White v. Molnar Trust , 2022 Ohio 1976 ( 2022 )

[Cite as White v. Molnar Trust, 2022-Ohio-1976.]
IN THE COURT OF APPEALS OF OHIO
SIXTH APPELLATE DISTRICT
OTTAWA COUNTY
Russell White, et al. Court of Appeals No. OT-21-022
Appellants/cross-appellees Trial Court No. 15CV236
v.
Gene F. & Mary E. Molnar Trust, et al. DECISION AND JUDGMENT
Appellees/cross-appellants Decided: June 10, 2022
*****
Kenneth R. Resar, for Appellees/cross-appellants
Jack Morrison, Jr. and Nathan P. Woodward, for Appellants/cross-appellees
*****
MAYLE, J.
{¶ 1} Plaintiffs-appellants, Russell White, Betty Oprian, David Barsan, and Anita
Barsan (appellants), appeal the July 27, 2021 judgment of the Ottawa County Court of
Common Pleas, finding in favor of appellants on their replevin/conversion claim and
awarding $0 in damages, and denying appellants’ request for attorney fees. Defendants-
appellees, the Gene F. Molnar Trust, the Mary E. Molnar Trust, and Gene and Mary
Molnar, as trustees and individually (appellees), asserted a cross-appeal of the same
judgment, challenging the trial court’s judgment in favor of appellants on the
replevin/conversion claim, as well as the judgment dismissing appellees’ claims for
fraudulent transfer and civil conspiracy.
{¶ 2} For the following reasons, we find the trial court abused its discretion in
dismissing appellees’ fraudulent transfer claim. Because this claim is dispositive of the
issues on appeal, we reverse the judgment of the trial court.
I. Background
{¶ 3} The issues in this appeal concern a marina business, with events spanning
several years. We address only the facts pertinent to the issues addressed on appeal.
A. Appellants acquire and operate the marina business
{¶ 4} Appellees constructed the marina and operated the business as NE Port
Marina from 1985 until 2008. In 2008, appellants formed NE Port Investments, LLC
(NE Port) for the purpose of acquiring the marina property from appellees. Appellees
conveyed the marina property to NE Port in exchange for $2 million. To secure funding
for the purchase, NE Port obtained a loan in the amount of $1.2 million from First
National Bank of Bellevue (the Bank), secured by a first mortgage to the Bank.
Appellees financed the remaining $800,000 of the purchase price, secured by a
promissory note and second mortgage, issued by NE Port to appellees. The parties
recorded the notes and mortgages.
{¶ 5} Appellants all reside in Summit County, and they appointed William Brown
as NE Port’s manager. Brown managed with little oversight by appellants, and by the
close of 2011, NE Port was facing default on its note with the Bank. The Bank agreed to
2.
a loan modification, extending the maturity date, but only if appellants each executed the
loan modification agreement as co-debtors and provided personal guaranties. On January
3, 2012, appellants executed the loan modification and individual cognovit notes, but NE
Port failed to make payment as required under the terms of the loan modification.
{¶ 6} On March 27, 2012, the Bank obtained a cognovit judgment against each
appellant in Summit County, and subsequently executed on the judgments, garnishing
appellants’ personal bank accounts for a total of $391,741.04. The amount collected by
the Bank did not satisfy the judgment, however, which then totaled over $1.1 million plus
interest.
{¶ 7} In an attempt to resolve the debt owed on the Bank’s judgment, as well as
the amount remaining due on appellees’ note, appellants negotiated a “buy-back” of the
marina property with appellees. On May 17, 2012, the parties executed a purchase
agreement. Appellees agreed to pay $1 million for the marina, with various credits
against the purchase price. NE Port agreed to satisfy the remaining amount owed to the
Bank to release the Bank’s mortgage and to deliver the property free of all liens, and
appellees agreed not to enforce their $800,000 note against NE Port. Based on these
terms, however, appellants and NE Port would have needed additional funds to satisfy the
Bank’s judgment.
{¶ 8} The “buy-back” sale never closed, and on December 14, 2012, appellees
sent a letter to NE Port and counsel for appellants, informing them of rescission, stating
“you are hereby notified that the Molnars [appellees] have elected to rescind and void the
3.
Purchase Agreement.” The letter also provided NE Port with notice of default on the
$800,000 note, and included a demand for immediate payment.
