[Cite as Freelon v. GRG Farms, Inc., 2024-Ohio-4764.]
IN THE COURT OF APPEALS OF OHIO SIXTH APPELLATE DISTRICT HURON COUNTY
Suzanna Freelon, As a Director of Court of Appeals No. H-23-022 GRG Farms, Inc. and as Successor Trustee of the Homer Ray Roof Trial Court No. CVH 2021 765 Revocable Living Trust
Appellee
v.
GRG Farms, Inc. et al. DECISION AND JUDGMENT
Appellants Decided: September 30, 2024
*****
Eric T. Michener and Gage T. Righter, for appellee.
Thomas L. Anastos for appellants.
***** ZMUDA, J.
I. Introduction
{¶ 1} Appellants, GRG Farms, Inc. and Norman Gannett, appeal the July 7, 2023
judgment of the Huron County Court of Common Pleas granting summary judgment in
favor of Suzanna Freelon, as Director of GRG Farms Inc., and as Successor Trustee of
the Homer Ray Roof Revocable Living Trust (“Freelon”), on her claim for judicial dissolution of GRG Farms, Inc. 1 For the following reasons, we affirm the trial court’s
judgment.
II. Facts and Procedural Background
{¶ 2} The following facts were developed from the parties’ depositions, affidavits,
discovery responses, and supporting Civ.R. 56 documents.
{¶ 3} In 2004, Gannett and Homer Roof formed GRG Farms, Inc., a beef cattle
breeding business. The Huron County, Ohio, business was located on 356-acres of land
owned originally owned by Gannet’s mother and aunt (the “Gannett Property”). Though
the transaction’s genesis is unclear, in September 2004, evidenced by a notarized
statement, Roof tendered $84,000 to Gannett’s mother who, in turn, purchased the
remaining property from Gannett’s aunt.
{¶ 4} On October 1, 2004, GRG’s board of directors, which consisted of Gannett,
Roof, and Roof’s wife, Louann Schroeder, held an organizational meeting. At the
meeting, the board elected Gannett the president of GRG, Roof the vice-president, and
Schroeder the secretary and treasurer. That same day, Roof, through the Homer J. Roof
1 Throughout the underlying action and this appeal, Gannett and GRG have made all their filings jointly. We cannot determine, based on the record before us, whether these parties’ interests are so aligned that joint filings are appropriate. For example, it is unclear that Gannett would have standing, as a shareholder, to file a declaratory judgment action against Freelon to declare the agreement void or an unjust enrichment claim to recover monies paid to Roof under that allegedly invalid agreement when he was not a party to the agreement. However, we make no findings related to the alignment of Gannett and GRG’s interests as that issue was not raised by the parties and because our decision resolves the assigned errors independent of any potential conflicting interests they may have.
2. Revocable Living Trust, and Gannett were named the sole shareholders, each holding 50
shares of stock as evidenced in the stock and transfer ledger. In exchange for the shares,
Gannett promised to transfer the Gannett Property and Roof agreed to transfer one 58-
acre parcel (the “Roof Property”). The agreement was ratified by resolution which
provided:
RESOLVED, that acceptance of the offer of the abovenamed stock
subscribers is in the best interest of the Corporation and necessary for
carrying out the corporate business, and in the judgment of the Board of
Directors, the assets proposed to be transferred to the Corporation are
reasonably worth the amount of consideration deemed therefor, and the
same is hereby accepted, and that upon receipt of the consideration
indicated above, the President and the Secretary are authorized to issue
certificates of fully-paid, non-assessable capital stocks of this Corporation
in the amounts indicated to the abovenamed persons.
{¶ 5} While Gannett transferred the Gannett Property by deed recorded on
December 6, 2004, Roof never transferred his parcel. At the time of the stock
distribution, the Roof Property was owned by SSU, Inc., of which Roof was president
and an owner. Gannett claimed that that he was not aware that the Roof Property had not
been transferred at that time.
