Case Title: Univ. Hosps. of Cleveland, Inc. v. Lynch

Citation: 2002-Ohio-3748

Docket Number: 

State: ohio

Court: Ohio Supreme Court

Date: 2002-08-07T00:00:00Z

Document:
[Cite as Univ. Hosps. of Cleveland, Inc. v. Lynch, 96 Ohio St.3d 118, 2002-Ohio-3748.] 
 
 
UNIVERSITY HOSPITALS OF CLEVELAND, INC. ET AL., APPELLEES AND CROSS-
APPELLANTS; MONTGOMERY, ATTORNEY GENERAL, APPELLEE, v. LYNCH ET 
AL., APPELLANTS AND CROSS-APPELLEES. 
[Cite as Univ. Hosps. of Cleveland, Inc. v. Lynch, 96 Ohio St.3d 118, 2002-Ohio-
3748.] 
Trusts — Action to adjudicate existence of a constructive trust for which no formal 
trust instrument exists and to substitute a new trustee is not subject to 
requirement of R.C. 109.25 that Attorney General be served with process or 
summons by registered mail — Failure of original parties to serve Attorney 
General with process or summons in a proceeding does not necessarily 
render any judgment entered therein void unless the proceeding falls within 
R.C. 109.25(A) through (D) — Party seeking judicial recognition of either a 
constructive or a resulting trust bears the burden of producing clear and 
convincing evidence justifying it. 
(No. 2001-0081 — Submitted January 30, 2002 — Decided August 7, 2002.) 
APPEAL and CROSS-APPEAL from the Court of Appeals for Cuyahoga County, Nos. 
77129 and 77134. 
__________________ 
SYLLABUS OF THE COURT 
1.  An action to adjudicate the existence of a constructive trust for which no 
formal trust instrument exists and to substitute a new trustee is not subject 
to the requirement of R.C. 109.25 that the Attorney General be served 
with process or by summons by registered mail. 
2.  The Attorney General has a statutory right to intervene pursuant to R.C. 
109.25, in his or her discretion, in any judicial proceeding affecting a 
charitable trust when the Attorney General determines that the public 
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2 
interest should be protected in such proceeding, but failure of the original 
parties to serve the Attorney General with process or summons in a 
proceeding does not necessarily render any judgment entered therein void, 
unenforceable, and subject to being set aside upon the Attorney General’s 
motion, unless the proceeding falls within R.C. 109.25(A) through (D). 
3.  A party seeking the judicial recognition of either a constructive or resulting 
trust bears the burden of producing clear and convincing evidence 
justifying it. 
__________________ 
 
MOYER, C.J. 
{¶1} 
This cause involves entities that are parts of an academic medical 
center at which medical students and physicians are trained, research is 
conducted, and patients are provided care.  Appellee and cross-appellant 
University Hospitals of Cleveland, Inc. (“the hospital”), operates in conjunction 
with the Case Western Reserve University School of Medicine and numerous 
clinical practice plans to form the Academic Medical Center at Case Western 
Reserve (“the medical center”).  Appellant and cross-appellee University 
Dermatologists, Inc. (“UDI”), was a medical practice operating in conjunction 
with the departments of dermatology of both the hospital and the medical school 
from 1979, the time of UDI’s incorporation, until 1998. 
{¶2} 
The hospital and the director of its dermatology department, 
appellee and cross-appellant Kevin D. Cooper, M.D., initiated this action, 
contending that they are legally entitled to control and manage UDI under various 
theories, e.g., resulting trust, constructive trust, quantum meruit, and breach of 
contract.  This case also presents the question whether the parties’ failure to serve 
appellee, Attorney General Betty D. Montgomery, with notice of the action 
rendered the trial court’s judgment voidable at the request  of the Attorney 
General pursuant to R.C. 109.25. 
January Term, 2002 
3 
I 
Factual Background 
A 
The Original Action 
{¶3} 
The term “practice plan” as used herein refers to an entity, 
sometimes incorporated, that is analogous to a private physician’s professional 
practice.  At the medical center, each practice plan corresponds to an academic 
department of the medical school, e.g., urology, cardiology, etc.  The medical 
school requires that its full-time faculty members treat patients solely through a 
designated practice plan.  Patients, or their insurers, pay the practice plans rather 
than the individual treating physicians.  The practice plans thereby generate 
significant revenues that are used to cover the expenses of the practice plan, e.g., 
salaries, rent, equipment, etc.  A portion of the net income generated by each 
practice plan is channeled to the hospital and medical school. The practice plans 
provide the medical school with comprehensive financial reporting on a regular 
basis.  Moreover, the salaries of physician faculty members are set by the chair of 
the corresponding medical school department in consultation with the dean of the 
medical school, although the salaries are paid to the physicians by their practice 
plan. 
