Montefiore Home v. Fields

[Cite as Montefiore Home v. Fields, 2021-Ohio-3734.]
COURT OF APPEALS OF OHIO
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
MONTEFIORE HOME, :
Plaintiff-Appellant, :
No. 110183
v. :
FAYE FIELDS, :
Defendant-Appellee. :
JOURNAL ENTRY AND OPINION
JUDGMENT: AFFIRMED
RELEASED AND JOURNALIZED: October 21, 2021
Civil Appeal from the Cuyahoga County Court of Common Pleas
Case No. CV-17-878371
Appearances:
Rolf Goffman Martin Lang, L.L.P., David S. Brown, and
W. Cory Phillips, for appellant.
Sam Thomas, III, Esq. & Associates, L.L.C., and Sam
Thomas, III, for appellee.
SEAN C. GALLAGHER, P.J.:
Plaintiff-appellant The Montefiore Home (“Montefiore” or
“Plaintiff”) appeals the judgment of the trial court that found in favor of defendant-
appellee Faye Fields (“Fields” or “Defendant”) on all claims raised in the complaint.
Upon review, we affirm the judgment of the trial court.
Background
We adopt the statement of the case and the statement of the facts set
forth in the trial court’s opinion, which is supported by the record herein and
provides as follows:
STATEMENT OF THE CASE
This action commenced on April 4, 2017, when Plaintiff The
Montefiore Home filed its Complaint against Defendant Faye Fields
(now known as Faye Henderson) for the following claims: promissory
estoppel, fraudulent transfer, and statutory cause of action under
O.R.C. 1337.092(B). Plaintiff’s Complaint seeks an award of
compensatory damages in the amount of $20,388.34 as to each count
of the Complaint, plus interest, attorney’s fees and costs.
The case proceeded to an arbitration on March 26, 2018, and an
award was entered in favor of Defendant on all counts. Plaintiff
appealed the arbitration award, and the case was reinstated to the
Court’s docket. Thereafter, on May 23, 2018, the Court granted
Defendant’s motion for summary judgment, filed September 7, 2017.
Plaintiff appealed, the Court’s ruling was reversed, and the case was
remanded for further proceeding. Upon remand, the Court issued a
new scheduling order. Plaintiff moved for summary judgment on
December 4, 2019 as to all counts. Defendant filed no opposition, and
the motion was granted on January 14, 2020.
Thereafter, Defendant obtained counsel and moved to set aside
the judgment against her, which this Court did on March 2, 2020. A
bench trial was held on October 22, 2020. The parties and witnesses
appeared virtually over Zoom. The Court heard testimony from
Melanie Alberts, Leah Rotenberg, and Defendant. At trial, Plaintiff
sought an award of compensatory damages in the amount of $22,941.11
plus interest at the rate of 12 percent per annum and attorney’s fees.
* * *.
STATEMENT OF FACTS
On June 12, 2014, non-party Hazel Thornton was admitted as a
resident at Montefiore’s skilled nursing facility. Thornton executed the
Admission Agreement admitted as Plaintiff’s Exhibit 3 during trial.
Defendant’s name appears on the Agreement as Thornton’s
“representative,” but there is no dispute that Defendant is not
contractually liable for the debt. Around the time of her admission,
Defendant, who was Thornton’s goddaughter, became Thornton’s
power of attorney. As Thornton’s power of attorney, Defendant assisted
Thornton while she remained at Montefiore by bringing her any mail
delivered to Thornton’s home, managing errands, and occasionally
serving as a contact with Montefiore to discuss Thornton’s billing.
Plaintiff billed Thornton’s care on a monthly basis, and delivered
monthly statements to Thornton at Defendant’s attention, which
Defendant then brought to Thornton. Leah Rotenberg, Plaintiff’s
Controller, testified to the various charges and credits assessed to
Thornton’s account related to her care. Thornton was approved for
Medicaid beginning June 1, 2014, which dictated the amount she would
be billed for Plaintiff’s services. Thornton’s patient liability, as
determined by Medicaid, was $2,246 per month from June 2014 - July
2015, and $2,355 per month from July 2015 - August 2016.