3. {¶ 6} Gannett stated that Roof “supported” the startup of GRG by providing 40-50
cows, valued at approximately $400-500 per cow. The pair also used Roof’s equipment
to clear land and plant fields.
{¶ 7} In 2006, Roof told Gannett that the Roof Property had been sold. Gannett
claimed that prior to the sale, he was not aware that GRG was not the owner of the
property. Gannett admittedly did not inquire as to the purchaser of the property, the
purchase price, or whether the proceeds benefited GRG. He maintained that sometime
after Freelon became a director, in approximately 2020, he learned that the Roof Property
was never transferred to GRG.
{¶ 8} Gannett denied any oversight of business expenses. He indicated that
purchases by GRG were paid with money in the business checking account. He had no
knowledge of where the money came from to pay bills or taxes, or who paid them. For
example, in 2005, a fence was built on the property with materials Roof purchased at an
auction; Gannett did not know the source of the funds. In 2007, a hay barn was
constructed on the property at a cost of approximately $58,000. It was paid for through
GRG, and Gannett stated that Roof hired the contractors. The company did not have
annual meetings, and he and Roof generally conducted business telephonically.
{¶ 9} Gannett stated that GRG was never profitable. The only distributions made
to the shareholders were equal payments in 2012, of $22,500 for the sale of timber, and in
2017, of $419,079 for a pipeline easement on the property. GRG’s shareholders
occasionally split a small profit from custom hay baling.
4. {¶ 10} GRG’s treasurer, Schroeder, provided financial information to the
corporation’s accountants, who, in turn, generated spreadsheets captioned “Note payable
to shareholder” and included running totals of sums contributed by Gannett and Roof and
sums owed to Gannett and Roof by GRG, including interest. Monies provided by Roof’s
company, SSU, were also included. Notably, the information listed values for both the
Roof Property, which had never been transferred, and the Gannett Property.
{¶ 11} The federal income tax returns, prepared by the same accounting firm,
reflected the listed notes payable to shareholders as the amount represented in the
spreadsheets. In 2011, 2014, and 2015, the firm prepared cognovit notes reflecting the
amounts owed to Roof and Gannett; they were never executed.
{¶ 12} Gannett was questioned about the income tax returns in years 2012-2018,
prepared by the accounting firm, representing that the shareholders, particularly Roof,
was owed more than $500,000. Gannett stated that he neither reviewed nor signed tax
documents.
{¶ 13} After Roof died in 2019, his wife, Schroeder, was appointed successor
trustee of the trust. Following Schroeder’s death in 2020, Roof’s daughter, Freelon,
became the trustee. Gannett consented to Freelon, as successor trustee, being named as a
director of GRG. In 2021, Gannett and Freelon entered negotiations for a buyout of
Freelon’s shares in the company. Negotiations broke down after Gannett was unable to
secure financing.
5. {¶ 14} On September 13, 2021, Freelon commenced this action by filing a verified
complaint for dissolution of GRG, pursuant to R.C. 1701.91(A)(4). Freelon, as trustee of
the Homer Ray Roof Revocable Trust, alleged that she was a fifty percent shareholder of
GRG and that she and equal shareholder, Gannett, were deadlocked on whether to
continue operations.
{¶ 15} Appellants jointly filed a counterclaim seeking a declaratory judgment that
Freelon, as successor trustee, lacked standing to seek judicial dissolution. They also
alleged that the stock shares issued to Roof, as trustee, were void because they were
issued without consideration. Thus, trustee Roof never owned the shares purportedly
held by the Freelon as successor trustee. Appellants also raised an unjust enrichment
claim.
{¶ 16} Freelon filed a motion to dismiss arguing that appellants’ counterclaims
were barred by the 15-year limitations period in effect in 2004, for breach of a written
contract. Relying on R.C. 1701.14, appellants opposed the motion arguing that because
the Articles of Incorporation placed no deadline for Roof’s performance, Roof or his
successors were still obligated to pay the agreed-upon consideration upon the call of the
directors. The trial court denied Freelon’s motion.
