Figgie v. Figgie

2025 Ohio 451

• Court: Ohio Court of Appeals
• Decided: February 13, 2025
• Docket: 113752, 113753
• Status: Published

Opinion

[Cite as Figgie v. Figgie, 2025-Ohio-451.]

COURT OF APPEALS OF OHIO

EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA

SUSAN A. FIGGIE, ET AL., :

Plaintiffs-Appellants, : Nos. 113752 and 113753 v. :

BETSY FIGGIE, ET AL., :

Defendants-Appellees. :

JOURNAL ENTRY AND OPINION

JUDGMENT: AFFIRMED RELEASED AND JOURNALIZED: February 13, 2025

Civil Appeal from the Cuyahoga County Common Pleas Court Probate Division Case Nos. 2019ADV024885 and 2018ADV239801

Appearances:

Reminger Co., L.P.A., Brian D. Sullivan, and Timothy J. Gallagher; McDonald Hopkins, LLC, and Franklin C. Malemud, for appellants Harry E. Figgie, IV, Catherine E. Figgie, and Susan A. Figgie.

UB Greensfelder LLP, Michael N. Ungar, Steven S. Kaufman, Robin M. Wilson, and Ashytn N. Saltz; Calfee, Halter, & Griswold LLP, Mitchell G. Blair, Colleen M. O’Neil, Zachary J. Stackhouse, and Nicholas M. Hudnell, for appellee Clark-Reliance Corporation. MARY J. BOYLE, P.J.:

In this consolidated appeal, plaintiffs-appellants, Harry E. Figgie, IV

(“Harry IV”), Catherine E. Figgie (“Katie”), and Susan A. Figgie (“Susie”)

(collectively referred to as “plaintiffs”), appeal the probate court’s grant of summary

judgment in favor of defendant-appellee, Clark-Reliance Corporation (“CRC”), a

company created by their grandfather, Harry E. Figgie, Jr. (“Harry Jr.”).1 Plaintiffs

raise the following two assignments of error for review:

Assignment of Error I: The probate court improperly granted CRC summary judgment.

Assignment of Error II: The probate court improperly concluded that Plaintiffs’ claims were time barred.

For the reasons set forth below, we affirm the probate court’s

judgment.

I. Facts and Procedural History

The crux of this appeal is plaintiffs’ claim that they were defrauded

when shares of CRC stock held in the 1983 Trust settled by their father, Harry E.

Figgie, III (“Harry III”), were redeemed by CRC in a securities transaction that

occurred more than 20 years ago, in 2001 (the “Transaction”), between CRC and,

Wilmington Trust, the then-trustee of the 1983 Trust, of which the plaintiffs were

beneficiaries. CRC claims that the plaintiffs, as trust beneficiaries, were not parties

to the Transaction at issue, CRC was not a fiduciary, had no duty to disclose, and

1 This appeal is consolidated with the appeal in Harry E. Figgie, et al. v. Betsy

Figgie, et al., 8th Dist. Cuyahoga No. 113753. made no misrepresentation of material fact and that plaintiffs’ fraud claim is time

barred by the statute of limitations. We find CRC’s argument regarding the statute

of limitations persuasive.

CRC is a closely held company owned by the Figgie family. Harry Jr.

was the chairman of CRC’s board of directors, and the CRC shares were owned by

Harry Jr., his wife, Nancy, and their three children, Harry III, Mark, and Matthew.

In the early 90s, Harry III took over the company. Harry III established a trust in

1983 (“the 1983 Trust”). Harry III and Harry Jr. eventually had a “falling out.” Prior

to this, Harry III asked Harry Jr. to serve as trust advisor for anything relating to the

1983 Trust’s ownership of CRC stock. Harry III died unexpectedly in December

1999. Wilmington Trust became trustee of the 1983 Trust in the summer of 2000.

Harry Jr. remained as trust advisor, with the power to make all decisions about the

CRC stock.

