[Cite as Ross Sinclaire & Assoc., L.L.C. v. Huntington Natl. Bank, 2018-Ohio-661.]

IN THE COURT OF APPEALS OF OHIO 

TENTH APPELLATE DISTRICT 

Ross Sinclaire and Associates, LLC, : 

 Plaintiff-Appellant, : 

 No. 17AP-355 

v. : (C.P.C. No. 15CV-2374)

The Huntington National Bank, : (REGULAR CALENDAR) 

 Defendant-Appellee. : 

 

D E C I S I O N 

Rendered on February 22, 2018 

 

On brief: Flagel & Papakirk, LLC, James Papakirk, and 

Hallie S. Borellis, for appellant. Argued: Hallie S. Borellis. 

On brief: Porter, Wright, Morris & Arthur LLP, 

Kathleen M. Trafford, Robert W. Trafford, and Jay A. 

Yurkiw, for appellee. Argued: Kathleen M. Trafford. 

 

APPEAL from the Franklin County Court of Common Pleas 

SADLER, J. 

{¶ 1} Plaintiff-appellant, Ross Sinclaire and Associates, LLC ("RSA"), appeals 

from a judgment of the Franklin County Court of Common Pleas in favor of defendantappellee, The Huntington National Bank ("HNB"). For the reasons that follow, we affirm. 

I. FACTS AND PROCEDURAL HISTORY 

{¶ 2} RSA is a full-service investment banking, securities brokerage, and asset 

management firm with a principal office in Cincinnati, Ohio. HNB is a national banking 

association with its principal place of business located in Columbus, Ohio. The events 

that have resulted in this appeal began in 1998 when Montgomery County issued 

approximately $5.8 million in Multifamily Housing Mortgage Revenue Bonds. The 
No. 17AP-355 2 

county allocated the proceeds from the sale of the bonds to a nonprofit corporation known 

as the Trinity Foundation, Inc. ("Trinity") to finance the redevelopment of the Squirrel 

Run Apartments ("Squirrel Run") in Trotwood, Ohio for low-income families. In 

conjunction with the receipt of the bond revenue, Trinity executed and delivered to HNB, 

as indenture trustee, a promissory note for each series of the bonds, secured by an OpenEnd First Mortgage, Assignment of Lease and Rents, and Security Agreement. (Ex. 3 

attached to Joint Stipulation of Facts and Exs. (hereinafter "Joint Ex.").) The promissory 

notes obligated Trinity to fund the principal and interest payments due under the bonds 

out of the rental income derived from Squirrel Run. The existing 160-unit Squirrel Run 

apartment complex provided the collateral for the loan to Trinity. In 1998, the Squirrel 

Run property appraised at $5.5 million using an income approach. 

{¶ 3} On November 8, 2001, HNB's trust administrator and senior vice president, 

Candada Moore ("Trustee Moore"), issued the first Notice to Holders of an Event of 

Default. The notice provides, in relevant part, as follows: 

As of the date of this notice, the Debt Service Reserve Fund 

* * * was used to make up the deficiencies in the payments for 

debt service due November 1, 2001 * * * and all holders of the 

Series A and Series B have been paid in full for such debt 

service that was due. To date, the Trinity Foundation, Inc. has 

not replenished the Debt Service Reserve Fund. Series C has 

not been paid for debt service due November 1, 2001. 

(Joint Ex. 4 at 1.) 

{¶ 4} Trustee Moore subsequently issued a similarly worded Notice to Holders of 

Continuing Events of Default on May 8, 2002, January 8, July 1, and November 20, 2003. 

Trustee Moore enclosed with the November 20, 2003 notice audited financial reports 

received on January 5, 2003. On December 10, 2003, Trinity and Montgomery County 

executed an agreement whereby Trinity agreed to make installment payments for 

delinquent property taxes. 

{¶ 5} On February 26, 2004, Trustee Moore notified bondholders as follows: 

We are writing to you in our capacity as Trustee * * * to advise 

you that Trinity * * * as owner of the Project property which 

serves as collateral for and secures the Bonds, and as the 

obligor under the Loan Agreement which provides the 

revenues to pay the Bonds, has contacted Reilly Mortgage 
No. 17AP-355 3 

Group, Inc. ("Reilly") to apply for FHA mortgage insurance 

and to place a mortgage loan to retire the Bonds. * * * In order 

to proceed, Reilly requires an up front payment of $23,000 to 

pay for initial fees and expenses [and] has requested your 

consent to use $23,000 from the Debt Service Reserve Fund 

which secures the Bonds, to pay Reilly. 

(Joint Ex. 10 at 1.) The notice also advised bondholders that Trinity remained delinquent 

in its real property taxes and acknowledged that "ongoing routine repair and maintenance 

items, such as fixing storm drains and downspouts and replacing carpet, have regularly 

fallen behind as occupancy and revenues have not kept pace. There are frequent roof 

repair needs, patio dividers and balcony floors and railings have deteriorated wood and 

fogged up patio doors have been an ongoing problem." (Joint Ex. 10 at 2.) 

{¶ 6} On May 18, 2004, Trustee Moore issued another Notice to Holders of 

Continuing Events of Default. On May 19, Reilly had the Squirrel Run property appraised 

in furtherance of its efforts to secure FHA refinancing. The appraiser estimated the fair 

market value of the property, using a cost-basis approach, between $3.3 and $3.5 million. 

