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Ohio Supreme Court Liquidated Damages Analysis: Hindsight is not 2020!

In a case decided on February 24, 2016, the Ohio Supreme Court construed the enforceability of a liquidated damages provision in a public works construction contract. The Court held that when evaluating the enforceability of a liquidated damages provision in a construction contract, the court must conduct its analysis prospectively, based on the per diem amount of the liquidated damages at the time the contract is executed, and not retrospectively, based on the total amount of liquidated damages that ultimately accrue.

In reversing the Court of Appeals, the Ohio Supreme Court determined that the mere fact that the liquidated damages totaled $277,900 (calculated at $700 per day times 397 days late) did not result in a finding that the amount of liquidated damages was unreasonable where the base contract amount was $683,300. The flaw in the Court of Appeals reasoning was that it applied a retrospective analysis using hindsight. The long-standing test in Ohio requires the analysis to be considered at the time the parties entered into the contract.

The Ohio Supreme Court also held that “liquidated damages are not deemed a penalty simply because a project consists of new construction of an improvement that did not exist previously and no proof of damages is required to enforce liquidated damages pursuant to such a contract.”

This decision also includes an interesting overview of the Samson Sales tripartite test for distinguishing between an unenforceable penalty clause and a valid liquidated damages clause.

To read the Slip Op. No. 2016-Ohio-628, Boone Coleman Constr., Inc., v. Piketon, visit: http://www.supremecourt.ohio.gov/rod/docs/pdf/0/2016/2016-Ohio-628.pdf

Should you wish to consult with the author of this article, please feel free to contact Attorney Robert A. Hager at (330) 253–4925.

Jury Awards Care Center $225,000

Congratulations to Scott Sandrock on the jury verdict in favor of our client. The verdict stems from the lawsuit filed on behalf of our client against Spectrum Cable for fraud in connection with business services. The jury awarded Plaintiff $22,000 for compensatory damages, plus $225,000 in punitive damages and recovery of attorney fees in favor of our client.

BMD Beefs Up its Attorney Force with 7 New Hires

Founded in 2000 by three entrepreneurial and business-minded attorneys to provide a legal platform for companies and entrepreneurs in a wide variety of industries, Brennan Manna Diamond (BMD) has been in growth mode ever since. The firm, which began in Akron with just seven attorneys, now has three Ohio and two Florida offices as well as an international location in Shanghai, China through a joint venture with the law firm Jade & Fountain. BMD recently added seven more lawyers, six who are located in the Akron office.

Akron Devil Strip Becomes First US News Co-op

Starting Nov. 1, Akronites can become part owners of The Akron Devil Strip. With the legal guidance of BMD's legal team, Matthew A. Heinle, Esq. and Michael D. De Matteis, Esq., the arts and culture magazine is breaking ground as the first news co-op in the United States.

Community Legal Aid honoring BMD Attorneys Duriya Dhinojwala and Michael Steel "Pro Bono Attorneys of the Year"

Community Legal Aid honoring BMD Attorneys Duriya Dhinojwala and Michael Steel "Pro Bono Attorneys of the Year"

Brennan Manna Diamond Welcomes Seven New Attorneys

Brennan Manna Diamond (BMD) is pleased to welcome the following attorneys: in our Akron office, Blake R. Gerney, David J. Hrina, Matthew R. Duncan, Hamilton DeSaussure, Jr., Stephen E. Matasich and Paul C. Filon; and in our Cleveland office, Russell T. Rendall.