Dueck v. Clifton Park Trust , 2019 Ohio 4784 ( 2019 )

[Cite as Dueck v. Clifton Park Trust, 2019-Ohio-4784.]
COURT OF APPEALS OF OHIO
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
ARTHUR P. DUECK, ET AL., :
Plaintiffs-Appellants, :
No. 108008
v. :
JOSEPH KERRIGAN, TRUSTEE, :
CLIFTON PARK TRUST, ET AL.
Defendants-Appellees. :
JOURNAL ENTRY AND OPINION
JUDGMENT: AFFIRMED
RELEASED AND JOURNALIZED: November 21, 2019
Civil Appeal from the Cuyahoga County Court of Common Pleas,
Probate Division
Case No. 2018 ADV 234080
Appearances:
Hahn, Loeser & Parks, L.L.P., Dennis R. Rose, and
Casey J. McElfresh, for appellant.
Krugliak, Wilkins, Griffiths & Dougherty Co., L.P.A.,
Terry J. Evans, and Karen Soehnlen McQueen, for
appellees.
ANITA LASTER MAYS, J.:
I. Introduction and Background
A. The 2012 action
We recite excerpts of our opinion in Dueck v. Clifton Club Co., 2017-
Ohio-7161, 95 N.E.3d 1032 (8th Dist.) (“Dueck I”), arising from a declaratory
judgment action initiated in 2012,1 as background for this case and hereby
incorporate the defined terms therein for the current opinion:
Plaintiffs-appellants Arthur P. Dueck (“Dueck”), Todd Gilmore
(“Gilmore”), Nancy Binder (“Binder”), and William R. Keller (“Keller,”
collectively “appellants”) appeal the trial court’s grant of summary
judgment in a declaratory judgment action, interpreting a trust
agreement in favor of defendants-appellees Clifton Park Trust Trustees
(“Trustees”) and The Clifton Club Company (“Clifton Club”). * * * After
a thorough review of the record, we find that the nonresident members
of the Clifton Club are not beneficiaries of the Trust and, as a result,
have no legal rights. The matter is reversed and remanded as instructed
herein for a hearing on the amount of sanctions.
Dueck I at ¶ 1.
The case involved a dispute regarding use of the Clifton Park Beach:
Appellants are lot owners in the Clifton Park Allotment in Lakewood,
Ohio (“Clifton Park”), a residential area owned and developed in the
1800s by the Clifton Park Association (“Clifton Park Association”),
predecessors in interest to the Clifton Park Land & Improvement
Company (“Land Company”). In 1912, the Land Company placed the
Clifton Park private park and beach area (collectively the “Beach”) into
a trust (“Trust”) for the use and enjoyment of all Clifton Park lot
owners, vesting lot owners with the legal status of Trust beneficiaries
(“Beneficiaries”). The Clifton Club, a social club operating in Clifton
Park since 1902, is a members-only establishment. Membership is
open to the lot owner Beneficiaries, as well as nonresidents of Clifton
Park (“Club Members”). While the Clifton Club’s membership is
comprised of both resident lot owners and nonresidents, the focus of
1 Dueck v. Clifton Club Co., Cuyahoga C.P. No. 2012 ADV 179424.
this case is whether Club Members, due to their status as Club
Members, are Beneficiaries under the Trust and entitled to Beach
access.
Dueck I at ¶ 2.
After an in-depth analysis of the trust documents and history, we
decided that there is
a historical understanding by the Trustees and Clifton Club that the
Club Members’ right to access the Beach is permissive, and that the
Trustees have full authority to regulate Beach access. The Club Lease,
capping the membership number subject to the settlors’ consent,
confirms that the Clifton Club’s use, even as a direct Beneficiary, is not
unfettered, particularly since the purpose of the Trust is to allow the lot
owners to enjoy the Beach.
We conclude that the trial court correctly determined that the Club
Members have a “right” to use the Beach. However, in response to the
declaration explicitly requested by appellants, we find that the Club
Members have no legal right of access as Beneficiaries. Access by the
Club Members is by permission and regulation of the Trustees.
Dueck I at ¶ 66-67.
B. The 2018 action
In the instant case, the parties continue to debate entitlement to
Beach access and Trustee regulation. Plaintiffs-appellants Arthur P. Dueck, Paul A.
Bjorn, Nancy Binder, and William R. Keller appeal the November 20, 2018
judgment of the Cuyahoga County Court of Common Pleas, Probate Division.
