[Cite as In re the Estate of Rife , 2014-Ohio-3644.]

IN THE COURT OF APPEALS OF OHIO SECOND APPELLATE DISTRICT MONTGOMERY COUNTY

In The Matter Of : : Appellate Case No. 26072 THE ESTATE OF : DOROTHY J. RIFE : Tria l Court Case No. 02-EST-341285 : : : (Probate Appeal from : ( Common Pleas Court) :

. . . . . . . . . . . O P I N I O N Rendered on the 22nd day of August, 2014.

. . . . . . . . . . . MICHAEL J. MILLONIG, Atty. Reg. #0017228, Michael Millonig, LLC, 7601 Paragon Road, Suite 103, Dayton, Ohio 45459 Attorney for Appellant, Debra Campbell JOHN H. STACHLER, Atty. Reg. #0064130, and SEAN H. HARMON, Atty. Reg. #0068706, Martin, Folino, Harmon & Stachler, 214 West Monument Avenue, Post Office Box 10068, Dayton, Ohio 45402-7068 Attorneys for Appellees, Hope Rife and Fred Rife RICHARD RIFE, 2891 Kearns Avenue, Dayton, Ohio 45414 Appellee, pro se

. . . . . . . . . . . . . HALL, J.[Cite as In re the Estate of Rife , 2014-Ohio-3644.] {¶ 1} Debra Campbell appeals from the trial court’s judgment entry vacating a prior order approving and settling a fi nal account she had filed as ad ministrator of her deceased

mother’s estate. {¶ 2} In her sole assignment of error, Campbell contends the trial court’s entry sustaining a motion to vacate th e final account is “against the ma nifest weight of the evidence

and an error of law.” {¶ 3} The record reflects that Campbell’s moth er, Dorothy Rife, died intestate in 2002. Campbell was appointed administrat or of the estate. In that cap acity, she filed a probate form listing herself and her brother, Richard Rife, as the next of kin. Cam pbell failed to mention appellees Hope and Fred Rife, the children of he r predeceased brother, Ernie Rife. The estate was settled and divided equally between Campbell and Richard Rife. The trial court filed a March 2004 entry approving and se ttling the final account. {¶ 4} In February 2013, Hope and Fred Rife filed a motion under R.C. 2109.35(B) to vacate the order approving and settling the final acc ount. They argued that they were entitled to share in the proceeds of the estate as lineal descendants of Ernie Rife. Following a hearing, a magistrate sustained the appellees’ motion. In a July 29, 2013 decision, the magistrate found that the appellees were entitled to ha ve the order approving and settling the final account vacated for good cause under R.C. 2109.35(B). The magistrate c oncluded that the stat utory requirements had been satisfied and that Campbell’s laches affirm ative defense had not b een established. Campbell filed objections challenging the ma gistrate’s rejection of her l aches defense. On January 7, 2014, the trial court overruled the obj ections, adopted the magistrate ’s decision, and vacated the 2004 order approving and settling th e final account. On appeal, Ca mpbell contends the evidence presented at the hearing before the magistrate esta blished the elements of laches. She argues that 3

 the trial court’s contrary conclusion is against th e weight of the evidence and contrary to law. {¶ 5} To provide some context, we begin our analysis with a review of the statute under which the appellees sought to vacate the 2004 order. As set fort h above, the appellees brought their motion under R.C. 2109.35, which authorizes vacating an order settling a fiduciary’s account under certain ci rcumstances. In relevant part, it provides: “The order may be vacated for good cause shown, other than fraud, upon motion of any person affected by the order who was not a party to the proceeding in whic h the order was made and who had no knowledge of the proceeding in time to appear in it[.]” 1 R.C. 2109.35(B). {¶ 6} Here the trial court found th at Hope and Fred Rife we re affected by the March 2004 order, that they were not parties to the proceeding that produced it, that they had no knowledge of the proceeding in time to participat e, and that good cause existed to vacate the order. In support, the trial court reasoned:

