Peoples Bank, Natl. Assn. v. Tome

[Cite as Peoples Bank, Natl. Assn. v. Tome , 2011-Ohio-5412.]
IN THE COURT OF APPEALS OF OHIO
FOURTH APPELLATE DISTRICT
WASHINGTON COUNTY
PEOPLES BANK, NATIONAL :
ASSOCIATION, :
Trustee of Dana Patterson Trust:
:
Plaintiff-Appellee, : Case No. 10CA38
:
vs. : RELEASED: Sept. 30, 2011
:
FLOYD TOME, : DECISION AND JUDGMENT
: ENTRY
Defendant-Appellant. :
_____________________________________________________________
APPEARANCES:
Dennis L. Sipe, Buell & Sipe Co., L.P.A., Marietta, Ohio, for Appellant.
James S. Huggins, John E. Triplett, Jr., and Daniel P. Corcoran, Theisen
Brock, L.P.A., Marietta, Ohio, for Appellee.
_____________________________________________________________
McFarland, J.:
{¶1} Appellant, Floyd Tome, appeals the trial court’s grant of
summary judgment in favor of Appellee, Peoples Bank, National
Association. On appeal, Appellant raises a single assignment of error,
contending that the trial court erred when it granted Appellee’s motion for
summary judgment. After construing the record and all inferences
therefrom in Appellant’s favor, we find there are no genuine issues of
material fact, Appellee is entitled to judgment as a matter of law, and
Washington App. No. 10CA38 2
reasonable minds can come to but one conclusion, and that conclusion is
adverse to Appellant. Accordingly, we overrule Appellant’s sole assignment
of error and affirm the judgment of the trial court.
FACTS
{¶2} This case involves the ownership of a painting, referred to as
“The Bay of Naples” and purportedly painted by English artist Joseph
Turner. The parties agree that the painting was formerly owned by Dana
and Merrill Patterson. Appellee, Peoples Bank, National Corporation
(successor trustee of the Dana Rymer Patterson Trust), contends that the
painting was conveyed to the trust after Mrs. Patterson’s death in 1995 and
that the trust retained possession of the painting until it was mistakenly
transferred to Appellant, Floyd Tome (a former student of Mr. Patterson and
friend of the Pattersons) in 2008. Appellant contends that the painting was
gifted to him while the Patterson’s were still living, and alternatively
contends that the painting was gifted to him in 2008 by Appellee when
Appellee transferred the painting to Appellant’s possession after locating a
note written by Mrs. Patterson in 1989 which stated Appellant was to have
the painting when the Pattersons were gone.
{¶3} The painting remained in the Patterson’s house after Mr.
Patterson’s death in 1990 and Mrs. Patterson’s death in 1995. Although
Washington App. No. 10CA38 3
Appellant inquired with the estate attorneys about obtaining the painting, the
painting was never transferred to him. A review of the record indicates that
that the painting was valued at $475.00 and listed as part of the estate
inventory. Appellant did not file an objection to the inventory or file a claim
against the estate and eventually the painting was conveyed to the trust
under the terms of Mrs. Patterson’s last will and testament.
{¶4} As previously stated, at some point in 2008, Appellee linked the
painting with the 1989 note written by Mrs. Patterson and arranged to
deliver possession of the painting to Appellant, via Ross Thomas, the estate
appraiser. Ross Thomas contacted Appellant, met him at the Patterson’s
home, and gave him the painting. At some point thereafter, Appellant
approached trust account officer Ron Close, employed by Appellee,
requested some additional information related to the painting, and suggested
that the painting might be valuable. Appellee eventually realized its mistake
and requested Appellant return the painting. Appellant refused.
{¶5} Thereafter, on November 17, 2009, Appellee filed a complaint
against Appellant, requesting that it be declared the rightful owner of the
painting. Subsequently, on July 28, 2010, Appellee filed a motion for
summary judgment. Pertinent to the decision herein, Appellee contended
that the Patterson’s did not make an effective inter vivos gift of the painting
Washington App. No. 10CA38 4
to Appellant, that Mrs. Patterson’s 1989 note failed under the Statute of
Wills because it was not witnessed, and that Appellee's transfer of the
painting to Appellant did not constitute a gift because Appellee lacked
authority under the language of the trust to make gifts. Appellee’ motion
was supported by the affidavit of trust account officer, Ron Close, which
will be discussed more fully, infra. Appellant objected to the motion,
supporting his arguments with his own affidavit.
