[Cite as Breen v. Group Mgt. Servs., Inc, 2022-Ohio-2689.]

COURT OF APPEALS OF OHIO

EIGHTH APPELLATE DISTRICT

COUNTY OF CUYAHOGA

JAMES P. BREEN, ET AL., :

Plaintiffs-Appellants, :

No. 111253

v. :

GROUP MANAGEMENT :

SERVICES, INC.,

:

Defendants-Appellees.

JOURNAL ENTRY AND OPINION

JUDGMENT: AFFIRMED

RELEASED AND JOURNALIZED: August 4, 2022

Civil Appeal from the Cuyahoga County Court of Common Pleas

Case No. CV-21-953272

Appearances:

Hoffman Legal Group, LLC, and W. Andrew Hoffman, III,

for appellants. 

Ross, Brittain & Schonberg Co., LPA, Nick A. Nykulak and 

Sean S. Kelly, for appellees. 

EILEEN A. GALLAGHER, J.:

James P. Breen (“Breen”) individually and as trustee for Child One 

2013 Trust, Child Two 2013 Trust and Child Three 2013 Trust (collectively 

“Appellants”) appeals the judgment of the trial court dismissing their claims for 
want of standing. However, Appellants had no relationship with Group 

Management Services, Inc., that could support a claim for breach of contract or a 

claim for breach of fiduciary duty. The trial court did not err in dismissing the action 

for want of standing. We overrule Appellants’ assignment of error and affirm the 

judgment of the trial court. 

I. Factual and Procedural Background

Appellants appeal the trial court’s dismissal of the complaint under 

Civ.R. 12(B)(6). Accordingly, these facts are taken from the complaint. 

Manchester Realty was a corporate entity. The complaint does not 

allege whether it is a corporation, limited liability company, limited partnership or 

some other vehicle1 nor does it allege a state of incorporation. However, the 

complaint does allege that its dissolution is publicly available on the Ohio Secretary 

of State’s website. 

The purpose of this entity was to own and operate the property 

located at 1360 E. 9th Street Cleveland, Ohio 44113 (“IMG Center”). In connection 

with managing the IMG Center, Manchester Realty entered into a contract

(“Contract”) with Group Management Services Inc. (“GMS”). Under this Contract,

GMS employed any personnel that Manchester Realty needed and leased those 

personnel’s services back to Manchester Realty.

1 Although the opposition to the motion to dismiss below and the assignment of 

error on appeal describes it as “Manchester Realty Limited Liability Company.”
1360 LLC is the successor entity of Manchester Realty. Manchester 

Realty was dissolved at the end of 2018 as a precondition for taking out a loan on 

the IMG Center. James P. Breen (“Breen”) is the principal of 1360 LLC as well as an

owner. Additionally, three trust funds (Child One 2013 Trust, Child Two 2013 Trust 

and Child Three 2013 Trust) each have an interest in 1360 LLC and Breen is the 

trustee for each trust. The complaint alleges that the trusts have an ownership 

interest in 1360 LLC, but does not allege that the trusts have an ownership interest 

in the Manchester Realty entity. Accordingly, the ownership of Manchester Realty 

is somewhat unclear. 

In March 2018, the parties substituted 1360 LLC for Manchester 

Realty in the Contract. Appellants did not attach a copy of the Contract nor a copy 

of the substitution to the complaint. In October 2019, the Cuyahoga County Court 

of Common Pleas appointed Paul Downey (“Downey”) as receiver over IMG Center. 

In January 2019, GMS began to use Manchester Realty’s employer identification 

number (“EIN”) to report payroll and file payroll taxes. 

Appellants allege that GMS’s use of the EIN supports two causes of 

action: breach of contract and breach of fiduciary duty. GMS moved that the 

complaint be dismissed for lack of standing because there were no facts alleged in 

the complaint that would establish that the Appellants had standing to pursue either 

claim. According to GMS, only Downey, as successor in interest, has the standing to 

pursue either claim.

The trial court below dismissed the complaint finding that:
In the instant action, 1360 East Ninth Cle, LLC is currently in active 

receivership in case CV-19-917685. The receiver is the only person who 

has standing to bring the suit on behalf of 1360 East Ninth Cle, LLC. 

Plaintiffs, an individual shareholder of 1360 East Ninth Cle LLC and 

the trusts of his children, do not have standing to pursue litigation on 

behalf of a company in active receivership. Plaintiffs’ complaint is 

hereby dismissed for failure to state a claim upon which relief may be 

granted. 

Appellants appeal and assign the following error for our review:

The trial court erred when it held that the Plaintiffs lacked standing to 

bring a claim because the Plaintiffs were not bringing suit on behalf of 

1360 East Ninth CLE, LLC (“1360 LLC”). Plaintiffs were bringing suit 

on behalf of themselves and Manchester Realty Limited Liability 

Company (“Manchester Realty”).