{¶ 7} On November 5, 2004, November 8, 2005, and May 5, 2006, Trustee 

Moore issued a Notice to Holders of Continuing Events of Default and Partial Interest 

payment. The November 5, 2004 notice informed bondholders that Reilly was unable to 

secure refinancing because "it has not been able to obtain FHA mortgage insurance due to 

receipt of an appraisal that was lower than needed for a full refinancing." (Joint Ex. 13 at 

2.) The notice indicated "[o]ther refinancing alternatives are being explored." (Joint Ex. 

13 at 2.) 

{¶ 8} In February 2006, RSA made its first purchase of the bonds at issue, by 

and through RSA employee Philip Lucas. Lucas knew the loan to Trinity was in default 

status when he made the purchase. Lucas and RSA also had access to all prior notices of 

default, but Lucas did not recall reviewing any of the notices to bondholders issued prior 

to the time he purchased the bonds in 2006. In his deposition, Lucas maintained he was 

not concerned the loan was in default status because he believed the collateral securing 

the loan and the bonds had value. Lucas testified that over several years he engaged in 

some direct communications with Trustee Moore regarding the status of the project and 
No. 17AP-355 4 

the value of the collateral. The parties disagree as to the precise nature and import of 

RSA's communications with Trustee Moore. 

{¶ 9} RSA did receive some scheduled interest payments associated with the 

Squirrel Run bonds purchased in 2006, but RSA received no such payments after 

December 2006. Trustee Moore subsequently issued a Notice to Holders of Continuing 

Events of Default on December 17, 2006, May 8, and November 8, 2007. A Squirrel Run 

"Balance Sheet" provided to all bondholders as an attachment to the December 27, 2006 

notice shows "Total Assets" of $4,559,229.84 and "Total Liabilities" of $5,909,991.73 as of 

December 31, 2005. (Joint Ex. 16.) 

{¶ 10} In February 2007, RSA records show it made a profit of $4,487.55 when 

Lucas sold some of the Squirrel Run bonds it had purchased in 2006. Lucas shared in 

these profits pursuant to a profit-sharing agreement with RSA. The record also shows on 

January 1, 2009, RSA held Squirrel Run bonds purchased by Lucas with a total face value 

of $250,000. From January 1 to March 24, 2009, Lucas purchased additional Squirrel 

Run bonds on behalf of RSA with a total face value of $530,000, for which it paid 

$58,415, approximately 11 cents on the dollar. 

{¶ 11} On April 2, 2009, HNB, "as Trustee for the Multifamily Housing Mortgage 

Revenue Bonds," filed a "Complaint on Notes, Foreclosure, Sale of Collateral, Specific 

Performance of Assignment of Rents, Appointment of a Receiver, and for an Accounting 

and Inspection" against Trinity and several other defendants in the Montgomery County 

Court of Common Pleas. (Joint Ex. 19 at 1, 2.) On April 10, 2009, Trustee Moore issued a 

Notice of Default and Acceleration notifying bondholders of the action. 

{¶ 12} RSA continued to buy Squirrel Run bonds after HNB filed the foreclosure 

action. RSA bought Squirrel Run bonds with a total face value of $755,000 for $80,865, 

or 9.3 cents on the dollar. The post-foreclosure purchases increased the total face value of 

RSA's holdings in Squirrel Run bonds to $1,535,000 for which it paid a total of $217,055, 

roughly 14 cents on the dollar on average. 

{¶ 13} On August 31, 2009, HNB moved the Montgomery County Court of 

Common Pleas to appoint a receiver. On that same date, the Montgomery County Court 

of Common Pleas appointed a receiver to "take charge of, preserve, [and] manage" 

Squirrel Run. (Joint Ex. 21 at 1.) On November 15, 2010, Trustee Moore issued a Notice 
No. 17AP-355 5 

of Default and Receiver Sale. On August 8, 2011, Trustee Moore issued an Urgent 

Request for Immediate Direction to all bondholders, which requested bondholder 

approval of a proposed sale of the Squirrel Run property for $2.45 million, conditioned on 

the buyer obtaining tax credit financing to rehabilitate the property. The request also 

indicates "[t]o date the receiver has received a number of offers in the $1,600,000 range 

and attempted to negotiate them higher." (Joint Ex. 23 at 1.) 

{¶ 14} On August 29, 2012, Squirrel Run sold for $1.6 million. After deducting 

outstanding expenses, taxes, and fees from the sale proceeds, RSA received a distribution 

out of the net proceeds of $164,043.05. HNB received a total of $134,462 for its services 

as indenture trustee from November 1998 through December 2012. 

{¶ 15} On July 31, 2013, RSA filed a complaint against HNB in the Montgomery 

County Court of Common Pleas alleging breach of contract and breach of fiduciary duty. 

That complaint was dismissed without prejudice, and on September 24, 2014, RSA refiled 

the complaint against HNB in the Hamilton County Court of Common Pleas. On 

February 18, 2015, the Hamilton County Court of Common Pleas transferred venue of the 

case to Franklin County. On April 25, 2015, RSA moved the trial court to amend the 

complaint to add claims for negligence and breach of trust. The trial court granted the 

motion on May 19, 2015. 

{¶ 16} On May 29, 2015, HNB moved the trial court to dismiss the complaint 

pursuant to Civ.R. 12(B)(6). The trial court dismissed RSA's claims for common-law 

negligence and breach of contract on November 20, 2015 for failure to state a claim on 

which relief may be granted. On August 19, 2016, HNB filed a motion for summary 

judgment as to the remaining claims for breach of fiduciary duty and breach of trust. 

