Johnson v. Kuehn ( 2020 )


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  • [Cite as Johnson v. Kuehn, 2020-Ohio-3757.]
    IN THE COURT OF APPEALS OF OHIO
    SEVENTH APPELLATE DISTRICT
    CARROLL COUNTY
    DIANE MARIE JOHNSON,
    Plaintiff-Appellant,
    v.
    JEFFREY W. KUEHN,
    Defendant-Appellee.
    OPINION AND JUDGMENT ENTRY
    Case No. 19 CA 0935
    Civil Appeal from the
    Court of Common Pleas of Carroll County, Ohio
    Case No. 18 CVH 29190
    BEFORE:
    Carol Ann Robb, Gene Donofrio, Cheryl L. Waite, Judges.
    JUDGMENT:
    Affirmed
    Atty. Sean Buchanan, Slater & Zurz, LLP, One Cascade Plaza, Suite 2210, Akron,
    Ohio 44308 for Plaintiff-Appellant, and
    Atty. Edgar Moore, Jr. and Atty. Timothy Moore, Bixler, Moore, LLC, 4505 Stephen
    Circle NW, Suite 101, Canton, Ohio 44718 for Defendant-Appellee.
    –2–
    Dated: July 10, 2020
    Robb, J.
    {¶1}    Plaintiff-Appellant Diane Marie Johnson appeals the decision of the Carroll
    County Common Pleas Court granting summary judgment for Defendant-Appellee Jeffrey
    Kuehn. The issue in this appeal is whether the trial court erred in granting summary
    judgment for Appellee. For the reasons expressed below, the trial court’s decision is
    affirmed.
    Statement of the Case
    {¶2}     Appellant and Appellee are brother and sister. Their father, Heinrich
    Kuehn, died in January 2018 with both probate and non-probate assets. At issue in this
    case is the non-probate assets, which are two Edward Jones accounts and Heinrich’s
    home. Appellee was listed as the beneficiary on both Edward Jones accounts. In 2010,
    prior to the onset of Alzheimer’s, Heinrich executed a Transfer on Death Deed for his
    house naming Appellee beneficiary.
    {¶3}    Following Heinrich’s death, Appellant filed a complaint against Appellee
    asserting either an express or implied trust was created and as such, one-half of the non-
    probate assets were to be held in trust for Appellant’s benefit. She also asserted Appellee
    would be unjustly enriched if he was permitted to keep all the non-probate assets. 12/2/18
    Complaint. It is undisputed that Heinrich did not have a written trust providing for the
    distribution of his non-probate assets.
    {¶4}    Appellee answered denying that an express or implied trust was
    created. 1/28/19 Answer.
    {¶5}     Both Appellant and Appellee were deposed.
    {¶6}    Thereafter, Appellee filed a motion for summary judgment arguing there
    was no evidence that an express or implied trust was created. 7/26/19 Defendant
    Summary Judgment Motion.
    {¶7}     Appellant filed a response asserting there was a genuine issue of material
    fact as to whether an express or implied trust was created. 8/26/19 Plaintiff Response to
    Summary Judgment Motion. She supported her position with statements from Appellee
    indicating that Heinrich wanted Appellee to help Appellant if she ever needed it. She also
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    –3–
    pointed to the Application for Authority to Expend Funds filed with the Probate Court
    where Appellee asked for permission to rent his father’s house to tenants. At the time,
    Heinrich resided at a facility for patients with Alzheimer’s Disease. In the application,
    Appellee stated, “Seek authority to rent the ward’s home or apartments for $600/month
    to offset his increase in costs to a new facility. The ward would like to retain his home for
    his daughter in the future and not sell it. Per local realtors, his home in current condition
    could only rent for that much.” Exhibit B to Jeffrey Kuehn’s Deposition.
    {¶8}     Appellee filed a reply re-asserting there was no evidence that an express
    or implied trust was created. 9/20/19 Defendant Reply in Support of Summary Judgment.