{¶ 17} On December 15, 2022, the parties filed motions for summary judgment on
all claims and counterclaims. Freelon’s motion argued that she had standing to request
dissolution of the company because Roof provided sufficient consideration despite not
transferring the agreed-upon property in exchange for his shares. She claimed that the
6. relevant deposition testimony and tax records demonstrate that Roof’s financial
contributions of approximately $369,600 through December 5, 2005, exceeded the value
of the Roof Property. Freelon further maintained that appellants’ declaratory judgment
action was barred by the statute of limitations because it was, in essence, a breach of
contract claim.
{¶ 18} Conversely, appellants asserted that Freelon is not a shareholder of GRG
because by not transferring the Roof Property to GRG, Roof never entered into a
unilateral contract with GRG and never acquired the shares. They further argued that
pursuant to the subscription agreement in the resolution, GRG was to issue shares to
Roof, not Roof in his trustee capacity. Finally, appellants argued that they were entitled
to summary judgment on their unjust enrichment claim because Roof wrongfully retained
a split of the profit distributions.
{¶ 19} On July 12, 2023, the trial court granted Freelon’s motion for summary
judgment while denying appellants’ motion. The court found that although Roof failed to
provide the bargained-for Roof Property, he made “sizeable monetary and in-kind
contributions to the business” and that his failure to provide the property did not “effect
the parties willingness to treat the business as a 50/50 proposition.” The court noted that
“equity demands that this Court honor the clear intentions of the parties and treat them as
equal co-owners of the business.” The court then concluded that Freelon and Gannett, as
directors and equal shareholders in GRG, were deadlocked on whether to dissolve the
company and granted Freelon’s request for judicial dissolution under R.C. 1701.91(A)(4).
7. III. Assignments of Error
{¶ 20} Appellants timely appealed and assert the following errors for our review:
1. The trial court erred by granting Freelon’s motion for summary judgment.
2. The trial court erred by denying [appellants’] motion for summary judgment.
IV. Law and Analysis
{¶ 21} At the outset, we note that the parties utilized significant portions of their
motion practice before the trial court, and their briefs on appeal, to argue whether the
contract was bilateral or unilateral and the impact of that distinction. Freelon argues that
the agreement was an express bilateral contract and that Roof’s failure to transfer his
parcel of land was a breach of that binding contract. She argues that appellants’
counterclaims were barred by the applicable statute of limitations based on the date of
Roof’s breach. Appellants argue that the agreement was a unilateral contract that
required Roof’s performance to ever become binding on the parties. Since Roof never
performed, appellants argue, there was never a binding agreement between the parties,
rendering any obligations under the agreement void and vacating Freelon’s status as a
shareholder with the ability request judicial dissolution of the company.
{¶ 22} The trial court did not make a specific finding regarding the nature of the
agreement, but determined that Roof’s contribution of "sizable monetary and in-kind
contributions” to GRG constituted “substantial” consideration for the shares GRG
transferred to him. Ostensibly, the trial court’s conclusion could satisfy Roof’s payment
of consideration under a bilateral contract or constitute performance to accept a unilateral
8. contract. The ambiguous nature of the trial court’s conclusion seemingly places more
emphasis on the parties’ arguments regarding the bilateral or unilateral nature of the
agreement. However, as described below, the initial question guiding this court’s
analysis is not whether the contract was unilateral or bilateral, but whether the contract
was express or implied in fact.
{¶ 23} Ohio recognizes three types of contracts—express, implied in fact, and
implied in law. Bayer v. Nachtrab, 2014-Ohio-5586, ¶ 26 (6th Dist.). “An express
contract is formed when there is mutual assent and consideration.” Larcom v. Larcom,
2010-Ohio-3632, ¶ 11 (6th Dist.). “In express contracts the assent to [the contract’s]
terms is actually expressed in offer and acceptance.” Waffen v. Summers, 2009-Ohio-
2940, ¶ 31 (6th Dist.). Conversely, “[i]n contracts implied in fact[,] the meeting of the
minds, manifested in express contracts by offer and acceptance, is shown by the
surrounding circumstances which make it inferable that the contract exists as a matter of
tacit understanding.” Id. By inferring that the parties entered into an agreement based on
the circumstances surrounding their interactions, the trial court concluded that parties’
agreement was an implied in fact contract. We disagree with the trial court’s conclusion.
