Court Opinion

ID: 8213652
Source: CourtListenerOpinion
Date Created: 2022-10-12 20:07:30.165641+00
Date Added: 2024-06-11T16:42:24.088130
License: Public Domain

[Cite as Gilcrest v. Gilcrest, 2022-Ohio-3640.]

                                         COURT OF APPEALS
                                     DELAWARE COUNTY, OHIO
                                     FIFTH APPELLATE DISTRICT

LAURA GILCREST                                    :   JUDGES:
                                                  :   Hon. Earle E. Wise, Jr., P.J.
        Plaintiff-Appellant                       :   Hon. John W. Wise, J.
                                                  :   Hon. Craig R. Baldwin, J.
-vs-                                              :
                                                  :
ROGER GILCREST, ET AL.                            :   Case No. 22 CAE 03 0019
                                                  :
        Defendants-Appellees                      :   OPINION

CHARACTER OF PROCEEDING:                              Appeal from the Court of Common
                                                      Pleas, Case No. 20 CV 0071

JUDGMENT:                                             Affirmed

DATE OF JUDGMENT:                                     October 12, 2022

APPEARANCES:

For Plaintiff-Appellant                               For Defendants-Appellees

ADAM FRIED                                            JOSEPH C. PICKENS
ADRIENNE MCGEE                                        Two Miranova Place
MARY KRAFT                                            Suite 700
200 Civic Center Drive                                Columbus, OH 43215
Suite 800
Delaware County, Case No. 22 CAE 03 0019                                                   2

Columbus, OH 43215
Wise, Earle, P.J.

       {¶ 1} Plaintiff-Appellant, Laura Gilcrest, appeals the July 17, 2020, February 1,

2021, and February 14, 2022 judgment entries of the Court of Common Pleas of Delaware

County, Ohio, dismissing her claims and awarding attorney fees and costs to Defendants-

Appellees, Roger Gilcrest and P. Gilcrest, LLC.

                         FACTS AND PROCEDURAL HISTORY

       {¶ 2} In 2004, Philip and Irene Gilcrest created PN Gilcrest Limited Partnership,

an Ohio family limited partnership. Appellant-Laura and appellee-Roger are Philip and

Irene's children.

       {¶ 3} The partnership has one general partner, appellee-P. Gilcrest LLC, of which

Roger is the sole managing member. Appellant is a limited partner, along with other

limited partners.

       {¶ 4} Irene and then Philip both passed away in 2017. Roger opened probate of

Philip's estate in Summit County Probate Court. Assets were distributed to appellant.

After the discovery of additional bank accounts, the estate was re-opened to distribute

those funds. Appellant filed a notice of objection. The probate action is still pending.

       {¶ 5} On September 6, 2019, appellant filed a complaint against appellees in

Franklin County, Ohio, to discover and determine the extent to which Roger improperly

managed, distributed, and/or disposed of partnership assets.        On October 9, 2019,

appellees filed a motion to dismiss or transfer venue. The motion to transfer venue was

granted and the case was transferred to Delaware County on February 12, 2020.

       {¶ 6} Appellant's complaint raised thirteen causes of action, the first five being

derivative claims against the partnership and the remaining claims against Roger
Delaware County, Case No. 22 CAE 03 0019                                                   3

individually: accounting (Count I), injunction (Count II), breach of statutory duty of care

(Count III), breach of fiduciary duty (Count IV), breach of contract (Count V), breach of

fiduciary duties (Count VI), breach of trust (Count VII), breach of fiduciary duty by trustee

(Count VIII), accounting (Count IX), tortious interference with expected inheritance (Count

X), complaint for money damages (Count XI), unjust enrichment (Count XII), and

disgorgement of excessive fees (Count XIII).

       {¶ 7} On March 11, 2020, appellees filed their answer and a counterclaim,

alleging declaratory judgment and abuse of process.

       {¶ 8} Also on March 11, 2020, appellees filed a motion to dismiss Counts VI

through XIII of the complaint, arguing Delaware County lacked jurisdiction because the

claims relating to trust, estate, and inheritance issues were subject to the exclusive

jurisdiction of the pending action in Summit County Probate Court. Appellees also filed a

motion for attorney fees on the transfer of venue to Delaware County. By judgment entry

filed July 17, 2020, the trial court granted the motions and dismissed Counts VI through

XIII of the complaint, finding the Summit County Probate Court had exclusive and/or

priority jurisdiction over the claims. The trial court ordered appellees to submit evidence

as to the requested attorney fees and costs.

