Court Opinion

ID: 6328042
Source: CourtListenerOpinion
Date Created: 2022-03-30 13:08:09.10017+00
Date Added: 2024-06-11T09:22:35.043038
License: Public Domain

[Cite as Helton v. Fifth Third Bank, 2022-Ohio-1023.]

                           IN THE COURT OF APPEALS
                  FIRST APPELLATE DISTRICT OF OHIO
                            HAMILTON COUNTY, OHIO

 HELEN CLARKE HELTON,                              :    APPEAL NO. C-210451
                                                        TRIAL NO. 2015-003814
 CATHERINE T. CLARKE,                              :
                                                           O P I N I O N.
 JAMES W. CLARKE,                                  :

 MARY ZIGO,                                        :

    and                                            :

 BRIDGET MURPHY,                                   :

       Plaintiffs-Appellants,                      :

    vs.                                            :

 FIFTH THIRD BANK,                                 :

       Defendant-Appellee.                         :

Appeal From: Hamilton County Court of Common Pleas, Probate Division

Judgment Appealed From Is: Affirmed

Date of Judgment Entry on Appeal: March 30, 2022

Schlichter Bogard & Denton, Andrew D. Schlichter and Alexander L. Braitberg, and
Christopher R. Heekin Co., LLC, and Christopher R. Heekin, for Plaintiffs-Appellants,

Vorys, Sater, Seymour and Pease LLP, Victor A. Walton, Jr., Nathaniel Lampley, Jr.,
Jacob D. Mahle, James B. Lind and Jessica K. Baverman, for Defendant-Appellee.
                     OHIO FIRST DISTRICT COURT OF APPEALS

MYERS, Presiding Judge.

       {¶1}    This is the second appeal in a lawsuit filed against defendant-appellee

Fifth Third Bank (“Fifth Third”) by plaintiffs-appellants Helen Clarke Helton,

Catherine T. Clarke, James W. Clarke, Mary Zigo, and Bridget Murphy (collectively

referred to as “the Clarke siblings”) concerning Fifth Third’s management of two trusts

of which the Clarke siblings are beneficiaries.

       {¶2}   In this appeal, we consider the propriety of the trial court’s grant of

summary judgment to Fifth Third on the Clarke siblings’ remaining claim for unjust

enrichment. Because the law-of-the-case doctrine did not prohibit the trial court from

considering a second motion for summary judgment following a remand from this

court, and because the Clarke siblings have not conferred a benefit on Fifth Third, a

necessary element for a claim of unjust enrichment, we affirm the trial court’s grant of

summary judgment to Fifth Third.

                        Factual and Procedural Background

       {¶3}   The Clarke siblings are current income beneficiaries of two separate

trusts over which Fifth Third serves as the sole trustee. A detailed history of these

trusts and how the Clarke siblings came to be beneficiaries is set forth in this court’s

opinion in Helton v. Fifth Third Bank, 1st Dist. Hamilton No. C-180284, 2019-Ohio-

5208 (“Helton I”). For purposes of this appeal, we provide a more concise explanation.

       {¶4}   The two trusts at issue are an inter vivos trust and a testamentary trust.

The inter vivos trust was established by the Clarke siblings’ great uncle William C.

Sherman for the benefit of the Clarke siblings’ mother and her descendants, and

Sherman’s brother John Q. Sherman (“JQS”) and his descendants. Sherman also

established a separate testamentary trust for the benefit of the Clarke siblings’ mother

and her descendants. The Clarke siblings’ mother was an income beneficiary of these

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                     OHIO FIRST DISTRICT COURT OF APPEALS

trusts until her death in 2015. While their mother was alive, the Clarke siblings were

remainder beneficiaries of both trusts. They became income beneficiaries of both

trusts upon their mother’s death.         Income beneficiaries, but not remainder

beneficiaries, of the trusts received ongoing distributions. The distributions came

from the income of the trusts and were paid directly to the beneficiaries. From 1981

until her death in 2015, the Clarke siblings’ mother received approximately 72 million

dollars in distributions from the two trusts.

       {¶5}   Both trusts were funded with shares from Standard Register, a paper

company founded by Sherman and JQS. Fifth Third, which as trustee had broad

discretion over the trusts’ investments, was concerned with the trusts’ concentration

in Standard Register stock. Fifth Third hired Morgan Stanley to prepare a report on

possible ways to diversify the trusts.      The report discussed several means of

diversification, including a sale of the company. The Clarke siblings, along with their

mother and a brother who is not a part of this lawsuit, sued Fifth Third to prevent it

from selling any Standard Register stock held by the two trusts unless the sale was a

part of a coordinated sale of all stock held by both trusts as well as all stock in a

separate trust established by JQS. Despite Fifth Third’s concerns, the trusts were

never diversified. The value of Standard Register stock declined over time. In 2013,

Standard Register merged with another company, and in 2015, it filed for bankruptcy.