{¶4} 
These practices are consistent with a document created in 1978 by 
the medical school entitled “Policies Governing Professional Practice Income of 
Full Time Faculty Members at Case Western Reserve University” (“policies 
statement”).  The policies statement sets forth the responsibilities each department 
chair and all full-time faculty members have to the dean with respect to the 
operation of practice plans at the medical school. 
{¶5} 
Historically, it was not uncommon for an individual to 
simultaneously hold the three positions of chair of a medical school department, 
director of the corresponding hospital department, and director of the 
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corresponding practice plan.  One witness described the relationship of the 
practice plans, the hospital, and the medical school as “almost symbiotic.”  As a 
result, the same person often found it difficult to separate his actions according to 
these theoretically separate roles. 
{¶6} 
In 1977, the  medical school appointed David Bickers, M.D., to 
head its division of dermatology, which at that time was part of the medical 
school’s department of medicine.  At Bickers’s urging, the division of 
dermatology was elevated to the status of department, and, in 1979, Bickers was 
appointed chair of the department of dermatology at the medical school.  He 
thereafter concurrently served as director of the department of dermatology of the 
hospital. 
{¶7} 
In August 1979, after conferring with legal counsel, Bickers 
formed UDI by incorporating it as a for-profit corporation, pursuant to R.C. 
Chapters 1785 and 1701.  Ohio law requires that the stock of a corporation 
formed pursuant to R.C. Chapter 1785 be held only by a licensed professional, in 
the case of UDI, by a medical doctor.  R.C. 1785.02, 1785.05, and 1785.07.  
Bickers obtained a personal bank loan of approximately $35,000 to equip and 
open UDI’s first clinic office. 
{¶8} 
When he incorporated UDI, Bickers was aware that practice plans 
varied from medical center to medical center, as well as within medical centers.  
He knew of a university where faculty members functioned independently, in 
individual private practices, and provided only minimal financial support to the 
university. 
{¶9} 
Bickers, in contrast, had a twofold purpose in incorporating UDI: 
he wanted to create a practice plan that would support the academic mission of the 
medical school, but he also wanted to “protect [him]self in terms of potential 
future incursions on the practice organization by the institution,” and thereby 
afford himself “some degree of protection or fall back” should “some unforeseen 
January Term, 2002 
5 
events occur that would threaten [his] livelihood and [his] ability to practice.”  In 
other words, he envisioned a for-profit corporation with himself as the sole 
shareholder so that he could leave the medical center and take the practice with 
him if the institution “decided that it wished to diminish or co-opt resources from” 
the practice plan. 
{¶10} In May 1980, in order to implement his plan that UDI would 
financially benefit the medical school, Bickers submitted a draft agreement to the 
dean of the medical school, proposing a formula for calculating the portion of 
UDI income to be given to the medical school.  Bickers subsequently met with 
Richard Behrman, M.D., who was to become dean in July 1980, to discuss the 
proposal. 
{¶11} During the meeting, the two doctors discussed numerous issues 
concerning UDI’s relationship with the hospital and the medical school, including 
the ownership of UDI should Bickers end his employment with the medical 
school.  Behrman proposed that in such a circumstance, Bickers would transfer 
the stock of UDI to the dean of the medical school, for ultimate transfer to 
Bickers’s successor to the chair of the department of dermatology.  Behrman 
testified that Bickers never rejected this proposal, nor indicated that he would not 
transfer UDI stock to the medical school should he decide to leave.  In fact, 
Behrman believed that Bickers orally agreed to this proposal at that meeting.  On 
the other hand, Bickers recalled that he had specifically rejected the dean’s 
suggestion that the UDI shares should be transferred to the dean if Bickers left the  
medical school. 
{¶12} After the meeting, Bickers and Behrman each prepared a draft 
agreement to govern that contingency, each with a different resolution of the 
issue.  However, no written agreement was ever executed.  Nevertheless, UDI 
began submitting payments to the medical school in accordance with the formula 
set forth in the original draft agreement submitted by Bickers in May 1980.  UDI 
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6 
also began providing annual financial reports to the medical school.  Over the 
years the hospital provided support to UDI, including supplying it with 
equipment, clinic space, loans, etc. 
{¶13} In 1981, Bickers recruited appellant and cross-appellee William S. 