    He argued the statements made by his father to help his sister did not create an express
    or implied trust. 9/20/19 Defendant Reply in Support of Summary Judgment. In response
    to his statement in Exhibit B, Application for Authority to Expend Funds, he pointed to his
    deposition testimony explaining that Appellant had told him that she or her family might
    want to purchase the home and he wanted to give her the opportunity to do so. Jeffrey
    Kuehn Depo. 38-39.
    {¶9}     The     trial   court   granted     Appellee’s    motion     for    summary
    judgment. 10/11/19 J.E. As to an express trust, the trial court concluded that neither
    party produced evidence that Heinrich made an explicit declaration of trust for Appellant’s
    benefit or intended to create a trust for her benefit. The trial court explained:
    The Plaintiff was asked several times in her deposition if she can recall
    anything that Heinrich told her that would indicate that he wanted the
    property to be held by Defendant for Plaintiff’s benefit. Plaintiff’s response
    to that line of questioning was always “no” or “I do not recall”.
    The Defendant was asked during his deposition about the elements of an
    Express Trust. Specifically, he admitted that Heinrich asked Defendant to
    take   care of Plaintiff after Heinrich’s death. However, there was no
    evidence of any explicit declaration that Heinrich intended to create a trust
    for Plaintiff. Instead Defendant described Heinrich’s desire for Defendant
    to help Plaintiff if she needed it, in the way any normal brother and sister
    would help each other.
    Case No. 19 CA 0935
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    10/11/19 J.E.
    {¶10}    The court also found that no implied trust was created. The court noted
    the evidence was clear that in October 2010 Heinrich named Appellee as beneficiary of
    the transfer on death deed. The evidence indicated Heinrich became angry at Appellant
    because she wanted the house but was going to make him move out, so he intentionally
    had the deed changed so she would not benefit. The trial court indicated there was no
    evidence to suggest Appellee influenced this decision. Also, there was no evidence that
    Appellee influenced Heinrich’s decision to name Appellee as beneficiary of the Edward
    Jones accounts. Accordingly, the trial court found the elements of constructive trust did
    not exist. 10/11/19 J.E.
    {¶11}    Appellant appeals the trial court decision to grant summary judgment in
    Appellee’s favor.
    Assignment of Error
    {¶12}    “The Court erred in the application of the summary judgment standard to
    this matter in granting summary judgment to the defendant.”
    {¶13}    The trial court held that the undisputed facts as a matter of law did not
    result in an express oral trust or an implied constructive trust. Appellant finds fault with
    that decision and asserts there is a genuine issue of material fact as to whether an
    express oral trust or an implied trust was created. Appellee counters arguing the facts do
    not rise to the level of creating an express oral trust or an implied constructive trust; there
    is no genuine issue of material fact.
    {¶14}    We review a trial court's summary judgment decision de novo, applying
    the same standard used by the trial court. Ohio Govt. Risk Mgt. Plan v. Harrison, 
    115 Ohio St. 3d 241
    , 2007-Ohio-4948, 
    874 N.E.2d 1155
    , ¶ 5. A motion for summary judgment
    is properly granted if the court, upon viewing the evidence in a light most favorable to the
    nonmoving party, determines that: (1) there are no genuine issues as to any material
    facts; (2) the movant is entitled to judgment as a matter of law; and (3) the evidence is
    such that reasonable minds can come to but one conclusion and that conclusion is
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    adverse to the opposing party. Civ.R. 56(C); Byrd v. Smith, 
    110 Ohio St. 3d 24
    , 2006-
    Ohio-3455, 
    850 N.E.2d 47
    , ¶ 10.
    {¶15}    This case involves the assertion that a trust was created to benefit
    Appellant. The Ohio Supreme Court has defined a trust as “the right, enforceable in
    equity, to the beneficial enjoyment of property, the legal title to which is in another.” Ulmer
    v. Fulton, 
    129 Ohio St. 323
    , 339, 
    195 N.E. 557
    (1935). There are two types of trusts,
    express and implied. Brate v. Hurt, 
    174 Ohio App. 3d 101
    , 2007-Ohio-6571, 
    880 N.E.2d 980
    , ¶ 25 (12th Dist.); Lawrence v. Bailey, 3d Dist. Marion No. 9-99-37, 
    2000 WL 51803
    (Jan 25, 2000). “An express trust arises by reason of a manifested intention to create it.
