2013 Ohio 1937
Ohio Ct. App.2013Background
- Fred Ward’s will creates life estates; Virgil Ward obtains fiduciary duties as implied trustee over remainder interests.
- Virgil sold the 240-acre Ward farm to the Bakers under terms he set, with $50,000 to reimburse his improvements and other distributions to his sisters.
- Sisters and descendants sued to declare the sale void; trial court voided the conveyance.
- Appellate court previously held Virgil owed fiduciary duties and remanded to determine authority under the will.
- Trial court found a breach of fiduciary duty due to selling far below fair market value and voided the documents; remand for R.C. 5810.12(A) analysis.
- Judgment: partly affirmed, partly reversed, remanded for further proceedings on remedies and applicability of R.C. 5810.12(A).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Authority under the power of sale limited by fiduciary duties | Bakers allege no absolute discretion | Virgil could sell under discretionary terms | Virgil constrained by implied-trust duties; not absolute power |
| Sufficiency of consideration to distinguish sale from gift | Sale involved money; no gift | No statutory limit on consideration | Court may consider adequate consideration; discussion appropriate |
| Will interpretation vs. testator’s intent | Discretion language meaningless if limited | Discretionary language stands | Law-of-the-case limits re-litigation; consideration of duty relevant to intent |
| Remedy for breach of fiduciary duty | Void sale proper remedy; allow restore | Damages or other remedies possible | Remand to resolve R.C. 5810.12(A) applicability and burden of proof |
| Admissibility of parol evidence about value | Value evidence irrelevant to sale/gift | Value evidence relevant to duty and terms | Parol evidence properly admitted; relevant to duty and terms |
Key Cases Cited
- Johnson v. Johnson, 51 Ohio St. 446 (Ohio 1894) (life estate with power to sell subject to trust duties)
- Nolan v. Nolan, 11 Ohio St.3d 1 (Ohio 1984) (law of the case governs retrial issues)
- FirstMerit Bank, N.A. v. Inks, 9th Dist. Nos. 25980, 26182 (Ohio 2012) (remand for unresolved burdens on trial court)
- Stevens v. Natl. City Bank, 45 Ohio St.3d 276 (Ohio 1989) (trustee duty to exercise discretion in good faith)
- Commerce & Industry Ins. Co. v. Toledo, 45 Ohio St.3d 96 (Ohio 1989) (breach of fiduciary duty questions of fact)