Swank v. Swank , 2011 Ohio 6920 ( 2011 )

[Cite as Swank v. Swank, 2011-Ohio-6920.]
COURT OF APPEALS
RICHLAND COUNTY, OHIO
FIFTH APPELLATE DISTRICT
ROBERT L. SWANK, et al.
Plaintiffs-Appellees
v.
FREEMAN J. SWANK, JR., et al.
Defendants-Appellants
JUDGES:
Hon. William B. Hoffman, P.J.
Hon. John W. Wise, J.
Hon. Julie A. Edwards, J.
Case No. 2011 CA 8
OPINION
CHARACTER OF PROCEEDING: Civil Appeal from the Court of Common
Pleas, Case No. 96 CV 0254
JUDGMENT: Affirmed in part; reversed in part
DATE OF JUDGMENT ENTRY: December 30, 2011
APPEARANCES:
For Plaintiffs-Appellees Robt. & E. Clark For Defendant-Appellant Mary Jane
MICHAEL L. INSCORE SHAWN W. MAESTLE
INSCORE, RINEHARDT, WHITNEY ANGELA G. CARLIN
& ENDERLE WESTON HURD
13 Park Avenue West, Suite 400 1301 East 9th Street, Suite 1900
Mansfield, Ohio 44902-1741 Cleveland, Ohio 44114-1862
For Defendant-Appellee Rheabelle For Defendant-Appellant Freeman and
Appellee Estate
JOHN K. KELLER
VORYS, SATER, SEYMOUR & PEASE ROBERT S. NAYLOR
Post Office Box 1008 Post Office Box 4697
Columbus, Ohio 43216 Steubenville, Ohio 43952
Wise, J.
{¶1} Defendants-appellants Freeman J. Swank, Jr. and Mary Jane Swank
appeal the jury verdict entered in the Court of Common Pleas of Richland County, Ohio,
in favor of Plaintiffs-Appellees Robert L. Swank and E. Clark Swank
{¶2} Robert L. Swank and E. Clark Swank filed a cross-appeal, challenging the
trial court’s judgment notwithstanding the verdicts as to their claims of unjust
enrichment, along with the trial court’s December 8, 2009, Judgment Entry denying their
motion for leave to file an amended complaint and dismissing their claims for
constructive fraud and promissory estoppel.
STATEMENT OF THE FACTS AND CASE
{¶3} The case has a very long and complicated history dating back to at least
1995. Freeman Swank, Sr., now deceased, and his wife Rheabelle Swank are the
parents of Freeman Swank, Jr., Robert L. Swank, and E. Clark Swank.
{¶4} Freeman Sr. and Rheabelle owned approximately 670 acres of farm land,
on which they conducted dairy and farming operations and raised hogs. The land was
referred to as the Residence Farm (76 acres), the Dairy Farm (305 acres) and the Hog
Farm (275 acres).
{¶5} Robert and Clark worked on the family farm, Robert beginning in 1965 and
Clark in 1968. According to Robert, Freeman Sr. had promised that approximately 285
acres of the property, including the dairy operations and a farm house where Robert
lived, would be conveyed to Robert upon the deaths of his parents, if not sooner. Clark
alleged the Swank parents had promised to title 270 acres of the property, where the
parties conducted the hog raising operation, as well as the farmhouse where Clark
lived, to Clark upon their deaths, if not sooner.
{¶6} Both Clark and Robert allege during the time they worked the family farm
they received weekly draws of substantially less than the minimum wage, along with
tenancy rights in the farmhouses. They allege from time to time, each had to borrow
money to finance various aspects of the farming operations and to maintain and
purchase farm equipment and livestock.
{¶7} Clark and Robert alleged they were actually partners in the family farm,
but because of income tax considerations, the family operated the business as a
proprietorship rather than a partnership.
{¶8} Clark and Robert also allege that on a number of occasions, prior to 1995,
their parents, Freeman Swank, Sr. and Rheabelle Swank, showed them their wills1
which, upon the death of the surviving parent, left either all of the farm property, or just
the hog and dairy farms to Robert and Clark.
{¶9} In the late 1970’s, early 1980’s, the farming operations began to lose
money, requiring the parents to use personal funds and to mortgage the property to
keep the farm going. In 1983, Freeman, Sr. and Rheabelle obtained a mortgage loan
with Bank One in the amount of $550,000. When their financial situation did not
improve, the parents took out additional loans.
1
The Swanks, Sr. executed reciprocal wills in 1950, 1968, 1982, 1995 and 1996.
{¶10} Further, in the early 1980s’ Freeman, Sr. became ill and was diagnosed
with pancreatic cancer, which would lead to two-year period of hospitalization at the
Cleveland Clinic.
{¶11} In October, 1995, AgriMark, a feed supplier, obtained a default judgment
in the amount of $77,844.00, including interest accruing at 24%. (T. II at 342, 476, T. III
at 745). As a result, Bank One, which held a mortgage on all of the farm property,
declared a default on its loan and called the note, which was at that time approximately
$452,000. (T. II at 489, 505, T. III at 676, 745-46, T. V at 1121, 1187-88, T. VI at 1263).
At that time, there were also outstanding liens to First National Bank of Shelby and
Mechanics Bank as well as other feed companies and suppliers.
{¶12} In early 1996, a family meeting was held between the Swank parents and
their three sons. (T. II at 346). During this meeting, an offer was made to Robert to
allow him to purchase the dairy farm for an assumption of the debt. (T. II at 346, 479,
T.III at 679, T.V at 1223, T VI at 1265). Robert refused the offer and “stormed out the
door.” (T.II at 348, T. VI 1265).
{¶13} In January, 1996, Freeman, Jr. hired an attorney to help his parents with
their financial problems.
{¶14} In the spring of 1996, farming operations were terminated and livestock
and equipment were auctioned. The auction raised approximately $156,000.00. These
funds were used to satisfy the AgriMark judgment and pay down the Bank One
Mortgage.
{¶15} Freeman Jr. then purchased the defaulted first mortgage held by Bank
One on the property and became the assignee on said mortgage.
