Dibert v. Carpenter , 2017 Ohio 689 ( 2017 )

[Cite as Dibert v. Carpenter, 2017-Ohio-689.]
IN THE COURT OF APPEALS OF OHIO
SECOND APPELLATE DISTRICT
CHAMPAIGN COUNTY
GERALD DIBERT :
:
Plaintiff-Appellant : C.A. CASE NO. 2015-CA-18
:
v. : T.C. NO. 08CV01
:
CYNTHIA SUE CARPENTER, : (Civil Appeal from Common Pleas
TRUSTEE, et al. : Court, Probate Division)
:
Defendants-Appellees :
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OPINION
Rendered on the ___24th ___ day of _____February_____, 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
.............
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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.
1
Some of the documents filed in the trial court refer to the parties as Gary and Cyndi,
which are apparently their nicknames. Although we refer to the parties by their first
names to avoid confusion with other family members, we will use their given names.
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{¶ 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
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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.
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{¶ 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
2
Gerald also sued Attorney Allen Maurice. The trial court granted summary judgment
to Maurice on those claims, which sounded in legal malpractice, because they were not
brought within the applicable statute of limitations. The trial court certified the ruling as
immediately appealable, but the summary judgment was not appealed.
3 The lawsuit was filed in the General Division of common pleas court, but was transferred
to the Domestic Relations-Juvenile-Probate Division.
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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
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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 were
both beneficiaries. Nor is there any evidence that Carpenter improperly persuaded or
coerced Dibert to make the transfer.” Id. at ¶ 28. We further stated that Gerald “was on
constructive notice that his right to purchase had already expired when he signed the
deed transferring the property from the Dibert trust to the Pickering trust.” Id. at ¶ 35.
{¶ 21} On June 9, 2011, on its own initiative, the trial court ordered Gerald and
Cynthia removed as co-trustees of the Dibert Trust; the court noted the animosity between
the parties and that each party had sought removal of the other as co-trustee of the Dibert
Trust. The court appointed Howard Traul as a “special fiduciary” to administer the trust,
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pursuant to R.C. 5807.06(C) and R.C. 5810.01(B). The trial court later ordered Traul, in
his capacity as special fidiciary of both the Pickering and Dibert Trusts, to be added as a
party to the litigation.
{¶ 22} On July 31, 2012, Cynthia, as trustee of the Pickering Trust and individually,
filed an amended counterclaim against Gerald. Cynthia brought thirteen claims for relief,
all of which claimed that Gerald misused funds and property from the Dibert Trust for his
personal benefit. Cynthia claimed that Gerald violated his duty to administer the Dibert
Trust in good faith and his duty of loyalty, contrary to R.C. Chapter 5808. Cynthia
requested relief “as a co-equal beneficiary of the Dibert Trust.”
{¶ 23} Gerald filed an answer to the counterclaims, denying the allegations and
raising defenses; he did not assert any claims against Cynthia related to the Dibert Trust
or request a jury trial on Cynthia’s counterclaims.
{¶ 24} On November 26, 2012, the parties reached an agreement in open court on
the issues raised by Gerald’s complaint; Cynthia agreed that she owed $120,000 to the
Pickering Trust. The trial court issued a judgment entry the following day, which set forth
the settlement amount and approved the settlement. On March 8, 2013, the trial court
issued an agreed entry addressing the distribution of the Pickering Trust assets. The
trial court included language under Civ.R. 54(B), but in the agreement, the parties waived
their right to appeal the judgment. No appeal was filed.
{¶ 25} Cynthia’s counterclaims against Gerald regarding the Dibert Trust remained
pending, and the trial on those claims was set to begin on September 30, 2013.
{¶ 26} On June 26, 2013, the judge who had been handling the case recused
himself, and Judge Reisinger issued an order stating that she would be the presiding
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judge “in finalizing the matter.” A conference between the attorneys and counsel was
held on August 2, 2013. As a result of that conference, on August 8, the trial court issued
several orders, including that Jane Dibert, as life income beneficiary of the Dibert Trust,
be joined as a party, that the special fiduciary investigate refinancing a mortgage with
First Central Bank, that discovery be exchanged immediately, that counsel “brief their
respective positions on the trust,” and that a settlement conference be held on September
30.
{¶ 27} On August 23, 2013, Gerald’s counsel wrote a letter to Judge Reisinger
expressing concern about the judge’s personal contact with participants in the litigation
and/or individuals who are close to the participants. On September 4, the trial court
issued an entry indicating that the court had held a conference call with the parties’
counsel and special fiduciary of the Dibert Trust regarding the August 23 letter. The
entry stated that, “[b]ased upon the representations of the Court, [Gerald’s attorney]
withdraws his request for Judge Reisinger to recuse herself from this matter. Judge
Reisinger shall continue to preside.”
{¶ 28} Pursuant to the August 8 order, counsel for Gerald and Cynthia filed lengthy
trial memoranda regarding the claims concerning the Dibert Trust. In his memorandum,
Gerald indicated that he had loaned money to the trust and had paid personal money on
behalf of the trust. Gerald also filed documents requesting reformation of the Dibert
Trust and the ability to exercise the purchase option provision. In her memorandum,
Cynthia argued, in part, that Gerald should not be permitted to raise new claims after six
years of litigation. Cynthia filed a motion in limine, seeking to restrict Gerald from
presenting evidence on newly-asserted but unpled claims.
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{¶ 29} A settlement conference was held, as scheduled, on September 30, but no
settlement was reached. Trial on the counterclaims began on October 22, 2013.
{¶ 30} Prior to the presentation of testimony on October 22 (Gerald was the sole
witness that day), the trial court made the following rulings from the bench regarding
Cynthia’s motion in limine, which were later journalized as follows:
Issue #1 Reformation of the Trust.
This Court will hold in abeyance until all evidence is heard to
determine whether the settlor’s intention(s) need to be addressed in
the final outcome.
Issue # 2 Relitigation of the Option Provision
The Court finds that the “Option Provision” was decided by both this
Court and the Appellate Court and those Orders shall stand and not
be reconsidered or litigated.
Issue # 3 Plaintiff’s unpled Claims and Defenses.
The Court will not hear unpled claims and/or defenses as they are
not properly before the Court for consideration.
{¶ 31} After the oral rulings on Cynthia’s motion in limine, Gerald orally moved to
amend his answer to Cynthia’s counterclaims, seeking to add claims related to the Dibert
Trust; the motion was orally denied as untimely. On October 30, Gerald attempted to file
a written motion for leave, but the motion was not accepted by the clerk for filing.
{¶ 32} A second day of trial was held on October 31, 2013, although most of the
day involved settlement discussions and no testimony was taken. Prior to the hearing,
Gerald filed a motion asking the trial court to reconsider its rejection of Gerald’s motion
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for leave to file an amended answer and counterclaim. The trial court orally granted the
motion to reconsider in part, allowing the motion for leave itself to be filed, but not the
proposed amended answer.
