Adams v. Margarum , 2017 Ohio 2741 ( 2017 )

[Cite as Adams v. Margarum, 2017-Ohio-2741.]
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
Bret Adams, :
Plaintiff-Appellant, :
v. : No. 16AP-515
(C.P.C. No. 16 CV 02398)
Christine Margarum et al., :
(ACCELERATED CALENDAR)
Defendants-Appellees. :
D E C I S I O N
Rendered on May 9, 2017
On Brief: The Law Office of Bryan D. Thomas, LLC, and
Bryan D. Thomas, for appellant.
On Brief: Arenstein & Andersen Co., L.P.A., and Nicholas I.
Andersen and Jessica L. Sohner, for appellees.
APPEAL from the Franklin County Court of Common Pleas
TYACK, P.J.
{¶ 1} Plaintiff-appellant, Bret Adams, appeals from the June 23, 2016 decision
and judgment entry of the Franklin County Court of Common Pleas dismissing his
complaint for failure to state a claim upon which relief can be granted. For the reasons
that follow, we affirm the judgment of the court of common pleas.
I. FACTS AND PROCEDURAL HISTORY
{¶ 2} Adams filed a complaint against defendants-appellees, Christine Margarum
and Patricia Pappas alleging fraud and civil conspiracy. Specifically, Adams alleged that
on March 4, 2014, he and Margarum agreed to pay Pappas $100,000 on or before May 3,
No. 16AP-515 2
2014 under the terms of a promissory note. (Compl. at ¶ 5.) A copy of the note was
attached to the complaint.1
{¶ 3} The complaint also alleged that, on November 6, 2014, Pappas filed a
complaint in the Franklin County Court of Common Pleas (Franklin C.P. No. 14 CV 11486)
claiming that Adams breached the terms of the note. (Compl. at ¶ 6.) Pappas did not
name Margarum as a party in the lawsuit. Id.{¶ 4} A bench trial was held, and Margarum testified that she was not liable under
the terms of the note and that she did not execute the note. (Compl. at ¶ 8, 9.)
{¶ 5} Adams alleged in the complaint that he was present when Margarum
executed the note. (Compl. at ¶ 10.)
{¶ 6} Adams alleged that Margarum and Pappas committed fraud because
Pappas never intended to receive any payments from Margarum pursuant to the terms of
the note, in part, because Margarum is Pappas' daughter. (Compl. at ¶ 11, 14.) In support
of his claim, Adams stated that:
[Margarum and Pappas] committed fraud by making certain
statements and/or representations to [Adams], as detailed in
the foregoing paragraphs. Specifically, when the Note was
executed by Plaintiff [Adams] and Defendant Pappas (sic) on
March 4, 2014, Defendant Pappas never intended to receive
any payments from Defendant Margarum pursuant to the
terms of the Note.
(Compl. at ¶ 14.) Adams further alleged that the fraud "allegation is unequivocally
supported by the fact that Defendant Pappas did not make Defendant Margarum in the
lawsuit as a Defendant." (Compl. at ¶ 16.)
{¶ 7} At the time Adams filed his complaint, no decision had been issued in
Franklin C.P. No. 14 CV 11486. (Compl. at ¶ 12.)
{¶ 8} Adams also alleged that Margarum and Pappas conspired to obtain Adams'
signature on the note with the intent that Margarum would not be required to make any
payments on the note. (Compl. at ¶ 23.) Adams alleged that "[i]n furtherance of the
conspiracy, [Margarum and Pappas] fraudulently concealed from [Adams] material facts
1 The note attached to the complaint as exhibit A contains Adams' signature on the signature line bearing
his name. The note does not contain Margarum's signature on the signature line with her name. There is
something that may be a signature on the date line across from the line for Margarum's signature.
No. 16AP-515 3
regarding their actions that were introduced to deceive and defraud [Adams]." (Compl. at
¶ 24.) The complaint does not identify what material facts were concealed.
{¶ 9} Margarum and Pappas filed a motion to dismiss pursuant to Civ.R. 12(B)(6)
on May 9, 2016. The basis of the motion was that Adams failed to sufficiently plead a
claim for fraud and, with respect to civil conspiracy, he failed to allege any unlawful act, or
that Pappas and Margarum could not have acted independently as required for a claim of
civil conspiracy.