{¶16} On August 22, 1996, Freeman and Rheabelle Swank executed a real
estate option contract in favor of Freeman, Jr. and also executed new wills. These new
wills again were reciprocal, naming each other as the primary beneficiary. The
contingency clauses in these wills, however, reflected a change from the previous wills
in that only Freeman, Jr. was named as the only contingent beneficiary; Robert and
Clark were not named.2
{¶17} Since that time, Robert and Clark have filed various actions, asserting,
among other things, their expectation to share in the inheritance of the farms.
{¶18} Robert Swank filed the first lawsuit, Case No. 96-CV-254, claiming that
cattle sold by Freeman, Sr. and Rheabelle Swank belonged to him.
{¶19} Thereafter, on or about January 3, 1997, Robert and E. Clark Swank filed
Case No. 97-CV-11, in which they asserted claims against their parents for an equitable
partnership in the farm, constructive fraud, restitution, promissory estoppels. They also
raised claims of intentional interference with their expectancies of inheritance against
Freeman, Jr. and Mary Jane Swank.
{¶20} On April 3, 1998, Appellees filed a First Amended Complaint and
Supplemental Complaint, alleging (1) breach of partnership and contractual obligations,
(2) constructive fraud, (3) unjust enrichment, (4) interference with expectancy of
inheritance and (5) punitive damages.
{¶21} Case Nos. 96-CV-254 and 97-CV-11 were consolidated under Case No.
254, along with two other cases (96-CV-501 and 96-CV-278) which are not at issue in
this case.
2
In 1998, the Swanks, Sr. signed almost identical reciprocal wills, again naming
Freeman, Jr. as the sole contingent beneficiary.
{¶22} In 1998 and 1999, the farm real estate was conveyed to Freeman, Jr. and
his wife Mary Jane in exchange for assumption of the remaining debt. (T. IV at 948-
950, 976; T. III at 780-82).
{¶23} In 1998, in response to Parents sale and inter vivos transfer of a portion of
the farm to Appellant, Appellees also instituted probate proceedings to have Parents
declared legally unfit to handle their own legal affairs. See, In re Freeman J. Swank, Sr.
and Rheabelle Swank, Richland County Court of Common Pleas, Probate Division,
Case Nos. 982036 and 982037. Specifically, Appellees claimed a guardianship was
necessary to protect Parents from further improvident disposition of their property; to
evaluate and seek to remedy any past breaches of the Parents' rights; and to protect
the interests of the Parents in the litigation described above.
{¶24} On June 2, 1998, the Richland County Court of Common Pleas, Probate
Division found that applicants (Appellees) seeking the imposition of a guardianship for
Parents failed to present clear and convincing evidence which, even if accepted as true,
would establish that Parents were incompetent as defined in R.C. §2111.01(D). In
addition, the Richland County Probate Court found there was insufficient evidence to
merit appointment by the court of a physician to examine either of the Parents. ld.
{¶25} In 2000, Robert and Clark Swank filed Case No. 00-CV-649, wherein they
asked for a declaratory judgment that Freeman, Jr.’s conduct was malicious, that he
had engaged in a conspiracy and/or other tortious conduct, including spoliation,
fabrication, and distortion of evidence and further attempted to disrupt their prosecution
of Case No. 97-CV-11.
{¶26} Specifically, Clark and Robert alleged that First National Bank (nka First
Citizens Bank) and its officer conspired with Freeman Sr. and Freeman, Jr.'s attorneys
to create the appearance that the farming operation was in financial difficulties, so as to
enable Freeman Jr. to acquire the property. Clark and Robert alleged that they knew or
should have known of Clark and Robert's claims against the property, and they argued
the farm was actually solvent.
{¶27} On January 9, 2001, the trial court dismissed Case No. 00-CV-649, finding
no fraud or wrongful disruption. In 00-CV-649, the trial court discussed Appellants
claims, finding the allegations in the complaint against Freeman, Jr. and Mary Jane
consisted of “nothing more than what any owner of property might do * * *.” Judgment
Entry of January 9, 2001, at page 2.
{¶28} In case number 00-CV-649, Clark and Robert filed a notice of appeal and
also a motion for relief from judgment pursuant to Civ.R. 60(B). However, they later
withdrew both the appeal and the motion.
{¶29} In 2002, Robert and Clark filed Case No. 02-CV-12. The defendants in
that case filed motions for summary judgment. In granting defendants’ motions for
summary judgment, the trial court found the allegations in 00-CV-649 and 02-CV-12
were virtually the same against all defendants. The court found the action was barred by
the principles of res judicata, and noted Civ.R. 41(B)(3) required the court to consider
the dismissal of 00-CV-649 to be on the merits because the order did not specify
otherwise.
{¶30} Robert and Clark appealed to this Court, which affirmed the decision of
the trial court in Swank v. Swank, Richland App. No. 10-CA-2, 2010-Ohio-3105.
{¶31} By Judgment Entry filed February 1, 2001, the trial court bifurcated the
issues in the Case No. 97-CV-11-H and ordered that the “nature and extent of the
claims by Plaintiffs Robert and Clark Swank to be an equitable interest in the Swankaire
Farms and against Defendants” be tried to the court.
{¶32} Two bench trials referred to as Phase I and Phase II followed in 2001 and
2004, respectively.
{¶33} During the Phase 1 trial which commenced on March 19, 2001, the trial
court ordered Appellees Robert and Clark Swank to raise and prosecute any equitable
claims they had in the farm property. Appellees chose to pursue a theory based on the
existence of an equitable partnership. At the conclusion of Phase I, the trial court found
instead that there existed an agreement between Appellees and their parents and that
such agreement was based on an exchange of promises and performance.
{¶34} Based on its finding in Phase I, the trial court set forth the issues to be
determined in Phase II as (1) determining the value of the farm and related personal
property as of December, 1995, (2) determining the value of Robert Swank’s interest in
the farm property and related personal property, and (3) determining Clark Swank’s
interest in the farm property and related personal property.
{¶35} In February, 2004, a bench trial was held and the trial court determined
that the net equity in the farm property and related chattels as of December, 1995, was
$324,243. The trial court determined that Robert Swank was entitled to 42% of the net
equity or $163,350.06 and E. Clark Swank was entitled to 35% of the net equity, or
$113,625.05.