According to plaintiffs, Harry Jr. wanted to divest the 1983 Trust of

the CRC stock because of Harry Jr.’s disdain for Harry III and did so by

manufacturing a lawsuit involving plaintiffs and Harry III’s wife and executor of his

estate, Kathy Bliven (“Bliven”), “to determine who would be responsible for paying

Harry III’s [E]state debts.” (Plaintiffs’ appellate brief, p. 10.) Plaintiffs contend that

the main issue in this lawsuit (“2000 Case”) was whether the 1983 Trust had any

responsibility to pay Harry III’s Estate debts, or if such debts were the responsibility

of another trust that Harry III established in 1997 (“1997 Trust”). Harry III’s Estate

consisted of a last will and testament, the 1983 Trust, and the 1997 Trust. The beneficiaries of the two trusts included plaintiffs and Bliven. KeyBank served as the

Trustee of the 1997 Trust. According to plaintiffs, “the goal of the lawsuit was to

satisfy Harry Jr.’s expectations. Harry Jr. and CRC would later utilize this lawsuit

as the rationale for the supposed need to sell the [1983 Trust’s] CRC stock in 2001.”

(Plaintiffs’ appellate brief, p. 10.) Plaintiffs allege that Harry Jr. selected the attorney

to represent them, and his selection was not in their best interest. At that time,

Harry IV was 18, Katie was 17, and Susie “was institutionalized” because she is

“developmentally disabled.” (Plaintiffs’ appellate brief, p. 3-4.)

Ultimately, Bliven liquidated assets to settle Harry III’s Estate. A

significant debt of the Estate that Bliven was concerned about was an estate tax

liability payable from the 1983 Trust. Thus, Bliven, in her capacity as Executor,

advised Wilmington Trust that the CRC stock held by the 1983 Trust would need to

be liquidated in order to address the needs of the Estate. Plaintiffs disagreed with

Bliven’s decision and filed an adversarial case in 2001 (“2001 Case”) in probate

court. In response to this case, Bliven, as named defendant, filed a counterclaim

against plaintiffs seeking an order for the “Sale of Closely Held Interests,” which

included the CRC stock held by the 1983 Trust.

The CRC stock in the 1983 Trust was subject to a 1985 Share Purchase

Agreement (“Share Purchase Agreement”) that would give CRC and the Figgie

family members a right of first refusal to buy any shareholder’s CRC stock if a

shareholder desired to sell to someone other than CRC or another shareholder. In

addition to seeking a court order to sell the CRC stock, Bliven allegedly contacted a third-party broker to ask him to sell the CRC stock and advised him that she was

asking for a court order to sell said stock. Because of Bliven’s request to sell the CRC

stock held by the 1983 Trust, CRC acknowledged the request and confirmed the

applicability of the Share Purchase Agreement. Thereafter, Wilmington Trust, as

Trustee of the 1983 Trust, agreed to the formula purchase price, as determined by

the Share Purchase Agreement, for the CRC shares held in the 1983 Trust. Bliven,

as a beneficiary of the 1983 Trust and Executor, likewise agreed to the sale and

purchase price through her counsel. Plaintiffs, each represented by counsel,

additionally advised the Trustee that they had no objection to the sale of the CRC

stock pursuant to the terms in the Share Purchase Agreement. At that time, there

were no objections or concerns raised regarding the execution of the Transaction

and no challenges to the purchase price.

Thereafter, on September 20, 2001, CRC purchased the shares from

Wilmington Trust for a total purchase price of $1,909,007.70. The probate court

approved the global settlement, and all parties (CRC was not a party to this

litigation), including plaintiffs, or their representatives, personally signed the

settlement agreement. The court then issued an order dismissing both cases with

prejudice on July 10, 2003.

Plaintiffs now contend that Harry Jr. facilitated this sale of the CRC

shares at below fair market value, and if the stock was redeemed at its fair market

value in 2001, it would have been worth around $3,000,000. Plaintiffs allege that

fraudulent nature of the CRC stock purchase became apparent to Mark when he learned that Harry Jr.’s (his father) statements were false. Mark was the only

surviving Figgie family member who was on CRC’s board when it authorized the

stock redemption in 2001. According to Mark, “it wasn’t made known to the board

at the time of the redemption that I later found out weren’t true, the things that I

didn’t know that I know now, and there were some things that were told to us as a

board that weren’t true at the time.” (Deposition, p. 61.) Mark stated:

My dad had told everyone that the 1983 trust didn’t have the cash and the wherewithal to pay the taxes and that they had to buy the stock back because the tax — in order to pay their taxes, and it turns out there was enough money in the trust to do that, and that the cash flow — the Clark-Reliance redemption was actually — well, let me walk you through this.

The Clark-Reliance redemption paid them the 1.9 with an initial payment and then a 10-year payout, but what they actually got taxed for by the IRS finally was 2.4, and they got the tax payment due right away so the Clark stock payment redemption didn’t even put in enough cash to pay the Clark stock tax responsibility, and that the Clark stock tax responsibility was paid out of some of the insurance proceeds.