B. NE Port loses the marina in foreclosure proceedings
{¶ 9} On January 13, 2013, the Bank filed a foreclosure complaint in Ottawa
County, naming NE Port and appellees as defendants, as well as other parties with an
interest in the property. Appellees filed a cross-claim in foreclosure against NE Port,
seeking judgment on their $800,000 note and second mortgage. Appellants received
notice of the foreclosure proceedings.1 At the Bank’s request, the foreclosure court
appointed a receiver for the marina and the receiver managed the business during the
pendency of the foreclosure proceeding.
{¶ 10} NE Port failed to answer the complaint or cross-claim in foreclosure, and
the Bank and appellees each obtained default judgment against NE Port. The property
was appraised at $2 million and scheduled for a sheriff’s sale on August 30, 2013.
{¶ 11} On August 9, 2013, appellants filed a motion to intervene in the
foreclosure, which was denied as untimely. In affirming, we noted the notice provided to
each appellant as well as the delay in seeking intervention. First Natl. Bank of Bellevue
v. NE Port Invests., LLC, 6th Dist. Ottawa No. OT-13-024, 2014-Ohio-1760 (Bellevue I).
We noted the delay in seeking to intervene until “72 days after final judgment had been
entered and the date for the sheriff’s sale had been scheduled.” Bellevue I at ¶ 11.
1
See First Natl. Bank of Bellevue v. NE Port Invests., LLC, 6th Dist. Ottawa No. OT-13-
024, 2014-Ohio-1760, ¶ 12 (“The record further reflects that [the LLC members] own all
of the membership units of NE Port, and that the summons and foreclosure complaint
was served upon them in January 2013.”).
4.
Furthermore, we remarked on the appellants’ allegation “in their own motion to intervene
that their potential claim arose on October 12, 2012,” the date the Summit County Court
of Common Pleas released the garnished funds to the Bank, totaling $391,741.04. Id. at ¶
12. In concluding appellants’ attempt to intervene in the foreclosure proceeding was
untimely, we found:
The record reflects that by the time the motion for intervention had been
filed, any and all potential interests in the real property had been
established by the court and the matter was set for sheriff’s sale. It is
unmistakable that prejudice would result to the enumerated mortgage and
lienholders if the sale and judgment were vacated to enable the court to
consider [appellants’] claims to establish and prioritize equitable liens.
Id. at ¶ 13.
{¶ 12} On August 30, 2013, appellees purchased the property at sheriff’s sale for
the minimum bid of $1,330,334.00. On November 22, 2013, the foreclosure court
confirmed the sheriff’s sale, and a month later, the Bank received funds sufficient to pay
off the remaining amount due on its loan and filed a satisfaction of its judgment. In
January, 2014, the receiver turned the property over to appellees.
C. The appellees resume owning and operating the marina business
{¶ 13} After appellees took possession of the marina property, they operated the
marina as NE Port Marina, Inc. They made use of the floating docks that remained on
the property after investing in the refurbishing and repair of those docks. On May 20,
2014, appellees received disbursement from the sale proceeds as partial satisfaction of
5.
their judgment, with over $500,000 remaining due. Neither NE Port nor appellants
contacted appellees regarding any personal property remaining at the marina.
{¶ 14} On March 27, 2015, appellants adopted an amended operating agreement
for NE Port, removing Brown as manager, and executed an Agreement for Sale of Goods
in Satisfaction of Debt, purporting to convey all goods and chattels of NE Port as “sole
owner, free and clear of any liens or encumbrances,” to appellants as satisfaction of
“valid unsecured priority accommodation claims against [NE Port] in an amount in
excess of $390,000.00, under which [appellants] are entitled to payment before all other
creditors.”
{¶ 15} In May 2015, after the Bank returned additional funds to the foreclosure
court, appellants filed a renewed motion to intervene in the foreclosure suit to assert an
“equitable claim” against those proceeds. See First Natl. Bank of Bellevue v. NE Port
Invests., LLC, 6th Dist. Ottawa No. OT-14-027, 2015-Ohio-558 (Bellevue II) (reversing
the award of attorney fees and expenses to the Bank in the amount of $48,650.66). The
foreclosure court denied appellant’s request for intervention and disbursed additional
funds to appellees. These additional funds were insufficient to fully satisfy appellees’
judgment, and NE Port made no attempt to satisfy that judgment.