{¶6} The trial court granted summary judgment over the objection of
Appellee on October 10, 2010. In its entry, the trial court determined that
Mrs. Patterson’s 1989 note violated the Statute of Wills1 and was ineffective
as an inter vivos gift. The trial court also determined that Appellee did not
gift the painting to Appellant in December of 2008. In reaching its decision,
the trial court reasoned that because the trust does not specifically authorize
the trustee to make gifts or gratuitous transfers, Appellee did not have the
authority to make a gift to Appellant. The trial court granted summary
judgment in favor of Appellee, determined Appellee to be the absolute
owner of the painting and enjoined Appellant from asserting any right title
or interest in the painting. It was unnecessary for the trial court to order the
1
In reaching its decision, the trial court specifically cited R.C. 2107.03, entitled “Method of making will,”
which requires that a will “be attested and subscribed in the conscious presence of the testator, by two or
more competent witnesses, who saw the testator subscribe, or heard the testator acknowledge the testator's
signature.” The parties herein do not dispute that the Mrs. Patterson’s 1989 note did not meet this
requirement.
Washington App. No. 10CA38 5
painting to be returned to Appellee, as Appellee had already recovered the
painting from Appellant pursuant to an earlier court order.
{¶7} It is from this grant of summary judgment in favor of Appellee
that Appellant now brings his timely appeal, assigning a single assignment
of error for our review.
ASSIGNMENT OF ERROR
“I. THE TRIAL COURT ERRED WHEN IT GRANTED APPELLEE’S
MOTION FOR SUMMARY JUDGMENT.”
LEGAL ANALYSIS
{¶8} In his sole assignment of error, Appellant contends that the trial
court erred when it granted Appellee’s motion for summary judgment.
Appellant limits his argument to the trial court’s determination that
Appellee, Peoples Bank, did not gift him the painting in 2008, and does not
challenge the trial court’s determinations that Mrs. Patterson’s 1989 note
failed as a gift inter vivos and violated the Statute of Wills.
{¶9} When reviewing a trial court's decision on a motion for summary
judgment, we conduct a de novo review governed by the standard set forth
in Civ.R. 56. Comer v. Risko, 106 Ohio St.3d 185, 2005-Ohio-4559, 833
N.E.2d 712, at ¶ 8. Summary judgment is appropriate when the movant has
established (1) that there is no genuine issue of material fact, (2) that
reasonable minds can come to but one conclusion, and that conclusion is
Washington App. No. 10CA38 6
adverse to the nonmoving party, with the evidence against that party being
construed most strongly in its favor, and (3) that the moving party is entitled
to judgment as a matter of law. Bostic v. Connor (1988), 37 Ohio St.3d 144,
146, 524 N.E.2d 881; citing Harless v. Willis Day Warehousing Co. (1978),
54 Ohio St.2d 64, 66, 375 N.E.2d 46; See also, Civ.R. 56(C).
{¶10} The burden of showing that no genuine issue of material fact
exists falls upon the party who moves for summary judgment. Dresher v.
Burt (1996), 75 Ohio St.3d 280, 294, 1996-ohio-107, 662 N.E.2d 264. To
meet its burden, the moving party must specifically refer to “the pleadings,
depositions, answers to interrogatories, written admissions, affidavits,
transcripts of evidence, and written stipulations of fact, if any, timely filed in
the action,” that affirmatively demonstrate that the nonmoving party has no
evidence to support the nonmoving party's claims. Civ.R. 56(C); See also
Hansen v. Wal–Mart Stores, Inc., Ross App. No. 07CA2990, 2008-Ohio-
2477, at ¶ 8. Once the movant supports the motion with appropriate
evidentiary materials, the nonmoving party “may not rest upon the mere
allegations or denials of the party's pleadings, but the party's response, by
affidavit or as otherwise provided in this rule, must set forth specific facts
showing that there is a genuine issue for trial.” Civ.R. 56(E). “If the party
Washington App. No. 10CA38 7
does not so respond, summary judgment, if appropriate, shall be entered
against the party.” Id.{¶11} Appellant raises two issues under his sole assignment of error.
Appellant’s first issue presented for review asserts that a court, when
deciding a motion for summary judgment, may only consider affidavits that
are based upon personal knowledge of the affiant. In raising this issue,
Appellant complains that the trial court erred when it considered the
affidavit of Ron Close, which was filed in support of Appellee’s motion for
summary judgment. Appellant specifically argues that the information
contained within the affidavit was not within Close’s personal knowledge.
