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Gibson’s Bakery Moves To Collect On $36 Million Surety Bond, Oberlin College Seeks Stay In Ohio Supreme Court

Gibson’s Bakery Moves To Collect On $36 Million Surety Bond, Oberlin College Seeks Stay In Ohio Supreme Court

Under the plain wording of the Surety Bond, Zurich American appears to owe the Gibsons the money, and what happens then is between Zurich American and Oberlin College.

https://www.youtube.com/watch?v=qw2Sk_JTaXA

The cross-appeals of Oberlin College and Gibson’s Bakery are awaiting decision from the Ohio Supreme Court, which has the discretion whether or not to take either appeal. We covered the latest on June 13, 2022, Gibson’s Bakery Wants Ohio Supreme Court To Restore Full Punitive Damage Verdict Against Oberlin College.

There is another drama working its way though the courts, namely, Gibson’s Bakery motion to collect on an approximately $36 million Surety Bond of Zurich American Surety Company. The bond was posted so that after judgment was entered for $32 million after the trial, the trial court would issue a stay of “execution” (i.e. collection action) on the judgment pending appeal. Absent that stay, the Gibson’s could obtain an execution on the judgment and start grabbing whatever assets of Oberlin College the local sheriff could find.

The bond had very specific language that becomes important (emphasis added):

KNOW ALL MEN BY THESE PRESENTS, that Defendants Oberlin College and Meredith Raimondo, as Principals, and Zurich American Insurance Company, authorized to do business in the State of Ohio, as surety (the “Surety”), are held and firmly bound, jointly and severally, unto Plaintiffs David Gibson, Allyn W. Gibson, and Gibson Bros., Inc. (collectively, the “Plaintiffs”), in the maximum penal sum of Thirty Six Million Three Hundred Sixty Seven Thousand Seven Hundred Eleven Dollars and 56/100 Cents ($36,367,711.56), for which, well and truly to be paid, they bind themselves, their heirs, executors, administrators and successors, and every one of them firmly by these presents.

NOW, THEREFORE, consistent with the conditions required by Ohio Revised Code Chapter 2505, if Defendants Oberlin College and Meredith Raimondo (the ” Defendants”): (i) pay the whole of the final judgment that may be required of or awarded against them on final determination of the Lorain County Court of Common Pleas and on any appeals rendered in this action after the exhaustion of all of Defendants’ appeals, including, if applicable, to the Ninth District Court of Appeals, the Supreme Court of Ohio, and the Supreme Court of the United States of America; (ii) abide and perform the order and judgment of the Lorain County Court of Common Pleas, the Ninth District Court of Appeals, the Supreme Court of Ohio, and the Supreme Court of the United States; (iii) pay all the money, interest, costs and damages that may be required of or awarded against them upon the final determination of any appeal(s); and (iv) thereafter abide and perfonn such other conditions as the Lorain County Court of Common Pleas, the Ninth District Court of Appeals, the Supreme Court of Ohio, and the Supreme Court of the United States may provide, then this obligation shall be void, otherwise to remain in full force and effect. If the judgment against Defendants is affirmed and not paid by Defendants to Plaintiffs in full, along with all other amounts ordered during and/or following the appeal(s), immediately upon Plaintiffs’ demand therefore, then the Surety agrees that judgment may be entered against it for the balance of all such amounts due from, but not paid by, Defendants. In no event, however, shall the Surety’s obligation under this bond exceed the maximum aggregate penal sum of Thirty Six Million Three Hundred Sixty Seven Thousand Seven Hundred Eleven Dollars and 56/100 Cents ($36,367,711.56).

Note that the language about exhausting all appeals relates to the bond being “void” if Oberlin College pays the judgment or otherwise complies. There is a separate sentence addressing what happens if Oberlin College does not pay the judgment after it is “affirmed,” which does not require exhaustion of all possible appeals to the Ohio or United States Supreme Courts, and which simply requires demand for payment.