During the course of her care at Montefiore, Thornton made
several payments to Plaintiff, totaling $11,300. In August 2015,
Defendant persuaded Thornton to direct her Ohio Public Employees
Retirement System (OPERS) pension and social security payments to
be sent directly to Plaintiff. Plaintiff began receiving Thornton’s OPERS
and social security payments in October 2015. As reflected in Plaintiff’s
Exhibit 7, after accounting for all voluntary, OPERS, and social security
payments credited to Thornton’s account, Thornton had an
outstanding balance with Plaintiff of $22,294.11 at the time of her death
on August 14, 2016.
While serving as Thornton’s power of attorney, Defendant
assisted with her banking needs, including making account
withdrawals and transfers at Thornton’s instruction and for Thornton’s
use. Specifically, on June 16, 2015, Plaintiff and Defendant had a
discussion wherein Defendant indicated that a $4,000 payment would
be dropped off at the facility. Defendant withdrew the $4,000 as
directed by Thornton, delivered it to Thornton, but then was instructed
by Thornton to redeposit the funds to her account.
When Defendant prepared a withdrawal from Thornton’s
account, she would usually try to have Thornton sign the withdrawal
slip, but occasionally would make withdrawals without Thornton’s
signature. The evidence revealed some withdrawals from Thornton’s
bank account that correlate directly with payments made to Plaintiff,
and others that did not. Defendant testified that other cash
withdrawals, for which she does not have receipts, were made at
Thornton’s direction and for Thornton’s benefit, and Defendant did not
use any of Thornton’s money for personal use. In total, $18,389 in
withdrawals or transfers were made from Thornton’s bank account for
which Defendant did not have receipts, but testified were made at
Thornton’s direction. Plaintiff did not present evidence otherwise.
Following Thornton’s death, Defendant covered all of Thornton’s
funeral expenses personally, in the amount of $7,000.
After considering the testimony and evidence presented at trial, the
trial court found against Montefiore on all claims. This appeal followed.
Law and Analysis
Montefiore raises three assignments of error for our review.1 Under
the first assignment of error, Montefiore claims the trial court erred in finding it
failed to prove by a preponderance of evidence Counts II and III of the complaint.
Montefiore argues that it was previously determined that Fields admitted to
averments in the complaint by failing to specifically deny allegations. Montefiore
maintains that the trial court erred by failing to construe the averments under
Counts II and III as admitted under Civ.R. 8(D).2
1 Montefiore has not challenged judgment in favor of Fields on the promissory
estoppel claim on appeal.
2 Although Fields argues Montefiore waived this argument because it does not
challenge rulings made in relation to Montefiore’s motions for summary judgment, the
The record shows that after the case was referred to arbitration, which
was decided in favor of Fields, the trial court granted Fields’s pro se motion for
summary judgment. On appeal to this court, the summary judgment ruling was
reversed. Montefiore Home v. Fields, 8th Dist. Cuyahoga No. 107359, 2019-Ohio-
1989. The panel determined that Fields failed to meet her initial burden of proving
she was entitled to summary judgment on the claims. Id. at ¶ 1, 24. In outlining the
procedural history, the panel observed that Fields had admitted “the basic outline of
Plaintiff’s Complaint” with several exceptions that were made, but stated in dicta
that “[b]y virtue of Fields’ failure to specifically deny the other averments in the
complaint, she thereby admitted them.” (Emphasis added.) Id. at ¶ 7, citing
Civ.R. 8(D) and State ex rel. Craig v. Scioto Cty., 117 Ohio St.3d 158, 2008-Ohio-
706, 882 N.E.2d 435, ¶ 20. The panel did not, as Montefiore suggests, find that
Fields admitted the averments included in Counts II and III of the complaint. Under
the legal analysis pertaining to the summary judgment ruling, the panel commented
upon evidence presented by Montefiore in support of its claims and determined
Fields presented limited arguments in support of her motion and “offered no
affidavit or evidence” to support arguments made in her motion. Id. at ¶ 16-22. As
a result, the court found that Fields had not met her initial burden to establish no
genuine dispute of material fact as to each claim, that “Fields entirely failed to
address Montefiore’s second and third causes of action,” and that a conclusory
transcript reflects that Montefiore argued at trial that Fields had admitted averments
included in Counts II and III of the complaint by failing to specifically deny them.
assertion was insufficient to satisfy her burden on summary judgment. Id. at ¶ 19-
23. We also note that the decision was limited to reviewing the evidence presented
with regard to the motion for summary judgment, and the court did not, nor could
it, evaluate testimony and evidence later introduced at trial.