HNB argued the four-year statute of limitations barred RSA's claims because as early as 

2007, RSA knew or should have known of the alleged breach of trust. RSA argued its 

claims for breach of trust and breach of fiduciary duty did not accrue until 2012 when it 

received the distribution of proceeds from the sale of Squirrel Run. RSA argues, 

alternatively, there are genuine issues of fact as to what RSA knew and when, precluding 

summary judgment. 

{¶ 17} The trial court found the only reasonable conclusion to be drawn from the 

evidence is that RSA's claims for breach of fiduciary duty and breach of trust accrued at 
No. 17AP-355 6 

the latest in April 2009 when HNB filed the complaint in foreclosure and notified 

bondholders of the action. Accordingly, the trial court held the four-year statute of 

limitations barred RSA's claims against HNB because they did not file the complaint in 

Montgomery County until July 31, 2013. The trial court journalized a final judgment 

entry in favor of HNB on April 17, 2017. 

{¶ 18} RSA timely appealed to this court from the judgment of the trial court. 

II. ASSIGNMENT OF ERROR 

{¶ 19} RSA sets forth the following assignment of error: 

The trial court erred in granting summary judgment to 

Huntington National Bank [] on Ross Sinclaire and 

Associates, LLC's [] claims for breach of fiduciary duty and 

breach of trust when substantial questions of material fact 

exist and HNB is not entitled to judgment as a matter of law. 

III. STANDARD OF REVIEW 

{¶ 20} Pursuant to Civ.R. 56(C), summary judgment "shall be rendered forthwith if 

the pleadings, depositions, answers to interrogatories, written admissions, affidavits, 

transcripts of evidence, and written stipulations of fact, if any, timely filed in the action, 

show 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." "Accordingly, summary judgment is appropriate 

only under the following circumstances: (1) no genuine issue of material fact remains to 

be litigated, (2) the moving party is entitled to judgment as a matter of law, and (3) 

viewing the evidence most strongly in favor of the nonmoving party, reasonable minds 

can come to but one conclusion, that conclusion being adverse to the nonmoving party." 

Slane v. Hilliard, 10th Dist. No. 15AP-493, 2016-Ohio-306, ¶ 12, citing Byrd v. Arbors E. 

Subacute & Rehab. Ctr., 10th Dist. No. 14AP-232, 2014-Ohio-3935, ¶ 6, citing Harless v. 

Willis Day Warehousing Co, 54 Ohio St.2d 64, 66 (1978). 

{¶ 21} " '[T]he moving party bears the initial responsibility of informing the trial 

court of the basis for the motion, and identifying those portions of the record before the 

trial court which demonstrate the absence of a genuine issue of fact on a material element 

of the nonmoving party's claim.' " Byrd at ¶ 7, quoting Dresher v. Burt, 75 Ohio St.3d 

280, 292 (1996). Once the moving party meets its initial burden, the nonmovant must set 

forth specific facts demonstrating a genuine issue for trial. Byrd at ¶ 7, citing Dresher at 
No. 17AP-355 7 

293. Because summary judgment is a procedural device to terminate litigation, courts 

should award it cautiously after resolving all doubts in favor of the nonmoving party. 

Byrd at ¶ 7, citing Murphy v. Reynoldsburg, 65 Ohio St.3d 356, 358-59 (1992). 

{¶ 22} Appellate review of summary judgment is de novo. Byrd at ¶ 5. When an 

appellate court reviews a trial court's disposition of a summary judgment motion, it 

applies the same standard as the trial court and conducts an independent review, without 

deference to the trial court's determination. Id., citing Maust v. Bank One Columbus, 

N.A, 83 Ohio App.3d 103, 107 (10th Dist.1992); Brown v. Cty. Commrs., 87 Ohio App.3d 

704, 711 (4th Dist.1993). 

IV. LEGAL ANALYSIS 

{¶ 23} In appellant's sole assignment of error, appellant contends the trial court 

erred when it granted summary judgment in favor of HNB as to the claims for breach of 

fiduciary duty and breach of trust because there are genuine issues of fact whether the 

statute of limitations barred appellant's claims. We disagree.

{¶ 24} One asserting a claim of breach of fiduciary duty must establish the 

existence of a fiduciary duty, breach of that duty, and injury proximately caused by the 

breach. Newcomer v. Natl. City Bank, 6th Dist. No. WM-12-007, 2014-Ohio-3619, ¶ 9, 

appeal dismissed, 141 Ohio St.3d 1429, 2015-Ohio-12, citing Strock v. Pressnell, 38 Ohio 

St.3d 207, 216 (1988); Sudnick v. Klein, 11th Dist. No. 2001-G-2356, 2002-Ohio-7341, ¶ 

25. Appellant's complaint alleges claims for breach of fiduciary duty under the common 

law and for breach of trust as defined in R.C. 5810.01 et seq. R.C. 2305.09(D) provides a 

four-year limitations period for a cause of action seeking recovery for "an injury to the 

rights of the plaintiff not arising on contract nor enumerated in sections 1304.35, 2305.10 

to 2305.12, and 2305.14 of the Revised Code." This court has determined the four-year 

limitations period in R.C. 2305.09(D) applies to a common-law claim for breach of 

fiduciary duty. Clemens v. Nelson Fin. Group, Inc., 10th Dist. No. 14AP-537, 2015-Ohio1232, ¶ 46, citing Wells v. C.J. Mahan Constr. Co., 10th Dist. No. 05AP-180, 2006-Ohio1831, ¶ 26. 

