Yeager v. U.S. Bank
2021 Ohio 1972
| Ohio Ct. App. | 2021Background
- Sara Lee Yeager created an irrevocable, generation‑skipping trust in 1990; Robert L. Yeager was the primary beneficiary and upon his death in 2017 the Yeager appellants became trust beneficiaries.
- In 2011 U.S. Bank discovered embezzlement by one or more trust officers and made a $453,366 cash deposit into the trust on July 1, 2011 listed as a reimbursement for loss.
- The Yeagers requested an explanation of the 2011 deposit and a full trust accounting in January and May 2018; U.S. Bank did not provide the requested accounting or explanations.
- The Yeagers sued in September 2018 and amended their complaint to add claims for: statutory trust accounting, breach of statutory and common‑law fiduciary duty, conversion, and civil theft.
- The probate court dismissed the amended complaint, concluding the Yeagers lacked privity/standing to sue for the 2011 wrongdoing and that conversion/civil‑theft allegations were not adequately pleaded.
- The court of appeals reversed in part and remanded: it held the Yeagers had standing to demand an accounting and to pursue fiduciary‑duty claims; it affirmed dismissal of conversion and civil‑theft claims but directed those dismissals be without prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing/privity to compel a trust accounting under R.C. 5808.13 | Yeager: as beneficiaries in 2018 they are entitled to information and an accounting; their beneficiary interests vested at trust creation | U.S. Bank: plaintiffs lacked privity/standing because the alleged wrongdoing occurred in 2011 before they were "current" beneficiaries (relying on Lewis) | Court: beneficiaries of an irrevocable trust acquire vested interests at creation; Yeagers had privity and the accounting claim survives |
| Standing/privity to pursue money‑damages fiduciary claims | Yeager: breach and damages from embezzlement give rise to claims against trustee now that they are beneficiaries | U.S. Bank: no privity for events occurring before plaintiffs became current beneficiaries; thus no standing for damages claims | Court: same privity analysis—interests vested at trust creation—fiduciary‑duty claims may proceed at pleading stage |
| Sufficiency of conversion and civil‑theft allegations | Yeager: facts show wrongful conversion/theft by bank (embezzlement and reimbursement entry) | U.S. Bank: pleading is conclusory; discovery will show no ratification/authorization; principal not liable for independent agent torts absent authorization/ratification | Court: allegations are conclusory and fail to plead an intentional tort by the bank; claims dismissed but dismissal must be without prejudice (plaintiffs may replead) |
Key Cases Cited
- Lewis v. Star Bank, N.A., 90 Ohio App.3d 709 (app. 1993) (discusses standing to sue for errors occurring before settlor’s death in revocable trust context)
- First Natl. Bank of Cincinnati v. Tenney, 165 Ohio St. 513 (Ohio 1956) (vested beneficial interests attach on creation of certain trusts)
- York v. Ohio State Highway Patrol, 60 Ohio St.3d 143 (Ohio 1991) (motion‑to‑dismiss standard; plaintiff need not prove case at pleading stage)
- Mitchell v. Lawson Milk Co., 40 Ohio St.3d 190 (Ohio 1988) (pleading construed in favor of nonmoving party)
- Corban v. Chesapeake Exploration, L.L.C., 149 Ohio St.3d 512 (Ohio 2016) (statutory interpretation—courts give effect to statutory text)
- Fletcher v. Univ. Hosps. of Cleveland, 120 Ohio St.3d 167 (Ohio 2008) (dismissal for failure to state a claim is ordinarily without prejudice)
- Schulman v. Cleveland, 30 Ohio St.2d 196 (Ohio 1972) (unsupported conclusory allegations insufficient to withstand dismissal)