After remand, an unopposed motion for summary judgment filed by
Montefiore was granted; however, the trial court granted a motion to set aside that
ruling and denied a second motion for summary judgment filed by Montefiore upon
determining “there are genuine issues of material fact and [Montefiore] is not
entitled to judgment as a matter of law.”3 The case proceeded to trial, and upon the
testimony and evidence presented, the trial court granted judgment in favor of
Fields on all claims. The trial court made findings regarding each claim and
determined that Montefiore failed to prove each claim by a preponderance of the
evidence.
Montefiore argues that the trial court erred by finding it had not
proven its claims by a preponderance of the evidence because, as observed in the
prior appeal, Fields admitted “other averments in the complaint” by failing to
specifically deny them. See id. at ¶ 6. However, as recognized in that decision, Fields
admitted “the basic outline” of the complaint with exception. Id. at ¶ 6.
Pursuant to Civ.R. 8(D), “[a]verments in a pleading to which a
responsive pleading is required, other than those as to the amount of damage, are
3 In moving to set aside the initial ruling, Fields argued, in part, that she had not
been properly served, was not given a full opportunity to be heard, and had not admitted
to the crux of Montefiore’s allegations.
admitted when not denied in the responsive pleading.” However, this rule must be
read in conjunction with the remaining sections of Civ.R. 8. Peppertree Farms,
L.L.C. v. Thonen, 2020-Ohio-3042, 154 N.E.3d 644, ¶ 58 (5th Dist.). Civ.R. 8(B)
provides that “[a] party shall state in short and plain terms the party’s defense to
each claim asserted and shall admit or deny the averments upon which the adverse
party relies,” and that the pleader has the option “to make the denials as specific
denials” or “the pleader may generally deny all the averments except the designated
averments * * * the pleader expressly admits * * *.” Additionally, Civ.R. 8(F) states
that “[a]ll pleadings shall be so construed as to do substantial justice.” As explained
in the staff notes, “Rule 8(F) emphasizes the fact that pleadings shall be construed
liberally in order that the substantive merits of the action may be served.” Staff
Notes to Civ.R. 8(F). As recognized by the Ohio Supreme Court, “[t]he spirit of the
Civil Rules is the resolution of cases upon their merits, not upon pleading
deficiencies.” Peterson v. Teodosio, 34 Ohio St.2d 161, 175, 297 N.E.2d 113 (1973).
In this case, the complaint included a number of factual allegations
pertaining to Hazel Thornton (“Thornton”), who is now deceased, including her
admission to the skilled nursing facility and the admission agreement, the provision
of health care, services, supplies, and room and board to Thornton, monthly invoices
showing an accruing balance, and Thornton’s failure to pay as reasonably
anticipated. The complaint proceeds to include allegations attributing liability to
Fields. Montefiore alleged that Fields had promised to pay or to arrange for
payment for health care, services, and supplies provided to Thornton; to sell
Thornton’s real estate in order to pay for the services provided; and to provide cash
payments that were never received and then seek Medicaid coverage. Montefiore
further alleged that after Thornton was admitted to its facility, Thornton
fraudulently transferred real and/or personal property to Fields for zero
consideration. Also, Montefiore alleged Fields, as Thornton’s attorney in fact, failed
to properly manage the financial affairs and pay the debts of Thornton. Upon these
and related factual allegations, Montefiore raised claims against Fields for
promissory estoppel, fraudulent transfer, and a statutory cause of action under R.C.
1337.092(B). Montefiore claimed that it had been damaged in the amount of
$20,388.34.
Fields filed a pro se answer to the complaint in which she only
admitted to “the basic outline” of the complaint with exception, stating as follows:
1. Admits the basic outline of Plaintiff’s Complaint with the following
exception:
2. Defendant was merely the emergency contact person for her
Godmother, Hazel Thornton and that in no way either verbally or in
writing whatsoever did Defendant obligate herself for the debt which is
the subject of this Complaint.
3. Moreover, Plaintiff’s own Exhibit substantiates this in that the
document does not show that the Defendant signed the Agreement.
4. Defendant further states that the property mentioned in Plaintiff’s
Complaint was foreclosed upon and funds derived from the sale.
Upon denying any verbal or written obligation for the debt of
Thornton and averring that the property was foreclosed, as opposed to fraudulently
transferred, Fields moved to dismiss the complaint in her answer.
