Court Opinion

ID: 4508472
Source: CourtListenerOpinion
Date Created: 2020-02-19 16:09:28.515822+00
Date Added: 2024-06-11T09:37:42.752539
License: Public Domain

[Cite as Schwab v. Schwab, 2020-Ohio-560.]

                                      COURT OF APPEALS
                                     STARK COUNTY, OHIO
                                  FIFTH APPELLATE DISTRICT

MARY LYNN SCHWAB                                JUDGES:
                                                Hon. William B. Hoffman, P. J.
        Plaintiff-Appellant                     Hon. W. Scott Gwin, J.
                                                Hon. John W. Wise, J.
-vs-
                                                Case No. 2019CA00082
DAVID A. SCHWAB

        Defendant-Appellee                      OPINION

CHARACTER OF PROCEEDING:                     Civil Appeal from the Court of Common
                                             Pleas, Case No. 2018CV00572

JUDGMENT:                                    Affirmed

DATE OF JUDGMENT ENTRY:                      February 18, 2020

APPEARANCES:

For Plaintiff-Appellant                      For Defendant-Appellee

F. THOMAS VICKERS                            CHARLES V. LONGO
VICKERS LAW GROUP CO., LPA                   CHARLES V. LONGO CO., LPA
1119 Bassett Road                            15550 Chagrin Blvd., Suite 320
Westlake, Ohio 44145                         Beachwood, Ohio 44122
Stark County, Case No. 2019CA00082                                                         2

Wise, J.

       {¶1}   Plaintiff-Appellant Mary Lynn Schwab appeals the May 13, 2019, decision

of the Stark County Court of Common Pleas granting Defendant-Appellee’s Motion to

Dismiss and directing a verdict in favor of Defendant-Appellee following a jury trial.

       {¶2}   Defendant-Appellee in this matter is David A. Schwab.

                           STATEMENT OF THE FACTS AND CASE

       {¶3}   The relevant facts presented at the jury trial are as follows:

       {¶4}   This action arises out of a family Trust which was settled in Florida on April

1, 1992, by Jerry Schwab. Jerry Schwab's two children, Appellant Mary Lynn Schwab and

Appellee David A. Schwab are beneficiaries of the Trust and members of the Trust's 3-

member Advisory Committee which provides direction to the Trustee concerning Trust

assets and is responsible for paying policy premiums. (Tr. II at 163). From April 1, 1992,

through July 2, 2015, Huntington Bank served as Trustee of the Trust.

       {¶5}   The Trust consisted of cash and three (3) life insurance policies. In 2013,

those insurance policies had a total death benefit of over $9 million. (Tr. II at 163).

       {¶6}   In 2012, Appellee David Schwab and Jerry Schwab filed a complaint in

Collier County, Florida, against Huntington Bank as Trustee, which was subsequently

removed to the U.S. District Court for the Middle District of Florida. The Florida litigation

was resolved pursuant to a Settlement Agreement that was executed in July, 2014. All

activity relating to the Settlement Agreement occurred in Florida. (M.L. Schwab Depo. at

173-174, 178; see also D. Schwab Aff. ¶ 9).

       {¶7}   Appellee received a payment in conjunction with the settlement of the

Florida litigation, as described in the Settlement Agreement, which consisted of
Stark County, Case No. 2019CA00082                                                        3

$100,000.00 paid by Huntington Bank to Appellee David Schwab and his father Jerry

Schwab for reimbursement of a portion of legal fees they incurred in the Florida litigation.

(D. Schwab 4/4/19 Aff. ¶10). It is undisputed that the Trust did not incur any expense or

damage as a result of the settlement payment made directly by Huntington Bank. (D.

Schwab 4/4/19 Aff. ¶10). The $100,000.00 check was issued on July 24, 2014, from

Huntington Bank to Appellee and his attorney and was drawn from a Huntington Bank

account ending in 7250. By contrast, the Trust's bank account number at Huntington Bank

for the accounting period from June 1, 2014, to May 31, 2015, ended in 4903.