1 Although R.C. 2109.35(B) lacks a statute of limitation for moving to vacate a settlement order, it provides that “[n]either the fiduciary nor the fiduciary’s surety shall in cur any liability as a result of the vacati on of an order settling an account in a ccordance with this division, if the motion to vacate the orde r is filed more than three years following the settlement of the fiduciary’s account showing complete distribution of assets[.]” Notably, the statute also provides that this “three-year period shall not affect the liability of an y heir, devisee, or distributee either before or after the expiration of that period.” Here the appellees did not seek to hold Campbell liable in h er capacity as a fiduciary. Rather, as the trial court recognized, they sought to hold her liable as an heir or distributee of Dorothy Rife’s es tate. (Doc. #39 at 8). There is no dispute that Movants ar e persons affected by the March 4 Order. Nor is there any real dispute that Movants were not parties to the proceeding in which the March 4 Order was made. R.C. 2109.35(B) provides that “[a] person affected by an order settling an account shall be considered to have been a party to the proceeding in which the order was made if that person was served with notice of the hearing on the account * * *, waived that notice, 4

 consented to the approval of the account, filed exceptions to the account, or is bound by section 2109.34 of the Revised Code.” Movants testified that they did not receive notice of the hearing on the Fi nal Account, did not waive notice of the hearing on the Final Account, did not cons ent to approval of the Final Account, and did not file exceptions to the Fi nal Account. This testimony was not contradicted by any other evidence. With respect to the third finding, whic h is disputed, Movants showed they had no knowledge of the hearing on the Final Account in time to appear in it. As indicated above, R.C. 2109.35(B) provides that a court may vacate an order approving a final account if the movi ng party “had no knowledge of the proceeding [in which the order was made ] in time to appear in it.” Movants testified that they had no knowledge of any Estate proceedings, including the hearing on the Final Account. This testim ony was consistent with [Campbell’s] testimony that she did not serve Movants with notice of any Estate proceedings and did not have any discussions with M ovants regarding any Estate proceedings. Significantly, this testimony was not inconsistent with evidence showing that Movants were generally aware that Do rothy died owning personal and real property and that [Campbell] and Richard [Rife] distributed some of Dorothy’s personal property to re latives and charity.

Turning to the fourth required finding , which is also disputed, Movants showed good cause to vacate the March 4 Or der. Construing previous versions of 5

 R.C. 2109.35, several appe llate courts have held or strongly suggested that good cause exists when the court approve s a final account while operating under a mistake of fact. * * * There is no dispute that Movants were entitled to inherit from Dorothy but were not listed on the Form 1.0. Thus, in entering the Order, the Court was operating under a mista ke of fact regarding the identity of those entitled to inherit from Dorothy. (Doc. #39 at 6-8). {¶ 7} With regard to laches, which was the subject of Campbell’s objections below and is the focus of her assignment of error, the trial court reasoned: Assuming arguendo that nine years constitutes an unreasonable delay or lapse of time, [Campbell] failed to show that Movants lacked an excuse for the delay or had actual or cons tructive knowledge of the injury or wrong. First, the

evidence failed to show that Movants ha d actual knowledge of the alleged injury or wrong—i.e., [Campbell’s] alleged failure to administer the Estate in accordance with R.C. 2105.06(A). There is no dispute that neither the Court nor [Campbell] served formal notice of any Estate proceedings on Movants and there is no evidence that either [Campbell] or Richard [Rife] informally mentioned or discussed any Estate proceedings with Movants. Second, the evidence failed to show that Movants, using reasonable care or diligence, would have been aware of the alleged injury or wrong. Rather, the evidence merely showed that Movants were aware that Dorothy died owning personal and real property and that [Campbell] and Richard [Rife] informa lly distributed some of Dorothy’s 6

 household goods to relatives and charitie s. Given the availability of estate planning devices to avoid probate, Movants’ awareness of these circumstances did

not constitute constructive knowledge of [Campbell’s] a lleged failure to properly administer the Estate. Third, Movants’ l ack of actual or constructive knowledge, even if it were not dispositive, would excuse any delay. Finally, [Campbell] failed to show that she will suffer material prejudice as a result of any delay. While there was evidence that [Campbell’s] recollection of her administration of the Estate may have faded over the past ten years, such recollection may be supplemented by th e record, which includes [Campbell’s] filings as administrator. These filings in clude the Final Account , which the parties stipulated accurately reflects [Campbell’s] administration of the Estate. Further, while there was evidence that [Campbell] and Richard [Rife] changed their positions by spending the personal prope rty that they received, and renovating, selling, and spending the proceeds of the sale of the real property that they received, there was no evidence that such changes were made in reasonable

reliance on Movants’ words or conduct. Indeed, given that Movants had no knowledge of any Estate proceedings, it would have been unreasonable for [Campbell] and Richard [Rife] to rely on Movants’ failure to file exceptions to the

Final Account. * * * ( Id . at 9-10). {¶ 8} Upon review, we see no basis for reve rsing the trial court’s rejection of Campbell’s laches defense. “The affirmative defens e of laches recognizes that a claim could be 7