Mindful that Fields’s answer must be liberally “construed as to do
substantial justice,” it is apparent from her answer that Fields opposed the claims
against her, denied liability, and requested the dismissal of the complaint. See
Civ.R. 8(F). The answer is sufficient to comply with Civ.R. 8 and constitutes a denial
of the averments underlying Montefiore’s claims for relief. See Peppertree Farms,
2020-Ohio-3042, 154 N.E.3d 644, at ¶ 60 (finding answer that disagreed with
counterclaims sufficiently complied with Civ.R. 8 and constituted a denial of the
allegations in the counterclaims); Karras v. Karras, 2018-Ohio-515, 107 N.E.3d 74,
¶ 24 (2d Dist.) (rejecting a claim that an answer did not satisfy Civ.R. 8(B) upon
finding “Appellee’s denial of owing Appellant any ‘rent and damages’ constitutes a
denial of the allegations in Appellant’s second claim for relief.”); see also Highland
Cty. Bd. of Commrs. v. Fasbender, 4th Dist. Highland No. 98CA24, 1999 Ohio App.
LEXIS 3565, 17-18 (July 28, 1999) (finding trial court unreasonably refused to treat
a pro se affidavit as an answer, and even in the absence of specific denials, it was
clear that the defendant opposed the action and intended to defend against the
claim).
Finding no error occurred, we overrule the first assignment of error.
Under the second assignment of error, Fields argues the trial court
erred in finding Montefiore failed to prove its claim for fraudulent transfer.
In reviewing a civil appeal from a bench trial, this court applies a
manifest weight standard of review. Mathews v. Cooper, 8th Dist. Cuyahoga
No. 109974, 2021-Ohio-2768, ¶ 66, citing United States Bank Natl. Assn. v.
Robinson, 2020-Ohio-32, 150 N.E.3d 1262, ¶ 8 (8th Dist.). When reviewing the
manifest weight of the evidence, the reviewing court “‘weighs the evidence and all
reasonable inferences, considers the credibility of witnesses and determines
whether in resolving conflicts in the evidence, [the trier of fact] clearly lost its way
and created such a manifest miscarriage of justice that the [judgment] must be
reversed and a new trial ordered.’” State v. Thompkins, 78 Ohio St.3d 380, 387, 678
N.E.2d 541 (1997), quoting State v. Martin, 20 Ohio App.3d 172, 175, 485 N.E.2d
717 (1st Dist.1983). The standard set forth in Thompkins applies in civil cases.
Eastley v. Volkman, 132 Ohio St.3d 328, 2012-Ohio-2179, 972 N.E.2d 517, ¶ 17.
Count II of Montefiore’s complaint raised a claim of fraudulent
transfer in violation of R.C. 1336.04(A)(1), or alternatively sections R.C.
1336.04(A)(2) and 1336.05(A).
R.C. 1336.04, entitled “When transfer or obligation incurred is
fraudulent as to a creditor,” provides,
(A) A transfer made or an obligation incurred by a debtor is fraudulent
as to a creditor, whether the claim of the creditor arose before, or within
a reasonable time not to exceed four years after, the transfer was made
or the obligation was incurred, if the debtor made the transfer or
incurred the obligation in either of the following ways:
(1) With actual intent to hinder, delay, or defraud any creditor of the
debtor;
(2) Without receiving a reasonably equivalent value in exchange for the
transfer or obligation, and if either of the following applies:
(a) The debtor was engaged or was about to engage in a business or a
transaction for which the remaining assets of the debtor were
unreasonably small in relation to the business or transaction;
(b) The debtor intended to incur, or believed or reasonably should have
believed that the debtor would incur, debts beyond the debtor’s ability
to pay as they became due.
(B) In determining actual intent under division (A)(1) of this section,
consideration may be given to all relevant factors, including, but not
limited to, the following:
(1) Whether the transfer or obligation was to an insider;
(2) Whether the debtor retained possession or control of the property
transferred after the transfer;
(3) Whether the transfer or obligation was disclosed or concealed;
(4) Whether before the transfer was made or the obligation was
incurred, the debtor had been sued or threatened with suit;
(5) Whether the transfer was of substantially all of the assets of the
debtor;
(6) Whether the debtor absconded;
(7) Whether the debtor removed or concealed assets;
(8) Whether the value of the consideration received by the debtor was
reasonably equivalent to the value of the asset transferred or the
amount of the obligation incurred;
(9) Whether the debtor was insolvent or became insolvent shortly after
the transfer was made or the obligation was incurred;
(10) Whether the transfer occurred shortly before or shortly after a
substantial debt was incurred;
(11) Whether the debtor transferred the essential assets of the business
to a lienholder who transferred the assets to an insider of the debtor.
