2022 Ohio 1326
Ohio2022Background
- Robert Burns was the contracted director/CEO of New City Community School (Aug. 2009–June 2010); he could approve budget expenditures in the Ohio Department of Education (ODE) system, which triggered disbursement of grant funds.
- Burns had no authority to disburse funds from New City bank accounts and did not supervise the school’s treasurer.
- Carl Shye, hired as an independent-contractor treasurer who reported to the board, had custody of and control over New City’s bank accounts and later pleaded guilty to embezzling funds.
- Auditor found more than $50,000 misappropriated from $432,989.57 in grants; Ohio Attorney General sued Burns under R.C. 9.39 seeking recovery as a public official.
- Trial court granted summary judgment for the AG, holding Burns strictly liable; the court of appeals reversed, finding liability requires receipt/collection/control of funds; the Ohio Supreme Court affirmed the court of appeals.
Issues
| Issue | Plaintiff's Argument (Yost) | Defendant's Argument (Burns) | Held |
|---|---|---|---|
| Whether a public official is liable under R.C. 9.39 when neither the official nor subordinates received/collected the funds | Burns ‘collected’ funds by procuring/approving grants and final expenditure reports; thus liable | Liability attaches only when the official or a subordinate actually receives/collects (i.e., controls or has custody of) the funds | No — official not strictly liable where neither he nor his subordinates received/collected the funds |
| Whether the words “received or collected” in R.C. 9.39 require control/custody of the funds | Statute’s plain language doesn’t require control; procuring funds suffices as "collected" | "Received/collected" necessarily implies possession or control; absent that, no liability | "Received/collected" includes an element of control; one cannot be strictly liable without having received or controlled the funds |
| Whether Shye was Burns’s subordinate for R.C. 9.39 purposes | AG treated Shye as within the chain of responsibility making Burns jointly liable | Shye was an independent contractor hired and managed by the board, not Burns’s subordinate | Shye was an independent contractor and not Burns’s subordinate |
Key Cases Cited
- Cordray v. Internatl. Preparatory School, 128 Ohio St.3d 50 (2010) (analyzes R.C. 9.39 and remands to determine whether official or subordinates received or collected public money)
- Seward v. Natl. Sur. Co., 120 Ohio St. 47 (1929) (public officer liable for moneys that come into his hands by virtue of office)
- State, for Use of Wyandot County v. Harper, 6 Ohio St. 607 (1856) (liability where defendant received and controlled public funds)
- Crane Twp. ex rel. Statler v. Secoy, 103 Ohio St. 258 (1921) (public money in officer’s hands constitutes a trust fund)