Figgie v. Figgie
173 N.E.3d 122
Ohio Ct. App.2021Background
- Decedent Harry E. Figgie III (Harry III) held voting and nonvoting shares of Clark Reliance Corporation (CRC) in the Harry III Trust; Harry II served as trust advisor after Harry III’s 1999 death.
- In October 2001 CRC redeemed the Harry III Trust’s CRC stock for $1.909 million; plaintiffs allege the redemption was fraudulently undervalued and orchestrated by Harry II and CRC to benefit remaining shareholders.
- Plaintiffs (Harry IV and conservator for Susan, a developmentally disabled beneficiary) sued CRC and successor trust defendants (trustees of Harry II, Nancy, and Matthew trusts) in probate court alleging fraud, tortious interference with expectancy, unjust enrichment, conversion, constructive trust, and related claims; they alleged they discovered facts supporting claims in late 2018.
- Trust defendants moved to dismiss under Civ.R. 12(B)(6), arguing among other things lack of actionable conduct by them, inability to impute Harry II’s liability, statute-of-limitations defenses, failure to plead fraud with particularity (Civ.R. 9(B)), and that constructive trust is a remedy, not an independent claim.
- The probate court dismissed all claims against the Trust Defendants: it held fraud was insufficiently pled as to them, declaratory relief not justiciable as pleaded, tortious-interference/unjust-enrichment/constructive-trust/conspiracy claims failed for reasons including timing, limitations, and remedy status, and conversion failed because the trust received redemption proceeds (no dispossession).
- The court of appeals affirmed, adopting its companion opinion addressing identical issues and specifically agreeing that conversion fails because the trust received payment rather than being dispossessed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Constructive trust | Constructive trust is a standalone equitable claim tied to tracing of benefits from the alleged 2001 fraud | Constructive trust is a remedy for fraud/unjust enrichment, not an independent cause of action; underlying claims fail | Dismissed — constructive trust cannot stand absent viable fraud/unjust-enrichment claims |
| Unjust enrichment | Trust defendants were unjustly enriched by assets traceable to the undervalued redemption; statute of limitations tolled by discovery | Benefits to trust defendants were indirect; claim time-barred and elements not adequately pleaded | Dismissed — limitations and failure to show direct benefit/supporting elements |
| Fraud (Civ.R. 9(B)) | Trust defendants knew of, participated in, or concealed the fraudulent redemption; allegations and late discovery support claim | Complaint fails to identify specific misrepresentations or conduct by trust defendants; cannot impute predecessors’ fraud; fails Civ.R. 9(B) particularity | Dismissed as to Trust Defendants — allegations lack the required particularity and specific actionable conduct |
| Tortious interference with expectancy | Redemption interfered with plaintiffs’ expectancy in inheritance from Harry III Trust | Plaintiffs’ expectancy vested on Harry III’s 1999 death; no intervening expectancy or causation shown by the 2001 redemption | Dismissed — expectancy and causation elements not established |
| Conversion | Redemption wrongfully deprived trust beneficiaries of stock value; conversion may apply to corporate stock transfers | No wrongful dominion: the Harry III Trust was paid for the shares (received proceeds), so no dispossession occurred | Dismissed — no conversion because trust received proceeds and was not dispossessed |
Key Cases Cited
- State ex rel. Hanson v. Guernsey Cty. Bd. of Commrs., 65 Ohio St.3d 545 (1992) (12(B)(6) tests sufficiency of the complaint)
- Assn. for Defense of Washington Local School Dist. v. Kiger, 42 Ohio St.3d 116 (1989) (motions to dismiss are procedural and test pleading sufficiency)
- Fahnbulleh v. Strahan, 73 Ohio St.3d 666 (1995) (courts accept complaint allegations as true and draw inferences for nonmoving party)
- York v. Ohio State Hwy. Patrol, 60 Ohio St.3d 143 (1991) (plaintiff need not prove the case at pleading stage)
- Perrysburg Twp. v. Rossford, 103 Ohio St.3d 79 (2004) (de novo appellate review of 12(B)(6) dismissal)
- Tabar v. Charlie's Towing Serv., 97 Ohio App.3d 423 (1994) (measure of damages in conversion is value at time of conversion)