{¶36} On April 29, 2004, Freeman Swank, Sr. died. The sole beneficiary of his
Last Will and Testament was his wife, Rheabelle Swank. No challenges or will contest
actions were raised as to Mr. Swank’s will.
{¶37} On November 16, 2004, the trial court issued its Judgment Entry on Phase
I and Phase II.
{¶38} Both parties filed appeals from the November 16, 2004, decision with this
Court. By Opinion filed October 17, 2005, this Court decided the case of Swank, et al.
v. Estate of Swank, et al., Richland App. Nos. 2004-CA-0110, 2004-CA-0111, and
2004-CA-0112, 2005-Ohio-5524. In the 2005 appeal, this Court reviewed several cases
arising out of the Court of Common Pleas, including 97-CV-11. This Court found the
various contractual interests Clark and Robert claimed were in reality an unenforceable
contract to make a will, because there was no present interest, by partnership or
otherwise, supported by the evidence and that the trial court's conclusion was contrary
to R.C. §2107.04. Swank at paragraph 91.
{¶39} In remanding the matter back to the trial court, this Court also reversed the
dismissal of Freeman, Sr. and Rheabelle Swank, holding that the merits of alleged
claims other than that of entitlement to a present interest in the parents' farm real estate
needed to be addressed. This Court also stated the presence of Parents as parties may
be of consequence relating to unjust enrichment, sale of chattels, and the assertion of
interference with the expectancy of inheritance claims. Id. at 94.
{¶40} On May 3, 2007, Appellants Freeman, Jr. and Mary Jane moved for
summary judgment as to all remaining issues. As to the Appellees' assertion of
interference with the expectancy of inheritance by Appellant, Appellant argued
Appellees could not establish they had an expectancy of inheritance. In Appellant’s
Motion for Summary Judgment, Appellant argued that Appellees admitted they are not
entitled to any interest in the land until both of their parents are dead. (Phase I, T. at
263-264).
{¶41} By Judgment Entry filed June 28, 2007, the trial court denied all parties’
motions for summary judgment and stated the case would be set for trial. Thereafter, on
December 7, 2007, the case was reassigned, and in early 2008, the parties prepared
case summaries in an attempt to narrow the remaining issues in the case.
{¶42} In November 2008, Appellees filed a Motion to Renew previously filed
motions, including a Motion for Partial Summary Judgment seeking judgment: (i) against
Appellant for constructive fraud; and (ii) against Appellant and Parents for fraudulent
conveyance related to the transfer of a lien interest and inter vivos transfer by contract
of the farm to Appellant by Parents.
{¶43} On December 22, 2008, Appellant filed a reply memorandum to Appellees'
Motion for Summary Judgment.
{¶44} By Judgment Entry dated December 8, 2009, the trial court denied all
pending motions for summary judgment. The trial court found that the operative
pleading in this matter was Appellees' First Amended and Supplemental Complaint
dated April 3, 1998. The trial court found plaintiffs’ claims of promissory estoppel and
quantum meruit were inadequately pled as individual claims and that the claim of
constructive fraud was waived because Plaintiffs failed to raise it in the Phase I trial.
{¶45} The trial court found that the only issues remaining for trial were limited to
unjust enrichment, interference with expectancy of inheritance against Appellant with
compensatory and punitive damages, counterclaims of Parents for fraud and
conversion, and the damage claim related to the sale of chattels.
{¶46} The trial court further stated that because this Court had ruled that
Appellees had no present interest in the land, issues relating to the conveyance of the
land including fraudulent conveyance, conspiracy, and spoliation of documents were not
properly raised by Appellees as part of the original claim and have been precluded by
the ruling of this Court.
{¶47} Said Judgment Entry also denied Plaintiffs’ motion for leave to amend
complaint.
{¶48} On September 27, 2010, a jury trial commenced on plaintiffs’ claims of
unjust enrichment against Freeman Swank, Sr. and Rheabelle Swank, interference with
expectancy of inheritance against Freeman Swank, Jr. and the counterclaims of
defendants for fraud and conversion. Also to be considered by the jury were damage
claims as to sales of chattels and cattle.
{¶49} On October 7, 2010, the jury found in favor of Appellee Robert Swank on
his claim related to the sale of cattle, and to Robert and E. Clark on their claims against
Freeman Swank, Sr. and Rheabelle Swank for unjust enrichment3 and against Freeman
Swank, Jr. and Mary Jane Swank for interference with expectancy of inheritance. The
jury also awarded $1.00 in punitive damages to each plaintiff and further found that
plaintiffs were entitled to recover attorney fees against Freeman Swank, Jr. and Mary
Jane Swank.
3
As to the unjust enrichment claims against Parents, the judgments awarded to
Appellee Robert L. Swank was the sum of $605,531 in compensatory damages, plus
costs and interest, and to Appellee E. Clark Swank the sum of $579,849 in
compensatory damages, plus costs and interest.
{¶50} By Judgment Entry docketed November 24, 2010, the trial court entered
judgment upon the verdicts and awarded to Plaintiff-Appellee Robert L. Swank on his
claim of intentional interference with and expectancy interest the sum of $767,666.00 in
compensatory damages, $1.00 in punitive damages, and $75,000.00 in attorney fees for
a total judgment of $842,667.00 plus interest at four percent (4%) per annum from
October 7, 2010 until paid and costs. The judgment awarded to Plaintiff-Appellee E.
Clark Swank on his claim of intentional interference with and expectancy interest the
sum of $607,667.00 in compensatory damages, $1.00 in punitive damages, and
$75,000.00 in attorney fees for a total judgment of $682,668.00 plus interest at four
percent (4%) per annum from October 7, 2010, until paid and costs.
{¶51} On or about December 6, 2011, Appellant filed a Motion for Judgment
Notwithstanding the Verdicts in favor of Appellees or, in the alternative, for a New Trial
on the claims of Appellees.
{¶52} On December 20, 2010, the trial court issued an Order Granting JNOV for
Appellants on Count III (unjust enrichment), Order Denying Motion for JNOV or New
Trial on Count IV (intentional interference with expectation of inheritance) and punitive
damages and attorney fees. This Order was journalized on December 21, 2010.