       {¶ 9} On December 11, 2020, appellees filed a motion to dismiss Counts I, III, IV,

and V, arguing the complaint failed to meet the requirements for derivative claims under

R.C. 1782.58 and Civ.R. 23.1 (failure to plead with particularity any demands made or

why any demands would have been futile, and failure to allege how she adequately and

fairly represented the interests of other limited partners). By judgment entry filed February

1, 2021, the trial court agreed and dismissed the counts.
Delaware County, Case No. 22 CAE 03 0019                                               4

      {¶ 10} On September 29, 2021, the partnership's general partner, P. Gilcrest LLC,

filed a motion for summary judgment on the sole remaining claim, Count II (an

accounting). By judgment entry filed November 16, 2021, the trial court granted the

motion, finding the LLC provided and/or made available for inspection all available

requested materials.

      {¶ 11} On January 14, 2022, appellees dismissed their counterclaims without

prejudice.

      {¶ 12} By judgment entry filed February 14, 2022, the trial court awarded appellees

as against appellant $10,851.65 for attorney fees and costs associated with the transfer

of venue.

      {¶ 13} Appellant filed an appeal and this matter is now before this court for

consideration. Assignments of error are as follows:

                                            I

      {¶ 14} "THE TRIAL COURT ERRED BY HOLDING APPELLANT LAURA

GILCREST'S      COMPLAINT        FAILED         TO    ALLEGE    SUFFICIENT       FACTS

DEMONSTRATING THAT A PRE-SUIT DEMAND WOULD HAVE BEEN FUTILE."

                                           II

      {¶ 15} "THE TRIAL COURT INCORRECTLY DETERMINED APPELLANT LAURA

GILCREST FAILED TO ADEQUATELY PLEAD HER ABILITY TO REPRESENT THE

INTERESTS OF SIMILARLY SITUATED LIMITED PARTNERS."

                                           III

      {¶ 16} "THE TRIAL COURT INCORRECTLY DETERMINED THAT THE SUMMIT

COUNTY PROBATE COURT HAD EXCLUSIVE AND/OR PRIORITY JURISDICTION
Delaware County, Case No. 22 CAE 03 0019                                                     5

OVER COUNTS XII AND XIII OF APPELLANT LAURA GILCREST'S COMPLAINT

RELATED TO APPELLEE ROGER GILCREST AND APPELLEE P. GILCREST LLC."

                                              IV

       {¶ 17} "THE TRIAL COURT ERRED IN AWARDING APPELLEES COSTS AND

FEES RELATED TO THE TRANSFER OF VENUE, BECAUSE APPELLANT LAURA

GILCREST WAS NOT DELIBERATE OR HEEDLESS IN INITIALLY FILING HER

COMPLAINT IN FRANKLIN COUNTY."

                                             I, II

       {¶ 18} In her first assignment of error, appellant claims the trial court erred in

finding her complaint failed to allege sufficient facts demonstrating that a pre-suit demand

would have been futile.

       {¶ 19} In her second assignment of error, appellant claims the trial court erred in

finding her complaint failed to adequately plead her ability to represent the interests of

similarly situated limited partners.

       {¶ 20} Specifically, appellant claims the trial court erred in dismissing Counts I, III,

IV, and V (judgment entry filed February 1, 2021). We disagree.

       {¶ 21} Appellees filed a motion to dismiss Counts I, III, IV, and V pursuant to Civ.R.

