Aurora Hill v. Bremner

• Docket Number: CASE NO. 2023-P-0005
• Decision Date: 16 October 2023
• Citation: Aurora Hill v. Bremner, 226 N.E.3d 555 (Ohio App. 2023)
• Parties: AURORA HILL, LTD., Plaintiff-Appellant, v. John BREMNER, Defendant-Appellee.
• Court: Ohio Court of Appeals

226 N.E.3d 555

2023-Ohio-3766

AURORA HILL, LTD., Plaintiff-Appellant,

v.John BREMNER, Defendant-Appellee.

CASE NO. 2023-P-0005

Court of Appeals of Ohio, Eleventh District, Portage County.

Decided: October 16, 2023

Civil Appeal from the Court of Common Pleas, Trial CourtNo. 2021 CV 00185.

Joseph P. Szeman, Hennig, Szeman & Klammer Co., LPA, The Matchworks Building, 8500 Station Street, Suite 245, Mentor, OH 44060 (For Plaintiff-Appellant).

Gerrit M. denHeijer, Giulitto Law Office, 222 West Main Street, P.O. Box 350, Ravenna, OH 44266 (For Defendant-Appellee).

OPINION

ROBERT J. PATTON, J.

{¶1}Appellant, Aurora Hill, Ltd.("Aurora Hill"), appeals from the judgment of the Portage County Court of Common Pleas, granting summary judgment in favor of appellee, John Bremner, on Aurora Hill’s claim seeking recovery of partnership funds which it claims were improperly retained by appellee in violation of the limited partnership agreement to which the parties were subject.At issue is whether the trial court properly determined there is no genuine issue of material fact to be litigated on Aurora Hill’s underlying complaint alleging it was entitled to restitution such that appellee is entitled to judgment as a matter of law.We affirm.

{¶2} The facts in this matter are in large part undisputed.Appellee is a resident of Illinois who is a commodities trader.Argo Wealth Management, Inc.("Argo") is the general partner of appellant.Aurora Hill is governed by a partnership agreement.

{¶3} On January 16, 2019, appellee executed a subscription agreement to become a limited partner of Aurora Hill.The partnership agreement provides, in pertinent part:

After the Partnership begins operations, an investor will become a Limited Partner in the Partnership on the first day of the month following receipt by the Partnership of the investor’s capital contribution and acceptance by the General Partner of such investor’s executed Limited Partnership Agreement, Subscription Agreement/Power of Attorney, Purchaser Questionnaire and any other documents required by the General Partner (collectively, the "subscription documents") no less than five (5) days preceding the first day of the month.

{¶4} On February 1, 2019, Aurora Hill sent a letter to appellee accepting him as a limited partner.Appellee invested $200,000 into the partnership.Notwithstanding the above, Argo did not admit appellee into the limited partnership until March 1, 2019.Appellee was made aware by Argo he was not admitted to the partnership in mid-February.Apparently, appellee was contacted by the president of Argo who advised him that, due to advice from Argo’s attorney, Argo did not invest his funds on February 1, 2019 for failure to disclose a specific fund in the limited partnership.According to appellee, Argo’s president represented that appellee would become a participating member of the limited partnership starting March 1, 2019.

{¶5}Aurora Hill experienced significant losses in the month of February 2019 which caused a substantial drawdown in the partnership’s capital.According to Aurora Hill, had appellee’s funds been properly accounted for as of February 1, 2019, his capital account would have been negatively adjusted to reflect the losses incurred for that month.

{¶6} In July 2019, appellee ended his participation in the limited partnership and submitted a request for redemption.Appellee redeemed $95,993.78 of his original investment.Appellee would ultimately file an arbitration claim with the National Futures Commission based on this transaction.That claim was unsuccessful, but the conduct of Argo was found to be improper by the Commission.

{¶7} On April 7, 2021, Aurora Hill filed a complaint that sought recovery of partnership funds to which it alleged appellee owed due to his technical admission to the limited partnership on February 1, 2019.Aurora Hill essentially alleged appellee received improper preferential treatment, of which he was aware and to which he acquiesced, by Argo when it bumped appellee’s membership back to March 1, 2019.In doing so, Aurora Hill alleged appellee was extended special treatment in order to avoid the losses sustained by other limited partners during the month of February.Although not specifically pleaded, Aurora Hill alleges its complaint stated a claim for restitution.

{¶8}Appellee filed a motion to dismiss to which Aurora Hill duly opposed.The trial court denied the motion, concluding Aurora Hill sufficiently stated a restitution claim to withstand a Civ.R.12(B)(6) challenge.The parties subsequently filed joint stipulations and, in December 2022, filed their respective motions for summary judgment.The parties additionally filed memoranda in opposition to the respective motions for summary judgment.