       {¶8}   As an additional part of the Settlement Agreement, because of certain

claims in the Florida litigation, Huntington Bank, as Trustee of the Trust, agreed to accept

$80,000.00 from the Trust as full settlement for its $600,000.00 claim tor reimbursement

of attorney fees relating to the Florida Litigation and other lawsuits. (See 4/4/19 D.

Schwab Aff. ¶11; Settlement Agreement). As referenced in the Settlement Agreement,

Huntington Bank acted as the Trustee of the Trust and in that capacity was solely

responsible for the payment of the $80,000.00 from Trust assets. (See Settlement

Agreement, 4/4/19 D. Schwab Aff. ¶12). The Settlement Agreement stated that Appellee

would "support a request to the Trust Advisory Committee to permit the Trust to borrow

against or liquidate insurance policies owned by the Trust as needed to generate the cash

to pay the [$80,000.00 in attorney] Fees." (Settlement Agreement, p. 2, ¶4). To Appellee's

knowledge and recollection, Huntington Bank did not request approval for the payment of

attorney fees in the amount of $80,000.00 as described in the Settlement Agreement.

(4/4/19 D. Schwab Aff. ¶14). Appellant conceded she did not know if Huntington ever

made such a request. (M.L. Schwab Depo. at 194). Appellee did not receive a direct or
Stark County, Case No. 2019CA00082                                                       4

indirect benefit from the payment of attorney fees from Trust assets. (4/4/19 D. Schwab

Aff. ¶13).

       {¶9}   It is undisputed that Appellee and Jerry Schwab are both Florida residents.

       {¶10} In approximately 2015, Premier Bank nka Home Savings Bank was

appointed as Trustee of the Trust. (D. Schwab Depo. at 10). On July 21, 2017, Home

Savings Bank issued a check in the amount of $12,343.21 payable to "David A Schwab,

Trustee of Schwab Irrev" in Florida. (See: D. Schwab Depo.) Appellee did not engage in

any conduct to cause Home Savings Bank to send to him the H.S. Check. (Motion for

Summary Judgment: Prelac Aff. at ¶4; see also 4/4/19 D. Schwab Aff. ¶4.) At the time,

the Trust had no bank account within which to deposit the check. The Tax Identification

Number (ETIN) related to the Trust was not known to Appellee, and he was not able to

open a bank account into which the H.S. check could be deposited. (4/4/19 D. Schwab

Aff. ¶5.)

       {¶11} On or about October 10, 2017, after consulting with his parents, the settlors

of the Trust, Appellee deposited the H.S. check into his personal account in Florida for

safe keeping, until the Trust ETIN could be discovered to enable the H.S. check funds to

be deposited in a Trust bank account. (D. Schwab Depo. 30-32; 4/4/19 D. Schwab Aff. ¶

16.)

       {¶12} Appellant commenced the instant lawsuit against Appellee on March 15,

2018, and subsequently filed an Amended Complaint, which alleged that Appellee

breached fiduciary duties owed to the Trust and to Appellant as a beneficiary of the Trust.

Specifically, Appellant took issue with Appellee's actions with regard to the $12,343.21

Home Savings Check; Appellee's receipt of $100,000.00 paid by Huntington Bank as part
Stark County, Case No. 2019CA00082                                                       5

of his personal Settlement Agreement with Huntington Bank; and Appellee's agreement

to support Huntington Bank's future request to the Trust Advisory Committee to use Trust

assets to pay $80,000.00 in attorney fees incurred in various lawsuits involving the Trust.

(11/14/18 Amended Complaint, ¶¶17, 25, see also M.L. Schwab Depo. 168). Appellant

sought damages in the amount of $192,343.21 and Appellee's removal from the Advisory

Committee. (Amended Complaint ¶28.)

       {¶13} On June 27, 2018, Appellee filed a Motion to Dismiss for Lack of Personal

Jurisdiction.