Lynch, M.D., to the medical school to develop the surgical practice within the 
dermatology department of the medical school.  Bickers described the addition of 
Lynch as “clearly the single and most important addition to [the UDI] staff at that 
time in terms of building our practice revenues.”  He described Lynch as “well 
established in the community,” with a “stellar reputation” for surgical skills, an 
“enthusiasm for teaching,” and an “ability to combine outstanding clinical skills 
with a commitment to the mission of an academic department.” 
{¶14} In December 1993, Bickers left the medical center to join the 
dermatology department at Columbia University, and Lynch became acting chair 
of the department of dermatology of the medical school and acting director of the 
department of dermatology of the hospital.  Not being interested in retaining those 
positions, Lynch served on a recruiting committee to find a permanent 
replacement for Bickers. 
{¶15} On April 5, 1994, Lynch purchased all outstanding shares of UDI 
stock from Bickers for $1,000.  Bickers testified that he had transferred the UDI 
stock to Lynch for this nominal amount because he considered Lynch to be a 
cofounder.  Bickers believed that UDI’s success and accomplishments were due 
to Lynch’s efforts as much as his own and deemed a $1,000 purchase price to be 
fair.  At trial, Bickers expressly rejected the suggestion that he had transferred the 
UDI stock to Lynch in trust until it could ultimately be transferred to a permanent 
director and chair at the medical center. 
{¶16} During Bickers’s tenure as department chair, and by the agreement 
of both doctors, Lynch had taken primary responsibility for administering UDI as 
a practice plan, while Bickers had focused primarily on academic responsibilities 
January Term, 2002 
7 
and research.  Lynch purchased the UDI stock with the understanding that he was 
assuming all of UDI’s assets and liabilities and that he would manage the practice 
with a division of responsibility between himself and the new chair similar to that 
he had shared with Bickers. 
{¶17} In November 1994, appellee and cross-appellant Kevin D. Cooper, 
M.D., accepted a permanent appointment to the positions of director of the 
department of dermatology of the hospital and chair of the department of 
dermatology of the medical school.  During his recruitment, Cooper had received 
general information as to the structure and operation of practice plans at the 
medical center but did not receive specific information concerning the ownership 
of UDI.  He was not aware that Lynch owned all outstanding UDI stock and 
asserted full rights of ownership, including the right to direct the practice plan.  
Rather, Cooper assumed that “the chair controlled the practice.”  In fact, he 
believed that it was critical to the success of the medical school and the hospital 
that this be the case.  Thus, he expected to control UDI upon becoming chair and 
director of the departments of dermatology of the medical school and the hospital. 
{¶18} In the spring of 1995, Cooper first became aware that the stock of 
UDI had been transferred from Bickers to Lynch and that Lynch intended to 
exercise full rights of ownership even after Cooper’s formal appointments to 
director and chair on July 1, 1995.  Lynch made it clear to Cooper that he did not 
intend to relinquish control of UDI.  Despite Cooper’s immediate sense of 
apprehension, he went forward with his plans to accept the appointments at the 
medical school and the hospital, believing that the dispute could be resolved in an 
equitable way.  However, extensive negotiations between Lynch and Cooper 
failed to resolve the controversy. 
{¶19} Ultimately, Cooper incorporated a new legal entity, University 
Hospitals Dermatology Associates, Inc., which became the medical center’s 
dermatology practice plan in July 1998, and UDI’s relationships with the hospital 
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and the medical school were terminated.  Thereafter, UDI and the newly created 
practice plan became competitors for dermatologists, administrative employees, 
and patients. 
{¶20} This action was initiated in July 1998, when the hospital and 
Cooper filed a complaint naming Lynch and UDI as defendants. The medical 
school has never been a party to the litigation. 
{¶21} The complaint asserted multiple legal claims sounding in both 
contract and tort.  In addition to seeking legal relief in the form of damages, the 
hospital and Cooper sought equitable relief in the form of specific performance of 
contract or imposition of a constructive or resulting trust.  It alleged that UDI had 
been created in trust for the benefit of the hospital and that Lynch held legal 
ownership of the shares of UDI in a fiduciary capacity as a trustee.  It further 
demanded that Lynch be required to transfer his interest in UDI to Cooper, the 
current director of the hospital’s department of dermatology.  In the alternative, it 
asserted a quantum meruit theory, claiming that Lynch and UDI had been unjustly 
enriched, and requested that they be ordered to disgorge their gains. 
{¶22} Lynch and UDI answered and asserted numerous counterclaims 
against the hospital and Cooper, as well as claims against the medical school’s 
new practice plan, University Hospitals Dermatology Associates, Inc., which they 
named a third-party defendant.  The trial court decided to try the legal claims of 
the hospital and Cooper separately from their equitable claims. 