12(B)(1) (lack of jurisdiction over the subject matter) and (6) (failure to state a claim upon

which relief can be granted). In reviewing a motion to dismiss under Civ.R. 12, a trial

court is limited to a review of the four corners of the complaint; however, "[d]ocuments

attached to or incorporated in the complaint may be considered on a motion to dismiss

pursuant to Civ.R. 12(B)(6)." NCS Healthcare, Inc. v. Candlewood Partners, L.L.C., 160
Delaware County, Case No. 22 CAE 03 0019                                                       6

Ohio App.3d 421, 2005-Ohio-1669, 827 N.E.2d 797, ¶ 20 (8th Dist.). In considering the

motion, a trial court "must accept as true all factual allegations in the complaint and

construe any reasonable inferences in favor of the non-moving party." Valentine v. Cedar

Fair, L.P., 6th Dist. Erie No. E-20-018, 2021-Ohio-2144, ¶ 22, citing Alford v. Collins-

McGregor Operating Co., 152 Ohio St.3d 303, 2018-Ohio-8, 95 N.E.3d 382. In order for

a trial court to dismiss a complaint under Civ.R. 12(B)(6), "it must appear beyond doubt

from the complaint that the plaintiff can prove no set of facts entitling him to recovery."

O'Brien v. University Community Tenants Union, Inc., 42 Ohio St.2d 242, 327 N.E.2d 753

(1975), syllabus.

       {¶ 22} Our standard of review is de novo, and therefore this court "must review the

issues independently of the trial court's decision." Perrysburg Township v. Rossford, 103

Ohio St.3d 79, 2004-Ohio-4362, 814 N.E.2d 44; Mellion v. Akron City School District

Board of Education, Summit App. No. 23227, 2007-Ohio-242, ¶ 6. "We review the grant

of the motion to dismiss afresh, again taking the factual allegations of the complaint as

true and drawing all reasonable inferences in favor of [appellant]." Habibi v. University of

Toledo, 10th Dist. Franklin No. 19AP-583, 2020-Ohio-766, ¶ 10.

       {¶ 23} In their motion to dismiss, appellees argued appellant failed to meet the

requirements for derivative claims under R.C. 1782.58 ("[i]n a derivative action brought

pursuant to section 1782.56 of the Revised Code, the complaint shall set forth with

particularity the effort of the plaintiff to secure initiation of the action by a general partner

or the reasons for not making the effort"), and Civ.R. 23.1 which states the following in

pertinent part:
Delaware County, Case No. 22 CAE 03 0019                                                 7

             In a derivative action brought by one or more legal or equitable

      owners of shares to enforce a right of a corporation, the corporation having

      failed to enforce a right which may properly be asserted by it, the complaint

      shall be verified and shall allege that the plaintiff was a shareholder at the

      time of the transaction of which he complains or that his share thereafter

      devolved on him by operation of law. The complaint shall also allege with

      particularity the efforts, if any, made by the plaintiff to obtain the action he

      desires from the directors and, if necessary, from the shareholders and the

      reasons for his failure to obtain the action or for not making the effort. The

      derivative action may not be maintained if it appears that the plaintiff does

      not fairly and adequately represent the interests of the shareholders

      similarly situated in enforcing the right of the corporation.

      {¶ 24} "Specifically, complaining shareholders [under Civ.R. 23.1] must (1) spell

out the efforts made to have the directors or the other shareholders take the action

demanded, (2) explain why they failed in this effort or did not make it, and (3) show that

they 'fairly and adequately' represent the interests of other shareholders 'similarly

situated.' " Weston v. Weston Paper & Manufacturing Co., 74 Ohio St.3d 377, 379, 658

N.E.2d 1058 (1996).

      {¶ 25} In her opposition to appellees' motion, appellant argued paragraphs 42, 43,

and 45 of her complaint fulfilled the necessary requirements:
Delaware County, Case No. 22 CAE 03 0019                                                  8

              42. Plaintiff made numerous requests to obtain documents and

       financial records relative to the Partnership.

              43. Despite Plaintiff's attempts to obtain documents and records

       relative to the Partnership from the General Partner, as of the date of filing

       the instant action, Plaintiff has not received the necessary documents and

       records pursuant to the lawful requests.

              45. Plaintiff will adequately and fairly represent the interests of the

       Partnership in enforcing and prosecuting its rights.

       {¶ 26} Further, appellant argued any effort to demand action from the

director/shareholders would have been futile. "Futility means that the directors' minds are

closed to argument and that they cannot properly exercise their business judgment in

determining whether the suit should be filed. It is not enough to show that the directors

simply disagree with a shareholder about filing a suit." Drage v. Proctor & Gamble, 119

Ohio App.3d 19, 25, 694 N.E.2d 479 (1st Dist.1997). Appellant argued paragraph 47 of

her complaint was sufficient to plead futility: "All conditions precedent to the bringing of

this action have been performed, have been waived, have occurred or would be futile."