{¶ 33} A third day of trial was held on November 27, 2013. During Gerald’s
testimony, he testified to a letter, signed by James R. Wilson, that was sent to him from
Citizens National Bank. The trial court stopped the hearing and reminded the parties
that Wilson was the trial judge’s father. The trial court recessed to permit counsel to
discuss the matter with their clients.
{¶ 34} During the recess, Gerald successfully filed his motion for leave to amend
his answer to Cynthia’s counterclaims. Gerald’s written motion indicated that Cynthia
was aware of his proposed new claims (seeking repayment of the loans he allegedly had
made to the Dibert Trust), that she had previously been provided the documentation that
supports it, and that she had used the documentation in settlement negotiations. Gerald
also filed a “motion to close this case.” After proceedings resumed, the trial court orally
overruled the motion for leave.
{¶ 35} With respect to the potential conflict of interest, Gerald informed the court
that he intended to call Wilson as a witness. Although Cynthia wished to proceed with
the hearing, the court determined that “at a minimum a perception of a conflict” existed,
and the judge orally recused herself. In light of her recusal, the judge declined to rule on
the “motion to close the case.”
{¶ 36} On January 3, 2014, retired judge James Rapp from Hardin County was
appointed by the Supreme Court of Ohio to preside over the matter. (The certificate of
assignment, which indicated the effective date of Judge Rapp’s appointment, was not
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filed in the trial court at that time.) On January 22, 2014, Judge Reisinger issued written
entries memorializing the events and her oral rulings of October 22 and 31 and November
27, 2013. On January 31, 2014, Judge Rapp’s certificate of assignment was filed in the
trial court.
{¶ 37} Gerald obtained new counsel, and the continuation of the trial was ultimately
scheduled to begin on September 16, 2014.
{¶ 38} A pretrial conference was held on August 28, 2014. According to the
court’s subsequent order of September 2, 2014, the court granted an oral motion to
substitute Traul, the special fiduciary of the Dibert Trust, as defendant for Cynthia, in her
capacity as co-trustee of the Dibert Trust. The court and parties had also reviewed the
status and merits of Gerald’s November 27, 2013 motion for leave to amend his answer
to the first amended counterclaim and his motion to close the case. The court overruled
the motions, finding “for reasons readily apparent in the record” that neither motion was
“well taken.”
{¶ 39} On September 16, 2014, the scheduled trial date, Gerald moved to
“suspend proceedings pending identification of real party in interest.” He asserted that
Cynthia lacked standing to prosecute her counterclaims against him, because she had
been removed as co-trustee of the Dibert Trust. Gerald argued that Cynthia’s claims
were more properly brought by the trustee of the Dibert Trust (i.e., Traul), not the
beneficiaries.
{¶ 40} Cynthia opposed the motion, arguing that Gerald had not raised “real party
in interest” as a defense in his answer to the amended counterclaim and that, as a
beneficiary, she had standing to raise a breach of trust claim against the trustee. Cynthia
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noted that the trial court had previously held on February 10, 2011, that a beneficiary can
bring such a claim, and that the law of the case doctrine precluded Gerald’s argument.
The trial did not proceed.
{¶ 41} On November 14, 2014, while the motion to suspend proceedings was
pending, Gerald filed a motion “to avoid orders by recused judge.” Specifically, he asked
the trial court to strike the orders docketed on January 22, 2014 on the ground that Judge
Reisinger “did not have judicial authority to enter an Order in this case subsequent to the
appointment of James S. Rapp by the Supreme Court of Ohio as Successor Judge in this
case.”
{¶ 42} On January 9, 2015, the trial court denied Gerald’s motions to suspend
proceedings and to avoid orders by the recused judge. (Doc. #168, File #13) The trial
court reviewed the chronology of proceedings in the case, including “the record and the
transcript with respect to each of the judgment entries [on January 22, 2014].” The court
held: “Having reviewed the record and transcript, the court concludes that Plaintiff Dibert’s
motions are untimely and/or without merit except that the Court concludes that Dibert
should have been permitted to file his proposed ‘amended answer and counterclaim.’ ”
The court’s order stated, in part:
3. In order to clarify the record and cure any procedural errors, the
undersigned presiding judge now makes the following ORDER:
A. With regard to Defendant’s [Cynthia’s] motion in limine filed
October 16, 2013 the motion is well-taken and the Court will not hear
unpled claims and/or defenses as they are not properly before the
Court for consideration.
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B. With regard to Defendant’s motion in limine filed October 16,
2013, the Motion is well taken and the Court finds that the “Option
Provision” was decided by both this Court and the Appellate Court
and those Orders shall stand and will not be reconsidered or litigated.
C. With regard to Defendant’s motion in limine filed October 16,
2013, as to Plaintiff’s [Gerald’s] proposed reformation of trust, this
issue has not been raised by any pleading before the Court.
However, the Court will not make a ruling at this time.
4. This Judge concurs and reaffirms Judge Reisinger’s rulings to deny
Plaintiff leave to file an amended “answer and counterclaim” during trial
proceedings. See ENTRY filed September 2, 2014. This Court DENIES
Plaintiff’s Motion for Leave to Amend his Answer. However, in order to
clarify the record and cure any procedural errors, Plaintiff may file the
“proposed amended answer and counterclaim” he had attempted to file after
commencement of the trial. Each page shall be clearly marked as a
“proposed amended answer and counterclaim.” Plaintiff may file such
“proposed amended answer and counterclaim” at any time before
recommencement of trial on January 15, 2104 [sic, 2015].
{¶ 43} The completion of the trial was ultimately held on February 9, 2015 and
February 13, 2015. Counterclaims Five, Eleven, and Thirteen were withdrawn by
Cynthia. On May 7, 2015, the trial court entered judgment in favor of Traul, as successor
trustee of the Dibert Trust, on four of the remaining counterclaims, as follows:
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Counter- Description of Counterclaim Principal
Claim # amount owed
1 The Trust paid money on Gerald’s behalf for his portion of the $26,261.32
Citizens National Bank note executed and delivered on Sept. 9, 1986
2 The Trust paid money to Peoples Savings Bank to stop the bank from $25,000
proceeding to sell all real property that Gerald owned, including the
real property identified as the “Strayer Farm” at a sheriff’s sale as a
result of foreclosure
3 The Trust paid money on Gerald’s behalf representing interest on $31,500
the Dillon Loan, a loan under which the Trust leveraged its property
as collateral so that Gerald could receive the benefit of the $210,000
loan
4 Gerald is responsible for his portion of the $300,000 Dibert Trust $230,000
Loan from First Central Bank dated April 6, 2010
The trial court dismissed counterclaims five through thirteen.
{¶ 44} On May 27, 2015, Cynthia filed a motion and application for attorney fees.
Two days later, prior to a ruling on Cynthia’s motion, Gerald filed a notice of appeal of the
court’s May 7, 2015 judgment. On June 5, 2015, Cynthia filed a “Suggestion of Remand”
in this appellate court, asserting that the case should be remanded to the trial court to
resolve her pending application for attorney fees. We sustained the “suggestion,”
pursuant to App.R. 4(B).
