Hadassah v. Schwartz
197 Ohio App. 3d 94
| Ohio Ct. App. | 2011Background
- Garnishment action filed in Hamilton County against Schwartz to satisfy a multi-million judgment in Hadassah v. Schwartz.
- BG&L held Schwartz’s $150,000 retainer in an IOLTA account and contested garnishment as a disputed retainer.
- Schwartz and BG&L argued the funds were a nonrefundable retainer and exempt from garnishment.
- Hadassah asserted the funds were Schwartz’s property subject to garnishment under R.C. 2716.01 and not exempt.
- Trial court overruled the objections and ordered garnishment; judgment affirmed on appeal.
- Court concluded the retainer was property subject to garnishment and not exempt under applicable statutes.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the $150,000 retainer exempt from garnishment? | Hadassah argues the funds are subject to garnishment. | Schwartz/BG&L contend the retainer is exempt as attorney funds. | No exemption; retainer subject to garnishment. |
| Do equitable arguments shield the retainer from garnishment? | Hadassah asserts no equitable exemption exists. | Schwartz argues policy favors funding litigation and fairness to representation. | Equitable arguments insufficient to create exemptions. |
| Did the Uniform Commercial Code/secured-interest concepts apply to create a superior claim by BG&L? | Hadassah maintains no security interest over funds. | Schwartz asserts secured-transactions principles apply. | No security-interest evidenced; not applicable. |
| Should the court recognize a possible legislative expansion of exemptions for attorney fees? | Hadassah requests no change in exemptions. | Schwartz suggests possible exemption expansion if legislature acts. | Court defers to legislature for exemptions; no current exemption. |
Key Cases Cited
- In re Estate of Mason, 109 Ohio St.3d 532 (Ohio 2006) (garnishment principles; property in the possession of another may be garnished)
- Invest. Research Inst., Inc. v. Sherbank Marketing, Inc., 134 Ohio App.3d 478 (Ohio App.3d 1998) (funds with an attorney are not automatically exempt)
- Disciplinary Counsel v. Miller, 126 Ohio St.3d 221 (2010-Ohio-3287) (trust accounts and client property rules; professional conduct)
- Ohio Bell Tel. Co. v. Antonelli, 29 Ohio St.3d 9 (1987) (statutory exemption list; burden on claimant to prove exemption)
- Silver Creek Supply v. Powell, 36 Ohio App.3d 140 (1987) (security interests require evidence of written document)
- Niskanen v. Giant Eagle, Inc., 122 Ohio St.3d 486 (2009-Ohio-3626) (waiver of issues not raised below; appellate review limits)