{¶23} After two weeks of trial to the bench, the court issued findings of 
fact and conclusions of law favoring Lynch and UDI.  It found that UDI had been 
incorporated for profit, funded by its founder, Bickers, and had operated in 
conjunction with, but was not owned by, the hospital.  Although recognizing that 
a “mutually beneficial working relationship” had developed between these 
entities, the court declared UDI to be a legal entity separate from the hospital and 
the medical school.  The trial court further found that the relationship between 
January Term, 2002 
9 
UDI and the hospital had been severed and that the hospital had evicted Lynch 
and UDI.  The trial court noted that Lynch’s removal from the faculty of the 
medical school was expected soon. 
{¶24} Accordingly, the trial court held that the hospital and Cooper had 
not satisfied their burden of proving that it would be unconscionable for Lynch to 
retain ownership of UDI or that the hospital was otherwise entitled to control 
UDI.  To the contrary, the trial court expressly found that to rule in favor of the 
hospital and Cooper on their equitable claims would result in unjust enrichment of 
the hospital.  The court concluded that Lynch and Bickers had developed UDI  
and contributed to its success through years of diligence and hard work and that 
all parties to the dispute had mutually benefited from UDI’s success. 
{¶25} In addition, the court ruled that a contract had never been formed 
between UDI and the medical school because there had been no meeting of the 
minds between Bickers and Behrman as to the disposition of UDI if Bickers 
decided to leave the medical school.  This finding foreclosed the hospital’s 
contention that the hospital had a right to equitable specific performance pursuant 
to a third-party-beneficiary theory or otherwise. 
{¶26} Thereafter, the Eighth District Court of Appeals dismissed an 
appeal filed by the hospital and Cooper for lack of a final appealable order 
because the legal claims remained pending. The parties then filed cross-motions 
seeking summary judgment on the remaining legal claims. 
B 
Appearance of the Attorney General 
{¶27} While these summary judgment motions were pending, and over 
two months after the trial court had rendered its decision on the equitable claims, 
the Attorney General of the state of Ohio, Betty D. Montgomery, appeared in the 
case for the first time, moving for leave to intervene and requesting the trial court 
to void its findings of fact and conclusions of law.  The Attorney General argued 
SUPREME COURT OF OHIO 
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that she had a statutory right to intervene pursuant to R.C. 109.25, in that the 
object of the case was “to terminate a charitable trust, distribute the assets thereof, 
or construe the provisions of an instrument with respect to a charitable trust.”  She 
claimed that she was a necessary party pursuant to statute, yet had not been served 
with process or summons, and that any judgment that the trial court might 
thereafter enter would be void and unenforceable.  She characterized herself as 
representing “the charitable beneficiaries served by [the hospital, the medical 
school], and several other charitable trusts and organizations.” 
{¶28} The court heard oral argument on the cross-motions for summary 
judgment and on the Attorney General’s motion to intervene.  It thereafter ruled in 
favor of UDI and Lynch on their motion for summary judgment on all remaining 
claims against them.  In the same entry, the trial court overruled the Attorney 
General’s motion to intervene. 
{¶29} The hospital and Cooper filed a notice of appeal, as did the  
Attorney General, and the court of appeals consolidated the two appeals.  In a 
split decision, the court of appeals accepted the Attorney General’s argument that 
the judgment of the trial court should be voided because she had not been served.  
It remanded the cause for new proceedings in which the Attorney General could 
participate.  The court deemed all remaining assignments of error to be moot. 
{¶30} This cause is now before this court upon the allowance of a 
discretionary appeal and cross-appeal. 
II 
The Right of the Attorney General to Intervene 
{¶31} UDI asserts that the court of appeals erred in reversing the trial 
court’s denial of the Attorney General’s motion to intervene and in declaring void 
the judgment of the trial court in UDI’s favor. 
{¶32} In rebuttal, the Attorney General and the hospital rely on R.C. 
109.25, which provides: 
January Term, 2002 
11 
{¶33} “The attorney general is a necessary party to and shall be served 
with process or with summons by registered mail in all judicial proceedings, the 
object of which is to: 
{¶34} “(A) Terminate a charitable trust or distribute assets; 
{¶35} “(B) Depart from the objects or purposes of a charitable trust as the 
same are set forth in the instrument creating the trust * * *; 
{¶36} “(C) Construe the provisions of an instrument with respect to a 
charitable trust; 
{¶37} “(D) Determine the validity of a will having provisions for a 
charitable trust. 
