[Cite as Pomeroy v. Schwartz, 2013-Ohio-4920.]

Court of Appeals of Ohio

EIGHTH APPELLATE DISTRICT 

COUNTY OF CUYAHOGA 

JOURNAL ENTRY AND OPINION 

No. 99638 

JACQUES C. POMEROY, ET AL.

PLAINTIFFS-APPELLANTS 

vs. 

MARK SCHWARTZ, ET AL.

DEFENDANTS-APPELLEES 

JUDGMENT: 

AFFIRMED 

Civil Appeal from the 

Cuyahoga County Court of Common Pleas 

Case No. CV-769361 

BEFORE: McCormack, J., Jones, P.J., and E.T. Gallagher, J. 

RELEASED AND JOURNALIZED: November 7, 2013 
ATTORNEY FOR APPELLANTS

Timothy P. Whitford 

Waldheger - Coyne 

1991 Crocker Road 

Suite 550 

Westlake, OH 44145

ATTORNEYS FOR APPELLEES

Eric Larson Zalud 

Matthew D. Gurbach 

Benesch, Friedlander, Coplan, & Aronoff L.L.P. 

200 Public Square 

Suite 2300 

Cleveland, OH 44114 

TIM McCORMACK, J.: 
{¶1} Appellants, Jacques C. Pomeroy (“Pomeroy”) and J.P. Agency, Inc. (“JP”), 

appeal from a judgment of the Cuyahoga County Common Pleas Court that granted 

summary judgment in favor of appellees, Mark Schwartz (“Schwartz”), G&S Metal 

Products Co., Inc. (“G&S”), and G&S Metal Products Employee Benefit Plan. The trial 

court ruled that the statute of limitations barred appellants’ claims of breach of contract, 

unjust enrichment, and conversion. After a careful review of the record and pertinent 

law, we find no merit to the appeal and affirm the judgment of the trial court. 

{¶2} The plaintiffs in this case are Jacques C. Pomeroy and his solely-owned 

insurance agency, JP. The defendants are Pomeroy’s long-term client Schwartz and his 

company G&S. The subject matter of this litigation is medical insurance claims totaling 

$362,614.04, which were incurred by G&S employees in 2001-2002 but were not covered 

under G&S’s health insurance policy. 

Substantive Facts and Procedural History

{¶3} The parties had a long and intricate business relationship spanning 40 years. 

Pomeroy was originally in the business of office equipment sales. He started his 

insurance business when he sold his first insurance policy in 1963 to Mark Schwartz’s 

father, founder of G&S. A long and extensive business relationship ensued. Over the 

years, Pomeroy provided many services to G&S, including human resources, 401(K) 

administration, investment management, employment benefits, group life and disability 

insurance polices, and health insurance policies, among others. 
{¶4} This case concerns a health insurance policy. For over 40 years, Pomeroy 

helped G&S select suitable health insurance plans for its employees. Pomeroy would 

obtain quotes from health insurance coverage providers and prepare spreadsheets for 

comparisons of prices and coverage. After G&S selected a plan, Pomeroy would prepare 

the application and collect checks for the insurance premiums. 

{¶5} G&S had always maintained a “self-insured,” as opposed to “fully insured,” 

health insurance plan, including the period from November 2001 to November 2002, the 

pertinent period of time for the instant litigation. During this time, employees of G&S 

were covered under a “self-insured” policy issued by Humana, Inc. However, G&S decided 

to switched to a “fully-insured” plan in November 2002. From November 2002 to 

November 2003, G&S’s employees were covered under a “fully-insured” policy, also 

issued by Humana. 

{¶6} Apparently when there is a change of policy from “self-insured” to “fully 

insured,” the claims that are incurred during the prior period but not made until the 

subsequent period — so called “trail claims” — are not covered by either policy. Separate 

coverage for the “trail claims” has to be purchased.1

 

 1

Pomeroy explained in his deposition that, under a self-insured plan, the claims are 

paid out of the self-insured plan regardless of when the claims are made or incurred, and therefore, 

there would be no need for “trail claim” coverage. However, when a self-insured plan is switched to a 

“fully insured” plan, a separate “trail claim” coverage is required to make it the responsibility of the 

insurance company to pay the “trail claims.”
{¶7} G&S did not purchase the additional “trail claims” coverage when it 

switched its policy from “self-insured” to “fully insured.” Beginning in November 2002, 

after the switch, G&S employees began to find that their claims that were incurred during 

the November 2001 – November 2002 period but were not made until after November 

2002 were rejected by the insurance company. 

{¶8} Not wanting to lose his valuable client, Pomeroy tried to resolve the issues. 