Appellants challenge the trial court’s dismissal with prejudice of Count 1 of the
Second Amended Complaint seeking to enjoin the current Clifton Park Trust
Trustees; Joseph Kerrigan, Mary Ellen Fraser, Robert Frost, Warren Coleman, and
Ryan Meany (“Trustees”); from granting members of the Clifton Club “a permissive
right to use the Beach that is equal to the rights of the Beneficiaries without the
unanimous consent of the Beneficiaries.” Brief of appellants, p. 5.
Appellants argue that the rules issued by the Trustees for 2018
granted the Club Members the same rights as the Beneficiaries and, to some extent,
greater rights. Appellants filed the instant action in May 2018. Via the second
amended complaint filed on May 2, 2018, appellants filed an action pursuant to
R.C. 2101.24 and 2721.05 and allege:
the Trustees have issued rules related to the use of Trust Property —
held in the form of the Clifton Park Beach and related Beach Property —
that (a) grants each individual Club Member a right to use the Trust
Property that is equal to the rights of an individual Resident Beneficiary
to the use the Trust Property and (b) grants the Club rights to use the
Trust Property that are far greater than any individual Resident
Beneficiary in Clifton Park — in fact 224 times greater.
Second amended complaint, ¶ 76.
Count 1 requests an injunction under R.C. 5810.01(B) to prevent the
Trustees from granting the permissive rights to the Club Members contained in the
rules without the unanimous consent of the Beneficiaries because the conduct is a
breach of the Trust and the Trustees’ fiduciary duties. Appellants also pray for costs,
expenses, and attorney fees pursuant to R.C. 5810.04.
Count 2 of the second amended complaint asserts that the Trustees
breached their fiduciary duties by implementing rules that provide the Club
Members with greater access and rights to use the Beach than the Beneficiaries.
Appellants seek an injunction under R.C. 5810.01(B) and costs, expenses, and
attorney fees under R.C. 5810.04.
Count 3 alleges that the Trustees breached their fiduciary duties by
creating rules that reduced the common use of the Beneficiaries to 60 percent of
portions of the Beach. Appellants seek an injunction under R.C. 5810.01(B) and
costs, expenses and attorney fees under R.C. 5810.04.
Appellants charge that the Trustees breached their fiduciary duty to:
(1) keep current Beneficiaries reasonably informed of Beach administration and
material facts to allow the Beneficiaries to protect their interests; and (2) promptly
respond to requests by Beneficiaries for Trust administration information.
Appellants seek an injunction under R.C. 5810.01(B) and costs, expenses, and
attorney fees under R.C. 5810.04.
It is the position of the Trustees that they have acted properly and
within the scope of their authority pursuant to this court’s ruling in Dueck I. The
Trustees respond that the instant action is simply a collateral attack because the
issues involved are res judicata.
On May 15, 2018, appellants filed a motion for temporary restraining
order and preliminary injunction under Civ.R. 65 (“TRO”) to enjoin the Trustees
from implementing the rules for the 2018 season. Attached to the motion was 79
pages of exhibits including the Trust Deed, historical information about Clifton Park
and the Beach, correspondence between the parties prior to institution of this case,
and a legal update document issued by the Trustees (“Legal Update”) that provides
a summary of the outcome of Dueck I and focuses on this court’s determination that
the Trustees have the right to regulate use of the Beach.
The Legal Update provides that while the Dueck I appeal in the Ohio
Supreme Court2 was pending in December 2017, the Trustees “increased the Clifton
Club’s assessment to 45 percent of the annual budget and maintained the same
number of Club Members to access the Beach as in the previous five years, for the
calendar year 2018.” Access to the Beach was granted to 224 Clifton Club families,
the same number with access over the prior five years.
The Legal Update also provides:
2018 Assessment & Club Member Access Review — 2018 assessments
will remain the same * * *. Any significant changes to assessments after
the calendar year has begun to present administrative challenges and
potential financial burden to Beneficiaries. For example, if $127,000
(the Clifton Club’s assessment) was to be re-assigned to Lot Owner
Beneficiaries other than the Clifton Club for only a portion of 2018,
administrative and substantive challenges occur for the following
reasons:
1) Trust Beneficiaries are preparing and transmitting
payments.
2) Clifton Park Trustees have received and processed
payments.
3) Assessment amounts to Lot Owner Beneficiaries would
increase significantly and may represent an unanticipated
financial burden to Lot Owner Beneficiaries.