{¶38} “A judgment rendered in such proceedings without service of 
process or summons upon the attorney general is void, unenforceable, and shall be 
set aside upon the attorney general’s motion seeking such relief.  The attorney 
general shall intervene in any judicial proceeding affecting a charitable trust when 
requested to do so by the court having jurisdiction of the proceeding, and may 
intervene in any judicial proceeding affecting a charitable trust when he 
determines that the public interest should be protected in such proceeding.” 
{¶39} This case was not brought for any of the purposes identified in 
R.C. 109.25(B) through (D).  Subsections (B) and (C) are not relevant, as each 
refers to the “instrument” creating or governing the charitable trust at issue.  Here 
no instrument was executed creating a charitable trust in which UDI or its assets 
constituted the trust res.  Similarly, Subsection (D), governing testamentary 
charitable trusts, is inapplicable. 
{¶40} The Attorney General argues, however, that she should be deemed 
a necessary party based on R.C. 109.25(A).  We are not persuaded by her 
argument.  The object of the action in which she sought to intervene was not one 
to terminate a charitable trust or distribute assets; it was one to adjudicate the 
existence of a trust. The hospital in its complaint sought judicial recognition that 
SUPREME COURT OF OHIO 
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the shares of UDI constituted the trust res of a resulting or constructive trust, 
claiming that Lynch’s legal ownership of UDI was unconscionable and abhorrent 
to equity.  It did not contend that UDI should be considered a charitable trust 
subject to R.C. 109.25, nor did it seek to terminate or distribute the assets of UDI.  
Rather, the hospital sought to have Lynch’s ownership of UDI stock declared to 
be ownership as a trustee only and further sought the substitution of a new trustee 
for Lynch. 
{¶41} Similarly, the Attorney General sought as relief in her proffered 
complaint an order for “the appointment of a new trustee over the charitable 
assets currently held by University Dermatologists, Inc.” and for “the transfer of 
the common stock of University Dermatologists, Inc. to the new trustee appointed 
over University Dermatologists, Inc.”  It is logically inconsistent to argue that the 
hospital’s suit against Lynch was to terminate a trust, as contemplated by R.C. 
109.25(A), and to simultaneously argue that a new trustee of that trust should be 
appointed. 
{¶42} Because none of the circumstances contemplated by R.C. 
109.25(A) through (D) is present, the Attorney General’s argument that the trial 
court’s judgment must be declared void for failure to serve her as a necessary 
party pursuant to these subsections lacks merit. 
{¶43} The last sentence of R.C. 109.25, however, provides that the 
Attorney General “may intervene in any judicial proceeding affecting a charitable 
trust when he [or she] determines that the public interest should be protected in 
such proceeding.”  This statutory language clearly gives the Attorney General the 
right to intervene in judicial proceedings “affecting a charitable trust” when the 
public interest requires protection.  This language, however, is not equivalent to 
the language immediately preceding it, which declares void any  judgment 
rendered in proceedings described in R.C. 109.25(A) through (D) in the absence 
of service upon the Attorney General. 
January Term, 2002 
13 
{¶44} We do not here decide the merits of the Attorney General’s 
contention that UDI is the res of a charitable trust or of a constructive charitable 
trust.  We do assume, without deciding, that the Attorney General’s allegation that 
a given legal entity constitutes a charitable trust is sufficient to trigger application 
of the last sentence of R.C. 109.25 and supports her statutory right to intervene.  
See Brown v. Concerned Citizens for Sickle Cell Anemia, Inc. (1978), 56 Ohio 
St.2d 85, 90, 10 O.O.3d 220, 382 N.E.2d 1155.  However, only those judgments 
involving circumstances falling within subsections (A) through (D) of R.C. 
109.25 are void based upon failure of service upon the Attorney General.  
Because the underlying action filed by the hospital did not constitute judicial 
proceedings within the scope of those subsections, the trial court’s judgment 
herein is not void pursuant to R.C. 109.25. 
{¶45} We hold that an action to adjudicate the existence of a constructive 
trust for which no formal trust instrument exists and to substitute a new trustee is 
not subject to the requirement of R.C. 109.25 that the Attorney General be served 
with process or by summons by registered mail.  In addition,  we hold that the 
Attorney General has a statutory right to intervene pursuant to R.C. 109.25, in her 
discretion, in any judicial proceeding affecting a charitable trust when she 
determines that the public interest should be protected in such proceeding, but that 
failure of the original parties to serve the Attorney General with process or 
summons in a proceeding does not necessarily render any judgment entered 
therein void, unenforceable, and subject to being set aside upon the Attorney 
General’s motion, unless the proceeding falls within R.C. 109.25(A) through (D). 