D. Appellants file their replevin suit;
Appellees assert counterclaims and third party claims
{¶ 16} On July 30, 2015, appellants filed suit seeking statutory replevin,
accompanied by a motion for immediate possession of the “goods and chattel” of the
marina. Appellants claimed ownership of a list of property pursuant to the March 27,
6.
2015 Agreement for Sale of Goods in Satisfaction of Debt, executed “for release of
[appellants’ $391,741.04] priority accommodation claim against NE Port.” This suit and
motion marked the first notice to appellees that the appellants claimed ownership of any
personal property of the marina, including the floating docks. Appellees, moreover,
believed they purchased the docks as part of the sheriff’s sale. After an August 2015
hearing on the motion for possession, appellants waived their motion for possession and
requested to proceed on the merits of the replevin claim.
{¶ 17} Appellees filed an answer to the complaint, as well as a counterclaim
against the appellants and a third party claim against NE Port, seeking damages for
breach of the buy-back agreement, civil conspiracy, and unjust enrichment, and seeking
to set aside the purported sale of goods and chattel from NE Port to appellants as a
fraudulent transfer under R.C. 1336.05.
{¶ 18} On October 29, 2015, appellants filed their answer to the counterclaim,
denying the allegations. On December 22, 2015, NE Port filed its answer to the third
party complaint, admitting that appellants “collectively own 100% of the ownership units
of NE Port” and otherwise denying the allegations of wrongdoing.
{¶ 19} The matter proceeded to trial before a magistrate on August 29 through 31,
2016.
{¶ 20} The parties stipulated that the replevin claim was limited to the floating
docks, with damages sought for conversion of the floating, removable portions of the
docks. The parties further stipulated to numerous exhibits, including LLC documents,
the 2012 “buy-back” agreement, the 2015 Agreement for Sale of Goods in Satisfaction of
7.
Debt, and select court filings in the foreclosure and Summit County cases which included
appellees’ 2013 foreclosure judgment against NE Port.
{¶ 21} On January 25, 2017, the magistrate issued a decision, and as part of the
findings of fact, determined the conveyance of property under the March 27, 2015
Agreement for Sale of Goods in Satisfaction of Debt was a fraudulent conveyance. In
addressing the value of the docks, the magistrate determined there was “no current retail
market for the sale or rental” of those docks, and found appellants’ expert testimony as to
value lacked a proper, factual foundation to be considered as evidence. The magistrate
also found appellants in breach of the “buy-back” agreement, and ordered contract
damages in the amount of $596,746.84, representing the amount paid at sheriff’s sale less
the contract purchase price. The magistrate made no findings or conclusions regarding
appellees’ civil conspiracy claim.
{¶ 22} Appellants and appellees filed their respective objections to the
magistrate’s decision. Pertinent to the present appeal, appellants challenged the
magistrate’s findings regarding fraudulent transfer, arguing their claim against NE Port
was a priority claim under R.C. 1303.59(E), and their claim arose prior to appellees’
judgment. Appellees responded, arguing that appellants “were not the lawful owners of
the floating docks, because any ownership interest they had obtained was the result of a
fraudulent and voidable transfer of the assets to them from NE Port[.]”
{¶ 23} On July 27, 2021, the trial court entered judgment, sustaining appellants’
objections, entering judgment for appellants on their replevin/conversion claim, and
dismissing appellees’ claims for fraudulent transfer, civil conspiracy, and breach of
8.
contract. In determining damages in conversion, however, the trial court determined
appellants’ expert testified using the “income approach,” and therefore “presented no
evidence as to the fair market value of the docks.” The trial court awarded appellants $0
in damages and declined to award attorney fees.
E. The Appeals
{¶ 24} Appellants filed a timely appeal of the judgment, assigning the following
errors for our review:
1. The trial court erred as a matter of law when it held that the income approach is
not evidence of the fair market value of personal property.
2. The trial court erred as a matter of law when it awarded the Whites and
Barsans [appellants] zero dollars of damages for the Molnars’ [appellees]
conversion and failed to award costs.
3. The trial court abused its discretion when it denied the Whites and Barsans’
[appellants] request for reasonable attorney fees.