The judgment was affirmed, and the 9th District Court of Appeals decision contained the following provision (emphasis added):

We order that a special mandate issue out of this Court, directing the Court of Common Pleas, County of Lorain, State of Ohio, to carry this judgment into execution. A certified copy of this journal entry shall constitute the mandate, pursuant to App.R. 27.

Oberlin College never sought a stay of the Court of Appeals mandate, and on May 27, 2022, the Gibsons sought execution on the judgment in the trial court in accordance with the mandate. We covered it all in Oops – Gibson’s Bakery Seeks To Execute On $36 Million Appeal Bond Since Oberlin College Failed To Obtain Stay Of Appeals Court Mandate. The Preliminary Statement described the arguments:

Nearly three years ago, a jury of Lorain County citizens took an oath, served through a nearly six-week trial, carefully deliberated, and found Oberlin College and its Dean of Students liable for their ruinous accusations and intentional conduct aimed at the Gibsons. Much has happened since, including the tragic deaths of David and Allyn Gibson-neither of whom lived to see justice done for their family and its business. The bakery continues to labor under the effects of the stigma created by Defendants, but without the relief awarded by the jury.

It is now time to honor the jury’s verdict. It is time to execute on the judgment awarded by them, entered by this Court, and affirmed by a unanimous panel of the Ninth District Court of Appeals.

The stay of execution entered by this Court only had the power to stay its own judgment. If Defendants wanted to stay execution of the mandate of the Ninth District Court of Appeals, they were required to seek that stay in the Ohio Supreme Court. They did not. Plaintiffs are entitled to judgment on the surety bond as provided by RC. 2505.20.

I expected fast action by Oberlin College. But nothing happened. Well, not exactly nothing. On June 10, 2022, Zurich American filed for an extension of time to respond. The motion provided that Zurich American’s counsel was having outpatient surgery, and this substantive reason (emphasis added):

1. Zurich’s involvement in this action arises from its issuance of Appeal Bond No. 9280167 (the “Bond”), as surety, on behalf of Defendants Oberlin College and Meredith Raimondo (the “Defendants”), as principals, in the penal sum of $36,367,711.56. On its face, the Bond conditions Zurich’s payment, obligations on, among other things, “the exhaustion of all of Defendants’ appeals, including, if applicable, to the Ninth District Court of Appeals, the Supreme Court of Ohio, and the Supreme Court of the United States of America.”

2. Though the Defendants’ appeals have not been exhausted and the Bond’s penal sum of $36,367,711.56 is the absolute cap on Zurich’s potential liability thereunder, the Motion requests the Court to enter judgment against Zurich relative to the Bond “in the amount of $36,127,181.25 plus $4,331.19 per diem from the date of filing.”

* * *

5. Accordingly, because Zurich denies that any payment is owed under the Bond, Zurich requests that the deadline for Zurich’s response to the Motion. be extended until June 24, 2022 so its counsel can fully brief the legal and factual issues arising from the Motion….

But, as we’ve seen in the language of the bond quoted earlier in this post, the exhaustion of appeals related to the bond being void if Oberlin paid the judgment after the exhaustion of appeals. The next sentence does not explicitly require exhaustion of all possible appeals, it only requires that the judgment be affirmed, which has happend. Under this wording, if the judgment was affirmed and not paid, Zurich American was on the hook under the bond upon demand of the Gibsons. Perhaps there’s some case law addressing this exact language, but so far no one has cited it.

On June 13, 2022, the Gibsons filed a supplement to their motion pointing to the “demand” language:

Zurich American Insurance Company (“Zurich”) has recently entered an appearance in this case and informally requested from the Gibsons an extension to respond to the Gibson’s motion. However, no response from Zurich is warranted. Zurich’s own commitment to this Court provided that judgment could be entered “immediately upon Plaintiffs demand2:

[fn. 2 – 2 See Bond No. 9280167, filed July 30, 2019.]