{¶ 24} Having reviewed the record, we find that Roof and GRG entered into an
express contract. Specifically, Roof offered to transfer a parcel of land he owned to GRG
in exchange for GRG’s offer to issue him 50 shares in the company. The agreement was
reflected in GRG’s October 1, 2004 organizational meeting minutes. The actual
expression of offer and acceptance is a classic example of an express contract. Id. at ¶
9. 31. Therefore, we find that the parties entered into an express agreement on October 1,
2004, and we apply the authority relevant to the parties’ arguments considering that as
the date the parties became bound by their agreement.
A. Standard of Review
{¶ 25} Each of appellants’ assignments of error challenge the trial court’s grant or
denial of the parties’ cross-motions for summary judgment. An appellate court reviews a
trial court’s decision to grant summary judgment de novo. Chalmers v. HCR ManorCare,
Inc., 2017-Ohio-5678, ¶ 21 (6th Dist.). Summary judgment will be granted only when
“the pleadings, depositions, answers to interrogatories, written admissions, affidavits,
transcripts of evidence, and written stipulations of fact,” show that there is no genuine
issue as to any material fact, and the moving party is entitled to judgment as a matter of
law. Civ.R. 56(C). “‘[T]he purpose of summary judgment is “not to try issues of fact, but
rather to determine whether triable issues of fact exist.”’ Tera, L.L.C. v. Rice Drilling D,
L.L.C., 2024-Ohio-1945, ¶ 19, quoting Smathers v. Glass, 2022-Ohio-4595, ¶ 3, quoting
Viock v. Stowe-Woodward Co., 13 Ohio App.3d 7, 15 (6th Dist. 1983).
{¶ 26} “The burden of showing that no genuine issue of material fact exists falls
upon the party who moves for summary judgment.” Wright-Patt Credit Union, Inc. v.
Byington, 2013-Ohio-3963, ¶ 9 (6th Dist.). “[O]nce the movant supports his or her
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
10. there is a genuine issue for trial.’” Id., quoting Civ.R. 56(E). “Summary judgment must
be awarded with caution because it terminates litigation.” Goodell v. Motorists Mut. Ins.
Co., 2017-Ohio-8425, ¶ 4 (6th Dist.), citing Murphy v. City of Reynoldsburg, 65 Ohio
St.3d 356, 358 (1992). Because it informs our analysis of their first assignment of error,
we begin our de novo review with appellants’ second assignment of error.
B. The trial court did not err in denying appellants’ motion for summary judgment.
{¶ 27} In their second assignment of error, appellants argue that the trial court
erred in denying their motion for summary judgment. In that motion, appellants argued
that they were entitled to a declaratory judgment finding that the transfer of shares to the
Roof trust was void as a matter of law because Roof never transferred the parcels of land
to GRG in accordance with the agreement. Freelon, in opposition, argued that appellants’
claim was barred under the statute of limitations applicable to written contracts and under
the doctrine of laches. We find each of Freelon’s arguments persuasive.
i. Appellants’ declaratory judgment claim is barred by the applicable statute of limitations.
{¶ 28} Appellants’ declaratory judgment claim alleges a clear breach of the
contract between GRG and Roof. Indeed, Freelon concedes that the bargained-for
consideration underlying the agreement—Roof’s transfer of parcels to GRG in exchange
for the shares—never occurred. While this constitutes a breach of the original agreement,
we find that appellants’ claim for declaratory judgment is barred by the applicable statute
of limitations.