{¶ 25} Appellees asserted a cross-appeal. They assign the following errors for our
review:
1. The trial court erred as a matter of law when it held that the portions of the
floating docks located at the NE Port Marina consisting of the ramps and
floating tanks were not fixtures that had become a part of the real property that
was transferred to the Molnars [appellees] upon their purchase of the NE Port
Marina real property at the Sheriff’s sale.
9.
2. The trial court erred as a matter of law when it held that the [sic.] Gene Molnar
and Mary Molnar [appellees] had converted the floating docks from the
Plaintiffs, Russell White, Betty Oprian, David Barsan and Anita Barsan
[appellants] because the Plaintiffs failed to establish that they were lawfully
entitled to possession of the floating docks at the time the Replevin and
Conversion Action was filed with the Ottawa Common Pleas Court on July 30,
2015.
3. The trial court erred as a matter of law when it denied and dismissed the claim
of Gene Molnar and Mary Molnar [appellees] that the March 27, 2015 transfer
of all the personal property of NE Port Investments, LLC, to the [sic.] Russell
White, Betty Oprian, David Barsan and Anita Barsan [appellants] was not a
fraudulent transfer in accordance with the provisions of Chapter 1336 of the
Ohio Revised Code.
4. The trial court erred as a matter of law when it denied and dismissed the claim
of Gene Molnar and Mary Molnar [appellees] that NE Port Investments, LLC,
and the Plaintiffs, Russell White, Betty Oprian, David Barsan and Anita Barsan
[appellants], intentionally engage in a malicious combination of two or more
persons to injure the Molnars in their person or property in a way that was not
competent for one person acting alone, resulting in actual damages to the
Molnars.
10.
II. Analysis
{¶ 26} Ownership of the docks is a threshold issue in this case. Appellants sought
damages for conversion, and therefore “ownership or right to possession” was an
essential element of their claim. Hutchings v. Hutchings, 2019-Ohio-5362, 150 N.E.3d
548, ¶ 23 (6th Dist.), citing Peirce v. Szymanski, 6th Dist. Lucas No. L-11-1298, 2013-
Ohio-205, ¶ 19. Appellees challenge appellants’ claim of ownership within their first and
third assignments of error in the cross-appeal. As such, we must first address the cross-
appeal and resolve these ownership issue before reaching appellants’ claimed error
regarding the value of the property, determined as damages within their
replevin/conversion claim.
A. Standard of Review
{¶ 27} Appellees challenge the trial court’s judgment, resolving the objections to
the magistrate’s decision, as those objections pertained to ownership of the floating
docks. A trial court must conduct an independent, de novo review of the magistrate’s
findings and conclusions, in accordance with Civ.R. 53. We review the trial court’s
decision, overruling or sustaining objections to the magistrate’s decision, for an abuse of
discretion. Tidewater Financial Co. v. Smith, 6th Dist. Lucas No. L-19-1181, 2020-
Ohio-5042, ¶ 6, citing Perrucci v. Whittington, 2018-Ohio-2968, 118 N.E.3d 311, ¶ 110
(2d Dist.); Thompson Thrift Constr. v. Lynn, 2017-Ohio-530, 85 N.E.3d 249, ¶ 56 (5th
Dist.).
{¶ 28} To demonstrate an abuse of discretion, appellee must show that the trial
court’s decision reflects an “unreasonable, arbitrary, or unconscionable” attitude. Hine v.
11.
Hine, 6th Dist. Wood No. WD-18-023, 2019-Ohio-734, ¶ 9, citing Blakemore v.
Blakemore, 5 Ohio St.3d 217, 219, 450 N.E.2d 1140 (1983).
B. Floating Docks as “Fixtures”
{¶ 29} In their first assignment of error, appellees argue the trial court erred in
rejecting their claim that the floating docks were fixtures and transferred to appellees as
part of the sheriff’s sale of the marina property. While it is undisputed that the floating
portions of the docks are removed at the end of every season, whether the property is
physically attached to the land “has come to be regarded as less determinative of fixture
status than was formerly the case at common law.” Masheter v. Boehm, 37 Ohio St.2d
68, 73, 307 N.E.2d 533 (1974). Instead, the applicable test places greater emphasis on
the “intention of the party responsible for emplacing the item, and the use or purpose to
which it is put.” Id. In addressing the issue, we must consider “the nature of the
property; the manner in which it is annexed to the realty; the purpose for which the
annexation is made; the intention of the annexing party to make the property a part of the
realty; the degree of difficulty and extent of any loss involved in removing the property
from the realty; and the damage to the severed property which such removal would
cause.” Masheter at paragraph two of the syllabus.