The Legal Update states that, in recognition of the difference between
the rights of Beneficiaries and Club Member, the car stickers issued for each group
would be distinguishable to allow the Trustees to monitor the traffic in consideration
of future adjustments. The Trustees also modified the table and occupancy rules to
2 The Ohio Supreme Court declined jurisdiction in Dueck v. Clifton Club Co.,
2018-Ohio-723, 92 N.E.3d 879.
“better reflect the intention of the rules and the assignment of rights in light of the
Court’s decision.”
The Legal Update also shares the result of the Trustees’ 2018
operating expense review:
We expect legal expenses to triple from the original budget of $20,000.
This is a direct result of (i) the Clifton Park Trustees seeking legal
counsel to interpret and administer the Trust following the Court’s
decision, and (ii) inquiries from Beneficiaries and Plaintiff Appellants
that carry legal ramifications to the Trust and all Beneficiaries
(primarily regarding the interpretation of the Court’s decisions). As a
result of the past litigation, the current Trustees felt it prudent to use
legal counsel on matters in order to appropriately carry out our duties,
as well as hopefully avoid future litigation involving the Trust. It is our
duty to protect the interests of all Trust Beneficiaries impartially and
with due regard to the interest of each Beneficiary.
It is our responsibility to continuously report the financial condition of
the Trust. We are delaying certain projects originally planned for the
[sic] 2018 to accommodate the increased legal expenses. These
projects include the replacement of the boardwalk and associated
lighting. We are still planning to repair the Beach House Chimney.
The 2018 rules are attached to the Legal Update.
On May 15, 2018, the Trustees filed a responsive motion accompanied
by 82 pages of exhibits that includes appellants’ opposition to summary judgment
in Dueck I, appellants’ October 19, 2015 trial brief, witness list and stipulations
submitted in Dueck I, and appellants’ August 16, 2017 press release regarding the
court victory in Dueck I.
The Trustees also filed a motion to dismiss the complaint on May 15,
2018. The motion is based on appellants’ failure to state a claim upon which relief
can be granted under Civ.R. 12(B)(6) as to Count 1 of the second amended complaint
based on res judicata. The Trustees also asserted a claim under Civ.R. 12(B)(7) due
to the failure to join Clifton Club and the other lot owner Beneficiaries as
indispensable and necessary parties as to all counts.
The trial court responded:
[T]he doctrine of res judicata encompasses the two concepts of claim
preclusion, also known as res judicata or estoppel by judgment, and
issue preclusion, also known as collateral estoppel. O’Nesti v.
DeBartolo Realty Corp., 113 Ohio St. 3d 59, 2007-Ohio- 1102, 862
N.E.2d 803, ¶ 6. Claim preclusion prevents subsequent actions, by the
same parties or their privies, based upon any claim arising out of a
transaction that was the subject matter of a previous action. Id.
Further, the doctrine of issue preclusion precludes the relitigation of an
issue that had been actually and necessarily litigated and determined
in a prior action that was based on a different cause of action. Ft. Frye
Teachers Assn., OEA/NEA v. State Emp. Relations Bd., 81 Ohio St. 3d
392, 395, 692 N.E.2d 140, (1998). Issue preclusion holds that a fact or
a point that was actually and directly at issue in a previous action, and
was passed upon and determined by a court of competent jurisdiction,
may not be drawn into question in a subsequent action between the
same parties or their privies, whether the cause of action in the two
actions be identical or different. Stacy v. Batavia Local School Dist.
Bd. of Edn., 97 Ohio St. 3d 269, 2002-Ohio-6322, 779 N.E.2d 216, ¶ 16
(2002).
As a result of Plaintiffs’ formerly litigated Complaint filed with this
Court in June 2012, the Eighth District Court of Appeals held that
Plaintiffs sought a declaration seeking that the Club Members are not
lot owners; Plaintiffs requested that the Court hold Club Members are
not Beneficiaries of the Trust and do not have the same legal rights as
the lot owner Beneficiaries to access the Beach. Dueck v. Clifton Club
Co., 8th Dist. Cuyahoga No[s]. 103868 [and 103888], 2017-Ohio-7161,
95 N.E.3d 1032, ¶ 3, appeal not allowed. Further, the Eighth District
Court of Appeals found, “while the Clifton Club’s membership is
comprised of both resident lot owners and nonresidents, the focus of
this case is whether Club Members, due to their status as Club
Members, are Beneficiaries under the Trust and entitled to Beach
access.” Id. at ¶ 2.