{¶12} In response, Appellee contends that because Appellant did not
object to Close’s affidavit below, he has waived the right to challenge the
affidavit on appeal. However, despite Appellant’s failure to object below,
we must nevertheless be mindful of the language of Civ.R. 56(E) set forth
above which states “* * * summary judgment, if appropriate, shall be
entered against the party.” (Emphasis added). Thus, despite Appellant’s
failure to object to the affidavit, summary judgment should only be granted,
when appropriate, under Civ.R. 56. As such, we will review the issue raised
by Appellant.
Washington App. No. 10CA38 8
{¶13} “For evidentiary material attached to a summary judgment
motion to be considered, the evidence must be admissible at trial.” See
Civ.R. 56(E) and Pennisten v. Noel (Feb. 8, 2002), Pike App. No. 01CA669,
2002-Ohio-686, at *2. Although we conduct a de novo review of the trial
court's decision to grant summary judgment, we review the court's rulings on
the admissibility of evidence for an abuse of discretion. Lawson v. Y.D.
Song, M.D., Inc. (Sept. 23, 1997), Scioto App. No. 97 CA 2480, 1997 WL
596293, at *3; See also, State v. Sage (1987), 31 Ohio St.3d 173, 510 N.E.2d
343, at paragraph two of the syllabus. The term “abuse of discretion” implies
that the court's attitude is unreasonable, arbitrary, or unconscionable. State v.
Adams (1980), 62 Ohio St.2d 151, 157, 404 N.E.2d 144. When applying the
abuse-of-discretion standard, a reviewing court may not substitute its
judgment for that of the trial court. Berk v. Matthews (1990), 53 Ohio St.3d
161, 169, 559 N.E.2d 1301.
{¶14} Civ.R. 56(E) states: “Supporting and opposing affidavits shall
be made on personal knowledge, shall set forth such facts as would be
admissible in evidence, and shall show affirmatively that the affiant is
competent to testify to the matters stated in the affidavit.” “Personal
knowledge” is “ ‘[k]nowledge gained through firsthand observation or
experience, as distinguished from a belief based on what someone else has
Washington App. No. 10CA38 9
said.’ ” Bonacorsi v. Wheeling & Lake Erie Ry. Co., 95 Ohio St.3d 314,
2002-Ohio-2220, 767 N.E.2d 707, at ¶ 26, quoting Black's Law Dictionary
(7th Ed.Rev.1999) 875. It is “ ‘knowledge of factual truth which does not
depend on outside information or hearsay.’ ” Residential Funding Co.,
L.L.C. v. Thorne, Lucas App. No. L–09–1324, 2010-Ohio-4271, at ¶ 64,
quoting Modon v. Cleveland (Dec. 22, 1999), Medina App. No. 2945–M,
1999 WL 1260318, at *2.
{¶15} First, Appellant claims that Ron Close lacked personal
knowledge of the “provenance” of the painting, as well as who had
possession of the painting from 1995 until 2008. After making these
assertions, Appellant concedes that these two examples of Close’s lack of
personal knowledge are not critical. We agree
{¶16} Appellant also challenges Ron Close’s assertions related to
Appellee’s “mistaken” belief that Appellant was entitled to the painting, as
well as Appellee’s decision to transfer the painting to Appellant based upon
that belief. Appellant argues that because Ross Thomas, who was not even
an employee of the bank,2 contacted Appellant and delivered the painting to
him, that Close did not have personal knowledge of the decision. Appellant
2
The relationship between Appellee and Ross Thomas is unclear to this Court. A review of the record
indicates that Thomas is the appraiser who performed the appraisal for the Patterson’s estate. However, on
appeal, in response to Appellant’s assertion that Thomas was Appellee’s employee, Appellee asserts that
Thomas was not its employee.
Washington App. No. 10CA38 10
specifically argues that “[n]owhere does it appear in his affidavit that Mr.
Close was personally involved in the decision to transfer to [sic] the painting
to Appellant or the actual transfer of the painting to Appellee [sic].
{¶17} Close’s affidavit specifically stated that his averments were
based upon his personal knowledge, as a trust account officer, employed by
Appellee, acting trustee of the Patterson’s trust. Appellant seems to argue
that because Ross Thomas, rather than Ron Close, physically transferred the
painting into Appellant’s possession that Close could not have personal
knowledge of the decision to effectuate that transfer. We disagree with
Appellant’s reasoning. Of importance, there was nothing in Appellant’s
memorandum opposing summary judgment, including Appellant’s affidavit
in support of his memorandum contra that defeated Close’s averment of
personal knowledge of the decision by Appellant to transfer the painting to
Appellant.
