Adams v. Margarum
2017 Ohio 2741
Ohio Ct. App.2017Background
- Bret Adams sued Christine Margarum and Patricia Pappas alleging fraud and civil conspiracy arising from a promissory note dated March 4, 2014, which Adams and Pappas signed and which included a signature line for Margarum that did not contain her signature. Adams alleged he saw Margarum sign the note.
- Pappas later sued Adams for breach of the note in a separate Franklin County case; Pappas did not name Margarum as a defendant in that action.
- At a bench trial in the Pappas v. Adams case, Margarum testified she did not execute the note and was not liable.
- Adams filed the present complaint alleging that Pappas never intended to obtain payments from her daughter Margarum and that Pappas and Margarum conspired to defraud Adams; his complaint did not specify the alleged fraudulent statements or concealed facts.
- Defendants moved to dismiss under Civ.R. 12(B)(6) and for failure to plead fraud with particularity under Civ.R. 9(B). The trial court granted the motion; Adams appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Adams pleaded fraud with the particularity required by Civ.R. 9(B) | Adams alleged Pappas and Margarum committed fraud — Pappas never intended to collect from Margarum, did not name Margarum in the suit, and Margarum testified she didn’t sign — and attached the note as exhibit | Defendants argued Adams failed to identify specific false statements, time/place/content, reliance, or concealed facts; thus fraud was not pled with particularity | Held: Dismissed — complaint fails Civ.R. 9(B) and does not plead the elements of fraud (no specific misrepresentations, no justifiable reliance, and allegations are conclusory) |
| Whether Adams stated a viable civil conspiracy claim | Adams alleged Margarum and Pappas conspired to obtain his signature so Margarum would not have to pay | Defendants argued conspiracy is derivative and requires an underlying actionable tort; since fraud claim fails, conspiracy fails | Held: Dismissed — conspiracy claim is derivative of fraud and fails because fraud claim was insufficient |
Key Cases Cited
- Burr v. Bd. of Cty. Commrs., 23 Ohio St.3d 69 (definition and elements of fraud in Ohio)
- Williams v. Aetna Fin. Co., 83 Ohio St.3d 464 (fraud elements and civil conspiracy requires underlying tort)
- Volbers-Klarich v. Middletown Mgmt., 125 Ohio St.3d 494 (fraud claims must be pled with particularity under Civ.R. 9(B))
- Perrysburg Twp. v. Rossford, 103 Ohio St.3d 79 (standard of de novo review for Civ.R. 12(B)(6) dismissals)
- O'Brien v. Univ. Community Tenants Union, Inc., 42 Ohio St.2d 242 (12(B)(6) dismissal standard — plaintiff must show any set of facts entitling recovery)
- Mitchell v. Lawson Milk Co., 40 Ohio St.3d 190 (pleadings: accept factual allegations as true and draw reasonable inferences for nonmoving party)