    Constructive trusts are imposed irrespective of intention.” Peterson v. Teodosio, 34 Ohio
    St.2d 161, 172, 
    297 N.E.2d 113
    (1973). See also 91 Ohio Jurisprudence 3d , Trusts,
    Section 5 (“Express trusts are those intentionally created by the direct and positive act of
    the settlor by some writing, deed, will, or oral declaration, and are distinguishable from
    the implied trusts or trusts by operation of law, resulting and constructive, in that resulting
    trusts are founded upon the intention, implied in law, of the parties to the transaction, and
    constructive trusts are founded upon fraud or wrongdoing irrespective of the intention of
    the parties concerned.”).
    {¶16}    The analysis will begin with whether there was evidence presented that
    creates a genuine issue of material fact as to whether an express oral trust was created.
    Express Oral Trust
    {¶17}    The party alleging the existence of an express oral trust has the burden of
    proving, by clear and convincing evidence, that a trust was created and the terms and
    conditions of that trust. In re Estate of Hoffman, 
    175 Ohio St. 363
    , 
    195 N.E.2d 106
    ,
    syllabus (1963); Boughman v. Boughman, 
    69 Ohio St. 273
    , 279, 
    69 N.E. 430
    (1903). “Regardless of the mode of creation, it is indispensable that the elements of a
    trust be established. Boughman at 280.
    {¶18}    The Ohio Supreme Court has set forth the elements of an express trust,
    stating:
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    While its elements have been variously stated to constitute an express trust
    there must be an explicit declaration of trust, or circumstances which show
    beyond a reasonable doubt that a trust was intended to be created,
    accompanied with an intention to create a trust, followed by an actual
    conveyance or transfer of lawful, definite property or estate or interest,
    made by a person capable of making a transfer thereof, for a definite term,
    vesting the legal title presently in a person capable of holding it, to hold as
    trustee for the benefit of a cestui que trust or purpose to which the trust fund
    is to be applied; or a retention of title by the owner under circumstances
    which clearly and unequivocally disclose an intent to hold for the use of
    another.
    Ulmer, 
    129 Ohio St. 323
    , 339–40, quoting 65 Corpus Juris, 231, § 21. See also 53 Ohio
    Jurisprudence 2d, Trusts, Section 40 (1962). See also 91 Ohio Jurisprudence 3d, Trusts,
    Section 49 (“Under Ohio law, four requirements are necessary to establish existence of
    an express or technical trust: (1) an intent to create trust; (2) a trustee; (3) a trust res; and
    (4) a definite beneficiary. An express trust is created by the act, consent, and mutual
    understanding of the parties. To constitute an express trust, there must be an explicit
    declaration of trust or circumstances which show beyond reasonable doubt that a trust
    was intended to be created and that it was made by a person capable of making a
    transfer.”).
    {¶19}    During her deposition, Appellant was asked whether she could recall
    Heinrich indicating he wanted the property (house and/or the Edward Jones Accounts) to
    be held for her benefit. Her answer was either “no” or “I do not recall.” Diane Johnson
    Depo. 26, 27, 32, 33. She did acknowledge that she was aware that in 2010 Heinrich
    executed a transferable on death deed for the house and named Appellee as the
    beneficiary. Diane Johnson Depo. 30. Heinrich did not tell her why that was
    occurring. Diane Johnson Depo. 30.
    {¶20}    Appellee’s testimony explained the circumstances that lead to the
    execution of the 2010 transferable on death deed naming Appellee as the beneficiary. He
    admitted that initially his father wanted Appellant to have the house. Jeffery Kuehn Depo.