Amended judgment entry No. 1974350 (Nov. 20, 2018), p. 1-2.
The trial court also addressed appellants’ contention underlying
Count 1 that unanimous consent by the Beneficiaries for the Club Members
permissive use of the Beach is required:
Pursuant to Count 1 of Plaintiffs’ Second Amended Complaint filed
with this Court on May 2, 2018, Plaintiffs now seek relief due to an
alleged breach of fiduciary duty by the Defendant Trustees for
permitting Clifton Club Members a permissive right to use the Beach
and Beach Property equal to the rights of the Trust beneficiaries
without the unanimous consent of the Clifton Park lot owners.
Although Plaintiffs allege a breach of fiduciary duty by the Defendant
Trustees, the alleged breach in Count 1 of the Complaint is based on the
assertion that Clifton Club Members do not have the right to access the
Beach and Beach Property without unanimous consent of the Clifton
Park lot owners.
Plaintiffs make such an allegation despite the conclusion of the Eighth
District Court of Appeals in the prior litigated case that, “the Club
Members are not equal or direct Beneficiaries of the Trust. The Club
Members have a permissive right to access the Beach as regulated by
the Trustees pursuant to the Trust Deed.” [Dueck I] at ¶ 126. The
matter of whether Clifton Club Members are permitted access to the
Beach and Beach Property was directly at issue in the Plaintiffs’ prior
complaint and decided by the Eighth District Court of Appeals which
held that there is a “historical understanding by the Trustees and
Clifton Club that the Club Members’ right to access the Beach is
permissive, and that the Trustees have full authority to regulate Beach
access.” Id. at ¶ 66.
In support of Count 1 of Plaintiffs’ Second Amended Complaint,
Plaintiffs maintain in allegation number eighteen (18) that unanimous
consent of lot owners is required to permit Clifton Club Members
access to the Beach and Beach Property. Plaintiffs quote the Trust Deed
asserting that “[n]o part of said land shall be sold, conveyed or
dedicated to public use without the unanimous consent of all the lot
owners in said allotment.” Upon review, this Court finds Plaintiffs’
claim that unanimous consent of lot owners is required for Clifton Club
Members to be permitted access to the Beach and Beach Property is
without merit. Clifton Club is a lot owner and is therefore a direct
beneficiary under the Trust. Further, as the Eighth District Court of
Appeals previously held, the Clifton Club Members have a permissive
right to access the Beach and Beach Property. Id. at ¶ 126. Because the
Clifton Club is a direct beneficiary to the Trust and Club Members have
a permissive right to access the Beach and Beach Property, Plaintiffs
have failed to establish how the access granted to the Clifton Club
Members constitutes a public use; because the access to the Beach and
Beach Property permitted and regulated by Defendant Trustees to the
Club Members does not qualify as a public use, unanimous consent of
the lot owners is therefore not required.
Id. at p. 2-4.
The trial court concluded:
This Court therefore finds that Count 1 of the Plaintiffs’ Second
Amended Complaint filed on May 2, 2018, is dismissed with prejudice.
The doctrine of res judicata bars Plaintiffs from relitigating whether the
Clifton Club Members have a permissive right to access the Beach and
Beach Property. Further, Clifton Club Members have a permissive right
to access the Beach and Beach Property, and as such, the access
permitted by the Trustees’ regulation does not qualify as public use
which would require unanimous consent of the lot owners. Therefore,
Defendant Trustees’ Motion to Dismiss is well-taken in part and should
be granted in part as to Count 1 of the Plaintiffs’ Second Amended
Complaint.
Amended judgment entry No. 1974350 (Nov. 20, 2018), p. 4.
The trial court declined to dismiss the remaining counts that focus on
an alleged breach of fiduciary duty against the Trustees. Joinder of the Clifton Park
lot owners as necessary parties was also required by the trial court.
The trial court expressly advised appellants that they could amend the
complaint to remove the claims that the Club Members lacked a permissive right
and that the Club Members’ use is a public use:
Plaintiffs shall be permitted leave to amend the complaint but may not
allege that Clifton Club Members do not have a permissive right to
access the Beach and Beach Property. Such a claim that Clifton Club
Members may not access the Beach and Beach Property is barred by
the doctrine of res judicata. Further, because the access permitted by
Defendant Trustees to Clifton Club Members does not qualify as a
public use, unanimous consent of the lot owners is not required.
Id. at p. 5.