R.C. 1336.05, entitled “Creditors whose claims arose before the
transfer made or obligation incurred,” provides as applicable to this matter,
(A) A transfer made or an obligation incurred by a debtor is fraudulent
as to a creditor whose claim arose before the transfer was made or the
obligation was incurred if the debtor made the transfer or incurred the
obligation without receiving a reasonably equivalent value in exchange
for the transfer or obligation and the debtor was insolvent at that time
or the debtor became insolvent as a result of the transfer or obligation.
R.C. 1336.01(L) defines “Transfer” to mean “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, and includes payment of money,
release, lease, and creation of a lien or other encumbrance.” Pursuant to R.C.
1336.06(A)(1)(b), “[a] transfer is made * * * [w]ith respect to an asset that is not real
property * * * when the transfer is so far perfected that a creditor on a simple
contract cannot acquire a judicial lien otherwise than under [R.C. Chapter 1336] that
is superior to the interest of the transferee.” R.C. 1336.02 instructs that “[a] debtor
is insolvent if the sum of the debts of the debtor is greater than all of the assets of
the debtor at fair valuation” and that “[a] debtor who generally is not paying his
debts as they become due is presumed to be insolvent.”
“Ohio’s Uniform Fraudulent Transfer Act, as set forth in R.C. Chapter
1336, was enacted to create a right of action for a creditor to set aside an allegedly
fraudulent transfer of assets.” Yoo v. Ahn, 8th Dist. Cuyahoga No. 105406, 2018-
Ohio-1291, ¶ 11, citing Sanderson Farms, Inc. v. Gasbarro, 10th Dist. Franklin No.
01AP-461, 2004-Ohio-1460, ¶ 41. “[T]he issue concerning fraudulent intent is to be
determined in view of the facts and circumstances of each case” and “[t]he burden
of proof in an action to set aside a fraudulent conveyance must be affirmatively
satisfied by the complainant.” Stein v. Brown, 18 Ohio St.3d 305, 308, 480 N.E.2d
1121 (1985), citing 37 American Jurisprudence 2d 872-873, Fraudulent
Conveyances, Section 216 (1968); and 51 Ohio Jurisprudence 3d 96-98, Fraud and
Deceit, Section 236 (1984). Due to the difficulty in finding direct proof of fraud,
courts look to inferences that can be made from the surrounding circumstances. Id.
at 308-309. Upon proof of a fraudulent transfer, judgment may be entered against
the original transferee, as well as any subsequent transferee other than a good faith
transferee, for the value of the asset transferred or the amount necessary to satisfy
the creditor’s claim, whichever is less. R.C. 1336.08(B)(1)(a) and (b).
In this case, the testimony and evidence presented demonstrated that
Thornton was admitted to the skilled nursing facility on or about June 12, 2014, and
she died on August 14, 2016. Thornton went into the nursing facility for rehab and
was described as being “so independent for so long.”
The total patient liability was a little over $36,000, and monthly
statements were mailed to Fields and given to Thornton. Direct payments of
$11,300 were made, and the last such payment received was in July 2015. There was
evidence that Montefiore spoke with Thornton regarding her private liability. A note
in August 2015 indicated Thornton had signed the paperwork necessary to have her
pension money redirected to Montefiore. In October 2015, Montefiore began
regularly receiving Thornton’s pension and her social security. There was testimony
that this is done by many residents because “it’s just easier for them” and then
“[t]hey don’t have to pay it on their own” because “[i]t just comes to Montefiore.”
The total amount Montefiore claimed due and owing on Thornton’s account was
$22,294.11.
Fields offered credible testimony demonstrating that as Thornton’s
attorney in fact, she assisted Thornton with her banking needs and made account
withdrawals and transfers at Thornton’s instruction and direction, and that
Thornton controlled what happened with the funds. Some withdrawals from
Thornton’s bank account correlated directly with payments made to Montefiore;
others did not. The record reflects the other withdrawals and transfers were in the
amount $18,389, including $5,592 in cash withdrawals and $12,797 in transfers
made to Fields’s own bank account, one telephone transfer, and two ATM debits.