{¶ 25} Under the common law, a cause of action for breach of fiduciary duty which 

could be brought prior to the termination of a trust is barred by the statute of limitations 

if not timely filed. Cundall v. U.S. Bank, 122 Ohio St.3d 188, 2009-Ohio-2523, ¶ 29, 
No. 17AP-355 8 

citing Paschall v. Hinderer, 28 Ohio St. 568, 576 (1876). When, however, a trustee's 

misconduct is surreptitious or obscured and remains so until the trustee's death or 

removal, a cause of action by trust beneficiaries against a trustee accrues and the statute 

of limitations begins to run when the fiduciary relationship ends. Cundall at ¶ 27, citing 

State ex rel. Lien v. House, 144 Ohio St. 238 (1944). 

{¶ 26} In this instance, RSA's claims for breach of fiduciary duty and breach of 

trust are predicated on the same operative facts. The gravamen of the complaint is that 

Trustee Moore failed to timely file a foreclosure action which, according to RSA, would 

have preserved a greater portion of trust assets for distribution to the bondholders.1 RSA 

alleges that HNB, by and through Trustee Moore, breached a duty it owed to RSA by 

failing to provide the bondholders with relevant information regarding the financial 

difficulties experienced by Trinity and the deteriorating condition of the Squirrel Run 

property and/or providing RSA with false and misleading information regarding the 

status of the project that prevented RSA from discovering the breach of trust. 

{¶ 27} The parties agree the applicable statute of limitations is four years for RSA's 

claims. RSA filed its original complaint in Montgomery County on July 13, 2013. 

Consequently, the statute of limitations barred any of RSA's claims that accrued prior to 

July 13, 2009. RSA first contends its cause of action accrued in 2012 when HNB "ended 

its role as trustee by selling the trust res and distributing the proceeds to the trust 

beneficiaries." (Emphasis sic.) (Appellant's Brief at 2.) HNB argues RSA's claims 

accrued when RSA either knew or, in the exercise of reasonable diligence, should have 

learned of a breach of trust. We agree with HNB. 

{¶ 28} In Cundall, a successor trustee, on behalf of certain trust beneficiaries, sued 

a former trustee for fraud, self-dealing, and breach of fiduciary duty. The First District 

Court of Appeals affirmed the judgment of the trial court that the cause of action did not 

 

1 The amended complaint provides, in relevant part, as follows: "Despite knowing, in 2004, that Trinity was 

not protecting the value of the asset underlying the bondholders' security, and knowing that an appraisal of 

Squirrel Run Apartments did not support refinancing, [HNB] did nothing to maximize bondholder return. 

Instead, [HNB] allowed Squirrel Run Apartments to fall into further disrepair and took no action to 

foreclose on Squirrel Run Apartments for another five years. [The trustee's] fiduciary failure is 

demonstrated drastically by its failure to take any decisive action to preserve the Trust asset. This delay 

ultimately caused the opportunity to be lost to the detriment of the Trust and the bondholders." (Am. 

Compl. at 11, 12.) 
No. 17AP-355 9 

accrue, and the four-year statute of limitations did not begin to run until the death of the 

former trustee. The Supreme Court of Ohio, in applying the four-year statute of 

limitations in R.C. 2305.09, held the First District erred when it determined the cause for 

breach of fiduciary duty accrued on the death of the prior trustee because the beneficiaries 

knew much earlier, or reasonably should have known, the true value of trust assets sold 

had possibly been misrepresented. In so holding, the Supreme Court adopted the 

following rule of law for determining when the cause of action for breach of trust accrues: 

" 'If the trustee violates one or more of his obligations to the beneficiary * * *, there 

obviously is a cause of action in favor of the beneficiary and any relevant Statute of 

Limitations will apply from the date when the beneficiary knew of the breach or 

repudiation, or by the exercise of reasonable skill and diligence could have learned of it.' " 

(Emphasis sic.) Id. at ¶ 28, quoting George Gleason Bogert, The Law of Trusts and 

Trustees, Section 951 at 630-34 (2d Ed.Rev.1995). The court noted under the prevailing 

rule of law, "[k]nowledge of the beneficiary is the critical factor because when the 

beneficiary knows of the misconduct, he has knowledge that the trustee has repudiated 

his trust obligation. Upon learning of the repudiation, the time for the beneficiary to act 

begins to run." Cundall at ¶ 27. The Cundall court noted that " '[c]onstructive knowledge 

of the facts, rather than actual knowledge of their legal significance, is enough to start the 

statute of limitations running.' " (Emphasis sic.) Id. at ¶ 30, quoting Flowers v. Walker,

63 Ohio St.3d 546, 549 (1992). 

{¶ 29} Consistent with the rule of law in Cundall, R.C. 5810.05(C), effective 

January 1, 2007, sets forth the limitation period for actions against a trustee, in relevant 

part, as follows: 

[N]otwithstanding section 2305.09 of the Revised Code, a 

judicial proceeding by a beneficiary against a trustee for 

breach of trust must be commenced within four years after 

the first of the following to occur: 

* * * 

(3) The termination of the trust; 

(4) The time at which the beneficiary knew or should have 

known of the breach of trust. 
No. 17AP-355 10 

(Emphasis added.)2

{¶ 30} Pursuant to Cundall and R.C. 5810.05, contrary to RSA's assertion, the 

claims against HNB accrued and the four-year statute of limitations began to run when 

RSA either knew or should have known of the breach of trust, not when HNB "ended its 

role as trustee by selling the trust res and distributing the proceeds to the trust 

beneficiaries."3 (Emphasis sic.) (Appellant's Brief at 2.) To that end, we note R.C. 

5801.03(A) provides a general definition of "knowledge" for purposes of trust matters. 

