Mancz v. McHenry , 2021 Ohio 82 ( 2021 )

[Cite as Mancz v. McHenry, 2021-Ohio-82.]
IN THE COURT OF APPEALS OF OHIO
SECOND APPELLATE DISTRICT
GREENE COUNTY
BARRY W. MANCZ, FIDUCIARY OF :
THE ESTATE OF AUDREY KIRBY :
: Appellate Case No. 2019-CA-74
Plaintiff-Appellee :
: Trial Court Case No. 2015-CV-183
v. :
: (Civil Appeal from
CALLISTA McHENRY, et al. : Common Pleas Court)
:
Defendants-Appellants :
...........
OPINION
Rendered on the 15th day of January, 2021.
...........
HARRY G. BEYOGLIDES, JR., Atty. Reg. No. 0018959, 130 West Second Street, Suite
1900, Dayton, Ohio 45402
Attorney for Plaintiff-Appellee
RICHARD A. BOUCHER, Atty. Reg. No. 0033614 and JULIA C. KOLBER, Atty. Reg. No.
0078855, 12 West Monument Avenue, Suite 200, Dayton, Ohio 45402
Attorneys for Defendants-Appellants
.............
HALL, J.
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{¶ 1} Callista and Robert McHenry appeal from the trial court’s decision and
judgment entry overruling their objections to a magistrate’s decision and entering
judgment against them for fraudulently conveying real estate and $127,133 in financial
assets.
Factual and Procedural Background
{¶ 2} The trial court’s judgment involves assets that Callista fraudulently conveyed
to Robert, her husband, after taking money from her elderly mother for personal use. The
record reflects that Callista began serving as attorney-in-fact for her mother, Audrey Kirby,
in October 2000. Nearly two years later, Kirby executed a will that provided for her assets
to be divided equally among her children, subject to deductions for advances to two
children. Kirby also executed a revocable trust agreement. Kirby died in April 2007,
leaving 13 surviving children. After one of Kirby’s sons resigned as executor of the estate,
attorney Barry Mancz was appointed as successor fiduciary.
{¶ 3} In December 2009, Mancz filed a lawsuit in Montgomery County Probate
Court, claiming that Callista had breached her fiduciary duties to Kirby’s estate by
concealing, embezzling, or conveying away estate assets in violation of R.C. 2109.50.
Following a hearing, the probate court found Callista guilty of concealing, embezzling, or
conveying away estate assets in the amount of $290,975.46. After assessing a 10-
percent penalty, the probate court entered judgment against Callista for $320,073.01. On
appeal, this court reviewed evidence establishing that while acting as her mother’s
attorney-in-fact, Callista improperly had moved money from her mother’s bank account
and certificates of deposit into numerous accounts that were titled in Callista’s name or
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that were held jointly by Callista and Robert. Callista also obtained certificates of deposit
in her own name using her mother’s assets. The evidence further established that Callista
had written hundreds of checks on these accounts apparently for her personal benefit.
Although Callista frequently moved the money she took from her mother, this court’s
examination of the evidence suggested that she in fact had taken more than the amount
found by the probate court. This court also rejected an argument that the assets taken by
Callista were “gifts” from her mother. Therefore, we affirmed the probate court’s judgment
against Callista for concealing, embezzling, or conveying away her mother’s assets. See
Mancz v. McHenry, 2012-Ohio-3285, 974 N.E.2d 784 (2d Dist.).
{¶ 4} In his capacity as fiduciary of Kirby’s estate, attorney Mancz filed the present
lawsuit against Callista and Robert in March 2015. The complaint alleged that Callista
had neither satisfied the judgment in the probate-court case nor returned any of the estate
property. The complaint further alleged that Callista had transferred her ownership
interest in real estate to her husband Robert while litigation was pending against her by
her siblings and prior to the probate-court lawsuit brought by Mancz. The complaint
alleged that this transfer was made with actual intent to hinder, delay, or defraud Mancz
and other creditors and that the transfer was made without Callista receiving reasonably
equivalent value in exchange.
{¶ 5} With regard to personal property, the complaint alleged that Callista had
transferred, converted, or concealed bank accounts and other financial interests that were
recoverable in furtherance of the judgment in the probate-court case. The complaint
alleged that these transfers were made with the intent to avoid the purpose of proceedings
under R.C. 2109.50 to R.C. 2109.55 (which was the subject of the probate-court action)
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“or in contemplation of an examination or complaint provided for by those sections.” The
complaint alleged that the financial transfers from Callista to Robert were fraudulent and
void and that Mancz was entitled to an order compelling the return of any and all such
proceeds or the value thereof. The complaint specifically requested a judgment ordering
the return of property of Kirby’s estate that had been conveyed by Callista to herself, to
Robert, or to others. The complaint also sought punitive damages.
{¶ 6} The case proceeded to a January 2019 jury trial presided over by a
magistrate. Based on the evidence presented, the jury returned a verdict finding that
Callista fraudulently had conveyed her interest in real estate to Robert. The jury also
returned verdicts against both Callista and Robert for the fraudulent transfer of Kirby’s
financial assets. The verdicts were accompanied by numerous interrogatory responses,
including interrogatories addressing statutory “badges of fraud.” With regard to the
fraudulent transfer of financial assets, the jury’s verdicts found actual damages of
$127,133.
{¶ 7} On January 15, 2019, the magistrate entered a decision on the jury verdicts.
The magistrate declared void the deed transferring Callista’s interest in real estate to
Robert. The magistrate also entered judgment against Callista in the amount of $127,133
and against Robert in the same amount. After holding a hearing, the magistrate declined
to impose punitive damages on Callista or Robert.
{¶ 8} The McHenrys subsequently raised five objections to the magistrate’s
decision on the jury verdicts. In a November 13, 2019 decision and judgment entry, the
trial court rejected all but one of the objections. With respect to one objection, the trial
court found that the magistrate’s decision was unclear as to whether judgment had been
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entered against Callista and Robert for $127,133 each. To avoid “double recovery,” the
trial court clarified that judgment was entered against Callista and Robert jointly and
severally for $127,133. The trial court also declared void the deed transferring Callista’s
interest in the real estate to her husband. Callista and Robert McHenry timely appealed
the trial court’s judgment, advancing 13 assignments of error.
Preliminary Issues
{¶ 9} In his appellee’s brief, Mancz responds to some of the McHenrys’
assignments of error by simply “incorporating by reference” arguments he raised in
memoranda and pleadings filed below. In their reply brief, the McHenrys argue that
Mancz’s extensive reliance on “incorporation by reference” of documents filed in the trial
court is inappropriate. Therefore, they urge us not to consider Mancz’s arguments that
rely on incorporation by reference. Upon review, we agree that wholesale incorporation
by reference of arguments raised below is inappropriate and not particularly helpful.1 We
note, however, that the McHenrys’ own eleventh assignment of error relies exclusively on
incorporation by reference of 50 pages of summary-judgment papers they filed in the trial
court. Under these circumstances, we will consider the McHenrys’ eleventh assignment
of error and Mancz’s incorporated arguments notwithstanding our disfavor of such an
approach.
{¶ 10} For his part, Mancz argues that some of the McHenrys’ assignments of error
are not properly before us because they are not “addressed by” or “asserted in” the
McHenrys’ notice of appeal. We find this argument to be unpersuasive. The McHenrys
1 We will address this issue more fully in our analysis of the McHenrys’ eleventh
assignment of error.
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appealed from the trial court’s November 13, 2019 Decision and Judgment Entry, which
overruled their objections to a magistrate’s post-verdict decision and entered final
judgment on the jury’s verdicts. In our view, the notice of appeal reasonably encompassed
the numerous issues and rulings that preceded the trial court’s final judgment entry. It
was not necessary for the McHenrys to enumerate each of the preceding issues and
rulings in their notice of appeal. Having resolved these threshold matters, we turn now to
the McHenrys’ 13 assignments of error.
Assignments of Error
{¶ 11} In their first assignment of error, the McHenrys contend the trial court erred
in failing to address their objection to the jury’s use of inadmissible evidence to determine
damages and to the jury’s verdict for the fraudulent transfer of financial assets being
against the weight of the evidence.
{¶ 12} This assignment of error concerns the McHenrys fifth objection to the
magistrate’s decision. Therein, the McHenrys argued that the magistrate had erred in
entering judgment on the jury’s verdicts with respect to the fraudulent transfer of financial
assets. In support, the McHenrys asserted that Mancz (who testified as a witness at trial)
never identified a certain dollar amount being transferred from any of the accounts at
issue. They claimed that Mancz’s only effort to establish a specific dollar amount was
through the use of improper demonstrative exhibits during closing arguments. The
McHenrys further claimed that Mancz failed to identify any money that Robert spent or
withdrew from any of the accounts at issue. In fact, the McHenrys argued that Mancz
failed to establish that the money was not still in the accounts to which it was transferred.
Without evidence that Robert spent the money or that the accounts had a zero balance,
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the McHenrys questioned how the jury could have found a fraudulent transfer. Therefore,
they argued in their fifth objection that the jury’s verdicts regarding the fraudulent transfer
of financial assets were against the manifest weight of the evidence.
{¶ 13} The trial court rejected the fifth objection, reasoning:
In their fifth and final objection, the McHenrys claim there was
insufficient evidence to establish a damages award of $127,133 against
each of the McHenrys. The McHenrys claim that the jury improperly relied
upon a demonstrative exhibit and Mancz’s closing argument to come up
with the amount of damages awarded.
The Court notes that the jury was instructed that their verdicts must
be based upon the evidence. The jury was further instructed that the
statements of counsel and closing arguments made by counsel are not
evidence. It is well settled that a trial jury is presumed to follow the
instructions given to it by the Court. [Citation omitted.]
The McHenrys’ fifth objection is not related to any decision made by
the Magistrate, but rather a general argument about the jury’s verdict that is
not appropriate for review on objections. Moreover, the Court presumes the
jury followed the instructions given to it by the Magistrate. Therefore, the
McHenrys’ fifth and final objection is overruled.
(November 13, 2019 Decision and Judgment Entry at 4-5.)
{¶ 14} Upon review, we find the McHenrys’ first assignment of error to be without
merit. Insofar as they challenged Mancz’s use of demonstrative exhibits (which were not
introduced into evidence) during his closing argument, the trial court addressed their
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objection. The jury was instructed that the demonstrative exhibits were not evidence.
Moreover, the trial court noted that the jury was instructed about counsel’s statements
and closing arguments in general not being evidence. Therefore, regardless of the
propriety of the demonstrative exhibits and counsel’s related argument, the trial court
presumed that the jury followed the instructions given to it and based its verdicts on actual
evidence. Regardless of whether the McHenrys agree with the trial court’s analysis, the
trial court did address that aspect of their fifth objection. Therefore, we do not find that the
trial court adopted the magistrate’s decision without considering the objection, which is
the McHenrys’ argument on appeal.
{¶ 15} Insofar as the McHenrys objected to the verdict being against the weight of
the evidence, we agree with the trial court that, strictly speaking, “the objection is not
related to any decision made by the Magistrate, but rather a general argument about the
jury’s verdict that is not appropriate for review on objection.” If the McHenrys had objected
to the magistrate’s denying a new-trial motion or denying a motion for judgment
notwithstanding the verdict based on the weight of the evidence, then the trial court would
have had something to review. But the McHenrys objected to the magistrate entering
judgment on verdicts that the McHenrys believed were against the weight of the evidence.
(June 5, 2019 Supplemental Objections at 13.) The magistrate did not err in simply
entering judgment on the verdicts, which were not defective or irregular in any way. In
any event, we will address the demonstrative exhibits and the weight of the evidence in
our analysis of the McHenrys’ sixth assignment of error, where they raise those same
issues again. The first assignment of error is overruled.
{¶ 16} In their second assignment of error, the McHenrys contend the trial court
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erred in adopting the magistrate’s decision where Mancz’s fraudulent-transfer claim was
barred by res judicata.