{¶ 30} Here, the testimony demonstrated that the marina business uses the floating
docks as part of its only revenue producing activity, slip rental, but each floating dock
section is designed for removal at the end of the boating season, and future plans include
replacing the 30-year-old floating docks with modern, low-maintenance designs. And
while appellees argued that they believed they had purchased the floating docks as part of
12.
the real property at sheriff’s sale, they proffered no evidence, such as the sheriff’s
appraisal, demonstrating the docks were part of the property for sale. See, e.g., Perez Bar
& Grill, 9th Dist. Lorain No. 11CA010076, 2012-Ohio-5820 at ¶ 14 (without evidence
the personal property was included in the appraisal, buyer “could not reasonably argue
that the price” paid included the personal property).
{¶ 31} The evidence at trial largely consisted of testimony regarding the market
value for the floating docks, with that testimony clearly demonstrating the docks’ limited,
future usefulness as part of the marina business. Furthermore, testimony assigning no
market value to the docks mainly relied on the age and condition of the docks. The
record further demonstrated that potential resale or rental of the docks to another marina
was not possible, not because the docks were not easily severed from the real property,
but because no other marina could use docks with such an outdated design. Accordingly,
considering the record, we find the trial court did not abuse its discretion in finding the
floating docks were not “fixtures,” but rather personal property not included in the sale of
the real property. Appellees’ first assignment of error on cross-appeal, therefore, is not
well-taken.
C. Fraudulent transfer
{¶ 32} In their second and third assignments of error on cross-appeal, appellees
challenge the judgment for conversion in favor of appellants and argue the appellants’
purported transfer of ownership from NE Port to themselves constituted a fraudulent
transfer pursuant to R.C. 1336.05(B). For ease of discussion, we address the error
regarding fraudulent transfer first.
13.
{¶ 33} As provided by R.C. 1336.05(B):
A transfer made or an obligation incurred by a debtor is fraudulent as to a
creditor whose claim arose before the transfer was made or the obligation
was incurred if the transfer was made to or the obligation was incurred with
respect to an insider for an antecedent debt, the debtor was insolvent at that
time, and the insider had reasonable cause to believe that the debtor was
insolvent.
Where the statutory elements are demonstrated, “fraud is imputed to the parties[.]”
Comer v. Calim, 128 Ohio App.3d 599, 606, 716 N.E.2d 245 (1st Dist.1998),
citing R.C. 1336.05(B). “Under those circumstances, the conveyance may be set
aside as constructively fraudulent regardless of the motives of the principal actors.
The transfer itself is deemed fraudulent.” Id.{¶ 34} In support of their claim, appellees presented evidence including
testimony of Russell White, Betty Oprian, and David Barsan, and documentation
demonstrating the sequence of NE Port’s borrowing and default, appellees’
judgment, and NE Port’s attempted sale of all remaining assets to appellants, its
sole owners/members. In response, appellants presented no evidence, refuting
these facts. Thus, the unrefuted evidence at trial demonstrated a note executed by
NE Port in 2008 and reduced to judgment in favor of the appellees and against NE
Port in 2013. The record further demonstrated NE Port’s purported transfer of all
of its remaining assets to appellants, sole members and owners of NE Port, in
14.
2015, after the debt to appellees arose. At the time of this transfer, NE Port no
longer owned the marina property and had no income.
{¶ 35} By definition, the LLC members are “insiders” of NE Port, as that term is
defined at R.C. 1336.01(G). Furthermore, NE Port was insolvent, and the LLC members
had reasonable cause to believe this was so, as NE Port’s debt far exceeded the value of
its assets and NE Port was no longer paying its debts as they became due. R.C.
1336.02(A). Rather than dispute this evidence of insider status and insolvency,
appellants argued that appellees’ claim was subordinated to their own, priority interest in
NE Port assets. Appellants’ priority argument lacks support in the record.
{¶ 36} Appellants argue a “priority interest” as accommodation makers, but cite to
no finding in the record that they were, in fact, accommodation parties entitled to priority.