{¶53} It is from this Order and the November 24, 2010, Judgment Entry that
Appellants Freeman Swank, Jr. and Mary Jane Swank filed their separate appeals and
Appellees Robert Swank and E. Clark Swank filed their cross-appeal.
ASSIGNMENTS OF ERROR
APPEAL
{¶54} Appellant Mary Jane Swank assigns four errors to the trial court:
{¶55} “I. THE TRIAL COURT ERRED IN FAILING TO DIRECT A VERDICT
AND/OR A JUDGMENT NOTWITHSTANDING THE VERDICT SINCE APPELLEES
LACKED LEGAL STANDING TO ASSERT AN INTENTIONAL INTERFERENCE WITH
EXPECTANCY OF INHERITANCE CLAIM.
{¶56} “II. THE TRIAL COURT ERRED IN FAILING TO DIRECT A VERDICT
AND/OR A JUDGMENT NOTWITHSTANDING THE VERDICT SINCE APPELLEES
INTENTIONAL INTERFERENCE CLAIM FAILS AS A MATTER OF LAW BECAUSE
APPELLEES HAD NO ACTUAL EXPECTANCY OF INHERITANCE AT THE TIME OF
FREEMAN SWANK, SR.'S DEATH NOR COULD THEY ESTABLISH THAT THEY
WOULD HAVE INHERITED BUT FOR THE ALLEGED TORTIOUS CONDUCT.
{¶57} “III. THE JURY'S VERDICT IS NOT SUPPORTED BY LEGALLY
SUFFICIENT EVIDENCE AND THEREFORE THE TRIAL COURT ERRED IN FAILING
TO ISSUE A JUDGMENT NOTWITHSTANDING THE VERDICT
{¶58} “IV. AS THERE WAS ABSOLUTELY NO COMPETENT CREDIBLE
EVIDENCE ESTABLISHING THAT APPELLANT MARY JANE SWANK COMMITTED
ANY INTENTIONAL TORT OR IN ANYWAY INTENTIONALLY INTERFERED AND
DEPRIVED APPELLEES OF THEIR ALLEGED INHERITANCE, THE JURY'S
VERDICT AND TRIAL COURT JUDGMENT IS AGAINST THE MANIFEST WEIGHT
OF THE EVIDENCE.”
{¶59} Appellant Freeman Swank, Jr. raises the following four assignments of
error:
{¶60} “I. THE TRIAL COURT ERRED AS A MATTER OF LAW WHEN IT
DENIED APPELLANT'S MOTION FOR A DIRECTED VERDICT AND IN THE
ALTERNATIVE APPELLANT'S MOTION FOR A JUDGMENT NOTWITHSTANDING
THE VERDICT AND/OR APPELLANT'S MOTION FOR A NEW TRIAL.
{¶61} “II. THE TRIAL COURT ERRED WHEN IT DENIED APPELLANT'S
MOTION FOR A JUDGMENT NOTWITHSTANDING THE VERDICT AND IN THE
ALTERNATIVE APPELLANT'S MOTION FOR A NEW TRIAL AS THE JURY'S
VERDICT IS NOT SUPPORTED BY LEGALLY SUFFICIENT EVIDENCE.
{¶62} “III. THE TRIAL COURT ERRED WHEN IT DENIED APPELLANT'S
MOTION FOR A JUDGMENT NOTWITHSTANDING THE VERDICT AND IN THE
ALTERNATIVE APPELLANT'S MOTION FOR A NEW TRIAL AS THE JURY'S
VERDICT IS AGAINST THE MANIFEST WEIGHT OF THE EVIDENCE.
{¶63} “IV. THE TRIAL COURT ERRED AS A MATTER OF LAW AND ABUSED
ITS DISCRETION IN AWARDING ATTORNEY FEES TO APPELLEES.”
CROSS-APPEAL
{¶64} Cross-Appellants Robert L. Swank and E. Clark Swank assign three
errors:
{¶65} “I. THE TRIAL COURT ERRED AS A MATTER OF LAW IN GRANTING
THE MOTIONS OF DEFENDANTS RHEABELLE SWANK AND ESTATE OF
FREEMAN SWANK, SR., FOR JUDGMENT NOTWITHSTANDING THE VERDICTS AS
TO THE CLAIM OF UNJUST ENRICHMENT.
{¶66} “II. THE TRIAL COURT ERRED AS A MATTER OF LAW IN DISMISSING
PLAINTIFFS' CLAIMS BASED ON CONSTRUCTIVE FRAUD AND PROMISSORY
ESTOPPEL.
{¶67} “III. THE TRIAL COURT ABUSED ITS DISCRETION IN DENYING THE
MOTION OF PLAINTIFFS FOR LEAVE TO FILE AN AMENDED OR SUPPLEMENTAL
COMPLAINT.
I, II, III, IV (Mary Jane Swank)
I, II, III (Freeman Swank, Jr.)
{¶68} We shall address the Mary Jane Swank’s assignments of error and
Freeman Swank, Jr.’s first three assignments of error together as they all deal with
Appellees’ claims of interference with expectancy of inheritance.
{¶69} Appellants herein argue that the trial court erred in failing to direct a
verdict or in failing to grant judgment notwithstanding the verdict as to Appellees’ claim
of intentional interference with expectancy of inheritance claims. Appellants further
argue that the jury’s verdict as to such claims is not supported by the manifest weight or
sufficiency of the evidence.
{¶70} Ohio Civil Rule 50 governs directed verdicts and judgments
notwithstanding the verdict, and reads, in pertinent part:
{¶71} “(A) Motion for a directed verdict
{¶72} “ ***
{¶73} “(4) When granted on the evidence. When a motion for a directed verdict
has been properly made, and the trial court, after construing the evidence most strongly
in favor of the party against whom the motion is directed, finds that upon any
determinative issue reasonable minds could come to but one conclusion upon the
evidence submitted and that conclusion is adverse to such party, the court shall sustain
the motion and direct a verdict for the moving party as to that issue.