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    33. Appellant had told Heinrich that her family really liked the house and would like to
    live in it when he passed away. Jeffery Kuehn Depo. 33. However, around 2009 or 2010,
    Appellant told Heinrich that they were moving out of state. Jeffery Kuehn Depo. 33.
    Heinrich told her he did not understand and thought they wanted to live in his house.
    Jeffery Kuehn Depo. 33. She responded by stating that maybe they would give the house
    to her middle child and that he would remodel it and live there now. Jeffery Kuehn Depo.
    33. Heinrich then asked her where he was supposed to live and she responded that he
    would have to go live somewhere else. Jeffery Kuehn Depo. 33. Appellee explained:
    At that point he [Heinrich] became very angry and he wanted to make sure
    that he’d heard Diane correctly. And at that point he had called me up and
    he said, Jeff, I want you to come over here and talk with your sister. She’s
    here now. He called me up. I dropped what I was doing, drove an hour and
    half from the other side of Youngstown, came over and said, Diane, dad’s
    very upset about something about the house. Did you tell dad that you were
    kicking him out of his house? And she said, Well I don’t know what you
    mean. He said something about you’re going to give the house to Jason
    and he’s going to live in the house and he’s going to go somewhere else.
    And she said, Well, yeah, if Jason’s living here, dad would have to go
    somewhere else. I said, Diane, what you’re telling dad is that he’s going to
    have to leave his own house? She said, Well, I guess he would have to.
    Jeffrey Kuehn Depo. 34-35.
    {¶21}    Appellee explained that Heinrich asked him if he wanted the house, to
    which he responded that he did not, but if it was given to him he would either sell it or
    utilize it as a rental property. Jeffrey Kuehn Depo. 35. Heinrich then executed the transfer
    on death deed naming Appellee as beneficiary. Jeffrey Kuehn Depo. 35. Appellee
    explained that Heinrich was so angry at Appellant that she and her family were going to
    kick him out of his house that his response was to give it Appellee. Jeffrey Kuehn Depo.
    35.
    Case No. 19 CA 0935
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    {¶22}    This evidence clearly indicates that in 2010 there was no intention by
    Heinrich to create an express oral trust regarding the house. The evidence in fact
    suggests the opposite; there was a clear intention to not create a trust.
    {¶23}   Admittedly, during the deposition, Appellant submitted Plaintiff’s Exhibit B,
    Application for Authority to Expend Funds. Appellee was named as Heinrich’s guardian
    because Heinrich had developed Alzheimer’s Disease. Appellee filed this Application for
    Authority to Expend Funds in the Stark County Probate Court on March 23, 2016. In this
    application, he stated, “Seek authority to rent the ward’s home or apartments for
    $600/month to offset his increase in costs to a new facility. The ward would like to retain
    his home for his daughter in the future and not sell it. Per local realtors, his home in
    current condition could only rent for that much.” Exhibit B to Jeffrey Kuehn’s Deposition.
    Appellant asserts this language creates a genuine issue of material fact as to whether an
    express oral trust was created.
    {¶24}    In making that argument, Appellant fails to acknowledge Appellee’s
    testimony regarding this statement. He was asked if after the 2010 execution of the
    transfer on death deed if there was any subsequent desire from Heinrich to give Appellant
    the house and Appellee responded there was not. Jeffrey Kuehn Depo. 36. When asked
    if that statement on the Application for Authority to Expend Funds meant Heinrich wanted
    to give the house to Appellant, Appellee responded, “Maybe. Maybe it does. He still
    hadn’t changed his mind on what he wanted to do with it, but at this point my father already
    had Alzheimer’s and dementia and he said a lot of things.” Jeffrey Kuehn Depo. 37. This
    statement indicates that if such an expression was made, it was when he had Alzheimer’s
    and did not have the capacity to express an intention to create a trust for Appellant.
    Furthermore, Appellee went on to explain that he did not make that statement about
    wanting to keep the house as the result of an express statement from Heinrich about
    keeping the house for Appellant’s benefit. Jeffrey Kuehn Depo. 38. Rather, he made the
    statement because Appellant had expressed an intention for her or her children to buy
    the house in the future. Jeffrey Kuehn Deop. 38.