{¶ 17} The record reflects that the McHenrys moved for summary judgment,
raising issues including res judicata. In particular, they argued that the allegedly
fraudulent transfers of the real estate and the money into bank accounts occurred prior
to the probate-court lawsuit. Therefore, the McHenrys argued that the fraudulent-transfer
claims were required to be brought as part of the probate-court action. The magistrate
found res judicata inapplicable, and the McHenrys filed objections. In a September 28,
2018, ruling, the trial court overruled the objection arguing the applicability of res judicata.
The trial court reasoned in part:
While the McHenrys are correct in stating that the present litigation
derives from the underlying Montgomery County Probate Court litigation
wherein Mancz obtained judgment, the gravamen of the present litigation is
based on actions taken by the McHenrys which Mancz maintains were
undertaken with “actual intent to hinder, delay or defraud the Plaintiff and
other creditors . . .” of Callista McHenry.
Accordingly, the current action is not an attempt to re-litigate a claim
or issue litigated and decided in the Montgomery County Probate Court
action. Rather, it appears this action has been instituted in an attempt to
gain compliance with the Probate Court’s order of judgment, which could
not have been undertaken prior to the judgment being entered.
(September 28, 2018 Decision and Judgment Entry at 3.)
{¶ 18} In reaching its conclusion, the trial court relied largely on Blood v. Nofzinger,
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162 Ohio App.3d 545, 2005-Ohio-3859, 834 N.E.2d 358 (6th Dist.). In Blood, the Sixth
District held that res judicata did not bar a fraudulent-transfer claim brought after the
underlying litigation that created a debtor-creditor relationship. Using language that is
directly applicable in the present case, the Blood court stated: “Litigation that resulted in
a judgment and created a judgment-creditor/judgment-debtor relationship is not res
judicata as to a subsequent claim that the debtor fraudulently transferred property to avoid
paying the judgment. In other words, appellant was not required to add her claim for
fraudulent conveyance to litigation that had not yet resulted in a judgment.” Id. at ¶ 22.
{¶ 19} In their objections to the magistrate’s decision, the McHenrys argued that
Blood was distinguishable because the allegedly fraudulent transfer there did not occur
until several years after the entry of judgment in the underlying case. (August 21, 2018
Supplemental Objections at 6-7.) The trial court rejected this attempt to distinguish Blood.
The trial court noted that the McHenrys had misread Blood, as the transfer of property at
issue in that case had occurred two years before the entry of judgment in the underlying
litigation. See Blood at ¶ 19.
{¶ 20} On appeal, the McHenrys now fail to cite Blood under their second
assignment of error or even to attempt to address the trial court’s reliance on it.
Regardless, we find Blood to be persuasive and see no error in the trial court’s ruling
regarding the inapplicability of res judicata. The question is whether the claims in the
present case arose from the same transaction, or “common nucleus of operative facts,”
as the claims in the probate-court case. Miami Valley Hosp. v. Purvis, 2d Dist.
Montgomery No. 21740, 2007-Ohio-4721, ¶ 11. We agree with the trial court that they did
not. The claims in the probate action involved Callista unlawfully removing assets from
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her mother’s estate. The claims in the present case involve Callista fraudulently
conveying those assets to Robert with the intent to hinder, delay, or defraud creditors
such as Mancz. Although the two cases are related, they do not share a common nucleus
of operative facts such that res judicata precludes the present lawsuit. The second
assignment of error is overruled.
{¶ 21} In their third assignment of error, the McHenrys claim the trial court erred in
adopting the magistrate’s decision permitting testimony from their former attorney, Brian
Roberts, despite the fact that his testimony was disclosed without a waiver of the attorney-
client privilege.
{¶ 22} This assignment of error concerns attorney Roberts’ testimony about the
circumstances surrounding his preparation of the deed conveying Callista’s interest in the
McHenrys’ home to her husband Robert. The trial court found that Callista had not waived
her attorney-client privilege with regard to this issue. The trial court found that Robert had
waived his attorney-client privilege, however, by testifying on cross-examination that the
conveyance was done on the “advice of counsel.” Although Callista and Robert had met
with the attorney together, the trial court allowed attorney Roberts to testify only about his
discussion with Robert. Attorney Roberts proceeded to testify among other things that
one of the reasons Robert wanted the deed put in his name was “asset protection.” (Trial
Tr. at 271-272.) According to the attorney, Robert expressed concern about keeping the
house out of the reach of creditors in litigation against Callista. (Id. at 272-273.) Attorney
Roberts explained to Robert that conveying Callista’s interest to him would not provide
“bullet proof” protection “and that creditors of Callista could claim that that conveyance
was inappropriate in an attempt to put assets beyond the reach of her creditors.” (Id. at
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272.) On appeal, the McHenrys argue that Robert’s reference to relying on the “advice of
counsel” did not waive the attorney-client privilege and, therefore, that attorney Roberts
should not have been allowed to testify.
{¶ 23} “The burden of showing that evidence ought to be excluded under the
attorney-client privilege rests upon the party asserting the privilege.” (Citations omitted)
MA Equip. Leasing I, L.L.C. v. Tilton, 2012-Ohio-4668, 980 N.E.2d 1072, ¶ 21 (10th Dist.).
“ ‘In Ohio, the attorney-client privilege is governed by statute, R.C. 2317.02(A), and in
cases that are not addressed in R.C. 2317.02(A), by common law.’ ” Jackson v. Greger,
110 Ohio St.3d 488, 2006-Ohio-4968, 854 N.E.2d 487, ¶ 7, quoting State ex rel. Leslie v.
Ohio Hous. Fin. Agency, 105 Ohio St.3d 261, 2005-Ohio-1508, 824 N.E.2d 990, ¶ 18.
Where the statute applies, the Jackson court opined that common-law doctrines involving
implied waiver of the privilege are inapplicable. Id. at ¶ 11-12. In such a case, the statute
provides the only two means by which the privilege may be waived: (1) express consent
of the client or (2) the client’s voluntary testimony on the same subject. Id. at ¶ 12.
{¶ 24} In the present case, Callista explained, as on cross-examination, that she
conveyed her interest in the real estate to her husband for privacy and estate-planning
purposes. (Trial Tr. at 152-153.) In the course of her explanation, Callista volunteered
that she and her husband had consulted a lawyer at the recommendation of a friend. (Id.)
Mancz then asked what estate-planning purpose Callista believed she would accomplish
by conveying her interest to Robert. (Id. at 154-155.) In her response, Callista voluntarily
referenced her meeting with an attorney. The following exchange then occurred:
MRS. McHENRY: Okay, I believed, as a result of the meeting with
the lawyer that now if Bob were to die before me, then I wouldn’t have to go
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to Probate. If I were to die before him, he wouldn’t have to go to Probate to
get his half of the house back. Oh, he wouldn’t have to do it because it was
in his name. It was me. See, so much has happened, I have to get this
straight. That’s what I believe.
MR. MANCZ: Did you also believe that by doing this if someone got
a judgment against you they wouldn’t be able to attach any interest in the
property because it was now in your husband’s name? Did you believe that?
MRS. McHENRY: I never—that never came up that I recall.
MR. MANCZ: That never came up?
MRS. McHENRY: I don’t know. I don’t know. As a result of the
meeting with the lawyer that’s what we did.
MR. MANCZ: Okay. I just want to be clear. Did you believe when the
deed was made that you could not get a judgment that would attach
anything to your real estate because you gave it to your husband? Did you
believe that?
MRS. McHENRY: I didn’t do it for that reason.
MR. MANCZ: Did—
MRS. McHENRY: I never thought about it. I never thought about it.
(Id. at 155-156.)
{¶ 25} Following Callista’s testimony, Mancz asserted during a bench conference
that she had perjured herself. (Id. at 161.) Specifically, Mancz claimed Callista had lied
when she testified that the possibility of someone attaching her assets was not a reason
for conveying her interest in the real estate to her husband. Mancz argued that evading
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creditors was her primary purpose, and he sought to call attorney Roberts to prove it. (Id.
at 161.) The McHenrys’ counsel objected, arguing that Callista’s attorney-client privilege
precluded Mancz from calling attorney Roberts to prove perjury. (Id.) The trial court
responded that the matter was “an issue that we’ll have to look into.” (Id. at 162.) Mancz
agreed to call Callista’s husband Robert first, and the trial court indicated that “we’ll talk
about [the alleged perjury] during the break.”2 (Id.)
{¶ 26} Robert then testified as on cross-examination. Mancz first asked whether
Robert gave Callista anything in exchange for her interest in the real estate. Robert
responded that he did give Callista something. Citing attorney-client privilege, however,
Robert refused to identify what consideration he gave Callista. (Id. at 233-236.) Mancz
then asked whether Robert signed any other documents at the time of the deed
conveyance. Robert refused to answer, citing attorney-client privilege. (Id. at 237.) Robert
also denied having heard Callista testify the previous day that she never considered
attempting to protect the house from attachment by creditors. (Id. at 238.)
{¶ 27} Mancz then asked Robert whether part of the reason he consulted an
attorney was because of the pending claims against Callista. Defense counsel objected
on the basis of attorney-client privilege. (Id. at 239.) The trial court overruled the objection,
finding that the reason why Robert went to see an attorney was not protected. (Id. at 239-
240.) Mancz then asked again whether part of Robert’s reason for seeing an attorney and
having the deed conveyed “was to keep creditors of your wife from attaching the property
should they get a judgment on their claim[.]” (Id. at 240.) Robert responded that it was
2 The record contains no other discussion of the perjury issue. If it was addressed again,
the trial court dealt with it off the record.
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not. (Id.) Mancz then asked what did prompt Robert to see the attorney. Robert
responded: “Without violating my attorney client privilege there were several reasons.”
Robert proceeded to cite privacy concerns related to the lawsuit against his wife and
various pieces of personal information being disseminated on the internet. (Id. at 240-
241.) In response, Mancz asked what that had to do with Callista conveying away her
interest in the real estate. Robert initially refused to answer, citing attorney-client privilege.
(Id. at 241.) When Mancz persisted and asked again, Robert responded, “We consulted
a lawyer and followed his advice.” (Id. at 242.)
{¶ 28} Following Robert’s testimony, Mancz sought to call attorney Roberts as a
witness. (Id. at 243.) The McHenrys’ counsel objected on the basis of attorney-client
privilege. (Id. at 244.) Counsel also argued that Robert’s reason for consulting counsel
and wanting the property conveyed to him was irrelevant because it was Callista’s intent
in conveying away her interest in the property that was critical. (Id. at 245.) Mancz
responded that Robert’s intent was relevant because he too signed the deed conveying
the property from both of the McHenrys to him alone and Mancz sought to hold him
responsible for the fraud too. (Id. at 249.)
{¶ 29} The trial court held the relevance objection in abeyance because it did not
know what attorney Roberts would say. As for the attorney-client privilege, the trial court
held that Robert had waived it based on his testimony about relying on the advice of
counsel. (Id. at 250.) In support, the trial court cited Maddox v. Greene Cty. Bd. of
Commrs., 2d Dist. Greene No. 2013-CA-71, 2014-Ohio-1541. (Id.) Based on its finding
that Callista did not waive her attorney-client privilege, the trial court limited attorney
Roberts to testifying only about his communication with Robert. (Id. at 250-251.) As set
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forth above, attorney Roberts then testified that Robert expressed concern about asset
protection and shielding the house from creditors in the litigation against Callista.
{¶ 30} Following the jury’s verdict in favor of Mancz on behalf of the estate, the trial
court overruled the McHenrys’ objection to the magistrate’s decision allowing attorney
Roberts to testify. In support of its decision, the trial court reasoned:
Under R.C. section 2317.02(A), if a client voluntarily testifies about
communications made to his or her attorney, then that attorney can be
compelled to testify about the same subject. Courts have interpreted “the
same subject” broadly. Walsh v. Barcelona Associates, Inc., 16 Ohio
App.3d 470 (1984). Voluntarily testifying that one acted on the advice of
counsel constitutes an implied waiver of the attorney-client privilege.