Beginning in February 2003, JP itself started to pay these unpaid claims. As Pomeroy 

testified later in his deposition, JP made the payments because he felt “a moral obligation 

to make them.” When he told Schwartz about the problem, Schwartz told him to “take 

care of it,” and he did. Also in his own words, he made the payments because he felt “in 

order for J.P. Agency to retain G&S and the Schwartz business, that this should be paid.” 

He wanted to “silence the complaints until [he] resolved the issue.” 

{¶9} Pomeroy also testified in his deposition that “he was sure” he would get 

reimbursed later, either by Humana or by G&S, stating “I thought somebody was going to 

reimburse me” and “[i]t may have been Humana.” He emphasized that “I knew that if 

there was a problem that I would be reimbursed for my expenses.” When asked how he 

knew, he answered “[j]ust because of the relationship.” 

{¶10} Pomeroy testified in his deposition that he did not recall if he had discussed 

thoroughly with Schwartz the need for a separate “trail claims” when the policy was 

switched to “fully-insured.” According to Schwartz, he did not know G&S did not have 
the necessary coverage for the “trail claims” and was never actually offered such a 

coverage by Pomeroy. 

{¶11} JP made the last of these “trail claim” payments on September 11, 2003. 

Nothing was brought up about these payments until three years later, in 2006, around the 

time when the relationship between Pomeroy and Schwarz went sour. 

{¶12} The deterioration of their relationship began when Pomeroy tried to sell 

Schwartz a “loss of income” policy, which turned out to be a fraudulent investment 

vehicle, peddled by a third individual. Pomeroy’s involvement in selling this fraudulent 

product led to a criminal investigation of him, and Pomeroy was eventually convicted of 

filing a false tax return over his involvement in the scheme in 2006. This is the same 

year Pomeroy, for the first time, demanded G&S’s reimbursement for the funds G&S had 

advanced to cover the “trail claims.” 

{¶13} Pomeroy alleges that he demanded the payment at that time because, during 

an annual audit, the auditor discovered G&S had not paid back the advanced funds for the 

“trail claims.” As a result of the “discovery,” Pomeroy’s son, who also worked at JP, 

sent a correspondence to Schwartz on April 20, 2006, demanding payment. The 

correspondence stated: “During a current outside audit it has been determined that 

several items paid by the J.P. Agency, Inc. have not been reimbursed by G&S Metal 

Products Company.” The correspondence demanded $362,614.04, referring to the money 

as “funds advanced.” 
{¶14} In a subsequent correspondence dated May 25, 2006, Pomeroy again 

demanded payment, stating that JP was never reimbursed by Humana for the payments 

made by JP regarding the “trail claims.” When Pomeroy was asked later in a deposition 

about this May 25, 2006 correspondence, he testified that “my indication was to go to 

Humana first and go to G&S second * * *.” He stated he was sure he would get paid “by 

someone.” 

{¶15} According to Schwartz, Pomeroy never raised this issue with him before 

these correspondences. Schwartz alleged Pomeroy demanded payment at this time 

because of his diminishing cash flow. 

{¶16} On November 16, 2011, eight years after JP made the last “trail claims” 

payment, Pomeroy and JP (collectively “appellants”) filed the instant complaint against 

Schwartz and G&S (collectively “appellees”) to recover the funds, asserting breach of oral 

contract, unjust enrichment, and conversion. Extensive discovery was exchanged, and 

depositions were taken of Pomeroy and Schwartz.2

 

{¶17} Appellees moved for summary judgment, and the trial court granted it, ruling 

that all three claims were barred by the applicable statute of limitations. 

{¶18} Appellants now appeal, raising five assignments of error. They state: 

1. The trial court erred in finding that the statute of limitations began to 

accrue as to each claim before all the elements of each claim existed. 

 2

The instant record is also supplemented with the deposition testimony of Pomeroy and 

Schwartz from two other related trial court cases. 
2. The trial court erred in awarding summary judgment in favor of the 

defendants by misinterpreting the “discovery rule,” which was never relied 

upon by the plaintiffs. 

3. The trial court erred in finding that the claims began to accrue at the time 

the money was paid rather than at the point in time when repayment was 

refused and retention of the money became unjust. 

4. The trial court erred when it found that there was no evidence for the loan 

to be repaid when the contract did not set a date for repayment. 

5. The trial court erred in awarding summary judgment as genuine issues of 

material fact remained for resolution by a jury. 

{¶19} Because all five assignments of error relate to the timeliness of the claims 

asserted by appellants, we consider them together. 