{¶ 10} The trial court found that Adams did not state with particularity what
statements and representations were made that induced fraud, and that he failed to plead
fraud with particularity as required by Civ.R. 9(B). The trial court found that having
failed to state a claim for fraud, his derivative claim of civil conspiracy failed also as a
matter of law.
II. ASSIGNMENTS OF ERROR
{¶ 11} Adams appealed, assigning the following as error:
[I.] The Trial Court erred in granting Defendants' Motion to
Dismiss because Plaintiff's Complaint sufficiently pled
factual allegations to support its causes of action under the
requirements of Civil Rule 9(B).
[II.] The Trial Court erred in granting Defendants' Motion to
Dismiss as Plaintiff sufficiently pled with particularity a
cause of action for fraud against Defendants which was
supported by specific factual allegations and documented in
the Exhibit attached to Plaintiff's Complaint.
III. STANDARD OF REVIEW
{¶ 12} A trial court's decision to dismiss a complaint pursuant to Civ.R. 12(B)(6) is
subject to de novo review. Perrysburg Twp. v. Rossford, 103 Ohio St.3d 79, 2004-Ohio-
4362, ¶ 5; Rooney v. Ohio State Hwy. Patrol, 10th Dist. No. 16AP-204, 2017-Ohio-1123, ¶
13. A Civ.R. 12(B)(6) motion to dismiss for failure to state a claim is procedural and tests
the sufficiency of the complaint. State ex rel. Hanson v. Guernsey Cty. Bd. of Commrs.,
65 Ohio St.3d 545, 548 (1992). In considering a Civ.R. 12(B)(6) motion to dismiss, the
trial court must limit its consideration to the four corners of the complaint and may
dismiss the case only if it appears beyond a doubt that the plaintiff can prove no set of
No. 16AP-515 4
facts entitling the plaintiff to recovery. O'Brien v. Univ. Community Tenants Union, Inc.,
42 Ohio St.2d 242 (1975), syllabus . The trial court must presume all factual allegations in
the complaint are true and draw all reasonable inferences in favor of the non-moving
party. Mitchell v. Lawson Milk Co., 40 Ohio St.3d 190, 192 (1988). This court need not,
however, accept as true any unsupported or conclusory legal propositions advanced in the
complaint. Rooney at ¶ 14.
IV. ANALYSIS
A. Fraud
{¶ 13} To prove fraud, a plaintiff must demonstrate: (1) a representation or, where
there is a duty to disclose, concealment of a fact; (2) which is material to the transaction at
hand; (3) made falsely, with knowledge of its falsity, or with such utter disregard and
recklessness as to whether it is true or false that knowledge may be inferred; (4) with the
intent of misleading another into relying on it; (5) justifiable reliance on the
representation or concealment; and (6) a resulting injury proximately caused by the
reliance. Burr v. Bd. of Cty. Commrs., 23 Ohio St.3d 69, 73 (1986); Williams v. Aetna
Fin. Co., 83 Ohio St.3d 464, 475 (1998); Gaines v. Preterm-Cleveland, Inc., 33 Ohio St.3d
54, 55 (1987).
{¶ 14} Additionally, Civ.R. 9(B) provides: "In all averments of fraud or mistake, the
circumstances constituting fraud or mistake shall be stated with particularity." Thus, a
claim of fraud must be pled with particularity. Volbers-Klarich v. Middletown Mgmt.,
125 Ohio St.3d 494, 501, 2010-Ohio-2057, ¶ 27; Korodi v. Minot, 40 Ohio App.3d 1, 4
(10th Dist.1987). To satisfy this requirement, a pleading must contain allegations of fact
that tend to show every element of a claim for fraud. Lopez v. Quezada, 10th Dist. No.
11AP-389, 2014-Ohio-367, ¶ 16. Typically, the requirement of particularity includes the
time, place, and content of the false representation, the fact represented, the individual
who made the representation, and the nature of what was obtained or given as a
consequence of the fraud. Lundeen v. Smith-Hoke, 10th Dist. No. 15AP-236, 2015-Ohio-
5086, ¶ 21; Ford v. Brooks, 10th Dist. No. 11AP-664, 2012-Ohio-943, ¶ 26. Failure to
specifically plead the facts constituting an alleged fraud results in a defective claim that
No. 16AP-515 5
cannot withstand a motion to dismiss for failure to state a claim pursuant to Civ.R.