While appellants alleged in their pleading that they were accommodation members,
“[o]ne asserting accommodation status has the burden of proving it.” (Citation omitted)
Fed. Land Bank of Louisville v. Taggart, 31 Ohio St.3d 8, 11–12, 508 N.E.2d 152 (1987).
Furthermore, “‘[w]hether an individual is an accommodation party presents a question of
fact; the trial court should focus on the intention of the parties as reflected by the
language of the pertinent instrument and by the surrounding circumstances.’” Huron Cty.
Banking Co. v. Knallay, 22 Ohio App.3d 110, 114, 489 N.E.2d 1049 (6th Dist.1984),
quoting Campo v. Maloney, 442 A.2d 997 (N.H.1982) (additional citation omitted.).
{¶ 37} The record contains no finding regarding the issue of “accommodation.”
Even presuming appellants were accommodation parties, however, R.C. 1303.59(F)
merely provides for “reimbursement” after the accommodating party pays the instrument.
15.
The statute makes no mention of priority or subrogation. Moreover, appellants’ partial
payment toward the judgment did not extinguish the debt NE Port owed to the Bank.
Until the Bank received satisfaction of the debt owed on the note, appellants could not
step in to the shoes of the Bank to exercise the Bank’s priority on the obligation.
“[A]lthough a guarantor may have a cause of action in reimbursement or restitution,
where a guarantor totally satisfies an underlying obligation, such as paying off a
promissory note entirely, general principles of guaranty law establish a guarantor’s right
to step into the shoes of a payee to enforce the note against the principal debtor.”
Greenzalis v. Nationwide Mut. Ins. Co., 10th Dist. Franklin No. 16AP-139, 2016-Ohio-
8344, ¶ 35.
{¶ 38} Appellants, however, argue their partial payment of the Bank’s note
granted them the right to subrogation, notwithstanding the remaining balance owed to the
Bank. As to a right of subrogation arising from only partial payment, “courts have
universally held that subrogation may not be enforced until the debt is paid in full and
thereby the third party has no further interest in the security bound for the debt.”
Harshman v. Harshman, 42 N.E.2d 447, 450 (2d.Dist.1941). With only partial payment
on the debt, appellants did not “step into the shoes” of the Bank. Furthermore, similar
attempts to assert a priority interest in proceeds of the sale, after the Bank had received
full payment, were denied as untimely in the foreclosure suit. Thus, at best, appellants
have a right to seek reimbursement from NE Port, without the equitable remedy of
subrogation to assert the Bank’s priority interest under the note.
16.
{¶ 39} Instead of seeking reimbursement, appellants purported to transfer all
remaining assets from NE Port to themselves. In challenging this transfer as fraudulent,
appellees presented evidence demonstrating each statutory element under R.C. 1336.05,
imputing fraud to the appellants. Comer, 128 Ohio App.3d at 606, 716 N.E.2d 245,
citing R.C. 1336.05(B). In response, appellants presented no evidence, and on appeal
point to nothing in the record, refuting fraud under the statute. Accordingly, the trial
court’s decision, sustaining appellants’ objection to the finding of fraudulent transfer and
dismissing appellees’ claim, was unreasonable and arbitrary.
{¶ 40} In their second assignment of error, appellees challenge the trial court’s
entry of judgment in favor of appellants’ on their replevin/conversion claim. In support,
appellees raise two issues: (1) a lack of demand for return of the property, lawfully
obtained and (2) a failure to demonstrate a lawful right to possession of the property,
based on the fraudulent transfer. As we determined the trial court erred in dismissing the
claim for fraudulent transfer based on undisputed evidence to support the claim, we need
not address appellees’ argument regarding demand, and agree with appellees that
appellants failed to demonstrate a lawful right to possession. Based on this conclusion,
we find appellees’ second assignment of error has merit.
{¶ 41} We therefore find appellees’ second and third assignment of errors in the
cross-appeal well-taken. The conveyance from NE Port to appellants, accordingly, must
be set aside, with ownership of the property restored to NE Port.
17.
D. Remaining assignments of error
{¶ 42} Our resolution of appellees’ first, second, and third assignments of error are
dispositive of each of appellants’ assignments of error, raised on appeal. Appellants’ sole
challenge on appeal, within their three assignments of error, address the damages and
attorney fee awards for their replevin/conversion claim. Because we determined the
conveyance to appellants must be set aside, appellants lacked the requisite ownership
interest in the property to maintain their replevin/conversion claim. Therefore,
appellants’ first, second, and third assignments of error on appeal are deemed moot.