       {¶14} On July 25, 2018, Appellant filed her opposition to Appellee’s motion to

dismiss.

       {¶15} On August 9, 2018, the trial court denied the Motion to Dismiss.

       {¶16} On April 8, 2019, Appellee filed a Motion for Summary Judgment arguing

lack of jurisdiction.

       {¶17} On April 18, 2019, Appellant filed her Brief in Opposition to Appellee’s

Motion for Summary Judgment.

       {¶18} By Judgment Entry filed May 2, 2019, the trial court denied Appellee’s

Motion for Summary Judgment.

       {¶19} A jury trial commenced on May 8, 2019, wherein the Plaintiff-Appellant

called only herself and Defendant-Appellee on cross-examination as witnesses and then

rested her case. At that time Defendant-Appellee renewed his Motion to Dismiss and

requested a directed verdict in his favor.

       {¶20} By Judgment Entry filed May 13, 2019, the trial court granted Defendant-

Appellee’s Motion to Dismiss and directed a verdict in his favor, finding that Plaintiff-
Stark County, Case No. 2019CA00082                                                         6

Appellant failed to establish damages, failed to establish a breach of fiduciary duty, failed

to establish personal jurisdiction over Defendant-Appellee and failed to establish that

Stark County was the appropriate venue.

       {¶21} Appellant now appeals, raising the following assignment of error:

                                   ASSIGNMENT OF ERROR

       {¶22} “I. THE TRIAL COURT ERRED IN GRANTING DEFENDANT'S MOTION

TO DISMISS AND DIRECTING A VERDICT IN DEFENDANT'S FAVOR AT THE CLOSE

OF PLAINTIFF’S CASE DURING A JURY TRIAL WHEN IT CONCLUDED THAT

PLAINTIFF:

       A. FAILED TO ESTABLISH A BREACH OF FIDUCIARY DUTY;

       B. FAILED TO ESTABLISH DAMAGES;

       C. FAILED TO ESTABLISH PERSONAL JURISDICTION OVER DEFENDANT;

       AND,

       D. FAILED TO ESTABLISH THAT STARK COUNTY WAS THE APPROPRIATE

       VENUE.”

                                                 I.

       {¶23} In her sole assignment of error, Appellant argues that the trial court erred in

granting Appellee’s motion to dismiss and directing a verdict in Appellee’s favor at the

close of Appellant’s case. We disagree.

                                       Personal Jurisdiction

       {¶24} Appellant argues the trial court had personal jurisdiction over Appellee in

this matter.
Stark County, Case No. 2019CA00082                                                           7

       {¶25} “ ‘Jurisdiction’ means ‘the courts' statutory or constitutional power to

adjudicate the case.’ The term encompasses jurisdiction over the subject matter and over

the person. * * * ‘If a court acts without jurisdiction, then any proclamation by that court is

void.’ ” (Citations omitted.) Pratts v. Hurley, 102 Ohio St.3d 81, 2004-Ohio-1980, 806

N.E.2d 992, ¶ 11. Personal jurisdiction is rudimentary for a court to render a valid

judgment over a defendant. Maryhew v. Yova, 11 Ohio St.3d 154, 156, 464 N.E.2d 538

(1984). “This may be acquired either by service of process upon the defendant, the

voluntary appearance and submission of the defendant or his legal representative, or by

certain acts of the defendant or his legal representative which constitute an involuntary

submission to the jurisdiction of the court.” Id.

       {¶26} We review the trial court's decision on personal jurisdiction de novo as a

question of law. Fraley, 138 Ohio St.3d 250, 2014-Ohio-452, 6 N.E.3d 9, at ¶ 11, citing

Kauffman Racing Equip., L.L.C. v. Roberts, 126 Ohio St.3d 81, 2010-Ohio-2551, 930

N.E.2d 784, ¶ 27.