If Zurich is dissatisfied with this result, its remedy is against Oberlin-the party Zurich chose to contract with-not in further delaying relief for the Gibsons.

That supplemental filing by the Gibsons, which appears to correctly apply the language of the bond unlike the Zurich American filing, apparently spurred action by Oberlin College, which filed for a stay today in the Ohio Supreme Court. That application for a stay is premised on the same misreading of the bond as Zurich American made in its filing in the trial court (emphasis added):

Appellants Oberlin College and Dr. Meredith Raimondo (“Oberlin”), under S.Ct.Prac.R. 4.01(A)(2), move for an order confirming and, if necessary, extending the trial court’s stay of execution or, in the alternative, immediately staying execution and any proceedings to enforce the judgment of the Lorain County Court of Common Pleas and Ninth District Court of Appeals—
including ongoing efforts to collect from Oberlin’s surety, Zurich American Insurance Company (“Zurich”), which posted a bond that by its express terms requires the exhaustion of all appeals before it becomes collectible.

This reading has the same problem as that proposed by Zurich American.

Oberlin College then quoted language from the trial court’s stay of the judgment:

Oberlin had no reason to seek a stay when it first filed its appeal, because the trial court had entered a stay—unopposed by Plaintiffs-Appellees/Cross-Appellants—through the exhaustion of all appeals, supported by a filed bond in an amount Plaintiffs requested. The trial court issued this unopposed stay in November 2019. See 11/18/19 JE (“Plaintiffs do not oppose” the request for a Civ.R. 62(B) stay), attached as Ex. B. That is, after finding “good cause shown,” the trial court stayed execution of the judgment “until the exhaustion of all of the Defendants’ appeals – including the appeal currently pending before the Ninth District Court of Appeals, any appeal to the Supreme Court of Ohio, and any appeal to the Supreme Court of the United States.” See Ex. B (emphasis added)…..

Exhibit B to the Oberlin College motion, which starts at page 61 of the pdf. linked above, does contain that language, but as the Gibsons pointed out in their motion to execute on the judgment, the trial court could only stay its own judgment, it could not stay a mandate from the appeals court:

The stay of execution entered by this Court only had the power to stay its own judgment. If Defendants wanted to stay execution of the mandate of the Ninth District Court of Appeals, they were required to seek that stay in the Ohio Supreme Court. They did not. Plaintiffs are entitled to judgment on the surety bond as provided by RC. 2505.20.

That’s a legal question that a trial court can determine in the first instance, whether a trial court can ignore the mandate of an appeals court because the trial court previously stayed the judgment. The Gibsons in their motion cite case law they say is on point (see pp. 6-9 of the motion). Oberlin College doesn’t directly refute this issue of the appeals court mandate, but argues against the jurisdiction of a trial court after it has issued a stay of judgment (see Oberlin College’s stay motion at pp. 2-3). This seems like a straightforward legal issue that the trial court would determine on the motion if Zurich American (the party obligated on the bond) raised it, which it has not so far.

So, the language of the bond appears to support the Gibsons. The argument of Oberlin College is more of a general plea to maintain the status quo pending whether the Ohio Supreme Court takes the case. But Oberlin College doesn’t address this unique circumstance, where there is an independent contractual obligation of a surety (Zurich American) that has come due to a third party (the Gibson), and as to which the party seeking a stay (Oberlin College) is not a contractual party. Arguably, Zurich American owes the Gibsons the money, and what happens then is between Zurich American and Oberlin College.

We will continue to follow these proceedings.

[Featured Image: Protest outside Gibson’s Bakery, November 2016]

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Comments

“Zurich American College” has a nice ring to it.

Close The Fed | June 15, 2022 at 10:05 pm

Law-itis strikes again. Everything else gets more efficient, but the appellate courts get more and more sclerotic.