    {¶25}   Appellant offers no evidence to dispute this testimony. She does not state
    that she never wished to buy the house or that Heinrich had a lucid moment and
    expressed an intention to create an express oral trust for her benefit regarding the
    Case No. 19 CA 0935
    –9–
    house. Therefore, the trial court’s conclusion that there was no clear and convincing
    evidence of the elements of an express oral trust was correct.
    {¶26}    As to the two Edward Jones accounts, the only potential evidence of an
    intention to create or the creation of an express oral trust regarding these accounts is
    Heinrich’s statements to Appellee to take care of his sister and her children, and to help
    them. Appellee admits these statements were made, but indicates Heinrich meant to help
    them if they got into trouble:
    He didn’t mention anything regarding money. He just mentioned
    helping them out in case they get into any kind of trouble. For my dad,
    trouble could have been any number of things, which would include, like I
    said, changing a light bulb or a stalled car or even helping them, you know,
    do their taxes, whatever, you know, you brought that up before. It could
    have been any number of things. My dad just said, in case they get into
    trouble, somebody’s probably going to need to be there, since I’m not
    going to be around, he wanted to know if I was still willing to help them,
    even though they had, you know, not really wanted to have any relationship
    with myself or my wife over the years, would I still be willing to help
    them. And I said, Dad, we’ve not been real close for these last ten years or
    so, and I said, I stepped up and helped you. I really wasn’t crazy about it,
    but I said, it’s the right thing to do because we’re family. And again, I’m still
    willing to do that.
    Jeffrey Kuehn Depo. 56-57.
    {¶27}    Appellant offers no evidence to indicate what Heinrich meant when he
    asked Appellee to help her and offers no evidence to dispute Appellant’s
    interpretation. As stated above, her testimony is that she does not know if Heinrich ever
    expressed an intention for the creation of a trust regarding the two Edward Jones
    accounts or she cannot recall if he did.
    {¶28}    Accordingly, the trial court’s conclusion that Appellant did not show by
    clear and convincing evidence that Heinrich intended to create or did create an express
    Case No. 19 CA 0935
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    trust for any of his property was correct. There is no genuine issue of material fact. The
    argument to the contrary is meritless.
    Implied Trust
    {¶29}    There are two types of implied trusts: constructive and resulting. Gabel v.
    Richley, 
    101 Ohio App. 3d 356
    , 363, 
    655 N.E.2d 773
    (2d Dist.1995).
    {¶30}   A constructive trust arises irrespective of the intention of the parties and is
    imposed when a person holding title to property is subject to an equitable duty to convey
    it to another on the ground that she would be unjustly enriched if she were permitted to
    retain it.
    Id. The duty
    to convey the property may arise because it was acquired through
    fraud, duress, undue influence, or mistake, through a breach of a fiduciary duty, or through
    the wrongful disposition of another's property.
    Id. A constructive
    trust may also be
    imposed “where it is against the principles of equity that the property be retained by a
    certain person even though the property was acquired without fraud.” Fewell v. Gross,
    12 Dist. Butler Nos. CA2006–04–096 and CA2006–05–103, 2007-Ohio-5788, ¶
    12. Thus, a constructive trust “is an equitable remedy imposed to prevent fraud or unjust
    enrichment.” Glick v. Dolin, 
    80 Ohio App. 3d 592
    , 596, 
    609 N.E.2d 1338
    (8th Dist.1992). A
    party asserting the imposition of a constructive trust must prove its existence by clear and
    convincing evidence. Fewell at ¶ 13.
    {¶31}    “A resulting trust has been defined as ‘one which the court of equity
    declares to exist where the legal estate in property is transferred or acquired by one under
    facts and circumstances which indicate that the beneficial interest is not intended to be
    enjoyed by the holder of the legal title.’” First Natl. Bank of Cincinnati v. Tenney, 165 Ohio
    St. 513, 515–516, 
    138 N.E.2d 15
    (1956). There are three general situations in which
    resulting trusts are imposed: (1) where an express trust fails in whole or in part, (2) where
    an express trust is performed without exhausting the trust estate, and (3) purchase-
    money trusts.