Summary Judgment Standard of Review

{¶20} Summary judgment is appropriate where it appears that: (1) there is no 

genuine issue as to any material fact; (2) the moving party is entitled to judgment as a 

matter of law; and (3) reasonable minds can come to but one conclusion, and that 

conclusion is adverse to the party against whom the motion for summary judgment is 

made, who is entitled to have the evidence construed most strongly in his favor. Harless 

v. Willis Day Warehousing Co., Inc., 54 Ohio St.2d 64, 66, 375 N.E.2d 46 (1978); Civ.R. 

56(C). 

{¶21} “The burden of showing that no genuine issue exists as to any material fact 

falls upon the moving party in requesting a summary judgment.” Id. Conclusory 

assertions that the nonmovant has no evidence to prove its case are insufficient. The 

movant must specifically point to evidence contained within the pleadings, depositions, 
answers to interrogatories, written admissions, affidavits, etc., which affirmatively 

demonstrate that the nonmovant has no evidence to support his claims. Dresher v. Burt, 

75 Ohio St.3d 280, 293, 1996-Ohio-107, 662 N.E.2d 264. Unless the nonmovant then 

sets forth specific facts showing there is a genuine issue of material fact for trial, summary 

judgment will be granted to the movant. We review a trial court’s grant of summary 

judgment de novo. Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105, 1996-Ohio-336, 

671 N.E.2d 241. 

The Timeliness of Appellants’ Claims

{¶22} It is undisputed that the “trail claims” from the G&S employees were not 

covered under either the 2001-2002 (“self-insured”) policy or the 2002-2003 

(“fully-insured”) policy, and that appellants made the payments for these “trail claims.” 

It is also undisputed the last payment was made September 11, 2003, and that Pomeroy 

made the demand for reimbursement for the first time on April 20, 2006. 

{¶23} Appellants asserted breach of oral contract, unjust enrichment, and 

conversion in their complaint, filed on November 16, 2011. Breach of oral contract and 

unjust enrichment have a six-year statute of limitations and conversion, four-year. The 

crux of this appeal is when the causes of action accrued for the statute of limitations 

purposes. 

{¶24} Appellees asserted, and the trial court agreed, that appellants’ causes of 

action accrued, and the statutory period began to run, on September 11, 2003, when 
appellants made the last payment for these claims. Appellants assert it was a much later 

date, April 20, 2006, when appellants demanded reimbursement for the first time. 

{¶25} On appeal, appellants no longer contest the untimeliness of their conversion 

claim, because, even if the cause of action accrued on April 20, 2006 as they claim, the 

four-year statute of limitation would have expired before the lawsuit was filed. 

Therefore, we only need to address the timeliness of appellants’ breach of oral contract 

and unjust enrichment claims. 

Breach of Oral Contract 

{¶26} A claim based on a contract not in writing must be brought six years after the 

cause of action accrues. R.C. 2305.07. 

{¶27} “Ohio law recognizes that a cause of action accrues ‘when the right to 

prosecute it begins.’” Kanally v. Ameritech Ohio Co., 8th Dist. Cuyahoga No. 8972, 

2008-Ohio-4446, ¶ 12, citing Singh v. ABA Publishing, 10th Dist. Franklin No. 

02AP-1125, 2003-Ohio-2314, ¶ 23, and Lynch v. Dial Fin. Co. of Ohio, No. 1, Inc., 101 

Ohio App.3d 742, 747, 656 N.E.2d 714 (8th Dist.1995). 

{¶28} The trial court determined the cause of action accrued on September 11, 

2003, when the last payment for the “trail claims” was advanced by JP. We agree. If 

there was an oral agreement made to reimburse JP for the funds advanced, as alleged by 

appellants, appellants had the right, beginning from that day, to seek reimbursement from 

G&S, first by demanding and then by litigation, if necessary. The last of the “trail 

claims” payments was paid on September 11, 2003. Therefore, the cause of action 
accrued on that day and the statute of limitations for the alleged breach of oral contract ran 

on September 11, 2009. 

{¶29} In an effort to extend the time for their breach of oral contract claim, 

appellants attempt to characterize the “trail claims” payments as a loan and to analogize 

this case to cases involving loan agreements. 

{¶30} The case law indicates when an oral contract involves a loan agreement, the 

courts have been willing to delay the running of the statutory time until when the creditor 

demands payment or when the borrower refuses to pay. “When the subject of the oral 

contract is a loan, the accrual date is when the loan is due to be repaid, the lender requests 

payment, and the borrower fails to pay.” Thomas v. Kramer, 194 Ohio App.3d 70, 

2011-Ohio-1812, 954 N.E.2d 1235, ¶ 34 (8th Dist.), citing Dandrew v. Silver, 8th Dist. 

