Carter v.LL&B Headwater II, LP, 2:16-cv-01162

Plaintiff Julius Carter (individually and as executor of Theresa E. Carter’s estate) challenges a January 2014 sale of 50% of mineral rights in ~103 acres to LL&B Headwater II, LP for $216,528.90, alleging the seller (his mother Theresa) did not own the rights, was incompetent (alcoholism), and received substantially less than fair market value.
Property had been conveyed to Richard Schreiber in 2007 and Schreiber quitclaimed to Carter in February 2010 (deed recorded in April 2015); Schreiber died in July 2010. No other transfers occurred between 2010 and 2015.
Plaintiff sued in Dec. 2016 asserting rescission, conversion, fraud/fraud in the inducement, and unjust enrichment; Defendant moved to dismiss for failure to state a claim under Fed. R. Civ. P. 12(b)(6).
Court applies Twombly/Iqbal plausibility standard and Rule 9(b) heightened pleading for fraud; assumes arguendo Plaintiff owned the rights but rejects claims on legal and pleading grounds.
Court dismisses all claims with prejudice and denies leave to amend as futile.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Rescission (mutual mistake / undue influence)	Theresa mistakenly sold property that belonged to Julius; she was incapacitated by alcoholism so not negligent	Rescission is a remedy, not a standalone claim; alleged mistake concerns legal status (law), not fact; no adequate facts showing incapacity or undue influence	Dismissed — mutual mistake claim fails because it alleges mistake of law; undue influence not pled with facts showing incapacity at signing
Conversion	Defendant wrongfully purchased mineral rights via fraud from a non-owner and incompetent seller	Mineral/mineral rights are real property, not subject to conversion (which applies to personal property)	Dismissed — conversion unavailable for real property/mineral rights
Fraud / Fraud in the Inducement	Defendant misrepresented/failed to disclose fair market value, distribution of proceeds, and seller’s ownership; induced sale	Plaintiff fails to plead time, place, content, or duty to disclose under Rule 9(b); no facts showing a fiduciary or other duty to disclose	Dismissed — fraud claims not pleaded with particularity and no duty to disclose alleged facts
Unjust Enrichment	Defendant unjustly benefited from unlawful purchase; plaintiff seeks return/payment	Plaintiff did not confer a benefit on Defendant and alleges no interaction or factual basis for enrichment elements	Dismissed — fails to allege benefit conferred; claim is conclusory

Golden v. City of Columbus, 404 F.3d 950 (6th Cir. 2005) (complaint construed in plaintiff's favor on Rule 12(b)(6))
Ouwinga v. Benistar 419 Plan Servs., Inc., 694 F.3d 783 (6th Cir. 2012) (accept well-pled allegations as true)
Mayer v. Mylod, 988 F.2d 635 (6th Cir. 1993) (resolve competing inferences for plaintiff on motion to dismiss)
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard)
Ashcroft v. Iqbal, 556 U.S. 662 (2009) (court need not accept legal conclusions)
Yuhasz v. Brush Wellman, Inc., 341 F.3d 559 (6th Cir. 2003) (Rule 9(b) particularity for fraud)
U.S. ex rel. SNAPP, Inc. v. Ford Motor Co., 532 F.3d 496 (6th Cir. 2008) (purpose of Rule 9(b))
Bennett v. MIS Corp., 607 F.3d 1076 (6th Cir. 2010) (elements for pleading fraud particularity)
Reilley v. Richards, 632 N.E.2d 507 (Ohio Ct. App.) (mutual mistake elements; material mistake of fact required)
In re Lytle's Estate, 318 N.E.2d 880 (Ohio Ct. Com. Pl.) (distinction between mistake of fact and mistake of law)
City of Cincinnati v. Fox, 49 N.E.2d 69 (Ohio App.) (mistake about legal status is mistake of law)
Chesapeake Expl., L.L.C. v. Buell, 45 N.E.3d 185 (Ohio 2015) (minerals are part of the realty)
Blon v. Bank One, Akron, N.A., 519 N.E.2d 363 (Ohio 1988) (no duty to disclose in arm’s-length transactions absent special circumstances)
Hambleton v. R.G. Barry Corp., 465 N.E.2d 1298 (Ohio 1984) (elements of unjust enrichment)