Court Opinion

ID: 6759780
Source: CourtListenerOpinion
Date Created: 2022-07-21 00:30:19.591666+00
Date Added: 2024-06-11T16:02:33.862809
License: Public Domain

Alice Robie Resnick, J.,
dissenting. I respectfully dissent from the majority’s finding that New York law applies.
The majority relies on Schulke Radio Productions, Ltd. v. Midwestern Broadcasting Co. (1983), 6 Ohio St. 3d 436, 6 OBR 480, 453 N.E. 2d 683, in determining that New York law should apply. The Schulke decision was based upon application of the test found in Section 187(2) of the Restatement of the Law 2d, Conflict of Laws (1971) 561, which states:
“The law of the state chosen by the parties to govern their contractual rights and duties will be applied, even if the particular issue is one which the parties could not have resolved by an explicit provision in their agreement directed to that issue, unless either
“(a) the chosen state has no substantial relationship to the parties or the transaction and there is no other reasonable basis for the parties’ choice, or
“(b) application of the law of the chosen state would be contrary to a fundamental policy of a state which has a materially greater interest than the chosen state in the determination of the particular issue and which, under the rule of § 188, would be the state of the applicable law in the absence of an effective choice of law by the parties.”
The key issue upon which I disagree with the majority opinion is whether Ohio has a “materially greater interest” in the determination of the issues in this case than New York. The only contact New York, the chosen forum, had with the parties is twofold: (1) Merrill, Lynch is a New York corporation and (2) the contract was received in New York for execution. Ohio, on the other hand, had considerably more contact: (1) Sekeres was a citizen of Ohio, (2) Merrill, Lynch was doing business in Ohio, (3) Merrill, Lynch had an agent permanently located in Ohio, (4) any explanations and negotiations of the contract were conducted in Ohio, (5) appellant signed the contract in Ohio and was bound by that signature, and (6) Ohio has a substantial interest in protecting the rights and needs of its citizens. When the contacts with New York and Ohio are compared, it is evident that Ohio does in fact have a materially greater interest than New York in the resolution of this issue.
The contract was not to be performed in either Ohio or New York, but primarily in a third state. This prevents the performance of the contract from favoring either state.
Since it is apparent that Ohio has a materially greater interest than New York, it becomes necessary to determine whether application of the attorney fees provision “* * * would be contrary to a fundamental policy * * *” of Ohio. Ohio case law makes it abundantly clear that a provision requiring the payment of the opposing party’s attorney fees violates the public policy of Ohio and is unenforceable. It is well-established in Ohio *28that attorney fees are not to be awarded to the successful party unless provided for by statute or unless the party against whom the fees are taxed was found to have acted in bad faith. See Ohio Edison Co. v. Franklin Paper Co. (1985), 18 Ohio St. 3d 15, 18 OBR 13, 479 N.E. 2d 843; State, ex rel. Crockett, v. Robinson (1981), 67 Ohio St. 2d 363, 21 O.O. 3d 228, 423 N.E. 2d 1099; State, ex rel. Fraternal Order of Police, v. Dayton (1977), 49 Ohio St. 2d 219, 3 O.O. 3d 360, 361 N.E. 2d 428; State, ex rel. Grosser, v. Boy (1976), 46 Ohio St. 2d 184, 75 O.O. 2d 228, 347 N.E. 2d 539; Sorin v. Bd. of Edn. (1976), 46 Ohio St. 2d 177, 75 O.O. 2d 224, 347 N.E. 2d 527; State, ex rel. Michaels, v. Morse (1956), 165 Ohio St. 599, 60 O.O. 531, 138 N.E. 2d 660.
This court has previously considered Section 187(2)(b) and has determined:
“Where the law of the chosen state sought to be applied is concededly repugnant to and in violation of the public policy of this state, the law of Ohio will only be applied when it can be shown that this state has a materially greater interest than the chosen state in the determination of the particular issue. (Restatement of the Law 2d, Conflict of Laws [1971] 561, Section 187[2][b], construed.)” Jarvis v. Ashland Oil, Inc. (1985), 17 Ohio St. 3d 189, 17 OBR 427, 478 N.E. 2d 786, at paragraph two of the syllabus.
Paying an opponent’s attorney fees absent a statutory provision or bad faith is repugnant to and does violate Ohio’s public policy. Also, Ohio does have a materially greater interest than New York in the contract. Therefore, Ohio law should be applied and the attorney fees provision should be found unenforceable.
I would also note that the court of appeals essentially stated in its decision that it did not matter whether Ohio or New York law was applied because the contract provision was not repugnant to Ohio law. The court of appeals failed to provide any applicable case law for its position. I must disagree with the court of appeals’ position because, as demonstrated in the foregoing, it is well-established that contractual attorney fees provisions are repugnant to Ohio public policy. I would, therefore, reverse the decision of the court of appeals.
Wright and H. Brown, JJ., concur in the foregoing dissenting opinion.