       {¶27} The determination whether an Ohio trial court has personal jurisdiction over

an out-of-state defendant requires a two-step inquiry. First, the court must determine

whether the defendant's conduct falls within Ohio's long-arm statute or the applicable civil

rule. If it does, then the court must consider whether the assertion of jurisdiction over the

nonresident defendant would deprive the defendant of due process of law under the

Fourteenth Amendment to the United States Constitution. Id. at ¶ 12, citing Kentucky

Oaks Mall Co. v. Mitchell's Formal Wear, Inc., 53 Ohio St.3d 73, 75, 559 N.E.2d 477

(1990).
Stark County, Case No. 2019CA00082                                                         8

       {¶28} Appellant has the burden to establish the trial court's personal jurisdiction.

Henderson, 6th Dist. Erie Nos. E-12-068, E-13-047, 2014-Ohio-4634, at ¶ 56; Klunk v.

Hocking Valley Ry. Co., 74 Ohio St. 125, 135, 77 N.E. 752 (1906) (at all times the burden

of proof remains on the party whose case requires the proof of the fact at issue.). “ ‘Once

a defendant has challenged the trial court's personal jurisdiction over him or her, the

plaintiff bears the burden of proving jurisdiction by a preponderance of the evidence.’ ”

(Citation omitted.) State ex rel. DeWine v. 9150 Group, L.P., 2012-Ohio-3339, 977 N.E.2d

112, ¶ 8 (9th Dist.). “[P]reponderance of evidence means the greater weight of evidence.

* * * The greater weight may be infinitesimal, and it is only necessary that it be sufficient

to destroy the equilibrium.” Travelers' Ins. Co. v. Gath, 118 Ohio St. 257, 261, 160 N.E.

710 (1928). Preponderance is a higher burden of proof than prima facie, which merely

means “at first view” appearing sufficient to establish the fact unless rebutted. Carr v.

Howard, 17 Ohio App.2d 233, 235, 246 N.E.2d 563 (2d Dist.1969).

       {¶29} Ohio's long-arm statute, R.C. §2307.382(A)(1), and Civ.R. 4.3(A)(1) permit

a court to exercise personal jurisdiction over a nonresident defendant and provide for

service of process to effectuate that jurisdiction Said long-arm statute sets forth specific

acts by a defendant which give rise to personal jurisdiction:

       §2307.382 Personal jurisdiction

              (A) A court may exercise personal jurisdiction over a person who acts

       directly or by an agent, as to a cause of action arising from the person's:

              (1) Transacting any business in this state;

              ***

              (3) Causing tortious injury by an act or omission in this state;
Stark County, Case No. 2019CA00082                                                     9

             (4) Causing tortious injury in this state by an act or omission outside

      this state if he regularly does or solicits business, or engages in any other

      persistent course of conduct, or derives substantial revenue from goods

      used or consumed or services rendered in this state;

             ***

             (6) Causing tortious injury in this state to any person by an act

      outside this state committed with the purpose of injuring persons, when he

      might reasonably have expected that some person would be injured thereby

      in this state;

             ***

      {¶30} Civ.R. 4.3, the corresponding rules for service of process upon

nonresidents, states:

             (A) *** Service of process may be made outside of this state, as

      provided in this rule, in any action in this state, upon a person who, at the

      time of service of process, is a nonresident of this state or is a resident of

      this state who is absent from this state. “Person” includes an individual, an

      individual's executor, administrator, or other personal representative, or a

      corporation, partnership, association, or any other legal or commercial

      entity, who, acting directly or by an agent, has caused an event to occur out

      of which the claim that is the subject of the complaint arose, from the

      person's:

             (1) Transacting any business in this state;

             ***
Stark County, Case No. 2019CA00082                                                     10

              (9) Causing tortious injury in this state to any person by an act

       outside this state committed with the purpose of injuring persons, when the

       person to be served might reasonably have expected that some person

       would be injured by the act in this state[.]