 ‘stale’ even though filed within the statute of limitations. When a claim is brought within the statute of limitations, the doctrine of laches may still bar the claim if ‘special circumstances’ render the delay in enforcing the claim inequitable.” (Citations omitted) Gordon v. Reid , 2d Dist. Montgomery No. 25507, 2013-Ohio-3649, ¶ 15. “Stated simply, laches is an equitable doctrine that bars a party from asserting an action when there is an unexcused delay that prejudices the opposing party. ‘The elements of laches are (1) unreasonable delay or lapse of time in asserting a right, (2) absence of an excuse for such a delay, (3) knowledg e—actual or constructive—of the injury or wrong, and (4) prejudice to the other part y.’ Each element must be established for laches to apply.” (Citations omitted) Id. at ¶ 16. “Whether laches should ba r an action is a fact-sensitive determination. Accordingly, we re view the trial court’s application of the doctrine of laches for

an abuse of discretion. An abus e of discretion means ‘that the court’s attitude is unreasonable, arbitrary or unconscionable.’ ” (Citations omitted) Id. at ¶ 17; see also Reid v. Wallaby’s Inc ., 2d Dist. Greene No. 2011-CA-36, 2012-Ohio-1437, ¶ 34 (reviewing the trial court’s application of laches for an abuse of discretion). 2

2 In their appellate brief, the appellees argue at length that an abuse-of-discretion standard applies to the trial court’s analy sis of their motion to vacate under R.C. 2109.35. While that may be true, Campbell’s assignme nt of error and appe llate argument focus on the trial court’s rejection of her laches affirmative defense. Therefore, we have looked to case law addressing the standard of review fo r the application of laches rather than case law addressing the standard of review for claims brought under R.C. 2109.35. {¶ 9} As set forth above, the tr ial court assumed, ar guendo, that the appellees’ delay in challenging the 2004 order approvi ng and settling the final account was excessively long. The trial court then found, however, that the appellees had a valid excuse for the delay, that they lacked actual or constructive knowledge of the in jury or wrong, and that Campbell would not be prejudiced by vacation of the 2004 order. 8

 {¶ 10} On appeal, Campbell addresses each element of laches. With regard to the length of the delay (the first element), she maintains that the appellees were not required to have “formal

notice” or to have counsel advise them of their rights before ta king some action. She claims the appellees “both had full knowledge of the decedent’ s estate administration for an eleven year period and did nothing.” (Appellant’s brief at 9). She asserts that “[a]n eleven year period should be sufficient grounds for this Court to find unreas onable delay on the part of the Appellees in filing their motion.” As a result, she contends th e trial court should have found the first element

of her laches defense satisfied. We note, however, that the trial court did find the first element satisfied. It assumed, argu endo, that the delay at issue was unreasonably long. 3 It rejected her laches defense based on a failure of proof re garding the other elements. (Doc. #39 at 9).

3 We need not decide whether the delay here was unreasonably long because the trial court ruled against Campbell on the other elements of her laches defense. We do note, however, that the delay in a laches case is not measured from when the challenged a ction occurred. Rather, it is measured from when the injured party has actual knowledge or is deemed to have had at least constructiv e knowledge of the injury . Portage Cty. Bd. of Commrs. v. Akron , 109 Ohio St.3d, 2006-Ohio-954, 846 N.E.2d 478, ¶ 82 (“Thus, the party relying on the defense of laches must demonstrate at least constructive knowle dge of the injury on the part of the affected party as a sta rting point of the delay that it asserts.”); Stevens v. National City Bank , 45 Ohio St.3d 276, 285, 544 N.E.2d 612 (1989) (recognizing that laches involves a delay in asserting rights after receiving knowledge or notice); Ellis v. Patonai , 9th Dist. Wayne No. 06CA0012, 2006-Ohio-5054, ¶ 13, citing Cox v. Garrett , 2d Dist. Greene No. 81-CA-69, 1982 WL 3782 (Aug. 23, 1982), at *2 (“Generally, the delay [in a laches case] is measured from the point in time at which the complaining party, having actual or constructive knowledge of the violation[,] * * * reasonably coul d have instituted suit.”). The trial court here found that the appellees both lacked actual or constructive knowledge of their injury until shortly before they sought relief under R.C. 2109.35. {¶ 11} Campbell also challenges the trial court’s finding that the appellees lacked actual or constructive knowledge of the injury or wrong (the third element). She reasons that such knowledge was established through testimony that they were awar e of their grandmother’s death and of the fact that she owned a house and pers onal property. Campbell further argues that the trial court erred in finding a va lid excuse for the appellees’ dela y (the second element) due to 9