{¶9} On January 27, 2023, the trial court granted appellee summary judgment, concluding that Aurora Hill’s complaint alleged a claim for unjust enrichment.And, because the matter at issue was derivative of the partnership agreement, it was governed by an express contract.The court therefore concluded there was no genuine issue of material fact to support a claim for unjust enrichment and appellee was entitled to judgment as a matter of law.Aurora Hill now appeals and assigns the following as error:

{¶10}"The trial court erred in granting the defendant-appellee summary judgment."

{¶11} Under its sole assignment of error, Aurora Hill asserts the trial court erred in concluding that its cause of action was an unjust enrichment claim; instead, it insists the complaint stated a cause of action in restitution and therefore genuine issues of material fact remain for litigation.We do not agree.

{¶12}We review a trial court’s entry of summary judgment de novo, i.e., "‘inde- pendently and without deference to the trial court’s determination.’"Johnson v. North Kingsville, 11th Dist. AshtabulaNo. 2020-A-0031, 2021-Ohio-1012, 2021 WL 6796847, ¶ 10, quotingBrown v. Scioto Cty. Bd. of Commrs.,87 Ohio App.3d 704, 711, 622 N.E.2d 1153(4th Dist.1993)(citation omitted).

{¶13}Civ.R. 56(C) provides that summary judgment is proper when:

(1)[n]o genuine issue as to any material fact remains to be litigated;

(2) the moving party is entitled to judgment as a matter of law; and

(3) it appears from the evidence that reasonable minds can come to but one conclusion, and viewing such evidence most strongly in favor of the party against whom the motion for summary judgment is made, that conclusion is adverse to that party.Temple v. Wean United, Inc., 50 Ohio St.2d 317, 327, 364 N.E.2d 267(1977).

[1, 2]{¶14}"[T]he moving party bears the initial responsibility of informing the trial court of the basis for the motion, and identifying those portions of the record before the trial court[e.g., pleadings, depositions, answers to interrogatories, etc.] which demonstrate the absence of a genuine issue of fact on a material element of the nonmoving party’s claim."Dresher v. Burt,75 Ohio St.3d 280, 292, 662 N.E.2d 264(1996), citingCiv.R. 56(C)andCelotex Corp. v. Catrett,477 U.S. 317, 323-324, 106 S.Ct. 2548, 91 L.Ed 2d 265(1986).If the moving party satisfies this burden, the nonmoving party has the burden to provide evidence demonstrating a genuine issue of material fact, pursuant to Civ.R. 56(E).Id. at 293, 662 N.E.2d 264.

[3]{¶15}Aurora Hill asserts the trial court erroneously framed its cause of action as a claim for unjust enrichment.Initially, it maintains the trial court rendered inconsistent rulings when it (1) denied appellee’s motion to dismiss for failure to state a claim concluding Aurora Hill’s complaint sufficiently pleaded a claim for restitution, but (2) granted appellee’s motion for summary judgment concluding Aurora Hill’s complaint was premised upon a claim for unjust enrichment.

{¶16} Although the trial court initially framed Aurora Hill’s complaint as one alleging a claim for restitution, it bears noting that the complaint fundamentally failed to set forth a specific cause of action.The complaint detailed copious facts regarding the parties’ association and why Aurora Hill believed it suffered damages; namely, because Argo gave appellee preferential treatment to the detriment of the limited partnership.The complaint relied upon the limited partnership agreement as a basis for its position, but did not plead breach of contract.And, throughout the underlying proceedings, it is fundamentally clear Aurora Hill is seeking equitable relief, not damages at law for a breach of contract.

{¶17} Moreover, the complaint alleged that appellee received a benefit, of which he knew, and retained the same which redounded to the economic disadvantage of Aurora Hill.The claim did not, however, expressly assert what equitable remedy it was seeking to make it whole.The complaint was, at best, vague and open-ended.In effect, although the trial court framed Aurora Hill’s complaint in terms of restitution, after considering the parties’ motions for summary judgment and memoranda in opposition, the court had more evidentiary quality material permitting it to recast the complaint as seeking restitution due to appellee’s alleged unjust enrichment.We consequently fail to see how the trial court’s initial construction of the complaint has any meaningful bearing on its ultimate order concluding Aurora Hill had failed to establish unjust enrichment as a matter of law.

{¶18} Next, Aurora Hill vehemently denies that it is seeking damages for unjust enrichment, and instead argues it is seeking equitable restitution.Aurora Hill asserts it "certainly reiterated the nature of the claim in all of its pleadings."The record, however, does not support Aurora Hill’s overstatement.

[4]{¶19} In Aurora Hill’s brief in opposition to appellee’s motion to dismiss, it sets forth elements of the "remedy" of equitable restitution.It follows this recitation with citing the elements for the "cause of action" of unjust enrichment.Aurora Hill...