The values of the testamentary trust and inter vivos trust have declined to almost zero.

       {¶6}   In 2015, after becoming income beneficiaries of both trusts, the Clarke

siblings filed a complaint against Fifth Third asserting various claims regarding Fifth

Third’s management of the trusts. In brief summary, count one of the complaint

alleged that Fifth Third had breached the common law, statutory, and trust duty to

diversify, count two alleged a breach of the duty of impartiality, count three alleged a

claim for breach of trust/fiduciary duty, and count four asserted a claim for unjust

enrichment. Counts five and six sought to remove Fifth Third as trustee of the trusts

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                      OHIO FIRST DISTRICT COURT OF APPEALS

and an injunction to prohibit Fifth Third from transferring any trust assets pending

its removal as trustee.

        {¶7}   Fifth Third moved for summary judgment on all counts, arguing that

the claim for the breach of the duty to diversify was filed outside of the applicable

limitations period, and that all remaining claims arose from the breach of the duty to

diversify and were also time-barred. The Clarke siblings opposed Fifth Third’s motion

and filed their own motion for summary judgment. The trial court denied the Clarke

siblings’ motion, but granted the motion filed by Fifth Third. It found that Fifth Third

was entitled to summary judgment because the essence of all of the Clarke siblings’

claims was a breach of fiduciary duty for the failure to diversify and that the claims

were filed outside of the limitations period set forth in R.C. 5810.05.

        {¶8}   The Clarke siblings appealed. In Helton I, 1st Dist. Hamilton No. C-

180284, 2019-Ohio-5208, we affirmed the trial court’s grant of summary judgment to

Fifth Third on the first three claims in the Clarke siblings’ complaint. We held that the

claim for breach of the duty to diversify was filed outside of the applicable limitations

period, and that the asserted claims for breach of the duty of impartiality and breach

of trust/fiduciary duty stemmed from the alleged failure to diversify and were also

time-barred. Id. at ¶ 42 and 47. But we reversed the trial court’s grant of summary

judgment with respect to the claim for unjust enrichment. After setting forth the

allegations in the complaint on which the unjust-enrichment claim was based, we held

that:

        The unjust-enrichment claim was based on Fifth Third’s alleged

        improper taking of fees from the trust. Although the complaint alleges

        that one reason Fifth Third was not entitled to the fees was because it

        had failed to diversify the trusts, the misconduct alleged in this claim is

        separate from the allegations of misconduct supporting the claim for

        breach of the duty to diversify the trusts. We therefore hold that the

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                      OHIO FIRST DISTRICT COURT OF APPEALS

        trial court erred in finding that the unjust-enrichment claim stemmed

        from the claim concerning the failure to diversify.

Id. at ¶ 49.

        {¶9}   On remand, after considering motions from both parties regarding the

court’s discretion to allow summary-judgment briefing on the remaining claim, the

trial court issued an entry permitting the filing of a motion for summary judgment on

the unjust-enrichment claim. Fifth Third filed various depositions, affidavits, and a

motion for summary judgment on the claim for unjust enrichment. The Clarke

siblings filed a memorandum in opposition. The trial court denied Fifth Third’s

motion.

        {¶10} Fifth Third subsequently filed a motion for reconsideration, asking the

trial court to reconsider its denial of Fifth Third’s motion for summary judgment in

light of this court’s intervening decision in Deffren v. Johnson, 2021-Ohio-817, 169

N.E.3d 270 (1st Dist.), which Fifth Third argued confirmed that to proceed on a claim

for unjust enrichment, a plaintiff must himself or herself confer a benefit upon the

defendant. Fifth Third argued that the Clarke siblings never conferred a benefit on

Fifth Third prior to their mother’s death, during the time period in which they were

remainder beneficiaries, because Fifth Third drew its fees from the income of the

trusts, which ultimately was distributed to the income beneficiaries after Fifth Third’s

fees were paid. Fifth Third contended that any benefit conferred during the period in

which the Clarke siblings were remainder beneficiaries was conferred by their mother.

And, Fifth Third argued, because the Clarke siblings were not challenging any fees

incurred by Fifth Third after they became income beneficiaries, Fifth Third was

entitled to summary judgment on the claim for unjust enrichment.