       {¶ 27} In its February 1, 2021 judgment entry, the trial court reviewed the four pled

claims and found the following:

              The Court finds that Plaintiff has not pled with particularity when or

       how she requested information from the general partner, or that she did so

       on behalf of the partnership as required by R.C. 1782.56. Her complaint
Delaware County, Case No. 22 CAE 03 0019                                               9

      also does not describe with particularity what documents or financial

      records she allegedly sought.       Therefore, Plaintiff has not met the

      requirement that her complaint spell out her efforts to obtain the information

      she sought.

             ***

             Based on the standard for pleading futility, the Court finds that

      Plaintiff's complaint does not sufficiently establish that further - or any -

      demands by Plaintiff would have been futile. Therefore, Plaintiff's complaint

      does not meet the requirement that she explain why further efforts were not

      undertaken.

             ***

             Plaintiff's complaint does not identify the other limited partners, nor

      does it indicate that she consulted with them and/or determined whether

      they support her taking action on their behalf.       Because Plaintiff was

      required to plead with specificity her ability to adequately represent the

      interests of the other limited partners, her complaint fails to meet this

      requirement of Civ.R. 23.1.

      {¶ 28} In reviewing the complaint, we agree with the trial court's analysis.

Appellant's complaint does not cite to any pre-suit demands or efforts she made to obtain

the requested action, nor cite to reasons why such a demand would have been futile.

Merely alleging futility is not enough to satisfy the requirement. Likewise, the general

allegations of Roger's conduct pertaining to self-dealing and inappropriate asset
Delaware County, Case No. 22 CAE 03 0019                                                    10

allocation do not satisfy the requirement. The complaint also does not identify any other

limited partners and whether she consulted them. Appellant has not shown that she fairly

and adequately represents the interests of other shareholders similarly situated in

enforcing the rights of the corporation. Paragraphs 42, 43, 45, and 47 of the complaint

are general and conclusory and are insufficient to meet the requirements of R.C. 1782.58

and Civ.R. 23.1.

       {¶ 29} Upon review, we find the trial court did not err in dismissing Counts I, III, IV,

and V of the complaint.

       {¶ 30} Assignments of Error I and II are denied.

                                              III

       {¶ 31} In her third assignment of error, appellant claims the trial court erred in

finding the Summit County Probate Court had exclusive and/or priority jurisdiction over

some of her claims. Specifically, appellant claims the trial court erred in dismissing

Counts XII and XIII (judgment entry filed July 17, 2020). We disagree.

       {¶ 32} Appellees filed a motion to dismiss Counts VI through XIII of the complaint

pursuant to Civ.R. 12(B)(1) (lack of jurisdiction over the subject matter). Appellees argued

the counts relating to trust, estate, and inheritance issues were subject to the exclusive

jurisdiction of the Summit County Probate Court under R.C. 2101.24(A), wherein an

action was pending prior to the filing of the subject complaint.

       {¶ 33} "The standard of review for a dismissal pursuant to Civ.R. 12(B)(1) is

whether any cause of action cognizable by the forum has been raised in the complaint."

State ex rel. Bush v. Spurlock, 42 Ohio St.3d 77, 80, 537 N.E.2d 641 (1989). We review
Delaware County, Case No. 22 CAE 03 0019                                                    11

an appeal of a motion for dismissal under Civ.R. 12(B)(1) de novo. Moore v. Franklin

County Children Services, 10th Dist. Franklin No. 06AP-951, 2007-Ohio-4128, ¶ 15.

       {¶ 34} The probate case was opened approximately seven months prior to the

subject complaint.     Under the "jurisdictional-priority rule," "[a]s between courts of

concurrent jurisdiction, the tribunal whose power is first invoked by the institution of proper

proceedings acquires jurisdiction, to the exclusion of all other tribunals, to adjudicate upon

the whole issue and to settle the rights of the parties." State, ex rel. Phillips v. Polcar, 50

Ohio St.2d 279, 364 N.E.2d 33 (1977), syllabus.