Thus, it appears that upon removal of the cited elements of Count 1,
the remaining claims in Count 1 that were advanced pursuant to R.C. 5810.01(B)3
would have survived. Appellants elected to file the instant appeal, and a stay of
proceedings has been issued by the trial court as to the remaining counts.
II. Preliminary Considerations
A. Final Appealable Order
We note for purposes of R.C. 2505.02 that the trial court’s judgment
entry disposes of fewer than all claims. The entry provides that the order is final and
appealable and that there is no just reason for delay pursuant to Civ.R. 54(B);
however, the entry must also satisfy R.C. 2505.02. “In cases involving multiple
parties or claims, an order is final if it satisfies one of the grounds under
R.C. 2505.02 and also satisfies Civ.R. 54(B).” Heaton v. Ford Motor Co., 2017-
Ohio-7479, 96 N.E.3d 1191, ¶ 18 (8th Dist.).
R.C. 2505.02(B)(1) provides, “[a]n order is a final order that may be
reviewed, affirmed, modified, or reversed, with or without retrial, when it is * * *
[a]n order that affects a substantial right in an action that in effect determines the
action and prevents a judgment[.]” “To determine the action and prevent a
3 That section requires that trustees administer a “trust in good faith, in
accordance with its terms and purposes and the interests of the beneficiaries” pursuant
to R.C. Chapter 5801 to 5811.
judgment, the order ‘must dispose of the whole merits of the cause or some separate
and distinct branch thereof and leave nothing for the determination of the court.’
Hamilton Cty. Bd. of Mental Retardation & Dev. Disabilities v. Professionals Guild
of Ohio, 46 Ohio St. 3d 147, 153, 545 N.E.2d 1260 (1989).” Fried v. Abraitis, 8th Dist.
Cuyahoga No. 104650, 2017-Ohio-746, ¶ 5.
The trial court disposed of the claim in the complaint that was
previously determined by this court that the Club Members’ use of the Beach is
permissive, not legal, and derives from the Clifton Club’s status as a Beneficiary. The
trial court held that res judicata applied to this claim. The trial court also rejected
appellants’ underlying Count 1 allegation that the determination of Club Members’
access to the Beach was subject to the unanimous vote of the Beneficiaries because
the action served as a public use under the Trust Deed.
As previously recited herein, the remaining claims, which also require
joinder of the Beneficiaries as necessary parties, are for breach of fiduciary duty by
the Trustees in light of the legal framework set forth by this court in Dueck I and
fiduciary law:
[Under] Count 2 and Count 3 * * * [the trial court must determine]
whether the nature and extent of access that the Clifton Club Members
are permitted to the Beach and Beach Property constitute a breach of
fiduciary duty owed by the Defendant Trustees. Further, Count 4
remains before this Court as to whether the Defendant Trustees have
breached their fiduciary duty to provide information and documents to
the Trust beneficiaries relating to the administration of the Trust.
Amended judgment entry No. 1974350 (Nov. 20, 2018, p. 2-3).
We find that the decision disposes of a discreet branch of the claim
raised by appellant in the complaint and is therefore a final appealable order.
B. Incomplete Record
The key issue in this case is the application of res judicata. The
Trustees assert that the assignments of error should be summarily overruled
because appellants failed to file a copy of their complaint in Dueck I. This failure,
the Trustees contend, has resulted in an incomplete record that prevents this court
from determining whether the issues are the same for purposes of res judicata.
An appellant has a duty to file those parts of the record necessary for
a review of the trial court’s decision. Lakewood v. Collins, 8th Dist. Cuyahoga
No. 102953, 2015-Ohio-4389, citing App.R. 9(B). In the absence of a complete
record, the appellate court accepts the factual findings of the trial court as true and
limits its review to the legal conclusions of the trial court. Bailey v. Bailey, 8th Dist.
Cuyahoga No. 981173, 2012-Ohio-5073.
The Trustees cite Ketchel v. Bainbridge Twp., 79 Ohio App. 3d 174,
607 N.E. 22 (11th Dist.1992), in support of their argument. In that case, the Eleventh
District decided whether the trial court erred in granting summary judgment against
appellants’ causes of action based on res judicata. As in the instant case, the plaintiff
in Ketchel failed to file a copy of the complaint from the prior action for comparison.
The Eleventh District concluded that
because the original complaint from [the first action] is not part of the
record before this court, the assignment cannot be properly addressed
and appellants cannot, therefore, demonstrate this portion of the
claimed error under this assignment.
