Taylor-Winfield Corp. v. The Huntington Bank
| Decision Date | 30 September 2021 |
| Docket Number | 2021-T-0015 |
| Parties | THE TAYLOR-WINFIELD CORPORATION, Plaintiff-Appellant, v. THE HUNTINGTON BANK, Defendant-Appellee. |
| Court | Ohio Court of Appeals |
Civil Appeal from the Court of Common Pleas Trial Court No. 2019 CV 00749
Judgment Reversed; remanded
Ned C Gold, Jr., The Gold Law Firm, (For Plaintiff-Appellant).
Natalie M. Niese, Weisensell Mastrantonio & Niese, LLP Christopher J. Niekamp and Justin D. Tjaden, Buckingham Doolittle and Burroughs, (For Defendant-Appellee).
{¶1} Appellant, The Taylor-Winfield Corporation ("Taylor-Winfield"), appeals the trial court's judgment entry granting appellee, The Huntington Bank's ("Huntington"), Civil Rule 12(B)(6) motion to dismiss the complaint as time-barred. The judgment is reversed.
{¶2} Taylor-Winfield filed suit against Huntington on April 30, 2019, seeking compensatory and punitive damages. In its amended complaint, Taylor-Winfield set forth five causes of action: breach of contract, promissory estoppel, misrepresentation and fraud, civil conspiracy, and breach of fiduciary duty. Huntington moved to dismiss the complaint under Civ.R. 12(B)(6) on multiple grounds, including that each claim was filed outside the applicable statute of limitations. The trial court dismissed the complaint in its entirety, concluding the events at issue occurred outside the applicable statute of limitations for each claim and, therefore, that Taylor-Winfield failed to state a claim upon which relief can be granted.
{¶3} From this decision, Taylor-Winfield appeals and advances three assignments of error:
{¶4} "'An order granting a Civ.R. 12(B)(6) motion to dismiss is subject to de novo review.'" LGR Realty, Inc. v. Frank & London Ins. Agency, 152 Ohio St.3d 517, 2018-Ohio-334, 98 N.E.3d 241, ¶ 10, quoting Perrysburg Twp. v. Rossford, 103 Ohio St.3d 79, 2004-Ohio-4362, 814 N.E.2d 44, ¶ 5.
{¶5} A Civ.R. 12(B)(6) motion to dismiss for failure to state a claim upon which relief can be granted is procedural and tests the legal sufficiency of the complaint. State ex rel. Hanson v. Guernsey Cty. Bd. of Commrs., 65 Ohio St.3d 545, 548, 605 N.E.2d 378 (1992); McGrath v. Mgmt. & Training Corp., 11th Dist. Ashtabula No. 2001-A-0014, 2001 WL 1602740, *2 (Dec. 14, 2001). (Internal citation omitted.) LGR Realty at ¶ 10, quoting O'Brien v. Univ. Community Tenants Union, Inc., 42 Ohio St.2d 242, 327 N.E.2d 753 (1975), syllabus.
{¶6} Generally, a trial court cannot grant a Civ.R. 12(B)(6) motion to dismiss on the basis of an affirmative defense, such as the statute of limitations, because the arguments raised often rely on matters outside the pleadings. Byers DiPaola Castle, LLC v. Portage Cty Bd. of Commrs., 2015-Ohio-3089, 41 N.E.3d 89, ¶ 35 (11th Dist.). Thus, "[a] court may dismiss a complaint as untimely under Civ.R. 12(B)(6) only when, after accepting the factual allegations as true and making all reasonable inferences in favor of the plaintiff, the complaint shows conclusively on its face that the action is time-barred." Schmitz v. Natl. Collegiate Athletic Assn. ("Schmitz II"), 155 Ohio St.3d 389, 2018-Ohio-4391, 122 N.E.3d 80, ¶ 11, citing Maitland v. Ford Motor Co., 103 Ohio St.3d 463, 2004-Ohio-5717, 816 N.E.2d 1061, ¶ 11 and Velotta v. Leo Petronzio Landscaping, Inc., 69 Ohio St.2d 376, 379, 433 N.E.2d 147 (1982) .
{¶7} "Application of a statute of limitations presents a mixed question of law and fact; when a cause of action accrues is a question of fact, but in the absence of a factual issue, application of the limitations period is a question of law." (Citations omitted.) Schmitz II at ¶ 11. "In order to conclusively demonstrate that the action is time barred, the allegations in the complaint must demonstrate both (1) the applicable statute of limitations, and (2) the absence of factors which would toll the pertinent statute, or make it inapplicable." (Citation omitted.) Ricketts v. Everflow Eastern, Inc., 2016-Ohio-4807, 68 N.E.3d 165, ¶ 12 (7th Dist.).