Cuyahoga No. 86089, 2005-Ohio-6355. When an oral agreement does not specify a time 

for repayment of a debt, the cause does not accrue until a party demands payment. Berry 

v. Lupica, 196 Ohio App.3d 687, 2011-Ohio-5381, 965 N.E.2d 318 (8th Dist.). 

{¶31} Appellants alleged that there was an oral contract for JP to loan the “trail 

claims” funds to G&S and, therefore, the statute of limitations did not begin to run until 

April 20, 2006, when JP demanded, without success, reimbursement of the funds from 

G&S. 

{¶32} The problem for appellants’ theory is that even if we construe the evidence 

most strongly in their favor, there was no evidence in the record to support the claim that 
the alleged oral contract was for a loan to be repaid upon demand. Pomeroy himself 

wavered in his depositions when asked why he made the payments for the “trail claims.” 

{¶33} On one occasion, he testified he made the payments to retain his most valued 

client; on another occasion he testified he made the payments believing either Humana, 

G&S, or “someone” would eventually reimburse him. Not once did he testify the 

payment was a loan to G&S. 

{¶34} In the correspondence of April 20, 2006, when JP demanded the 

reimbursement for the first time, there was no reference to a loan agreement. 

Furthermore, the fact that no interest on the “loan” was ever mentioned in the parties’ 

communication regarding the “trail claims” payments also belies appellants’ 

characterization of these payments as a loan. Finally, appellants’ own statement in their 

appellate brief is also inconsistent with the allegation of a loan to G&S: “* * * all parties 

expect a delay in payment for the reimbursement to be sought from the Appellees’ 

insurance company and a demand to be made to the Appellees if no payment was made by 

the insurer * * *.” 

{¶35} In its judgment, the trial court rejected the claim of a loan agreement, stating 

“there is absolutely no evidence to support * * * the allegation that the alleged oral 

contract was for a loan to be repaid on demand.” Our review of the record supports the 

determination. Because the record lacks any evidence to support a loan agreement, the 

rule applied in cases such as Kramer, 194 Ohio App.3d 70, 2011-Ohio-1812, 954 N.E.2d 

1235, and Lupica, 196 Ohio App.3d 687, 2011-Ohio-5381, 965 N.E.2d 318, is not 
applicable in this case to make April 20, 2006, when appellants demanded payment, the 

accrual date for the breach of oral contract claim. 

Discovery Rule Not Applicable to Breach of Contract Claim

{¶36} In its judgment, the trial court also determined that the discovery rule — 

which would have extended the statutory time — does not apply in a breach of contract 

case, stating “[a] cause of action for breach of contract accrues when the breach occurs, 

regardless of the aggrieved party’s lack of knowledge of the breach.” 

{¶37} Appellants take issue with this statement by the trial court. They maintain 

that the discovery rule should have been applicable in this case and tolls the statutory time.

 

Generally, a cause of action accrues and the statute of limitations begins to 

run at the time the wrongful act was committed. However, the discovery 

rule is an exception to this general rule and provides that a cause of action 

does not arise until the plaintiff discovers, or by the exercise of reasonable 

diligence should have discovered, that he or she was injured by the wrongful 

conduct of the defendant. 

 (Citations omitted.) Norgard v. Brush Wellman, 95 Ohio St.3d 165, 2002-Ohio-2007, 

766 N.E.2d 977, ¶ 8. 

{¶38} “A court may invoke the discovery rule ‘in situations where the injury 

complained of may not manifest itself immediately and, therefore, fairness necessitates 

allowing the assertion of a claim when discovery of the injury occurs beyond the statute of 

limitations.’” Cristino v. Admr., 10 Dist. Franklin No. 12AP-60, 2012-Ohio-4420, 977 

N.E.2d 742, ¶ 40, quoting NCR Corp. v. United States Mineral Prods. Co., 72 Ohio St.3d 

269, 271, 1995-Ohio-191, 649 N.E.2d 175. 
{¶39} No Ohio courts have applied the discovery rule to a claim for breach of 

contract. Cristino at ¶ 41, citing Vitek v. AIG Life Brokerage, S.D. Ohio No. 06-CV-615, 

2008 U.S. Dist. LEXIS 82132 (Sept. 22, 2008), and Settles v. Overpeck Trucking Co., 12th 

Dist. Butler No. CA93-05-083, 1993 Ohio App. LEXIS 6217 (Dec. 27, 1993). 