{¶46} The Attorney General’s right to intervene pursuant to the last 
sentence of R.C. 109.25 is subject to the general rules governing intervention in 
civil actions, specifically, Civ.R. 24.  In this case, the Attorney General’s right to 
intervene did not fall within the scope of R.C. 109.25(A) through (D) but rather 
was based either on the last sentence of R.C. 109.25 or on the common law.  
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Under either theory, her motion to intervene was subject to the general procedural 
rules governing intervention. 
{¶47} Both Civ.R. 24(A)(1), providing for intervention as of right in an 
action when a statute of this state confers an unconditional right to intervene, and 
Civ.R. 24(B), providing for permissive intervention generally, require a party 
seeking intervention to make “timely application.”  The timeliness of a motion to 
intervene pursuant to Civ.R. 24(A) is a matter within the sound discretion of the 
trial judge, and the trial court’s decision will be reversed only upon a showing of 
an abuse of that discretion.  State ex rel. First New Shiloh Baptist Church v. 
Meagher (1998), 82 Ohio St.3d 501, 503, 696 N.E.2d 1058. 
{¶48} In determining the timeliness of a motion to intervene pursuant to 
Civ.R. 24, a court should consider the following factors: (1) the point to which the 
suit has progressed, (2) the purpose for which intervention is sought, (3) the 
length of time preceding the application during which the proposed intervenor 
knew or reasonably should have known of his interest in the case, (4) the 
prejudice to the original parties due to the proposed intervenor’s failure after he or 
she knew or reasonably should have known of his or her interest in the case to 
apply promptly for intervention, and (5) the existence of unusual circumstances 
militating against or in favor of intervention.  Id., 82 Ohio St.3d at 503, 696 
N.E.2d 1058. 
{¶49} It is significant that the Attorney General’s motion was filed well 
after the completion of two weeks of trial, and more than two months after the 
trial court had issued findings of fact, conclusions of law, and an opinion rejecting 
the assertion that a trust existed.  While UDI does not deny that the Attorney 
General acted promptly in filing her motion upon first learning of the underlying 
suit, other factors support the trial court’s denial of the motion.  The record clearly 
demonstrates that the original parties had fully litigated the relevant facts.  The 
January Term, 2002 
15 
trial court had made findings of fact that did not support the contention that a trust 
should be imposed. 
{¶50} Moreover, the responsibility for serving the Attorney General,  
assuming that a responsibility existed, rested primarily with the hospital, as the 
only party that characterized the action as one involving a charitable trust.  Here 
the hospital and Cooper seek to benefit from their own failure to give the Attorney 
General timely notice of the suit.  The hospital and Cooper did not proffer the 
theory that their action in any way affected a charitable trust as governed by R.C. 
Chapter 109, and apparently first contacted the Attorney General to notify her of 
the action only upon having received an unfavorable decision from the trial court 
on the theories they chose to pursue. 
{¶51} The trial court did not abuse its discretion in denying intervention 
in this case, and the court of appeals erred in holding the judgment of the trial 
court to be void pursuant to R.C. 109.25.  The court of appeals should not have 
reversed and remanded the cause to the trial court for new proceedings. 
III 
Cross-Appeal of the Hospital and Cooper 
{¶52} Having determined that the trial court’s judgment was void 
pursuant to R.C. 109.25, the court of appeals deemed all other assignments of 
error to be moot, based on its decision that the trial court’s judgment was void 
pursuant to R.C. 109.25.  We, however, have the authority to review those 
assignments of error de novo. Apel v. Katz (1998), 83 Ohio St.3d 11, 18, 697 
N.E.2d 600.  We have chosen to do so. 
A 
Alleged Error in Denying Equitable Relief 
{¶53} In its cross-appeal, the hospital and Cooper argue that the trial 
court erred in denying equitable relief in the form of declaring a resulting or 
constructive resulting trust.  We disagree. 
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{¶54} The trial court refused to impose a constructive or resulting trust 
on the stock of UDI, finding that equity did not demand it.  It concluded that 
Lynch was legally entitled to full ownership rights in UDI and that his retention of 
that ownership was neither shocking to the conscience nor inequitable.  We find 
more than sufficient evidence in the record to support the trial court’s factual 
findings and find no error in its conclusions of law. 
{¶55} A party seeking the judicial recognition of either a constructive or 
resulting trust bears the burden of producing clear and convincing evidence 
justifying it.  Professor Bogert observes that precedent exists that “ ‘[i]f the 
evidence is doubtful or capable of reasonable explanation upon a theory other 
than the existence of the trust, it is not sufficient to support a decree declaring and 
enforcing the trust,’ ” explaining that “[t]hese statements reflect judicial caution in 
accepting oral evidence which is intended to contradict absolute conveyances.”  