    Id. {¶32} As
    the trial court noted, Appellant does not expressly indicate what type of
    implied trust she contends was created. However, given the pleading of unjust
    enrichment and the facts presented, the only possible implied trust that could have been
    created would have been an implied constructive trust. “A constructive trust is
    Case No. 19 CA 0935
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    substantially an appropriate remedy against unjust enrichment. It is raised by equity in
    respect of property which has been acquired by fraud, or where, although acquired
    originally without fraud, it is against equity that it should be retained by the person holding
    it. * * *.” Whitman v. Souder, 3d Dist. Seneca No. 13-84-30, 
    1985 WL 4387
    (Dec. 12,
    1985).
    {¶33}    The following is the trial court’s reasoning that there was no evidence that
    an implied constructive trust based on fraud, mistake, or breach of duty:
    In this case there is no doubt that Defendant holds title to both the real
    estate in question and the IRAs [Edward Jones accounts]. The real estate
    was passed to him by virtue of the Transfer on Death Deed. The IRAs
    should be passed to him by virtue of being the sole beneficiary under the
    IRA policies.
    But does he have an equitable duty to convey it to another on the grounds
    of unjust enrichment? The answer is no. The evidence presented indicates
    that    Heinrich   created   the   transfer on     death   deed    in   October
    2010. Neither party makes any allegations that Heinrich was incompetent
    in 2010 and unable to handle his own affairs. By all accounts Heinrich
    became angry at Plaintiff in 2010 and intentionally had the deed changed
    so that she would not benefit from it. There is no evidence to suggest that
    Defendant influenced Heinrich’s decision at all. Likewise, neither party
    presented any evidence or arguments to show that Defendant obtained the
    property through fraud, duress, mistake, breach of fiduciary duty or a
    wrongful disposition.
    The same can be said for Defendant’s beneficiary status on the IRA
    accounts. There was some testimony that at one time Heinrich had one of
    Plaintiff’s children listed as a beneficiary on at least one of the IRA accounts.
    However, there was no evidence presented to show that the beneficiary
    status was changed due to fraud, duress, undue influence or mistake or
    Case No. 19 CA 0935
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    through breach of fiduciary duty, or through the wrongful disposition of
    another’s property.
    The elements required to create a constructive trust for Plaintiff simply do
    not exist and there are no issues of material fact left to decide otherwise.
    10/11/19 J.E.
    {¶34}    There is nothing in the record to indicate this reasoning is
    incorrect. Furthermore, in addition to the above analysis, it is noted that there is nothing
    in the record to create a genuine issue of material fact that it is against the principles of
    equity to not create an implied constructive trust. The argument that there is a genuine
    issue of material fact that an implied construction trust was created is meritless.
    Conclusion
    {¶35}    This court finds no merit with the assignment of error. The trial court’s
    grant of summary judgment for Appellee is affirmed.
    Donofrio, J., concurs.
    Waite, P. J., concurs.
    Case No. 19 CA 0935
    [Cite as Johnson v. Kuehn, 2020-Ohio-3757.]
    For the reasons stated in the Opinion rendered herein, the assignment of error
    is overruled and it is the final judgment and order of this Court that the judgment of the
    Court of Common Pleas of Carroll County, Ohio, is affirmed. Costs to be taxed against
    the Appellant.
    A certified copy of this opinion and judgment entry shall constitute the mandate
    in this case pursuant to Rule 27 of the Rules of Appellate Procedure. It is ordered that
    a certified copy be sent by the clerk to the trial court to carry this judgment into
    execution.
    NOTICE TO COUNSEL
    This document constitutes a final judgment entry.
    

Document Info

Docket Number: 19 CA 0935

Judges: Robb

Filed Date: 7/10/2020

Precedential Status: Precedential

Modified Date: 7/17/2020