       {¶ 35} In State ex rel. Dunlap v. Sarko, 135 Ohio St.3d 171, 2013-Ohio-67, 985

N.E.2d 450, ¶ 10-11, the Supreme Court of Ohio explained:

              To be sure, it is a condition of the jurisdictional-priority rule that the

       claims and parties be the same in both cases, so "[i]f the second case is not

       for the same cause of action, nor between the same parties, the former suit

       will not prevent the latter." See State ex rel. Judson v. Spahr, 33 Ohio St.3d

       111, 113, 515 N.E.2d 911 (1987).

              Nevertheless, we have also recognized that the jurisdictional-priority

       rule can apply even when the causes of action and relief requested are not

       exactly the same, as long as the actions present part of the same "whole

       issue." State ex rel. Otten v. Henderson, 129 Ohio St.3d 453, 2011-Ohio-

       4082, 953 N.E.2d 809, ¶ 29; State ex rel. Sellers v. Gerken, 72 Ohio St.3d

       115, 117, 647 N.E.2d 807 (1995).
Delaware County, Case No. 22 CAE 03 0019                                               12

       {¶ 36} Count XII of the subject complaint is a claim for unjust enrichment and

states as follows:

              110. Roger, through directing to himself assets properly distributable

       to Plaintiff, has been unjustly enriched by his conduct, including but not

       limited to making improper distributions, withdrawals, and/or transfers to

       himself and/or for his own benefit from the Trust, Limited Partnership and/or

       Estate assets.

       {¶ 37} Claim XIII is a claim for disgorgement of excessive fees and states as

follows:

              112. Upon information and belief, Roger charged excessive executor

       fees, trustee fees and General Partner fees related to the Limited

       Partnership.

              113. Upon information and belief, Roger further retained the services

       of an investment advisor for purposes unrelated to the needs of the Trusts

       and/or the Limited Partnership and paid excessive fees therefrom.

              114. Roger Gilcrest and P Gilcrest Limited Liability Company should

       be made to account for all fees paid and return all said fees to the probate

       estate, trust estates of Philip and Irene Gilcrest and/or Limited Partnership

       until the reasonableness of said fees, and costs can be established.
Delaware County, Case No. 22 CAE 03 0019                                                 13

       {¶ 38} In its July 17, 2020 judgment entry, the trial court reviewed Counts VI

through XIII and found the following:

              Among the claims asserted in Laura's complaint are those for breach

       of trust, breach of fiduciary duty, and tortious interference with expected

       inheritance, all claims that mirror objections she raised in the probate case

       and that are subject to the exclusive jurisdiction of the probate court.

       Inasmuch as this Court would have concurrent jurisdiction over any of her

       claims under Counts VI through XIII, the jurisdictional priority rule requires

       this Court to dismiss them.

       {¶ 39} In her appellate brief, appellant argues Counts XII and XIII relate to the

partnership and are unrelated to the trusts and/or estates which are the subject of the

probate case. Appellant acknowledges the unjust enrichment claim relates to Roger's

"improper distributions, withdrawals, and/or transfers to himself and/or for his own benefit

from the Trust, Estate, and/or Limited Partnership." (Emphasis sic.) Appellant's Brief at

12. For the disgorgement of excessive fees claim, appellant argues, "[w]hile Count XIII

alleged that Roger charged excessive executor and trustee fees, this claim also asserted

that Roger charged excessive General Partner fees to the Partnership." Id.

       {¶ 40} Appellant admits Counts XII and XIII involve trust and estate issues.

Appellant now argues the trial court should have carved out the claims against the

partnership. However, the claims against the partnership were dismissed for failure to

meet the requirements of R.C. 1782.58 and Civ.R. 23.1 as discussed above. We concur
Delaware County, Case No. 22 CAE 03 0019                                                   14

with the trial court's analysis that the jurisdictional-priority rule applies. We find Counts

XII and XIII "present part of the same 'whole issue' " and should be heard by the probate

court.

         {¶ 41} Upon review, we find the trial court did not err in dismissing Counts XII and

XIII of the complaint.

         {¶ 42} Assignment of Error III is denied.

