
they pointed to no evidence that the criminal prosecutions against Ms. Vahila would
have been resolved more favorably to her but for defendants’ alleged mishandling;
and they pointed to no evidence that the investigation of Ms. Vahila by the Ohio
Department of Insurance would have been resolved more favorably to her but for
the alleged mishandling of that investigation by defendants.”
       {¶ 8} The cause is now before this court pursuant to the allowance of a
discretionary appeal.
                               __________________
       McLaughlin, McNally & Carlin, Clair M. Carlin and Thomas M. Vasvari,
for appellants.
       Ulmer & Berne, P.L.L., Thomas R. Kelly and Jay W. Pearlman, for
appellees.
       Frank E. Todaro, urging reversal for amicus curiae, Ohio Academy of Trial
Lawyers.
                               __________________
       DOUGLAS, J.
       {¶ 9} The primary issue in this case is whether the trial court and court of
appeals properly concluded that appellees were entitled to summary judgment on
the claims set forth in appellants’ legal malpractice complaint. For the reasons that
follow, we find that summary judgment should not have been granted in favor of
appellees. Accordingly, we reverse the judgment of the court of appeals and
remand this cause to the trial court for further proceedings.
       {¶ 10} Initially, we note that the trial court and court of appeals determined
that appellees were entitled to summary judgment because appellants failed to
establish that they sustained any damages proximately caused by the alleged




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                                       January Term, 1997




negligent acts and/or omissions of appellees. The trial court’s determination was
based in part on the fact that appellants had failed to establish that, but for the
negligence of their attorneys, appellants would have been successful in the
underlying actions and proceedings in which the alleged malpractice had occurred.
It appears that the court of appeals agreed with the findings of the trial court in this
regard. However, we disagree with the conclusions reached by the trial court and
court of appeals.
         {¶ 11} In Krahn v. Kinney (1989), 

43 Ohio St.3d 103, 106

, 

538 N.E.2d 1058, 1061

, we held that “a plaintiff need not allege a reversal of his or her
conviction in order to state a cause of action for legal malpractice arising from
representation in a criminal proceeding. To plead a cause of action for attorney
malpractice arising from criminal representation, a plaintiff must allege (1) an
attorney-client relationship giving rise to a duty, (2) a breach of that duty, and (3)
damages proximately caused by the breach.”1
         {¶ 12} In Krahn, Lynn B. Krahn managed a bar owned by High Spirits, Inc.
(“High Spirits”). Krahn hired Winfield E. Kinney III to defend her with respect to
three misdemeanor gambling charges that had been brought against her. High
Spirits retained Kinney to represent it in connection with a citation issued by the
Ohio Department of Liquor Control. However, following pretrial negotiations
between Kinney and the prosecutor, Kinney failed to convey to Krahn that the
prosecutor had offered to dismiss the charges in exchange for Krahn’s testimony
against her gambling-device supplier. On the day of trial, Krahn followed Kinney’s
recommendation to withdraw her plea of not guilty and enter a plea of guilty to one
of the charges. Further, Kinney failed to appear at a hearing before the Ohio Liquor



1. We also noted in Krahn v. Kinney (1989), 

43 Ohio St.3d 103, 105

, 

538 N.E.2d 1058, 1060-1061

,
that the elements required to state a cause of action for malpractice arising out of legal representation
in criminal matters also apply to a cause of action for legal malpractice relating to civil matters.




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Control Commission to defend the citation that had been issued against High
Spirits. As a result of Kinney’s conduct, Krahn and High Spirits sued Kinney and
the law firm for malpractice. The trial court granted summary judgment in favor
of Kinney and the firm. The court of appeals reversed the judgment of the trial
court.
         {¶ 13} Kinney and the law firm appealed to this court, arguing, among other
things, that relief should not be granted in these types of cases unless the plaintiff
first obtains a reversal of his or her underlying conviction on grounds of ineffective
assistance of counsel. We rejected this argument and stated that:
         “The inequity of requiring a plaintiff to obtain a reversal of his or her
conviction before bringing a malpractice action is apparent from the facts in the
present case. Krahn’s claim is based in part on Kinney’s alleged failure to
communicate the prosecutor’s offer. Consequently, Krahn was forced into the
situation of having to plead to a more serious charge or risk a still greater conviction
and sentence. Krahn may have made a valid plea on the day of trial, but she would
have been better served had she accepted the earlier bargain. As aptly stated by the
court of appeals, the injury in such a situation ‘is not a bungled opportunity for
vindication, but a lost opportunity to minimize her criminal record.’
         “The situation is like that in a civil action where the attorney fails to disclose
a settlement offer. Such failure may expose the attorney to a claim of legal
malpractice. Lysick v. Walcom (1968), 

