[Cite as Lugenbeal v. Stupak, 2016-Ohio-7408.] 

 

Civil Appeal From: Hamilton County Court of Common Pleas 

 

Judgment Appealed From Is: Affirmed 

Date of Judgment Entry on Appeal: October 21, 2016 

Klein, Tomb & Eberly, LLP, and Jeremy M. Tomb, for Plaintiff-Appellant, 

Graydon Head & Ritchey LLP, Stacy A. Cole and Michael C. Surrey, for DefendantsAppellees. 

IN THE COURT OF APPEALS 

FIRST APPELLATE DISTRICT OF OHIO 

HAMILTON COUNTY, OHIO 

RANDALL LUGENBEAL, 

 Plaintiff-Appellant, 

 vs. 

JEFF STUPAK, Individually, and as 

Chief Financial Officer of DEI 

Incorporated, 

WILLIAM SPEELMAN, Individually, 

and as Executive Vice President of 

Production of DEI Incorporated, 

 and 

DEI INCORPORATED, 

 Defendants-Appellees. 

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APPEAL NO. C-160413 

 TRIAL NO. A-1502575 

O P I N I O N.
OHIO FIRST DISTRICT COURT OF APPEALS

2

CUNNINGHAM, Judge. 

{¶1} Randall Lugenbeal appeals the trial court’s entry of summary judgment 

in favor of Jeff Stupak, William Speelman and DEI Incorporated (“DEI”). He argues 

that the court improperly excluded testimony that would have demonstrated that 

genuine issues of material fact existed as to whether Stupak and Speelman had breached 

their fiduciary duty to him, whether they were liable in civil conspiracy to him and 

whether Stupak, Speelman and DEI were liable for a violation of R.C. 1701.93. 

{¶2} We conclude that none of Lugenbeal’s assignments of error are well 

taken. The breach-of-fiduciary-duty and civil-conspiracy claims were shareholderderivative claims that could not be brought by a nonshareholder. And he presented no 

evidence that the defendants had issued false tax forms in violation of R.C. 1701.93. We 

therefore affirm the judgment of the trial court. 

I. Background Facts and Procedure 

{¶3} Prior to 2013, Lugenbeal was a minority shareholder of DEI 

Incorporated. In 2013, he signed over to DEI his shares, which had been seized in 

execution of a judgment held by Richard Grow, the majority shareholder of DEI. At the 

time he signed them over, the shares had no value. 

{¶4} In 2015, Lugenbeal filed a complaint against Stupak, who was DEI’s 

Chief Financial Officer, Speelman, DEI’s Executive Vice President of Production, and 

DEI. In the complaint, Lugenbeal alleged that Stupak and Speelman had breached their 

fiduciary duty to him “by their improper acts * * * including, but not limited to, their 

management of DEI in bad faith, and directly against the best interests of the company, 

rendering [Lugenbeal’s] interest in DEI worthless.” He also alleged that Stupak and 
OHIO FIRST DISTRICT COURT OF APPEALS

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Speelman had acted in conspiracy to injure him and DEI and that the defendants had 

issued false tax information to him in violation of R.C. 1701.93. 

{¶5} The defendants moved for summary judgment on all the claims. In 

support of his claims, Lugenbeal filed transcripts from a domestic-relations case 

between Richard Grow and Cynthia Lou Grow, Lugenbeal’s mother, the court’s decision 

in that case and Stupak’s affidavit, which had been filed in the case. Other than Stupak’s 

testimony given during the domestic-relations case, the trial court refused to consider 

the transcripts or the decision on grounds that they were “inadmissible and hearsay.” 

The court did consider Stupak’s testimony and his affidavit as admissible admissions of 

a party-opponent. 

{¶6} The court granted the defendants’ motion, concluding that the claims for 

breach of fiduciary duty and for civil conspiracy were in reality shareholder-derivative 

claims, which Lugenbeal, as a nonshareholder, could not bring. The court also 

concluded that Lugenbeal had not presented evidence of either civil conspiracy or a R.C. 

1701.93 violation. 

II. The Claims for Breach of Fiduciary Duty and Civil Conspiracy are 

Shareholder-Derivative Claims 

{¶7} We consider Lugenbeal’s second and third assignments of error first. In 

the second, he asserts that the trial court erred when it concluded that none of the 

defendants were liable to him. In the third, he claims the court erred when it concluded 

that there was no evidence to support the civil-conspiracy claim. The essence of the 

assignments of error is that the court erred in granting summary judgment on the 

fiduciary-duty and civil-conspiracy claims. 