12(B)(6). Id. at ¶ 27.
{¶ 15} In Ohio, fraud cannot be predicated on promises or representations relating
to future action or conduct. Brevoort v. Internatl. Fin. Resources, Inc., 10th Dist. No.
93AP-977 (Dec. 30, 1993). To constitute actionable fraud, the misrepresentation must be
of a fact existing when the misrepresentation was made or one which had previously
existed. Gouge v. Bax Global Inc., 252 F.Supp.2d 509, 515 (N.D.Ohio 2003), citing Yo-
Can, Inc. v. The Yogurt Exchange, Inc., 149 Ohio App.3d 513, 525, 2002-Ohio-5194 (7th
Dist.), citing Link v. Leadworks Corp., 79 Ohio App.3d 735, 742 (8th Dist.1992).
Generally, fraud cannot be based on a representation concerning a future event because
such a representation is more in the nature of a prediction or opinion about what the
future may bring. Id. However, a promise made with a present intention not to perform
is a misrepresentation of an existing fact even if the promised performance is to occur in
the future. Id.{¶ 16} Adams has failed to allege any false misrepresentations made prior to his
signing the note. Our review of the allegations in the complaint reveals that Adams has
not alleged any specific statements made by Pappas or Margarum other than to refer to
Margarum's trial testimony that she was not liable under the note and that she did not
execute the note. (Compl. at ¶ 9, 17.) Assuming, for purposes of Civ.R. 12(B)(6), that
Margarum misrepresented to the court that she did not sign the note, Adams ignores the
fact that the signature line on the note does not contain her signature. The note, attached
as an exhibit to the complaint, does not supply any facts that would make the complaint
legally sufficient. Furthermore, the complaint does not show that Adams relied on any
such misrepresentation since he states in the complaint that she signed the note in his
presence. (Compl. at ¶ 10.)
{¶ 17} The complaint fails to identify any statements or representations made by
Pappas to form the basis of a fraud claim. Instead, Adams contends that "Pappas never
intended to receive any payments from Defendant Margarum pursuant to the terms of the
Note," that Pappas did not name Margarum in her lawsuit, and that Margarum is the
daughter of Pappas. (Compl. at ¶ 11, 14.)
No. 16AP-515 6
{¶ 18} Assuming again for purposes of Civ.R. 12(B)(6) that these allegations are
true, Adams fails to identify any duty owed by Pappas to inform him that she did not
intend to seek payment from her daughter or that she had any obligation to do so.
{¶ 19} Adams has failed to plead facts from which one can infer that there were
any material misrepresentations or concealed facts on which he relied or that were made
with the intent of misleading him into relying on them. Adams' complaint does not state a
claim on which relief may be granted for fraud. Therefore, it was proper for the trial court
to dismiss the claim.
B. Civil Conspiracy
{¶ 20} The tort of civil conspiracy is a malicious combination of two or more
persons to injure another in person or property, in a way not competent for one alone,
resulting in actual damages. Williams v. Aetna Fin. Co., 83 Ohio St.3d 464, 475 (1998).
An underlying unlawful act is required before a civil conspiracy claim can succeed. Id.The malice involved in the tort is that state of mind under which a person does a wrongful
act purposely, without a reasonable or lawful excuse, to the injury of another. Id.{¶ 21} "A civil conspiracy claim is derivative and cannot be maintained absent an
underlying tort that is actionable without the conspiracy." Morrow v. Reminger &
Reminger Co. LPA, 183 Ohio App.3d 40, 60, 2009-Ohio-2665, ¶ 40 (10th Dist.). Here,
Adams' civil conspiracy claim is based on fraud by Pappas and Margarum. Having
concluded that the complaint fails to state a claim for fraud, the derivative claim of civil
conspiracy must fail also.
V. CONCLUSION
{¶ 22} Viewing the allegations and all reasonable inferences in Adams' favor, we
conclude that Adams has not stated a claim against Pappas and Margarum for fraud or
civil conspiracy pursuant to Civ.R. 12(B)(6) and 9(B). Based on the foregoing, we overrule
the assignments of error and affirm the judgment of the Franklin County Court of
Common Pleas.
Judgment affirmed.
BROWN and LUPER SCHUSTER, JJ., concur.
_________________