258 Cal.App.2d 136

, 

65 Cal. Rptr. 406

.
See, also, Smiley v. Manchester Ins. & Indemn. Co. (1978), 

71 Ill.2d 306

 [

16 Ill.Dec. 487

], 

375 N.E.2d 118

, where the attorney failed to effect a settlement on a
client’s behalf.” (Emphasis added and footnote omitted.) Krahn, 

43 Ohio St.3d at 105-106

, 

538 N.E.2d at 1061

.
         {¶ 14} We also found in favor of High Spirits and further observed that:
         “We also find that High Spirits has stated a cause of action. High Spirits
incurred extra attorney fees in rectifying Kinney’s failure to appear at the original




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                                January Term, 1997




commission hearing. The injury is not the penalty ultimately imposed by the
commission, but the expenses involved in rectifying Kinney’s failure. High Spirits
states a cause of action regardless of whether the ultimate penalty imposed by the
commission is reversed.
       “Having enunciated the elements of a claim sounding in malpractice and
arising from criminal representation, we note that in most cases the failure to secure
a reversal of the underlying criminal conviction may bear upon and even destroy
the plaintiff’s ability to establish the element of proximate cause. In other words,
we do not relieve a malpractice plaintiff from the obligation to show that the injury
was caused by the defendant’s negligence. But the analysis should be made in
accordance with the tort law relating to proximate cause. The analysis should focus
on the facts of the particular case. We reject the suggestion that a proximate cause
analysis can be eliminated and replaced by a rule of thumb based on whether the
malpractice plaintiff has succeeded in overturning the underlying criminal
conviction.” (Emphasis added and footnote omitted.) 

Id.,

43 Ohio St.3d at 106

,

538 N.E.2d at 1061-1062

.
       {¶ 15} We believe that many of the principles set forth in Krahn are directly
applicable to the situation here. In this regard, we reject any finding that the
element of causation in the context of a legal malpractice action can be replaced or
supplemented with a rule of thumb requiring that a plaintiff, in order to establish
damage or loss, prove in every instance that he or she would have been successful
in the underlying matter(s) giving rise to the complaint. This should be true
regardless of the type of representation involved. In fact, one legal authority has
severely criticized imposing such a burden on victims of legal malpractice:
       “A standard of proof that requires a plaintiff to prove to a virtual certainty
that, but for the defendant’s negligence, the plaintiff would have prevailed in the
underlying action, in effect immunizes most negligent attorneys from liability. No
matter how outrageous and morally reprehensible the attorney’s behavior may have




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been, if minimal doubt exists as to the outcome in the original action, the plaintiff
may not recover in the malpractice action. Except in those rare instances where the
initial action was a ‘sure thing,’ the certainty requirement protects attorneys from
liability for their negligence.
        “A strict ‘but for’ test also ignores settlement opportunities lost due to the
attorney’s negligence. The test focuses on whether the client would have won in
the original action. A high standard of proof of causation encourages courts’
tendencies to exclude evidence about settlement as too remote and speculative. The
standard therefore excludes consideration of the most common form of client
recovery.
        “In addition, stringent standards of proving ‘but for’ require the plaintiff to
conduct a ‘trial within a trial’ to show the validity of his underlying claim. A full,
theoretically complete reconstruction of the original trial would require evidence
about such matters as the size of jury verdicts in the original jurisdiction. For
example, an experienced attorney could testify that juries in that jurisdiction
typically award verdicts of x dollars in similar cases. But such evidence is too
remote and speculative; the new factfinder must try the merits of both the
malpractice suit and the underlying claim to make an independent determination of
the damage award. The cost and complexity of such a proceeding may well
discourage the few plaintiffs otherwise willing to pursue the slim chance of success.
        “Other problems await those who do proceed with the ‘trial within a trial.’
For example, the attorney in the original action may have negligently failed to
pursue the discovery that would have insured success. If the results of that same
discovery are now necessary to prove the merit of the underlying claim — and the
passage of time has precluded obtaining that information — the attorney by his own
negligence will have protected himself from liability. In such a case, the more
negligent the attorney, the more difficult is the plaintiff’s task of proving