11. {¶ 29} To determine the statute of limitations applicable to a declaratory judgment
action, “we look to the underlying nature or subject matter of the claim.” Joseph
Brothers Company, LLC v. Dunn Bros., Ltd., 2019-Ohio-4821, ¶ 41 (6th Dist.). When a
declaratory judgment action “revolves around breach of contract claims,” the applicable
statute of limitations is the one applicable to that type of claim. See Ricketts v. Everflow,
2016-Ohio-4807, ¶ 6 (holding that the statute of limitations applicable to the underlying
contract applied to a party’s declaratory judgment action when that action sought a
declaration of the parties’ rights in light of that breach). The record here clearly shows
that the subject matter of appellants’ claim is, at its most basic terms, a breach of contract
action and that the breach of contract statute of limitations is applicable to appellants’
declaratory judgment claim.
{¶ 30} When GRG and Roof entered into the underlying agreement on October 1,
2004, R.C. 2305.06 established a 15-year statute of limitations for actions arising from a
breach of written contracts. R.C. 2305.06 (eff. July 1, 1993). Roof’s breach of the
agreement occurred on October 1, 2004, when he failed to transfer the parcels of land
owed to GRG after it issued him the agreed-upon shares.2 See Banner Const. Co. v.
Koester, 2000 WL 331385 (6th Dist. 2000) (“A breach occurs upon the failure to perform
2 In his affidavit attached to appellants’ opposition to Freelon’s motion for summary judgment, Gannett alleged that he was not aware of Roof’s breach until after the underlying action was filed. Gannett’s inclusion of the alleged delay in discovering Roof’s breach is irrelevant to our statute of limitations analysis as “no Ohio court has ever applied the discovery rule to a claim for a breach of contract.” Taylor-Winfield Corp. v. Huntington Bank, 2021-Ohio-3480, ¶ 21 (11th Dist.).
12. a contractual duty”). It is undisputed that Roof failed to perform his obligation upon
GRG’s transfer of shares to him. As a result, appellant’ declaratory judgment action,
relating to Roof’s breach of contract, had to be filed within fifteen years of Roof’s
breach—that is, before October 1, 2019.
{¶ 31} Freelon initiated this action on September 13, 2021. Appellants’
counterclaim seeking a declaration that the contract was void and unenforceable was filed
on December 3, 2021, more than two years after the applicable statute of limitations
expired. Even assuming that appellants’ counterclaim was a compulsory counterclaim
and relates back to that date Freelon filed her complaint, See National Retailers Mut. Ins.
Co. v. Gross, 142 Ohio St. 132 (1943), that counterclaim would still be deemed filed well
after the October 1, 2019 deadline. As a result, we find that appellants’ counterclaim was
barred by the applicable statute of limitations and their motion for summary judgment on
that claim was properly denied.
ii. Appellants’ declaratory judgment action is barred by the doctrine of laches.
{¶ 32} Appellants’ declaratory judgment claim was further barred by the doctrine
of laches. Laches is “a party’s failure to assert a right for an unreasonable and
unexplained period of time under circumstances that cause prejudice to the opposing
party.” Pollard v. Eiber, 2018-Ohio-4538, ¶ 30-31 (6th Dist.). While showing that the
opposing party delayed in asserting a claim or defense is an element of laches, delay
alone is insufficient to succeed on a laches defense. Id. Instead, “the party asserting the
13. defense must also show that [they were] materially prejudiced by the opposing party’s
delay. Material prejudice exists when the defendant shows (1) the loss of evidence
helpful to the defendant’s case or (2) a change in the defendant’s position that would not
have occurred if the plaintiff had asserted [their] rights sooner.” Id. “Laches is an
affirmative defense. In the context of a motion for summary judgment, the party
asserting an affirmative defense has the burden of producing sufficient evidence in
support of the defense to show the absence of a genuine issue of material fact for trial.”
Id.