Zook v. JPMorgan Chase Bank Natl. Assn., 10th Dist. No. 15AP-750, 2017-Ohio-838, 

¶ 38. That provision reads as follows: 

Subject to division (B) of this section, a person has knowledge 

of a fact if any of the following apply: 

(1) The person has actual knowledge of the fact. 

(2) The person has received notice or notification of the fact. 

(3) From all the facts and circumstances known to the 

person at the time in question, the person has reason to know 

the fact. 

(Emphasis added.) R.C. 5801.03(A). 

{¶ 31} HNB argues the only reasonable inference to be drawn from the evidence 

presented both in support of and in opposition to the motion for summary judgment is 

that RSA either knew or should have known of the alleged breach of trust as early as 2007. 

HNB relies primarily on Lucas's deposition testimony in support of its argument. 

{¶ 32} Lucas testified he is an account executive at RSA, and RSA's core specialty is 

the purchase and sale of municipal bonds. Lucas stated RSA also gets involved in 

underwriting bond issues, but he acknowledged RSA had little experience in municipal 

revenue bonds for low-income housing. Lucas maintained 85 to 90 percent of his 

business involves distressed municipal bonds. According to Lucas, he considers 

 

2"[W]here breach of trust claims are not barred by the applicable statute of limitations prior to the time 

when [R.C. 5810.05] went into effect, then, in that event, the statute of limitations set forth in [R.C. 5810.05] 

applies to the claim, notwithstanding other provisions." Newcomer at ¶ 29. 

3 This court issued its decision in Cassner v. Bank One Trust Co., N.A., 10th Dist. No. 03AP-1114, 2004-

Ohio-3484, several years prior to the effective date of R.C. 5810.05 and the decision of the Supreme Court in 

Cundall. Thus, RSA's reliance on Cassner is misplaced. 
No. 17AP-355 11 

municipal bonds "distressed" when the obligor fails to make debt service payments or a 

credit or other event occurs that casts doubt on the obligor's ability to pay. (Lucas Dep. at 

103.) Lucas testified he typically does not get involved in the purchase of distressed 

municipal revenue bonds until the bonds are selling for 30 cents on the dollar or less. 

{¶ 33} When Lucas purchased the Squirrel Run bonds in 2006, he did not consult 

the portion of the "official statement" pertaining to bondholder risks because "I know 

what the bondholder risks are." (Lucas Dep. at 190-91.) He did not obtain copies of the 

prior notices to bondholders of events of default issued by Trustee Moore when he made 

the initial purchase of bonds in 2006, even though he was aware he could obtain them 

from Trustee Moore. Lucas acknowledged he knew Trinity was in default when he made 

the initial purchase of bonds in 2006, but he could not recall whether he was aware 

Trinity had been in default since 2001. Lucas testified he believed there were still funds 

left in the debt service reserve fund at that time, and he was aware the Squirrel Run 

property was collateral for the underlying indebtedness. Lucas stated the exhaustion of 

the debt service reserve fund is a concern for bond holders but "[n]ot a major concern." 

(Lucas Dep. at 201.) He did acknowledge that a Notice to Bondholders in May 2006 

stated there were no funds left in the debt service reserve fund. 

{¶ 34} According to Lucas, the lack of cash flow was not a big concern to him when 

he purchased the Squirrel Run bonds because the collateral was still available for sale. 

Lucas testified he "didn't have any reason to believe the [fair market value of the Squirrel 

Run property] was extremely low." (Lucas Dep. at 203.) Lucas testified he first visited 

the property sometime in 2006 0r 2007, after the initial purchase of bonds. According to 

Lucas, he got a look at the buildings and grounds, and Trinity representative John Bojo 

permitted Lucas to inspect an unoccupied unit. Lucas testified the property consisted of 

well-maintained townhouses with "market grade type finishes." (Lucas Dep. at 159.) 

Lucas recalled Squirrel Run was "a good-looking facility; it wasn't run down." (Lucas 

Dep. at 162.) Lucas testified that Bojo spoke with him about Trinity's efforts to increase 

occupancy and "different methods to try to * * * get it leased up" and that there was "some 

competition." (Lucas Dep. at 161.) Lucas noticed a fire had damaged some of the units 

that were now empty, but he saw no "broken windows and junk cars." (Lucas Dep. at 

161.) Lucas concluded Squirrel Run was a good property. 
No. 17AP-355 12 

{¶ 35} According to Lucas, he drove through the facility on one occasion thereafter, 

either in 2007 or 2008, and he observed the property "[l]ooked all right," and he 

acknowledged the property was "still well-maintained." (Lucas Dep. at 159, 164.) After 

the visit, Lucas telephoned Bart Welprin, the commercial real estate broker who first 

alerted him to the availability of Squirrel Run bonds, and he told Welprin that the 

property "[l]ooks fine." (Lucas Dep. at 164.) In his deposition, Lucas maintained neither 

he nor Welprin expressed an opinion during the conversation regarding the fair market 

value of the Squirrel Run property. 

{¶ 36} HNB cites Lucas's deposition testimony as support for its contention RSA 

knew or should have known as early as 2007 or 2008 of the operative facts that allegedly 

support its claim for breach of trust. In his deposition, Lucas testified as follows: 

Q. Did you think it should get foreclosed on at that time? 

A. I think that I—I would have liked to have seen it happen 

sooner than later. The bonds weren't being paid on, so we 

weren't getting any interest, and I—I thought that it was past 

time that the discussion take place. 

Q. Past time that the discussion about a foreclosure take 

place? 