{¶ 45} Upon remand, Gerald filed a memorandum opposing any award of attorney
fees. After a hearing, the trial court awarded $105,127 in attorney fees, plus $719.50 in
deposition costs, to Cynthia.
{¶ 46} Gerald raises five assignments of error on appeal.
II. Right to Jury Trial
{¶ 47} In his first assignment of error, Gerald claims that the trial court erred when
it denied him a jury trial, as demanded in Gerald’s complaint. Gerald argues that Article
I, Section 5 of the Ohio Constitution grants him a constitutional right to a jury trial, and the
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trial court erred in concluding that he lacked either a constitutional or statutory right to a
jury trial. Cynthia responds that Gerald’s appeal of this issue is barred by res judicata,
that he made only a limited demand for a jury trial that did not encompass her
counterclaims, and that the trial court correctly held that it was acting as a court of equity
in this case and thus no constitutional right to a jury trial exists.
{¶ 48} First, Cynthia claims that res judicata bars Gerald’s appeal of the trial court’s
January 2009 order, because he failed to appeal that order in 2011 as part of his appeal
from the trial court’s grant of partial summary judgment against him. We disagree.
{¶ 49} We addressed this issue in Trotwood v. S. Cent. Constr., L.L.C., 192 Ohio
App.3d 69, 2011-Ohio-237, 947 N.E.2d 1291 (2d Dist.), saying:
The issue before us, then, is whether a trial court’s inclusion of Civ.R. 54(B)
certification on one otherwise interlocutory order (the declaratory-judgment
ruling) makes another otherwise interlocutory order (the ruling on the
residents’ motion for leave to amend) final and appealable. Although
neither party has cited a case on point, we conclude that it does not. “[A]n
order that neither disposes of all claims between the parties nor contains an
express determination that there is no just reason for delay is an
interlocutory order. * * * When an order of a trial court is interlocutory, the
order remains subject to revision or modification by the trial court until and
unless the order is certified as suitable for appeal, or the action is finally
terminated as to all claims and all parties. Once a final judgment is issued
terminating a case, all interlocutory orders are merged into the final
judgment.” (Citations omitted.) Lingo v. Ohio Cent. RR. v. Norfolk S. Ry.,
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Franklin App. No. 05–AP–206, 2006-Ohio-2268, ¶ 17.
S. Cent. Constr. at ¶ 57. We held that, unless the interlocutory order were certified as
immediately appealable or until the trial court “terminated the actions as to all claims and
all parties,” the interlocutory order was not appealable. Id. at ¶ 58.
{¶ 50} Here, Gerald attempted to appeal the trial court’s ruling on his right to a jury
trial in 2009. We dismissed that appeal for lack of a final appealable order. Gerald’s
2011 appeal concerned the grant of a motion for partial summary judgment, an order that
would have been interlocutory but for the trial court’s Civ.R. 54(B) certification. The
judgment on appeal in 2011 did not terminate the action as to all claims and parties.
Accordingly, the January 2009 interlocutory order relating to Gerald’s right to a jury trial
did not merge into that 2011 judgment, and res judiciata does not bar Gerald’s appeal of
the denial of his request for a jury trial.
{¶ 51} Second, Cynthia asserts that Gerald did not properly demand a jury trial on
her counterclaims. Pursuant to Civ.R. 38(B), “[a]ny party may demand a trial by jury on
any issue triable of right by a jury by serving upon the other parties a demand therefor at
any time after the commencement of the action and not later than fourteen days after the
service of the last pleading directed to such issue.” Civ.R. 38(B) continues: “Such
demand shall be in writing and may be indorsed upon a pleading of the party. If the
demand is indorsed upon a pleading the caption of the pleading shall state ‘jury demand
endorsed hereon.’ ” (Indorse v. endorse sic.)
{¶ 52} Civ.R. 38(C) further provides:
In his [or her] demand a party may specify the issues which he [or she]
wishes so tried; otherwise he [or she] shall be deemed to have demanded
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trial by jury for all the issues so triable. If he [or she] has demanded trial
by jury for only some of the issues, any other party within fourteen days after
service of the demand or such lesser time as the court may order, may
serve a demand for trial by jury of any other or all of the issues of fact in the
action.
Civ.R. 38(C). Thus, “if a general jury demand is made without specifying particular
issues, it will be interpreted as a demand for a jury trial on all issues triable by a jury.”
Soler v. Evans, St. Clair & Kelsey, 94 Ohio St. 3d 432, 437, 763 N.E.2d 1169 (2002).
{¶ 53} The Ohio Supreme Court has held that, once a general jury demand is
made, the demand applies to all issues raised in the litigation, including subsequently
filed counterclaims, and a second jury demand is not required after the filing of the
counterclaims. Id. Moreover, the demand remains effective even if the claims brought
by the party requesting the jury trial are later dismissed. See id.
{¶ 54} The body of Gerald’s complaint requested a jury trial “on Counts Two,
Three, and Four.” However, Gerald failed to include a jury demand in the form that Civ.R
38(B) requires. The endorsement of the jury demand in the caption “is intended to insure
that the right will not be overlooked.” Tipp City v. Watson, 2d Dist. Miami No. 02CA43,
2003-Ohio-4836, ¶ 16. Although a demand for a jury trial in a pleading without the
endorsement in the caption does not comply with Civ.R. 38(B), “[m]ost courts hold that,
at least if no prejudice befalls the opposing party, failure to include the requisite
phraseology in the caption makes the demand technically deficient but does not operate
as a waiver of jury trial if the demand is otherwise timely and proper.” Id., quoting
Baldwin’s Ohio Civil Practice, Section 38:24. It is apparent from the trial court’s rulings
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on Gerald’s request for the jury trial that the trial court considered Gerald’s request in his
complaint to be adequately raised.
{¶ 55} Assuming that Gerald’s request for a jury was effective, the complaint
specified the issues that Gerald wanted to be tried by a jury, and his demand did not
constitute a general jury demand, such that it would encompass any counterclaims or
cross-claims that might later be filed. Because Gerald’s complaint included only a limited
jury demand (i.e., Counts Two, Three, and Four), the jury demand in his complaint did not
extend to Cynthia’s later-filed counterclaims.
{¶ 56} Gerald’s answer to the relief portion of Cynthia’s counterclaims also
indicated that he believed that a jury trial was necessary to determine the amount of
damages, if any. In response to paragraphs 4 and 5 of the relief portion of Cynthia’s
pleading (which requested damages in favor of the Pickering Trust and Dibert Trust,
respectively), Gerald states that the amount of any judgment must be determined by a
jury. Like his complaint, Gerald failed to endorse a jury demand in the caption of his
pleading. Again assuming that the lack of an endorsement in the caption did not
constitute a waiver, it is questionable, at best, whether Gerald’s response to Cynthia’s
original counterclaims constituted even a limited jury demand on her counterclaims.