Although Fields had no record or receipts pertaining to the other
funds that were withdrawn or transferred, Fields testified she “would do whatever
was directed [of] me by Ms. Thornton.” There was a note in June 2015 stating that
Fields would be dropping off a $4,000 check. Evidence demonstrated that the
$4,000 was withdrawn from Thornton’s bank account, but the funds were later
redeposited at Thornton’s direction, less cash received of $460. Fields testified that
when she took the $4,000 check to Thornton, Thornton told her she was “not doing
that” and she needed the money in order “to go back home” and to “get [her home]
together.” There was evidence to corroborate the redeposit of the funds.
Fields could not say what exactly the funds were used for; however,
she maintained the funds were used for and on behalf of Thornton. She testified
that she “did as directed” by Thornton and that at Thornton’s direction, “[a] large
chunk of cash I would take to her in the nursing home, and then she would go out or
send individuals to do different * * * things for her, then she would have it.” Fields
would usually try to have Thornton sign the withdrawal slip, but Fields did not
always get her signature. She stated “[o]ccasionally, when we were out, we’d stop by
the bank” and that “[Thornton] had cash always in the nursing home * * *.”
Fields testified to Thornton’s spending habits. She indicated there
were various things that Thornton asked for, from a bar of soap to decorations and
items on her Christmas list. Fields explained she “did as directed” and “[Thornton
would] say, I want you to do this. She would write out her list of the different things.”
When things were delivered, the receipt would be “in the bag” given to Thornton.
Fields also testified that Thornton did not use any of the facility’s items and that she
had her own television, phone, clothes, and “everything else.” Thornton also had
“the social center at the facility that were not covered in facility costs” and “there
were multiple things that she was doing.” She took care of her personal hygiene,
bought her groceries, would offer to buy lunch, and bought gifts for others. Fields
testified that some funds were used for “doing things around [Thornton’s] house”
and that the idea was “that she would come out of the facility and go back to normal
living.” When asked for more specific information, Fields indicated she “would have
to refer to Ms. Thornton” and she “was following her instructions.” Fields
acknowledged she “should have kept better records.” The home was eventually
foreclosed.
Fields testified she felt like Thornton’s personal concierge and that
the transfers were made to her account because she explained to Thornton that she
could not keep going to the bank. Fields denied using any of Thornton’s money for
Fields’s personal use and testified to using $7,000 of her own funds toward
Thornton’s expenses.
Montefiore argues that its burden was met in this case because the
record demonstrates the transfer of $18,389 from Thornton to Fields, several
badges of fraud exist, and Fields failed to present evidence to demonstrate that the
transfers were made in good faith and for reasonably equivalent value. The proof of
indicia or badges of fraud may give rise to an inference or presumption that shifts
the burden and makes it incumbent upon the transferee to come forward with proof
and explain the bona fides of the transaction. Cardiovascular & Thoracic Surgery,
Inc. v. Di Mazzio, 37 Ohio App.3d 162, 166, 524 N.E.2d 915 (5th Dist.1987), citing
24 Ohio Jurisprudence 3d 559, Creditors’ Rights, Section 884 (1980); In re Harper,
132 B.R. 349, 353 (Bankr.S.D.Ohio 1991). The defense provided under R.C.
1336.08(A) provides that “[a] transfer * * * is not fraudulent under [R.C.
1336.04(A)(1)] against a person who took in good faith and for a reasonably
equivalent value * * *.” R.C. 1336.04(A)(1) merely codifies one way to defend the
action, and “simply because appellees failed to satisfy the requirement of R.C.
1336.08(A) of reasonably equivalent value, ‘does not mean they did not rebut the
presumption’ that the transfer of the deed was fraudulent.” Van Dyne v. Cortez, 5th
Dist. Perry No. 14-CA-00030, 2015-Ohio-3070, ¶ 28, quoting Witschey, Witschey &
Firestone Co., L.P.A. v. Daniele, 9th Dist. Summit No. 26811, 2013-Ohio-5724, ¶ 11.
“‘The ultimate burden of proof in fraud cases rests with the party asserting fraud.’”
Witschey at ¶ 11, quoting Baker & Sons Equip. Co. v. GSO Equip. Leasing, Inc., 87
Ohio App.3d 644, 651, 622 N.E.2d 1113 (10th Dist.1993).