So they didn’t need to sell the Clark stock. They had enough with the insurance proceeds to pay off the taxes on this, and then they could have kept the stock, and they would have had an ongoing cash flow because as we were getting the distributions for the defective trust to pay off the stock that Matthew and I had been gifted, they would have continued to get an income from Clark-Reliance.

So they would have done better to hold onto the stock, not only the future value of the stock, but the income flow from the defective trust.

(Deposition, p. 68-69.)

According to the plaintiffs, Mark believed that the misrepresentations

were motivated by Harry Jr.’s animus towards plaintiffs and his desire to regain

control over CRC: I think that my father was upset enough about the defective trust and the fact that he was losing control of the stock or the voting control, they were having to pay out income pari passu to the 1983 trust and that they had to convert over to an S Corp, that he not only fired Bottger and Deloitte & Touche, but he then found the opportunity to buy the stock back at a discount over 10 years and get Harry’s kids out of the picture and gain control of the voting percentage again, stopped paying out the money to the 1983 trust, and it was a very well created fraud, I think.

(Deposition, p. 67.)

Plaintiffs claim that they did not learn of this fraudulent scheme until

after Thanksgiving 2018 when Harry IV’s aunt asked him about the value of CRC

stock. This prompted Harry IV to inquire about the 2001 sale of CRC stock with his

Uncle Mark. According to Harry IV, Mark told him “he didn’t recall what we got for

our shares, but that it was an egregiously low valuation, and that he wasn’t sure what

Nancy got for hers, but she had sold shares right around the same time that we did.”

(Deposition, p. 88-89.)

Shortly thereafter, on December 20, 2018, Plaintiffs initiated the

underlying matter filing a complaint seeking to recover money and damages from

the 2001 redemption of the CRC stock. Plaintiffs assert claims for declaratory

judgment, fraud, tortious interference with expectancy of inheritance, unjust

enrichment, constructive trust, and civil conspiracy.

By way of an amended complaint, plaintiffs allege that CRC

improperly redeemed its stock from the 1983 Trust for a transaction that was

initiated and directed by Harry Jr. Plaintiffs further allege that, at the time of the

stock redemption, “Harry Jr. was a member of CRC’s board of directors and an officer of the corporation and that he was operating under numerous conflicts of

interest by virtue of his conflicting obligations arising from his absolute control over

CRC, his position as trust advisor to the Harry III Trust, and his personal animus

toward [p]laintiffs.” (Plaintiffs’ appellate brief, p. 5.) Plaintiffs allege that CRC did

not properly value its stock and that Harry Jr. “manipulated and/or relied on

manipulated data to artificially deflate the value of the CRC shares for the benefit of

CRC and to Plaintiffs’ detriment.” (Plaintiffs’ appellate brief, p. 5.) Plaintiffs further

allege that CRC misrepresented and concealed the truth and that the redemption of

the shares of CRC were purchased by CRC for a price below fair market value and

for the benefit of CRC.

Plaintiffs allege that CRC and Harry Jr. had a duty to disclose the

valuations that were relied upon in the redemption of the CRC stock, the valuations

were manipulated, the Share Purchase Agreement was deflated and below fair

market value, and the misleading information was knowingly relied on in forming

or accepting the terms of the stock redemption. Plaintiffs further allege that their

representatives justifiably relied upon the manipulated data to their detriment.

Plaintiffs allege that they did not learn of the fraudulent redemption until November

25, 2018.

After initial motion practice disposed of several of plaintiffs’ claims,

CRC moved for summary judgment on plaintiffs’ claims for (1) declaratory judgment

(which requested a determination that the 2001 redemption of CRC stock was below

value and caused a loss to the plaintiffs, and the improper benefits and proceeds from the redemption are in the possession, control, and ownership of CRC); (2)

fraud (by CRC as it relates to the CRC stock redemption transaction in 2001); (3)

civil conspiracy; (4) constructive trust; and (5) unjust enrichment as to Susie only.

CRC argued that plaintiffs’ remaining claims were time barred and that plaintiffs’

fraud claim was not supported by sufficient evidence.2 Plaintiffs opposed CRC’s

motion for summary judgment, arguing that their claims were not time barred

because the discovery of the material facts were delayed by CRC’s

misrepresentations and concealment of the truth.