{¶40} Similarly, we decline to apply the discovery rule to this case to extend the 

time limitation for appellant’s breach of oral contract claim. This is not a case “where the 

injury complained of may not manifest itself immediately.” Appellants knew, since 

2003, or should have known by the exercise of reasonable diligence, that they were not 

reimbursed by appellees. They did not make any demand for the reimbursement until 

three years later, in 2006, and, having been aware that appellees refused the demand for 

payment in 2006, did not file the lawsuit for another five years. We do not believe that, 

under these circumstances, “fairness necessitates allowing the assertion of a claim when 

discovery of the injury occurs beyond the statute of limitations.” The application of 

discovery rule as advocated by appellants would stretch the rule beyond recognition. 

Appellants’ breach of oral contract claim is time barred. 
Unjust Enrichment

{¶41} Appellant’s unjust enrichment claim is similarly time barred. An unjust 

enrichment claim is subject to a six-year statute of limitations. Kramer, 194 Ohio App.3d 

70, 2011-Ohio-1812, 954 N.E.2d 1235, ¶ 45, citing R.C. 2305.07. It arises when the 

following elements exist: “(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.” 

Miller v. Keybank Natl. Assn., 8th Dist. Cuyahoga No. 86327, 2006-Ohio-1725, ¶ 43. 

“[A] claim for unjust enrichment accrues on the date that money is retained under 

circumstances that make it unjust to do so.” Palm Beach Co. v. Dun & Bradstreet, 106 

Ohio App.3d 167, 655 N.E.2d 158 (1st Dist.1995). 

{¶42} Here, the trial court found the unjust enrichment claim accrued on September 

11, 2003, when the last payment of the “trail claims” was made. We agree. This is the 

date the last of the benefit that was allegedly (1) conferred to appellees, (2) with appellees’ 

knowledge, and (3) was retained, under circumstances where it would be unjust without 

payment. 

{¶43} On appeal, appellants advance a rather convoluted argument for their claim 

that the April 20, 2006 date was the date of accrual for the unjust enrichment cause of 

action. They argue that an unjust enrichment action accrues on the date when the 

benefit/money is wrongfully retained. They claim that, because the “trail claim” funds 
was not wrongfully retained until April 20, 2006, that is the date the statute of limitations 

began to run. They cite the Palm Beach case for this argument. 

{¶44} Our reading of Palm Beach, 106 Ohio App.3d 167, 655 N.E.2d 158, does not 

support appellants’ claim. There, the defendant, a credit information company, allegedly 

deceived plaintiff company into buying more of its services than plaintiff needed. The 

First District, after stating that Ohio does not recognize the discovery rule for unjust 

enrichment claims, explained that the traditional rule in Ohio for a cause of action for 

unjust enrichment is that it accrues from the date “that money is retained under 

circumstances where it would be unjust to do so.” Id. at 175. In response to the 

plaintiff’s claim that the cause of action accrued only when defendant refused to return the 

overcharged payment, the court reasoned as follows: 

* * * Although in certain cases the unlawfulness of the retention may not 

arise until there is a request for a return of the money, in the instant case, if 

Palm Beach’s allegations are true, it was the receipt of the money that was 

unlawful, and therefore the cause of action accrued at the latest, as the trial 

court determined, in 1982 when the last of the alleged overcharges, or false 

billings or accountings, occurred. 

Id. 

{¶45} The trial court’s determination in the instant case, that the last payment of the 

“trail claims” triggered the statute of limitations, comports with Palm Beach. Although 

the First District appeared to suggest, without explanation, that there might be cases where 

“the unlawfulness of the retention may not arise until there is a request for a return of the 

money,” the court held the last overcharge or false billing was the date the cause of action 

of unjust enrichment began to accrue. 
{¶46} Appellants’ attempt to circumvent the statute of limitations, by arguing 

appellees’ retention of the benefit only became “wrongful” in April 2006, is equally 

unavailing. Appellees’ failure to reimburse appellants, if unjust under the circumstances 

as appellants allege, was unjust from the beginning; when appellants decided to demand 

the return of the allegedly wrongfully retained benefit is not a significant event for 

purposes of the statute of limitations. To conclude otherwise would allow a plaintiff to 

unilaterally control the statutory time. 

{¶47} Appellants have failed to create a genuine issue of material fact for trial. The 

trial court properly concluded the appellants’ claims are barred by the applicable statute of 

limitations, entitling them to summary judgment. Appellants’ assignments of error are 

overruled. 

{¶48} Judgment affirmed. 

It is ordered that appellees recover of 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 common 

pleas 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. 

______________________________________________ 

TIM McCORMACK, JUDGE 

LARRY A. JONES, SR., P.J., and 

EILEEN T. GALLAGHER, J., CONCUR