In its decision, the trial court reviewed the requirements for a
fraudulent transfer under R.C. 1336.04 and 1336.05. Upon considering the facts
and circumstances presented in this case, as reflected in the statement of facts, the
trial court found Montefiore failed to prove the assets were fraudulently transferred,
stating as follows:
Defendant testified that in over $18,000.00 in withdraws and
transfers, all were made at the direction of Thornton and given to
Thornton or used for her benefit. Defendant testified that, because
Thornton didn’t use many of the facility’s features, Thornton would
direct her to make withdrawals in furtherance of Thornton’s care.
Defendant recalled Thornton using these funds for groceries,
decorations, television, phone, and social activities that were not
included in Plaintiff’s facility costs.
Plaintiff introduced no evidence to suggest that any of the withdrawals
or transfers were made for Defendant’s benefit. Contrarily, Defendant
testified that she did not use any of Thornton’s money for her own
personal use. Defendant testified that after resident Thornton signed
her OPERS check over to Plaintiff, Defendant began using her own
money to support Thornton, including $7,000.00 in burial expenses.
Although Montefiore takes issue with some findings by the trial court,
the trial court did not impose any improper burden upon Montefiore. We recognize
that under R.C. 1336.04(A)(1), the plaintiff's burden is to establish the fraudulent
intent of the debtor, not the transferee. However, the transferee’s intent is relevant
in establishing a good faith defense. Here, the trial court commented upon the proof
and testimony demonstrating the bona fides of the withdrawals and transfers and
rebutting any inference of a fraudulent transfer.
We acknowledge the dissent’s position and the inferences that may
be raised by the nature of the bank-to-bank transfers completed by Fields. We also
recognize the concerns raised by the dissent. However, we ultimately cannot
conclude the decision of the trial court is against the manifest weight of the evidence.
Although documentary evidence certainly would have been helpful to
establish the expenditures made by Thornton, Fields provided credible testimony to
explain the bona fides of the transactions. It appears Thornton spent two years in
the skilled nursing facility. The record reflects that Thornton was a competent
woman who was in control of her payments to Montefiore and of her own funds and
spending habits. Fields’s testimony demonstrated that she acted in good faith and
at the direction of Thornton. Fields credibly testified to using some of her own
money to support Thornton, including for her burial expenses. Montefiore failed to
ultimately prove its claim of fraudulent transfer under either R.C. 1336.04 or
1336.05 in view of the facts and circumstances of the case.
Upon weighing the evidence and all reasonable inferences and
considering the credibility of witnesses, we are unable to find that the trial court’s
judgment in favor of Fields on the claim for fraudulent transfer is against the
manifest weight of the evidence. This is not the exceptional case in which the
evidence weighs heavily against the trial court’s judgment. We find no merit to any
other argument raised. The second assignment of error is overruled.
Under the third assignment of error, Fields argues the trial court
erred in finding Montefiore failed to prove its statutory claim pursuant to R.C.
1337.092(B). In the complaint, Montefiore claimed that “[w]hile acting as attorney-
in-fact for Hazel Thornton, Defendant Faye Fields failed to properly manage the
financial and personal affairs of Hazel Thornton and to pay the just debts of Hazel
Thornton as they came due.”4
Pursuant to R.C. 1337.092(B), “[a]n attorney in fact is not personally
liable for a debt of the attorney in fact’s principal” unless, as relevant here, “[t]he
negligence of the attorney in fact gave rise to or resulted in the debt,” or “[a]n act of
the attorney in fact that was beyond the attorney in fact’s authority gave rise to or
resulted in the debt.” R.C. 1337.092(B)(3) and (4).
“A power of attorney is a written instrument authorizing an agent to
perform specific acts on behalf of his principal.” Testa v. Roberts, 44 Ohio App.3d
161, 164, 542 N.E.2d 654 (6th Dist.1988), citing Trenouth v. Mulroney, 124 Mont.
499, 227 P.2d 590 (1951). “[A]n agent ‘may not make gratuitous transfers of the
principal’s assets unless the power of attorney from which the authority is derived
expressly and unambiguously grants the authority to do so.’” Temple v. Temple,
2015-Ohio-2311, 38 N.E.3d 342, ¶ 29 (3d Dist.), citing MacEwen v. Jordan, 1st Dist.
Hamilton No. C-020431, 2003-Ohio-1547, ¶ 12.
Upon considering the testimony and evidence in this matter, the trial
court found Montefiore failed to prove its statutory cause of action under R.C.
1337.092(B), stating as follows:
4Although Fields raises an issue of standing, citing R.C. 1337.36, because the
assignment of error is otherwise overruled, we do not address this issue.