{¶ 57} In his January 7, 2009 “Memorandum in Support of Trial by Jury,” Gerald
asserted that he had a right to a jury on Counts 2, 3, and 4 of his Complaint. He argued
that Count 2 (conversion) and Count 3 (unjust enrichment) were claims for monetary
damages, which were claims at law, not in equity. He further argued that he had sought
punitive damages, which was a matter for a jury. Gerald acknowledged that he had
failed to include the required endorsement in the caption of his pleading, but argued that
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it should not result in a waiver in this case. Gerald did not argue, or even mention, that
he also had a right to jury trial on Cynthia’s counterclaims.
{¶ 58} Cynthia amended her counterclaims in 2012. The amendment removed
the claims regarding the Pickering Trust and replaced the single counterclaim regarding
the Dibert Trust (which raised four alleged instances of misconduct by Gerald as co-
trustee) with thirteen counterclaims regarding the Dibert Trust; Counts One through Four
of the amended counterclaim each addressed a particular allegation of misconduct by
Gerald as co-trustee of the Dibert Trust that had been raised in the original counterclaim
regarding that trust. Counts Five through Thirteen raised new allegations of misconduct
by Gerald as co-trustee of the Dibert Trust.
{¶ 59} Gerald filed an answer to the amended counterclaims on September 20,
2012. The answer denied the allegations and raised affirmative defenses, but made no
reference to or demand for a jury trial on the amended counterclaims.
{¶ 60} Once a jury demand is made, the party demanding a jury trial cannot simply
withdraw that request. See Civ.R 39(A); Cleveland v. Lancaster, 2d Dist. Greene No.
02CA123, 2003-Ohio-4976. However, based on the record before us, we find no clear
demand for a jury trial on Cynthia’s counterclaims. Gerald did not include a demand for
a jury trial or the jury demand endorsement in his original answer to Cynthia’s
counterclaim (although a jury was mentioned), his subsequent memoranda in support of
his right to a jury trial addressed only his own claims, and he did not include a jury
demand, of any kind, in his answer to Cynthia’s amended counterclaims.
{¶ 61} Even assuming, for sake of argument, that Gerald adequately requested a
jury trial on Cynthia’s counterclaims, we agree with the trial court that he was not entitled
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to a jury trial. R.C. 2101.31, which addresses the right to a jury trial in probate court,
provides: “All questions of fact shall be determined by the probate judge, unless the judge
orders those questions of fact to be tried before a jury or refers those questions of fact to
a special master commissioner as provided in sections 2101.06 and 2101.07 of the
Revised Code.” R.C. 2101.31 gives the probate judge discretion whether to allow a jury
trial, and Gerald had no statutory right to a jury trial in probate court.
{¶ 62} We note that Gerald originally filed his action in the General Division of the
common pleas court, which has concurrent jurisdiction over claims involving intervivos
trusts (see R.C. 2101.24(B)(1) and R.C. 5802.03). But, Gerald agreed to the transfer of
his action from the General Division of the common pleas court to the Domestic Relations-
Juvenile-Probate Division. Whether Gerald would have had a statutory right to a jury
trial in the common pleas court is not before us.
{¶ 63} Gerald claims that R.C. 2101.31 is unconstitutional, because he has a right
to a jury trial under Article I, Section 5 of the Ohio Constitution. That Section provides:
“The right of trial by jury shall be inviolate, except that, in civil cases, laws may be passed
to authorize the rendering of a verdict by the concurrence of not less than three-fourths
of the jury.”
{¶ 64} The Ohio Supreme Court has long held that Section 5 does not guarantee
the right to a jury trial in all contexts, but rather “guarantees the right of trial by jury in
those cases where it existed previous to its adoption.” Belding v. State, 121 Ohio St.
393, 169 N.E. 301 (1929), syllabus. As stated by the Ohio Supreme Court:
Section 5 of the Ohio Bill of Rights provides that “the right of trial by
jury shall be inviolate,” etc. It was not, however, the intention of the framers
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of that clause of the Bill of Rights to guarantee the right of trial by jury in all
controversies. That guaranty only preserves the right of trial by jury in
cases where under the principles of the common law it existed previously
to the adoption of the Constitution. The right of trial by jury has uniformly
been recognized and enforced in this state in actions for money, where the
claim is an ordinary debt, but it is equally well recognized that many special
proceedings for the enforcement of a moral duty, where the payment of
money is the ultimate relief granted, does not entitle the parties to a jury
trial. Nearly all alimony proceedings are for the recovery of money, and an
order for payment of money either in bulk or in installments is usually
granted. No one would contend that a jury trial was guaranteed in that
character of cases. In Brown, Ex'r, v. Reed, 56 Ohio St. 264, 46 N.E. 982,
it was held that an executor who exercises bad faith in the sale of lands
under a testamentary power to sell can be charged with the difference
between an inadequate sale price and the true value of the lands, and it
was stated by Judge Shauck in the opinion that the guaranty of the right of
trial by jury does not extend to such a proceeding.
Belding at 396-397.
{¶ 65} “[W]hether a proceeding is a case in chancery or an action at law is to be
determined from the pleadings and from the issues made thereby.” Gantz v. Louisville,
155 Ohio St. 425, 428-429, 99 N.E.2d 308 (1951). Chancery courts historically had
jurisdiction of trusts and trust estates. See Madden v. Shallenberger, 121 Ohio St. 401,
406, 169 N.E.450 (1929); Official Comment to R.C. 5802.01 (Uniform Trust Code § 201,
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Role of court in administration of trust).
{¶ 66} Because Gerald settled his claims against Cynthia, we need not address
whether Gerald had a constitutional right to a jury trial on his claims; any error in the trial
court’s ruling regarding Gerald’s claims is moot.
{¶ 67} Cythnia’s amended counterclaims, which were the only claims that were
tried, asserted that Gerald had violated his duty to administer the Dibert Trust in good
faith and had breached his duty of loyalty by misusing trust funds and property for his
personal benefit, contrary to the Uniform Trust Code. Her claims concerned the
administration of a trust and sought redress for a trustee’s alleged breaches of the duties
of loyalty and to administer the trust. Although the requested redress for Cynthia’s
claims was monetary, the nature of the dispute arose in equity.
{¶ 68} Gerald’s first assignment of error is overruled.
III. Adjudication of Counterclaims
{¶ 69} In his second assignment of error, Gerald claims that the trial court erred
when it “accepted and proceeded to adjudicate” Cynthia’s counterclaims. Gerald
emphasizes that his claims were brought against Cynthia individually and as trustee of
the Pickering Trust and dealt “exclusively with the distribution of residual assets of the
Pickering Trust.” Gerald argues that Cynthia’s counterclaims based on the Dibert Trust
should not have been adjudicated, because “neither the Dibert Trust nor a Dibert Trustee
was a party to the action.”
{¶ 70} Cynthia advances four arguments as to why the trial court properly
adjudicated her counterclaims: (1) she is the real party in interest; (2) Gerald waived any
argument that Cynthia was not the real party in interest; (3) acceptance of the
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counterclaims for litigation was “consistent with the principal goal of the civil rules, that
being to permit the resolution of all controversies between the parties in a single suit”;
and (4) Cynthia’s standing to bring the counterclaims is determined as of the
commencement of the action, in this case, at the time the counterclaims were filed.