In a thorough and well-written opinion, the probate court found that

CRC’s motion was well-taken and granted summary judgment. The probate court

detailed the lengthy, procedural history of the matter, including the two previous

matters filed in probate court surrounding the debts owed by the Harry III Trust

and the 2001 sale of its CRC shares. With regard to the fraud claim, the court found

that the plaintiffs failed to establish, with particularity, any false statement or

fraudulent misrepresentations made by a representative of CRC, such as Harry Jr.,

as Chairman and CEO of CRC, on which plaintiffs relied. “Specifically, Plaintiffs

2 We note that in 2021, this court issued Figgie v. Figgie, 2021-Ohio-1195 (8th

Dist.), and Figgie v. Figgie, 2021-Ohio-1812 (8th Dist.), appeals filed by Harry IV and Katie and Susie, in the underlying matter, against defendant, Brent Ballard, as co-Trustee of the Harry E. Figgie, Jr. Trust Agreement dated July 15, 1976, as amended, Trustee of the Nancy F. Figgie Trust Agreement dated September 7, 1976, as amended, and Trustee of the Matthew P. Figgie Trust Agreement dated October 20, 1985, as amended (collectively, the “Trust Defendants”). On appeal, this court affirmed the probate court’s decision granting the Trust Defendants’ Civ.R. 12(B)(6) motion to dismiss Harry IV, Katie, and Susie’s claims for fraud, tortious interference with expectancy of inheritance, unjust enrichment, and constructive trust arising out of the CRC share redemption. have failed to identify a particular time and place that such a false statement was

made to them and upon which they relied regarding the redemption of CRC stock or

its valuation, as Plaintiffs themselves were not directly involved in the transaction.”

(Judgment Entry Feb. 22, 2024.) As to plaintiffs’ assertion that CRC “acted

fraudulently by creating the illusion” that the 1983 Trust was insolvent so that the

CRC stock would be sold, the court found that it was “Bliven as Executor, and not a

representative of CRC, who alleged that the Estate was insolvent and that there were

potential tax implications.” (Judgment Entry Feb. 22, 2024.) In addition, the court

found that plaintiffs failed to identify or plead, with particularity, any statements or

representations Harry Jr., as a representative of CRC, made to Bliven, that caused

her to file the counterclaims in the 2001 Case seeking the sale of the CRC stock to a

third party, which triggered the Share Purchase Agreement.

The court concluded that plaintiffs failed to establish fraud because

plaintiffs’ “allegations are that third parties, such as the Trustee, Executor, and/or

various attorneys in the redemption transaction, relied on misrepresentations made

by Harry Figgie, Jr. on behalf of CRC.” (Judgment Entry, Feb. 22, 2024.)

Furthermore, the plaintiffs failed to plead, with particularity, any material fact that

they justifiably relied on or that was concealed by CRC regarding the CRC stock

redemption transaction. “Specifically, the transaction was between CRC and the

Trustee Wilmington Trust, and not the Plaintiffs. Thus, as Plaintiffs were not privy

to the transaction, there was no misrepresentation of facts that Plaintiffs relied on

or that were concealed from them.” (Judgment Entry, Feb. 22, 2024.) In addition, the probate court found that plaintiffs’ fraud claim was

barred by the four-year statute of limitations set forth in R.C. 2305.09(C). The court

did not agree with plaintiffs’ assertion that they did not discover the fraud until

November 2018 because plaintiffs were parties in the 2001 counterclaim filed by

Bliven where she sought a court order to sell the shares of CRC stock held by the

1983 Trust and a September 2001 letter from plaintiffs’ attorney to Wilmington

Trust stated that plaintiffs had no objection to the redemption of the shares of CRC

stock held in the 1983 Trust pursuant to the terms of the Share Pursuant Agreement.

Furthermore, the 1983 Trust began receiving distributions in 2001 for the purchase

of the CRC stock redemption, which continued annually until the year 2010.

Additionally, plaintiffs had access to all Trust statements, documents, and

correspondence as early as 2009, and Harry IV was appointed as Susie’s guardian

in 2006, which granted him the right to full access to documents detailing the assets

of the 1983 Trust on her behalf. Based upon the foregoing, the court concluded that

plaintiffs “could have discovered, in the exercise of reasonable diligence, any alleged

fraud by CRC thereby barring their claim for fraud in their Complaint due to the

statute of limitations.” (Judgment Entry, Feb. 22, 2024.)