Don’t they have any embarassment that they do things no faster than they did before the age of computers? When I first started practicing, I did a LOT of appellate cases….. it is unsatisfying then, the interminable waits, and it even more unsatisfying now….

    Lawfare by attrition. Oberlin’s and Zurich’s lawyers are like the Russian military in Ukraine, they just grind on pulverizing everyone in its way. They’re guilty, everyone knows they are, they know everyone knows and they don’t care. The kids shoplifted (they admitted it), Oberlin is a racist, riot inciting institution (the jury said so), and Zurich is a collection of escape artists trying to avoid responsibility for its obligations. All this while Gibson’s bakery lies in commercial ruin.

    Have faith: if this gets to the exalted Supreme Court of the United States, they’ll find a way to exonerate Oberlin, excuse Zurich, sympathize with Gibson’s, and get everyone off the hook for thirty nine dollars and eighteen cents . . . plus attorney’s fees, of course.

    Gibson’s will still lie in ruins.

      Tom Servo in reply to Owego. | June 16, 2022 at 10:52 am

      It’s not going to the SCOTUS. It’s probably not even going to be heard by the Ohio Supreme Court. (we’ll see) This case is over, that’s why Oberlin is panicking.

    Olinser in reply to Close The Fed. | June 16, 2022 at 12:37 pm

    They don’t WANT to do it faster.

    A bad lawyer can make a case drag on for years.

    A good lawyer can make it drag on forever.

healthguyfsu | June 15, 2022 at 10:39 pm

This is what happens when you hire woke lawyers for their demographics rather than their legal accumen. Oberlin can be eaten by its own wokeness and Zurich American may have a similar problem in their own ranks if they didn’t do their due diligence when issuing the bond.

I’ve dealt with a few bonds related to procurement of what I will just call academic resources that have liabilities attached to them. I can tell you that this bond company seems to just rubber stamp it because it’s a numbers game for them. I would have hoped this particular bond would have warranted intense scrutiny from their top legal minds. The question is: what legal minds do they consider the top and did they get to that pedestal on merit?

oberlin is not a college….it is just another political operative in a much larger game in which they are doomed to lose. They have no idea what losing entails…..none,

    GWB in reply to max dugan. | June 16, 2022 at 8:39 am

    Oberlin is a church seminary for a somewhat extreme form of Progressivism.

      jb4 in reply to GWB. | June 16, 2022 at 9:51 am

      Ironically, for much of its history, Oberlin actually did have a Seminary on campus. How the mighty have fallen, indeed possibly starting around the 1966 closure of the Graduate School of Theology.

      “The Graduate School of Theology began as the Theological Department of Oberlin Collegiate Institute in 1833. Academic work began in 1835 with the arrival of rebel seminarians from Lane Theological Seminary. By the 1870s, the school had become known as the Oberlin Theological Seminary. Its name changed to the Graduate School of Theology in 1916. The purpose of the seminary throughout its 133-year history was the training of ministers in a non-sectarian, non-denominational setting. The seminary closed in 1966 and moved to Nashville where it merged with Vanderbilt University Divinity School.”

So, the bond appears to be ambiguous.

I suspect that Zurich, the entity that is financially on the hook for $36 million, drafted the bond,

Courts, when faced with an ambiguous contract, interpret the contract in the non-drafter’s favor.

Therefore, Gibsons’ win and Zurich loses.