{¶18} Further, “personal knowledge may be inferred from the
contents of an affidavit * * *.” Carter v. U-Haul Internatl., Franklin App.
No. 09AP–310, 2009-Ohio-5358, at ¶ 10; Flagstar Bank F.S.B. v. Diehl,
Ashland App. No. 09 COA 034, 2010-Ohio-2860, at ¶ 25. Here, Close’s
averments, based upon his position as a trust account officer sufficiently
permit an inference of personal knowledge on his part of Appellee’s decision
Washington App. No. 10CA38 11
to transfer the painting to Appellant. This is true despite the fact that he may
not have been the one to contact Appellant and arrange for the physical
transfer of the painting to Appellant’s possession.
{¶19} Thus, we conclude that Appellee’s affidavit filed in support of
its motion for summary judgment complies with Civ.R. 56(E). As such, the
trial court did not err or abuse its discretion in relying on the affidavit in
reaching its decision to grant summary judgment in favor of Appellee.
Accordingly, Appellant’s first issue raised under his sole assignment of error
is without merit and is therefore overruled.
{¶20} The next issue raised by Appellant relates to the moving party’s
burden to demonstrate that there is no dispute as to the existence of any
material fact. Specifically, Appellant asserts that there is a genuine issue of
fact as to Appellee’s intent, claiming that when Appellee transferred the
painting to Appellant, it intended to make an inter vivos gift. Appellant
suggests Appellee’s claim that it never intended to gift the painting to
Appellant is simply an attempt to limit its liability after it “gave away a
painting that had potentially a great deal of value to the trust and its
beneficiaries.”
{¶21} Appellee, on the other hand, contends that by transferring the
painting to Appellant, it was mistakenly trying to honor the settlor’s
Washington App. No. 10CA38 12
intentions. Specifically, Appellee explains that on or about December of
2008, as it was selling trust assets in order to generate cash for the
beneficiary of the trust, it discovered the painting at issue and linked it with
the note written by Mrs. Patterson in 1989. Appellee further explains that it
mistakenly believed Appellant was entitled to the painting, even though the
note violated the Statute of Wills and failed as an inter vivos gift.3 Appellee
claims that it then mistakenly delivered the painting to Appellant, claiming
that it did not intend to make a gift, and instead was only trying to honor the
settlor’s intentions.
{¶22} A review of the record indicates that in granting summary
judgment, the trial court determined that Appellee did not intend to gift the
painting to Appellant. The trial court further found that “regardless of
[Appellee’s] donative intent, the Trust Agreement does not grant [Appellee]
the power or authority to make a gift of trust property. See Article IV, ¶ IV
of the December 30, 1972 Dana Rymer Patterson Trust Agreement.” Based
upon the following, we agree with the reasoning of the trial court.
{¶23} “When construing provisions of a trust, our primary duty is to
‘ascertain, within the bounds of the law, the intent of the * * * settlor.’ ” In
3
As set forth above, the trial court’s entry granting summary judgment determined that Mrs. Patterson’s
1989 note was not effective as an inter vivos gift and also failed as a testamentary disposition under the
Statute of Wills. Appellant does not challenge those findings on appeal and instead only appeals the trial
court’s determination that the transfer of the painting from Appellee to Appellant failed as an inter vivos
gift and was beyond the authority of the trustee.
Washington App. No. 10CA38 13
the Matter of the Trust of Brooke, 82 Ohio St.3d 553, 557, 1998-Ohio-185,
697 N.E.2d 191; citing Domo v. McCarthy (1993), 66 Ohio St.3d 312, 314,
612 N.E.2d 706. “The express language of the trust guides the court in
determining the intentions of the settlor.” Brooke at 557; citing, Casey v.
Gallagher (1967), 11 Ohio St.2d 42, 227 N.E.2d 801. “Any words used in
the trust are presumed to be used according to their common, ordinary
meaning.” Brooke at 557; citing Albright v. Albright (1927), 116 Ohio St.
668, 157 N.E. 760. Further, “[t]he powers and duties of a trustee are
determined by the terms of the trust.” Brooke at 557; citing Daloia v.
Franciscan Health Sys., 79 Ohio St.3d 98, 102, 1997-Ohio-402, 679 N.E.2d
1084.