Here, Plaintiff alleges Defendant was negligent and/or
committed unauthorized acts. Defendant testified that she did exactly
as resident Thornton directed her while attempting to ensure resident
Thornton’s safety and comfort. Plaintiff was unable to produce any
evidence that showed Defendant went outside of resident Thornton’s
authorization. Further, Plaintiff failed to provide a preponderance of
evidence showing Defendant was negligent in her duties or that any
negligence resulted in Thornton’s debt.
Montefiore argues that Fields withdrew funds while she was aware a
debt was owed to Montefiore and Thornton was on Medicare. Our review shows
that Fields testified that Thornton “was still able to make all her decisions, even her
hospice care.” Montefiore had a conversation with Fields about redirecting her
funds, and she did. Fields testified she acted pursuant to Thornton’s direction and
the funds were used for Thornton’s benefit. Although receipts were not maintained,
Fields testified the funds were withdrawn and/or transferred for and on behalf of
Thornton.
We are not persuaded by any other arguments raised by Montefiore.
Upon our review, we are unable to find that the trial court’s judgment in favor of
Fields on the statutory claim under R.C. 1337.092(B) is against the manifest weight
of the evidence. Montefiore’s third assignment of error is overruled.
Judgment affirmed.
It is ordered that appellee recover from appellant costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this court directing the
common pleas court to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27
of the Rules of Appellate Procedure.
_______________________________
SEAN C. GALLAGHER, PRESIDING JUDGE
FRANK D. CELEBREZZE, JR., J., CONCURS;
EILEEN T. GALLAGHER, J., CONCURS IN PART AND DISSENTS IN PART WITH
SEPARATE OPINION
EILEEN T. GALLAGHER, J., CONCURRING IN PART AND DISSENTING IN
PART:
I concur with the majority’s resolution of the first and third
assignments of error. However, I respectfully dissent from the majority’s resolution
of the fraudulent transfer allegations set forth in Count 2 of the civil complaint. In
my view, the nature of the bank-to-bank transfers completed by the defendant
during the relevant time periods were troublesome and raised serious inferences of
fraud. In this case, the evidence presented at trial demonstrated that money was
transferred to the defendant, the debtor’s goddaughter, in exchange for little or no
consideration during a period of time where Thornton was incurring substantial
debts during her stay in the Montefiore home. In addition, the defendant testified
that Thornton retained control over the money placed in the defendant’s accounts
and directed the defendant how to use the funds. See R.C. 1336.04(B).
As recognized in the majority decision, the proof of badges of fraud
may give rise to an inference or presumption that shifts the burden and makes it
incumbent upon the transferee to come forward with proof and explain the bona
fides of the transaction. In this case, I agree that it was not unreasonable for the
defendant to make cash withdrawals from Thornton’s personal bank accounts in
order to make purchases and pay debts on Thornton’s behalf. In my view, however,
the defendant did not establish why it was necessary to deposit $12,797 of
Thornton’s money directly into her own personal bank account in order to carry out
her duties as Thornton’s attorney-in-fact. Any debts paid or money used on
Thornton’s behalf could have been completed by the defendant without placing
Thornton’s money into her own personal accounts. I understand that the defendant
believed it was more convenient to transfer Thornton’s funds in order to avoid
frequent trips to Thornton’s bank. However, a substantial amount of money was
placed in the defendant’s bank accounts and an accounting of the commingled funds
was required to determine whether the funds were transferred in good faith and for
convenience, or whether the funds were transferred and left unused in order to avoid
the debts owed to Montefiore. In the absence of clear and convincing documentary
evidence demonstrating that the full value of the money transferred was actually
utilized in a manner consistent with the best interests of Thornton, I would find
Montefiore presented sufficient evidence to support its allegations in Count 2 as it
pertains to the bank-to-bank transfers.
It is my belief that the defendant’s self-serving testimony was not
sufficient to satisfy the shifted burden of proof. To allow an attorney -in-fact to place
money into his or her personal bank accounts without sufficient accounting may
result in untenable scenarios in analogous situations where potentially fraudulent
conduct may go unchecked. Debtors would be permitted to transfer assets into the
personal accounts of their representatives in order to avoid outstanding debts
without providing documentary evidence to establish whether those funds were, in
fact, transferred and used in good faith.
Accordingly, I would sustain the second assignment of error, in part.