Helton v. Fifth Third Bank , 2022 Ohio 1023 ( 2022 )

[Cite as Helton v. Fifth Third Bank, 2022-Ohio-1023.]
IN THE COURT OF APPEALS
FIRST APPELLATE DISTRICT OF OHIO
HAMILTON COUNTY, OHIO
HELEN CLARKE HELTON, : APPEAL NO. C-210451
TRIAL NO. 2015-003814
CATHERINE T. CLARKE, :
O P I N I O N.
JAMES W. CLARKE, :
MARY ZIGO, :
and :
BRIDGET MURPHY, :
Plaintiffs-Appellants, :
vs. :
FIFTH THIRD BANK, :
Defendant-Appellee. :
Appeal From: Hamilton County Court of Common Pleas, Probate Division
Judgment Appealed From Is: Affirmed
Date of Judgment Entry on Appeal: March 30, 2022
Schlichter Bogard & Denton, Andrew D. Schlichter and Alexander L. Braitberg, and
Christopher R. Heekin Co., LLC, and Christopher R. Heekin, for Plaintiffs-Appellants,
Vorys, Sater, Seymour and Pease LLP, Victor A. Walton, Jr., Nathaniel Lampley, Jr.,
Jacob D. Mahle, James B. Lind and Jessica K. Baverman, for Defendant-Appellee.
OHIO FIRST DISTRICT COURT OF APPEALS
MYERS, Presiding Judge.
{¶1} This is the second appeal in a lawsuit filed against defendant-appellee
Fifth Third Bank (“Fifth Third”) by plaintiffs-appellants Helen Clarke Helton,
Catherine T. Clarke, James W. Clarke, Mary Zigo, and Bridget Murphy (collectively
referred to as “the Clarke siblings”) concerning Fifth Third’s management of two trusts
of which the Clarke siblings are beneficiaries.
{¶2} In this appeal, we consider the propriety of the trial court’s grant of
summary judgment to Fifth Third on the Clarke siblings’ remaining claim for unjust
enrichment. Because the law-of-the-case doctrine did not prohibit the trial court from
considering a second motion for summary judgment following a remand from this
court, and because the Clarke siblings have not conferred a benefit on Fifth Third, a
necessary element for a claim of unjust enrichment, we affirm the trial court’s grant of
summary judgment to Fifth Third.
Factual and Procedural Background
{¶3} The Clarke siblings are current income beneficiaries of two separate
trusts over which Fifth Third serves as the sole trustee. A detailed history of these
trusts and how the Clarke siblings came to be beneficiaries is set forth in this court’s
opinion in Helton v. Fifth Third Bank, 1st Dist. Hamilton No. C-180284, 2019-Ohio-
5208 (“Helton I”). For purposes of this appeal, we provide a more concise explanation.
{¶4} The two trusts at issue are an inter vivos trust and a testamentary trust.
The inter vivos trust was established by the Clarke siblings’ great uncle William C.
Sherman for the benefit of the Clarke siblings’ mother and her descendants, and
Sherman’s brother John Q. Sherman (“JQS”) and his descendants. Sherman also
established a separate testamentary trust for the benefit of the Clarke siblings’ mother
and her descendants. The Clarke siblings’ mother was an income beneficiary of these
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trusts until her death in 2015. While their mother was alive, the Clarke siblings were
remainder beneficiaries of both trusts. They became income beneficiaries of both
trusts upon their mother’s death. Income beneficiaries, but not remainder
beneficiaries, of the trusts received ongoing distributions. The distributions came
from the income of the trusts and were paid directly to the beneficiaries. From 1981
until her death in 2015, the Clarke siblings’ mother received approximately 72 million
dollars in distributions from the two trusts.
{¶5} Both trusts were funded with shares from Standard Register, a paper
company founded by Sherman and JQS. Fifth Third, which as trustee had broad
discretion over the trusts’ investments, was concerned with the trusts’ concentration
in Standard Register stock. Fifth Third hired Morgan Stanley to prepare a report on
possible ways to diversify the trusts. The report discussed several means of
diversification, including a sale of the company. The Clarke siblings, along with their
mother and a brother who is not a part of this lawsuit, sued Fifth Third to prevent it
from selling any Standard Register stock held by the two trusts unless the sale was a
part of a coordinated sale of all stock held by both trusts as well as all stock in a
separate trust established by JQS. Despite Fifth Third’s concerns, the trusts were
never diversified. The value of Standard Register stock declined over time. In 2013,
Standard Register merged with another company, and in 2015, it filed for bankruptcy.