    MajorWood in reply to ParkRidgeIL. | June 16, 2022 at 3:30 pm

    Zurich is not on the hook, yet. They got paid a commission to guarantee payment to the Gibsons. When that happens, Zurich will then go after the collateral that Oberlin offered up in order to secure the bond. This is when things will “get real” for Oberlin, and, gasp, people might actually lose their jobs. I still think that the screw-up with not getting an appeal extension was deliberate. Deep deep down I suspect that some in power at Oberlin do understand that they are going to lose, so being able to do so on a “petty legal technicality” is a possible way to save face. No, they didn’t lose on the merits or vailidity or evidence; they lost because a minimum wage paralegal somewhere forgot to put the stamp on an envelope. “Yeah, that’s right. THAT’S the ticket.” (apologies to Jon Lovitz) Losing this way, just about as they were going to win on double-secret appeal, is something that they might be able to get past the alumni who otherwise might actually get a bit riled that $50M was flushed down the toilet over a problem that could have been solved with a timely apology. I watch a lot of, some say far too many, police dashcam videos. The entire Oberlin-Gibsons thing is just so similar to a simple traffic stop that somehow morphs into someone getting shot because they chose stupid over reasonable. Oberlin really has no one to blame here but themselves, and because of that, I suspect that they will try to battle ZA over the collection of the collateral. I suspect that this is far from over, for Oberlin, because they seem to either be slow learners or fast forgetters.

Fist pump!

I have a dream. That when Gibson’s gets their cash, they buy the whole block of buildings, close all of the establishments and cover all the windows with plywood. This will help certain students feel at home. And will remind everyone what happens when your society disolves into lawless chaos.

Is it possible the Gibsons get the insurance money and then the courts let Oberlin off the hook because it is easier to screw over an insurance company than a woke-religious institution? I would rather see Oberlin pay up instead.

    Subotai Bahadur in reply to broomhandle. | June 15, 2022 at 11:51 pm

    Not an attorney, nor do I play one on TV. I would say that under the law, Oberlin would be in the unprecedented position in this country of having consequences for their actions. That in itself will horrify our Leftist institutions..

    But that is under the law. Watching what has been happening in this country where there now seems to be multiple levels and layers of law that apply to people and groups [especially political groups] differently, I have to admit that I would not be surprised at all if Oberlin is let off, Zurich American eats the loss for a while, but tucked away in an unrelated bill is reimbursement for ZA with interest. Keeping in mind that in any Federal spending bill, $36 million is a rounding error.

    Subotai Bahadur

Typical commercial insurance company stall maneuver. They will pay eventually (by year end) but are looking to negotiate the payout. ZA wants a judge to order them to pay.

Having followed this from the beginning, I am left with admiration for the competence of Gibson’s lawyers at every stage and amazement at what looks like the Joe Biden team on the other side.

Financially, considering the significant market losses in both stocks and bonds, I wonder how much $36 million is of endowment funds that are actually available to pay it and not otherwise restricted.

And from that date in time any time a legal issue was grossly mishandled it was referred to as being “Oberlined”. eg; “They Oberlined it” “Don’t Oberlin this” “This is a complete Oberlin” “This stinks worse than an Oberlin” And we saw Law School introduce required classes on the subject. “Oberlin Avoidance 101″ And Websters American Slang Dictionary added the word ‘oberlin”;Def. Huge legal mess or quagmire that could have or should have been easily avoided.
Also noted from this date; Resumes with Oberlin College were immediately discarded.

    Sadly, a very long time ago, Oberlin was considered one of the finest Liberal Arts colleges in the country – when “liberal” meant the classical definition of liberal and not the modern “progressive”. (Its music school has always been first rate.)

I wonder if Oberlin had souch hubris that they hired second rate legal advisors expecting liberal judges to go along with them as a matter of course

    rebelgirl in reply to diver64. | June 16, 2022 at 11:14 am

    They hired ‘woke’ lawyers…defined as second rate, yes.