A. Uh-huh. 

Q. And this is in 2007? 

A. Yeah. 

Q. And it was your feeling that the property should be sold so 

that bondholders could cash out, correct? 

A. Yeah. Right, yes. 

Q. Did you tell Ms. Moore that? 

A. I told Ms. Moore that—and I don't know if it was that 

particular conversation, but I told Ms. Moore on several 

occasions that we should form a bondholder committee and 

discuss the—and see what the other bondholders had to say 

about moving forward with—with some sort of resolution. 
No. 17AP-355 13 

Q. And this is all before Huntington foreclosed? 

A. Correct. 

Q. And what would the purpose of the bondholder committee 

be? 

A. It's a fact-finding mission and weigh the options and—and 

get the—get the trustee to—to act. 

Q. And what did Ms. Moore say in response to that? 

A. Nothing. 

Q. And you say you wanted to get the trustee to act, correct? 

A. Uh-huh. 

Q. What did you want the trustee to do? 

A. You know, enforce their remedies, whatever they are. So if 

they could—if they could—if the obligor had some money or 

they were holding money back, maybe they could come up 

with some money and—and make up some past due 

payments, start marketing the property. 

Q. But none of that happened? 

A. No. 

(Lucas Dep. at 174-76.) 

{¶ 37} Concerning Trustee Moore's representation about the efforts to obtain 

additional financing in 2008 and the conduct of the trustee, Lucas testified as follows: 

Q. Were you aware of refinancing efforts that were going on 

in 2008? 

A. According to the—to the event notice, the—I didn't believe 

there was any refinance opportunities in '08. 

Q. Did you see any way to get value out of these bonds other 

than through a sale of the Squirrel Run Apartments? 

A. I could—I could put—I could put them up for sale. 
No. 17AP-355 14 

Q. Okay. Other than selling the bonds, was there any way 

that you'd get money— 

A. Extract value? 

Q. Yeah. Extract value from the bonds in 2008? 

A. No. At that point—you know, at that point it's—you know. 

Sell—sell the facility. 

Q. In your view was it time to pull the plug and sell the 

facility? 

A. I thought it was past time. 

Q. Did you tell that to Ms. Moore? 

A. If you tell a trustee's administrator that you don't think 

they're doing their job properly, they're not going to take your 

calls. So no. I didn't. 

Q. But that's what you thought? 

A. What? 

Q. That the trustee's administrator wasn't doing their job 

properly? 

A. There wasn't—there didn't seem to be much happening at 

that point. 

Q. At this point the bonds were seven years in default, 

correct? 

A. When was the first default, '01? 

Q. November of 2001. 

A. 2001, so, yeah, approximately. 

Q. Had you ever seen a default situation go this long? 

A. No. 
No. 17AP-355 15 

Q. And in your view it was time for Huntington to move 

forward with foreclosing on the property or take some 

attempts at selling the property, correct? 

A. Yeah, but I wasn't worried. I mean I wasn't worried about 

it. I'd never gotten an indication that—that there was a—that 

there was a big problem, that there was—you know, that the 

facility wasn't worth anything. 

Q. But in 2008, I mean, there was no other way that the 

trustee was going to extract any value out of this project other 

than through selling the property at that point? 

A. That's correct. 

Q. And that wasn't happening? 

A. No. It wasn't happening. 

(Lucas Dep. at 238-40.) 

{¶ 38} R.C. 5808.04 imposes a duty on a trustee to "administer the trust as a 

prudent person would and shall consider the purposes, terms, distributional 

requirements, and other circumstances of the trust. In satisfying this standard, the 

trustee shall exercise reasonable care, skill, and caution." Pursuant to R.C. 5808.09, "[a] 

trustee shall take reasonable steps to take control of and protect the trust property." R.C. 

5810.01 sets out the remedies available to beneficiaries for a breach of trust. R.C. 

5810.01(B) authorizes the court to issue orders designed to "remedy a breach of trust that 

has occurred or may occur," including compelling the trustee to perform the trustee's 

duties, enjoining the trustee from committing a breach of trust, removing the trustee, and 

ordering any other appropriate relief.4

{¶ 39} Lucas's deposition testimony establishes at some point in 2008, RSA 

became aware of the operative facts that allegedly support its breach of duty claims 

 

4 R.C. 5810.02(A) sets forth the damages for a breach of trust, in relevant part, as follows: 

A trustee who commits a breach of trust is liable to the beneficiaries 

affected for the greater of the following: 

(1) The amount required to restore the value of the trust property and 

trust distributions to what they would have been had the breach not 

occurred. 
No. 17AP-355 16 

against HNB. Based on Lucas's deposition testimony, there is no question that by 

sometime in 2008, RSA knew Trinity was not meeting its obligations regarding debt 

service and alternative financing options had been unsuccessful. Sometime in 2008, 

Lucas had formed the opinion the only way the trustee could preserve the assets of the 

trust was to file a foreclosure action against Trinity and sell the collateral. Lucas knew 

Trustee Moore had no intention of doing so at that time. Lucas also acknowledged 

Trustee Moore had failed to respond to his informal request to form a bondholder 

committee and had not become engaged in marketing the property. Thus, the only 

reasonable conclusion to be drawn from the evidence submitted in connection with the 

motion for summary judgment is that RSA's cause of action for breach of trust and/or 

breach of fiduciary duty accrued sometime in 2008 when Trustee Moore failed to timely 

initiate foreclosure. Because RSA did not file its complaint in Montgomery County until 

July 31, 2013, the four-year statute of limitations bars RSA's claims against HNB. 