The values of the testamentary trust and inter vivos trust have declined to almost zero.
{¶6} In 2015, after becoming income beneficiaries of both trusts, the Clarke
siblings filed a complaint against Fifth Third asserting various claims regarding Fifth
Third’s management of the trusts. In brief summary, count one of the complaint
alleged that Fifth Third had breached the common law, statutory, and trust duty to
diversify, count two alleged a breach of the duty of impartiality, count three alleged a
claim for breach of trust/fiduciary duty, and count four asserted a claim for unjust
enrichment. Counts five and six sought to remove Fifth Third as trustee of the trusts
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and an injunction to prohibit Fifth Third from transferring any trust assets pending
its removal as trustee.
{¶7} Fifth Third moved for summary judgment on all counts, arguing that
the claim for the breach of the duty to diversify was filed outside of the applicable
limitations period, and that all remaining claims arose from the breach of the duty to
diversify and were also time-barred. The Clarke siblings opposed Fifth Third’s motion
and filed their own motion for summary judgment. The trial court denied the Clarke
siblings’ motion, but granted the motion filed by Fifth Third. It found that Fifth Third
was entitled to summary judgment because the essence of all of the Clarke siblings’
claims was a breach of fiduciary duty for the failure to diversify and that the claims
were filed outside of the limitations period set forth in R.C. 5810.05.
{¶8} The Clarke siblings appealed. In Helton I, 1st Dist. Hamilton No. C-
180284, 2019-Ohio-5208, we affirmed the trial court’s grant of summary judgment to
Fifth Third on the first three claims in the Clarke siblings’ complaint. We held that the
claim for breach of the duty to diversify was filed outside of the applicable limitations
period, and that the asserted claims for breach of the duty of impartiality and breach
of trust/fiduciary duty stemmed from the alleged failure to diversify and were also
time-barred. Id. at ¶ 42 and 47. But we reversed the trial court’s grant of summary
judgment with respect to the claim for unjust enrichment. After setting forth the
allegations in the complaint on which the unjust-enrichment claim was based, we held
that:
The unjust-enrichment claim was based on Fifth Third’s alleged
improper taking of fees from the trust. Although the complaint alleges
that one reason Fifth Third was not entitled to the fees was because it
had failed to diversify the trusts, the misconduct alleged in this claim is
separate from the allegations of misconduct supporting the claim for
breach of the duty to diversify the trusts. We therefore hold that the
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trial court erred in finding that the unjust-enrichment claim stemmed
from the claim concerning the failure to diversify.
Id. at ¶ 49.
{¶9} On remand, after considering motions from both parties regarding the
court’s discretion to allow summary-judgment briefing on the remaining claim, the
trial court issued an entry permitting the filing of a motion for summary judgment on
the unjust-enrichment claim. Fifth Third filed various depositions, affidavits, and a
motion for summary judgment on the claim for unjust enrichment. The Clarke
siblings filed a memorandum in opposition. The trial court denied Fifth Third’s
motion.
{¶10} Fifth Third subsequently filed a motion for reconsideration, asking the
trial court to reconsider its denial of Fifth Third’s motion for summary judgment in
light of this court’s intervening decision in Deffren v. Johnson, 2021-Ohio-817, 169
N.E.3d 270 (1st Dist.), which Fifth Third argued confirmed that to proceed on a claim
for unjust enrichment, a plaintiff must himself or herself confer a benefit upon the
defendant. Fifth Third argued that the Clarke siblings never conferred a benefit on
Fifth Third prior to their mother’s death, during the time period in which they were
remainder beneficiaries, because Fifth Third drew its fees from the income of the
trusts, which ultimately was distributed to the income beneficiaries after Fifth Third’s
fees were paid. Fifth Third contended that any benefit conferred during the period in
which the Clarke siblings were remainder beneficiaries was conferred by their mother.
And, Fifth Third argued, because the Clarke siblings were not challenging any fees
incurred by Fifth Third after they became income beneficiaries, Fifth Third was
entitled to summary judgment on the claim for unjust enrichment.