      MajorWood in reply to rebelgirl. | June 16, 2022 at 4:00 pm

      A question posed and debated four years ago is “just how were the lawyers selected?” I had the opportunity to pay a lawyer for some advice at one time, and some extra wisdom that I got for free was his statement that one out of 19 people are mentally ill, and that one person is responsible for 90% of the litigation. Reasonable people settle, unreasonable people fight, sometimes until they lose everything. So back four years ago we were wondering whether Oberlin took their case to a number of law firms, who in succession said “it is probably best to settle.” Did Oberlin continue to go down a list of possible firms until they found one who said “yeah, we can fight this.” Because a firm needs to balance the positive effect of billing hours vs the negative effect of losing a case and what that can do to their reputation. Some firms are so big that the Oberlin thing will not affect their image, while a small firm might not recover their reputation after a big loss. So, who knows? I do believe that the attorney of record for the firm that handled the first trial was an Oberlin graduate. Don’t know if this a selection criteria or just a coincidence. At some point I do want to meet up with a former classmate who is/was a partner in a large nearby firm to get their take on the case. I am pretty sure they wouldn’t want to communicate with me via email because the content would likely be a lot of “what were they thinking? speculation. Their firm would have been a likely contender to take on this case, and if offered, I would be interested in knowing why they declined, perhaps also giving answers that Oberlin’s GC didn’t agree with. Gibsons chose their counsel very well; everone else, not so much.

Hey, folks, a dose of reality here. There is a rule of contractual construction that provisions are construed reflecting their context. Is there a logical reason that anybody can advance to the effect that parties understood and intended that the bond would be paid if there was an appellate decision in favor of Gibson’s but before an appeal to the Ohio Supreme Court or beyond had been exhausted? Maybe (“one bite at the apple”), but absent that, it appears that on one side we have the literal language, as this article and commenters have pointed out, which clearly does not give Zurich any basis for delay, but on the other side is the inconvenient logic that that result probably was not the one intended, and one might possibly read the limitations of the first sentence implicitly into the second. The lesson to be drawn, no matter how this comes out, is to be more careful about how you draw up your contracts.

    CommoChief in reply to RRRR. | June 16, 2022 at 10:19 am

    True. It is equally true that the language was a construction of ZA. It’s also true a very basic principle of contract law that the party which constructs the document is responsible for any ambiguity and that the resulting ambiguity is not read in their favor. IOW if you create a document that hurts you then that mistake is your own fault and the other parties can seek to execute the unfavorable provisions.

On the cynical side, I am surprised that Oberlin is not defending on the ground that the contract is void because it begins with “Know all men by these presents . . . ” so the college and its post-binary-gender administration could not have had notice is to what the contact said.

Nice. I might have to hire Gibson’s lawyer(s) if I ever need them.

“Gibson bakery moves to collect…”

I hope the next post the Professor puts up is, “Gibson collects!”

First, ZA is to Oberlin as Oberlin was to Gibsons. Oberlin is not going to get away from paying ZA, who probably has as many lawyers on staff as Oberlin has faculty. That is why they are a bonding company. The court knows that they, unlike Oberlin, ARE good for the money. I suspect that even attemting to fight ZA here will totally tank Oberlin’s bond rating, as in, good luck getting anyone, including the mob, to lend you money down the road. It just stuns me how it seems that no one at Oberlin is capable of seeing more than 15 minutes into the future. One of my favorite daily go-to subreddits is “Whatcouldpossiblygowrong.” How Oberlin hasn’t made daily appearances there is amazing, since many of them don’t seem quite as smart as the 15yo who decides to go down a long run of steps on his skateboard, or the guy who decides to take an axe to the hornets nest at the top of the 30 ft ladder.

I would expect ZA to act immediately on this, because every day is another $4,300 that they will need to extract from Oberlin, and with inflation well into double digits, you really want to not let someone run forever with only a 5% penalty. Of course, Oberlin may well be losing endowment money at a rate well in excess of 5%, so that $36M they could have paid today from stocks worth $50M might end up being $36M paid from stock that is only worth $36M a month from now. To be fair, that 5% penalty payment should have been adjusted to reflect actual inflation, and maybe it will be at some point. So while we have a whole bunch of monetary considerations in play at the moment, the only thing I am actually certain of is that those in power at Oberlin do not believe for a second that they were wrong, and that anyone who opposes them is a white supremacist or worse.

