Dibert v. Carpenter

• Citation: 85 N.E.3d 419,2017 Ohio 689
• Decision Date: 24 February 2017
• Docket Number: NO. 2015–CA–18,2015–CA–18
• Parties: Gerald DIBERT, Plaintiff–Appellant v. Cynthia Sue CARPENTER, Trustee, et al., Defendants–Appellees
• Court: United States Court of Appeals (Ohio)

85 N.E.3d 419

2017 Ohio 689

Gerald DIBERT, Plaintiff–Appellant

v.Cynthia Sue CARPENTER, Trustee, et al., Defendants–Appellees

NO. 2015–CA–18

Court of Appeals of Ohio, Second District, Champaign County.

February 24, 2017

QUENTIN M. DERRYBERRY, II, Atty. Reg. No. 0024106, 15 Willipie Street, # 220, P.O. Box 2056, Wapakoneta, Ohio 45895, Attorney for Plaintiff–Appellant.

STANLEY R. EVANS, Atty. Reg. No. 0011933, P. O. Box 499, Sidney, Ohio 45365, Attorney for Defendant–Appellee.

DAVID R. WATKINS, Atty. Reg. No. 0013126, 1111 Rush Avenue, P. O. Box 68, Bellefontaine, Ohio 43311, Attorney for Appellee Howard A. Traul II, Special Fiduciary.

OPINION

FROELICH, J.

{¶ 1} This litigation involves two trusts: a trust created by the parties' grandfather, Gerald Pickering ("the Pickering Trust"), and a trust created by the parties' father, Kenneth Dibert ("the Dibert Trust"). Gerald Dibert ("Gerald")¹ sued his sister, Cynthia Carpenter ("Cynthia"), for conduct related to the Pickering Trust. Cynthia counterclaimed, originally raising three claims related to the Pickering Trust and one related to the Dibert Trust. Cynthia later filed an amended pleading, raising 13 counterclaims related solely to the Dibert Trust.

{¶ 2} Gerald appeals from two judgments of the Champaign County Court of Common Pleas, Domestic Relations/Juvenile/Probate Division. The first judgment, dated May 7, 2015, found in favor of Cynthia on four of her counterclaims against Gerald and awarded judgment totaling $287,786.32 to the Dibert Trust trustee. The second judgment, which was issued on July 29, 2015, after a limited remand from this court, granted attorney fees of $105,127 and deposition costs of $719.50 to Cynthia.

{¶ 3} For the following reasons, the trial court's judgments will be affirmed.

I. Factual and Procedural History

{¶ 4} This litigation began in 2007, and its history is complex. Although the parties settled Gerald's claims against Cynthia and this appeal involves only the trial court's judgments on Cynthia's counterclaims, it is helpful to review relevant portions of the entire history of this litigation.

{¶ 5} The parties, Gerald and Cynthia, are siblings. In 1975, their grandfather, Gerald Pickering, conveyed four parcels of land, totaling approximately 570 acres, to the parties' parents, Joycelyn (nee Pickering) and Kenneth Dibert; Pickering retained a life estate in the property. In 1980, Pickering sold his life estate interest to Kenneth and Joycelyn in exchange for a note, secured by a mortgage, for $271,671.33.

{¶ 6} A month later, Pickering established the Pickering Trust and assigned the note and mortgage to the trust. Pursuant to the terms of the trust and an amendment to the trust, the income from the trust was designated to go to Pickering's second wife, Lucille (the parties' step-grandmother), upon Pickering's death. When Lucille died, the trust designated Joycelyn and Kenneth Dibert as the income beneficiaries. When both Lucille and the Diberts died, the trust corpus was to be distributed to Pickering's grandchildren, Gerald and Cynthia. Pickering died in 1981 and, at that point, Lucille was the life income beneficiary of the Pickering Trust.

{¶ 7} Joycelyn Dibert, the parties' mother, died in 1989, and Kenneth Dibert remarried. In 1991, Kenneth created the Dibert Trust into which he placed the property conveyed by Pickering; no payments had been made on the note held by the Pickering Trust, and the property was still subject to a mortgage.

{¶ 8} According to the terms of the Dibert Trust, Kenneth was designated as income beneficiary during his lifetime, and his second wife, Amelia Jane ("Jane"), was to be designated as income beneficiary upon his death. Upon Jane's death, Gerald and Cynthia were to share equally in the trust. The Dibert trust also contained the following language:

[T]he part for Donor's son, GERALD J. DIBERT, shall include: Donor's farm chattels (including grain, livestock, etc.) and Donor's farm real estate. In the event that the value of the afore-described property to be included in GERALD J. DIBERT'S part exceeds the value of his fifty percent (50%) overall distribution, then GERALD J. DIBERT shall have the option to purchase all of the remainder of such property having a value in excess of that which is placed in his trust, at the value of such property as established for Ohio Estate Tax purposes, provided that this option to purchase must be exercised within a period of ninety (90) days from the date of Donor's death.

(Capitalization sic.; italics added.)

{¶ 9} Jane was initially appointed trustee of the Dibert Trust. The Trust specified that if Jane died or no longer was able to serve as trustee, Gerald and Cynthia were to serve as co-trustees.