{¶11} After considering Fifth Third’s motion and a memorandum in
opposition filed by the Clarke siblings, the trial court issued an entry “granting [Fifth
Third’s] motion for reconsideration and granting partial summary judgment on unjust
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OHIO FIRST DISTRICT COURT OF APPEALS
enrichment claim.” It stated that it was applying the law as clarified by this court in
Deffren, and that because the Clarke siblings had conferred no benefit on Fifth Third,
Fifth Third was entitled to summary judgment on the unjust-enrichment claim with
respect to all trustee fees paid prior to May 1, 2015—the date that the Clarke siblings
became income beneficiaries. The trial court’s entry additionally stated that there was
no just reason for delay.
{¶12} The Clarke siblings appeal the trial court’s judgment, arguing in a single
assignment of error that the trial court erred in granting summary judgment to Fifth
Third.1 We review a trial court’s grant of summary judgment de novo. Grafton v. Ohio
Edison Co., 77 Ohio St.3d 102, 105, 671 N.E.2d 241 (1996). Summary judgment is
appropriately granted when there exists no genuine issue of material fact, the party
moving for summary judgment is entitled to judgment as a matter of law, and the
evidence, when viewed in favor of the nonmoving party, permits only one reasonable
conclusion that is adverse to that party. State ex rel. Howard v. Ferreri, 70 Ohio St.3d
587, 589, 639 N.E.2d 1189 (1994).
Unjust-Enrichment Claim
{¶13} A more detailed explanation of the Clarke siblings’ claim for unjust
enrichment is necessary before turning to the merits of the appeal. The complaint
contained the following allegations in support of the claim for unjust enrichment:
Defendant-Trustee Fifth Third obtained and continues to retain
benefits to which it is not entitled, at the expense of Plaintiffs-
1As set forth above, the trial court held that Fifth Third was entitled to summary judgment on the
unjust-enrichment claim with respect to all trustee fees paid prior to May 1, 2015, which was the
date that the Clarke siblings became income beneficiaries. The Clarke siblings concede that they
are not challenging any fees collected by Fifth Third after they became income beneficiaries.
Consequently, our analysis of the unjust-enrichment claim in this opinion concerns fees taken by
Fifth Third prior to May 1, 2015, the time period in which the Clarke siblings were remainder
beneficiaries.
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OHIO FIRST DISTRICT COURT OF APPEALS
Beneficiaries, including but not limited to the fees which it took for
purposes of prudently managing Trust assets, which, given its
abdication of its duties (particularly the duty to diversify), [are] fees it
did not earn[.]
Defendant-Trustee Fifth Third obtained these fees by way of
constructive fraud/unjust enrichment and it should not, in equity hold
them[.]
Said management fees should be disgorged to Plaintiffs-Beneficiaries[.]
Plaintiffs-Beneficiaries are entitled to the equitable remedies of
Constructive Trust and Disgorgement.
{¶14} Through the unjust-enrichment claim, the Clarke siblings sought to
personally recover the fees that Fifth Third took for its management of the trusts,
which the Clarke siblings alleged were excessive and not earned by Fifth Third.
Law-of-the-Case Doctrine
{¶15} The Clarke siblings contend that the law-of-the-case doctrine barred the
trial court from reentering summary judgment on the unjust-enrichment claim after
this court’s reversal of the trial court’s prior entry of summary judgment on that claim.
{¶16} Under the law-of-the-case doctrine, “legal questions resolved by a
reviewing court in a prior appeal remain the law of that case for any subsequent
proceedings at both the trial and appellate levels.” Giancola v. Azem, 153 Ohio St.3d
594, 2018-Ohio-1694, 109 N.E.3d 1194, ¶ 1. The intent of the doctrine is to ensure
consistent results in a case and to avoid endless litigation. Id. at ¶ 14. It is “a rule of
practice rather than a binding rule of substantive law and will not be applied so as to
achieve unjust results.” Nolan v. Nolan, 11 Ohio St.3d 1, 3, 462 N.E.2d 410 (1984).
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{¶17} The doctrine has also been applied to “preclude[] a litigant from
attempting to rely on arguments at a retrial which were fully pursued, or available to
be pursued, in a first appeal.” City of Hubbard ex rel. Creed v. Sauline, 74 Ohio St.3d
402, 404-405, 659 N.E.2d 781 (1996). It is inapplicable, however, where “the
subsequent proceedings involve different evidence or different legal issues.”
Vonderhaar v. City of Cincinnati, 191 Ohio App.3d 229, 2010-Ohio-6289, 945 N.E.2d
603, ¶ 13 (1st Dist.).