The court further found that the five-year statute of limitations for the

sale of securities under R.C. 1707.43(B) also time barred plaintiffs’ fraud claim. The

court found that R.C. 1707.43(B) applies because plaintiffs’ claims arise from alleged

misrepresentations made with respect to the sale and purchase of securities in 2001, and the allegations in plaintiffs’ complaint are “inextricably interwoven” with the

sale of securities.

Having found that plaintiffs failed to establish their fraud claim, the

court additionally found that plaintiffs’ civil-conspiracy claim fails as a derivative

claim that cannot be maintained without fraud. The court likewise found that

Susie’s unjust-enrichment claim fails because plaintiffs failed to establish that the

Transaction was fraudulent. The court also found that plaintiffs’ constructive-trust

claim fails because plaintiffs failed to establish the elements of fraud, civil

conspiracy, and unjust enrichment.

Based on the foregoing, the probate court found plaintiffs’ declaratory

judgment action a nullity because they failed to establish fraud, civil conspiracy, or

unjust enrichment and dismissed the plaintiffs’ declaratory judgment. The court

then granted CRC’s motion for summary judgment and dismissed plaintiffs’ first

amended complaint.

It is from this order that plaintiffs now appeal.

II. Law and Analysis

Summary Judgment Standard of Review

An appellate court reviews the grant or denial of summary judgment

de novo. Grafton v. Ohio Edison Co., 77 Ohio St.3d 102, 105 (1996). In a de novo

review, this court affords no deference to the trial court’s decision and

independently reviews the record to determine whether the denial of summary

judgment is appropriate. Hollins v. Shaffer, 2009-Ohio-2136, ¶ 12 (8th Dist.). Summary judgment is appropriate if (1) no genuine issue of any

material fact remains; (2) the moving party is entitled to judgment as a matter of

law; and (3) it appears from the evidence that reasonable minds can come to but one

conclusion, and construing the evidence most strongly in favor of the nonmoving

party, that conclusion is adverse to the party against whom the motion for summary

judgment is made. Id., citing State ex rel. Cassels v. Dayton City School Dist. Bd. of

Edn., 69 Ohio St.3d 217 (1994).

The party moving for summary judgment bears the burden of

demonstrating that no material issues of fact exist for trial. Dresher v. Burt, 75 Ohio

St.3d 280, 292-293 (1996). If the moving party fails to meet this burden, summary

judgment is not appropriate; if the moving party meets this burden, the nonmoving

party must then point to evidence of specific facts in the record demonstrating the

existence of a genuine issue of material fact for trial. Id. at 293.

“Because summary judgment represents a shortcut through the

normal litigation process by avoiding a trial, the burden is strictly upon the moving

party to establish, through the evidentiary material permitted by the rule, that there

is no genuine issue of material fact and that [the moving party] is entitled to

judgment as a matter of law. Civ. R. 56(C).” Angus v. Blue Cross & Blue Shield,

1992 Ohio App. LEXIS 3935, *8 (8th Dist. July 30, 1992).

Within their two assigned errors, plaintiffs argue that the probate

court incorrectly concluded that no disputed facts existed in support of their claims

because they presented evidence that (1) they were defrauded by the elaborate scheme of a powerful and wealthy family member to purchase their CRC stock below

market value by misrepresenting the need to liquidate and concealing the true

valuations of the stock, which resulted in the loss of millions of dollars and a role in

their family business and (2) CRC concealed its fraud until November 2018 at which

time plaintiffs were placed on notice of the need to investigate the circumstances of

the Transaction, discovered the fraud, and then timely filed the underlying matter.

With this in mind, we begin by addressing the second assignment of

error first because it is dispositive of the matter.

Statute of Limitations

In the second assignment of error, plaintiffs argue the probate court

improperly concluded that their claims were time barred because they presented

evidence that CRC was successful in concealing its fraud until their discovery in

2018.