{¶8} Each of Taylor-Winfield's claims is premised on the following factual allegations, which we accept as true for resolving the present appeal.
{¶9} Taylor-Winfield, incorporated in 1927, was an international manufacturer of manufacturing equipment owned by the Anderson family. Both the corporation and the family have had an ongoing relationship with Huntington and its predecessors (Second National Bank and Sky Bank) in regard to nearly all aspects of banking. Mr. John A. Anderson-Taylor-Winfield's chairman of the board, CEO, and principal shareholder-was the longest tenured member of Second National Bank's Board of Directors at the time the bank was acquired by Sky Bank. For decades, Taylor-Winfield had an open line of credit with Huntington and its predecessors for several million dollars, which it used predominantly for working capital. Due to the corporation's outstanding credit rating, the line of credit was unsecured and was renewed annually for many years. Taylor-Winfield had never been in default on any payments or on any terms of the notes and agreements entered into with Huntington's predecessors relating to this line of credit.
{¶10} At the time of renewal in 2008, Huntington required Taylor-Winfield to provide security in the form of a mortgage on various real properties owned by Hubbparts, Inc., a Taylor-Winfield related company. At the time of renewal in 2010, the mortgage was amended, and Huntington required Mr. Anderson to personally guarantee those notes. On August 10, 2010, Mr. Anderson executed mortgages and two cognovit promissory notes, one for the principal amount of $4, 000, 000.00 and the other for the principal amount of $2, 000, 000.00. Subsequent to the 2010 renewal, Taylor-Winfield continued timely making all payments and did not violate any other terms and conditions of the notes.
{¶11} In September 2010, immediately after the cognovit notes were executed and the line of credit renewed, Huntington called the notes and demanded immediate payment from Taylor-Winfield, without explanation. Taylor-Winfield did not have the financial capacity to meet Huntington's demand for immediate payment and was, therefore, forced to immediately find a buyer to purchase the corporation and its assets so that the proceeds of the sale could be used to repay the notes.
{¶12} Taylor-Winfield was purchased by Brian Benyo ("Benyo Brothers") for $5, 650, 000.00-$4, 000, 000.00 was to be paid to Huntington in full settlement of the loan, with the remaining $1, 500, 000.00 to be applied toward Taylor-Winfield's accounts payable. To accomplish the purchase, Benyo Brothers formed a new company called Taylor Winfield Technologies, Inc. ("Technologies"). Benyo Brothers also owns other companies related to this matter, namely, Brilex Industries, Inc. ("Brilex") and McDonald Industrial Development, Inc. ("MID").
{¶13} Taylor-Winfield never received confirmation that the loan had been satisfied and cancelled or that accounts payable had been paid. And, unbeknownst to Taylor-Winfield at that time, Huntington sold the notes and mortgage to MID in March 2011. On April 17, 2013, MID obtained judgment by confession as to the cognovit notes in the amounts of $701, 608.17 and $56, 432.17, plus interest. The following day, MID filed suit to foreclose on the mortgages that were security for the notes.
{¶14} In or about 2018, Taylor-Winfield became aware that there may have been inappropriate dealings between Huntington and Benyo Brothers/Technologies related to the notes and mortgages. Taylor-Winfield approached the bank and asked to see certain documents, for an accounting of monies paid on the notes, and for an explanation as to why the notes had been called in 2010. Huntington first responded to these inquiries by claiming Taylor-Winfield had defaulted on payments. When Taylor-Winfield showed that it had not defaulted, Huntington refused to state its reasons for calling the notes. Huntington also advised that the loan sale agreement between Huntington and MID contains a confidentiality agreement that forbids the bank from providing information regarding the transaction. Huntington refused to provide any documents to Taylor-Winfield, with the exception of a nominal accounting provided during the course of these proceedings. Taylor-Winfield alleges that this accounting demonstrates that Benyo Brothers/Technologies paid only $3, 376, 807.33 on the loan, which is $773, 192.67 less than required under the asset sale agreement.
{¶15} Taylor-Winfield supplemented its amended complaint with copies of the 2008 open-end mortgage between Hubbparts and Huntington and the 2010 first amendment to that mortgage; the August 2010 cognovit...
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