Jacobson v. Gross
| Decision Date | 29 September 2022 |
| Docket Number | 110987 |
| Citation | 2022 Ohio 3427 |
| Parties | WENDY JACOBSON, ET AL., Plaintiffs-Appellees, v. DOLORES H. GROSS, ET AL., Defendants-Appellants. |
| Court | Ohio Court of Appeals |
Mansour Gavin, LPA, Charles T. Brown, and Michael P. Quinlan for appellees.
Jonathan Gross, pro se.
JOURNAL ENTRY AND OPINION
{¶ 1} Third-party defendant-appellant, Jonathan Gross ("Jonathan"), appeals the probate court's decision to enforce a 2015 settlement agreement. For the reasons set forth below, we affirm.
{¶ 2} The instant appeal has a protracted procedural history flowing from a prolonged interfamily feud, resulting in years of litigation, on several different fronts, aspects of which are still ongoing. We will limit our factual and procedural review to matters pertinent to this appeal.
{¶ 3} In 1999, Marvin J. Gross ("Marvin"), as settlor and trustee, executed an instrument of trust creating the Marvin J. Gross Declaration of Trust. Marvin died in April 2007, and the instrument created a Family Trust ("Trust") and his wife, Dolores Gross ("Dolores"), became the successor trustee. Marvin and Dolores had five children namely: Wendy Jacobson ("Wendy"), Deborah Gross ("Deborah") Linda Gross ("Linda"), David Gross ("David"), and Jonathan Gross.
{¶ 4} The Trust's major asset was Gross Management Inc. ("GMI"), an Ohio corporation that owned Beachcliff Place Apartments (the "Apartments"). An additional asset of the Trust was a promissory note from David in the amount of $1,000,000, evidencing a loan relative to David's ownership of Sahbra Farms, Inc., a horse farm ("Sahbra").[1]
{¶ 5} Distributions of income and/or principal from the Trust was for the primary benefit of Dolores and Marvin's lineal descendants as Dolores, serving as the trustee, determined in accordance with certain discretionary standard. Under the Trust, upon Dolores' death, Wendy, Deborah, Linda, and David would receive an equal share of the Trust's assets. Under the Trust, Jonathan and his descendants were intentionally excluded as beneficiaries.
{¶ 6} On May 20, 2015, Wendy, Deborah, and Linda (hereinafter collectively "the Appellees") filed a complaint in the Cuyahoga County Probate Court against Dolores individually, and as trustee of the Trust, as well as against David.[2] The complaint stemmed from the discovery, following an independent forensic examination of the management of GMI, that David had allegedly embezzled approximately $500,000 from GMI. The report indicated that David, whom Dolores had hired in 2007 to be GMI's property manager, had been using GMI's assets to pay Sahbra's expenses. Shortly after the revelation, Dolores dismissed David as the property manager.
{¶ 7} The complaint alleged that Dolores had breached her fiduciary duty, by negligently enabling the embezzlement, and that she was physically, emotionally, and mentally unable to carry out her duties as the trustee. The complaint sought an accounting for the Trust from April 2007, through the date of the filing of the complaint, and compensatory damages from David[3] because of his embezzlement. The complaint also requested that Dolores be removed from the role of trustee and be replaced by Wendy.
{¶ 8} In July 2015, Dolores discovered that the Trust only owned 80 percent of the Apartments, under GMI, while she owned the remaining 20 percent in her individual capacity. Dolores announced her intentions to bequeath that 20 percent to Jonathan, the only offspring disinherited under the Trust.
{¶ 9} In October 2015, the Appellees entered into a settlement agreement ("Settlement Agreement") with Dolores and Jonathan. Under the Settlement Agreement, in exchange for Dolores' individual 20 percent interest in the Apartments, the Appellees agreed that Dolores would remain trustee of the Trust. The Appellees also agreed that a transfer on death instrument of Dolores' home to Jonathan to go unchallenged, that her most recent will to go unchallenged after her death, and agreed to release their claims against Dolores and Jonathan.
{¶ 10} In accordance with the terms of the Settlement Agreement, Dolores executed a stock power and transfer on death beneficiaries for membership interests conveying her 20 percent individual interest in the Apartments to the Appellees upon her death. Under the Settlement Agreement, Dolores expressly agreed that the retitling of her shares in the Apartments was "irrevocable." Also, Jonathan agreed that he would refuse to accept any interest in the Apartments from Dolores after the date of the Settlement Agreement.