The elements of fraud are “(a) a representation or, where there is a

duty to disclose, concealment of a fact, (b) which is material to the transaction at

hand, (c) made falsely, with knowledge of its falsity, or with such utter disregard and

recklessness as to whether it is true or false that knowledge may be inferred, (d) with

the intent of misleading another into relying upon it, (e) justifiable reliance upon the

representation or concealment, and (f) a resulting injury proximately caused by the

reliance.” Friedland v. Lipman, 68 Ohio App.2d 255 (8th Dist. 1980), paragraph

one of the syllabus; Cohen v. Lamko, Inc., 10 Ohio St.3d 167, 169 (1984). R.C. 2305.09(C) provides that a fraud action shall be brought within

four years. The statute does not begin to run, however, until the cause of action

accrues. Under R.C. 2305.09, the cause of action does not accrue until the fraud is

discovered. “The Ohio Supreme Court has interpreted this statute to mean that the

four-year limitations period commences to run when the complainant has

discovered, or should have discovered in the exercise of reasonable diligence, the

alleged fraud.” McDougal v. Vecchio, 2012-Ohio-4287, ¶ 17 (8th Dist.), citing

Investors REIT One v. Jacobs, 46 Ohio St.3d 176 (1989), paragraph 2b of the

syllabus. Therefore, the question before this court is when plaintiffs knew or should

have known, in the exercise of reasonable diligence, about Harry Jr.’s alleged

scheme to “create the mirage of a solicited offer under the false premise that the

1983 Trust was insolvent and in dire need of liquidity to pay taxes and expenses,

and subject to potential third-party buyers” for the sole purpose of redeeming the

CRC shares at below fair market value. (Judgment Entry, Feb. 22, 2024.)

“Generally, the determination of when a plaintiff reasonably should

have discovered the fraud necessarily involves questions of fact that would preclude

resolution of the matter by summary judgment.” McDougal at ¶ 18, citing Thut v.

Thut, 2001 Ohio App. LEXIS 1748, *9 (11th Dist. Apr. 13, 2001); Hamilton v. Ohio

Sav. Bank, 70 Ohio St.3d 137 (1994); Cyrus v. Henes, 89 Ohio App.3d 172 (9th Dist.

1993). In McDougal, this court stated that the law with respect to discovery is that

“[n]o more than a reasonable opportunity to discover the misrepresentation is required to start the period of limitations. Information sufficient to alert a reasonable person to the possibility of wrongdoing gives rise to a party’s duty to inquire into the matter with due diligence.”

Id., quoting Craggett v. Adell Ins. Agency, 92 Ohio App.3d 443, 454 (8th Dist.

1993). Here, in granting CRC’s motion for summary judgment, the probate court

found that the plaintiffs’ fraud claim accrued no later than 2001. We agree.

In the instant case, there is no dispute that plaintiffs initiated the

2001 Case and were parties in the 2001 counterclaim filed by Bliven, where she

sought a court order to sell the shares of CRC stock held by the 1983 Trust. In

addition, there is no dispute that plaintiffs’ attorney sent a letter to Wilmington

Trust in September 2001, stating that plaintiffs had no objection to the redemption

of the shares of CRC stock held in the 1983 Trust. Also, there were no challenges to

the purchase price. As a result of the sale, the 1983 Trust began receiving

distributions in 2001, which continued annually until the year 2010. In addition,

plaintiffs had access to all trust statements, documents, and correspondence as early

as 2009 and Harry IV was appointed as Susie’s guardian in 2006, which granted

him the right to full access to documents detailing the assets of the 1983 Trust on

her behalf.

Plaintiffs contend that the fraud claim is not time barred because they

were not aware of the fraud until November 2018, when Harry inquired about the

2001 sale of CRC stock with his Uncle Mark and they timely filed their complaint in

December 2018. Although Harry IV inquired from his uncle in late 2018, it does not

change the fact that the shares of stock involved in the alleged fraud were the same shares of stock at issue in the 2000 Case and 2001 Case; the plaintiffs were

represented by counsel and consented to the redemption; plaintiffs received annual

distributions from the redemption for ten years; and plaintiffs had access to all trust

documents.

In light of the foregoing, and construing the evidence most strongly

in plaintiffs’ favor, we conclude reasonable minds can come to but one conclusion,

with that conclusion being adverse to the plaintiffs. We agree with the probate court:

Based upon the foregoing instances and information, Plaintiffs had knowledge of the CRC stock redemption that, if using ordinary care and thoughtfulness, would alert a reasonable person to investigate the possibility that fraud may have occurred. Thus, based upon all the foregoing events, Plaintiffs could have discovered, in the exercise of reasonable diligence, any alleged fraud by CRC thereby barring their claim for fraud in their Complaint due to the statute of limitations.