 their lack of actual or constructive knowledge. Ev en if the appellees did lack such knowledge, she argues that their lack of knowledge cannot be used to excuse their delay. Campbell reasons: “If lack of knowledge could satisfy the requireme nt for no excuse for a delay, then the latter would not be a separate requirement. There must be separate facts and circumstances concerning the element of delay.” (Appellant’s brief at 10). Finally, she claims the trial court erred in finding no prejudice to her (the fourth element). She argues that prejudice was shown because she and Richard Rife sold their mother’s house and spen t all of the estate proceeds in reliance on the appellees’ years of inaction. {¶ 12} Having reviewed the record, we find no merit in Campbell’s argument that the trial court erred in rejecting her laches defense. The trial court’s judgment is neither against the weight of the evidence nor contrary to law. At a minimum, the evidence supports the trial court’s finding that the appellees lacked actual or constructive knowledge of the injury or wrong. Here the pertinent injury or wrong was the appellees’ exclusion from the prior proceedings, due to Campbell’s failure to list them as heirs, which resulted in them not sharing in the probate estate. Both appellees testified that they never received actual notice of the probate proceedings. (Tr. at 27, 33-34). Appellee Hope Rife did recall once dr iving past her deceased grandmother’s house and seeing “a bunch of stuff out.” She stopped and wa s told to take what she wanted because the rest was going to charity. ( Id. at 34). As for Fred Rife, he cl aimed Campbell advi sed him that he and his sister “would not be getting anything.” ( Id . at 30). With regard to Campbell’s argument that constructive knowledge ex isted based on the appellees’ general awareness of their grandmother’s death and her ownershi p of assets, the trial court concluded otherw ise. It reasoned: * * * [T]he evidence failed to show th at Movants, using reasonable care or 10

 diligence, would have been aware of the alleged injury or wrong. Rather, the evidence merely showed that Movants were aware that Dorothy died owning personal and real property and that [Cam pbell] and Richard [Rife] informally distributed some of Dorothy’s household goods to relatives and charities. Given the availability of estate planning devices to avoid probate, Movants’ awareness of

these circumstances did not constitute constructive knowledg e of [Campbell’s] alleged failure to properly administer the Estate. * * * (Doc. #39 at 9).[Cite as In re the Estate of Rife , 2014-Ohio-3644.] {¶ 13} We do not find the trial court’s reso lution of the “knowledge” issue to be unreasonable, arbitrary, or unconscionable. The tr ial court drew a reasona ble distinction between the appellees knowing that the decedent died ow ning some property and knowing that she had a probate estate from which they were entitled to share. The a ppellees’ actual knowledge of the

former did not constitute cons tructive knowledge of the latter. 4 Moreover, Campbell’s failure to establish the appellees’ actual or constructive knowledge of the inju ry or wrong is fatal to her

laches defense. As noted above , “[e]ach element must be esta blished for laches to apply.”

Gordon at ¶ 16. Because the record supports the tria l court’s finding that Campbell failed to establish the “knowledge” element, we need not decide whether the trial court also correctly analyzed the other elements. {¶ 14} Campbell’s assignment of error is overruled, and the trial court’s judgment is

affirmed.

. . . . . . . . . . . . .

FROELICH, P.J., and DONOVAN, J., concur.

Copies mailed to: Michael J. Millonig John H. Stachler

4 The case law cited in Campbell’s brief fails to persuade us otherwise. She cites 1937 and 1956 New York cases, a 1937 New Hampshire case, a 1953 Illinois case, and a 1984 Montana case. Even setting aside the fact that these cases are from other juri sdictions, none of them say anything contrary to our analysis herein. Campbell al so cites a 1952 Montgomery Co unty trial court decision in Fletcher v. Stanton , 69 Ohio Law Abs. 161, 124 N.E.2d 495 (C.P. 1952), and this court’s affirmance of that decision in Fletcher v. Stanton , 69 Ohio Law Abs. 174, 124 N.E.2d 493 (2d Dist. 1953). In Fletcher , this court upheld the trial court’s refusal to allow the plaintiff to challenge the settlement of an executor’s final accounting that she had approved twenty-five years earlier. See Fletcher , 124 N.E.2d at 498. Fletcher is distinguishable from the present case because here the appellees did not approve Campbell’s 2004 final account. 12

 Sean H. Harmon Richard Rife Hon. Alice O. McCollum