Meyers Roman Friedberg & Lewis [v. Malm], 183 Ohio App.3d 195, 2009
Ohio 2577. Indeed, one “cannot manipulate the attorney-client privilege by
unilaterally choosing to disclose information favorable to him, while
concurrently seeking to bar the search for potentially unfavorable
information.” Id. at ¶ 61.
In this case and without objection, the question was posed, “[w]hat
was the reason that you had your wife convey her interest—or, your wife
convey her interest to you with a transfer on death back to you? . . . Or back
to her—excuse me.” Robert McHenry testified, “[w]e consulted a lawyer and
followed his advice.” (TR Volume IV, p. 242). He voluntarily asserted that
the deed transfer was done on the advice of counsel as the answer to the
question. Given the authority cited above, this Court finds an implied waiver
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of the attorney-client privilege, and given the broad interpretation of “the
same subject,” this Court finds that Brian Roberts’s testimony was on the
same subject as that of Robert McHenry. The Magistrate did not err in
allowing the testimony of Brian Roberts as a result of that implied waiver.
Moreover, the Magistrate properly limited Roberts’s testimony to exclude
any references to communications with or by Callista McHenry. The
McHenrys’ first objection is overruled.
(November 13, 2019 Decision on Objections at 2.)
{¶ 31} Upon review, we disagree with the trial court’s determination that Robert
voluntarily waived his attorney-client privilege. The trial court found the statutory privilege
under R.C. 2317.02(A) applicable but concluded that Robert implicitly had waived it by
relying on an advice-of-counsel defense. A voluntary assertion of an advice-of-counsel
defense can be deemed as a voluntary waiver, although in Matter of Estate of Weiner,
2019-Ohio-2354, 138 N.E.3d 604, ¶ 65 (2d Dist.), we recently stated, without analysis,
that “[t]he statutory attorney-client privilege may be waived only expressly, and not by
implication[.]” Here though we conclude the record does not support the trial court’s
conclusion that Robert “voluntarily” waived the privilege “without objection.” Just before
answering the question at issue, Robert explicitly objected by invoking his attorney-client
privilege and refused to answer. (Trial Tr. at 241-242.) Only after opposing counsel
persisted did Robert answer. (Id.) In fact, we note that Robert attempted to invoke his
attorney-client privilege at virtually every turn when discussing the deed conveying the
real estate and the meeting with an attorney even though we believe the privilege did not
apply to questions about what his own intentions were in transferring the real estate to
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Callista. We note too that Robert answered the specific question at issue as on cross-
examination. Under Ohio law, “there is at least a presumption that statements made
during cross-examination are not voluntarily.” Avis Rent A Car Sys., LLC v. City of Dayton,
No. 3:12-CV-399, 2013 WL 3778922, at *7-8 (S.D. Ohio July 18, 2013) (Citing cases.)
“[A] party claiming that the attorney-client privilege has been waived may overcome that
presumption by pointing to the cross-examined party’s unprompted disclosure of
privileged communications, affirmatively offered, to which the examined party or their
counsel did not object.” Id. Here Robert did not make an unprompted disclosure of his
communications with his attorney. He mentioned acting on the advice of counsel in
response to repeated questioning by opposing counsel and only after invoking his
attorney-client privilege and initially refusing to answer. Under these circumstances, we
believe Robert did not voluntarily waive his attorney-client privilege.
{¶ 32} This court’s decision in Maddox, on which the magistrate relied at trial, is
not to the contrary. In Maddox, we found a waiver of the attorney-client privilege where
the party seeking to invoke the privilege voluntarily had raised “advice of counsel” as an
affirmative defense in its answer. Under Ohio law, acting on the “advice of counsel” is a
recognized affirmative defense to certain civil claims. See, e.g., Kleemann v. Carriage
Trace, Inc., 2d Dist. Montgomery No. 21873, 2007-Ohio-4209, ¶ 63. To establish the
advice-of-counsel defense, a defendant is required to prove that he sought the advice of
counsel, that he fairly and impartially informed his attorney of all material facts, and that
he followed his attorney’s advice in good faith. Killilea v. Sears, Roebuck & Co., 27 Ohio
App.3d 163, 168, 499 N.E.2d 1291 (10th Dist.1985). In Maddox, we found that the
defendant had chosen to make a voluntary assertion in its answer that it had acted on the
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advice of counsel. Maddox at ¶ 11. Therefore, the attorney-client privilege was waived
with respect to that advice. One should not be able to claim they acted on advice of
counsel without exposing what that advice entailed.
{¶ 33} Here the McHenrys did not assert an advice-of-counsel affirmative defense,
which would have meant that they admitted conveying the real estate with fraudulent
intent but did so in good faith because their attorney recommended that course of action.
See State ex rel. Plain Dealer Publishing Co. v. Cleveland, 75 Ohio St.3d 31, 33, 661
N.E.2d 187 (1996) (recognizing that an affirmative defense is “a new matter [that],
assuming the complaint to be true, constitutes a defense to it”). Nor did Robert McHenry
voluntarily choose to assert that he had acted on the advice of counsel. Unlike the
defendant in Maddox, he made that disclosure as on cross-examination and after
repeatedly invoking his attorney-client privilege. Therefore, we find Maddox to be
distinguishable.
{¶ 34} Despite the foregoing conclusion, we see no grounds for reversing the trial
court’s judgment on the attorney-client privilege issue. Although Mancz has not raised the
issue on appeal, we note that Callista very well may have waived her own attorney-client
privilege notwithstanding the trial court’s conclusion to the contrary. When asked about
an affidavit in which she claimed to have conveyed the real estate to Robert for privacy
and estate-planning purposes, Callista voluntarily mentioned going with Robert to see a
lawyer. (Trial Tr. at 152-153.) When asked what estate-planning purpose she was
accomplishing, Callista again voluntarily referenced her attorney reviewing the deed. (Id.
at 154.) When asked again about what estate-planning purpose she was accomplishing
by conveying her interest to Robert, Callista responded that, as result of her meeting with
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an attorney, she believed neither she nor Robert would have to go through probate if the
other died. (Id. at 155.) When asked whether she also believed as a result of the meeting
that putting the house in her husband’s name would shield it from creditors, Callista
responded without objection that she did not believe that issue ever came up, that she
did not convey the real estate for that reason, and that she never thought about protecting
the house from creditors. (Id. at 156.) By asserting without objection that protecting the
real estate from potential claims from creditors never came up during the meeting with an
attorney, Callista likely waived her attorney-client privilege regarding the substance of the
meeting. Compare Selby v. O’Dea, 2020 Ill.App. (1st) 181951, __ N.E.3d __, 2020 WL
1548471, ¶ 185-191 (holding that a client waived the attorney-client privilege when
discussing the content of attorney-client communications by disclosing what such
communications did not contain); Terry v. Bacon, 2011 Utah App. 432, 269 P.3d 188,
¶ 19 (“[T]he Terrys should not be permitted to use the [attorney-client] privilege as a sword
by relying on their statements about what was not said during the communications with
former counsel, while also asserting the attorney-client privilege as a shield when the
defendants attempt to refute those assertions.”). Allowing a party to testify concerning the
substance of an attorney-client communication without allowing the attorney to respond
would violate the principle that “the attorney-client privilege is a shield, to protect the
confidentiality of a client’s consultation with her attorney, not a sword to facilitate perjury
concerning the substance of counsel’s advice.” State v. Houck, 2d Dist. Miami No. 09-
CA-08, 2010-Ohio-743, ¶ 38. But even setting aside the issue of Callista’s potential
waiver, we see no basis for reversing the trial court’s judgment with regard to the attorney-
client privilege issue.
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{¶ 35} It is apparent to us that the attorney-client privilege never attached to
Robert’s conversation with attorney Roberts in the first place. “[I]t is beyond contradiction
that the privilege does not attach in a situation where the advice sought by the client and
conveyed by the attorney relates to some future unlawful or fraudulent transaction. Advice
sought and rendered in this regard is not worthy of protection, and the principles upon
which the attorney-client privilege is founded do not dictate otherwise.” (Citations
omitted.) Moskovitz v. Mt. Sinai Med. Ctr., 69 Ohio St.3d 638, 661, 1994-Ohio-324, 635
N.E.2d 331 (1994). “[T]he attorney-client privilege exists to aid in the administration of
justice and must yield in circumstances where justice so requires.” Id; see also Hayes v.
Lindquist, 22 Ohio App. 58, 63, 153 N.E. 269 (6th Dist.1926) (finding that testimony about
a conversation between a client and his attorney was not protected by the attorney-client
privilege where it concerned a discussion of the client fraudulently conveying stock to his
sister, as the testimony “related to proposed future wrongdoing on the part of the client”).
{¶ 36} Here attorney Roberts’ testimony indisputably supported a finding that
Robert McHenry sought and obtained legal advice related to a fraudulent transaction,
namely the fraudulent conveyance of Callista’s interest in their home to shield it from
creditors in the litigation against her. Under these circumstances, no attorney-client
privilege attached to Robert’s conversation with his attorney. Although the trial court did
not rely on this rationale, “[r]eviewing courts affirm and reverse judgments, not reasons.”
State v. Rubes, 2012-Ohio-4100, 975 N.E.2d 1054, ¶ 33 (11th Dist.); see also Joyce v.
Gen. Motors Corp., 49 Ohio St. 3d 93, 96, 551 N.E.2d 172 (1990) (noting that “a reviewing
court is not authorized to reverse a correct judgment merely because erroneous reasons
were assigned as the basis thereof”). For the foregoing reasons, we overrule the
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McHenrys’ third assignment of error.
{¶ 37} In their fourth assignment of error, the McHenrys assert that the trial court
erred in adopting the magistrate’s decision overruling their motion for a mistrial. This
assignment of error is predicated on an assumption that the testimony of attorney Roberts
was inadmissible. Based on our resolution of the third assignment of error, however, we
conclude that attorney Roberts properly was allowed to testify. We note too that the
motion for a mistrial itself was prompted by the McHenrys’ counsel’s own questioning of
attorney Roberts. Before allowing Roberts to testify, the trial court carefully limited him to
discussing his conversations with Robert without mentioning anything about Callista.
When the McHenrys’ counsel subsequently questioned attorney Roberts, the following
exchange occurred:
MR. BOUCHER: Okay. And, just so I’m clear, did you ever meet
independently with Mr. McHenry?
MR. ROBERTS: Not that I recall.
MR. BOUCHER: Okay. So, everything you’ve just testified to you did
with both Mr. and Mrs. McHenry, correct?
MR. MANCZ: Objection.
THE COURT: Approach.
(BENCH CONFERENCE)
Mr. BOUCHER: We’re going for a mistrial. This is—this is way over
the line. It’s absolutely a mistrial. She was going to . . .
(CROSS TALK)
THE COURT: It’s not appropriate for you to ask that question.
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MR. MANCZ: That’s correct.
MR. BOUCHER: Well, we’re having a mistrial because there’s an
inference to the jury now: Did he ever meet independently with Bob? Not to
my recollection. So, now the jury knows that he met with both of them and
that the conversations that Bob had with him were in front of Callista. We
have a mistrial. * * *
(Trial Tr. at 276-277.)
{¶ 38} Although the jury perhaps may have been able to infer that Callista was
present when her husband Robert spoke with attorney Roberts, that fact had not been
highlighted or clearly established prior to the McHenrys’ counsel’s own questioning. By
directly asking attorney Roberts whether Callista and Robert were both present—a
question the trial court correctly found inappropriate under the circumstances—the
McHenrys’ counsel magnified the potential for the prejudice about which he now
complains. Under these circumstances, the trial court did not abuse its discretion in
declining to declare a mistrial. The fourth assignment of error is overruled.
{¶ 39} In their fifth assignment of error, the McHenrys argue that the trial court
erred in adopting the magistrate’s decision overruling their motion for a directed verdict.