10 Bogert, Trusts and Trustees (2d Ed. Rev.1978) 44-49, Section 472, quoting 
Catherwood v. Morris (1931), 345 Ill. 617, 636, 178 N.E. 487, 494. 
1 
Resulting Trust 
{¶56} We have defined a resulting trust as one that the court of equity 
declares to exist where the legal estate in property is transferred or acquired by 
one under circumstances indicating that the beneficial interest is not intended to 
be enjoyed by the holder of the legal title.  First Natl. Bank of Cincinnati v. 
Tenney (1956), 165 Ohio St. 513, 515, 60 O.O. 481, 138 N.E.2d 15.  See, also, 
Comment b to Section 160 of the Restatement of the Law, Restitution (1937) 642.  
Generally, resulting trusts have been recognized in three situations, none of which 
is present in the case at bar: (1) purchase-money trusts, (2) instances where an 
express trust does not exhaust the res given to the trustee, and (3) where express 
trusts fail, in whole or in part.  Id., 165 Ohio St. at 515-516, 60 O.O. 481, 138 
N.E.2d 15. 
January Term, 2002 
17 
{¶57} The trial court found that Bickers had transferred the stock of UDI 
to Lynch.  Because there was no finding of any intent to transfer anything less, the 
sine qua non of a resulting trust is absent.  Therefore the trial court did not abuse 
its discretion in refusing to recognize a resulting trust. 
2 
Constructive Trust 
{¶58} We have adopted the following definition of a constructive trust:   
{¶59} “ ‘[A] trust by operation of law which arises contrary to intention 
and in invitum, against one who, by fraud, actual or constructive, by duress or 
abuse of confidence, by commission of wrong, or by any form of unconscionable 
conduct, artifice, concealment, or questionable means, or who in any way against 
equity and good conscience, either has obtained or holds the legal right to 
property which he ought not, in equity and good conscience, hold and enjoy.  It is 
raised by equity to satisfy the demands of justice.’ ”  Ferguson v. Owens (1984), 9 
Ohio St.3d 223, 225, 9 OBR 565, 459 N.E.2d 1293, quoting 76 American 
Jurisprudence 2d (1975) 446, Trusts, Section 221. 
{¶60} The imposition of a constructive trust is usually associated with the 
acquisition of property by fraud.  Aetna Life Ins. Co. v. Hussey (1992), 63 Ohio 
St.3d 640, 642, 590 N.E.2d 724.  Unjust enrichment of a person occurs when he 
or she “has and retains money or benefits which in justice and equity belong to 
another.”  Hummel v. Hummel (1938), 133 Ohio St. 520, 528, 11 O.O. 221, 14 
N.E.2d 923.  A constructive trust is imposed “not because of the intention of the 
parties but because the person holding the title to property would profit by a 
wrong, or would be unjustly enriched if he were permitted to keep the property.”  
Restatement of the Law, Restitution, Section 160, Comment b. 
{¶61} It was therefore the burden of the hospital and Cooper to support 
imposition of a constructive trust by clear and convincing evidence that Lynch, 
who holds legal title to the shares of UDI, would profit by his own wrongdoing or 
SUPREME COURT OF OHIO 
18 
be unjustly enriched by retaining ownership and control of UDI, in that control of 
UDI rightfully belonged to the hospital.  The trial court rejected the proposition 
that the stock of UDI belongs in justice and equity to the hospital, and the record 
supports that holding. 
{¶62} At best, the hospital and Cooper have demonstrated that they 
believed that UDI stock would, or should, be transferred to Bickers’s successor 
should he no longer serve in the position of hospital department director or 
medical school chair.  It is axiomatic that the formation of a contract is dependent 
upon both offer and acceptance and that silence in response to an offer does not 
generally indicate assent.  1 Corbin on Contracts (Rev.Ed.1993), Sections 3.18 
and 3.28. The record supports the trial court’s factual finding that Bickers never 
assented to Behrman’s proposal regarding disposition of UDI stock.  That being 
the case, Bickers was not contractually precluded from transferring UDI stock to 
someone other than the hospital’s department director. 
{¶63} Clearly, the hospital and Cooper believe that it would be equitable 
for the hospital to control UDI.  However, the facts as found by the trial court, and 
amply supported by the record, do not demonstrate that such a result is justified in 
equity.  The doctrine of constructive trust does not allow a court to disregard 
existing legal rights merely to fashion a result that it deems fairer than that created 
by the parties. 