II. Argument and Authorities

Appellants’ complaint alleges two causes of action breach of contract 

and breach of fiduciary duty. However, the complaint does not allege that 

Appellants are parties to a contract with GSM. Further, the complaint does not 

allege any relationship, let alone a fiduciary relationship, between Appellants and

GMS. The trial court did not err in dismissing Appellants’ complaint for want of 

standing. 

Appellants’ sole assignment of error appeals the trial court’s order 

granting GMS’s motion to dismiss under Civ.R. 12(B)(6). We review rulings on 

Civ.R. 12(B)(6) motions to dismiss under a de novo standard. “A motion to dismiss 

for failure to state a claim upon which relief can be granted is procedural and tests 

the sufficiency of the complaint. * * * Under a de novo analysis, we must accept all 

factual allegations of the complaint as true and all reasonable inferences must be 

drawn in favor of the nonmoving party.” NorthPoint Props. v. Petticord, 179 Ohio 
App.3d 342, 2008-Ohio-5996, 901 N.E.2d 869, ¶ 11 (8th Dist.). “For a trial court to 

grant a motion to dismiss for failure to state a claim upon which relief can be 

granted, it must appear ‘beyond doubt from the complaint that the plaintiff can 

prove no set of facts entitling her to relief.’” Graham v. Lakewood, 2018-Ohio-1850, 

113 N.E.3d 44, ¶ 47 (8th Dist.), quoting Grey v. Walgreen Co., 197 Ohio App.3d 418, 

2011-Ohio-6167, 967 N.E.2d 1249, ¶ 3 (8th Dist.).

“It is well established that before an Ohio court can consider the 

merits of a legal claim, the person seeking relief must establish standing to sue.” 

State ex rel. Ohio Academy of Trial Lawyers v. Sheward, 86 Ohio St.3d 451, 469,

715 N.E.2d 1062 (1999). “An action brought by a party that lacks standing will be 

dismissed.” State ex rel. Ohio Stands Up!, Inc. v. DeWine, Slip Opinion No. 2021-

Ohio-4382, ¶ 5. To establish standing, Appellants must show they suffered “(1) an 

injury that is (2) fairly traceable to the appellees’ allegedly unlawful conduct, and (3) 

likely to be redressed by the requested relief.” Torrance v. Rom, 2020-Ohio-3971, 

157 N.E.3d 172, ¶ 24 (8th Dist.).

The complaint includes two alleged causes of action: breach of 

contract and breach of fiduciary duty. 

“In order to substantiate a breach of contract claim, a party must 

establish four elements: (1) a binding contract or agreement was formed; [(2)] the 

nonbreaching party performed its contractual obligations; [(3)] the other party 

failed to fulfill its contractual obligations without legal excuse; and [(4)] the 
nonbreaching party suffered damages as a result of the breach.” Telecom 

Acquisition Corp. I v. Lucic Ents., 2016-Ohio-1466, 62 N.E.3d 1034, ¶ 23 (8th Dist.). 

Where there are no allegations that a plaintiff is a party to a contract 

or a third party intended beneficiary to a contract, a court does not err in dismissing 

the complaint. Skaff v. Khutorsky, 6th Dist. Lucas No. L-15-1249, 2016-Ohio-4903, 

¶ 21. The complaint does not allege anywhere that Breen individually, or as trustee,

is an intended third-party beneficiary of the Contract. Nor does the complaint allege 

that Breen individually, or as a trustee, was intended by GMS to have “the benefit of 

the promised performance.” Huff v. FirstEnergy Corp., 130 Ohio St.3d 196, 2011-

Ohio-5083, 957 N.E.2d 3, ¶ 10. “Generally, the parties’ intention to benefit a third 

party will be found in the language of the agreement.” Torrance, 2020-Ohio-3971, 

157 N.E.3d 172, at ¶ 36. The only allegations in the complaint are that the 

beneficiaries of the Contract were Manchester Realty and 1360 LLC. The only 

benefits Appellants would receive from the contract with GMS is as members of 

Manchester Realty or 1360 LLC.

Accordingly, the complaint fails to allege that Appellants have the 

standing to maintain a breach of contract cause of action against GMS.

The complaint’s second cause of action is breach of fiduciary duty. 

The elements of a breach of fiduciary duty are: “(1) the existence of a fiduciary duty; 

(2) the failure to observe the duty; and (3) an injury resulting proximately 

therefrom.” DPLJR, Ltd. v. Hanna, 8th Dist. Cuyahoga No. 90883, 2008-Ohio-
5872, ¶ 19, citing Strock v. Pressnell, 38 Ohio St.3d 207, 216, 527 N.E.2d 1235

(1988). 

This court has previously determined that the principal of a firm may 

not assert, individually, a claim for breach of contract or breach of fiduciary duty 

against a vendor of that firm based on the relationship of the firm. Torrance, 2020-

Ohio-3971, 157 N.E.3d 172, at ¶ 15-17 (“Having chosen to do business as a 

corporation, [Torrance] is bound by that choice. [The corporation] was a party to 

the property-management agreements, [Torrance] was not.”). Appellants cite no 

case to the contrary. 

