Hecht v. Equity Trust Co.
2022 Ohio 198
Ohio Ct. App.2022Background
- Plaintiff Douglas Hecht sued Equity Trust Company (custodian of his IRA) on Dec. 23, 2020, alleging breach of contract and breach of fiduciary duty for alleged untimely/incorrect processing of deposits/payments that caused fees and diminished IRA value.
- Equity Trust moved to dismiss under Civ.R. 12(B)(6) on Feb. 1, 2021, attaching a signed Dec. 21, 2012 custodial agreement (2012 Agreement) and an unsigned, revised Dec. 2017 agreement (2017 Agreement) that contained a one-year limitations clause.
- Hecht missed the Feb. 16, 2021 response deadline, filed a stipulation on Feb. 19 (stating a joint extension to Feb. 22), and did not file a response; the trial court denied an extension and granted the motion to dismiss as unopposed on Feb. 23, 2021, dismissing with prejudice.
- Hecht moved for Civ.R. 60(B) relief and appealed; the appeal was consolidated and remanded for a ruling on the 60(B) motion, which was denied; Hecht appealed again.
- The appellate court affirmed denial of the extension, reversed the dismissal under Civ.R. 12(B)(6), held that the court could not consider the 2017 amendment without converting the motion to summary judgment with notice, and remanded for conversion/notice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Denial of extension to respond | Hecht said Loc.R. 8(C) permitted a self-executing stipulation and his counsel’s health excuses show excusable neglect | Equity Trust said the stipulation was filed after the deadline and only the court could extend time after the deadline | No abuse of discretion; denial affirmed (stipulation filed after deadline; Civ.R.6(B) relief requires court motion and timely showing) |
| Consideration of agreements on 12(B)(6) motion | Hecht contends court improperly relied on documents outside complaint | Equity Trust contends the 2012 Agreement was incorporated by reference and the 2017 amendment triggered a 1‑year limitation barring suit | Dismissal reversed; court may not consider the 2017 amendment (factual issue about mailing/consent) without converting to summary judgment with notice to parties |
| Failure to attach written instrument to complaint | Hecht said privacy and defendant possession justified omission | Equity Trust argued Civ.R.10(D)(1) required attachment so claims could be tested | Complaint not fatally defective; plaintiff pleaded sufficient operative facts and could have redacted instrument or court could have ordered a more definite statement; dismissal under 12(B)(6) improper |
| Civ.R. 60(B) relief / meritorious defenses | Hecht argued counsel wasn’t neglectful or neglect was excusable and he had meritorious claims | Equity Trust relied on procedural default and timeliness problems | Appellate court deemed the 60(B) assignments moot after resolving extension and dismissal issues; primary relief denied as moot |
Key Cases Cited
- Blackmore v. Blackmore, 5 Ohio St.3d 217 (1983) (abuse-of-discretion standard explained)
- AAAA Enterprises, Inc. v. River Place Community Urban Redevelopment Corp., 50 Ohio St.3d 157 (1990) (definition of abuse of discretion; unreasonable decision standard)
- State ex rel. Hanson v. Guernsey County Bd. of Commrs., 65 Ohio St.3d 545 (1992) (12(B)(6) tests complaint sufficiency; cannot rely on outside evidence)
- State ex rel. Fuqua v. Alexander, 79 Ohio St.3d 206 (1997) (12(B)(6) standard: presume allegations true and construe in plaintiff’s favor)
- Perrysburg Twp. v. Rossford, 103 Ohio St.3d 79 (2004) (de novo review of 12(B)(6) dismissal)
- Ferreri v. Plain Dealer Publishing Co., 142 Ohio App.3d 629 (2001) (stipulation after deadline does not constitute excusable neglect under Civ.R.6(B))
- Fletcher v. Univ. Hospitals of Cleveland, 120 Ohio St.3d 167 (2008) (Civ.R.10(D)(1) does not automatically require attaching instrument to survive a motion to dismiss)
- Point Rental Co. v. Posani, 52 Ohio App.2d 183 (1976) (belief defendant has a copy is insufficient justification to omit the instrument)
- State ex rel. V Cos. v. Marshall, 81 Ohio St.3d 467 (1998) (conversion of 12(B) motion to summary judgment requires notice)
- Petrey v. Simon, 4 Ohio St.3d 154 (1983) (conversion principles for summary judgment)
- Lucarell v. Nationwide Mut. Ins. Co., 152 Ohio St.3d 453 (2018) (elements of breach of contract)
- Cincinnati v. Beretta USA Corp., 95 Ohio St.3d 416 (2002) (Ohio is a notice-pleading state; minimal operative facts required)