       {¶31} As the Supreme Court of Ohio emphasized, both the statute and the rule

are broadly worded and permit jurisdiction over any defendant who is “transacting any

business” in Ohio. Kentucky Oaks Mall Co. v. Mitchell's Formal Wear Inc., 53 Ohio St.3d

73, 75, 559 N.E.2d 477 (1990). Quoting Black's Law Dictionary (5th Ed.1979), the court

in Kentucky Oaks stated the term “transact” “ ‘means to prosecute negotiations; to carry

on business; to have dealings,’ ” “ ‘but it is a broader term than the word “contract” and

may involve business negotiations which have been either wholly or partly brought to a

conclusion.’ ” (Emphasis sic.) Id. Whether a defendant has transacted any business in

Ohio is determined on the particular facts of the case. United States Sprint

Communications Co. at 185, 624 N.E.2d 1048.

       {¶32} Here, Appellant’s sole argument in support of personal jurisdiction is based

on the Home Savings check which was sent to Appellee at his home in Fort Myers,

Florida, and then deposited into a Florida bank account. The check itself had an address

of St. Clairsville, Ohio, endorsed on it.

       {¶33} Upon review, we do not find the mere act of receiving a check, which

contained an Ohio address and may or may not have been sent from Ohio, by Appellee

in Florida, without evidence of any solicitation or further involvement by Appellee,

amounts to “transacting business” in the state of Ohio for purposes of exercising personal

jurisdiction over Appellee pursuant to Ohio’s long-arm statute.
Stark County, Case No. 2019CA00082                                                       11

                                               Venue

     {¶34} Civ.R. 3(C) provides in pertinent part:

            Any action may be venued, commenced, and decided in any court in

     any county. When applied to county and municipal courts, “county,” as used

     in this rule, shall be construed, where appropriate, as the territorial limits of

     those courts. Proper venue lies in any one or more of the following counties:

            (1) The county in which the defendant resides;

            (2) The county in which the defendant has his or her principal place

     of business;

            (3) A county in which the defendant conducted activity that gave rise

     to the claim for relief;

            (4) A county in which a public officer maintains his or her principal

     office if suit is brought against the officer in the officer's official capacity;

            (5) A county in which the property, or any part of the property, is

     situated if the subject of the action is real property or tangible personal

     property;

            (6) The county in which all or part of the claim for relief arose; or, if

     the claim for relief arose upon a river, other watercourse, or a road, that is

     the boundary of the state, or of two or more counties, in any county

     bordering on the river, watercourse, or road, and opposite to the place

     where the claim for relief arose;

            (7) In actions described in Civ.R. 4.3, in the county where plaintiff

     resides;
Stark County, Case No. 2019CA00082                                                          12

               (8) In an action against an executor, administrator, guardian, or

        trustee, in the county in which the executor, administrator, guardian, or

        trustee was appointed;

               ****

        {¶35} Upon review, we find that none of the above factors apply in the instant

case.

        {¶36} While Appellant attempts to argue that venue is proper under (7), we find

that said Civ.R. 4.3(A)(1) authorizes out-of-state service of process on a defendant who

is “[t]ransacting any business in this state[.]” As Appellee in this matter was not transacting

business in Ohio, Civ.R. 4.3(A)(1) is not applicable.

                                      Breach of Fiduciary Duty

        {¶37} No testimony or evidence was presented with regard to what fiduciary duties

were owed, if any, and/or how and when said duties were breached.

                                              Damages

        {¶38} Upon review we find Appellant failed to produce any evidence in support of

claim for damages. There is no evidence that the Trust suffered any damages as a result

of the Florida litigation and resulting settlement.

        {¶39} In light of the above, we find no error in the trial court’s decision directing a

verdict in favor of Appellee and dismissing Appellant’s action.
Stark County, Case No. 2019CA00082                                            13

      {¶40} Appellant’s assignment of error is overruled.

      {¶41} For the foregoing reasons, the judgment of the Court of Common Pleas,

Stark County, Ohio, is affirmed.

By: Wise, J.

Hoffman, P. J., and

Gwin, J., concur.

JWW/d 0205