    Zurich probably has a cast iron contract that guarantees reimbursement for all expenses and a market interest rate in the event that the bond proceeds are paid out.

    If Zurich pays any money out, it will receive a market rate of return. E.G. Libor plus x %.

      DallasMatt in reply to ParkRidgeIL. | June 23, 2022 at 9:56 pm

      I would think ZA has the option to forclose on real estate, and maybe the Endowment. Whatever asset is most liquid to recoup their payment. Time to pay up Oberlin – get woke and now you’re GOING BROKE….

    Edward in reply to MajorWood. | June 16, 2022 at 3:10 pm

    “…the guy who decides to take an axe to the hornets nest at the top of the 30 ft ladder. ”

    Good one!

Bluedaisy100 | June 16, 2022 at 12:41 pm

I found this explanation at the ABA site:

How are appeal bonds underwritten?
Due to the high risk and probability of a claim, collateral in the full amount of the bond is typically required. There are exceptions to this general rule, and to consider providing a bond without collateral, surety insurers review the company or individual’s financial statements to determine if the financial strength is significantly greater than the bond required. If the surety is comfortable that the appellant has the resources to easily pay the judgment (not just today, but several years from now when the appeal concludes), the surety will likely provide the bond with just the appellant’s indemnity. Often this is limited to publicly traded companies, insurers, large private corporations, and very high net worth individuals.

The last 2 sentences may offer an explanation for the panic on the ZA and Oberlin side. ZA might not have required Oberlin to put up the money, but only to indemnify. So ZA will have to go after Oberlin if this is the case, and we all know how litigious they are.

As I read the terms, Oberlin or Zurich is about to pay up. Ultimately, I believe Oberlin will have to pay Zurich. Then add on another $10 million (or thereabouts) in additional punitive damages. Let’s get this party started.

Sounds as if Oberlin’s lawyers aren’t the sharpest knives in the drawer.

I thought I was following this well, but not a lawyer so I am confused.

Oberlin had to put up millions of dollars … their own dollars a few years ago. I thought Zurich was kind of like escrow holder of the money. No?

I remember reading on this site that they had to put tens of millions of dollars into a trust … maybe not the whole $30m + ….

Where does ZA come in if more than an escrow entity?

    PDQ2 in reply to PDQ2. | June 16, 2022 at 2:42 pm

    Answered my own question. https://legalinsurrection.com/2019/07/oberlin-college-posts-36-million-bond-to-secure-gibsons-bakery-judgment/

    I guess the college only had to commit assets to Zurich … not actual dollars.

    Yikes. Tensions must be high inside the Oberlin administration building as well as their lawyers offices. They will really have to start liquidating assets if Z-A is forced to pay.

      Edward in reply to PDQ2. | June 16, 2022 at 3:11 pm

      “They will really have to start liquidating assets if Z-A is forced to pay.”

      Couldn’t happen to a more deserving group.

      (non-lawyer take) If ZA was smart, they got ‘committed assets’ in liquid form, i.e. a bank account with $X in it. When the judge issues the “Pay up” demand, they can go straight to the bank, have $X (plus their fee) removed from the account in question, transferred to the Gibson account, get a signed proof of the transfer, and present it to the judge the same day. Then they can walk away free of any nasty tanglesome threads. Not my circus, not my monkeys. All sides have been paid as per our agreement, and have a nice day.

      If they’re thinking ahead, they’ve got the documents drafted for the bank already. If they’re thinking *way* ahead, they’ll have somebody at the bank the moment the judge makes his decision so they can get it all tied up and done in about five minutes.

Here is my prediction, as an appellate lawyer (not in Ohio!) with about 50-100 argued appeals under his belt (and, unfortunately, too many extra pounds as well!):

First, the court will not rule on this motion until after they have made the decision whether or not to take the case.

If they decide not to review the case (most likely), then they will issue that decision and grant the motion. The case will effectively be over.