Id. at 178. This conclusion was based on the notion that a comparison of the “exact
wording” of the two complaints was “of paramount importance.” Id.
However, Ketchel is distinguishable from the case before us because,
unlike Ketchel, which was reviewing a motion for summary judgment, this court was
reviewing a motion to dismiss which is limited to the allegations alleged in the four
corners of the complaint. Therefore, the failure to include a copy of the complaint
in Dueck I is immaterial.
Nevertheless, both the trial court and the appellate court may take
judicial notice of court filings and opinions that are readily accessible from the
internet. State ex rel. Everhart v. McIntosh, 115 Ohio St. 3d 195, 2007-Ohio-4798,
874 N.E.2d 516, ¶ 8, 10 (court can take judicial notice of judicial opinions and public
records accessible from the internet). Therefore, the trial court was permitted, as is
this court, to consider this court’s opinion in Dueck I which clearly identifies the
issues in Dueck I. (See, e.g., Dueck I at ¶ 26.)
III. Assignments of Error
Appellants present three assignments of error:
I. The trial court erred in concluding that res judicata barred
litigating the separate issue of whether the Trustees have
authority pursuant to the Trust Deed terms to permit non-
Beneficiaries of the March 1912 Trust Deed to use Trust Property
based on Dueck I, a case which only sought declaratory relief.
II. The trial court erred by concluding that the Eighth District Court
of Appeals in Dueck I gave the Trustees authority that is not
found in the Trust Deed to unilaterally permit the non-
Beneficiary members of the Clifton Club Company a right of
Trust Property Use.
III. The Trustees had to seek unanimous consent to grant Club
Members a right of Beach use because the Club Members’ use is
a public use within the meaning of the Trust.
IV. Discussion
This appeal was filed pursuant to App.R. 9(A), and there is no
transcript of proceedings. “The appellant has the duty to file the transcript or such
parts of the transcript that are necessary for evaluating the trial court's decision.”
Lakewood v. Collins, 8th Dist. Cuyahoga No. 102953, 2015-Ohio-4389, ¶ 9, citing
App.R. 9(B) and State v. Peterson, 8th Dist. Cuyahoga No. 96958, 2012-Ohio-87,
¶ 7.
Without the filing of a transcript or alternative record under
App.R. 9(C) or (D), “[w]e presume that the trial court considered all the evidence
and arguments raised.” Miranda v. Saratoga Diagnostics, 2012-Ohio-2633, 972
N.E.2d 145, ¶ 26 (8th Dist.). “[W]e accept the factual findings of the trial court as
true and limit our review to the legal conclusions of the trial court.” Bailey v. Bailey,
8th Dist. Cuyahoga No. 981173, 2012-Ohio-5073, ¶ 8, citing Snider v. Ohio Dept. of
Rehab. & Corr., 10th Dist. Franklin No. 11AP-965, 2012-Ohio-1665, & 8.
A. Standard of Review
An appellate court reviews a motion to dismiss under Civ.R. 12(B)(6)
as follows:
Our standard of review on a Civ.R. 12(B)(6) motion to dismiss is de
novo. A motion to dismiss for failure to state a claim upon which relief
can be granted is procedural and tests the sufficiency of the complaint.
Under a de novo analysis, we must accept all factual allegations of the
complaint as true and all reasonable inferences must be drawn in favor
of the nonmoving party.
(Citations omitted.) NorthPoint Props. v. Petticord, 179 Ohio App. 3d 342, 2008-
Ohio-5996, 901 N.E.2d 869, ¶ 11 (8th Dist.).
A trial court may grant a motion to dismiss for failure to state a claim
upon which relief can be granted where it appears “beyond doubt from the
complaint that the plaintiff can prove no set of facts entitling her to relief.” Grey v.
Walgreen Co., 197 Ohio App. 3d 418, 2011-Ohio-6167, 967 N.E.2d 1249, ¶ 3 (8th
Dist.).
B. Discussion
We combine the assigned errors for ease of analysis due to
intertwined facts and issues and analyze based on the key issues of res judicata and
public use. We affirm the trial court’s judgment.
1. Res Judicata
Appellants argue that res judicata does not apply because: (1) the
issue of Trustee authority was not before the court; (2) appellants never agreed that
the Trustees have authority to grant non-beneficiaries rights of Beach use without
lot owner consent; (3) this court did not grant the Club Members a legally binding
permissive right to use Trust Property; and (4) the question of whether the Trustees
had authority pursuant to the Trust to grant a right of Beach use without unanimous
consent of the lot owners was never decided.