The record reflects that the McHenrys orally moved for a directed verdict at the conclusion
of Mancz’s case, raising numerous arguments. (Trial Tr. at 493-513.) On appeal, the
McHenrys argue that the trial court erred in overruling their motion with respect to several
of those arguments.
{¶ 40} The McHenrys first contend they were entitled to a directed verdict with
regard to the allegedly fraudulent transfer of real estate because Mancz “never
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established through testimony that there was a transfer of real estate, what the date of
the alleged transfer of real estate was, whether any deed was recorded, whether both
parties were aware of the deed, executed the deed, etc.” (Appellants’ Brief at 14-15.) The
McHenrys assert that the only testimony about the real estate came from their former
attorney, Brian Roberts. In addition to arguing that his testimony should have been
disallowed on the basis of privilege, the McHenrys contend that Roberts “did not testify
as to the validity of the deed, whether it was recorded, whether it was executed, etc.” (Id.
at 15.)
{¶ 41} The McHenrys also argue that a directed verdict was appropriate based on
Callista’s testimony that the real estate was not transferred until after she heard that a
2007 Greene County case against her by her siblings was going to be dismissed.
Although the trial court found an inference of fraudulent intent based in part on the 2007
case remaining pending when the real estate was transferred on June 2, 2008, the
McHenrys claim there was no testimony about June 2, 2008 being the date of transfer.
{¶ 42} The McHenrys further assert that Callista’s siblings in the 2007 case never
became her “creditors” for purposes of a fraudulent transfer because the 2007 case
ultimately was dismissed. The McHenrys also suggest that Mancz was not a “creditor” in
the 2007 lawsuit in which he did not participate. Therefore, they contend the real estate
transfer could not have been fraudulent as to him.
{¶ 43} The McHenrys next assert that they were entitled to a directed verdict based
on their belief that some of the statutory “badges of fraud” did not apply. In particular, they
assert (1) that Callista was not insolvent at the time of the real-estate transfer, (2) that
she received “value” from Robert for the real-estate transfer, and (3) that there was no
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concealment of any transfer of real estate or money. The McHenrys also argue that
Callista remained in control of all of the money at issue and made all withdrawals. They
argue that Robert never spent any of the money or made any withdrawals despite the fact
that some of the disputed funds were placed in joint accounts in his and Callista’s name.
{¶ 44} Because a motion for a directed verdict presents a question of law, we apply
de novo review. Goodyear Tire Co. v. Aetna Casualty & Surety Co., 95 Ohio St.3d 512,
2002-Ohio-2842, 769 N.E.2d 835, ¶ 4. A directed verdict is proper if, construing the
evidence most strongly in favor of the non-moving party, the trial court “finds that upon
any determinative issue reasonable minds could come to but one conclusion upon the
evidence submitted and that conclusion is adverse to such party.” Civ.R. 50(A)(4). This
test “requires the court to discern only whether there exists any evidence of substantive
probative value that favors the position of the nonmoving party.” Goodyear at ¶ 3.
{¶ 45} With the foregoing standards in mind, we conclude that the McHenrys have
not demonstrated error in the ruling on their directed-verdict motion. Their first argument
about a lack of evidence establishing any transfer of real estate is arguably frivolous.
Counsel for the McHenrys began his directed-verdict argument by admitting “the fact” that
Callista signed the deed conveying her interest in the real estate to Robert on June 2,
2008. (Trial Tr. at 493-494.) The McHenrys also ignore Planitiff’s Exhibit 3, a copy of the
June 2, 2008 warranty deed transferring the real estate from Callista and Robert jointly to
Robert alone. The recorded deed signed by the McHenrys was referenced multiple times
during Mancz’s case-in-chief, and it was admitted into evidence without objection by the
McHenrys’ counsel. (Trial Tr. at 435.) Finally, Robert testified and acknowledged that he
and his wife executed the deed on June 2, 2008 conveying the marital residence from
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them jointly to him. (Id. at 164.) In short, the existence of the real-estate conveyance was
not disputed below. The McHenrys’ current argument to the contrary is devoid of any
factual support.
{¶ 46} We also reject the McHenrys’ argument that they were entitled to a directed
verdict based on Callista’s testimony that the real estate was not transferred until after
she heard that the 2007 Greene County lawsuit brought by her siblings was going to be
dismissed. The fact remains that the Greene County lawsuit had not been dismissed
when Callista and Robert conveyed their home to Robert alone. Callista admitted that
claims were pending against her when the transfer occurred. (See, e.g., Trial Tr. at 150.)
Moreover, the expectation was that the 2007 case brought by the siblings, as individuals,
would be dismissed because it was anticipated that Mancz would pursue a separate
lawsuit acting as a fiduciary on behalf of the estate, to recover the same assets of Audrey
Kirby that Callista had taken, which is exactly what occurred. Construing the evidence in
a light most favorable to Mancz, we are unpersuaded that Callista’s testimony about the
anticipated dismissal of her siblings’ lawsuit supported a directed verdict in the McHenrys’
favor.
{¶ 47} We are equally unpersuaded by the McHenrys’ argument that there could
not have been a fraudulent transfer because neither Callista’s siblings nor Mancz qualified
as a “creditor” when the real estate was transferred. Under R.C. 1336.04(A)(1), a transfer
made by a “debtor” may be fraudulent as to a “creditor” whether the creditor’s claim arose
before or within a reasonable time not to exceed four years after the transfer. A “claim”
means a “right to payment, whether or not the right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal,
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equitable, secured, or unsecured.” R.C. 1336.01(C). A “creditor” means a person who
has a claim, R.C. 1336.01(D), and a “debtor” is a person who is liable on a claim. R.C.
1336.01(F).
{¶ 48} At the time of the real estate transfer, Callista’s siblings and Audrey Kirby’s
estate had a disputed right to payment that had not been reduced to judgment. In fact,
the Greene County case brought against Callista by the siblings was pending at that time.
Therefore, they had a “claim” against Callista. Perhaps more importantly for present
purposes, when he initially became involved as a fiduciary on behalf of Audrey Kirby’s
estate, Mancz also had a “claim” because he had at least a disputed right to payment.
Following the June 28, 2011 probate-court judgment that Mancz obtained on behalf of the
estate, he also had a right to payment that had been reduced to judgment. We note too
that he filed his original complaint in this case in May 2012, which was less than four
years after the allegedly fraudulent real-estate transfer at issue. In any event, contrary to
the implication of the McHenrys’ appellate brief, it matters not whether Mancz qualified as
a “creditor” when the real-estate transfer was done. Prouse, Dash & Crouch, L.L.P. v.
DiMarco, 175 Ohio App.3d 467, 2008-Ohio-919, 887 N.E.2d 1211, ¶ 48 (8th Dist.).
“Rather, anyone who now has a claim against a party and alleges that the transfer was
done fraudulently to elude other creditors or obligations may step in and declare that the
transfer was done fraudulently. The plain language of R.C. 1336.04 clearly provides that
the claim of the creditor can arise after the transfer of the property.” Id.{¶ 49} We also find no merit in the McHenrys’ argument that they were entitled to
a directed verdict because a few of the statutory “badges of fraud” did not apply here.
Specifically, the McHenrys claim Callista was not insolvent at the time of the real-estate
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transfer, she received “value” from Robert for the real-estate transfer, and there was no
concealment of any transfer of real estate or money.
{¶ 50} Under R.C. 1334.06(A), a transfer made by a debtor is fraudulent if the
transfer is made (1) “with actual intent to hinder, delay, or defraud any creditor of the
debtor” or (2) without receiving a “reasonably equivalent value” where additional
circumstances exist. To determine actual intent, R.C. 1334.06(B) identifies 11 non-
exclusive factors or “badges of fraud” to consider. Three of those actual-intent factors are
whether the value received by the debtor was reasonably equivalent to the value of the
asset transferred, whether the debtor was insolvent or became insolvent shortly after the
transfer, and whether debtor removed or concealed assets. The McHenrys argue that
these factors do not apply here.
{¶ 51} Having reviewed the record, we do not agree that Callista received “value”
(and certainly not “reasonably equivalent value”) from Robert in exchange for transferring
her interest in their home to him. The McHenrys argue that this “value” consisted of Robert
making the mortgage payments. Construing the evidence most strongly in favor of Mancz,
however, Robert made these payments both before and after the real-estate transfer
using money that he earned while married to Callista, who was not employed outside the
home. The record does not compel a finding that Robert made the mortgage payments
in exchange for Callista’s conveying her interest in the real estate to him. We note too
that jury interrogatories establish the jury’s finding that Callista did not receive reasonably
equivalent value in exchange for the transfer.
{¶ 52} Whether Callista concealed or removed assets is a closer question, as is
the question of whether the transfers at issue rendered her insolvent. In answers to
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interrogatories, the jury found with regard to the real estate that Callista did not remove
or conceal assets, perhaps because the recorded deed was a matter of public record, but
they did conclude the transfer rendered her insolvent. (See January 11, 2019 Jury
Interrogatories.) With regard to financial assets, the jury found that Callista did conceal
her transfers, that she concealed or removed assets, and that the transfers rendered her
insolvent. (Id.) But even if we assume, arguendo, that the two badges of fraud pertaining
to concealing or removing assets and insolvency do not apply, the McHenrys’ argument
fails to establish their entitlement to a directed verdict.
{¶ 53} In their assignment of error, the McHenrys fail to address the other badges
of fraud, a number of which Mancz’s evidence supported. The existence of as few as
three of the badges of fraud has been held to constitute clear and convincing evidence of
fraudulent intent. William E. Weaner & Assocs., LLC v. 369 West First, LLC, 2d Dist.
Montgomery No. 28399, 2020-Ohio-48, ¶ 60. With regard to the real estate, the jury found
among other things, and Mancz’s evidence supported, that Callista’s transfer was to an
insider, she retained possession or control of the real estate, she had been sued or
threatened with suit before the transfer, and she did not receive reasonably equivalent
value. With regard to financial assets, the jury found, among other things, and Mancz’s
evidence supported, that Callista’s transfer(s) were to an insider, she had been sued or
threatened with suit before the transfer(s), the transfer(s) were of substantially all of her
assets, she did not receive reasonably equivalent value, and the transfer(s) occurred
before or shortly after a substantial debt was incurred. Mancz’s evidence on all of the
foregoing issues under R.C. 1334.06(A) was enough to overcome the McHenrys’
directed-verdict motion.
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{¶ 54} In their final argument, the McHenrys suggest that Callista remained in
control of all of the financial assets at issue despite Robert’s name being on accounts.
They argue that Robert never spent any of the money or made any withdrawals. The
issue, however, was whether Callista fraudulently transferred the money, not whether
Robert actually used it. In fact, Callista’s claim that she retained control over all of the
money despite Robert’s name being on accounts was another badge of fraud against her
under R.C. 1336.04(B)(2), which the jury also found applicable. For the foregoing
reasons, we overrule the fifth assignment of error.
{¶ 55} In their sixth assignment of error, the McHenrys contend the trial court erred
in adopting the magistrate’s decision entering judgment on verdicts that were against the
weight of the evidence, based on inadmissible statements and demonstrative evidence
presented during closing arguments, and based on speculative damages.
