Background - Richard and Gail Thomas (the Thomases) invested about $700,000 of retirement funds with Glen Galemmo, who operated a multi‑year Ponzi scheme and was later criminally convicted. - Galemmo’s investors (including the Thomases, defendants Akram Othman and Mark Woehler) are members of a class of “Net Losers” that received pro rata distributions from recovered assets in consolidated civil and criminal proceedings. - The Thomases alleged they could trace a portion of their investments (commingled in Galemmo accounts) to specific payments made by Galemmo’s entities to Othman and Woehler, and sought a constructive trust and recovery from those defendants on tracing/fraudulent‑transfer and unjust‑enrichment theories. - Othman and Woehler moved to dismiss under Civ.R. 12(B)(6), arguing an individual Net‑Loser cannot pursue the requested relief against other Net‑Losers and that the suit improperly circumvents the class‑action settlement. - The trial court dismissed, finding the complaint sought relief that would conflict with the class‑action pro rata allocation and alleged no independent wrongdoing by the defendants. - The appellate court affirmed, holding the Thomases’ requested constructive‑trust relief would impermissibly alter the settled pro rata distributions and constitute a collateral attack on the class‑action settlement; the complaint failed to state a viable claim independent of that conflict. ### Issues | Issue | Plaintiff's Argument | Defendant's Argument | Held | |---|---:|---:|---:| | Whether the Thomases stated a claim under tracing/fraudulent‑transfer/unjust‑enrichment to impose a constructive trust on funds received by other Net‑Losers | Thomases: their funds can be traced (even though commingled) to specific payments to Othman and Woehler, entitling them to a percentage recovery and a constructive trust | Defendants: no actionable claim against fellow Net‑Losers; relief would conflict with and circumvent the class‑action settlement and pro rata distributions | Court: dismissed — complaint fails to state a claim because relief would alter class‑action allocations and amount to a collateral attack on the settlement | | Whether Cunningham and tracing principles permit an individual Net‑Loser to obtain priority over other victims by imposing a constructive trust on traceable funds outside the fraudster’s primary account | Thomases: Cunningham supports equitable tracing and constructive‑trust remedies among victims where funds are traceable | Defendants: Cunningham does not authorize disturbing settled pro rata distributions among class members; factual differences limit Cunningham’s application | Court: Cunningham does not permit imposing constructive trust here because doing so would interfere with settled distributions and class‑action judgments | | Whether dismissal under Civ.R. 12(B)(6) was improper because plaintiffs could potentially plead facts to support fraud or other claims later | Thomases: dismissal focused improperly on failure to litigate on behalf of other Net‑Losers rather than sufficiency of tracing allegations | Defendants: complaint sought improperly to reallocate losses settled in class actions; plaintiffs accepted distributions and cannot now pursue conflicting relief individually | Court: dismissal proper — allegations, even if accepted, could not yield the requested relief without conflicting with prior judgments | ### Key Cases Cited United States v. Durham, 86 F.3d 70 (5th Cir. 1996) (upheld district court’s pro rata distribution of recovered assets despite claimant’s tracing attempt) Cunningham v. Brown, 265 U.S. 1 (U.S. 1924) (discusses tracing and limits on imposing constructive trusts in Ponzi cases where funds cannot be traced) Donell v. Kowell, 533 F.3d 762 (9th Cir. 2008) (application of fraudulent‑transfer law to Ponzi‑scheme avoidance actions) Scholes v. Lehmann, 56 F.3d 750 (5th Cir. 1995) (treatment of Ponzi investors and avoidance claims under fraudulent‑transfer law) * Ohio Pyro, Inc. v. Ohio Dept. of Commerce, Div. of State Fire Marshal, 115 Ohio St.3d 375 (Ohio 2007) (describing limits on collateral attacks and when judgments may be revisited)