        {¶11} After considering Fifth Third’s motion and a memorandum in
opposition filed by the Clarke siblings, the trial court issued an entry “granting [Fifth

Third’s] motion for reconsideration and granting partial summary judgment on unjust

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                        OHIO FIRST DISTRICT COURT OF APPEALS

enrichment claim.” It stated that it was applying the law as clarified by this court in

Deffren, and that because the Clarke siblings had conferred no benefit on Fifth Third,

Fifth Third was entitled to summary judgment on the unjust-enrichment claim with

respect to all trustee fees paid prior to May 1, 2015—the date that the Clarke siblings

became income beneficiaries. The trial court’s entry additionally stated that there was

no just reason for delay.

        {¶12} The Clarke siblings appeal the trial court’s judgment, arguing in a single

assignment of error that the trial court erred in granting summary judgment to Fifth

Third.1 We review a trial court’s grant of summary judgment de novo. Grafton v. Ohio

Edison Co., 77 Ohio St.3d 102, 105, 671 N.E.2d 241 (1996). Summary judgment is

appropriately granted when there exists no genuine issue of material fact, the party

moving for summary judgment is entitled to judgment as a matter of law, and the

evidence, when viewed in favor of the nonmoving party, permits only one reasonable

conclusion that is adverse to that party. State ex rel. Howard v. Ferreri, 70 Ohio St.3d

587, 589, 639 N.E.2d 1189 (1994).

                                  Unjust-Enrichment Claim

        {¶13} A more detailed explanation of the Clarke siblings’ claim for unjust
enrichment is necessary before turning to the merits of the appeal. The complaint

contained the following allegations in support of the claim for unjust enrichment:

        Defendant-Trustee Fifth Third obtained and continues to retain

        benefits to which it is not entitled, at the expense of Plaintiffs-

1As set forth above, the trial court held that Fifth Third was entitled to summary judgment on the
unjust-enrichment claim with respect to all trustee fees paid prior to May 1, 2015, which was the
date that the Clarke siblings became income beneficiaries. The Clarke siblings concede that they
are not challenging any fees collected by Fifth Third after they became income beneficiaries.
Consequently, our analysis of the unjust-enrichment claim in this opinion concerns fees taken by
Fifth Third prior to May 1, 2015, the time period in which the Clarke siblings were remainder
beneficiaries.

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                      OHIO FIRST DISTRICT COURT OF APPEALS

       Beneficiaries, including but not limited to the fees which it took for

       purposes of prudently managing Trust assets, which, given its

       abdication of its duties (particularly the duty to diversify), [are] fees it

       did not earn[.]

       Defendant-Trustee Fifth Third obtained these fees by way of

       constructive fraud/unjust enrichment and it should not, in equity hold

       them[.]

       Said management fees should be disgorged to Plaintiffs-Beneficiaries[.]

       Plaintiffs-Beneficiaries are entitled to the equitable remedies of

       Constructive Trust and Disgorgement.

       {¶14} Through the unjust-enrichment claim, the Clarke siblings sought to

personally recover the fees that Fifth Third took for its management of the trusts,

which the Clarke siblings alleged were excessive and not earned by Fifth Third.

                               Law-of-the-Case Doctrine

       {¶15} The Clarke siblings contend that the law-of-the-case doctrine barred the

trial court from reentering summary judgment on the unjust-enrichment claim after

this court’s reversal of the trial court’s prior entry of summary judgment on that claim.

       {¶16} Under the law-of-the-case doctrine, “legal questions resolved by a

reviewing court in a prior appeal remain the law of that case for any subsequent

proceedings at both the trial and appellate levels.” Giancola v. Azem, 153 Ohio St.3d

594, 2018-Ohio-1694, 109 N.E.3d 1194, ¶ 1. The intent of the doctrine is to ensure

consistent results in a case and to avoid endless litigation. Id. at ¶ 14. It is “a rule of

practice rather than a binding rule of substantive law and will not be applied so as to

achieve unjust results.” Nolan v. Nolan, 11 Ohio St.3d 1, 3, 462 N.E.2d 410 (1984).

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                         OHIO FIRST DISTRICT COURT OF APPEALS

       {¶17} The doctrine has also been applied to “preclude[] a litigant from

attempting to rely on arguments at a retrial which were fully pursued, or available to

be pursued, in a first appeal.” City of Hubbard ex rel. Creed v. Sauline, 74 Ohio St.3d

402, 404-405, 659 N.E.2d 781 (1996).         It is inapplicable, however, where “the

subsequent proceedings involve different evidence or different legal issues.”