{¶ 56} More specifically, the McHenrys assert that Mancz never testified as to a
specific dollar amount he believed was fraudulently transferred. They also claim Mancz
failed to establish that Robert spent or withdrew any of the money Callista transferred to
him. In fact, the McHenrys claim Mancz failed to establish that the transferred money no
longer remained in the accounts at issue. They further argue that the jury was forced to
speculate about what amounts were transferred, what Robert may have spent, what
remained in the accounts, and whether any transfers were fraudulent. To support their
argument, the McHenrys cite testimony about Callista transferring $22,085.15 into a
Huntington Bank account. They contend that Robert was not asked anything about this
transfer other than the fact of its existence. In particular, they argue that Mancz failed to
“ask about anything else, including withdrawals, joint owners, signature cards, remaining
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balances, expenditures, current balance, etc.” (Appellants’ Brief at 19.) They further argue
that Mancz failed to establish “a single badge of fraud” with regard to the Huntington Bank
account. They also claim Mancz “never contested” Robert’s claim that he gave the money
in the Huntington Bank account “back to Mrs. McHenry.” (Id.) Finally, with regard to the
damages calculation, the McHenrys argue as follows:
* * * In addition to the $22,085.00 mentioned above, the remainder
of the award by the jury was made up of the following figures: $35,000.00,
$59,025.00 and $11,023.00. A review of the transcript will demonstrate that
there was no actual evidence represented or elicited that established
anything fraudulent about those figures/accounts or that established who
utilized the money, where the money sits currently, or that refuted the return
of the funds to Mrs. McHenry. Appellee did not meet his burden, plain and
simple. In an effort to make up for that, Appellee provided the jury a list of
the amounts that he wanted to be awarded, an exact match to the four
mentioned above. The jury appears to have lost their way and instead of
stating that Appellee failed to meet his burden, they rather took his
“testimony” made during closing arguments and awarded judgment without
actually having seen or heard any evidence to support the numbers he
recited to them.
(Id. at 19-20.)3
3 The jury’s award of $127,133 consists of the balances at various times from four
accounts: 1) $22,085 (precisely $22,085.15) resulting from a transfer from Callista’s
Liberty Savings CD #3780 to a Huntington account #9184 in Robert’s name only on May
19, 2009. (Trial Tr.143-144, 200-201 & Exhibits 25 and 32); 2) $35,000 in Callista’s Chase
Bank account #1411 which was transferred to her and Robert’s joint names on July 9,
2008, (Trial Tr. 100, 105, 119, 187 & Exhibit 17); 3) $11,023 [precisely $11,023.56] that
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{¶ 57} In civil and criminal cases alike, a judgment will be reversed as being
against the manifest weight of the evidence only in an exceptional case in which the
evidence weighs heavily against the judgment. Amesse v. Wright State Physicians, Inc.,
2018-Ohio-416, 105 N.E.3d 612, ¶ 46 (2d Dist.) (noting that the same manifest-weight
standard of review applies in civil and criminal cases). Here we conclude that the weight
of the evidence was not contrary to the jury’s verdict.
{¶ 58} Although Mancz did not testify as to a specific dollar amount that he
believed was fraudulently transferred, he presented the jury with bank records and other
evidence from which it was able make that determination on its own. We are equally
unpersuaded by the McHenrys’ repeated argument about a lack of evidence that Robert
ever withdrew or spent any of the money Callista transferred to him. The McHenrys fail
to explain how or why this made any difference to the fraudulent-conveyance claims. The
trial court correctly instructed the jury that a fraudulent conveyance required proof that
“Callista McHenry fraudulently transferred assets to Robert McHenry[.] (Trial Tr. at 647.)
Under R.C. 1336.04, Mancz was not required to prove that Robert, the transferee, did
anything in particular with the transferred assets. Rather, upon proof of a fraudulent
transfer, a creditor is entitled, among other things, to a judgment against the transferee
for the value of the asset transferred or the amount of the creditor’s claim. R.C.
was the balance after Callista deposited $11,000 on November 20, 2008 into Chase Bank
account #1034, a joint checking account held by Robert and Callista. (Trial Tr. 190-192,
Exhibit 17.); and 4) $59,025 (precisely $59,025.42) representing the closing balance of
PNC account 0500. A National City(4833)/PNC(0500) account had been funded from the
closing of Liberty Savings account #3705 that was opened solely in Callista’s name. (Trial
Tr. 90, 93, 97,197-198, and Exhibits 10 and 15.) We provide more detail for this last
account in resolution of the Seventh Assignment of error. The rounded total of the four
accounts is $127,133.
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1336.08(B)(1)(a).
{¶ 59} We also reject the McHenrys’ argument that “the jury was forced to
speculate about what amounts were transferred, what Robert may have spent, what
remained in the accounts, and whether any transfers were fraudulent.” Again, Mancz was
required to prove only that Callista made fraudulent transfers to Robert. Mancz
presented numerous bank documents establishing the existence of transfers, and the
record was replete with circumstantial evidence from which the jury reasonably could
have inferred that Callista made the transfers with fraudulent intent.
{¶ 60} Under their assignment of error, the only specific transfer the McHenrys
address involves the $22,085.15 balance in the Huntington Bank CD account. 4 The
record reflects that Callista had multiple Liberty Savings Bank CDs that she had funded
with money wrongfully obtained from her mother’s estate. (Trial Tr. at 143-145.) Robert
testified that the Huntington Bank account was funded when Callista closed one of the
Liberty Savings Bank CDs and deposited that money into the Huntington Bank CD
account, which was in Robert’s name alone. This testimony from Robert established a
“transfer” from Callista to him. Plaintiff’s Exhibit 25, which was admitted into evidence
without objection (Id. at 454-457.), further demonstrated that the Huntington Bank CD
account had been opened in May 2009 with Robert’s name alone appearing on a
signature card. Given the timing and other circumstances of this transfer from Callista to
Robert involving money obtained from her mother’s estate, the jury could have reasonably
inferred the existence of fraudulent intent by Callista.
4 The McHenrys refer to the transfer being $22,085.00, but the record reflects that it more
precisely was $22,085.15. (See Plaintiff’s Exhibit 25.)
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{¶ 61} Despite the McHenrys’ argument, we see nothing significant in Mancz’s
failure to inquire about “withdrawals, joint owners, signature cards, remaining balances,
expenditures, [or] current balance” with regard to the Huntington Bank account. Once
again, Plaintiff’s Exhibit 25 was admitted into evidence without objection from the
McHenrys. That exhibit showed deposits, withdrawals, and the remaining balance. It also
included a signature card bearing Robert’s name alone, indicating that it was not a joint
account, which Robert himself confirmed. The bottom line is that Mancz proved a transfer
from Callista to Robert into the Huntington Bank CD account, and the jury reasonably
inferred the existence of fraudulent intent. As for Robert’s unsubstantiated claim that he
gave the money at issue “back” to Callista, the jury was free to disbelieve him when
assessing witness credibility. Therefore, that aspect of its verdict was not against the
manifest weight of the evidence.
{¶ 62} The McHenrys’ final argument of this assignment challenges other aspects
of the jury’s damages award. Specifically, they address other transfers involving the
$35,000, $59,025, and $11,023 and assert “that there was no actual evidence
represented or elicited that established anything fraudulent about those figures/accounts
or that established who utilized the money, where the money sits currently, or that refuted
the return of funds to Mrs. McHenry.” (Appellants’ Brief at 20.)
{¶ 63} In our view, the record supported a finding that the disputed accounts were
funded with money Callista improperly obtained from her mother’s estate. In July 2008,
the $35,000 was transferred from an account solely in Callista’s name into a joint Chase
Bank CD account with Robert. (Trial Tr. at 119-123, 187.) In November 2008, the $11,000
was deposited by Callista into a joint Chase Bank checking account held jointly by Robert
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and Callista. (Plaintiff’s Exhibit 17.) The probate court determined that Callista opened a
Liberty Savings CD in her sole name on May 3, 2007, shortly after Kirby’s death, with
$54,188.96 that was the remaining balance of a Bank One CD that had been purchased
years earlier with Kirby’s money. (Plaintiff’s Exhibit 10, pg. 16-17.) The proceeds were
eventually deposited or converted to joint accounts in both of the McHenry’s names. The
record supported a finding that Callista lacked sufficient assets to make such deposits
with her own money. Aside from the assets that she took from her mother’s estate, she
had an IRA account, but she never moved the IRA money anywhere. (Id. at 190-192.)
Callista was not employed at the time, and she actually admitted transferring money to
Robert, either jointly or individually, from her mother’s estate through the end of 2008. (Id.
at 110, 112-113, 141-142.) Under these circumstances, the jury reasonably could have
inferred that the $35,000 transfer, the $11,000 deposit, and the changing into their joint
names the account that became $59,025 were fraudulent transfers. Accordingly, the
sixth assignment of error is overruled.
{¶ 64} In their seventh assignment of error, the McHenrys more specifically argue
that the funds with regard to the $59,025 portion of the judgment appear to have been
transferred from a joint account belonging to Callista and Robert into another joint account
belonging to Callista and Robert. They contend the trial court erred in upholding a jury
verdict finding that a transfer of assets from one joint bank account to another joint bank
account, with the same owners, can be a fraudulent transfer of funds.
{¶ 65} This assignment of error concerns money that Callista took belonging to her
mother’s estate and deposited in a Liberty Savings Bank certificate of deposit on May 3,
2007. The initial complaint in this case was filed May 3, 2012 and the four-year statute of
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limitations for a fraudulent transfer claim means a transfer from Callista to Robert would
have had to occur after May 3, 2008 to be within the statute of limitations. Central to the
McHenry’s argument is their conclusion that “Liberty CD 3705 was opened by Mrs.
McHenry on May 4, 20075 as a joint certificate of deposit between Mrs. McHenry and Mr.
McHenry. (Tr. P. 144, 197).” Appellant’s Brief at 20. But the McHenry’s are s incorrect.
Our concerns about their representations regarding this account are twofold: first, the
pages cited by the McHenrys do not support the argument that account 3705 was a joint
account when first opened in May 2007, and second, the evidence reasonably supported
a conclusion that account 3705 was opened solely in Callista’s name and was
“transferred” by being made into a joint account with Robert sometime after June 23,
2008. That timing of the transfer would place the transfer from Callista to a jointly-held
account with Robert within the four-year statute of limitations.
{¶ 66} With respect to the McHenrys’ citations to pages 144 and 197 of the
transcript for the proposition that Callista opened the Liberty account 3705 in May 2007
as a joint account, neither cited page supports that conclusion. The evidence showed that
when account 3705 matured in November 2008, the proceeds were used to open a jointly-
held CD, first at National City Bank, account 4833, and when National City was acquired
by PNC it apparently became PNC account 0500. On page 144, Mancz’s attorney asked
Callista, “we know 3705 is an account that became a joint account with your husband - at
least a joint account with your husband - as 4833 with PNC, correct?” (Emphasis added.)
5 The probate court judgment refers to Callista’s opening a Liberty Bank CD with
$54,188.96 on May 3, 2007. We are unable to reconcile the one-day date difference
between the probate court’s judgemnt and the McHenrys’ reference to May 4, 2007.
However, after reviewing all the testimony and exhibits, we are convinced they are
referring to the same account, Liberty Account 3705.
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Her response was affirmative. But nothing in that exchange or on that page reveals that
Liberty account 3705 was joint when it was opened at Liberty Bank. On page 197, during
the questioning of Robert, one can only discern that the available electronically-archived
records from PNC account 0500 are “confusing,” and that the money for that PNC account
came from Robert’s wife and from Liberty account 3705. Whether 3705 was initiated as
a joint account is not addressed on page 197.
{¶ 67} At trial, Mancz argued that PNC CD account 0500 was an account solely in
Robert’s name. (Id. at 92-94.) Therefore, Mancz asserted the existence of a subsequent
fraudulent transfer by Callista and Robert jointly from account number 4833 to Robert
alone in PNC CD account number 0500. In support of his claim that the PNC Bank CD
was only in Robert’s name, Mancz cited a letter he obtained from opposing counsel in
discovery. (Id. at 89-90.) Mancz claimed the letter identified the account as being Robert’s
alone. Mancz also cited bank records he had obtained pertaining to the account. (Id. at
90-95.) At the top of one of the pages was the PNC CD account number and the name
“Robert L. McHenry.” (Plaintiff’s Exhibit 15.)
{¶ 68} In opposition to Mancz’s argument, Callista denied that the PNC Bank CD
was Robert’s alone. (Id. at 91-96.) She maintained that it was a joint account. (Id.) Robert
also testified that the PNC Bank CD remained a joint account that came into being as a
result of National City Bank being acquired by PNC Bank. (Id. at 196-197.)