{¶ 11} On October 21, 2015, the Appellees dismissed all claims against Dolores, individually, and explicitly stated that the claims against the other defendants remained pending. The following month, Dolores executed a supplement to the Settlement Agreement ("Supplement Agreement"), wherein she promised not to sell nor attempt to market the Apartments without consent from the Appellees.
{¶ 12} In January 2016, Appellees filed a notice of breach of the Settlement Agreement. Therein, the Appellees alleged that Dolores breached the Settlement Agreement by refusing to cooperate with Bellwether Enterprises' requests for an accurate reporting of all income and expenses associated with the Apartments and the laundry facility, in accordance with paragraph six of the Settlement Agreement. The Appellees further alleged that Dolores' termination of the Apartments' manager, Branislav Ugrinov ("Branislav"), was a breach of the Settlement Agreement. Pursuant to the terms of the Settlement Agreement, the Appellees gave Dolores 14 days to respond to the notice and warned that if she failed to respond or if there was no resolution, the parties would proceed to mediation.
{¶ 13} The following month, pursuant to the Settlement Agreement's mediation clause, the Appellees filed a motion for an order of mediation, which the probate court granted on February 11, 2016. On February 15, 2016, the Appellees' counsel sent a letter to Dolores attempting to begin mediation proceedings. However, these attempts to schedule mediation were halted because Dolores' attorney, citing conflicts of interest, rejected the three mediators chosen by the court. Eventually, the Appellees' counsel asked Dolores' attorney to choose the mediator. Ultimately, Dolores did not choose a mediator.
{¶ 14} In the interim and unbeknownst to the Appellees,[4] at the end of February 2016, Dolores allegedly gave Jonathan power of attorney. On March 11, 2016, Dolores also executed a "Stock Power" and a "Designation of Transfer on Death Beneficiary for Membership Interests," which would serve to transfer the 20 percent individual interest in the Apartments to Jonathan upon her death. In addition, on April 16, 2016, Dolores executed "Gift Documents" that transferred the same 20 percent to Jonathan as an inter vivos gift.
{¶ 15} On April 25, 2016, Dolores passed away and her death ended the mediation discussions. Pursuant to the Settlement Agreement, the Appellees were slated to become the owners of Dolores' 20 percent interest in the Apartments and Jonathan would become the owner of Dolores' condominium, which he later sold for $375,000.
{¶ 16} On October 3, 2017, Jonathan filed a complaint in the Cuyahoga County Court of Common Pleas, General Division, seeking a declaratory judgment that the Settlement Agreement was fraudulently induced.[5] Jonathan also sought a declaration that the transfer on death and inter vivos documents transferring Dolores' 20 percent individual interest in the Apartments to him were valid.
{¶ 17} On October 19, 2017, after discovering that Dolores had allegedly executed the above documents in favor of Jonathan, the Appellees filed an Emergency Motion to Enforce the Settlement Agreement in the Probate Court. Therein, the Appellees indicated that on October 6, 2017, "[Jonathan] filed an Affidavit of Facts Related to Title with Cuyahoga County Recorder's Office, claiming he is a 20 percent owner of certain property owned by [the Trust], Wendy, Linda, and Deborah." The Appellees indicated that Jonathan's filing of the affidavit had created a cloud on the title to the Apartments and had caused damage to the Trust and to the Appellees.
{¶ 18} In addition, the Appellees noted that all of Jonathan's claims, in his filing in the General Division, which related to his alleged ownership of the 20 percent interest in GMI was the subject of the Settlement Agreement. The Appellees further noted that all the parties to Jonathan's action in the General Division were the same parties in the matter pending in the Probate Court.
{¶ 19} On October 26, 2017, Jonathan filed a motion in opposition, arguing that the Probate Court did not have jurisdiction. Jonathan also argued that the Appellees needed to first adhere to the mediation clause of the Settlement Agreement before seeking court intervention. In addition, Jonathan argued that the Appellees' motion was an improper attempt to deny him the right to pursue his claim in his chosen forum. Further, Jonathan argued that his fraud claim could not be resolved in a perfunctory hearing and that the motion was an attempted end-run around the rule of law and his right to properly litigate these issues.
{¶ 20} On January 9, 2018, the probate court directed the parties to brief the jurisdictional issue. On January 23 2018, the Appellees filed their memorandum in support of the probate court's jurisdiction to enforce the Settlement Agreement. Days later, Jonathan filed his brief in opposition. On April 25, 2018, the probate court journalized...
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