{¶74} “(B) Motion for judgment notwithstanding the verdict
{¶75} “Whether or not a motion to direct a verdict has been made or overruled
and not later than fourteen days after entry of judgment, a party may move to have the
verdict and any judgment entered thereon set aside and to have judgment entered in
accordance with his motion; or if a verdict was not returned such party, within fourteen
days after the jury has been discharged, may move for judgment in accordance with his
motion. A motion for a new trial may be joined with this motion, or a new trial may be
prayed for in the alternative. If a verdict was returned, the court may allow the judgment
to stand or may reopen the judgment. If the judgment is reopened, the court shall either
order a new trial or direct the entry of judgment, but no judgment shall be rendered by
the court on the ground that the verdict is against the weight of the evidence. If no
verdict was returned the court may direct the entry of judgment or may order a new
trial.”
{¶76} When ruling on a motion for judgment notwithstanding the verdict, a trial
court applies the same test as in reviewing a motion for a directed verdict. Ronske v.
Heil Co., Stark App.No. 2006-CA-00168, See also, Pariseau v. Wedge Products, Inc.
(1988), 36 Ohio St.3d 124, 127, 522 N.E.2d 511. “A motion for judgment
notwithstanding the verdict is used to determine only one issue i.e., whether the
evidence is totally insufficient to support the verdict.” Krauss v. Streamo, Stark App. No.
2001 CA00341, 2002-Ohio-4715, paragraph 14; see also, McLeod v. Mt. Sinai Medical
Center (2006), 166 Ohio App.3d 647, 853 N.E.2d 1235, reversed on other grounds, 116
Ohio St.3d 139, 876 N.E.2d 1201. Neither the weight of the evidence nor the credibility
of the witnesses is a proper consideration for the court. Posin v. A.B.C. Motor Court
Hotel, Inc. (1976), 45 Ohio St.2d 271, 275, 344 N.E.2d 334. See, also, Civ.R. 50(B); and
Osler v. Lorain (1986), 28 Ohio St.3d 345, 347, 504 N.E.2d 19. In other words, if there is
evidence to support the nonmoving party's side so that reasonable minds could reach
different conclusions, the court may not usurp the jury's function and the motion must be
denied. Goodyear Tire & Rubber Co. v. Aetna Casualty & Surety Co., 95 Ohio St.3d
512, 769 N.E.2d 835, 2002-Ohio-2842. Again, in ruling on a motion for judgment
notwithstanding the verdict, the court does not determine factual issues, but only
questions of law, even though it is necessary to review and consider the evidence in
deciding the motion. Goodyear at paragraph 4.
{¶77} Appellate review of a ruling on either a motion for directed verdict or a
motion for judgment notwithstanding the verdict is de novo, Midwest Energy
Consultants, L.L.C. v. Utility Pipeline, Ltd., 5th Dist.App. No. 2006CA00048, 2006-Ohio-
6232; Ronske v. Heil, supra; Cleveland Electric Illuminating Company v. Public Utility
Commission, 76 Ohio St.3d 521, 523, 1996-Ohio-298, 668 N.E.2d 889, citation deleted.
Intentional interference with expectancy of inheritance
{¶78} In Firestone v. Galbreath (1993), 67 Ohio St.3d 87, 616 N.E.2d 202, the
Ohio Supreme Court first recognized the tort of intentional interference with expectancy
of inheritance. The essential elements of the claim are: (1) the existence of a plaintiff's
expectancy of inheritance; (2) a defendant's intentional interference with plaintiff's
expectancy, (3) the defendant's tortious conduct involving the interference, such as
fraud, duress, or undue influence; (4) a reasonable certainty that, but for the defendant's
interference, the expectancy of inheritance would have been realized; and (5) damage
resulting from the interference. Id. at 88, 616 N.E.2d 202.
{¶79} Before pursuing an intentional interference with expectancy of
inheritance (IIEI) claim, a plaintiff must first exhaust all appropriate probate procedures.
Firestone v. Galbreath (Oct. 6, 1992), 10th Dist. No. 92AP-159. See also Roll v.
Edwards, 156 Ohio App.3d 227, 2004-Ohio-767, ¶ 28. The rationale is that the probate
proceedings may resolve the damages issue by simply validating the will through which
the plaintiff claims an expectancy. In re Estate of Goehring, 7th Dist. No. 05 CO 35,
2007-Ohio-1133, ¶ 66. An exception to the rule allows a plaintiff to bypass probate if no
remedy is available in the probate court or if that remedy would be inadequate.
Firestone v. Galbreath (S.D.Ohio 1995), 895 F.Supp. 917, 926. Thus, “[c]ourts must
look to whether the probate court can provide the plaintiff with adequate relief in the
form of the actual damages which would be recovered in the tort action; punitive
damages awards are not considered a valid expectation in this context.” Id. Rather, the
circumstances surrounding the tortious conduct must be what effectively precludes
adequate relief in the probate court. DeWitt v. Duce (Fla.1981), 408 So.2d 216, 219.
{¶80} With regard to exhaustion of remedies, we find that the two probate
actions which could have been raised in the case were a will contest action or a
declaratory judgment action to determine the validity of the inter vivos transfer of the
farm property.
{¶81} However, we do not find that either Robert or Clark would have had
standing to raise such claims with the probate court.
{¶82} In the case sub judice, Freeman, Sr.’s 1996 will left everything to his wife
Rheabelle, who survived him. Appellees were not even named as contingent
beneficiaries in this will. Even under all of Freeman, Sr.’s previous wills, including the
ones that did include Robert and Clark as contingent beneficiaries, Rheabelle was
always the primary beneficiary. Appellees only ever stood to inherit if their mother
predeceased their father, which did not happen, and their mother was the sole
beneficiary of their father’s estate. As long as Rheabelle survived Freeman, Sr., the
result would have been the same.
{¶83} Furthermore, at the time of his death, Freeman, Sr. no longer owned the
farm real estate, which is what Appellees claim as the inheritance they were expecting.
The farm property had been transferred to Freeman, Jr. approximately nine years prior
to Freeman, Sr.’s death. In cases where there are questions raised as to the validity of
certain inter vivos transfers that involve property which would revert to the estate if the
transfers are found invalid, the action is related to the administration of the estate and is
within the exclusive jurisdiction of the probate court.” (Emphasis added.) Bobko v.