{¶ 69} For purposes of the fraudulent-transfer statute, a “transfer” includes “every
direct or indirect, absolute or conditional, and voluntary or involuntary method of disposing
of or parting with an asset or an interest in an asset[.]” (Emphasis added.) R.C.
1336.01(L). In light of this definition, we agree with the McHenrys that a transfer of money
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from a National City joint account between Callista and Robert into a PNC joint account
between Callista and Robert would not qualify as a potentially fraudulent transfer under
the statute. Based on the evidence before us, we believe the weight of the evidence did
not prove that PNC CD account number 0500 was in Robert’s name alone. Nevertheless,
the evidence was that Callista closed Liberty account 3705 on November 4, 2008 and
deposited the proceeds of $56,465.68 in a National City Bank or PNC Bank joint certificate
of deposit with Robert, originally bearing account number 4833. At some point, that
account became PNC Bank CD account number 0500, which grew to have a balance of
$59,025.
{¶ 70} The foregoing analysis does not end the inquiry about Liberty account 3705
because the evidence reveals that account 3705 was not a joint account with Robert when
it was opened. It was in Callista’s name alone. The jury reasonably could have concluded
the evidence established a fraudulent transaction with regard to Liberty account 3705
sometime after June 23, 2008. The genesis of the Liberty 3705 account was a Bank One
CD purchased with Audrey Kirby’s funds. How the account was held at that time is
undetermined but that Bank One CD matured January 9, 2007. The probate court
determined:
When the CD matured, its value was $78,411.57. Callista withdrew $16,000
on January 10, 2007, and she deposited $8,000 in Mrs. Kirby's Charter
account and $8,000 in Callista's Liberty account #6925. On April 11, 2007,
the day after her mother's death, Callista withdrew $8,500. Callista used the
balance, $54,188.96 to purchase a 9 month CD in her sole name at Liberty
Savings Bank on May 3, 2007.
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(Emphasis added.) Probate Court Judgment, Exhibit 10 at 16. From this evidence, the
jury could have found the Liberty 3705 account was in Callista’s name only when it was
opened.
{¶ 71} The jury also had a copy of Callista McHenry’s sworn affidavit signed
January 9, 2017 and submitted by her in this litigation. In an attempt to demonstrate that
she was not insolvent when she made the June 2, 2008 real estate transfer, she said:
13. “At the time of the transfer of the Real Estate I held the following assets
in my name:
***
b. Liberty Savings CD [XX-XXXX]3705 had a June 23, 2008 balance of
approximately $56,891.94.”
(Emphasis added.) (Probate Court Judgment Exhibit 12.) Callista was careful in
describing eight other assets in the affidavit to include only a “one-half interest” when she
held something jointly with her husband. She did not do that for the Liberty account,
reflecting that the 3705 account was hers alone as of June 23, 2008. Furthermore, in the
probate litigation, Mancz had taken Callista’s deposition in October 2010, and Callista
then denied that Robert had received any of the money from her mother’s estate, claiming
that “it was my money.” (Trial Tr. 76, 78.)
{¶ 72} To be complete, there was a page at the end of numerous attachments to
Exhibit 38, the letter from the McHenry’s counsel to Mancz revealing previously
undisclosed accounts, which was a printout of an electronically-archived summary of
2008 activity for Liberty Account 3705. The heading of that summary listed both Callista
and Robert, but that record did not say the account was jointly-held or, if so, when it
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became jointly-held. No one was asked about, and no one referred to this attachment
during the trial. And, when questioned about the Liberty to National City to PNC series of
accounts, Robert was asked when it became a joint account; he replied “I don’t recall the
date.” (Trial Tr. 196.)
{¶ 73} Given the evidence of the transfer of real estate on June 2, 2008, the
transfer of $35,000 from one of Callista’s Chase Bank accounts to a Huntington Bank
account in Robert’s name on July 9, 2008, and the deposit of $11,000 from Callista into
a joint Chase account with Robert on November 20, 2008, the jury could have reasonably
concluded that Callista’s plan of transferring assets began with the real estate transfer of
June 2, 2008. These transfers continued by her transferring financial accounts to Robert,
including the Liberty account 3705, sometime after June 23, 2008, when she said the
account was in her name, either before the account was closed at Liberty or when the
proceeds were placed into a joint account in National City Bank, which later became a
joint PNC account.
{¶ 74} Because the evidence supported the jurys conclusion that Callista opened
Liberty account 3705 in her sole name and it was in her sole name until at least June 23,
2008, the transfer by making the account, or its proceeds, a joint account with Robert was
a transfer within the four-year statute of limitations.6 The seventh assignment of error is
overruled.
6 Given our conclusion that the jury could reasonably have found that there was a
fraudulent transfer related to Liberty account 3705, or its proceeds, within the four-year
statute of limitations, we need not address whether any earlier transfer could also have
been within the statute of limitations based on justifiable late discovery of the transfer.
There was evidence of failure to timely disclose transfers of funds and of late discovery
of transfers. The jury was also instructed about these circumstances as a potential
extension of the statute of limitations. Resolution of those issues is unnecessary.
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{¶ 75} In their eighth assignment of error, the McHenrys contend the trial court
erred in finding that Callista transferred any asset with actual intent to hinder, delay, or
defraud any creditor of the debtor.
{¶ 76} In support of their argument, the McHenrys correctly note that intent to
hinder, delay, or defraud can be established circumstantially by considering the 11
“badges of fraud” found in R.C. 1336.04(B). Under this assignment of error, the McHenrys
do not address the evidence as it relates to each badge of fraud. Instead, they simply
assert that Mancz failed to examine or inquire about any of the badges at trial. They argue
that transferring assets was not enough to establish fraud and that Mancz “completely
neglected” to address the badges of fraud that can establish fraud. With regard to
Callista’s conveyance of her interest in real estate to Robert, they also cite Robert’s
testimony that the conveyance was done on the advice of a lawyer. The McHenrys
suggest that acting on the advice of counsel necessarily negates any inference of fraud
that otherwise might exist.
{¶ 77} Upon review, we find the eighth assignment of error to be without merit.
Although the badges of fraud were not identified as such and specifically discussed with
witnesses at trial, a large part of Mancz’s case involved attempting to establish their
existence through the testimony and other evidence presented. We note too that jury
interrogatories specifically addressed each of the badges of fraud. The jury responded to
the interrogatories by making a finding that each badge had or had not been established.
Whether Mancz’s evidence supported a finding of fraudulent intent was an issue that was
raised under the McHenrys’ fifth and sixth assignments of error. For purposes of the
eighth assignment of error, we reject the McHenrys’ suggestion that Mancz attempted to
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establish fraudulent intent by proving nothing more than a mere transfer of assets.
{¶ 78} We also find no merit in the McHenrys’ claim that acting on the advice of
counsel necessarily negated any inference of fraud with respect to Callista’s transfer of
her interest in real estate to Robert. Without more, the mere assertion that the McHenrys
acted on the advice of counsel did nothing to dispel an inference of fraud. If counsel’s
“advice” was in response to a question from Callista or Robert about how to shield the
McHenrys’ home from potential creditors, then such advice would do nothing defeat an
inference of fraudulent intent. The eighth assignment of error is overruled.
{¶ 79} In their ninth assignment of error, the McHenrys claim the trial court erred
in finding that funds returned by Robert to Callista should be counted as a fraudulent
transfer.
{¶ 80} In particular, the McHenrys contend the record contains “uncontroverted”
evidence that Robert returned to Callista $22,085 that she had transferred into a
Huntington Bank account in his name alone. Based on testimony that he had “returned”
this money to Callista, the McHenrys assert that it was error for the jury to include those
funds as part of its fraudulent-transfer verdict.
{¶ 81} We find the McHenrys’ argument to be unpersuasive for at least two
reasons. First, the testimony about Robert “returning” money to Callista involved $22,000
that she had placed in Chase bank accounts in his name. (Trial Tr. at 174-183.) It does
not appear to have involved a separate $22,085.15 that Callista had placed in a
Huntington bank account in his name. (Id. at 200-201.) Second, the jury was not obligated
to believe Robert’s self-serving testimony that he returned money to Callista. When
Robert professed to have returned $22,000 from the Chase accounts to Callista, Mancz
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asked what evidence Robert had to support his claim. Robert responded that “it” was in
Mancz’s discovery “some place.” (Id. at 177.) When Mancz later accused Robert of having
no documentary evidence to support his claim about returning $22,000 to Callista, Robert
responded that Mancz “should have the evidence.” (Id. at 183.) But Mancz apparently did
not have any such evidence, the McHenrys have not cited any such evidence, and we
have not seen any such documentary evidence.
{¶ 82} On appeal, the McHenrys correctly observe that Robert had no legal burden
to produce evidence to support his testimony about returning money to Callista. It is
equally true, however, that the jury was free to disbelieve Robert’s testimony. Indeed, it
is well settled that a jury, as the trier of fact, is responsible for assessing witness credibility
and may believe some, all, or none of what a witness says. Bailey v. Wilson, 2d Dist.
Champaign No. 2015-CA-19, 2016-Ohio-3352, ¶ 15. Accordingly, the ninth assignment
of error is overruled.
{¶ 83} In their tenth assignment of error, the McHenrys assert that the trial court
erred in finding that Kirby’s estate suffered any damage by virtue of a single transfer of
assets.
{¶ 84} The McHenrys’ entire substantive argument is as follows:
The evidence in this case never established that Appellee [Mancz]
could not collect on its judgment [in the underlying probate-court case].
Appellee failed to prove any harm flowing from the alleged fraudulent
transfers. Appellee never established that the accounts made joint
somehow became out of his reach for collection. Shockingly, since 2011,
Appellee has never even attempted to collect on the judgment from the
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[probate court], which he certainly would have been successful in doing if
he had filed a bank account attachment.
How can one be awarded damages for their own lack of due
diligence? There was no harm to Appellee because there was no attempt
to recover and the accounts were not placed out of his reach for collection.
Appellee again bore the burden of proof to establish his harm and failed to
do so.
(Appellants’ Brief at 26.)
{¶ 85} Upon review, we find the foregoing argument to be unpersuasive. As an
initial matter, not all of the bank accounts involved in allegedly fraudulent transfers were
joint accounts. Nor were they all in existence at the time of the probate court judgment.
In any event, the McHenrys have not cited any requirement for Mancz to pursue a
collection action in probate court before seeking to establish the existence of fraudulent
transfers involving Callista and Robert. We note too that Mancz testified below and
addressed the issue of collecting on the judgment in the probate-court case. He recalled
deposing Callista and testified that “in the execution deposition of Callista McHenry, she
claimed as she has claimed that she has nothing.” (Trial Tr. at 328.) Mancz further testified
that he contacted the McHenrys’ counsel and the response he received about the funds
at issue “was that they were all gone somewhere.” (Id. at 330.) Mancz also testified that
he had contacted the McHenrys about returning the funds at issue, but they did not offer
him any money. (Id. at 333.) We note too that Mancz could not have attempted to satisfy
the probate-court judgment against Callista by executing against the McHenrys’
residence, as it had been transferred to Robert. For these reasons, we see nothing
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inappropriate about Mancz initiating the present lawsuit. The tenth assignment of error is
overruled.
{¶ 86} In their eleventh assignment of error, the McHenrys challenge the trial
court’s overruling of their motion for summary judgment. In particular, they note that they
moved for summary judgment on the following eight grounds: “(1) There was not a
fraudulent transfer of real property or personal property by Mrs. McHenry; (2) Appellants’
interest in the Real Estate is exempt from collection by Appellee under ORC 2329.66,
and, therefore, Appellee’s claim is moot; (3) The remainder of Appellants’ assets are
exempt from collection by law and, therefore, Appellee’s claim is moot; (4) Because there
are no collectable assets belonging to Appellants, Appellee’s suit for alleged fraudulent
transfers serves merely to harass; (5) Appellee’s second claim for relief against Mrs.