(Judgment entry, Feb. 22, 2024.) There remains no genuine issue of material fact

as to when the statute of limitations period commenced to run on plaintiffs’ fraud

claim. CRC is entitled to judgment as a matter of law

The probate court further found, and we agree, that plaintiffs’ fraud

claim is also time barred by the five-year statute of limitations for the sale of

securities under R.C. 1707.43(B), which provides:

No action for the recovery of the purchase price as provided for in this section, and no other action for any recovery based upon or arising out of a sale or contract for sale made in violation of Chapter 1707. of the Revised Code, shall be brought more than two years after the plaintiff knew, or had reason to know, of the facts by reason of which the actions of the person or director were unlawful, or more than five years from the date of such sale or contract for sale, whichever is the shorter period. In the matter before us, plaintiffs’ claims arise from alleged

misrepresentations made with respect to the sale and purchase of securities, and the

allegations in plaintiffs’ complaint are “inextricably interwoven” with the sale of

securities. The five-year statute of limitations applies to plaintiffs’ claims because

their claims arise from alleged misrepresentations made with respect to the sale and

purchase of securities. Therefore, the fraud claim is additionally time barred under

R.C. 1707.43(B) because the CRC stock was sold in 2001.

Having found that summary judgment is proper on the plaintiffs’

fraud claim, we likewise find that their civil conspiracy, unjust enrichment,

constructive trust claims fail as a matter of law.

To maintain a claim of civil conspiracy, a plaintiff must demonstrate

“(1) a malicious combination of two or more persons, (2) causing injury to another

person or property, and (3) the existence of an unlawful act independent from the

conspiracy itself.” Syed v. Poulos, 2016-Ohio-3168, ¶ 28 (8th Dist.), citing Kenty v.

Transamerica Premium Ins. Co., 1995-Ohio-61. “An underlying unlawful act must

be committed in order to establish an action for civil conspiracy.” Id., citing O’Brien

v. Olmsted Falls, 2008-Ohio-2658 (8th Dist.). In the instant case, plaintiffs allege

that the unlawful act underlying their claim for civil conspiracy is fraud and that

CRC and Harry Jr.’s fraudulent conduct in devising the 2001 redemption of the CRC

stock was due to a civil conspiracy. We note that “‘[a] civil conspiracy claim is

derivative and cannot be maintained absent an underlying tort that is actionable

without the conspiracy.”’ Arnoff v. PAJ Ents., LLC, 2022-Ohio-1759, ¶ 18 (8th Dist.), quoting Adams v. Margarum, 2017-Ohio-2741, ¶ 21 (10th Dist.). Because

plaintiffs’ civil-conspiracy claim is based upon their fraud claim, and their fraud

claim is time barred, we find that their civil-conspiracy claim necessarily fails.

Similarly, Susie’s unjust-enrichment claim alleges that CRC’s

fraudulent conduct resulted in the redemption of the CRC stock. In order to

demonstrate a claim for unjust enrichment, it must be proven that (1) the plaintiff

conferred a benefit upon the defendant, (2) the defendant had knowledge of such

benefit, and (3) the defendant retained that benefit under circumstances in which it

would be unjust to do so without payment. Sterling Contracting, LLC v. Main Event

Ent., LP, 2022-Ohio-2138, ¶ 19 (8th Dist.), citing Johnson v. Microsoft Corp., 2005-

Ohio-4985, ¶ 20, citing Hambleton v. R.G. Barry Corp., 12 Ohio St.3d 179, 183

(1984). In this matter, because plaintiffs’ fraud claim is time barred, Susie’s claim

for unjust enrichment also fails.

Lastly, with regard to plaintiffs’ constructive-trust claim, we note that

a constructive trust “is an equitable remedy to unjust enrichment and fraud.” Baillis

v. Ross, 2012-Ohio-705, ¶ 33 (8th Dist.). Here, plaintiffs’ fraud claim is time barred,

and as such, their constructive-trust claim fails as a matter of law.

Accordingly, the second assignment of error is overruled.

In the first assignment of error, plaintiffs argue that genuine issues of

material fact exist in support of their fraud claim. Having found that plaintiffs’ fraud

claim is time barred by the statute of limitations, we overrule this assigned error as

moot. App.R. 12. Accordingly, judgment is affirmed.

It is ordered that appellee recover from appellants costs herein taxed.

The court finds there were reasonable grounds for this appeal.

It is ordered that a special mandate be sent to said 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.

_____________________________ MARY J. BOYLE, PRESIDING JUDGE

MICHAEL JOHN RYAN, J., and SEAN C. GALLAGHER, J., CONCUR