Sagen (1989), 61 Ohio App.3d 397, 572 N.E.2d 823.
{¶84} A declaratory judgment action could have been filed with the probate court
to determine the validity of inter vivos transfers to Freeman, Jr. A successful challenge
would have resulted in the transfers being invalidated and the property would have
reverted to the estate. Bobko, supra. See, also, In re Estate of Morrison (1953), 159
Ohio St. 285, 112 N.E.2d 13 (holding that matters “as to the title to and the status of
certain personal property-whether it properly belongs to the estate and should be
administered as a part thereof or whether the decedent effectually disposed of such
property during his lifetime * * *” is “within the jurisdiction of the Probate Court and are
determinable by that tribunal”); Johnson v. Johnson (June 25, 1999), Vinton App. No.
98CA519, 1999 WL 527753.
{¶85} Again, however, the only primary beneficiary to Freeman, Sr.’s estate was
Rheabelle. As such, she was the only person with standing to raise such a claim.
{¶86} In Firestone, the Ohio Supreme Court stated that any person who can
prove the elements of the tort of intentional interference with expectancy of inheritance
has standing to maintain a claim. Id. As set forth above, the fourth element of the test
requires that Appellants demonstrate to a reasonable certainty that the expectancy of
inheritance would have been realized but for the tortious conduct. This requires a
showing to a reasonable certainty that, had the alleged undue influence not occurred,
appellants would have realized their expectancy to inherit from the decedent’s estate.
{¶87} Applying a de novo standard of review, we find that the trial court erred
when it determined that Appellees had standing to assert this claim. “Standing” means
that the plaintiff has some personal stake in the outcome of the controversy, some
concrete injury that will be resolved by the court, rather than a hypothetical or
conjectural matter. Bourke v. Carnahan, 163 Ohio App.3d 818, 2005-Ohio-5422, 840
N.E.2d 1101, ¶ 10.
{¶88} The facts of the case, as set forth above, make it clear that the Appellees
would not have been beneficiaries of Freeman, Sr.'s estate (probate or non-probate),
even if the purported tortious interference had not occurred. In light of these facts, it is
impossible for Appellees to prove the fourth element of the tort.
{¶89} Further, there was no evidence presented that the Freeman, Sr.’s transfer
of the farmland to Freeman, Jr. during her lifetime was anything other than by voluntary
choice. If Appellees felt that the conveyance of the property by the parents to Freeman,
Jr. was based on undue influence or was in some way coerced or fraudulent, Appellees
should have brought an action for fraudulent conveyance within the statute of limitations
allowed for such an action.
{¶90} It appears that Appellees did unsuccessfully attempt to try and stop the
transfer of the land by bringing an action before the probate court challenging their
parents’ competency and seeking the appointment of a guardian for the Swank parents.
The trial court, however, found insufficient evidence was presented that the parents
were incompetent to handle their own affairs and understood. Instead, the trial court
found:
{¶91} “There is also evidence that the [Parents], in attempting to salvage their
operations and restore their financial well-being were involved in differences of opinion
with children which resulted in hostility toward two, and favorable relationships with one.
That unfortunately happens, family fights and squabbles, it’s very unfortunate. But in
itself is not evidence of incompetency.” (T. of Recording of Judge Christiansen’s May
22, 1998, Ruling Only at 2).
{¶92} At any time during their lifetimes, Freeman Swank, Sr. and Rheabelle
Swank could have chosen to sell all or part of the farmland which Appellees claim they
should have inherited. Ohio law does not provide a means to prevent a competent
person from using or disposing of property as he or she wishes, even if to do so may
appear unfair or unwise to other persons.
{¶93} Alternatively, any number of events could have transpired which could
have had an effect on the Swank, Sr.’s ownership of the property. In this case, financial
problems caused the parents to have to sell and/or transfer the property in exchange for
a release of their debts. The Swank, Sr.’s financial problems were very real, as
evidenced by the record. Their son Freeman, Jr. offered them an opportunity to get out
from under their debt and still be able to continue to live on the farm the remainder of
their lives. The fact that they sold/transferred the property to one of their sons and not
an unrelated person does not automatically create an undue influence situation.
{¶94} Having found that Appellees did not have standing to pursue claims of
intentional interference with expectation of inheritance against Freeman Swank, Jr.
and/or Mary Jane Swank, we find Mary Jane Swank’s assignments of error I, II, III and
IV and Freeman Swank, Jr.’s assignments of error I, II and III well-taken and sustain
same.
IV.
{¶95} In Appellant Freeman, Jr.’s fourth assignment of error, he argues that the
trial court erred in awarding attorney fees in this action. We agree.
{¶96} Based on our disposition of the above assignments of error, we find that
attorney fees were improperly awarded in this matter.
{¶97} Appellant’s fourth assignment of error is sustained.
Cross-Appeal
I.
{¶98} In their first assignment of error, Cross-Appellants argue that the trial
court erred in granting Cross-Appellees’ motion for judgment notwithstanding the verdict
on their claims of unjust enrichment.
{¶99} As set forth above, Ohio Civ.R. 50 governs directed verdicts and
judgments notwithstanding the verdict, and reads, in pertinent part:
{¶100} “(B) Motion for judgment notwithstanding the verdict
{¶101} “Whether or not a motion to direct a verdict has been made or
overruled and not later than fourteen days after entry of judgment, a party may move to
have the verdict and any judgment entered thereon set aside and to have judgment
entered in accordance with his motion; or if a verdict was not returned such party, within
fourteen days after the jury has been discharged, may move for judgment in accordance
with his motion. A motion for a new trial may be joined with this motion, or a new trial
may be prayed for in the alternative. If a verdict was returned, the court may allow the
judgment to stand or may reopen the judgment. If the judgment is reopened, the court
shall either order a new trial or direct the entry of judgment, but no judgment shall be
rendered by the court on the ground that the verdict is against the weight of the
evidence. If no verdict was returned the court may direct the entry of judgment or may
order a new trial.”
{¶102} When ruling on a motion for judgment notwithstanding the verdict, a trial
court applies the same test as in reviewing a motion for a directed verdict. Ronske v.
Heil Co., Stark App. No. 2006-CA-00168, See also, Pariseau v. Wedge Products, Inc.