McHenry is barred by the doctrine of res judicata; (6) Appellee’s second claim for relief
against Mr. McHenry is barred by the doctrine of res judicata; (7) Appellee’s second clam
for relief against Mr. McHenry is barred by the applicable statute of limitations; (8)
Appellee is not entitled to punitive damages.” (Appellants’ Brief at 28.)
{¶ 87} Rather than arguing any of the foregoing issues in their appellate brief, the
McHenrys merely refer us to the record below. They purport to “incorporate herein all
arguments in their entirety contained in Defendants’ Amended and Supplemental Motion
for Summary Judgment filed on January 8, 2018, Defendants’ Reply to Plaintiffs’
Response to Defendants’ Amended and Supplemental Motion for Summary Judgment
filed on February 9, 2018, Defendants’ Supplemental Objections to Magistrate’s Decision
filed August 21, 2018 and Defendants’ Reply to Plaintiff’s Response to Defendants’
Supplemental Objections to Magistrate’s Decision filed on September 18, 2018.” (Id.) The
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McHenrys then conclude their assignment of error with the following broad argument:
“The trial court’s decision was in error because Appellee did not provide the requisite
evidence on any issue for which he bore the burden of production at trial. Appellee rested
on allegations and suspicions, but not evidence. Summary Judgment should have been
granted in Appellant’s favor.” (Id.)
{¶ 88} Upon review, we note that the first document the McHenrys incorporate by
reference into their appellate brief is a 26-page “amended and supplemental” summary-
judgment motion, which includes approximately 180 pages of supporting exhibits. The
second document is another seven pages. The third document is 11 pages. And the final
document they incorporate into their appellate brief by reference is six pages. Thus, not
counting the 180 pages of summary-judgment exhibits, the four documents the McHenrys
incorporate by reference into their 35-page appellate brief total 50 pages, effectively
making their appellate brief 85 pages long. The practice of wholesale “incorporation by
reference” cannot be used to circumvent page limits for briefs established by the appellate
rules. Moreover, the practice of an appellant incorporating issues and arguments by
reference to other documents is not authorized by the appellate rules. The Twelfth District
Court of Appeals examined this issue in Ebbing v. Lawhorn, 12th Dist. Butler No. CA2011-
07-125, 2012-Ohio-3200, reasoning:
The appellate rules expressly provide what an appellant must include
in an appellate brief and the resulting consequences if an appellant chooses
to ignore the rules. App.R. 16(A)(7) states that an appellant shall include
“[a]n argument containing the contentions of the appellant with respect to
each assignment of error presented for review and the reasons in support
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of the contentions, with citations to the authorities, statutes, and parts of the
record on which appellant relies. The argument may be preceded by a
summary.” Thus, pursuant to App.R. 16, arguments are to be presented
within the body of the merit brief.
If an appellant fails to comply with App.R. 16(A), an appellate court
may overrule the assignment of error as stated in App.R. 12(A)(2): “The
court may disregard an assignment of error presented for review if the party
raising it fails to identify in the record the error on which the assignment of
error is based or fails to argue the assignment separately in the brief, as
required under App.R. 16(A).”
It is well-established that “the Rules of Appellate Procedure do not
permit parties to ‘incorporate by reference’ arguments from other sources.”
Kulikowski v. State Farm Mut. Ins. Co., 8th Dist. Nos. 80102 and 80103,
2002-Ohio-5460, ¶ 56; Tripodi Family Trust v. Muskingum Watershed
Conservancy Dist., 5th Dist. No. 2007AP 09 0056, 2008-Ohio-6902;
McNeilan v. Ohio State Univ. Med. Ctr., 10th Dist. No. 10AP-472, 2011-
Ohio-678. It is not the duty of an appellate court to search the record for
evidence to support an appellant’s argument as to an alleged error. Cireddu
v. Cireddu, 8th Dist. No. 76784, 2000 WL 1281253, *9 (Sept. 7, 2000). An
appellate court is not a “performing bear,” required to dance to each and
every tune played on appeal. Id.Consequently, and pursuant to App.R. 12 and 16, we decline to
consider appellant's second and third assignments of error.
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Id. at ¶ 29-32.
{¶ 89} In Ebbing, the Twelfth District declined to consider assignments of error
related to the trial court’s ruling on a motion to strike and a motion for default judgment
where the appellant simply incorporated those motions into his appellate brief “by
reference.” Admittedly, this court at times has overlooked limited incorporation by
reference in the interest of justice. Here, however, the McHenrys’ eleventh assignment of
error abuses that process, adding 50 pages and eight issues that are not properly argued
to their already-lengthy appellate brief.
{¶ 90} In any event, we find the McHenrys’ summary-judgment arguments to be
unpersuasive on the merits. Two of the eight issues the McHenrys incorporate by
reference require no discussion. The first summary-judgment argument incorporated by
the McHenrys is that “[t]here was not a fraudulent transfer of real property or personal
property by Mrs. McHenry.” This issue involves questions of fact that were resolved in
Mancz’s favor by the jury. “Any error by a trial court in denying a motion for summary
judgment is rendered moot or harmless if a subsequent trial on the same issues raised in
the motion demonstrates that there were genuine issues of material fact supporting a
judgment in favor of the party against whom the motion was made.” Cont’l Ins. Co. v.
Whittington, 71 Ohio St. 3d 150, 642 N.E.2d 615 (1994), syllabus. The eighth summary-
judgment argument incorporated into the McHenrys’ appellate brief is even more patently
meritless. The eighth argument asks us to find that Mancz was not entitled to punitive
damages. But neither the magistrate nor the trial court awarded Mancz any punitive
damages. His motion for punitive damages was denied. We note too that the fifth and
sixth summary-judgment arguments address the applicability of res judicata, an issue we
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resolved above in our analysis of the second assignment of error.
{¶ 91} As for the McHenrys’ remaining four summary-judgment arguments, we find
them to be unpersuasive. In their second argument, the McHenrys contend their interest
in the real estate is exempt from collection under R.C. 2329.66. In their third argument,
they assert that the other assets at issue are exempt from collection “by law.” In their
fourth argument, they reason that in the absence of any non-exempt assets demonstrates
that Mancz’s fraudulent-transfer lawsuit was intended merely to harass.
{¶ 92} Upon review, we find the McHenry’s three exemption-related arguments
unpersuasive. In their summary-judgment motion, they argued that their real estate and
other assets were exempt from “collection” by Mancz, making the entire fraudulent-
transfer action moot. The trial court rejected this argument, reasoning:
The McHenrys next claim the magistrate erred in her decision
wherein she determined this matter is not moot as a result of asset
exemption.
As the McHenrys point out, certain assets held by individuals
domiciled in the State of Ohio are exempt from execution. See R.C.
2329.66. When interpreting the right to an exemption as provided by this
statute, Ohio courts have ruled that exemption may be claimed in an answer
or even claimed after a judgment has of been issued, but in the case of the
homestead exemption, have conclusively stated that the time for asserting
the right is prior to the foreclosure sale. Gledhill v. Walker (1944), 143 Ohio
St. 381; Adkins v. Massie, 4th Dist. App. No. 99CA18, 2001 Ohio 2448;
Gale v. Ficke, 148 Ohio App.3d 657, 2002 Ohio 4030. “In other words, the
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debtor’s right to exercise the homestead exemption is determined as of the
date of execution, garnishment, attachment, or sale of the property.” Adkins,
supra. The logic of the timing of the assertion of an exemption is equally
applicable to the other asset exemptions contained in the statute. Indeed,
this is consistent with case law relating to the time for the assertion of the
debtor’s exemption claim, which is after judgment has been rendered. Gale,
supra. Simply put, the McHenrys’ claim of asset exemption is premature.
Moreover, as the Magistrate pointed out, R.C. 1336.07 gives the trial
court broad discretion in fashioning an appropriate remedy, depending upon
the facts and circumstances proven at trial. Based upon the foregoing, the
Court overrules the McHenrys’ third objection to the Magistrate’s decision.
(September 28, 2018 Decision and Judgment Entry on Defendants’ Objections to
Magistrate’s Decision at 5.)
{¶ 93} In essence, the trial court found that the focus of Mancz’s fraudulent-transfer
action was on whether the conveyances and transfers at issue were fraudulent and
should be set aside. Indeed, under R.C. 1336.07(A)(1), one of the available remedies
when a fraudulent transfer is established is “avoidance of the transfer or obligation.” The
trial court reasoned that whether execution on a judgment or attachment of assets was
proper was a separate question to be determined later. Notably, the asset-exemption
statute cited by the McHenrys, R.C. 2329.66, identifies property that is “exempt from
execution, garnishment, attachment, or sale to satisfy a judgment or order[.]” See also
UBS Fin. Servs., Inc. v. Lacava, 8th Dist. Cuyahoga No. 106461, 2018-Ohio-3055, ¶ 46
(finding argument regarding asset exemption under R.C. 2329.66(A) premature in a
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fraudulent-transfer action where execution upon a judgment “has not yet occurred”).
{¶ 94} In the present case, the trial court’s final judgment entry did not order
execution, garnishment, attachment, or sale of any assets. The trial court simply ordered
the deed conveying Callista’s interest in the real estate to Robert declared void and, with
respect to the other fraudulently conveyed assets, entered judgment in favor of Mancz.
(November 13, 2019 Decision and Judgment Entry at 5.)
{¶ 95} The summary-judgment motion that the McHenrys incorporate by reference
on appeal asserts only that their assets are exempt from collection. The motion fails to
address the trial court’s finding that the present action is not a collection action and,
therefore, that their exemption argument is premature. Because the McHenrys’ appellate
brief fails to recognize or address the basis for the trial court’s ruling against them, it
follows that they have failed to demonstrate error in that ruling.
{¶ 96} In their final argument, the McHenrys contend Mancz’s second claim for
relief against Robert was barred by the applicable statute of limitation. The McHenrys’
entire summary-judgment argument, as incorporated into their appellate brief by
reference, was as follows:
To the extent that this case is an attempt by Plaintiff [Mancz] to
remedy his failure to name Robert McHenry in the [probate court] case, that
attempt must fail due to the statute of limitations. The applicable statute of
limitations on an ORC 2109.50 claim is four years. RC 2305.09. See, also,
Gustafson v. Miller, 5th Dist. Perry No. 15-CA-0008, 2015-Ohio-5515.
Audrey Kirby died on April 10, 2007. Any claims Plaintiff had against Robert
McHenry with regard to the assets of Audrey Kirby should have been
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brought within four years of her death or by April 10, 2011, and, as such,
they are forever barred. Summary judgment in favor of Robert McHenry is
an appropriate remedy for a violation of the statute of limitations as there is
no genuine issue of material fact to be litigated.
(Defendants’ January 8, 2018 Amended and Supplemental Motion for Summary
Judgment at 24.)
{¶ 97} In rejecting the McHenrys’ argument, the magistrate noted that Mancz’s
claims were fraudulent-transfer claims brought under R.C. 1336. They were not claims
brought under R.C. 2109.50, which addresses discovery proceedings brought in probate
court to examine individuals suspected of concealing or embezzling assets of an estate.
Here, the probate court already had determined that Callista had concealed and
embezzled assets from her mother’s estate. The fraudulent-transfer action addressed her
conveyance of those assets to Robert. The magistrate noted that the applicable statute
of limitation for a fraudulent transfer begins to run when the transfer is made or, possibly
later, when the transfer is discovered. Here at least some of the transfers at issue
occurred well after the death Audrey Kirby. That being so, the magistrate correctly
rejected the McHenrys’ summary-judgment argument that the statute of limitation began
to run when Callista’s mother passed away. (July 10, 2018 Magistrate’s Decision on
Motion for Summary Judgment at 5.) We note too that the McHenrys’ summary-judgment
motion did not even address discovery of the transfers.