{¶ 71} Under Civ.R. 13, a pleader (1) shall state a counterclaim against any
“opposing party” if the counterclaim “arises out of the transaction or occurrence that is
the subject matter of the opposing party’s claim and does not require for its
adjudication the presence of third parties of whom the court cannot acquire
jurisdiction,” Civ.R. 13(A), or (2) may state a counterclaim against an “opposing party” if
the claim does not arise out the transaction or occurrence that is the subject of the
opposing party’s claim, Civ.R. 13(B).
{¶ 72} In general, a party appears only in the capacity in which it is named. Thus,
the “opposing party” requirement regarding counterclaims generally means that when a
party has brought suit in one capacity, the opposing party may not state a counterclaim
against that party in a different capacity; the parties must have the same capacity in both
the claim and the counterclaim. See, e.g., 75 Ohio Jurisprudence 3d Pleading, Section
218 (Mutuality of Parties and Demands); Collection Center, Inc. v. Bydal, 2011 N.D. 63,
795 N.W.2d 667 (2011); United States Fidelity and Guar. Co. v. Goudeau, 272 S.W.3d
603, 609 (Tex.2008) (“while a compulsory counterclaim must be brought against an
‘opposing party,’ the latter term does not include claims against the same party acting in
a different capacity”); Pomfret Farms Ltd. Partnership v. Pomfret Assoc., 174 Vt. 280,
285, 811 A.2d 655, 660 (2002); McLeod v. Sandy Island Corp., 260 S.C. 209, 219-220,
195 S.E.2d 178, 183 (1973) (defendant, sued as officer and director of corporation, could
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not bring counterclaim in his individual capacity); Ehrlich v. American Moninger
Greenhouse Mfg. Corp., 26 N.Y.2d 255, 260, 257 N.E.2d 890, 892 (1970); Wesolowski,
v. Erickson, 5 Wis. 2d 335, 341-342, 92 N.W.2d 898, 902 (1958). See also, e.g., In re
Adbox, Inc., 488 F.3d 836, 840 (9th Cir.2007).
{¶ 73} Nevertheless, some courts have recognized two exceptions to the “same
capacity” rule. See, e.g., Bydal at ¶ 41; Pomfret Farms Ltd. Partnership, 811 A.2d at
660; Blanchard v. Katz, 117 F.R.D. 527, 529 (S.D.N.Y.1987).
First, if a plaintiff has sued in a representative capacity but will benefit
individually from any recovery, a counterclaim may be made against the
plaintiff in his individual capacity. Second, a counterclaim may be made
against a plaintiff in a capacity different than that in which he sued if
principles of equity and judicial economy support such a counterclaim.
Blanchard at 529. See also, e.g., Kreamer Sports, Inc. v. Rocky Brands, Inc., Case No.
2:06cv576, 2007 WL 1144865 (S.D. Ohio Apr. 16, 2007); Rhodes, Inc. v. Morrow, 937
F. Supp. 1202, 1207 (M.D.N.C.1996).
{¶ 74} As detailed above, Gerald’s complaint was brought in his individual capacity
and raised allegations against Cynthia concerning her conduct as trustee of the Pickering
Trust; Gerald brought suit against her individually and as trustee of the Pickering Trust.
Cynthia counterclaimed as trustee of the Pickering Trust and co-trustee of the Dibert
Trust. She sought a declaratory judgment regarding the option-to-purchase provision
and raised two claims that Gerald interfered with arrangements between the Pickering
Trust and third parties. Cynthia’s fourth counterclaim alleged that Gerald breached his
fiduciary duty and engaged in self-dealing as co-trustee of the Dibert Trust; the
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counterclaim alleged a number of different transactions (which were later separated into
four of the counts in Cynthia’s amended counterclaim).
{¶ 75} In her capacity as trustee of the Pickering Trust and individually, Cynthia
was entitled to bring counterclaims against Gerald, pursuant to Civ.R. 13, for conduct that
harmed the Pickering Trust. Cynthia, in her capacity as co-trustee of the Dibert Trust,
was not a party to the action, and she could not bring a claim as the co-trustee of the
Dibert Trust.
{¶ 76} However, Gerald’s answer to Cynthia’s counterclaim did not include any
defenses, as set forth in Civ.R. 12. Specifically, he did not raise that the counterclaim
concerning the Dibert Trust was not brought by the real party in interest (if construed as
raised by Cynthia as trustee of the Pickering Trust) or by a party that had not been
properly joined in the action (Cynthia as co-trustee of the Dibert Trust). Gerald did not
move to dismiss the counterclaim concerning the Dibert Trust as being improperly raised.
To the contrary, prior to the filing of Cynthia’s amended counterclaim, Gerald litigated the
counterclaims related to the Dibert Trust, without objection, such as by filing a motion to
remove Cynthia as co-trustee of the Dibert Trust (Apr. 5, 2011) and participating in a
pretrial hearing on Cynthia’s counterclaims (June 5, 2012).
{¶ 77} The trial court was under no obligation to address, sua sponte, whether
Cynthia’s original counterclaim regarding the Dibert Trust was properly raised. Given
Gerald’s failure to raise a “different capacity” defense and his litigation of all claims raised
in the parties’ pleadings, we find no error in the trial court’s failure to dismiss Cynthia’s
original counterclaim concerning the Dibert Trust. See First Union Natl. Bank ex rel.
Southeast Timber Leasing Statutory Trust v. Pictet Overseas Trust Corp., Ltd., 351 F.3d
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810, 815 (8th Cir.2003) (“a plaintiff submits its alternate capacity to the jurisdiction of the
court if it defends the counterclaim on the merits and fails to proffer a ‘different capacity’
defense”).
{¶ 78} Civ.R. 15(A) allows for amendment of pleadings by leave of court and
provides that “[l]eave of court shall be freely given when justice so requires.” Cynthia’s
amended counterclaim was filed with leave of court on July 31, 2012. The amended
counterclaim states that it was brought by Cynthia individually and as trustee of the
Pickering Trust; she demanded relief as “a co-equal beneficiary of the Dibert Trust.” In
essence, the amended counterclaim substituted Cynthia individually (who had been a
party throughout the litigation) for herself as co-trustee of the Dibert Trust; both the original
counterclaim and amended counterclaim were also brought by Cynthia as trustee of the
Pickering Trust. Cynthia’s amended counterclaim, filed with the court’s permission
pursuant to Civ.R. 15(A), superseded her prior counterclaim. See Gordon v. Morris, 2d
Dist. Greene No. 99CA109, 2000 WL 873191, *2 (June 30, 2000).