If they decide to review the case (less likely, but not impossible), then they either interpret the law the way Oberlin wants, or they allow Oberlin to cure any error by belatedly posting a revised bond.

What they will not do is allow this kind of technical issue to “trump” a ruling on the merits. I know that kind of victory is every lawyer’s wet dream (and I have in fact won some cases in this way), but I don’t see it happening in this large dollar of a case.

    Thanks for your expertise. What keeps me coming back to this site is not just the well-presented, interesting topics but, especially, the uniquely high signal/noise ratio in comments.

    puhiawa in reply to Wisewerds. | June 17, 2022 at 12:31 am

    I agree. In Hawaii a stay lasts through appeal and is dismissed by the appellate court either directly (uncommon) or by remand. But only with an affirmation of the lower court’s decision in whole or part.

    RandomCrank in reply to Wisewerds. | June 17, 2022 at 1:20 pm

    Any guess as to when the Ohio Supreme Court will decide whether or not to take the case?

      Wisewerds in reply to RandomCrank. | June 22, 2022 at 10:26 pm

      In my jurisdiction, the state Supreme Court schedules days on which they get together and vote on whether or not to grant review, and the decision is made public the next day.

CaliforniaJimbo | June 17, 2022 at 9:29 am

I am excited to see the grandson, Allyn, graduate from Gibsons college.

The Gibsons agreed to have their judgment fobbed off on a third party, Zurich. In return they got that they can enforce the judgment now (given the totality of current circumstances.) Those are the terms under which Zurich took the deal and the Gibsons agreed to it.

The distinction between payment by Oberlin and payment by Zurich is an integral part of the deal. The Gibsons should be paid now.

The other issue, too, is that as long as this is in some form “pending,” those at Oberlin can shirk any questions by saying that it is still active. Yhe day that is becomes “inactive” is when the really difficult questions wil start to be asked, because then we will expect an answer, starting with “what were you thinking?”

Sadly, the majority of alumni are dim-witted liberals and they too will not see how Oberlin was at fault here in this very very important first amendment case. /s

Coming late to the comments but I notice Zurich American DOES NOT contest the money is now owed, only that they should pay it.

Specifically, ZA appears to argue they do not owe the judgment amount precisely because appeals have not yet been exhausted.

It seems they might agree the money is owed and judgment against the defendants should be executed. Just leave ZA out of it. That could put Oberlin in the curious position of having to come up with unrestricted endowment money other than the assets they provided to ZA to secure the surety bond. Maybe a temporary problem, and perhaps just a mere inconvenience, but still interesting.

surfcitylawyer | June 21, 2022 at 5:44 pm

I do probate law and some appellate work. When the probate bond company has to pay, they turn around and go after the bonded entity for reimbursement. For an appeal bond, Oberlin had to put up cash or have assets to reimburse ZA when they have to pay out. ZA’s bond is poorly worded. If the court decides Gibson’s can go after Oberlin, ZA is contractually obligated to pay the judgment.

    drsamherman in reply to surfcitylawyer. | June 22, 2022 at 3:19 pm

    The few times I have been on a governing board for a hospital or health care entity and we have had to draw on a surety bond, there was initial resistance to pay by the bonding company, then they paid and went after the bonded company with hellfire and brimstone. The bonding company went after every asset they could attach, down to office supplies. The bonding company was worse than a combination Ebenezer Scrooge and Milburn Drysdale.

      DallasMatt in reply to drsamherman. | June 23, 2022 at 10:10 pm

      In general course of business, companies can get complacent. A former employer I worked for purchased specialty steel from around the world. For large purchases we would typically insure payment by Letters of Credit with cash in a bank securing the LC. We had one issued to a Japanese trading company for purchase of $2 million in steel from Germany. When the steel was delivered, my former employer had filed bankruptcy due to the oil prices collapsing. The bank had seized the cash they held securing the LC, and the trading company was SOL. You have to be sharp and when things are changing, complacency can bite you.