{¶ 43} Finally, appellees challenge the trial court’s finding regarding their civil
conspiracy claim within their fourth assignment of error. After a careful review of the
record, it appears the only reference to a civil conspiracy within the trial record and
judgment entries occurred within the trial court’s final judgment, dismissing the claim.
Furthermore, while appellees argue intentional, malicious conduct by the appellants and
NE Port, they cite to no evidence within the record to support this argument and no
evidence to demonstrate any damages as a result of a civil conspiracy.
{¶ 44} Civil conspiracy is “a malicious combination of two or more persons to
injure another in person or property, in a way not competent for one alone, resulting in
actual damages.” Avery v. Rossford, Ohio Transp. Improvement Dist., 145 Ohio App.3d
155, 165, 762 N.E.2d 388 (6th Dist.), citing Kenty v. Transamerica Premium Ins. Co., 72
Ohio St.3d 415, 419, 650 N.E.2d 863 (1995). In this case, while appellees demonstrated
an underlying tort, fraudulent transfer, they cite to no evidence of actual damages to
support the claim. Therefore, as to the trial court’s summary dismissal of this claim, we
18.
find no abuse of discretion, and appellees’ fourth assignment of error is found not well-
taken.
III. Conclusion
{¶ 45} As to appellants’ first, second, and third assignments of error, we conclude
that, the appellants did not have any ownership interest in the floating docks because the
purported transfer from NE Port to appellants was fraudulent under R.C. 1336.05(B), and
NE Port continues to own the property. Accordingly, we find appellants’ first, second,
and third assignments of error in the appeal regarding damages for their
replevin/conversion claim moot, as the judgment must be vacated as a result of our
disposition of the cross-appeal.
{¶ 46} As to appellees’ first assignment of error, we conclude the trial court did
not abuse its discretion in determining the floating docks were not fixtures. Therefore,
appellees’ first assignment of error in the cross-appeal is not well-taken.
{¶ 47} As to appellees’ second and third assignments of error, challenging
appellants’ ownership interest as an element for conversion and claiming fraudulent
transfer, we find appellees’ second assignment of error in the cross-appeal well-taken as
to the challenged ownership interest in the property. Additionally, because we conclude
the trial court abused its discretion in overruling the findings of fraudulent transfer and
dismissing appellees’ claim for relief under R.C. Chapter 1336, we find appellees’ third
assignment of error in the cross-appeal well-taken.
19.
{¶ 48} As to appellees’ fourth and final assignment of error in the cross-appeal, we
find the trial court did not abuse its discretion in dismissing the claim for civil conspiracy.
Appellees’ fourth assignment of error, therefore, is not well-taken.
{¶ 49} Given our conclusions respecting the appellees’ second and third
assignments of error in the cross-appeal, we reverse the July 27, 2021 judgment of the
Ottawa County Court of Common Pleas granting judgment in favor of appellants on the
replevin/conversion claim. We further reverse the same judgment finding in favor of
appellants, and against appellees, on the counterclaim for fraudulent transfer.
{¶ 50} The judgment on the replevin/conversion claim in favor of appellants is
hereby vacated, and appellants’ assigned errors respecting damages for
replevin/conversion are deemed moot. Finding substantial justice has not been done, we
enter judgment in favor of appellees on their counterclaim and third-party claim for
fraudulent transfer, and order ownership of the floating docks restored to NE Port.
{¶ 51} The costs of this appeal are assessed to appellants pursuant to App.R. 24. It
is so ordered.
Judgment reversed.
20.
Russell White, et al. v. Gene F. &
Mary E. Molnar Trust, et al.
C.A. No. OT-21-022
A certified copy of this entry shall constitute the mandate pursuant to App.R. 27.
See also 6th Dist.Loc.App.R. 4.
Christine E. Mayle, J. ____________________________
JUDGE
Gene A. Zmuda, J.
____________________________
Myron C. Duhart, P.J. JUDGE
CONCUR.
____________________________
JUDGE
This decision is subject to further editing by the Supreme Court of
Ohio’s Reporter of Decisions. Parties interested in viewing the final reported
version are advised to visit the Ohio Supreme Court’s web site at:
http://www.supremecourt.ohio.gov/ROD/docs/.
21.