The doctrine of res judicata provides that “a valid, final judgment
rendered upon the merits bars all subsequent actions based upon any claim arising
out of the transaction or occurrence that was the subject matter of the previous
action.” Id. Res judicata encompasses either claim preclusion, formerly known as
estoppel by judgment, and issue preclusion, also known as collateral estoppel, or
both depending on the case. Id. at 381, citing Whitehead v. Gen. Tel. Co., 20 Ohio
St.2d 108, 254 N.E.2d 10 (1969); Krahn v. Kinney, 43 Ohio St. 3d 103, 107, 538
N.E.2d 1058 (1989); 46 American Jurisprudence 2d 780, Judgments, Section 516
(1994).
In considering a claim under the doctrine of res judicata, we ask
whether:
(1) there is a final, valid decision on the merits by a court of competent
jurisdiction; (2) the second action involves the same parties or their
privies as the first; (3) the second action raises claims that were or could
have been litigated in the first action; and (4) the second action arises
out of the transaction or occurrence that was the subject matter of the
previous action.
(Citation omitted.) Lenard v. Miller, 8th Dist. Cuyahoga No. 99460, 2013-Ohio-
4703, ¶ 27.
“[T]he doctrine of res judicata requires a final order of the court to
preclude relitigation of issues that have or could have been raised in a prior
proceeding” Deutsche Bank Natl. Co. v. Caldwell, 8th Dist. Cuyahoga No. 100594,
2014-Ohio-2982, ¶ 19. “A final order is also a prerequisite to appellate review.” Id.
See also Grava v. Parkman Twp., 73 Ohio St. 3d 379, 381, 653 N.E.2d 226 (1995),
citing Norwood v. McDonald, 142 Ohio St. 299, 52 N.E.2d 67 (1943), paragraph one
of the syllabus.
In Dueck I, we defined the question before us:
We construe the pending question to be whether the nonresident Club
Members are direct Beneficiaries under the Trust Deed, as stated in
Count 1 of the first amended complaint, arguably entitling them to
equal access and commensurate status as the owner Beneficiaries.
Dueck I at ¶ 41.
After an in-depth review of the Trust documents and history, this
court concluded that:
the lot owners are the sole legal beneficiaries of the Trust. The Clifton
Club is a lot owner and thus a beneficiary. The Trust Deed is the sole
conveyor of legal rights to the beneficiaries. The Club Deed transferred
title to the Club Lots. The Club Deed did not, and could not, convey any
greater rights to the Trust property than those that are set forth in the
Trust Deed, because title to, and control of, the Trust property was
vested solely in the Trustees via the Trust Deed.
The Club Members are not equal or direct Beneficiaries of the Trust.
The Club Members have a permissive right to access the Beach as
regulated by the Trustees pursuant to the Trust Deed.
(Emphasis added.) Id. at ¶ 125-126.
We recite the majority of Count 1 of the Second Amended Complaint
for purposes of clarity:
93. The Trustees owe a duty to administer the Trust Deed according
to its terms.
94. The Trustees owe a duty to administer the Trust Deed solely in
the interests of the beneficiaries, the lot owners in Clifton Park.
95. The Trustees owe a duty of loyalty to the Trust beneficiaries.
96. The Trustees owe a duty to the Trust beneficiaries to take
reasonable steps to take control of and protect the Trust
Property.
97. The Trustees have no authority under the terms of the Trust to
grant a right to use the Trust Property, including the Beach and
Beach Property, to any person who is not a beneficiary of the
Trust without the unanimous consent of the lot owners.
98. The Clifton Park lot owners have not given unanimous consent
to the Trustees to grant a right to use the Trust Property,
including the Beach and Beach Property, to any person who is
not a beneficiary of the Trust.
99. The Trustees have no authority under the terms of the Trust to
grant a right or permission to use the Trust Property, including
the Beach and Beach Property, to any person who is not a
beneficiary of the Trust that is equal to the rights of the Trust
beneficiaries without the unanimous consent of the lot owners.
100. The Clifton Park lot owners have not given unanimous consent
to the Trustees to grant a right to use the Trust Property,
including the Beach and Beach Property, to any person who is
not a beneficiary of the Trust that is equal to the rights of the
Trust beneficiaries.
101. The Club Members are not beneficiaries of the Trust.
102. The Club Members have no legal rights under the Trust.
103. The Club Members have no legal rights or permission under the
Trust to use Trust Property.
