• Amendment To Ohio's Consumer Sales Practices Act "CSPA"
  • July 5, 2012 | Author: Adam J. Russ
  • Law Firm: Frantz Ward LLP - Cleveland Office
  • On April 3, 2012, Ohio Governor John Kasich signed into law Ohio House Bill 275 (“HB 275”), which had been passed by both the Ohio Senate and House of Representatives.  HB 275 significantly amends Chapter 1345 of the Ohio Revised Code, better known as the Ohio Consumer Sales Practices Act (the “CSPA”).  The new law will take effect on July 3, 2012, ninety days from the date of signature.

    The Ohio CSPA is a consumer protection statute that prohibits any “unfair or deceptive consumer sales practice” by “suppliers”.  Prior to its amendment, the Ohio CSPA provided for alternative private remedies by those aggrieved consumers, including:

    • rescission of the transaction;
    • recovery of three times the amount of his or her actual damages or two hundred dollars; whichever is greater;
    • recovery of damages or other appropriate relief in a class action under Civil Rule 23; or
    • a declaratory judgment, an injunction, or other appropriate relief against an unfair or deceptive act or practice.

    A court could also award to a prevailing party a “reasonable attorney’s fee limited to the work reasonably performed,” if either the consumer brought or maintained an action that is groundless and in bad faith or the supplier has knowingly committed an act or practice in violation of the CSPA.

    HB 275 alters the available remedies under a CSPA claim, and it provides for a new method for a supplier to resolve a dispute prior to a judgment being rendered. To do this, HB 275 adds new section Ohio Rev. Code § 1345.092, which allows suppliers to offer a potential “cure” after a consumer files a complaint.  A supplier has thirty days after service of process has been completed to deliver a “cure offer” letter to the consumer or his or her attorney who initiated the complaint.  The cure offer must be sent by certified mail, return receipt requested, to the consumer or his attorney, and the supplier must file a copy of the cure offer with the applicable court where the action is pending.  The letter must include a mandatory disclosure, as follows:

    NOTICE:  THIS LETTER INCLUDES A “CURE OFFER” THAT IS BEING OFFERED TO SETTLE ALL ALLEGED VIOLATIONS OF CHAPTER 1345 OF THE REVISED CODE RAISED BY YOUR WRITTEN COMPLAINT.  THE CURE OFFER INCLUDES BOTH A “SUPPLIER’S REMEDY” TO SOLVE THIS DISPUTE AND AN OFFER TO PAY YOUR ATTORNEY’S FEES UP TO $2,500.00 AND YOUR COURT COSTS IN FILING THE COMPLAINT.  YOU ARE NOT OBLIGATED TO ACCEPT THIS CURE OFFER AND HAVE THE RIGHT TO CONSULT WITH LEGAL COUNSEL BEFORE MAKING YOUR DECISION.

    YOU MUST NOTIFY THE SUPPLIER WITHIN THIRTY (30) DAYS OF RECEIPT OF THIS CURE OFFER OF YOUR DECISION TO EITHER ACCEPT OR REJECT THE OFFER BY FILING A RESPONSE WITH THE COURT AND SENDING A COPY OF THE RESPONSE TO THE SUPPLIER.  IF THE COURT DOES NOT RECEIVE YOUR RESPONSE WITHIN THE REQUIRED TIME, YOUR FAILURE TO RESPOND WILL, BY LAW, BE CONSIDERED REJECTION OF OUR OFFER.

    REJECTION OF THIS CURE OFFER COULD IMPACT YOUR ABILITY TO COLLECT COURT COSTS AND LEGAL FEES.  IF A COURT, JURY, OR ARBITRATOR FINDS IN YOUR FAVOR, BUT DOES NOT AWARD YOU AN AMOUNT MORE THAN THE VALUE OF THE SUPPLIER’S REMEDY, THE SUPPLIER WILL NOT BE RESPONSIBLE FOR TREBLE DAMAGES, ATTORNEY’S FEES, OR ANY COURT COSTS YOU INCUR AFTER THE DATE THIS CURE OFFER WAS MADE.

     VALUE OF SUPPLIER’S REMEDY = ----------------------------

    THE SELLER ALSO AGREES TO PAY YOUR ATTORNEY’S FEES, UP TO $2,500.00, THAT ARE NECESSARY OR REASONABLY RELATED TO THE FILING OF YOUR INITIAL CLAIM, AS WELL AS YOUR COURT COSTS.

    As the disclosure notes, a consumer has thirty days after receipt of the cure offer to notify the supplier of acceptance or rejection.  A cure offer must include the supplier’s remedy consisting solely of monetary compensation.  The consumer must file his or her notice of acceptance or rejection with the court and serve notice upon the supplier. Notice is considered to be effective when filed with the court.  If the consumer does not file a notice of acceptance or rejection of the supplier’s cure offer within thirty days of receipt, then it will be deemed to be a rejection of the cure offer.

    If the consumer accepts the cure offer, the consumer may request an amount of up to two thousand five hundred dollars ($2,500.00) from the supplier to pay attorney’s fees and an amount to pay court costs.  The consumer shall provide bills and other documents to evidence these amounts. If the supplier believes that the requests are reasonable, then it shall pay the consumer the requested amounts, along with the offered remedy to resolve the dispute.  If the supplier believes the requested amounts are unreasonable, within ten (10) days of the consumer accepting the offer, the supplier must seek a ruling from the court, which will review the documentation provided by the consumer and award attorney’s fees, up to two thousand five hundred dollars ($2,500.00) deemed to be necessary or reasonably related to the filing of the claim and court costs.

    Rejection of a cure offer also affects a consumer’s potential recovery of treble damages. If a judge, jury, or arbitrator awards actual economic damages, as defined in section 1345.09 of the Revised Code, that do not exceed the value in the supplier’s cure offer, the consumer shall not be entitled to an award of treble damages, any court costs incurred, or any attorney’s fees after the date the consumer receives the cure offer.  The comparison of actual economic damages and the supplier’s remedy shall not take into consideration statutory treble damages, court costs, or attorney’s fees.