Vonderhaar v. City of Cincinnati, 191 Ohio App.3d 229, 2010-Ohio-6289, 945 N.E.2d

603, ¶ 13 (1st Dist.).

       {¶18} In the first appeal of this case, the only holding that this court made with

respect to the claim for unjust enrichment was that the misconduct on the part of Fifth

Third alleged in support of the claim was separate from the allegations of misconduct

supporting the claim for the breach of the duty to diversify, and that summary

judgment on the unjust-enrichment claim was not appropriate based on a finding that

the unjust-enrichment claim stemmed from the breach-of-the-duty-to-diversify claim.

Helton I, 1st Dist. Hamilton No. C-180284, 2019-Ohio-5208, at ¶ 49. We did not

otherwise consider the merits of the claim, as the parties made no other arguments to

this court regarding the claim.

       {¶19} Following our remand, additional affidavits were filed and the record

was expanded. And the legal issue presented to the court—that the claim for unjust

enrichment failed because the Clarke siblings could not establish that they conferred

a benefit on Fifth Third—was not argued to the trial court in the first motion for

summary judgment or considered by this court in the earlier appeal. The Clarke

siblings argue that Fifth Third could have raised the argument in its first motion for

summary judgment, and that consequently the law-of-the-case doctrine prevents it

from relying on that argument on remand.

       {¶20} We agree that this argument was available to be raised by Fifth Third in
its first motion for summary judgment. But we also recognize that this case, from its

inception, involved a myriad of legal issues and a voluminous record concerning Fifth

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                       OHIO FIRST DISTRICT COURT OF APPEALS

Third’s actions as trustee over many decades. In the first motion for summary

judgment, the parties and the court focused on whether the gravamen of all asserted

claims was the breach of the duty to diversify. Once it was determined that the unjust-

enrichment claim was supported by independent allegations, Fifth Third focused its

arguments in support of a second motion for summary judgment on the merits of the

claim.

         {¶21} We find that the law-of-the-case doctrine did not bar the trial court from

reentering summary judgment on the unjust-enrichment claim on remand.

                                    Impact of Deffren

         {¶22} The Clarke siblings next argue that the Deffren case relied on by the trial

court when granting Fifth Third’s motion for reconsideration cannot overrule this

court’s finding in Helton I, 1st Dist. Hamilton No. C-180284, 2019-Ohio-5208, that

summary judgment on the unjust-enrichment claim (which the Clarke siblings

continue to refer to as their “excessive fee” claim) was improper.

         {¶23} First, we again point out that this court’s decision in Helton I did not

hold that summary judgment would never be appropriate on the unjust-enrichment

claim. Rather, we held that summary judgment could not be granted on the unjust-

enrichment claim based on a finding that it stemmed from the claim for breach of the

duty to diversify. Our decision solely concerned the statute of limitations for the

breach-of-the-duty-to-diversify claim and whether the gravamen of the remaining

claims was a breach of the duty to diversify. We made no ruling on the merits of the

claim for unjust enrichment.

         {¶24} Second, contrary to the Clarke siblings’ assertion, the trial court, in its

entry granting partial summary judgment, did not find that the Deffren case overruled

our earlier opinion in Helton I, nor could it have. Deffren did not involve a statute-of-

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                       OHIO FIRST DISTRICT COURT OF APPEALS

limitations analysis, and it had no impact on our holding in Helton I. Rather, the

Deffren case, as discussed below, analyzed the elements of a claim for unjust

enrichment as they related to the facts of that case. Deffren did not expand the law on

unjust enrichment. The Deffren court applied the elements of unjust enrichment—

elements that have been long established and recognized as the law on unjust

enrichment—to the unique facts of that case.

                                No Benefit was Conferred

         {¶25} We now turn to the merits of the Clarke siblings’ claim for unjust

enrichment. A person is unjustly enriched where she or he “has and retains money or

benefits which in justice and in equity belong to another.” Morequity, Inc. v. Fifth

Third Bank, 1st Dist. Hamilton No. C-080824, 2009-Ohio-2735, ¶ 22, quoting Smith

v. Vaughn, 174 Ohio App.3d 473, 2007-Ohio-7061, 882 N.E.2d 941, ¶ 10 (1st Dist.).

To establish unjust enrichment, a plaintiff must show that (1) a benefit was conferred

by the plaintiff upon the defendant; (2) the defendant had knowledge of the benefit;

and (3) the benefit was retained by the defendant in circumstances where it would be

unjust to do so without payment. Id.; Deffren, 2021-Ohio-817, 169 N.E.3d 270, at ¶

10.