{¶ 33} In her opposition to appellants’ motion for summary judgment, Freelon
argued that appellants’ failure to raise their claim that Roof’s shares were invalid for
more than 17 years—from October 1, 2004 to December 3, 2021—was unreasonable and,
if permitted to proceed, would result in prejudice to her. Specifically, she argued that
since Roof and another GRG director that was present when the agreement was reached
had died before the underlying litigation, that she would be unable to obtain their
testimony for use in defending against appellants’ counterclaim.
{¶ 34} In their reply, appellants argued (1) that Freelon did not have standing to
file her claim because the shares she alleged to control were invalid based on Roof’s
breach of the original contract, (2) that they could not have challenged the validity of
those shares until Freelon filed her complaint, and (3) that they were unaware of Roof’s
alleged breach until Freelon filed her complaint. Curiously, while these arguments are
contained in appellants’ reply in support of their own motion for summary judgment, they
14. frame these arguments as defenses to Freelon’s motion for summary judgment. That
anomaly notwithstanding, appellants’ arguments are without merit. We address their
arguments in turn.
{¶ 35} First, appellants’ argument that Freelon’s shares are invalid acknowledges
the prejudice Freelon would suffer should they be permitted to pursue their declaratory
judgment action. Specifically, Freelon’s change in status from equal shareholder to
having no shares in GRG can only be viewed as “a change in [her] position that would
not have occurred if [appellants] had asserted [their] rights sooner.” Pollard at ¶ 30-31.
Additionally, appellants’ delay in asserting their declaratory judgment action precludes
Freelon from obtaining any testimonial evidence from Roof that could defend his status
as a shareholder since he died before appellants filed their claim. Therefore, rather than
support their own motion for summary judgment, appellants’ arguments actually support
Freelon’s argument that she would suffer prejudice if they are able to raise these issues
after remaining silent on their rights for more than 17 years.
{¶ 36} Second, appellants’ argument that Freelon’s laches argument fails because
their attempt to invalidate the Roof shares only came in defense to Freelon initiating this
action is wholly unsupported by the record. Appellants’ argument ignores that they filed
their own claim for a declaratory judgment and that they raised these arguments in a reply
brief in support of their own motion for summary judgment on that claim. Their
argument that the declaratory judgment action was merely a defense to Freelon’s action
does not comport with the facts on record. Further, their reply cites no authority to
15. support their argument that the declaratory judgment action could not have been filed in
the 17 years since Roof failed to transfer the parcels to GRG but only in response to
Freelon’s complaint. Put simply, appellants’ argument that the declaratory judgment
action is merely a defense to Freelon’s request for dissolution is invalid on its face.
{¶ 37} Finally, appellants’ argument that they did not know that Roof never
transferred the parcels until after Freelon’s complaint is irrelevant to the issue before us
and not supported by the record. In their motion for summary judgment, appellants
argued that Gannett did not receive a copy of the October 1, 2004 agreement until after
Freelon filed her complaint. This fact, even if true, is limited to Gannett’s personal
knowledge and would not permit GRG as an entity to claim it had no knowledge of the
agreement contained in its own corporate records. Additionally, Gannett acknowledged
during his deposition that he became aware that Roof’s parcels were sold to another
entity in 2006. This certainly would have provided him with some notice that there was
an issue with GRG’s ownership of these parcels and that he could have investigated this
issue in the 15 years between that alleged later discovery and Freelon’s filing of the
complaint. Moreover, even assuming Gannett and GRG were not aware of Roof’s failure
to transfer the parcels until after Freelon filed her complaint, that discovery is irrelevant
to our analysis because the discovery rule is not applicable to their declaratory judgment
action as described above. See Taylor-Winfield Corp. v. Huntington Bank, 2021-Ohio-
3480, ¶ 21 (11th Dist.).