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                                January Term, 1997




causation.” (Footnotes omitted.) Note, The Standard of Proof of Causation in
Legal Malpractice Cases (1978), 63 Cornell L.Rev. 666, 670-671 (“Note”).
       {¶ 16} The inequity of requiring appellants to prove that they would have
been successful in the underlying matters giving rise to their malpractice action is
duly apparent from the facts of this case. Appellants’ malpractice suit is premised
on multiple negligent acts and/or omissions that had allegedly been committed by
their attorneys. The majority of the allegations stem from the failure of appellees
to properly disclose all matters and/or legal consequences surrounding the various
plea bargains entered into by Terry Vahila and the settlement arrangements agreed
to by appellants with respect to the several civil matters. According to appellants,
the pleas and settlements were obtained under duress and/or coercion and were not
entered into voluntarily. Moreover, appellants have also asserted that appellees
failed to adequately protect their interests in many of the underlying matters and
negligently failed to secure viable defenses on their (appellants’) behalf. Thus,
given the facts of this case, appellants have arguably sustained damage or loss
regardless of the fact that they may be unable to prove that they would have been
successful in the underlying matter(s) in question.
       {¶ 17} Accordingly, we hold that to establish a cause of action for legal
malpractice based on negligent representation, a plaintiff must show (1) that the
attorney owed a duty or obligation to the plaintiff, (2) that there was a breach of
that duty or obligation and that the attorney failed to conform to the standard
required by law, and (3) that there is a causal connection between the conduct
complained of and the resulting damage or loss. We are aware that the requirement
of causation often dictates that the merits of the malpractice action depend upon the
merits of the underlying case. Naturally, a plaintiff in a legal malpractice action
may be required, depending on the situation, to provide some evidence of the merits
of the underlying claim. See Note at 671; and Krahn, 

43 Ohio St.3d at 106

, 

538 N.E.2d at 1062

. However, we cannot endorse a blanket proposition that requires a




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plaintiff to prove, in every instance, that he or she would have been successful in
the underlying matter. Such a requirement would be unjust, making any recovery
virtually impossible for those who truly have a meritorious legal malpractice claim.
        {¶ 18} An equally important matter in this case concerns the court of
appeals’ interpretation and application of Celotex Corp. v. Catrett, 

477 U.S. 317

,

106 S.Ct. 2548

, 

91 L.Ed.2d 265

. Appellees, in their memorandum in support of
their motion for summary judgment, asserted that “No Evidence Exists in This Case
To Demonstrate that the Damages Plaintiffs Have Allegedly Sustained Were
Proximately Caused by the Alleged Acts and/or Omissions of Defendants.” The
court of appeals quoted appellees’ assertion and concluded, citing Celotex, that this
assertion, by itself, was sufficient to discharge appellees’ initial responsibilities
under Civ.R. 56, requiring appellants to then point to specific facts in the record
demonstrating the existence of a genuine issue for trial. We disagree.
        {¶ 19} In Mitseff v. Wheeler (1988), 

38 Ohio St.3d 112, 114-115

, 

526 N.E.2d 798, 800-801

, we recognized that:
        “While Celotex says that a moving party does not have to support its motion
with affidavits negating the opponent’s claims, Celotex also plainly states that ‘a
party seeking summary judgment always bears the initial responsibility of
informing the district court of the basis for its motion, and identifying those portions
of “the pleadings, depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any,” which it believes demonstrates the absence of
a genuine issue of material fact.’ 

Celotex, supra, at 323

 [

106 S.Ct. at 2553

, 

91 L.Ed.2d at 274

].
        “Accordingly, even Celotex makes clear that a party moving for summary
judgment has certain obligations that must be met. These obligations are set forth
in Massaro v. Vernitron Corp. (D.Mass.1983), 

559 F.Supp. 1068

. Massaro held
that the party seeking summary judgment ‘* * * bears the burden of affirmatively
demonstrating that, with respect to every essential issue of each count in the




                                          10
                               January Term, 1997




complaint, there is no genuine issue of fact.’ 

Massaro, supra,

 at 1073 (citing Mack
v. Cape Elizabeth School Board [C.A.1, 1977], 533 [sic, 553] F.2d 720, 722). The
moving party bears this burden ‘* * * even with regard to issues on which plaintiffs
* * * would have the burden of proof should the case go to trial.’ 

Massaro, supra, at 1073

, citing Ramsey [sic, Ramsay] v. Cooper (C.A.1, 1977), 

553 F.2d 237

, 240-
241, fn.8; Adickes v. S.H. Kress & Co. (1970), 

398 U.S. 144, 159-161

 [

90 S.Ct. 1598, 1609-1610

, 

26 L.Ed.2d 142, 155-156

]. See, also, Bird v. Zimmerman Fur
Institute, Inc. (S.D.Ohio 1968), 

294 F.Supp. 202

.
       “The requirement that a party seeking summary judgment disclose the basis
for the motion and support the motion with evidence is well founded in Ohio law.
‘The burden of showing that no genuine issue exists as to any material fact falls
upon the moving party in requesting a summary judgment.’ Harless v. Willis Day
Warehousing Co. (1978), 