{¶ 40} In opposition to the motion for summary judgment, RSA claims the notices 

to bondholders issued by Trustee Moore combined with Trustee Moore's direct 

communications with Lucas misled RSA about Trinity's financial condition and the 

market value of the Squirrel Run property, causing RSA to reasonably believe the bonds 

remained a sound investment. The duty to keep the beneficiaries/bondholders 

reasonably informed of the administration of the trust is a fundamental duty of a trustee. 

Kidd v. Alfano, 2d Dist. No. 26598, 2016-Ohio-7519, ¶ 29, citing R.C. 5807.06. R.C. 

5808.13 describes in general terms a trustee's duty to inform and report, in relevant part, 

as follows: 

(A) A trustee shall keep the current [bondholders] of the trust 

reasonably informed about the administration of the trust and 

of the material facts necessary for them to protect their 

interests. Unless unreasonable under the circumstances, a 

trustee shall promptly respond to a [bondholder's] request for 

information related to the administration of the trust. 

{¶ 41} The record shows as early as February 26, 2004, Trustee Moore notified 

bondholders that "ongoing routine repair and maintenance items, such as fixing storm 

drains and downspouts and replacing carpet, have regularly fallen behind as occupancy 

and revenues have not kept pace. There are frequent roof repair needs, patio dividers and 
No. 17AP-355 17 

balcony floors and railings have deteriorated wood and fogged up patio doors have been 

an ongoing problem." (Joint Ex. 10 at 2.) Additionally, on November 5, 2004, Trustee 

Moore notified bondholders that Reilly had "not been able to obtain FHA mortgage 

insurance due to receipt of an appraisal that was lower than needed for a full refinancing." 

(Joint Ex. 13 at 2.) Lucas also visited the site on two occasions, once in 2007 and one 

other time in 2007 or 2008. Thus, Lucas had an opportunity to personally observe the 

condition of the property securing the bonds in 2007 and 2008. There can be no doubt, 

based on this undisputed evidence, RSA either knew or should have known in 2007 or 

2008 of Trustee Moore's alleged breach of duty in failing to preserve the real property 

securing the bonds. 

{¶ 42} Though Lucas maintained he had several conversations with Trustee Moore 

between the years 2007 and 2009 regarding the Squirrel Run property, he acknowledged 

Trustee Moore discussed the value of the RSA property with him on only one occasion. 

Lucas's testimony regarding the conversation is as follows: 

Q. From Febuary 20—from Febuary 2006 through April 

2009, did you have any communications with anyone 

regarding what the fair market value of the Squirrel Run 

Apartments was? 

A. Yeah I did. I do recall that I had a telephone conversation 

with [Trustee] Moore at one point discussing, you know, 

what—what's the outcome going to be here, you know, what's 

going to happen here. And she—she assured me that, you 

know, that there was a—there was a good appraisal out there 

and that they had some—she had some interested buyers. 

And she didn't enumerate market value, but I got from that 

conversation it wasn't a complete disaster. 

Q. When was this conversation? 

A. Oh, gosh, I'm really bad at dates as I told you. I'm going to 

say it was a couple years prior to foreclosure. 

(Lucas Dep. at 168.) 

{¶ 43} The undisputed evidence in the record shows on or about the time Lucas's 

conversation with Trustee Moore took place, Lucas had visited the property and had 

gotten a look at the buildings and grounds, including a tour of one of the apartment units. 
No. 17AP-355 18 

At the time he spoke with Trustee Moore, Lucas also had access to all prior notices sent by 

Trustee Moore to the bondholders. Additionally, though Lucas recalled Trustee Moore 

told him she had interested buyers for the property, she did not tell him she had received 

any offers. Lucas acknowledged Trustee Moore never offered her opinion regarding the 

market value of the Squirrel Run property. 

{¶ 44} With regard to the alleged misrepresentations and misinformation 

regarding Trinity's financial condition vis-à-vis RSA's investment in the Squirrel Run 

property, it is difficult to conceive on this record how RSA could have been unaware of 

Trinity's desperate financial condition in light of the information contained in the 

numerous notices issued by Trustee Moore, as summarized above. RSA argues Trustee 

Moore mislead bondholders in the event notice of November 5, 2004, when she indicated 

"[o]ther refinancing alternatives are being explored." (Joint Ex. 13 at 2.) Even if we 

accept RSA's contention Trustee Moore mislead bondholders into believing alternative 

financing was available, Lucas acknowledged by 2008 he did not believe alternative 

financing options existed. Thus, there is no question Lucas harbored no misconceptions 

about the refinancing options in 2008. In discussing RSA's claims regarding Trustee 

Moore's comments to Lucas, the trial court stated: "On this record, informal and isolated 

comments by [Trustee] Moore did not constitute misleading misconduct that legally 

delay[ed] [RSA's] obligation to investigate legal action against HNB." (Mar. 30, 2017 

Decision at 7.) Based on our review of the record, we agree with the trial court that no 

reasonable trier of fact could interpret Trustee Moore's alleged statements to Lucas in the 

manner suggested by RSA. 

{¶ 45} Taking the above-cited evidence and RSA's arguments into consideration, 

the trial court found RSA's claims for breach of fiduciary duty and breach of trust accrued, 

at the latest, in April 2009 when Trustee Moore filed the foreclosure action in 

Montgomery County and notified bondholders of that fact. The trial court found it 

significant that in addition to all the information contained in the prior notices provided 

to bondholders, the April 2, 2009 complaint sought the appointment of a receiver. The 

trial court stated the "request was a red flag warning to bondholders" that their 

investment was in jeopardy. (Mar. 30, 2017 Decision at 9.) We agree. 
No. 17AP-355 19 

{¶ 46} As noted above, our de novo review of the evidence submitted in connection 

with the motion for summary judgment convinces us RSA either knew or should have 

known of the breach of trust sometime in 2008 when Lucas formed the opinion that the 

only means to preserve the value of the property for later distribution to the bondholders 

was to bring a foreclosure action against Trinity and sell the Squirrel Run property. Lucas 

believed it was "past time" to "pull the plug and sell the facility." (Lucas Dep. at 239.) 