16. {¶ 38} Put simply, Freelon adequately supported her argument that she will suffer
prejudice as a result of appellants’ failure to file their declaratory judgment action to
invalidate the Roof shares within a reasonable time. Appellants fail to identify any
portion of the record that negates Freelon’s laches defense to appellants’ declaratory
judgment claim for Roof’s alleged breach of a bilateral contract. For these reasons, we
find that the trial court did not err in denying appellants’ motion for summary judgment
on their declaratory judgment claim under the doctrine of laches.
iii. Appellants’ unjust enrichment claim is barred as a matter of law.
Appellants’ second assignment of error also alleges that the trial court erred in
denying their motion for summary judgment on their unjust enrichment claim. In that
claim, appellants seek to recover funds GRG paid to Roof as a shareholder under a theory
of unjust enrichment. Such a claim is invalid under Ohio law when an express contract
exists. See Bickham v. Standley, 2009-Ohio-3530, ¶ 14 (3d Dist.), citing Aultman Hosp.
Assn. v. Community Mut. Ins. Co., 46 Ohio St.3d 51 (1989) (“the doctrine of unjust
enrichment cannot apply when an express contract exists.”). Having found that the
parties entered in an express contract, appellants could not succeed on their unjust
enrichment claim as a matter of law and the trial court did not err in denying their motion
for summary judgment on this claim.
17. iv. The trial court’s denial of appellants’ motion for summary judgment was correct, but for the wrong reasons
{¶ 39} For the reasons identified herein, we find that the trial court did not err in
denying appellants’ motion for summary judgment on their declaratory judgment and
unjust enrichment counterclaims. We note that our conclusions are based on reasons not
relied on by the trial court. We are not precluded, however, from affirming the trial
court’s decision for other reasons as long as the other bases relied on does not result in
prejudice to the appealing party. See State ex rel. Sommers v. Perkins Local Schools
Board of Education, 2017-Ohio-7991 (6th Dist.) (“this court will not reverse a trial court
decision that achieves the right result for the wrong reason, because such an error is not
prejudicial.”). The trial court’s denial of appellants’ motion was correct and they suffer
no prejudice from this court affirming that judgment for different reasons. Therefore, we
find appellants’ second assignment of error not well-taken.
{¶ 40} Having resolved appellants’ second assignment of error by finding, in part,
that their counterclaims are time-barred, we find that our analysis of their first assignment
of error is constrained as the arguments they relied on in support of their own motion for
summary judgment are identical to those alleged in opposition to Freelon’s motion.
C. The trial court did not err in granting Freelon’s motion for summary judgment.
{¶ 41} In their first assignment of error, appellants argue that the trial court erred
in granting Freelon’s motion for summary judgment. Their argument—that the parties
never entered into a binding contract and, as a result that Freelon was not a shareholder
18. that could seek judicial dissolution of GRG—is identical to the arguments raised in their
second assignment of error. We find that the trial court did not err in granting Freelon’s
motion for summary judgment.
{¶ 42} In her motion for summary judgment, Freelon argued that she was a
director of GRG and that she was trustee of the Roof trust that controlled 50 shares in
GRG. She and Gannett are the sole directors of GRG and are deadlocked on whether to
dissolve GRG. Freelon’s complaint alleges that because she controls 50% of the total
shares in GRG, and because Gannett controls the other 50%, that their deadlock cannot
be broken by the shareholders. As a result, she sought judicial dissolution of GRG
pursuant to R.C. 1701.91(A)(4).
{¶ 43} In support of her motion for summary judgment, Freelon identified the
share certificate GRG issued to the Roof trust, coupled with her role as trustee of that
trust, as evidence that she controls 50% of the stock in GRG. This certificate is sufficient
to create a presumption that the Roof trust owned the shares identified on the certificate.
See Robson v. Discount Drug Mart, Inc., 2023-Ohio-3291, ¶ 15 (9th Dist.), quoting
Algren v. Algren, 2009-Ohio-3009, ¶ 22 (2d Dist.). By averring that she was the trustee
of the Roof trust’s shares and that, as trustee, she was tasked with controlling the votes of
those shares, Freelon satisfied her initial burden under Civ.R. 56 to show that there were
no genuine issues of material fact and that she was entitled to judgment as a matter of law
on her request for judicial dissolution. Wright-Patt at ¶ 9.