104. The Trustees have granted 224 Club Members a permissive right
to use the Trust Property, including the Beach and Beach
Property that is equal to the rights of the Trust beneficiaries.
105. The Trustees’ grant to 224 Club Members of a permissive right
to use the Trust Property, including the Beach and Beach
Property, without the unanimous consent of the Clifton Park lot
owners is a breach of fiduciary duty.
106. Under R.C. 5810.01(B), the Court should enjoin the Trustees
from granting to the Club Members of a permissive right to use
the Trust Property, including the Beach and Beach Property,
without the unanimous consent of the Clifton Park lot owners
because such conduct is a breach of the trust and a breach of their
fiduciary duty.
107. Under R.C. 5810.01(B), the Court should enjoin the Trustees
from granting to the Club Members of a permissive right to use
the Trust Property, including the Beach and Beach Property, that
is equal to the rights of any other individual Trust beneficiary
without the unanimous consent of the Clifton Park lot owners
because such conduct is a breach of trust and/or fiduciary duty.
The trial court ruled that appellants “shall be permitted leave to
amend the complaint but may not allege that Clifton Club Members do not have a
permissive right to access the Beach and Beach Property.” Amended judgment entry
No. 1974350 (Nov. 20, 2018), p. 4. “Such a claim that Clifton Club Members may
not access the Beach and Beach Property is barred by the doctrine of res judicata.”
Id. The complaint was not amended.
We find that, as written, Count 1 is based on a false premise because
the issue of the permissive right of the Club Members to access the Beach as
regulated by the Trustees is, indeed, res judicata. In Dueck I, we stated that the
Clifton Club, as a lot owner, is a direct Beneficiary of the Trust, that the Club
Members possess a permissive right derived solely from Clifton Club’s status as a
direct Beneficiary, and that the Trustees are empowered by the Trust Deed to
regulate the use of the Beach. Our determination in Dueck I does not impact the
duty of the Trustees to administer the Trust equitably and according to its terms as
well as impartially where there are multiple beneficiaries. R.C. 5808.02.
The trial court’s judgment is affirmed. We find that the first assigned
error lacks merit.
2. Public Use
The trial court also rejected appellants’ public use claim. “[T]he
“unanimous consent of the lot owners is not required” to allow access by the Club
Members to the Beach because it “does not qualify as a public use.” Amended
judgment entry No. 1974350 (Nov. 20, 2018), p. 4.
The trial court also rejected appellants’ claim that Beach access by the
Club Members requires the unanimous consent of the lot-owner Beneficiaries. First
of all, we posit here that due to the ongoing contention and alleged competing
interests between use of the Beach by the appellants as Beneficiaries, and possibly
other lot owner Beneficiaries versus the Club as a Beneficiary, it is questionable that
there could ever be a unanimous agreement. Be that as it may, public use is not an
issue here.
The Trust Deed provides, in pertinent part, that:
“1) The trustees shall hold title to and preserve all the land deeded to
them for the common use of all the lot owners in the Clifton Park
Allotment, and their successors in title, and members of their
households.”
“(2) No part of said land shall be sold, conveyed or dedicated to public
use without the unanimous consent of all the lot owners in said
allotment.”
“(3) The trustees shall collect money from the persons interested as
hereinafter provided, and from such sums so collected, * * * [to pay
taxes, maintenance, etc.]; shall establish regulations for the use of, and
provide for proper policing * * * for the use of lot owners in said
allotment, as the same is now maintained.”
(Emphasis added.) Dueck I at ¶ 48, quoting the Trust Deed.
Appellants’ definition of the term public use is inapplicably
restrictive. “When the owner of property devotes it to a public use, he, in effect,
grants to the public an interest in such use.” (Citations omitted.) Lake S. & M. S. R.
Co. v. Cincinnati, S. & C. R. Co., 30 Ohio St. 604, 616 (1876). We have already
determined that use by the Club Members is permissive as it derives from the Clifton
Club’s status as a direct Beneficiary. Thus, access by the Club Members is not a
public use.
We find that appellant’s assigned errors lack merit. The trial court’s
findings are affirmed.
V. Conclusion
The trial court’s judgment is affirmed.
It is ordered that appellees recover from appellants costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this court directing the
probate court to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to
Rule 27 of the Rules of Appellate Procedure.
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ANITA LASTER MAYS, JUDGE
EILEEN T. GALLAGHER, P.J., and
KATHLEEN ANN KEOUGH, J., CONCUR