Though Lucas's conduct in continuing to purchase bonds even after Trustee Moore filed 

the foreclosure action permits the inference that RSA did not recognize or appreciate the 

degree of risk associated with the investment, the evidence in the record does not permit 

an inference RSA was without actual or constructive knowledge on or before April 2009 of 

the operative facts which gave rise to the claims for breach of trust alleged in their 

complaint. Even construing the evidence in RSA's favor, any optimism regarding either 

the financial position of Trinity or the value of the Squirrel Run property that was created 

by Trustee Moore's statements to Lucas should have been dispelled by the filing of the 

foreclosure action and the request for appointment of a receiver in April 2009. It is 

impermissible on this record to infer RSA did not have actual or constructive knowledge 

of the alleged breach of trust in April 2009. 

{¶ 47} RSA next contends the delayed damages rule applies to its claims for breach 

of fiduciary duty and breach of trust. We disagree. 

{¶ 48} Under the delayed damages rule, " 'where the wrongful conduct complained 

of is not presently harmful, the cause of action does not accrue until actual damage 

occurs.' " Flagstar Bank, F.S.B. v. Airline Union's Mtge. Co., 128 Ohio St.3d 529, 2011-

Ohio-1961, ¶ 19, quoting Velotta v. Leo Petronzio Landscaping, Inc., 69 Ohio St.2d 376, 

379 (1982). "Unlike the discovery rule, the delayed-damages rule does not just toll the 

running of the statute of limitations, it adjusts when the cause of action accrues." 

Chateau Estate Homes, L.L.C. v Fifth Third Bank, 1st Dist. No. C-160703, 2017-Ohio6985, ¶ 14. "In other words, a cause of action for negligence is not complete, and the 

statute of limitations does not begin to run, until there has been an injury." Flagstar at ¶ 

19. 

{¶ 49} In Union Sav. Bank v. Lawyers Title Ins. Corp., 191 Ohio App.3d 540, 

2010-Ohio-6396 (10th Dist.), this court held a bank's claim against a title company 
No. 17AP-355 20 

alleging negligence and breach of fiduciary duty was time-barred because the cause of 

action accrued when the homeowners closed on their loan and the title company failed to 

subordinate two mortgages, not when the property went into foreclosure and was sold at a 

sheriff's sale. Id. at ¶ 33. In rejecting the homeowners' delayed damages argument, this 

court ruled that the plaintiff-bank suffered damages at the time of the closing when it 

assumed a second lien position due to the defendant's failure to subordinate two liens. 

Id.5

{¶ 50} Here, RSA alleges that HNB breached a duty to bondholders when Trustee 

Moore failed to timely file a foreclosure action against Trinity. RSA claims it suffered 

harm as a result of Trustee Moore's breach due to the subsequent decrease in the market 

value of the real property securing the bonds.6 Though RSA did not discover the full 

extent of its losses until 2012 when the real property securing the investment sold in 

foreclosure, RSA suffered a loss and the breach of trust occurred when Trustee Moore 

failed to act. Under R.C. 2305.09 and 5810.05, RSA's cause of action against HNB 

accrued when RSA either knew or should have known facts which would have alerted it to 

Trustee Moore's breach, not when the property securing the investment sold in 

foreclosure. Thus, to the extent the delayed damages rule remains viable in Ohio, we find 

the rule is inapplicable in this case. 

{¶ 51} For the foregoing reasons, we hold the trial court did not err when it granted 

HNB's motion for summary judgment. RSA's claims for breach of fiduciary duty and 

breach of trust accrued when, from all the facts and circumstances known to RSA, RSA 

either knew or should have known of the breach of trust, not when the trust terminated. 

Construing the evidence in RSA's favor, we find RSA knew of or should have known of the 

alleged breach of trust on or before April 2009. The statute of limitations barred RSA's 

claims against HNB as a matter of law because HNB did not file the complaint in 

 

5 There is considerable doubt as to the continued viability of the delayed damages rule in Ohio. See, e.g., 

LGR Realty, Inc. v. Frank & London Ins. Agency, __ Ohio St.3d __, 2018-Ohio-334, ¶ 32-34 (Dewine, 

concurring); Flagstar at ¶ 25-27, citing Investors REIT One v. Jacobs, 46 Ohio St.3d 176 (1989); Chateau 

Estate at ¶ 22. 

6 In his deposition, RSA's expert, Robert Irwin Landau, testified "as the months and years went by, the value 

of the property went down [and] if the trustee had acted more aggressively, * * * quicker, if they had pulled 

the trigger quicker and disposed of the property sooner, the probability of the bondholders receiving more 

than they got at finally six or seven years later is significantly higher." (Landau Dep. at 260.) 
No. 17AP-355 21 

Montgomery County within four years of the date when it knew or should have known of 

the breach of trust. 

V. CONCLUSION 

{¶ 52} Having overruled appellant's sole assignment of error, we affirm the 

judgment of the Franklin County Court of Common Pleas. 

Judgment affirmed.

TYACK and KLATT, JJ., concur. 

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