Spencer v. Spencer
2018 Ohio 4277
Ohio Ct. App.2018Background
- Edward sued his brother David individually for conversion, alleging David withheld $26,119 (his distributive trust share) and various personal property items after their mother’s death and while David served as trustee. David was not sued in his trustee capacity.
- The magistrate trial found (and the trial court adopted) that David converted specific solely‑owned items (pressure cookers, crocks, a disc) and withheld jointly‑owned items, awarding Edward $11,996.91 and declaring $7,774.15 in the trust account to be Edward’s.
- David distributed other siblings’ trust shares but delayed or withheld Edward’s share, made unilateral deductions (paying his wife, paying himself additional funds, charging for cow housing) and used trust funds to pay his personal attorney fees.
- David denied wrongdoing, argued he acted as trustee and therefore could not be personally liable, and failed to assert affirmative defenses or counterclaims in his answer. He also did not object below to some magistrate findings now challenged.
- The trial court concluded David was sued in his individual capacity, that a trustee can be personally liable for converting trust assets, and that the magistrate’s factual findings were supported by competent, credible evidence. The court affirmed the magistrate’s judgment in full.
Issues
| Issue | Plaintiff's Argument (Edward) | Defendant's Argument (David) | Held |
|---|---|---|---|
| Whether David can be held personally liable for converting funds paid from trust accounts | David converted Edward’s distributive share and personal property; he is entitled to money damages and declaration of ownership of remaining trust funds | Payments were made in trustee capacity from trust accounts; David argues he cannot be personally liable for trustee disbursements | Court: Trustee may be personally liable for converting trust property or misfeasance; David sued individually can be held personally liable for improper payments made from trust funds |
| Whether magistrate’s damage award ($11,996.91) is against manifest weight of the evidence | Amount reflects distributive share less permissible deductions and specific converted items; supported by record | Award unsupported, David acted as trustee, assets belonged to trust not Edward; amount not supported by evidence | Court: Award supported by competent, credible evidence; David’s objections waived in part; judgment affirmed |
| Whether the $7,774.15 in the trust account can be declared Edward’s property when trustee not joined | Edward seeks declaration that remaining trust funds are his due to David’s improper payments | David contends court lacked jurisdiction to order distribution because he wasn’t sued as trustee | Court: Magistrate’s declaratory finding that $7,774.15 is Edward’s property is supported, but distribution/order against trust requires separate action against David as trustee; judgment treated as declaratory, not an in rem order against trust assets |
| Whether David waived defenses or was precluded from asserting rights in joint property by failing to plead affirmative defenses | Edward argued failure to join trustee/indispensable party was waived and entitled him to directed verdict on trust assets | David did not assert certain defenses below and did not seek compensation for his joint interest in answer; but jurisdictional limits remain | Court: Failure to plead defenses waived certain objections on appeal, but waiver does not cure lack of jurisdiction over trust assets; directed verdict not warranted |
Key Cases Cited
- Goldfuss v. Davidson, 79 Ohio St.3d 116 (1997) (defines plain error standard in civil cases)
- Judd v. City Trust & Sav. Bank, 133 Ohio St. 81 (1937) (trustee may be personally liable for mismanagement or misconduct in connection with a trust)
- Shuster v. North American Mortg. Loan Co., 139 Ohio St. 315 (1942) (trustee may be liable to beneficiary for violations of beneficiary rights through misfeasance)
- Hill v. Irons, 160 Ohio St. 21 (1953) (definition of trust as fiduciary relationship)
- Belvedere Condominium Unit Owners’ Assn. v. R.E. Roark Cos., Inc., 67 Ohio St.3d 274 (1993) (fiduciary duties and standards)
- State ex rel. Ballard v. O’Donnell, 50 Ohio St.3d 182 (1990) (trial court lacks jurisdiction to render judgment against persons not served or made parties)
- Hurst v. Ent. Title Agency, Inc., 157 Ohio App.3d 133 (2004) (discussing fiduciary duties of trustees and related obligations)