{¶8} As the trial court did, we begin by characterizing what type of claims 

Lugenbeal alleged. “It is well-settled that only a corporation and not its shareholders 
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can complain of an injury sustained by, or a wrong done to, the corporation.” Adair v. 

Wozniak, 23 Ohio St.3d 174, 176, 492 N.E.2d 426 (1986). Thus, “[a] plaintiffshareholder does not have an independent cause of action where there is no showing 

that he has been injured in any capacity other than in common with all other 

shareholders as a consequence of the wrongful actions of a third party directed towards 

the corporation.” Id. at syllabus. Applying this principle in Adair, the Ohio Supreme 

Court concluded that the plaintiffs had stated shareholder-derivative claims, as opposed 

to individual claims, where the gravamen of the complaint was “that defendants 

tortiously depleted the assets of [the corporation.]” Id. at 176. Similarly, the crux of 

Lugenbeal’s claims is that the actions of Stupak and Speelman adversely affected the 

value of DEI. Such claims must be brought as shareholder-derivative claims. 

{¶9} Lugenbeal argues that we should apply an exception to Adair found in 

Crosby v. Beam, 47 Ohio St.3d 105, 548 N.E.2d 217 (1989). In Crosby, minority 

shareholders filed an action against majority shareholders alleging the 

misappropriation of corporate funds. Id. at 107. The Ohio Supreme Court held that 

breach-of-fiduciary-duty claims brought by minority shareholders against majority 

shareholders did not have to be brought as shareholder-derivative complaints. Id. at 

paragraph three of the syllabus. The court reasoned that majority shareholders owed 

a heightened fiduciary duty to minority shareholders, and that if the minority 

shareholders were required to proceed in a derivative action, “any recovery would 

accrue to the corporation and remain under the control of the very parties who are 

defendants in the litigation.” Id. at 109. 

{¶10} We are not persuaded that the reasoning of Crosby should be extended 

to allow Lugenbeal to proceed with individual claims against Stupak and Speelman. 

Here, there is no evidence that Stupak and Speelman were shareholders, much less 
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majority shareholders. Thus, if Lugenbeal were to succeed in his claim, any benefit 

would inure to DEI, not to Stupak and Speelman. And further, he alleged no harm 

separate from the harm done to the corporation. Both the fiduciary-duty claim and the 

civil-conspiracy claim were shareholder-derivative claims, which Lugenbeal could not 

pursue as a nonshareholder. The trial court properly granted summary judgment on the 

claims. The second and third assignments of error are overruled. 

{¶11} The first assignment of error, which challenged the trial court’s 

evidentiary decisions, is moot in light of our disposition of the second and third 

assignments of error, and we decline to address it. 

III. There was No Evidence of a Violation of R.C. 1701.93. 

{¶12} In his final assignment of error, Lugenbeal asserts that the trial court 

erred when it concluded the defendants had not violated R.C. 1701.93. Under the 

statute: 

No officer [or] director * * * of a corporation shall, either alone or with another or 

others, with intent to deceive * * * [m]ake, issue, deliver, publish, or send by mail 

or by any other means of communication any * * * document, respecting the 

shares * * * of a corporation, that is false in any material respect, knowing the 

statement to be false[.] 

{¶13} Lugenbeal argues that the K-1 tax forms issued for tax purposes were 

false because they showed that his shares in the corporation had value. The falsity is 

demonstrated, Lugenbeal maintains, by the fact that his shares were worthless when he 

signed them over in 2013. But Lugenbeal has presented no evidence that Stupak, 

Speelman, or any other DEI officer or director issued, with intent to deceive, false 

documents knowing them to be false. Indeed, Stupak averred that “the K-1s [were] 

truthful and accurate” and that he was “not aware of any facts that would suggest or 
OHIO FIRST DISTRICT COURT OF APPEALS

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show that the K-1s or DEI’s tax returns [were] false, inaccurate or misleading.” And 

Speelman stated that, as Executive Vice President of Production, he had no knowledge 

or control over DEI’s tax filings. These statements were uncontroverted. We conclude 

that the trial court did not err when it granted judgment to the defendants on the claim. 

The fourth assignment of error is overruled. 

{¶14} We therefore affirm the judgment of the trial court. 

Judgment affirmed. 

FISCHER, P.J., and MOCK, J., concur. 

Please note: 

The court has recorded its own entry on the date of the release of this opinion.