19. {¶ 44} Upon satisfying her burden as the moving party under Civ.R. 56, the
burden then shifted to appellants to show that there was a genuine issue for trial. Id. We
find that appellants failed to satisfy their reciprocal burden. The relevant portion of
appellants’ opposition argues that the Roof trust is not a shareholder of GRG and,
therefore, that Freelon cannot control the votes of those shares, because Roof never
transferred the parcels of land required by his contract with GRG. In support of this
argument, appellants simply renewed the arguments made in support of their declaratory
judgment action that the transfer of shares was invalid because Roof never transferred the
bargained-for parcels of land. Notably, appellants offered no additional evidence,
unrelated to the allegedly void contract between GRG and Roof, to refute the
presumption that the stock certificate issued to the Roof Trust was valid or that Freelon,
as trustee, controlled the votes of those shares.
{¶ 45} We already determined that appellants’ arguments that the stock transfer
was void are time-barred. Although those claims are time-barred, this does not
necessarily preclude their use as a defense to Freelon’s motion. Instead, time-barred
claims are “available as a defense * * * when [they arise] out of the same transaction as
the plaintiff’s claim for relief, and when [they are] offered to reduce the plaintiff’s right
to relief.” See Riley v. Montgomery, 11 Ohio St.3d 75 (1984). Our review of the record
shows that appellants’ renewal of their expired counterclaim as a defense to Freelon’s
request for dissolution of GRG does not meet either of these elements.
20. {¶ 46} First, a claim arises out of the same transaction when it is “logically related
to the opposing party’s claim where separate trials on each of their respective claims
would involve a substantial duplication of effort and time by the parties and the courts.”
Rettig Enterprises, Inc. v. Koehler, 68 Ohio St.3d 274 (1994). We find that there is
nothing duplicative between Freelon’s request for judicial dissolution of GRG based on a
director and shareholder deadlock and appellants’ claim that Roof breached his contract
with GRG 17 years prior. Second, even if these claims even arguably arose from the
same transaction, there is absolutely nothing in the record to suggest that appellants
advanced their claim to reduce Freelon’s right to relief. See Id. at 78 (holding that time-
barred counterclaims under the common-law theory of recoupment may be used to reduce
a plaintiff’s right to relief). Indeed, Freelon is not seeking relief that can be reduced as
she seeks no monetary award. Therefore, we find that appellants’ cannot use these time-
barred claims as defenses to Freelon’s motion for summary judgment and they do not
satisfy their reciprocal burden to show that there was an issue for trial in this action.
Freelon, having satisfied her burden under Civ.R. 56, was entitled to summary judgment
as a matter of law.
{¶ 47} As a result, we find that the trial court did not err in granting Freelon’s
motion for summary judgment, albeit for reasons other than those relied on by the trial
court. See Sommers, 2017-Ohio-7991 (6th Dist.). We find appellants’ first assignment of
error not well-taken.
21. V. Conclusion.
{¶ 48} For these reasons, we find appellants’ first and second assignments of error
not well-taken and affirm the July 7, 2023 judgment of the Huron County Court of
Common Pleas granting summary judgment in favor of appellee.
{¶ 49} Appellants are ordered to pay the costs of this appeal pursuant to App.R.
24.
Judgment affirmed.
A certified copy of this entry shall constitute the mandate pursuant to App.R. 27. See also 6th Dist.Loc.App.R. 4.
Christine E. Mayle, J. ____________________________ JUDGE Gene A. Zmuda, J. ____________________________ Charles E. Sulek, P.J. JUDGE CONCUR. ____________________________ JUDGE
This decision is subject to further editing by the Supreme Court of Ohio’s Reporter of Decisions. Parties interested in viewing the final reported version are advised to visit the Ohio Supreme Court’s web site at: http://www.supremecourt.ohio.gov/ROD/docs/.
22.