{¶ 10} Kenneth Dibert died in October 1993, and Jane became the life income beneficiary of the Dibert Trust; Gerald and Cynthia were appointed co-trustees of the Dibert Trust. According to Gerald's deposition testimony, within 90 days of his father's death, in early 1994, he attempted to exercise his right-to-purchase option but was told by an attorney that he could not do so because the property had been placed into a trust.

{¶ 11} On December 13, 1996, Attorney Allen Maurice, as attorney for the successor trustee to the Pickering Trust, sent a letter to Gerald and Cynthia, as co-trustees of the Dibert Trust, indicating that the approximately $271,000 indebtedness to the Pickering Trust needed to be addressed. Gerald and Cynthia attempted to obtain a loan to pay the indebtedness, but they were unsuccessful.

{¶ 12} In 1997, Cynthia was appointed successor trustee to the Pickering Trust. In May 1999, Gerald and Cynthia, as co-trustees of the Dibert Trust, conveyed two parcels of land to the Pickering Trust to satisfy the note and mortgage. The fiduciary deed including the following language: "This conveyance is subject to the right to purchase the above described real estate granted to Gerald A. Dibert as set forth in the Kenneth A. Dibert Trust, dated March 12, 1991."

{¶ 13} Lucille Pickering, the income beneficiary of the Pickering Trust, died in July 2007. According to the record, Jane Dibert, income beneficiary of the Dibert Trust, is alive and resides in Champaign County.

{¶ 14} In November 2007, Gerald, as a beneficiary of the Pickering Trust, filed this lawsuit against Cynthia² , both individually and as trustee of the Pickering Trust, alleging that (1) Cynthia had breached her fiduciary duties as trustee of the Pickering Trust, (2) Cynthia converted Pickering Trust property for her own use, (3) Cynthia had been unjustly enriched by her actions; and (4) Cynthia should be removed as trustee of the Pickering Trust.³ Gerald sought an accounting of the Pickering Trust and a jury trial on Counts Two, Three, and Four.

{¶ 15} In January 2008, Cynthia filed an answer, which denied any wrongdoing, and brought four counterclaims. The first counterclaim sought a declaratory judgment as to Gerald's right to exercise the option to purchase the property transferred to the Pickering Trust by fiduciary deed. The second counterclaim alleged that Gerald had interfered with an agreement between the Pickering Trust and a prospective tenant of Pickering Trust property. The third alleged that Gerald interfered with a long-standing rental agreement between the Pickering Trust and Gerald's son. The fourth alleged that Gerald, as co-trustee of the Dibert Trust, breached his fiduciary duty and engaged in self-dealing, contrary to R.C. 2109.44. Cythnia sought relief as "acting trustee of the Pickering Trust" and as "Co–Trustee of the Dibert Trust."

{¶ 16} On February 28, 2008, Gerald filed his "Answer to Counterclaim." Gerald denied the claims against him and, in responding to Cynthia's allegations, alleged that Cynthia breach her fiduciary duties regarding both the Pickering and Dibert Trusts. Gerald also asserted that he was owed money from the Dibert Trust for actions he had taken and that Cynthia owed money to the Dibert Trust. However, Gerald did not raise these allegations as counterclaims against Cynthia regarding the Dibert Trust. Gerald also stated that damages needed to be determined by a jury, but he did not include an express jury demand, as specified in Civ.R. 38.

{¶ 17} On January 8, 2009, the trial court held that Gerald lacked either a constitutional or statutory right to a jury trial in probate court. Gerald sought to appeal the trial court's ruling, but we dismissed the appeal for lack of a final appealable order. Dibert v. Carpenter, 2d Dist. Champaign No. 2009–CA–09 (June 17, 2009).

{¶ 18} In February 2009, Judge Reisinger began her term as a newly-elected judge of the Champaign County Court of Common Pleas, Domestic Relations/Juvenile/Probate Division. On February 13, 2009, Judge Reisinger recused herself and another newly-elected judge from the case due to a conflict of interest. The retiring judge was appointed, by assignment, to continue presiding over the case.

{¶ 19} In November 2010, Cynthia filed a motion for partial summary judgment on Gerald's claims, which was granted in part and denied in part; the court certified the judgment as immediately appealable, pursuant to Civ.R. 54(B). Gerald appealed the trial court's grant of summary judgment on his claim that Cynthia fraudulently induced the transfer of property from the Dibert Trust to the Pickering Trust. Cynthia cross-appealed, claiming that the trial court erred in denying her motion for summary judgment on Gerald's conversion claim.

{¶ 20} We affirmed the trial court's grant of summary judgment to Cynthia on the fraud-based claim, and dismissed Cynthia's cross-appeal for lack of a final appealable order. Dibert v. Carpenter, 196 Ohio App.3d 1, 2011-Ohio-5691, 961 N.E.2d 1217 (2d Dist.). We commented that "[t]here was no evidence that Carpenter acted improperly when she pursued, after her appointment as successor trustee, the repayment of the monies owed by the Dibert trust to the Pickering trust—of which she and Dibert...