                                              IV

         {¶ 43} In her fourth assignment of error, appellant claims the trial court erred in

awarding appellees attorney fees and costs associated with the transfer of venue

(judgment entry filed February 14, 2022). We disagree.

         {¶ 44} "A trial court's decision as to the appropriateness of an award of attorney

fees will not be reversed absent an abuse of discretion." Sheet Metal Workers Local

Union No. 33 v. Sutton, 5th Dist. Stark No. 2010CA00323, 2011-Ohio-3809, ¶ 32. In

order to find an abuse of discretion, we must determine the trial court's decision was

unreasonable, arbitrary or unconscionable and not merely an error of law or judgment.

Blakemore v. Blakemore, 5 Ohio St.3d 217, 450 N.E.2d 1140 (1983).

         {¶ 45} Civ.R. 3 governs venue. Subsection (D)(2) states: "When an action is

transferred to a county which is proper, the court may assess costs, including reasonable

attorney fees, to the time of transfer against the party who commenced the action in a

county other than stated to be proper in division (C) of this rule." As stated in a 1970 staff

note to Civ.R. 3(C)(2), now (D)(2):
Delaware County, Case No. 22 CAE 03 0019                                                  15

              Since any action may be commenced and decided in any court that

       has jurisdiction of the subject matter, this provision is needed to place a

       curb upon the party who deliberately or heedlessly files an action in a county

       where venue is not proper thereby causing these additional expenses.

       Costs should not be assessed under this rule if venue is in doubt so that the

       error was one that any diligent attorney could have made.

       {¶ 46} Appellant filed her initial complaint in Franklin County, Ohio. Appellees filed

a motion to dismiss or transfer venue because all business related to the partnership and

the trusts and estates occurred in Delaware County. Roger lived and worked in Delaware

County. Appellant contested the change of venue. The motion was granted and the case

was transferred to Delaware County. Appellees filed a motion for attorney fees and by

judgment entry filed July 17, 2020, the trial court granted the motion and ordered

appellees to submit evidence as to the requested attorney fees and costs. Appellees

submitted the evidence on February 1, 2022.

       {¶ 47} In its February 14, 2022 judgment entry awarding the attorney fees, the trial

court stated the following:

              In granting Defendants' motion for attorney fees and costs incurred

       in obtaining the transfer of this case from the Franklin County Court of

       Common Pleas, the Court emphasized that Plaintiff knew that Roger

       Gilcrest resides in Delaware County and performed tasks related to his

       parents' estates and the P. Gilcrest LLC in Delaware County. Further, she
Delaware County, Case No. 22 CAE 03 0019                                                16

       knew the Franklin County Common Pleas Court had rejected her assertion

       of venue there as "pure speculation and conjecture." Given the opportunity

       to voluntarily transfer venue, she refused, forcing Defendants to expend

       significant resources to obtain the transfer.

                These facts informed the Court's decision that attorney fees

       connected with the transfer should be borne by Plaintiff. Reviewing that

       issue again as prompted by Plaintiff's response to Defendant's notice

       regarding attorney fees, the Court maintains its position that Plaintiff's

       actions were "deliberate and heedless" so as to merit the award.

       {¶ 48} In her appellate brief, appellant argues she did not deliberately and

heedlessly initiate the action in an improper venue because she received two letters from

Roger on his employer's letterhead bearing a Franklin County address. However, as

found by the trial court, appellant knew Roger lived and performed tasks for the

partnership and estates in Delaware County. When confronted with these facts, appellant

chose to contest the transfer of venue. We cannot say the trial court abused its discretion

in finding appellant actions were "deliberate and heedless" to warrant an award of

attorney fees pursuant to Civ.R. 3(D)(2).

       {¶ 49} Upon review, we find the trial court did not abuse its discretion in awarding

appellees attorney fees and costs associated with the transfer of venue.

       {¶ 50} Assignment of Error IV is denied.

       {¶ 51}
Delaware County, Case No. 22 CAE 03 0019                                       17

      {¶ 52} The judgment of the Court of Common Pleas of Delaware County, Ohio is

hereby affirmed.

By Wise, Earle, P.J.

Wise, John, J. and

Baldwin, J. concur.

EEW/db