         {¶26} As set forth in their complaint, the Clarke siblings contend that Fifth

Third took excessive fees for its management of the trusts, that Fifth Third abdicated

its duties and did not earn those fees, and that Fifth Third obtained the fees by way of

unjust enrichment. Fifth Third argued, and the trial court agreed, that the Clarke

siblings’ claim necessarily failed because they had not conferred a benefit on Fifth

Third.

         {¶27} In Deffren, this court discussed in detail this first element of a claim for
unjust enrichment. Plaintiff Deffren purchased the assets of a company from its

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                     OHIO FIRST DISTRICT COURT OF APPEALS

owner, Kenneth Johnson. Several years after the purchase, Deffren sued Kenneth, as

well as Kenneth’s wife Donna and his two children, alleging a misappropriation of

company funds. Id. at ¶ 2. Deffren specifically alleged that Donna had deposited

customer payments for work that was done prior to closing on the sale into the

company’s account, instead of turning the payments over to Deffren. After the

company’s dissolution, the funds at issue were then transferred into a joint account

owned by Kenneth and Donna. Id. at ¶ 3. Kenneth passed away during the litigation,

and Deffren sought to recover the funds at issue from Donna via a claim for unjust

enrichment.

       {¶28} This court held that the unjust-enrichment claim could not be brought

against Donna, a third-party to the contract between Deffren and Kenneth. Id. at ¶ 12.

We explained that Deffren conferred no benefit on Donna, stating “True, [the

company] eventually dissolved and turned those funds over to Kenneth (as sole

shareholder), and those funds were eventually placed in a joint bank account with

Donna, but such facts are too slender a reed on which to construct an unjust

enrichment claim. By that logic, any downstream recipient of funds would risk liability

for unjust enrichment.” Id. at ¶ 13.

       {¶29} In this case, the evidence establishes that the Clarke siblings did not
confer a benefit on Fifth Third. As stated in an affidavit in support of Fifth Third’s

motion for summary judgment by Jenny Franta, a Fifth Third employee who served

as a trust officer for both trusts involved in this case, Fifth Third took its fees from

income earned by the two trusts, not from the principal of the trusts. According to

Franta, Fifth Third never collected fees for trust management in any given year

exceeding the total amount of income earned by the trust for the same year. And after

Fifth Third took its fees, any remaining income was given directly to the income

beneficiaries. For the testamentary trust, this was the Clarke siblings’ mother. And

for the inter vivos trust, this was the Clarke siblings’ mother and either JQS or his

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                      OHIO FIRST DISTRICT COURT OF APPEALS

descendants. If any benefits were conferred on Fifth Third, it was done so by these

income beneficiaries.

       {¶30} During the time that they were remainder beneficiaries, the Clarke

siblings had no current interest in the trusts and received no income distributions.

Rather, all distributions went to their mother and any other income beneficiaries. So

if Fifth Third had, in fact, taken excessive fees to which it was not entitled for

management of the trusts, any benefit conferred on Fifth Third was done so by the

then income beneficiaries, including the Clarke siblings’ mother, to whom those fees

would have been disbursed if not taken by Fifth Third.

       {¶31} Seemingly aware of this roadblock to their unjust-enrichment claim, as

the Clarke siblings’ conceded in both appellate briefing and during oral argument

before this court that they could not have conferred a benefit on Fifth Third as

remainder beneficiaries, the Clarke siblings argue that they brought the unjust-

enrichment claim on behalf of the trusts and that they sought to have the allegedly

excessive fees taken by Fifth Third returned to the trust. The language of the complaint

negates this contention, as nowhere does it state that the Clarke siblings were asserting

their claims on behalf of the trusts. The complaint was brought by the Clarke siblings

in their individual capacities, and the cause of action for unjust enrichment requested

that the excessive management fees taken by Fifth Third be disgorged to the Clarke

siblings themselves. And in their prayer for relief, the Clarke siblings personally

requested compensatory and punitive damages, and did not request that any funds be

returned to the trusts.

       {¶32} Because the record contains no genuine issues of material fact and

establishes that the Clarke siblings did not confer a benefit on Fifth Third, a necessary

element for an unjust-enrichment claim, we hold that the trial court did not err in

granting Fifth Third’s motion for summary judgment.

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                       OHIO FIRST DISTRICT COURT OF APPEALS

       {¶33} The Clarke siblings’ assignment of error is overruled, and the judgment

of the trial court is affirmed.

                                                                      Judgment affirmed.

ZAYAS and CROUSE, JJ., concur.

Please note:

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

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