{¶24} Applying this framework to the trust at issue, we believe the
trial court correctly concluded that Appellee had no power under the trust to
gift the subject painting to Appellant. Here, the trust agreement provides no
express or implied power to make gifts or gratuitous transfers. As noted by
the trial court in its decision, Appellant attempts to create such a power
where none exists by citing language from the trust agreement regarding
Appellee’s “power to convey.” However, as correctly noted by the trial
court, this power specifically relates to Appellee’s power to convey in
connection with its power to sell, not give away, trust assets. In fact, none of
Washington App. No. 10CA38 14
the discretionary provisions in the trust provide the trustee with the
discretion to make gifts of trust property or assets. Further, Article II,
Section 8 of the January 14, 1982, amendment to the trust agreement
provides that the trustee shall exercise its discretion in using principal for the
benefit of the trust beneficiary. The making of a gift of trust assets or
property would be contrary to the duty of the trustee to exercise its discretion
in using principal for the benefit of the trust beneficiary.
{¶25} Further, although not cited by the parties, R.C. 5810.01, entitled
“Remedies for breach of trust” provides as follows:
“(A) A violation by a trustee of a duty the trustee owes to a beneficiary is a
breach of trust.
(B) To remedy a breach of trust that has occurred or may occur, the court
may do any of the following:
***
(9) Subject to section 5810.12 of the Revised Code4, void an act of the
trustee, impose a lien or a constructive trust on trust property, or trace
trust property wrongfully disposed of and recover the property or its
proceeds;
(10) Order any other appropriate relief.”
Appellant argues on appeal that he should be able to keep the painting, even
if the trustee acted without authority, claiming that the trust would still have
4
R.C. 5810.12, entitled “Protections of person dealing with trustee” essentially provides protection to a
bona fide purchaser for value in connection with trust related transactions. As correctly noted by the trial
court, however, Appellant was not a bona fide purchaser of the painting. Thus, this section does not afford
Appellant any protection.
Washington App. No. 10CA38 15
a remedy against the trustee for the wrongful disposition of trust assets. A
review of the record reveals that Appellee, in its summary judgment filings,
requested that the trial court void its act of delivering the painting as it was
not authorized to do so under the language of the trust agreement. Finding
that Appellee lacked authority under the trust to make a gift of trust
property, the trial court declared Appellee to be absolute owner of the
painting and enjoined Appellant from asserting any right, title, or interest in
the painting. We conclude that this action was a proper remedy under R.C.
5810.01, as it essentially voided the action of the trustee, as requested by the
Appellee Trust, rather than seeking compensation from the trustee.5
{¶26} After reviewing the record below, we find no merit to the
second issue raised under Appellant’s sole assignment of error. The trial
court correctly determined that under the circumstances of this case,
Appellee had no authority under the trust agreement to gift the painting at
issue to Appellant and, as such, the transfer of the painting to Appellant did
not vest Appellant with any right, title or interest in the painting. The trial
court further ordered an appropriate remedy under R.C. 5810.01 by having
the painting transferred back to Appellee’s possession, albeit prior to its
5
A review of the record reveals that it was not necessary for the trial court to impose a constructive trust on
the trust property or recover the property, as Appellant had already turned the painting over to Appellee
pursuant to an earlier order the trial court.
Washington App. No. 10CA38 16
grant of summary judgment, and enjoining Appellant from asserting any
right, title, or interest in the painting.
{¶27} Viewing the evidence in a light most favorable to Appellant, we
conclude there is no genuine issue of material fact, and reasonable minds can
come to but one conclusion, which conclusion is adverse to Appellant. As
such, Appellee is entitled to judgment as a matter of law. Accordingly, we
affirm the trial court's decision to grant summary judgment.
JUDGMENT AFFIRMED.
Harsha, P.J., concurring.
{¶28} I conclude the appellant waived the issue of the trial court’s
reliance on the Close affidavit because he failed to object to it. Therefore, I
do not join in addressing the merits of the appellant’s argument that the
affidavit lacks the proper foundation of personal knowledge.
Washington App. No. 10CA38 17
JUDGMENT ENTRY
It is ordered that the JUDGMENT BE AFFIRMED and that the
Appellee recover of 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 Washington County Common Pleas Court, Probate Division to carry this
judgment into execution.
Any stay previously granted by this Court is hereby terminated as of
the date of this entry.
A certified copy of this entry shall constitute the mandate pursuant to
Rule 27 of the Rules of Appellate Procedure.
Exceptions.
Harsha, P. J. Concurs with Concurring Opinion.
Kline, J. Concurs in Judgment and Opinion; Concurs in J. Harsha’s
Concurring Opinion.
For the Court,
BY: _________________________
Matthew W. McFarland, Judge
NOTICE TO COUNSEL
Pursuant to Local Rule No. 14, this document constitutes a final
judgment entry and the time period for further appeal commences from
the date of filing with the clerk.