{¶18} In the first appeal of this case, the only holding that this court made with
respect to the claim for unjust enrichment was that the misconduct on the part of Fifth
Third alleged in support of the claim was separate from the allegations of misconduct
supporting the claim for the breach of the duty to diversify, and that summary
judgment on the unjust-enrichment claim was not appropriate based on a finding that
the unjust-enrichment claim stemmed from the breach-of-the-duty-to-diversify claim.
Helton I, 1st Dist. Hamilton No. C-180284, 2019-Ohio-5208, at ¶ 49. We did not
otherwise consider the merits of the claim, as the parties made no other arguments to
this court regarding the claim.
{¶19} Following our remand, additional affidavits were filed and the record
was expanded. And the legal issue presented to the court—that the claim for unjust
enrichment failed because the Clarke siblings could not establish that they conferred
a benefit on Fifth Third—was not argued to the trial court in the first motion for
summary judgment or considered by this court in the earlier appeal. The Clarke
siblings argue that Fifth Third could have raised the argument in its first motion for
summary judgment, and that consequently the law-of-the-case doctrine prevents it
from relying on that argument on remand.
{¶20} We agree that this argument was available to be raised by Fifth Third in
its first motion for summary judgment. But we also recognize that this case, from its
inception, involved a myriad of legal issues and a voluminous record concerning Fifth
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Third’s actions as trustee over many decades. In the first motion for summary
judgment, the parties and the court focused on whether the gravamen of all asserted
claims was the breach of the duty to diversify. Once it was determined that the unjust-
enrichment claim was supported by independent allegations, Fifth Third focused its
arguments in support of a second motion for summary judgment on the merits of the
claim.
{¶21} We find that the law-of-the-case doctrine did not bar the trial court from
reentering summary judgment on the unjust-enrichment claim on remand.
Impact of Deffren
{¶22} The Clarke siblings next argue that the Deffren case relied on by the trial
court when granting Fifth Third’s motion for reconsideration cannot overrule this
court’s finding in Helton I, 1st Dist. Hamilton No. C-180284, 2019-Ohio-5208, that
summary judgment on the unjust-enrichment claim (which the Clarke siblings
continue to refer to as their “excessive fee” claim) was improper.
{¶23} First, we again point out that this court’s decision in Helton I did not
hold that summary judgment would never be appropriate on the unjust-enrichment
claim. Rather, we held that summary judgment could not be granted on the unjust-
enrichment claim based on a finding that it stemmed from the claim for breach of the
duty to diversify. Our decision solely concerned the statute of limitations for the
breach-of-the-duty-to-diversify claim and whether the gravamen of the remaining
claims was a breach of the duty to diversify. We made no ruling on the merits of the
claim for unjust enrichment.
{¶24} Second, contrary to the Clarke siblings’ assertion, the trial court, in its
entry granting partial summary judgment, did not find that the Deffren case overruled
our earlier opinion in Helton I, nor could it have. Deffren did not involve a statute-of-
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limitations analysis, and it had no impact on our holding in Helton I. Rather, the
Deffren case, as discussed below, analyzed the elements of a claim for unjust
enrichment as they related to the facts of that case. Deffren did not expand the law on
unjust enrichment. The Deffren court applied the elements of unjust enrichment—
elements that have been long established and recognized as the law on unjust
enrichment—to the unique facts of that case.
No Benefit was Conferred
{¶25} We now turn to the merits of the Clarke siblings’ claim for unjust
enrichment. A person is unjustly enriched where she or he “has and retains money or
benefits which in justice and in equity belong to another.” Morequity, Inc. v. Fifth
Third Bank, 1st Dist. Hamilton No. C-080824, 2009-Ohio-2735, ¶ 22, quoting Smith
v. Vaughn, 174 Ohio App.3d 473, 2007-Ohio-7061, 882 N.E.2d 941, ¶ 10 (1st Dist.).
To establish unjust enrichment, a plaintiff must show that (1) a benefit was conferred
by the plaintiff upon the defendant; (2) the defendant had knowledge of the benefit;
and (3) the benefit was retained by the defendant in circumstances where it would be
unjust to do so without payment. Id.; Deffren, 2021-Ohio-817, 169 N.E.3d 270, at ¶
10.