(1988), 36 Ohio St.3d 124, 127, 522 N.E.2d 511. “A motion for judgment
notwithstanding the verdict is used to determine only one issue i.e., whether the
evidence is totally insufficient to support the verdict.” Krauss v. Streamo, Stark App. No.
2001 CA00341, 2002-Ohio-4715, paragraph 14; see also, McLeod v. Mt. Sinai Medical
Center (2006), 166 Ohio App.3d 647, 853 N.E.2d 1235, reversed on other grounds, 116
Ohio St.3d 139, 876 N.E.2d 1201. Neither the weight of the evidence nor the credibility
of the witnesses is a proper consideration for the court. Posin v. A.B.C. Motor Court
Hotel, Inc. (1976), 45 Ohio St.2d 271, 275, 344 N.E.2d 334. See, also, Civ.R. 50(B); and
Osler v. Lorain (1986), 28 Ohio St.3d 345, 347, 504 N.E.2d 19. In other words, if there is
evidence to support the nonmoving party's side so that reasonable minds could reach
different conclusions, the court may not usurp the jury's function and the motion must be
denied. Goodyear Tire & Rubber Co. v. Aetna Casualty & Surety Co., 95 Ohio St.3d
512, 769 N.E.2d 835, 2002-Ohio-2842. Again, in ruling on a motion for judgment
notwithstanding the verdict, the court does not determine factual issues, but only
questions of law, even though it is necessary to review and consider the evidence in
deciding the motion. Goodyear at paragraph 4.
{¶103} Appellate review of a ruling on a motion for judgment notwithstanding the
verdict is de novo, Midwest Energy Consultants, L.L.C. v. Utility Pipeline, Ltd., 5th
Dist.App. No. 2006CA00048, 2006-Ohio-6232; Ronske v. Heil, supra.
{¶104} Three elements comprise an unjust enrichment claim: “(1) a benefit
conferred by a plaintiff upon a defendant; (2) knowledge by the defendant of the benefit;
and (3) retention of the benefit by the defendant under circumstances where it would be
unjust to do so without payment.” Hambelton v. R.G. Barry Corp. (1984), 12 Ohio St.3d
179, 183, 465 N.E.2d 1298. Unjust enrichment is inapplicable to gifts or any officious
act. Wendover Rd. Property Owners Assn. v. Kornicks (1985), 28 Ohio App.3d 101, 502
N.E.2d 226, syllabus.
{¶105} In its Entry granting Cross-Appellee’s JNOV, the trial court found that the
testimony of Cross-Appellant’s witness Dr. James Zinser failed to provide “evidence of
the value of services furnished by Robert and Clark Swank and claimed to be unjustly
retained by Freeman Swan, Sr. [sic] and Rheabelle Swank. It is proof only of earnings
the plaintiffs might have made had they worked for a higher wage. The testimony was
insufficient and there is no competent, credible evidence of the value of any unjust
enrichment.” (Dec. 20, 2010, Order at 2).
{¶106} Upon review of the record, we likewise find that Cross-Appellants failed
to present sufficient evidence of the value of any unjust enrichment to Freeman Swank,
Sr. and Rheabelle Swank. In this case, Cross-Appellants worked on the farm owned by
their parents for an agreed upon wage, free rent for their entire families and other
miscellaneous benefits. The fact that they could have made more money working
somewhere else does not constitute unjust enrichment on the part of their parents.
While it may be true that they did so based on an assumption that they would someday
inherit part of the farm, such assumptions were premised on the actuality that their
parents still owned the farm at the time of their death. As evidenced by the events
which took place in this case, any number of factors could cause their parents to be
divested of their real estate: i.e., at any time during their lives, their parents could have
chosen to sell all or part of their lands or financial obligations could cause them to
default on their loans resulting in foreclosure.
{¶107} Based on the foregoing, we find Cross-Appellants’ first assignment of
error is overruled.
II.
{¶108} In their second assignment of error, Cross-Appellants argue that the trial
court erred in dismissing their claims based on constructive fraud and promissory
estoppel. We disagree.
Promissory Estoppel
{¶109} Promissory estoppel is an equitable doctrine for preventing the harm
resulting from reasonable reliance upon false representations. GGJ, Inc. v. Tuscarawas
Cty. Bd. of Commrs., Tuscarawas App.No. 2005AP070047, 2006-Ohio-2527, ¶ 11,
citing Karnes v. Doctors Hosp. (1990), 51 Ohio St.3d 139, 142, 555 N.E.2d 280. The
party asserting promissory estoppel bears the burden of proving, by clear and
convincing evidence, all of the elements of the claim. In re Estate of Popov, Lawrence
App. No. 02CA26, 2003-Ohio-4556, ¶ 30.
{¶110} The elements necessary to establish a claim for promissory estoppel
are: (1) a promise clear and unambiguous in its terms; (2) reliance by the party to whom
the promise is made; (3) the reliance must be reasonable and foreseeable; and (4) the
party claiming estoppel must be injured by the reliance. Schepflin v. Sprint-United
Telephone of Ohio (April 29, 1997), Richland App.No. 96-CA-62-2, citing Stull v.
Combustion Engineering, Inc. (1991), 72 Ohio App.3d 553, 557, 595 N.E.2d 504.
{¶111} We have reviewed Cross-Appellants’ first Amended Complaint and find
that promissory estoppel was not raised against Freeman Swank, Sr. and/or Rheabelle
Swank. As such, we find that the trial court did not err in dismissing such individual
claim.
Constructive fraud
{¶112} Constructive fraud is an equitable action which does not require proof of
fraudulent intent. Perlberg v. Perlberg (1969), 18 Ohio St.2d 55, 247 N.E.2d 306.
Constructive fraud is defined as “ ‘a breach of a legal or equitable duty, which,
irrespective of moral guilt of the fraud feasor, the law declares fraudulent, because of its
tendency to deceive others, to violate public or private confidence, or to injure public
interests.’ “ Camp St. Mary's Assn. of the W. Ohio Conf. of the United Methodist Church,
Inc. at ¶ 22, quoting Cohen v. Estate of Cohen (1986), 23 Ohio St.3d 90, 91-92, 491
N.E.2d 698; L & N Partnership v. Lakeside Forest Assn., 183 Ohio App.3d 125, 916
N.E.2d 500, 2009-Ohio-2987.