{¶ 79} Gerald’s answer to the amended counterclaim expressly set forth five
specific affirmative defenses, including that Cynthia had failed to join all necessary parties
and that she failed to state a claim upon which relief may be granted. The answer did
not include the defense that Cynthia was not the real party in interest.4
4
Gerald’s answer to Cynthia’s amended counterclaim attempted to preserve any
affirmative defenses that he might later identify through discovery. Given the
requirement in Civ.R. 8(C) that a party “set forth affirmatively” his or her affirmative
defenses, we question whether this broad language was adequate to preserve any
unspecified affirmative defenses, absent the filing of an amended pleading. Regardless,
at the time that Gerald filed his answer to Cynthia’s amended counterclaim, Cynthia was
no longer a trustee of either the Pickering Trust or the Dibert Trust, and Gerald knew or
should have known of a potential real-party-in-interest defense. Thus, pursuant to Civ.R.
8(C), Gerald should have raised that defense in his answer to Cynthia’s amended
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{¶ 80} In his motion to suspend litigation, Gerald ultimately raised that the
counterclaims were not brought by the real party in interest, because Cynthia had been
removed as co-trustee of the Dibert Trust; Gerald argued that it was within the province
of the trustee (i.e., Special Fiduciary Traul) to pursue her claims for breach of duty. The
court concluded that, as a residual beneficiary, Cynthia individually was a proper party to
assert a breach of duty claim against Gerald for his actions as a co-trustee of the Dibert
Trust. We agree.
{¶ 81} A “real party in interest” is defined as “ ‘one who has a real interest in the
subject matter of the litigation, and not merely an interest in the action itself, i.e., one who
is directly benefitted or injured by the outcome of the case.’ ” (Emphasis sic.) Countrywide
Home Loans, Inc. v. Swayne, 2d Dist. Greene No. 2009 CA 65, 2010-Ohio-3903, ¶ 28,
quoting Shealy v. Campbell, 20 Ohio St. 3d 23, 24, 485 N.E.2d 701 (1985).
{¶ 82} A trustee has a duty to administer the trust in good faith, in accordance with
the trust’s terms and purposes, the interests of the beneficiaries, and applicable law.
See R.C. 5808.01 (setting forth the duties of a trustee). A trustee must administer a trust
solely in the interests of the beneficiaries. R.C. 5808.02. It thus follows that, if a trustee
breaches his or her fiduciary duty under the trust, a beneficiary with a vested interest in
the trust has a direct interest in the outcome of any litigation related to the breach. See
Papiernik v. Papiernik, 45 Ohio St. 3d 337, 544 N.E.2d 664 (1989), syllabus (“A
remainderman holding a vested interest in a trust which is subject to defeasance by the
exercise of a testamentary power of appointment has standing to maintain an action to
modify the administrative provisions of the trust agreement.”)
counterclaim if he wished to preserve it.
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{¶ 83} This is consistent with the fact that a trustee acts in a representative
capacity when he or she brings an action to enforce claims of the trust, and that the
beneficiaries of the trust may themselves sue as the real parties in interest. See Civ.R.
17(A) (A “trustee of an express trust * * * may sue in his [or her] name as representative
without joining with him [or her] the party for whose benefit the action is brought.”).
{¶ 84} In short, at the time Cynthia’s claims were tried, Cynthia, a beneficiary of
the Dibert Trust, had brought claims, in her individual capacity, against Gerald, in his
individual capacity, for actions Gerald allegedly had done as co-trustee of the Dibert Trust.
Both Cynthia and Gerald, in their individual capacities, were parties to the litigation as a
result of Gerald’s complaint. Finally, Cynthia was a real party in interest regarding the
Dibert Trust claims as a beneficiary of that trust. Although Cynthia’s original
counterclaim arguably violated the “same capacity” requirement, Gerald failed to raise
that defense, and Cynthia’s amended counterclaim, filed with the court’s permission,
corrected those errors.
{¶ 85} Gerald’s second assignment of error is overruled.
IV. Adjudications by Recused Judge
{¶ 86} In his third assignment of error, Gerald claims that Judge Reisinger, who
had recused herself in February 2009, erred in adjudicating matters in this case in late
2009 and in 2013, after the judge who had been handling the case recused himself.
Gerald claims that, once Judge Reisinger recused herself in February 2009, she should
not have further participated in this litigation.
{¶ 87} “The disqualification of a judge is an extraordinary remedy.” In re
Disqualification of Capper, 134 Ohio St. 3d 1271, 2012-Ohio-6287, 984 N.E.2d 1082, ¶
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26. R.C. 2701.03 sets forth the procedures for seeking disqualification of a common
pleas court judge for prejudice. Under that statute, a party or the party’s attorney may
file an affidavit of disqualification with the clerk of the Supreme Court of Ohio. R.C.
2701.03(A). The affidavit must meet several requirements, as set forth in R.C.
2701.03(B). If a proper affidavit is submitted, the chief justice of the supreme court or
his or her designee determines whether the trial judge is biased or prejudiced. R.C.
2701.03(D), (E).
{¶ 88} The procedure set forth in R.C. 2701.03 provides “the exclusive means by
which a litigant may claim that a common pleas judge is biased and prejudiced.” Jones
v. Billingham, 105 Ohio App. 3d 8, 11, 663 N.E.2d 657 (2d Dist.1995); see, e.g., State v.
Osie, 140 Ohio St. 3d 131, 2014-Ohio-2966, 16 N.E.3d 588, ¶ 62; State v. Hudson, 2d
Dist. Clark No. 2014 CA 53, 2014-Ohio-5363, ¶ 25; State v. Galluzzo, 2d Dist. Champaign
No. 2004-CA-25, 2006-Ohio-309, ¶ 15. “A court of appeals does not have authority to
rule on the disqualification of the trial judge or to void a judgment of the trial court on that
basis.” Easterling v. Hafer, 2d Dist. Montgomery No. 24950, 2012-Ohio-2101, ¶ 9.
{¶ 89} On February 13, 2009, within days of being sworn in as a newly-elected
judge, Judge Reisinger issued an order that she “recuses herself and Brett A. Gilbert,
Judge from this case, because of conflict of interest.” Judge Newlin, the retiring judge,
was appointed by the Supreme Court of Ohio to continue hearing the case. The order
did not provide details regarding the purported conflict of interest.
{¶ 90} On September 22, 2009, Judge Newlin indicated his intention to recuse
himself from considering a particular motion to compel discovery regarding Peoples
Savings Bank. Judge Newlin stated, “The undersigned has had an ongoing relationship
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with the management of Peoples Savings Bank which may make Plaintiff uncomfortable
with the undersigned proceeding with a decision on the motion.” On September 29, the
day after a pretrial conference, Judge Newlin issued an order recusing himself from
considering the motion to compel discovery and returning the matter to Judge Reisinger
for decision.
{¶ 91} On October 13, Judge Reisinger scheduled a pretrial hearing on the motion
for December 7, 2009, and the hearing was apparently held as scheduled. On
December 17, 2009, Judge Reisinger overruled the motion to compel, finding that the
bank had produced the documents in its possession in compliance with the subpoena,
with the exception of Cynthia’s financial statements. The court found that Gerald had
not overcome the bank’s mandate to maintain its customers’ privacy, and indicated that
Gerald could request those documents from Cynthia directly.