Appellants also contend that they brought “suit on behalf of 

themselves and Manchester Realty Limited Liability Company.” However, the 

complaint does not identify Manchester Realty as a party. Manchester Realty does 

not appear in the caption as required by Civ.R. 10(A) and the Appellants did not 

attach the Contract to the complaint as required by Civ.R. 10(D)(1).

In their brief, Appellants claimed that Manchester Realty “executed 

an assignment of rights that authorizes Plaintiffs to sue GMS on its behalf[.]” 

Regardless of the subsequent motion practice, “[i]n deciding whether 

a complaint should be dismissed pursuant to Civ.R. 12(B)(6), the court’s review is 

limited to the four corners of the complaint along with any documents properly 

attached to or incorporated within the complaint.” Windsor Realty & Mgt., Inc. v. 

Northeast Ohio Regional Sewer Dist., 2016-Ohio-4865, 68 N.E.3d 327, ¶ 23 (8th 

Dist.). 
The complaint alleges that Manchester Realty was “dissolved at the 

end of 2018[.]” The dissolution of a limited liability company does not automatically 

divest it of authority to pursue civil actions: “A limited liability company’s 

dissolution, in itself: * * * (2) Does not prevent the commencement of a proceeding 

by or against the limited liability company in its limited liability company name[.]” 

R.C. 1706.471.2 

However, the authority of a dissolved LLC to carry on litigation is 

limited. A dissolved Ohio LLC “may not carry on any activities except as is 

appropriate to wind up and liquidate its activities and affairs.” R.C. 1706.471.3 At 

some point, actions subsequent to the dissolution of the company are not within the 

authority granted by the Ohio Revised Code. See ACV Realty, Ltd. v. Bayview Loan 

Servicing, LLC, 7th Dist. Mahoning No. 15 MA 0059, 2016-Ohio-5467, ¶ 53 (decided 

under a previous analogous section of the Ohio Revised Code); St. Clair Builders, 

Inc. v. Aetna Cas. & Sur. Co., 81 Ohio App.3d 675, 680, 611 N.E.2d 1009 (8th 

Dist.1992) (same but for corporations).4 Appellants allege misconduct that all 

2 The application of this provision relies on the presumption that Manchester 

Realty is an Ohio limited liability company, a fact not alleged. The complaint alleges that 

the document on file with the secretary of state is a “dissolution” and not a cancellation of 

registration, so this seems a reasonable inference. Compare R.C. 1706.514 (providing for 

cancellation of registration of foreign LLC) and R.C. 1706.471(B)(1) (requiring a dissolved 

Ohio LLC to file a certificate of dissolution).

3 There is no case law concerning the application of the Revised Ohio Limited 

Liability Company Act to LLCs that were formed and dissolved under the Ohio Limited 

Liability Company Act. However, the two acts have similar limits on post-dissolution 

activity, so we need not decide which applies here. 
occurred after the dissolution of Manchester Realty. There are no facts alleged that 

could support the inference that Appellants’ causes of action arise out of the windup and dissolution of Manchester Realty. 

The complaint does not allege facts that establish standing on the part 

of Appellants based on an assignment from Manchester Realty.

Finally, Appellants argue that they can demonstrate injury traceable 

to GMS’s misconduct because Breen will likely be assessed as “the responsible 

person under the Employment Taxes and the Trust Fund Recovery Penalty 

(“TFRP”). ‘Under 26 U.S.C. § 6672, the IRS may collect a TFRP against individual 

officers who are responsible for a corporation’s failure to remit trust fund taxes —

the tax withholdings from employee paychecks — to the government.’” (Emphasis 

added.), quoting In re J.J. Re-Bar Corp., Inc., 644 F.3d 952, 954 (9th Cir.2011). The 

TFRP allows the IRS to recover a penalty “against individual officers who are 

responsible for a corporation’s failure to remit trust fund taxes[.]” Id. at 954. 

Liability under TFRP attaches to “[a]ny person required to collect, 

truthfully account for, and pay over any tax imposed by this title who willfully fails 

to collect such tax or truthfully account for and pay over such tax, or willfully 

attempts in any manner to evade or defeat any such tax or the payment therof[.]” 

26 U.S.C. 6672.

GMS’s alleged misconduct began in January 2019. GMS’s 

misconduct began after Manchester Realty was no longer a party to the contract and 

after 1360 LLC took over management for the property. Further, the complaint 
alleges that the “IMG Center” is in a receivership and the Contract at issue is for the 

purpose of managing the IMG Center. The complaint alleges facts that establish 

Downey was the “person required to collect, truthfully account for, and pay over any 

tax[.]” The complaint does not allege facts that could establish standing for

Appellants based on potential liability under the TFRP.

We overrule Appellants’ sole assignment of error and affirm the 

judgment of the trial court. 

It is ordered that appellee recover from appellant costs herein taxed.

The court finds there were reasonable grounds for this appeal.

It is ordered that a special mandate be sent to said 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.

 ___

EILEEN A. GALLAGHER, JUDGE

SEAN C. GALLAGHER, A.J., and

ANITA LASTER MAYS, J., CONCUR