{¶113} Constructive fraud is different from actual fraud. Actual fraud requires an
“affirmative misrepresentation,” while constructive fraud “results from the ‘failure to
disclose facts of a material nature where there exists a duty to speak.’ ” Camp St.
Mary's Assn. of the W. Ohio Conf. of the United Methodist Church, Inc., quoting
Baughman v. State Farm Mut. Auto. Ins. Co., 9th Dist. No. 22204, 2005-Ohio-6980,
quoting Layman v. Binns (1988), 35 Ohio St.3d 176, 178, 519 N.E.2d 642. Constructive
fraud typically exists where the parties to an agreement have a special confidential or
fiduciary relationship. Cohen at 92, 491 N.E.2d 698.
{¶114} With regard to the claim of constructive fraud, the trial court found that
while such claim had been appropriately pled, it was waived because Cross-Appellants
failed to pursue it during the Phase I trial.
{¶115} In this case, the trial court bifurcated the trials into legal and equitable
issues, with the equitable issues being tried in the first trial referred to as Phase I.
Cross-Appellants did not pursue their claims for constructive fraud during this phase of
the trial. We therefore find that the trial court did not err or abuse its discretion in
determining that claims were therefore waived.
{¶116} Cross-Appellants’ second assignment of error is overruled.
III.
{¶117} In their third assignment of error, Cross-Appellants argue that the trial
court erred in denying their November 18, 2008, motion for leave to file an amended or
supplemental complaint. We disagree.
{¶118} Specifically, Cross-Appellants sought to amend their Complaint to add
as additional defendants, Mary Jane Swank in her official capacity as a purported
trustee and Regal Eagle Enterprises, Inc., a corporation owned and/or controlled by
Freeman Swank, Jr. or Freeman Swank, Jr. and Mary Jane Swank jointly.
{¶119} Upon review, we find that Cross-Appellants filed their initial Complaint in
this matter in 1997, followed by an Amended Complaint in 1998. They then moved the
trial court for leave to amend again in 2000, 2002, 2007, 2008 and 2009, all of which
were denied.
{¶120} A trial court's determination whether to grant a motion for leave to
amend a complaint will not be reversed on appeal absent an abuse of discretion.
Darulis v. Ayers (Feb. 2, 1999), 5th Dist. No.1996CA00398 citing Cselpes v. Cleveland
Catholic-Diocese (1996), 109 Ohio App.3d 533, 541, 672 N.E.2d 724. To demonstrate
abuse of discretion in denying a motion for leave to amend complaint, appellant must
demonstrate more than error of law and that the trial court's denial of the motion was
unreasonable, arbitrary or unconscionable. Id.{¶121} Pursuant to Civ.R. 15(A):
{¶122} “A party may amend his pleading once as a matter of course at any time
before a responsive pleading is served or, if the pleading is one to which no responsive
pleading is permitted and the action has not been placed upon the trial calendar, he
may so amend it at any time within twenty-eight days after it is served. Otherwise a
party may amend his pleading only by leave of court or by written consent of the
adverse party. Leave of court shall be freely given when justice so requires. A party
shall plead in response to an amended pleading within the time remaining for response
to the original pleading or within fourteen days after service of the amended pleading,
whichever period may be the longer, unless the court otherwise orders.”
{¶123} The Ohio Supreme Court has held that “it is an abuse of discretion for a
court to deny a motion, timely filed, * * *, where it is possible that plaintiff may state a
claim upon which relief may be granted and no reason otherwise justifying denial of the
motion is disclosed.” Peterson v. Teodosio (1973), 34 Ohio St.2d 161, 297 N.E.2d 113,
paragraph six of the syllabus.
{¶124} The Ohio Supreme Court refined the holding in Peterson, supra, by
adopting the test found in Solowitch v. Bennett (1982), 8 Ohio App.3d 115, 117, 456
N.E.2d 562, that “there must be at least a prima facie showing that the movant can
marshal support for the new matters sought to be pleaded, and that the amendment is
not simply a delaying tactic, nor one which would cause prejudice to the defendant.”
Wilmington Steel Products, Inc. v. Cleve. Elec. Illum. Co. (1991), 60 Ohio St.3d 120,
123, 573 N.E.2d 622, syllabus.
{¶125} While Civ.R. 15(A) allows for liberal amendment, the trial court does not
abuse its discretion if it denies a motion to amend pleadings if there is a showing of bad
faith, undue delay or undue prejudice to the opposing party. Hoover v. Sumlin (1984),
12 Ohio St.3d 1, 465 N.E.2d 377, paragraph two of syllabus; Turner v. Cent. Local
School Dist., 85 Ohio St.3d, 95, 99, 1999-Ohio-207, 706 N.E.2d 1261.
{¶126} By the time Cross-Appellants filed the November, 2008, motion for leave
to amend, this case had been pending for eleven (11) years and two trials had already
taken place. As such, we find that the trial court did not abuse its discretion in denying
Cross-Appellants’ request to amend and/or supplement the Amended Complaint in this
matter.
{¶127} Cross-Appellants’ third assignment of error is overruled.
{¶128} For the reasons stated in the foregoing opinion, the judgment of the
Court of Common Pleas of Richland County, Ohio, is affirmed in part and reversed in
part.
By: Wise, J.
Hoffman, P. J., and
Edwards, J., concur.
IN THE COURT OF APPEALS FOR RICHLAND COUNTY, OHIO
FIFTH APPELLATE DISTRICT
ROBERT L. SWANK, et al. :
:
Plaintiffs-Appellees :
:
-vs- : JUDGMENT ENTRY
:
FREEMAN J. SWANK, JR., et al. :
:
Defendants-Appellants : Case No. 2011 CA 8
For the reasons stated in our accompanying Memorandum-Opinion, the
judgment of the Court of Common Pleas of Richland County, Ohio, is reversed as to
Robert Swank and E. Clark Swank’s claims of intentional interference with expectation
of inheritance, punitive damages and attorney fees and affirmed in all other aspects.
Costs assessed to Appellants.