For businesses engaged in residential construction (transactions primarily for personal, family or household purposes), a potential cure to a vexing problem has arrived in the form of an amendment to the Ohio Consumer Sales Practices Act (OCSPA). The amendment is an important new tool for residential construction suppliers who have been hit with a lawsuit under the OCSPA.
The OCSPA sets forth a one-sided provision for attorneys’ fees to be recovered by the consumer-claimant. As a result, OCSPA cases too often become virtually impossible to resolve due to demands for attorneys’ fees that routinely exceed the amount of the underlying claim. As of July 3, 2012, suppliers (as businesses are referred to in parlance of the Act) can make an early statutory cure offer. A cure offer is designed to foster an early resolution and cut-off the incentive to perpetuate the litigation in order to accrue more legal fees.
Ohio Rev. Code §1345.092 establishes a process and timeline for making a statutory cure offer, which includes (i) an offer to pay a stated dollar amount of monetary compensation (i.e., the estimated cost to repair), (ii) an offer to pay reasonable attorneys’ fees in an amount not to exceed $2,500, and (iii) an offer to reimburse costs relating to filing the complaint. The cure offer is presented pursuant to a specific statutory disclosure. A cure offer must be made within 30 days after service of the complaint, requiring prompt consideration.
The critical feature of the amendment is triggered by an unaccepted cure offer. If a claimant-consumer who refused a cure offer is later awarded actual economic damages that are less than or equal to the amount of the offer, then the consumer is not entitled to treble damages, court costs incurred after the cure offer, or incremental attorneys’ fees. With respect to an accepted cure offer, the claimant’s attorney is entitled to reasonable attorneys’ fees up to $2,500; the attorney is not automatically entitled to $2,500. In the case of a dispute, the judge decides the amount of reasonable attorneys’ fees up to the amount of the cap. In many cases, a cure offer will be less than estimated defense costs if the case were to go forward.