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Appeals court affirms trial victory for plaintiffs in nanny-school, sex-abuse, cover-up case--and overturns trial court's attempt to sanction plaintiffs' attorney for engaging in First Amendment-protected speech

Appeals court also found that trial court abused its discretion in reducing jury's damages and attorneys' fees awards to plaintiffs―complete victory for plaintiffs on all five issues raised in the appeal and cross-appeal

CLEVELAND, OH - Today, the Eighth District Court of Appeals in Cuyahoga County issued its ruling on the appeal in Cruz v. English Nanny & Governess School. The ruling affirms the trial victory for Plaintiffs Christina Cruz (a former student of the nanny school) and Heidi Kaiser (a former employee). The evidence at trial showed that the nanny-training school and placement agency in Chagrin Falls, Ohio and its owners, defendants Sheilagh Roth and Bradford Gaylord, retaliated against Cruz and Kaiser when they resisted defendants' efforts to suppress Ms. Cruz's report that she witnessed the defendants' client sexually abusing his nine-year-old daughter.

The appeals court rejected both of defendants' arguments seeking to overturn the jury's verdict.

First, as to Cruz's claim for intentional infliction of emotional distress, the Court found that sufficient evidence existed to support the jury's finding that "the defendants' outrageous conduct actually caused Cruz severe and debilitating emotional distress."

And as to Kaiser's claim for wrongful discharge in violation of public policy, the Court held that "the public policy of child abuse prevention and reporting was jeopardized by the defendants' actions." "What is most troubling," the Court found, "is that Kaiser's fate at the Placement Agency rested upon her power of persuading an individual to not report the allegation of abuse." The Court further affirmed that, "allowing a common law cause of action for wrongful termination" under these circumstances "would serve to further the public policy of reporting child abuse."

The appeals court also agreed with plaintiffs' concerns about the trial court's conduct, finding that the trial court abused its discretion in reducing the jury's damages and attorneys' fees awards to plaintiffs, and also in sanctioning Plaintiffs' attorney Peter Pattakos for sharing scheduling information and publicly available pleadings with a reporter.

As to the attorneys' fee award, the appeals court found that the trial court "abused its discretion in deviating [downward] from the lodestar amount [the amount of time spent by plaintiffs' attorneys multiplied by their reasonable hourly rates] based solely on the contingency fee agreement" between plaintiffs and their counsel. The Court found that "no consideration was given to the ... relevant factors [required by Ohio law] as they pertained to this four-year litigation that resulted in a 26-day jury trial involving substantial evidence and testimony." The appeals court also found that the trial court abused its discretion in fail[ing] to "consider any fees associated with any other attorney or support staff during this four-year litigation." "Based on the entire record," the appeals court held, "the trial court's award of attorney fees as they would be awarded under a contingent fee agreement," $77,626.60, plus expenses, was so low as to "shock[] the conscience."

Finally, in overturning the trial court's finding that Attorney Pattakos engaged in "frivolous conduct" in urging reporters at Cleveland Scene to cover this lawsuit, the appeals court observed that,

"Upholding the trial court's decision could have numerous unintended consequences; for example, defendants in criminal cases potentially could ask for sanctions against prosecutors who provide information to the media about criminal cases. On any given day, newspapers show headlines of ongoing trials, recapping the evidence that was presented that day at trial. In fact, on April 3, 2015, around the same time that Scene Magazine printed the article at issue, a former Cuyahoga County Prosecutor issued a public statement that was published on various news media outlets about the trial of a Cleveland police officer that was set to begin in three days. No sanction was levied against the prosecutor's officer for this public statement. There is always a substantial likelihood that a jury member or potential juror may read a publication or encounter a publication about an upcoming or pending case. However, the judicial system trusts that jury members abide by the instructions to consider the case on the evidence at trial, not the 'evidence' in the news media."

The court added,

"It should not be held that merely urging a media outlet to cover a trial constitutes frivolous conduct. ... Therefore, we find that the trial court abused its discretion in sanctioning attorney Pattakos for engaging in frivolous conduct in violation of R.C. 2323.51 by communicating with the media."

"The appeals court's decision represents a great victory for Ms. Cruz and Ms. Kaiser, and vindicates the First Amendment, the public's right to access court proceedings, and most importantly, Ohio's strong public policy against child abuse," said plaintiffs' attorney Peter Pattakos. "Christina Cruz and Heidi Kaiser are real heroes, and not just for resisting the efforts of defendants―who were in a position of great power and influence over them and their careers―to suppress the child-abuse report. Cruz and Kaiser took on a heavy burden in standing up for themselves and for child sexual-abuse victims by pursuing this litigation, which started in 2011, and in which defendants have relentlessly tried to smear their character and have used their advantage in resources to attack them at every conceivable turn. Thankfully, Cruz and Kaiser stood strong, the jury easily saw through defendants' high-priced efforts to deceive them, and the appeals court has correctly upheld this correct result."

Subodh Chandra, who represented Pattakos in the appeal of the sanction for sharing case information with the media, added, "The defendants' feeble efforts to cloak themselves in victimhood―and to have the court's handling of allegations regarding retaliation hidden from public view―have been incinerated. The precious right to free speech has been protected."

The underlying five-week jury trial in the Cuyahoga County Court of Common Pleas took place in May and June of 2015 and resulted in a combined verdict of $392,750 plus attorneys' fees against defendants. The jury awarded Ms. Kaiser $20,000 in compensatory damages and $54,000 in punitive damages on her claim for wrongful termination against the nanny school. The jury awarded Ms. Cruz $150,000 in compensatory damages and a combined $168,750 in punitive damages on her claim for intentional infliction of emotional distress against all defendants.

The punitive damages awards were later reduced based on mandatory (and arbitrary) caps imposed on such awards by Ohio law.

The suit, captioned Cruz, et al. v. English Nanny & Governess School, et al. was filed in 2011 in Cuyahoga County Court of Common Pleas. More details about the underlying case are included in the Cleveland Scene magazine article found here.

Peter Pattakos, Sandhya Gupta, Patrick Haney, and Subodh Chandra of The Chandra Law Firm, LLC represented the plaintiffs.

The ACLU of Ohio, First Amendment Lawyers Association, Ohio Broadcasters Association, and Ohio Newspapers Association all filed friend-of-the-court briefs supporting Pattakos on the sanctions issue.

The Court's opinion is linked here.

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