54 Ohio St.2d 64, 66

, 

8 O.O.3d 73, 74

, 

375 N.E.2d 46, 47

, citing Hamlin v. McAlpin Co. (1964), 

175 Ohio St. 517

, 519-520, 

26 O.O.2d 206

, 207, 

196 N.E.2d 781

, 783-784. Reading the requirement of 

Harless, supra,

 in
conjunction with Civ.R. 56 and 7(B)(1), it can readily be seen that the moving party
must state specifically which areas of the opponent’s claim raise no genuine issue
of material fact and such assertion may be supported by affidavits or otherwise as
allowed by Civ.R. 56(C).
       “It should be noted that placing the above-mentioned requirements on the
moving party does not mean the nonmoving party bears no burden. Requiring that
the moving party provide specific reasons and evidence gives rise to a reciprocal
burden of specificity for the non-moving party.” (Footnote omitted.)
       {¶ 20} Recently, in Dresher v. Burt (1996), 

75 Ohio St.3d 280, 295

, 

662 N.E.2d 264, 275

, we limited paragraph three of the syllabus of Wing v. Anchor
Media, Ltd. of Texas (1991), 

59 Ohio St.3d 108

, 

570 N.E.2d 1095

, wherein a
majority of this court held that “[a] motion for summary judgment forces the
nonmoving party to produce evidence on any issue for which that party bears the




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burden of production at trial.” In 

Dresher at 293

, 

662 N.E.2d at 274

, this court
reaffirmed that:
       “[A] party seeking summary judgment, on the ground that the nonmoving
party cannot prove its case, bears the initial burden of informing the trial court of
the basis for the motion, and identifying those portions of the record that
demonstrate the absence of a genuine issue of material fact on the essential
element(s) of the nonmoving party’s claims. The moving party cannot discharge
its initial burden under Civ.R. 56 simply by making a conclusory assertion that the
nonmoving party has no evidence to prove its case. Rather, the moving party must
be able to specifically point to some evidence of the type listed in Civ.R. 56(C)
which affirmatively demonstrates that the nonmoving party has no evidence to
support the nonmoving party’s claims. If the moving party fails to satisfy its initial
burden, the motion for summary judgment must be denied. However, if the moving
party has satisfied its initial burden, the nonmoving party then has a reciprocal
burden outlined in Civ.R. 56(E) to set forth specific facts showing that there is a
genuine issue for trial and, if the nonmovant does not so respond, summary
judgment, if appropriate, shall be entered against the nonmoving party.” (Emphasis
added in part.)
       {¶ 21} The court of appeals in the case at bar indicated that a party seeking
summary judgment can satisfy his or her initial burden by merely asserting in his
or her motion that the nonmoving party cannot prove an essential element of that
party’s case. However, the court of appeals clearly misstated the law in this area.
As explained in Mitseff (and more recently in Dresher), bare allegations by the
moving party are simply not enough. The party seeking summary judgment always
bears the initial responsibility of informing the court of the basis for the motion and
identifying those portions of the record which support his or her claim. Then, and
only then, is the initial burden discharged, requiring the nonmoving party to comply
with Civ.R. 56(E).




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                               January Term, 1997




       {¶ 22} In conclusion, we find that appellees were not entitled to have
summary judgment granted in their favor on any of the claims set forth in
appellants’ complaint. Appellants were not required to establish that they would
have been successful in the underlying civil, criminal, and administrative matters
giving rise to the malpractice action. Further, by filing appropriate evidentiary
materials in opposition to appellees’ motion for summary judgment, it is apparent
that appellants effectively raised triable issues of fact not susceptible of summary
judgment. Construing the evidence most favorably toward appellants, reasonable
minds could differ as to the proximate cause(s) of the various alleged negligent
representations and the alleged damages or losses flowing therefrom.
       {¶ 23} Accordingly, we reverse the judgment of the court of appeals and
remand this cause to the trial court for further proceedings consistent with this
opinion.
                                                                Judgment reversed
                                                              and cause remanded.
       RESNICK, F.E. SWEENEY, PFEIFER and LUNDBERG STRATTON, JJ., concur.
       MOYER, C.J., and COOK, J., concur separately.
                             ____________________
       COOK, J., concurring.
       {¶ 24} I decline to join in the majority’s dicta regarding the movant’s
burden in summary judgment for the reasons expressed in the dissent to the plurality
opinion in Dresher v. Burt (1996), 

75 Ohio St.3d 280, 299

, 

662 N.E.2d 264, 278

.
A discussion of Dresher and the movant’s burden is superfluous in this case and
was raised as a proposition of law only by amicus curiae.            The majority
acknowledges that appellees supported their motion by relying on evidentiary
materials of the type listed in Civ.R. 56(C). Thus, as noted by the court of appeals
below, any discussion of the summary judgment standards is properly focused upon
whether the nonmovants met their burden under Civ.R. 56.




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                    SUPREME COURT OF OHIO




MOYER, C.J., concurs in the foregoing concurring opinion.
                    ____________________




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