Camp St. Mary's Assn. v. Otterbein Homes

• Decision Date: 30 March 2008
• Docket Number: No. 2-06-40.,2-06-40.
• Citation: 176 Ohio App.3d 54,889 N.E.2d 1066,2008 Ohio 1490
• Parties: CAMP ST. MARY'S ASSOCIATION OF THE WEST OHIO CONFERENCE OF THE UNITED METHODIST CHURCH, INC., Appellant, v. OTTERBEIN HOMES et al., Appellees.
• Court: Ohio Court of Appeals

889 N.E.2d 1066

176 Ohio App.3d 54

2008-Ohio-1490

CAMP ST. MARY'S ASSOCIATION OF THE WEST OHIO CONFERENCE OF THE UNITED METHODIST CHURCH, INC., Appellant, v. OTTERBEIN HOMES et al., Appellees.

No. 2-06-40.

Court of Appeals of Ohio, Third District, Auglaize County.

Decided March 30, 2008.

Stephen D. Jones, Columbus, and Kent D. Stuckey, for appellant.

David C. Greer and Gretchen M. Treherne, Dayton, for appellees.

WILLAMOWSKI, Judge.

{¶ 1} The plaintiff-appellant, The Camp St. Mary's Association of the West Ohio Conference of the United Methodist Church, Inc., appeals the judgment of the Auglaize County Common Pleas Court granting summary judgment in favor of the defendant-appellant, Otterbein Homes. For the reasons stated herein, the judgment of the trial court is affirmed in part and reversed in part.

STATEMENT OF THE FACTS

{¶ 2} Otterbein Homes is a nonprofit corporation, which was formed in 1912, and is related to the United Methodist Church. Otterbein Homes currently operates a retirement and private living community on real property, which was formerly known as Camp St. Mary's and which was founded in 1946 by the United Brethren Church. After several mergers, the United Brethren Church became part of the United Methodist Church.

{¶ 3} When the United Brethren Church purchased the land that became Camp St. Mary's, several private homes were located on the property. So that the owners of the private homes would be able to remain in their homes, the church issued 99-year leases to the homeowners. Under these agreements, the church owned the land, but the structures on the land were considered the personal property of the lessees, who paid nominal rental payments to the church. Over the years, additional private residences were built on the property, and the church continued its practice of issuing 99-year leases to the people who built the new structures.

{¶ 4} In 1978, the church sold Camp St. Mary's to the Camp St. Mary's Association. Approximately one year after its purchase, the association became interested in starting a retirement community on the property. This idea continued to be discussed until 1984, when the association approached Otterbein Homes to take over the property. On July 26, 1985, the association transferred the real property known as Camp St. Mary's to Otterbein Homes in fee simple absolute and also transferred $83,000 as part of the transaction. Otterbein Homes has developed an apparently successful retirement community on the property, and approximately 34 of the private structures are still subject to lease agreements.

{¶ 5} During the time the church and the association owned Camp St. Mary's, they allowed lessees to transfer privately owned homes to new purchasers. When a transfer of a private residence was made, the church or the association would issue a new 99-year lease to the new buyer/lessee. For example, if a lessee leased the property for 15 years of the 99-year lease and then opted to sell the home, the lessee could sell the structure to a new buyer. The new buyer would then enter into a new 99-year lease agreement with the then owner of the real property known as Camp St. Mary's, even though there were 84 years remaining on the first lease.

{¶ 6} Otterbein Homes continued the practice of offering new 99-year leases to new buyers until 2004. Then, Otterbein Homes put into effect a new lease policy. In part, the new policy stated that if a lessee wished to terminate a lease prior to the expiration of the 99-year term, he had two options: one option was to sell the structure to Otterbein Homes under one of two specified payment plans, and the second option was to sell the property to a third party.¹ However, if the lessee opted to sell to a third party, Otterbein Homes would no longer offer 99-year leases; instead, any new lease agreement would be available for only 25 years.

At the end of the 25-year lease, the structure would belong to Otterbein Homes, and the lessee would not be entitled to compensation for the structure.

STATEMENT OF THE CASE

{¶ 7} Because of Otterbein Homes' change in policy, the association filed a complaint in the Auglaize County Common Pleas Court on November 18, 2005. The complaint stated one claim on each of the following causes of action: fraud, breach of contract, promissory estoppel, breach of constructive trust, a violation of the civil RICO statute, conspiracy to violate the civil Racketeer Influenced and Corrupt Organizations ("RICO") statute, breach of fiduciary duty, negligent misrepresentation, constructive fraud, corporate mismanagement, unjust enrichment, and rescission. On December 23, 2005, Otterbein Homes filed a motion for summary judgment, arguing that the association was not a real party in interest and did not have standing to pursue the allegations set forth in its complaint. The association filed a memorandum in opposition, and on January 25, 2006, the trial court granted partial summary judgment to Otterbein Homes on the claims for promissory estoppel, negligent misrepresentation, corporate mismanagement, and rescission.