{¶ 92} Gerald did not object, at any time, to Judge Reisinger’s limited participation
in the litigation to resolve his motion to compel discovery regarding Peoples Savings
Bank. Gerald could have sought disqualification under R.C. 2701.03, but he did not. In
addition, Gerald has neither argued nor demonstrated the nature of Judge Reisinger’s
alleged bias or that he was prejudiced by Judge Reisinger’s conduct in 2009.
{¶ 93} Judge Newlin recused himself from the case on June 26, 2013, and on June
27, Judge Reisinger issued an order, which informed the parties that she would be
“finalizing the matter” and set an attorney conference for August 2. On August 23,
Gerald’s counsel wrote a letter to the court, identifying the following circumstances:
A. At the first pretrial, Judge Reisinger reported to both counsel that she
previously had communications with the Defendant Cindy Carpenter.
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B. The Judge had also been a customer of the flower shop and tux rental
business owned by Cindy Carpenter.
C. Approximately three years ago, the Judge indicated that she had been
cornered at the flower store for an extensive interview by Carpenter about
her dispute with Gary Dibert.
D. The Judge stated that she no longer had a clear memory of what was
said, but asked [Gerald’s counsel] if there was any objection to her serving
since Judge Newlin had recused himself.
E. Judge Reisinger had served as a substitute for Judge Newlin at the time
a hearing was being held concerning the People’s [sic] Bank refusing to
honor a subpoena * * *. There was conversation with Cindy Carpenter and
the Judge instructed Cindy Carpenter to turn over the document requested
and Carpenter responded that she wasn’t sure she had it, but she would
look. That Motion was then dismissed and the subpoena was never
completed. The Pickering Trust was eliminated and all funds disbursed
without any further contact with the People’s [sic] Bank.
F. With all of the above, the Court inquired of [Gerald’s counsel] whether
he had any objections to Judge Reisinger staying on the bench and she
suggested that he talk with his client. Judge Reisinger stated that she
could put all past information from her mind and she did not have a clear
memory of any further information.
G. [Gerald’s counsel] met with his client, Gary Dibert, immediately. At
that time, there was no additional information or any reason to believe why
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Judge Reisinger would not, in fact, be fair and impartial.
H. Subsequently, the Plaintiff Gary Dibert has received new information
that has been considered and it has been determined by counsel that it is
in everyone’s best interest to have that information known.
I. Defendant Cindy Carpenter is now living with Ruth Zerkle who is
believed to be a close contact and friend of Judge Reisinger, but the only
source of that information is unsupported hearsay. However, if the Court
does have a close relationship, either socially, politically or professionally,
it needs to be considered. Ruth Zerkle had a very close relationship with
Allen Mitchell who is a relative by marriage to Gary Dibert. He informed
Mr. Dibert that the separation between and [sic] he and Ms. Zerkle had a
great deal to do with the fact of the constant bombardment against Gary
Dibert from Ruth Zerkle and other associates including her close friend,
Cindy Carpenter.
{¶ 94} On September 4, Judge Reisinger filed an entry indicating that a conference
call had been held with counsel and the special fiduciary on September 3 to discuss the
August 23 letter. The entry further stated that, “based on the representations of the
Court,” Gerald’s counsel withdrew his request for Judge Reisinger to recuse herself and
that Judge Reisinger would continue to preside.
{¶ 95} Gerald did not file an affidavit of disqualification with the clerk of the Ohio
Supreme Court, and the trial court’s September 4 entry indicates that Gerald agreed to
Judge Reisinger’s continued participation in the litigation. Even if we could consider
whether Judge Reisinger was biased or prejudiced, Gerald has waived any claim that
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Judge Reisinger erred in failing to recuse herself in September 2013 and in continuing to
proceed over the matter.
{¶ 96} Judge Reisinger ultimately recused herself in November 2013, when Gerald
indicated that he intended to call her father as a witness at trial. There is no evidence
that Gerald was prejudiced by Judge Reisinger’s conduct up to that point, and to the
extent that Judge Reisinger’s January 22, 2014 entries had any effect (considering that
Judge Rapp had been appointed prior to their filing), those entries merely memorialized
decisions that had been made prior to the recusal. Gerald has not suggested that Judge
Reisinger’s decisions were affected by a conflict of interest or bias. In addition, Judge
Rapp, who was appointed to preside over the matter after Judge Reisinger’s recusal,
reaffirmed Judge Reisinger’s decisions after an independent review.
{¶ 97} Gerald’s third assignment of error is overruled.
IV. Denial by Successor Judge of Gerald’s Motions for Leave
to File Amended Answer and to Close the Case
{¶ 98} Gerald’s fourth assignment of error, as articulated and argued in his brief,
differs somewhat from his fourth assignment, as identified in his “statement of errors
presented.” Both concern Judge Rapp’s denial of Gerald’s renewed motion to amend
his answer and his motion to close the case.
{¶ 99} On appeal, Gerald does not challenge Judge Reisinger’s decision denying
his motion to amend his answer. He acknowledges that his motion was “appropriately”
overruled by Judge Reisinger during the trial proceedings as untimely and that “to grant
the motion during the proceeding would be * * * prejudicial to counterclaimant.”
{¶ 100} Gerald claims, however, that once Judge Reisinger recused herself in
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November 2013 and a new judge was appointed, Cynthia would not have been prejudiced
by the amendment of his answer to the counterclaims. Gerald states that his renewed
motion to amend his answer was made ten months after the proceedings before Judge
Reisinger and four months before the bench trial to Judge Rapp. Gerald claims that
“undue prejudice to Carpenter no longer existed” and that, pursuant to Civ.R. 15, the
interests of justice supported granting his motion to amend his answer.
{¶ 101} Civ.R. 15(A) provides:
A party may amend its pleading once as a matter of course within twenty-
eight days after serving it or, if the pleading is one to which a responsive
pleading is required within twenty-eight days after service of a responsive
pleading or twenty-eight days after service of a motion under Civ.R. 12(B),
(E), or (F), whichever is earlier. In all other cases, a party may amend its
pleading only with the opposing party’s written consent or the court’s leave.
The court shall freely give leave when justice so requires. * * *
{¶ 102} Despite the liberal policy in granting motions to amend, the appellate
review of a trial court’s decision regarding a motion to amend consists of determining
whether the trial judge’s decision was an abuse of discretion, not whether it was the same
decision we might have made. Han v. Univ. of Dayton, 2015-Ohio-346, 28 N.E.3d 547,
¶ 57 (2d Dist.), citing Wilmington Steel Prods., Inc. v. Cleveland Electric Illuminating Co.,
60 Ohio St. 3d 120, 122, 573 N.E.2d 622 (1991). “Justice does not require the granting
of leave when a proposed amended complaint, not submitted as a matter of right, seeks
to add new parties or seeks to assert a completely new claim, ‘where a plaintiff fails to
make a prima facie showing of the new matters sought to be pleaded.’ ” Han at ¶ 58,
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quoting Wilmington Steel Prods. at 123.
