State ex rel. Montrie Nursing Home, Inc. v. Creasy

• Decision Date: 08 June 1983
• Docket Number: No. 82-1345,82-1345
• Citation: State ex rel. Montrie Nursing Home, Inc. v. Creasy, 5 Ohio St.3d 124, 449 N.E.2d 763, 5 OBR 258 (Ohio 1983)
• Parties: , 5 O.B.R. 258, 2 Soc.Sec.Rep.Ser. 1402, Medicare & Medicaid Guide P 33,439 The STATE ex rel. MONTRIE NURSING HOME, INC., et al., Appellees and Cross-Appellants, v. CREASY, Dir., et al., Appellants and Cross-Appellees.
• Court: Ohio Supreme Court

Page 124

5 Ohio St.3d 124

449 N.E.2d 763, 5 O.B.R. 258, 2 Soc.Sec.Rep.Ser. 1402,

Medicare & Medicaid Guide P 33,439

The STATE ex rel. MONTRIE NURSING HOME, INC., et al., Appellees and Cross-Appellants, v.CREASY, Dir., et al., Appellants and Cross-Appellees.

No. 82-1345.

Supreme Court of Ohio.

June 8, 1983.

Lucas, Prendergast, Albright, Newman & Gee, Rankin M. Gibson Co., L.P.A., Rankin M. Gibson, and W. Joseph Strapp Co., L.P.A., Columbus, for appellees and cross-appellants.

William J. Brown, Atty. Gen., Thomas W. Hess and Michael H. Igoe, Asst. Attys.Gen., for appellants and cross-appellees.

PER CURIAM.

Respondents initially raise the question of whether the court of appeals properly used the interest on the amount deposited by respondents to pay attorney's fees to relators' attorneys.Respondents argue that any prejudgment interest belongs to the state, while relators maintain that the state admitted liability when it deposited the sum with the court and the interest which subsequently accrues inures to the relators, the prevailing party.We find respondents' argument well-taken and reverse the decision of the court of appeals to distribute the interest as attorney's fees.

This court faced nearly the same issue in State, ex rel. Home Care Pharmacy, Inc. v. Creasy(1981), 67 Ohio St.2d 342, 423 N.E.2d 482[21 O.O.3d 215].There, certain pharmaceutical retailers sought a writ of mandamus to compel the payment of Medicaid reimbursements from the ODPW which had been delayed due to a state fiscal crisis.In addition, relators sought to compel the state to pay interest on the delayed reimbursements.We unanimously denied the writ and stated at page 344, 423 N.E.2d 482:

" * * * ' "[i]n the absence of a statute requiring it * * * interest cannot be adjudged against the state for delay in the payment of money." 'Lewis v. Benson(1979), 60 Ohio St.2d 66, 67[397 N.E.2d 396, 14 O.O.3d 269], quoting from the fourth paragraph of the syllabus in State, ex rel. Parrott v. Board of Public Works(1881), 36 Ohio St. 409."

While R.C. 2743.18(A)¹ does allow prejudgment interest to be assessed against the state, we have limited R.C. 2743.18(A) to cases arising in the Court of Claims:

" * * * This statute[R.C. 2743.18(A) ] is part of the Court of Claims Act and is applicable only to actions brought in the Court of Claims."Id.

As a result, relators' argument that the state is not entitled to retain the prejudgment interest is without merit.For the foregoing reasons, the judgment of the court of appeals awarding the prejudgment interest to relators' attorneys as attorney's fees is reversed.

The next issue is whether the award of attorney's fees was proper in this case.In Smith v. Kroeger(1941), 138 Ohio St. 508, 37 N.E.2d 45[21 O.O. 386], this court stated at paragraph three of the syllabus:

"In such case [class action], a court exercising equitable jurisdiction may allow, in addition to costs between party and party, reasonable attorney fees, technically known as costs between solicitor and client, to be paid out of the fund under the control of the court."

The court in Smith v. Kroeger, supra, at 515, 37 N.E.2d 45, further stated that the attorney who is eligible for attorney's fees is one " 'who, at his own expense, has maintained a successful suit for the preservation, protection, and increase of a common fund or common property, or who has created at his own expense, or brought into court a fund in which others may share with him.' "

In other words, where a fund has been created or preserved for the benefit of a class at the expense of one class member or a few class members, all members of the class may be required to share proportionately in the counsel fees incurred thereby.Thus, the court below had discretion whether to grant attorney's fees.However, any attorney's fees must come from the fund itself and may not be assessed against respondents in the absence of some exceptional conduct on respondents' part which would justify the imposition of attorney's fees as costs or damages.²

The facts of the case at bar mandate a remand to the court of appeals for a consideration of the propriety of awarding attorney's fees from the fund created in this case.On remand, should the court of appeals determine that relators' counsel are entitled to a portion of the fund as attorney's fees, the court shall not award simply a percentage of the fund as attorney's fees, but shall award any attorney's fees solely upon a determination of the amount of reasonable compensation for the legal services rendered by counsel for relators.

Several questions must be answered by the court of appeals.The court below shall first consider the effect of the fact that the costs of this litigation were advanced to relators' counsel by the Ohio Health Care Association.Specifically, it must be determined whether the members of the class have in fact already financed this litigation through membership fees or dues in this organization.

If the court below ultimately finds that attorney's fees are proper under these circumstances, the court will consider the following factors in arriving at the amount of allowable fees: (1) the time and labor involved in maintaining this litigation, (2) the novelty, complexity, and difficulty of the questions involved, (3) the professional skill required to perform the necessary legal services, (4) the experience, reputation, and ability of the attorneys, and (5) the miscellaneous expenses of this litigation.³

Finally, we address the court of appeal's construction of Am.Sub. H.B. Nos. 155 and 1546, 111th General Assembly.That bill provided the method to compute the reasonable costs incurred by nursing...