{¶ 8} Otterbein Homes filed its answer on February 8, 2006, and on July 31, 2006, it filed a second motion for summary judgment. The association filed a memorandum in opposition, and on October 13, 2006, the trial court granted summary judgment on each of the remaining claims in favor of Otterbein Homes. The association, having appealed the trial court's judgments granting summary judgment, asserts two assignments of error for our review.

First Assignment of Error

The trial court erred in awarding partial summary judgment in its order dismissing promissory estoppel, negligent misrepresentation and rescission claims.

Second Assignment of Error

The trial court erred in awarding summary judgment in its order dismissing fraudulent inducement, constructive fraud, contract, fiduciary duty, unjust enrichment and constructive trust claims.

STANDARD OF REVIEW

{¶ 9} An appellate court reviews a grant of summary judgment de novo, independently and without deference to the trial court's decision. Ohio Govt. Risk Mgt. Plan v. Harrison, 115 Ohio St.3d 241, 2007-Ohio-4948, 874 N.E.2d 1155, at ¶ 5, citing Comer v. Risko, 106 Ohio St.3d 185, 2005-Ohio-4559, 833 N.E.2d 712, at ¶ 8. "A grant of summary judgment will be affirmed only when the requirements of Civ.R. 56(C) are met." Adkins v. Chief Supermarket, 3d Dist. No. 11-06-07, 2007-Ohio-772, 2007 WL 567441, at ¶ 7. The party moving for summary judgment must establish (1) that there are no genuine issues of material fact; (2) that the moving party is entitled to judgment as a matter of law; and (3) that reasonable minds can come to but one conclusion, and that conclusion is adverse to the nonmoving party, said party being entitled to have the evidence construed most strongly in his favor. Id., citing Civ.R. 56(C); Horton v. Harwick Chem. Corp. (1995), 73 Ohio St.3d 679, 653 N.E.2d 1196, paragraph three of the syllabus. In ruling on a motion for summary judgment, a court may not "weigh evidence or choose among reasonable inferences * * *." Adkins, 2007-Ohio-772, 2007 WL 567441, at ¶ 8, citing Jacobs v. Racevskis (1995), 105 Ohio App.3d 1, 7, 663 N.E.2d 653. Rather, the court must consider the above standard while construing all evidence in favor of the nonmovant. Jacobs at 7, 663 N.E.2d 653.

{¶ 10} The party moving for summary judgment must identify the basis of the motion to allow the nonmovant a "meaningful opportunity to respond." Mitseff v. Wheeler (1988), 38 Ohio St.3d 112, 116, 526 N.E.2d 798. In its motion, the moving party "must state specifically which areas of the opponent's claim raise no genuine issue of material fact" and must support its assertion with affidavits or other evidence as allowed by Civ.R. 56(C). Id. at 115, 526 N.E.2d 798, citing Harless v. Willis Day Warehousing Co. (1978), 54 Ohio St.2d 64, 66, 8 O.O.3d 73, 375 N.E.2d 46, citing Hamlin v. McAlpin Co. (1964), 175 Ohio St. 517, 519-520, 26 O.O.2d 206, 196 N.E.2d 781; Dresher v. Burt (1996), 75 Ohio St.3d 280, 293, 662 N.E.2d 264. If the moving party fails to meet its burden, summary judgment is inappropriate; however, if the moving party meets its initial burden, the nonmoving party has a "reciprocal burden outlined in Civ.R. 56(E) to set forth specific facts showing that there is a genuine issue for trial." Dresher, 75 Ohio St.3d at 293, 662 N.E.2d 264.

ISSUES PRESENTED IN THE FIRST MOTION FOR SUMMARY JUDGMENT

{¶ 11} In its first motion for summary judgment, Otterbein Homes argued that the association was not a real party in interest because it suffered no injury in fact. Otterbein Homes stated that the real parties in interest would be the individual leaseholders who may have been negatively affected by its new policies. Otterbein Homes also argued that the deed transferring Camp St. Mary's to it did not contain any conditions and that the association had failed to preserve the right of re-entry because the deed did not contain any such provision. Attached to the motion was the affidavit of Marlen Yost.

{¶ 12} In response, the association claimed it had suffered an injury in fact and therefore, it had standing to represent its members in bringing their claims against Otterbein Homes. Attached to the association's memorandum in opposition was the affidavit of Paul E. Stuckey, and attached to the affidavit were five exhibits — specifically, copies of three letters, a copy of the deed conveying Camp St. Mary's from the association to Otterbein Homes, and a copy of Otterbein Homes' "Leasehold Transfer Policy."

The Association's Standing as an Individual

{¶ 13} In any litigation, the plaintiff must have standing. "The requirement of standing ensures that the party challenging an order has a `personal stake in the outcome of the controversy.'" Ahrns v. SBA Communications Corp., 3d Dist. No. 2-01-13, 2001 WL 1167240, at *2, quoting Middletown v. Ferguson (1986) 25 Ohio St.3d 71,...