Ohio Consumer Law Blog
Information on Ohio's Consumer Laws from Attorney Daniel Myers, Myers Law, LLC, not legal advice
Six Year Recap on Business Cure Offers: The More Things Changed, the More They Stayed the Same
In 2012, Ohio changed its decades-old consumer protection law to allow businesses the right to make a cure offer, or offer to settle. The idea was a dispute quickly, after a lawsuit is filed. In practice, however, the cure offer was really intended to be a poison-pill, to hurt the value of a consumer’s lawsuit and protect a business from a large judgment. We discussed this change and its impact back in a 2012 blog post.
I Forget, What’s a Cure Offer?
Under the Consumer Sales Practices Act (CSPA), when a business commits an unfair, deceptive, or unconscionable act, consumers are generally entitled to treble (triple) their actual economic damages, plus $200 per violation of the law (when no damages are suffered), up to $5000 in non-economic damages, attorney fees, and costs, among other things.
The cure offer amendment to the CSPA allowed businesses the opportunity, during the first 30 days after they are served with summons in a lawsuit, to make an offer of payment to settle the case. The offer has to use the right language, comply with timing and filing requirements, and also offer to pay court costs and cup to $2,500 in attorney fees. If the business does this, and the offered amount is the same or greater than the amount the consumer is awarded as “actual economic damages” by the court, then the consumer’s right to recover triple damages disappears. It also limits the amount the business has to pay toward attorney fees.
A valid cure offer, if made for the right amount, can reduce the value of a consumer’s case by 2/3rds (66.67%) or more. Few consumers can afford to lose tens of thousands of dollars. It can turn a $50,000 case ($24,000 treble damages, $5,000 non-economic damages, $21,000 in attorney fees) into a $10,500 case, and can make it impossible for a consumer to get the compensation needed to cover the actual harm done by a bad business.
Consumers’ Initial Fears.
Many feared the cure offer amendment to the CSPA would make Ohio’s exceptionally strong consumer protection law the weakest law in the country. Others worried that lawyers engaged in consumer protection were going to fade away. Many lawyers feared that area of practice would be dead.
So, has anything changed in the last six years?
Not really…We’re still here.
Sure, when properly used, a cure offer can have a real detrimental impact on consumers, their rights, and their remedies when they are defrauded by a business. There are practical steps that consumers should follow to protect themselves and help dissuade companies from issuing a cure offer. But in reality, at least in our experience, very few lawyers, and very few companies, actually use cure offers, and those that do often failure to properly use them.
In our experience, in the hundreds of consumer disputes we have handled since 2012, businesses have issued cure offers on fewer than 10% of disputes. Cure offers are almost never used in our larger cases, and when they are, the offered amounts are far below any reasonable calculation of the damages suffered by our clients, making it easier to reject the offer, and avoid the bad aspects of the cure offer amendment to the CSPA.
So what theories can we deduce from our experience?
Our Strategy is Often Effective.
Part of this may be because we ascribed to a specific strategy to avoid cure offers. As discussed in our 2012 article:
An experienced consumer law attorney would immediately file a lawsuit instead of negotiating with the company. The other side may not know how much money to offer you in its “Cure Offer,” and it may undershoot or overshoot your actual damages. If the company overshoots, and offers you more . . . that is a better deal for you than you otherwise would have had. If the company undershoots, and offers you less . . . your attorney can tell you whether it is a good idea to go forward with the case. . .
It is critical to share as little information as possible about the costs and expenses they caused you, the amount of the harm they have done, with the bad business, before you sue them. In many cases, it is best to avoid talking about settlement with the bad business before you contact an attorney, or before a lawsuit is filed. Hiring an experienced consumer attorney to manage your dispute may help you neutralize the risks of these cure offers.
Many Lawyers and Businesses are Unfamiliar or Unwilling to Issue Cure Offers
Of the ~10% of our cases where cure offers are made, our clients have accepted a couple (because they were good deals), but more often, the cure offer is defective or legally deficient. Courts have thrown out more of the cure offers used by bad businesses than we have accepted. Why is that?
The cure offer amendment to the CSPA puts very specific time limitations, language requirements, and other requirements that businesses, or their lawyers, have often overlooked. Courts can “strike,” or disregard, filings for various reasons. Timing, i.e. filing a cure offer too late, is the most common reason we have seen a court strike a cure offer. We have also seen courts strike cure offers because the offer was not a money payment, but an offer to perform services (which is not allowed by the amendment). Other times, the cure offer is never filed with the court, as required by law. There are many more open questions that courts will have to decide in the coming years, but given the low rate at which cure offers are made, the courts may never decide these other issues.
Most Companies Simply do not use the law.
When the cure offer amendment to the CSPA, R.C. 1345.092, was passed, it was supported by a large number of businesses, business associations, and conservative politicians. One of the largest supporters was the Ohio Automobile Dealers Association. Dealerships are often sued under the CSPA, as many dealerships engage in unfair, deceptive, or unconscionable acts under Ohio’s consumer protection laws. The thing with vehicle sales, as opposed to home construction work, repair work, or mechanical work, is that the economic damages are often very clear and very certain from the beginning of the dispute.
Auto dealers, more than any other business, can use the cure offer to quickly and efficiently settle cases, often for far less than the consumer might be entitled to absent the cure offer. But they usually do not issue cure offers, at least in our cases. It is rare that we receive cure offers on our cases, and even more rare that the cure offer is made on a case filed against a dealership. Instead, most cure offers we have seen come from construction contractors, not used or new car dealerships.
One truth seems to be that these companies, the companies that pushed for these legal protections in the first place, simply do not use the protections provided to them. We have had cases where the dealership knows, before the lawsuit is even filed, what the cure offer amount would need to be to match or exceed the actual economic damages. It’s usually a very obvious amount. However, in these cases, the dealership fails to ever issue a cure offer.
While Ohio law continues to develop on the issue of cure offers and settlements under the CSPA, our strategy and our focus will remain the same–we formulate a logical plan, and execute it, in order to help our clients fight these bad businesses. Maybe our plan has been effective, or perhaps the overwhelming majority of businesses we deal with are being irrational and are not using the cure offer rights under the CSPA. In any case, not much has changed since the 2012 cure offer amendment became effective.
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Daniel Myers
MensaBlondEsq
Ohio Consumer Law Blog 
Great blog you have heree