{¶64} The hospital and Cooper contend that the 1978 practice policies 
statement adopted at the medical center is evidence of an implied contract that 
UDI stock would be transferred if necessary to ensure that the stock of the 
dermatology practice plan was held by a department director of the hospital.  We 
find nothing to that effect in the statement.  That document governs disposition of 
the  practice income of full-time faculty, financial reporting of practice plan 
income to the hospital, and the determination of faculty salaries.  It does not 
address ownership of the practice plans, although it recognizes that practice plans 
January Term, 2002 
19 
might be organized as partnerships, corporations, or other associations.  Nor does 
the fact that UDI operated in accordance with those policies for many years, or in 
accordance with other requests of Dr. Behrman, mean that continuation of that 
course of conduct by UDI was contractually required. 
{¶65} Bickers incorporated UDI and was the legal owner of all its stock.  
Inherent in that ownership was the right to dispose of that stock on terms that 
Bickers alone deemed acceptable.  He transferred his interest to Lynch.  We find 
nothing unjust in Lynch thereupon asserting the rights of ownership that he 
legally possessed. 
{¶66} Lynch, in purchasing UDI’s stock, obtained the right to control 
UDI.  In the absence of proof of an equitable obligation to the contrary, the 
hospital had no right to interfere with Lynch’s exercise of control over the 
corporation he owned.  If either party became dissatisfied with the other, it had 
the legal right to terminate the relationship.  In fact, upon determining that control 
of its dermatology practice plan was critical to its mission, the hospital had the 
option of terminating its recognition of UDI as its dermatology practice plan.  
That is exactly the course the hospital followed. 
{¶67} The trial court did not err in refusing to grant equitable relief to the 
hospital in the form of a constructive or resulting trust. 
B 
Alleged Error in Granting Summary Judgment Motion on Legal Claims 
{¶68} In the second proposition of law of their cross-appeal, the hospital 
and Cooper challenge the trial court’s entry of summary judgment for UDI and 
Lynch on the hospital’s legal claims, e.g., breach of contract and tortious 
interference with contractual relations. 
{¶69} Summary judgment is appropriate where the evidence shows that 
there is no genuine issue as to any material fact and that the moving party is 
entitled to judgment as a matter of law.  Civ.R. 56(C). 
SUPREME COURT OF OHIO 
20 
{¶70} We have reviewed the record and find it sufficient for us to 
conclude that the trial court did not err in entering summary judgment in favor of 
UDI and Lynch on the legal claims asserted in the complaint. 
C 
Alleged Error in Denying Leave to Amend Complaint 
{¶71} In the third proposition of law of their cross-appeal, the hospital 
and Cooper assert that the trial court abused its discretion in denying their motion 
for leave to amend their complaint filed nearly a full year after the initial 
complaint had been filed, and after the trial court had issued its findings of fact 
and conclusions of law.  The motion requested leave to add five additional causes 
of action for damages based on various tort theories. 
{¶72} The trial court did not abuse its discretion in denying this untimely 
motion. 
{¶73} The judgment of the court of appeals is reversed, and the cause is 
remanded with instructions to reinstate the judgment of the trial court. 
Judgment reversed 
and cause remanded. 
 
DOUGLAS, RESNICK, F.E. SWEENEY, PFEIFER and LUNDBERG STRATTON, 
JJ., concur. 
 
COOK, J., concurs in part and dissents in part. 
__________________ 
Cook, J., concurring in part and dissenting in part. 
{¶74} R.C. 109.25(A) through (D) list the types of judicial proceedings to 
which the Attorney General is a necessary party. Because this case does not fit 
any of these descriptions, the failure to serve the Attorney General did not render 
void the trial court’s judgment.  I therefore agree with the majority’s decision to 
reverse the judgment of the court of appeals. 
January Term, 2002 
21 
{¶75} Unlike the majority, however, I would not reach the matters 
addressed in Part III of its opinion.  The court of appeals declared these issues to 
be moot in light of its holding that the trial court’s judgment was void.  Having 
found this determination to be erroneous, we should remand this cause and allow 
the court of appeals to address, in the first instance, the parties’ remaining 
contentions on appeal. 
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Jones, Day, Reavis & Pogue, George J. Moscarino and Stephen J. Squeri, 
for appellees and cross-appellants. 
 
Betty D. Montgomery, Attorney General, and David J. Espinoza, Assistant 
Attorney General, for appellee Attorney General Betty D. Montgomery. 
 
Reminger & Reminger, Mario C. Ciano and T. Leigh Anenson; Gallagher, 
Sharp, Fulton & Norman and John E. Martindale, for appellants and cross-
appellees. 
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