Orvets v. National City Bank, Northeast

722 N.E.2d 114, 131 Ohio App. 3d 180
CourtOhio Court of Appeals
DecidedFebruary 10, 1999
DocketC.A. No. 18975.
StatusPublished
Cited by13 cases

This text of 722 N.E.2d 114 (Orvets v. National City Bank, Northeast) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Orvets v. National City Bank, Northeast, 722 N.E.2d 114, 131 Ohio App. 3d 180 (Ohio Ct. App. 1999).

Opinion

Dickinson, Judge.

Plaintiffs Daniel Orvets, Martin Orvets, and Gregory Orvets have appealed from an order of the Summit County Common Pleas Court that granted defendant John Mayo summary judgment in this breach-of-fiduciary-duty case. By their complaint, plaintiffs alleged that in a number of transactions since 1981, Mayo breached a fiduciary duty that he owed to a trust of which they are remaindermen. In granting Mayo’s motion for summary judgment, the trial court determined that the applicable statute of limitations had expired for all but one of the transactions about which plaintiffs were complaining. It further determined that there were no genuine issues of material fact and Mayo was entitled to judgment as a matter of law on the merits in regard to that final transaction.

Plaintiffs have argued to this court that the trial court (1) incorrectly determined that the “discovery rule” did not apply to extend the statute of limitations applicable to their claims against Mayo, (2) incorrectly determined that Ohio’s saving statute did not apply in this case, and (3) incorrectly determined that there were no genuine issues of material fact and that Mayo was entitled to judgment as a matter of law on the merits of plaintiffs’ single claim that the trial court did not believe was barred by the statute of limitations. This court reverses and remands this matter to the trial court because the “discovery rule” does apply to plaintiffs’ claims in this case and Mayo did not carry his burden of establishing that there were no genuine issues of material fact and that he was entitled to judgment as a matter of law on the merits of the one claim that the trial court did not believe was barred by the statute of limitations. This court does not reach the issue of whether the saving statute is applicable in this case because, in view *183 of this court’s determination that the discovery rule is applicable, on remand, the trial court must determine when Mayo’s alleged misconduct was “discovered” for purposes of the statute of limitations and, depending upon that determination, plaintiffs’ argument regarding the savings statute may be moot.

I

Plaintiffs are sons of Leonard Orvets (“Mr. Orvets”). Mr. Orvets died on February 28, 1981. During his lifetime, Mr. Orvets engaged in the real estate business as an equal partner with defendant John Mayo in three separate partnerships and as an equal owner of a corporation with Mayo. Among other things, Mayo and Mr. Orvets, through the partnerships and the corporation, owned a number of parcels of commercial real estate. Upon his death, Mr. Orvets’s interests in the partnerships and the corporation passed to a trust he had established. National City Bank, Kenneth Melek, and Loretta Orvets (Mr. Orvets’s wife) were cotrustees of the trust. 1 Plaintiffs are three of the four remaindermen of the trust.

The partnership agreements for the three partnerships provided that, in the event of the death of one of the two partners, the other partner would purchase the interest of the decedent in the partnerships. In addition, Mr. Orvets and Mayo had entered into a stock purchase agreement that provided that the survivor of the two would purchase the shares of the other in the corporation. Upon Mr. Orvets’s death, however, Mayo was apparently unable to secure financing necessary for him to buy the trust’s interests in the partnerships and the corporation.

On April 2, 1982, the trustees and Mayo entered into an agreement that provided Mayo authority to liquidate the real estate that had previously been owned by Mr. Orvets and Mayo and that was now held by the trust and Mayo. The agreement, which recited that it was “made as of the 1st day of March, 1981,” provided that Mayo would carry out the liquidation at his “sole and exclusive discretion, and upon prices, terms and conditions determined by [him], including, but not limited to, whether a sale shall be for cash or on an installment basis, and if not for cash, the terms and security for payment.” It further provided that Mayo would be devoting a substantial amount of his working time to the sale of the real estate he and the trust held and that he would “use his best efforts to obtain terms and prices most beneficial to the parties.” In return for his efforts, he was to be paid $5,250 per month, and be reimbursed for his reasonable business expenses. The net proceeds of any sales, “after deducting *184 Mayo’s compensation and expenses as aforesaid, and all other costs of sale including real estate commissions,” were to be divided equally between the trust and Mayo.

The agreement also provided that Mayo would manage two shopping center properties that he and the trust owned. For those services, he was to be paid $1,000 per month.

The trust agreement by which Mr. Orvets established the trust at issue in this case provided that, upon the death of Mrs. Orvets, the assets of the trust would be divided and distributed, per stirpes, to the remaindermen, half when they reached the age of twenty-five and the other half when they reached the age of thirty. On February 12, 1983, the trustees, Mayo, and the remaindermen entered into an agreement in which they recited that the best interests of the trust and the remaindermen would be served by continuing the liquidation of the real estate in which the trust and Mayo held an interest. Accordingly, the remaindermen waived their rights to receive distributions from the trust upon reaching the ages of twenty-five and thirty following Mrs. Orvets’s death, and Mayo, the trustees, and the remaindermen agreed that the earlier agreement, pursuant to which Mayo was liquidating real estate in which the trust had an interest, would be extended until ten years after Mrs. Orvets’s death. Mrs. Orvets died on January 2,1989.

On January 19, 1995, plaintiffs filed an action in the Summit County Common Pleas Court, case No. CV 95 01 0234, against National City Bank, Melek, and Mayo. 2 In a section of their complaint that was captioned “Background,” plaintiffs recited the establishment of the trust by Mr. Orvets and averred that National City Bank had convinced Melek and Mrs. Orvets to enter into the April 2,1982 agreement authorizing Mayo to liquidate the trust’s interest in the various parcels of real estate “despite the fact that the Bank was warned by members of its own trust department that the [April 2, 1982, agreement] would place too much control in Mayo, who was not a trustee, but rather the major creditor of the trust.” They further alleged that they had entered into the February 12, 1983 agreement extending the April 2, 1982 agreement under “economic duress by Mayo and the Bank because Mayo appeared at the hospital and/or [Mrs.] Orvets’ home where it was believed by Plaintiffs that [Mrs.] Orvets was dying” and “threatened ruination of the trust because of tax obligations unless [the] Agreement was signed.” According to plaintiffs, National City Bank allowed Mayo “to treat the trust assets as his own without regard to the benefit of the trust remaindermen.” They also specifically averred that the “Bank approved of *185 Mayo’s self-dealing” and gave an example of a transaction pursuant to which Mayo allegedly sold trust property to an entity known as the Mayo Family Limited Partnership for less than its appraised value.

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Cite This Page — Counsel Stack

Bluebook (online)
722 N.E.2d 114, 131 Ohio App. 3d 180, Counsel Stack Legal Research, https://law.counselstack.com/opinion/orvets-v-national-city-bank-northeast-ohioctapp-1999.