To enact section 2307.31 of the Revised Code to create a procedure for settling civil actions between parties other than natural persons and providing for an award of reasonable attorney's fees and litigation expenses by motion or by a separate action in certain situations in which a judgment is entered against a party that rejects an offer of settlement.

Section 1. That section 2307.31 of the Revised Code be enacted to read as follows:

Sec. 2307.31. (A) As used in this section, "entity" means any of the following:

(1) A for-profit or nonprofit organization incorporated under Title XVII of the Revised Code or any other law of this state, any other state, or the United States;

(2) A business trust, real estate investment trust, limited liability company, limited partnership, or limited partnership association organized under Title XVII of the Revised Code or any other law of this state, any other state, or the United States;

(3) A bank, savings bank, or savings and loan association chartered under the laws of the United States.

(B) At any time more than thirty days after the service of a summons and complaint on a party but not less than thirty days before trial, or not less than twenty days before trial in the case of a counteroffer, any party that is an entity may serve on any opposing party that is an entity a written offer to settle a civil action for the amount of money specified in the offer and to enter into an agreement dismissing the claim or to allow judgment to be entered accordingly. The offer shall do all of the following:

(1) State that the offer is being made pursuant to section 2307.31 of the Revised Code;

(2) Identify the party or parties making the offer and the party or parties to whom the offer is being made;

(3) Generally identify the claim or claims the offer is attempting to resolve;

(4) State with particularity any conditions upon which the offer is being made;

(5) State the total amount of the offer;

(6) State with particularity the amount proposed to settle a claim for punitive damages, if any;

(7) State whether the offer includes attorney's fees or other expenses and whether attorney's fees or other expenses are part of the legal claim;

(8) Be accompanied by proof of service.

(C)(1) If a plaintiff rejects an offer of settlement made by a defendant pursuant to this section and if the final judgment is one of no liability or for an amount that is less than seventy-five per cent of the offer, the defendant may recover reasonable attorney's fees and expenses of litigation incurred by the defendant or on the defendant's behalf from the date of the rejection of the offer through the entry of judgment.

(2) If a defendant rejects an offer of settlement made by the plaintiff pursuant to this section and the plaintiff recovers a final judgment in an amount greater than one hundred and twenty-five per cent of the offer, the plaintiff may recover reasonable attorney's fees and expenses of litigation incurred by the plaintiff or on the plaintiff's behalf from the date of the rejection of the offer through the entry of judgment.

(D) An offer made under this section shall remain open for thirty days unless, before the expiration of the thirty-day period, the offeror withdraws the offer by a writing served on the offeree prior to acceptance by the offeree or the offeree rejects the offer. If the offeror withdraws the offer before the expiration of the thirty-day period, the offeror may not recover attorney's fees and expenses under division (C) of this section. A counteroffer constitutes a rejection, but it may serve as an offer if it is specifically denominated as an offer under this section.

(E) Acceptance or rejection of an offer by the offeree must be in writing and served upon the offeror. An offer that is neither withdrawn nor accepted within thirty days after being served shall be deemed rejected.

(F) Service of an offer or of an acceptance, rejection, or withdrawal of an offer shall be made in the manner prescribed in Civil Rule 5, except that the offer, acceptance, rejection, or withdrawal shall not be filed with the court.

(G) The rejection of an offer does not preclude the offeror from making one or more subsequent offers. A party's right to recover attorney's fees and expenses under division (C) of this section is determined in accordance with the last offer made by that party under this section.

(H) Evidence of an offer is not admissible except in proceedings to enforce a settlement or to determine reasonable attorney's fees and costs under this section.

(I)(1) After affirmance of the judgment on appeal or, if no appeal is taken, after the expiration of the time within which a notice of appeal must be filed, a party may apply to the court for an order requiring payment of attorney's fees and expenses under division (C) of this section. Subject to division (I)(2) of this section, upon receipt of proof that the judgment is one to which division (C) of this section applies and proof of the attorney's fees and expenses incurred, the court shall order the payment of reasonable attorney's fees and expenses.

(2) The court may deny an application made under division (I)(1) of this section if the court determines that the offer was not made in good faith. The court shall deny an application made under division (I)(1) of this section if it determines, on a motion made under section 2323.51 of the Revised Code, that the party making the application asserted a frivolous claim or defense. If the court denies the application, it shall set forth the basis for the denial in the order denying the application.

(J)(1) If a party makes an offer of settlement in accordance with this section and the offeree rejects the offer, the offeror has a cause of action against the offeree for attorney's fees and expenses as determined under division (C) of this section. The cause of action accrues upon affirmance of the judgment on appeal or, if no appeal is taken, upon the expiration of the time within which a notice of appeal must be filed. An action under division (J)(1) of this section shall be brought within one year after the cause of action accrues.

(2) It is an affirmative defense to an action brought under division (J)(1) of this section that the offeror did not make the offer in good faith or that the offeror asserted a frivolous claim or defense in the action in which the offer was made.

(3) A court may award reasonable attorney's fees and expenses of litigation to the prevailing party in an action brought under division (J)(1) of this section.

(4) Divisions (B) to (I) of this section do not apply to an action brought under division (J)(1) of this section.

(K) A party may not seek relief under both division (I) and division (J) of this section.