{¶ 103} At the outset, we note that Gerald’s proposed amended answer is not part
of the record. On the second day of trial (October 31, 2013), the trial court reiterated that
it would not permit Gerald to file an amended answer, but it would permit the filing of his
motion for leave so that it would be part of the record. The court further stated that it
would allow Gerald to proffer the amended answer at the next hearing. However, at the
hearing on November 27, 2013, the third day of trial, the parties discussed the proffer with
the court, and the trial court stated that it did not “believe a proffer would be appropriate
at this time.” No proffer was made, and the proposed amended answer was not filed.
{¶ 104} Judge Rapp later permitted Gerald to file his proposed amended answer
to the amended counterclaim so that it would be part of the record. (See January 9, 2015
Entry.) Appendix A-19 of Gerald’s appellate brief is the first page of a proposed
amended answer to Cynthia’s amended counterclaim. The first page indicates that the
document was filed at 8:38 a.m. on January 15, 2015 in the Champaign County Family
Court. However, the docket of this case does not reflect the filing, and the document
itself is not in the record.
{¶ 105} Gerald’s trial memorandum, filed September 25, 2013, included
allegations that he was owed money from the Dibert Trust and that the trust should be
reformed. Specifically, he responded to Cynthia’s first counterclaim, stating that the
Trust owed him $486,709.11; he argued with respect to the fifth counterclaim that the
trust should be reformed to allow him to exercise the option to purchase land within 90
days of Jane’s death; and he asserted with respect to the twelfth counterclaim that the
trust owed him $105,740.86. Gerald’s proposed amended answer sought “repayment of
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the loans he made to the trust at the time of his Father’s death.” (Doc. #118; Gerald’s
motion for leave to file an amended answer)
{¶ 106} Judge Rapp addressed Gerald’s motion to file an amended answer on two
occasions. On September 2, 2014, the trial court issued an order following an August
24 pretrial conference, during which the parties and the court reviewed “outstanding trial
issues and motions as well as settlement issues.” The court stated that the parties
“reviewed the status and merits of the November 27, 2013, Motions of Plaintiff,” namely
Gerald’s motions for leave to file an amended answer and his motion to close the case.
The court overruled the motions “for reasons readily apparent in the record.” The motion
for leave to amend Gerald’s answer was again addressed on January 9, 2015. The trial
court again denied the motion as untimely and/or without merit.
{¶ 107} We find no abuse of discretion in the trial court’s denial of Gerald’s motion
for leave to file an amended answer. When Judge Rapp considered Gerald’s motion for
leave to file an amended answer in September 2014, the case had been pending for
approximately seven years, and the court had previously held two days of trial. The
issue regarding Gerald’s option to purchase trust property had already been addressed
by the parties and the court. Although Gerald asserted that Cynthia had been aware of
the evidence that supported his claims that the Dibert Trust owed him money, Gerald
offered no explanation why he waited until just before trial to raise his claims. In light of
the late stage of the litigation at the time Judge Rapp ruled on Gerald’s motion, we cannot
conclude that the court abused its discretion in finding that Gerald’s motion was untimely.
{¶ 108} Gerald also contends that Judge Rapp erred in denying his “motion to
close the case.” In that motion, Gerald had asked the court to order Traul, as special
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fiduciary, to determine what Gerald and Cynthia each owed the Dibert Trust and to
provide Gerald a right to purchase the land using reformed language; Gerald asked the
trial court to terminate the case. Given the history of the litigation and the contentious
unresolved issues between the parties, the trial court did not abuse its discretion in
proceeding to trial on the issues pled.
{¶ 109} Gerald’s fourth assignment of error is overruled.
V. Attorney Fees
{¶ 110} Gerald’s fifth assignment of error claims that the trial court committed plain
error when it awarded $105,127 in attorney fees and $719.50 in costs to Cynthia. At the
hearing on attorney fees and costs, Gerald asserted that Cynthia prevailed on the four
counterclaims which were not strongly contested and that she lost on her remaining
counterclaims, which were added in her amended counterclaim.
{¶ 111} On appeal, Gerald’s principal argument is that Cynthia’s counterclaims
were not validly presented to the trial court, and thus Cynthia should not have been
awarded attorney fees and costs to present those claims. He emphasizes that Howard
Traul was appointed special fiduciary of the Dibert Trust and that he was substituted for
Cynthia in her capacity as co-trustee of the Dibert Trust. Gerald does not claim that the
trial court lacked the authority to grant attorney fees and costs, nor does he contest the
amount of attorney fees and costs that were awarded.
{¶ 112} As discussed above, we conclude that Cynthia’s counterclaims related to
the Dibert Trust were properly before the trial court. Prior to the filing of Cynthia’s
amended counterclaims, Gerald did not challenge Cynthia’s assertion of counterclaims
related to the Dibert Trust in his answer or otherwise. Cynthia, individually, was a party
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to the litigation, and in her individual capacity, she properly brought a permissive
counterclaim as a beneficiary of the Dibert Trust against Gerald for his actions as co-
trustee of the Dibert Trust. (Whether Cynthia believed the counterclaim to be
compulsory, rather than permissive, is irrelevant.) Cynthia ultimately litigated four of her
counterclaims successfully, and she obtained a judgment in favor of the Dibert Trust
totaling $287,786.32.
{¶ 113} As noted by the trial court, R.C. 5810.04 provides:
In a judicial proceeding involving the administration of a trust, including a
trust that contains a spendthrift provision, the court, as justice and equity
may require, may award costs, expenses, and reasonable attorney’s fees
to any party, to be paid by another party, from the trust that is the subject of
the controversy, or from a party’s interest in the trust that is the subject of
the controversy.
The Official Comment to this section notes, in part, that “[t]he court may award a
beneficiary litigation costs if the litigation is deemed beneficial to the trust. Sometimes,
litigation brought by a beneficiary involves an allegation that the trustee has committed a
breach of trust.” The trial court expressly found that Cynthia’s litigation was beneficial to
the trust.
{¶ 114} Pursuant to R.C. 5810.04, Cynthia sought attorney fees totaling $145,127
for services rendered after August 2, 2013; she did not seek reimbursement of attorney
fees for the time period in which the Pickering Trust claims were pending. The trial court
considered the reasonableness of the fees charged, the results obtained and the
counterclaims that were dismissed, Cynthia’s own breach of fiduciary duty (for which she
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voluntarily executed a note to the Dibert Trust for $70,000), Gerald’s deposition costs,
and the interests of justice and equity. The court concluded that it was just and equitable
that Cynthia be granted an award of attorney fees in the amount of $105,127 and
deposition costs of $719.50, both to be paid from the interest that Gerald, as a contingent
beneficiary, may be entitled to receive from the Dibert Trust upon the death of the life
beneficiary (Jane). We find no error in the trial court’s determination.
{¶ 115} Gerald’s fifth assignment of error is overruled.
VI. Conclusion
{¶ 116} The trial court’s judgment will be affirmed.
.............
HALL, J. and WELBAUM, J., concur.
Copies mailed to:
Quentin M. Derryberry, II
Stanley R. Evans
David R. Watkins
Hon. James S. Rapp
(by assignment)