2022 Ohio 1023
Ohio Ct. App.2022Background
- Two trusts (an inter vivos trust and a testamentary trust) funded largely with Standard Register stock named Fifth Third Bank as sole trustee; the trusts paid income to income beneficiaries and principal to remaindermen.
- The Clarke siblings were remainder beneficiaries until their mother’s 2015 death, after which they became income beneficiaries; they challenge trustee fees taken before May 1, 2015 (while they were remaindermen).
- Fifth Third retained Morgan Stanley advice about diversification but the trusts remained concentrated in Standard Register; the stock later declined and trusts’ values fell to near zero.
- The Clarke siblings sued in 2015 asserting breach of duty to diversify, breach of impartiality, breach of trust/fiduciary duty, unjust enrichment, and sought removal/injunction; Fifth Third won summary judgment on most claims as time-barred in a prior appeal, but this court reversed as to unjust enrichment (Helton I).
- On remand the record expanded (including an affidavit from Fifth Third trust officer Jenny Franta showing trustee fees were taken from trust income and distributions went to then-income beneficiaries), Fifth Third moved again for summary judgment; the trial court granted reconsideration and partial summary judgment that plaintiffs did not confer a benefit before May 1, 2015.
- The appellate court affirmed: law-of-the-case did not bar reexamination on remand, and unjust-enrichment failed because the Clarke siblings (as remainder beneficiaries before 2015) did not confer the benefit of the disputed fees on Fifth Third.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether law-of-the-case prevented the trial court from readdressing unjust-enrichment on remand | Helton: prior reversal precludes relitigation of unjust-enrichment summary judgment | Fifth Third: new evidence and new legal argument on remand justified rebriefing | Court: law-of-the-case did not bar reentry because different evidence/legal issues were presented on remand |
| Whether Deffren controls the unjust-enrichment analysis here | Helton: earlier reversal meant summary judgment was improper; Deffren cannot nullify Helton I | Fifth Third: Deffren confirms plaintiff must have conferred a benefit on defendant to maintain unjust-enrichment | Court: Deffren did not overrule Helton I; it articulated established elements of unjust enrichment applicable here |
| Whether the Clarke siblings (while remaindermen) conferred a benefit on Fifth Third sufficient for unjust enrichment | Helton: claim seeks disgorgement of excessive fees to the trusts/beneficiaries; argues constructive relief available | Fifth Third: fees were taken from trust income and distributions went to then-income beneficiaries (mother/others), so any benefit was conferred by them, not the Clarke siblings | Court: no genuine dispute—fees came from trust income and went to income beneficiaries, so Clarke siblings did not confer the benefit while remaindermen |
| Whether summary judgment on unjust enrichment (fees before May 1, 2015) was appropriate | Helton: factual disputes remain about whether fees were excessive/unearned and who benefited | Fifth Third: record (affidavits, deposition) establishes entitlement to judgment as a matter of law for pre-2015 fees | Court: granted summary judgment for Fifth Third as to fees taken before May 1, 2015 because a necessary element (benefit conferred by plaintiffs) was lacking |
Key Cases Cited
- Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 671 N.E.2d 241 (Ohio 1996) (summary-judgment standard; de novo review)
- State ex rel. Howard v. Ferreri, 70 Ohio St.3d 587, 639 N.E.2d 1189 (Ohio 1994) (standard for granting summary judgment)
- Giancola v. Azem, 153 Ohio St.3d 594, 109 N.E.3d 1194 (Ohio 2018) (describes law-of-the-case doctrine and its purpose)
- Nolan v. Nolan, 11 Ohio St.3d 1, 462 N.E.2d 410 (Ohio 1984) (law-of-the-case is a rule of practice, not absolute)
- City of Hubbard ex rel. Creed v. Sauline, 74 Ohio St.3d 402, 659 N.E.2d 781 (Ohio 1996) (preclusion of arguments on retrial that were available in first appeal)
- Vonderhaar v. City of Cincinnati, 191 Ohio App.3d 229, 945 N.E.2d 603 (1st Dist. 2010) (law-of-the-case inapplicable when subsequent proceedings involve different evidence or issues)
- Smith v. Vaughn, 174 Ohio App.3d 473, 882 N.E.2d 941 (1st Dist. 2007) (elements and definition of unjust enrichment)
- Deffren v. Johnson, 169 N.E.3d 270 (1st Dist. 2021) (applied unjust-enrichment elements; emphasized plaintiff must have conferred benefit on defendant)