{¶26} As set forth in their complaint, the Clarke siblings contend that Fifth
Third took excessive fees for its management of the trusts, that Fifth Third abdicated
its duties and did not earn those fees, and that Fifth Third obtained the fees by way of
unjust enrichment. Fifth Third argued, and the trial court agreed, that the Clarke
siblings’ claim necessarily failed because they had not conferred a benefit on Fifth
Third.
{¶27} In Deffren, this court discussed in detail this first element of a claim for
unjust enrichment. Plaintiff Deffren purchased the assets of a company from its
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owner, Kenneth Johnson. Several years after the purchase, Deffren sued Kenneth, as
well as Kenneth’s wife Donna and his two children, alleging a misappropriation of
company funds. Id. at ¶ 2. Deffren specifically alleged that Donna had deposited
customer payments for work that was done prior to closing on the sale into the
company’s account, instead of turning the payments over to Deffren. After the
company’s dissolution, the funds at issue were then transferred into a joint account
owned by Kenneth and Donna. Id. at ¶ 3. Kenneth passed away during the litigation,
and Deffren sought to recover the funds at issue from Donna via a claim for unjust
enrichment.
{¶28} This court held that the unjust-enrichment claim could not be brought
against Donna, a third-party to the contract between Deffren and Kenneth. Id. at ¶ 12.
We explained that Deffren conferred no benefit on Donna, stating “True, [the
company] eventually dissolved and turned those funds over to Kenneth (as sole
shareholder), and those funds were eventually placed in a joint bank account with
Donna, but such facts are too slender a reed on which to construct an unjust
enrichment claim. By that logic, any downstream recipient of funds would risk liability
for unjust enrichment.” Id. at ¶ 13.
{¶29} In this case, the evidence establishes that the Clarke siblings did not
confer a benefit on Fifth Third. As stated in an affidavit in support of Fifth Third’s
motion for summary judgment by Jenny Franta, a Fifth Third employee who served
as a trust officer for both trusts involved in this case, Fifth Third took its fees from
income earned by the two trusts, not from the principal of the trusts. According to
Franta, Fifth Third never collected fees for trust management in any given year
exceeding the total amount of income earned by the trust for the same year. And after
Fifth Third took its fees, any remaining income was given directly to the income
beneficiaries. For the testamentary trust, this was the Clarke siblings’ mother. And
for the inter vivos trust, this was the Clarke siblings’ mother and either JQS or his
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OHIO FIRST DISTRICT COURT OF APPEALS
descendants. If any benefits were conferred on Fifth Third, it was done so by these
income beneficiaries.
{¶30} During the time that they were remainder beneficiaries, the Clarke
siblings had no current interest in the trusts and received no income distributions.
Rather, all distributions went to their mother and any other income beneficiaries. So
if Fifth Third had, in fact, taken excessive fees to which it was not entitled for
management of the trusts, any benefit conferred on Fifth Third was done so by the
then income beneficiaries, including the Clarke siblings’ mother, to whom those fees
would have been disbursed if not taken by Fifth Third.
{¶31} Seemingly aware of this roadblock to their unjust-enrichment claim, as
the Clarke siblings’ conceded in both appellate briefing and during oral argument
before this court that they could not have conferred a benefit on Fifth Third as
remainder beneficiaries, the Clarke siblings argue that they brought the unjust-
enrichment claim on behalf of the trusts and that they sought to have the allegedly
excessive fees taken by Fifth Third returned to the trust. The language of the complaint
negates this contention, as nowhere does it state that the Clarke siblings were asserting
their claims on behalf of the trusts. The complaint was brought by the Clarke siblings
in their individual capacities, and the cause of action for unjust enrichment requested
that the excessive management fees taken by Fifth Third be disgorged to the Clarke
siblings themselves. And in their prayer for relief, the Clarke siblings personally
requested compensatory and punitive damages, and did not request that any funds be
returned to the trusts.
{¶32} Because the record contains no genuine issues of material fact and
establishes that the Clarke siblings did not confer a benefit on Fifth Third, a necessary
element for an unjust-enrichment claim, we hold that the trial court did not err in
granting Fifth Third’s motion for summary judgment.
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{¶33} The Clarke siblings’ assignment of error is overruled, and the judgment
of the trial court is affirmed.
Judgment affirmed.
ZAYAS and CROUSE, JJ., concur.
Please note:
The court has recorded its own entry on the date of the release of this opinion.
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