{¶ 98} In objections to the magistrate’s decision, the McHenrys broadened their
argument, asserting that Callista had spent money or written checks from various estate
accounts prior to her mother’s death. The McHenrys also argued that various accounts
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had been opened by Callista prior to her mother’s death. (August 21, 2018 Supplemental
Objections at 8.) In response, Mancz asserted that Callista depositing and spending her
mother’s money was not shown to be improper until the probate court filed its decision in
June 2011. Mancz also presented evidence that transfers from Callista to Robert from the
accounts she had opened with her mother’s money were unknown to him until March
2016 during discovery in this case and that some of the transfers occurred long after
Audrey Kirby’s death. (August 30, 2018 Plaintiff’s Response in Opposition to Objections.)
{¶ 99} Ultimately, the trial court overruled the McHenrys’ objections. With regard
to the real-estate transfer, the trial court found that the conveyance had occurred on June
2, 2008 and that Mancz had filed his initial complaint in May 2012, within the applicable
four-year statute of limitation. Mancz subsequently dismissed the complaint on March 25,
2014 and refiled it on March 11, 2015, within the time allowed by the one-year saving
statute. As for the financial assets, the trial court concluded, based on the parties’ filings
and the evidence before it, that “whether Mancz discovered the transfers of proceeds
* * * within either the four-year limitation period or, if later, within one year after the
transfers reasonably could have been discovered by him or not is a question of fact for
the jury to determine.” (September 28, 2018 Decision and Judgment Entry at 4.) As a
result, the trial court found no error in the magistrate’s denial of summary judgment
regarding the statute of limitation. (Id.)
{¶ 100} Upon review, we agree with the trial court’s determination. The McHenrys’
actual summary-judgment argument predicated on R.C. 2305.09 and the statute of
limitation beginning to run on the death of Audrey Kirby lacks merit. Based on the record
before us, we also see no error in the trial court’s finding a genuine issue of material fact
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as to whether Mancz timely filed suit after the fraudulent transfers at issue or after
reasonably discovering them. The McHenrys failed to establish their entitlement to
judgment as a matter of law on that issue. For all of the foregoing reasons, we overrule
their eleventh assignment of error.
{¶ 101} In their twelfth assignment of error, the McHenrys contend the trial court
erred in overruling a motion in limine and subsequent objections to the same evidence at
trial. This assignment of error concerns a five-part October 19, 2018 motion in limine the
McHenrys filed. Therein, they sought to exclude from trial: (1) the trial court’s judgment in
the probate-court case to the extent it contained inflammatory and prejudicial language;
(2) any itemization of the plaintiff’s damages, whether through testimony or an exhibit; (3)
any testimony from Mancz on the basis that he could not act as both an advocate and a
witness; (4) any records from financial institutions or related testimony on the basis of
hearsay; and (5) any reference to a disciplinary complaint.
{¶ 102} In an October 26, 2018 decision, the magistrate overruled the first branch
of the motion, finding that the probate-court judgment established Mancz as a “creditor,”
which was an issue in the present case. The magistrate also found that the question in
the probate-court case was whether Callista was guilty of having concealed, embezzled,
or conveyed away assets belonging to her mother. The probate judgment made this
finding, and the magistrate saw no basis for excluding it.
{¶ 103} The magistrate deferred ruling on the second branch of the motion, finding
no evidence that Mancz had failed to turn over an itemized list of damages or that such a
list even existed. With regard to the third branch, the magistrate declined to preclude
Mancz from testifying on the basis of Ohio Professional Conduct Rule 3.7, which limits
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the ability of an attorney to act as both an advocate and a witness. The magistrate found
that the rule did not apply when an attorney is a party to the case. With regard to the
fourth branch, the magistrate noted that the financial records could be authenticated as
business records, thereby overcoming a hearsay objection. As a result, the magistrate
declined to exclude the records “at this time.” Finally, the magistrate declined to rule on
the request to exclude a disciplinary complaint without knowing the substance of the
complaint or the context in which it might be used.
{¶ 104} The McHenrys objected to the magistrate’s liminal ruling by filing a
November 5, 2018 motion asking the trial court to set it aside. Notably, however, the
McHenrys did not challenge or object to the magistrate’s finding that Mancz could act as
counsel and testify at trial because he was a party. On January 4, 2019, the trial court
overruled the McHenrys’ motion to vacate the magistrate’s decision. The trial court noted
that the probate proceeding was quasi-criminal and that the probate judge was required
to determine whether Callista was guilty of concealing, embezzling, or conveying away
assets. The trial court saw no error in the magistrate’s resolution of the issue but noted
that it could be revisited at trial. The trial court also saw no error in the magistrate’s
resolution of the other issues, noting that they could be resolved in context if and when
they arose at trial. With regard to the financial records, the trial court specifically noted
that they might be authenticated in various ways and that it remained to be seen how the
plaintiff approached them at trial.
{¶ 105} A motion in limine is a pretrial request for a precautionary, tentative, and
presumptive ruling on an evidentiary issue to avoid error or prejudice at trial. If a trial court
resolves a motion in limine before trial, its ruling is effective only until the admissibility of
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the evidence is determined in context at the appropriate time during trial. Cranford v.
Buehrer, 2d Dist. Montgomery No. 26266, 2015-Ohio-192, ¶ 13, quoting State v. Leslie,
14 Ohio App.3d 343, 344, 471 N.E.2d 503 (2d Dist.1984). “An appellate court need not
review the propriety of such an order unless the claimed error is preserved by a timely
objection when the issue is actually reached during the trial.” Id.{¶ 106} On appeal, the McHenrys first challenge the admission of the language in
the probate-court judgment stating that Callista had been found guilty of concealing,
embezzling, or conveying away assets belonging to her mother. They have not identified
anywhere in the 765-page trial transcript, however, where they objected when that issue
arose at trial. Regardless, we see no abuse of discretion in allowing the jury to hear that
information. The probate-court judgment was the predicate for the present lawsuit alleging
the existence of fraudulent conveyances. Moreover, the fact that Callista had been found
to have concealed, embezzled, or conveyed away her mother’s assets provided
necessary and relevant context for the present lawsuit. We note too that the challenged
language from the probate-court judgment was referenced at times to refute the
McHenrys’ repeated suggestions that Callista had done nothing wrong and that the
money at issue belonged to her. (See, e.g., Trial Tr. at 173.) The McHenrys also argue
that no one authenticated Exhibit 10, which is a copy of the probate-court judgment, or
identified Exhibit 10 as an accurate representation of that judgment. The McHenrys fail to
mention the parties’ stipulation at trial that Exhibit 10 was a copy of the probate-court
decision and judgment. (Id. at 170-172.)
{¶ 107} The McHenrys next allege error with regard to their motion in limine insofar
as it sought to preclude Mancz from presenting an itemization of damages. We note that
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the McHenrys did renew this objection at trial when Mancz sought to use demonstrative
exhibits for that purpose in his closing argument. (Trial Tr. at 562-565.) We addressed
Mancz’s use of the demonstrative exhibits to itemize damages and found no error in our
resolution of the sixth assignment of error. We likewise see no error in overruling the
motion in limine on that issue.
{¶ 108} The McHenrys also challenge the motion in limine insofar as it sought to
preclude Mancz from acting as an advocate and testifying at trial. In support, they cite
Ohio Prof.Cond.R. 3.7, which limits the circumstances under which an attorney may act
as both an advocate and a witness at trial. They also assert in conclusory fashion that
Mancz “had no personal knowledge of any transaction at issue in this case.”
{¶ 109} With regard to the professional-conduct rule, the McHenrys have not even
responded to the magistrate’s finding that the rule did not apply because Mancz was a
party to the case. Absent any argument from the McHenrys on this point, we have nothing
to review. We note too that the McHenrys’ objections to the magistrate’s ruling on the
motion in limine did not address this issue. Nor did they raise the issue in their post-trial
objections to the magistrate’s decision. Therefore, they failed to preserve the issue for
appeal. As for Mancz’s purportedly lacking “personal knowledge” of the transactions at
issue, a cursory review of his trial testimony reveals that he provided relevant testimony
despite the fact that he was not a party to the transactions. The McHenrys’ one-sentence
argument to the contrary is unpersuasive.
{¶ 110} Finally, the McHenrys contend their motion in limine should have been
sustained insofar as they challenged the admissibility of bank records and related
testimony. They argue that the records and any testimony about them constituted hearsay
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and that Mancz failed to demonstrate applicability of the business-records exception
under Evid.R. 803(6). The McHenrys argue that the records should have been
authenticated through testimony of the custodian of records or other qualified witness.
{¶ 111} We find the McHenry’s authentication argument to be without merit. At trial,
Mancz sought and obtained the admission of three exhibits containing financial records,
namely Plaintiff’s Exhibits 15, 17, and 25. When Mancz moved for admission of these
exhibits at trial, the McHenrys did not raise a hearsay objection to any of them. Indeed,
their counsel acknowledged that the McHenrys themselves had “authenticated” portions
of Exhibit 15, and the trial court admitted only those portions. (Trial Tr. at 439, 491.)
Defense counsel also agreed that the McHenrys had been questioned about the portions
of Exhibit 17 that were admitted into evidence and raised “no objection” as to those
records. (Id. 480-481.) Defense counsel further affirmatively agreed to the admission of
portions of Exhibit 25 concerning a signature card and “account activity,” and these were
the only portions of that exhibit admitted into evidence. (Id. at 457, 490.) We note too that
the McHenrys lodged no hearsay objection when the foregoing exhibits were introduced
and discussed at trial. (Id. at 91, 99-100, 200.) In light of the McHenrys’ failure to preserve
the hearsay issue raised in their motion in limine by renewing their challenge at trial (rather
than agreeing to the admissibility of the exhibits), we find their argument unpersuasive.
The twelfth assignment of error is overruled.
{¶ 112} In their thirteenth assignment of error, the McHenrys claim the trial court
erred in overruling their motion for sanctions and motion to dismiss Mancz’s complaint.
This assignment of error concerns a motion the McHenrys filed alleging that Mancz had
violated a local rule requiring him to prepare and submit a complete set of jury instructions
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and interrogatories approved by opposing counsel. The McHenrys argued that Mancz
filed proposed jury instructions and interrogatories by the required October 16, 2018 date
without them having been seen or approved by opposing counsel. The McHenrys further
asserted that Mancz did not serve their counsel with his filing until three days later. They
also asserted that Mancz had done the same thing when the case previously had been
set for trial. As a result, they sought sanctions and dismissal of the case with prejudice.
Mancz responded to the motion, arguing that both parties previously had submitted
proposed instructions and interrogatories before an earlier trial date had been vacated.
Mancz suggested that his subsequent filing on October 16, 2018 was simply a
“reformalization” of what previously had been filed.
{¶ 113} In a November 20, 2018 decision, the magistrate overruled the sanctions
motion. The magistrate noted, among other things, that trial had been postponed yet
again until January 7, 2019. The magistrate further noted that the parties would be
required to submit jointly-proposed jury instructions by December 26, 2018. In light of that
determination, the trial court found no prejudice to the McHenrys as a result of Mancz’s
filing on October 16, 2018. In the exercise of discretion, the magistrate declined to impose
sanctions on Mancz or to dismiss his lawsuit. (November 20, 2018 Decision.) The
McHenrys objected to the magistrate’s decision. The trial court overruled the objection on
December 5, 2018, and the parties subsequently filed joint proposed jury instructions, jury
interrogatories, and verdict forms on December 26, 2018.
{¶ 114} It is axiomatic that whether to impose sanctions or to dismiss the complaint
was a matter within the discretion of the trial court. Having reviewed the parties’
arguments and the rulings by the magistrate and the trial court, we see no abuse of
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discretion. The thirteenth assignment of error is overruled.
Conclusion
{¶ 115} The judgment of the trial court is hereby affirmed.
.............
TUCKER, P.J. and WELBAUM, J., concur.
Copies sent to:
Harry G. Beyoglides, Jr.
Richard A. Boucher
Julia C. Kolber
Hon. Michael A. Buckwalter