Medina County Courthouse

Sunday, May 19, 2013

Ninth Appellate District Opinions from Wayne County Released on May 13, 2013

The Court of Appeals for the Ninth Appellate District released two opinions on appeals out of Wayne County. 

Weygandt v. Ward, 2013-Ohio-1937 was a case involving an appeal from a decision of the Wayne County Common Pleas Court. The facts were as follows:

Fred Ward died in 1988, leaving his wife a life estate in his property. His will provided that, upon his wife’s death, his real property would pass to his son Virgil, who also received a life estate. The will provided that Virgil could “sell and dispose of any or all of said real property for such prices and upon such terms as he in his own discretion may deem advisable * * *.” If Virgil sold any of the land, however, he had to divide the proceeds into six parts. Virgil was allowed to keep two of the parts but he had to give the others to his four sisters or their descendants.

One of the properties that Virgil received after Mr. Ward’s wife died was a 240-acre farm that he and his father had farmed together. Virgil continued farming the land for several years until it became too difficult for him. He began renting the land to his niece and her husband, Diane and Roger Baker, who lived nearby.

Desiring to keep the 240-acres together as a family farm, Virgil later decided that he wanted the Bakers to have the land. After consulting with a lawyer, he learned that he could not give the land to the Bakers, but could sell it to them. According to the Bakers, Virgil proposed that he sell the land to them for $1000 an acre, contingent on it remaining a farm and their letting him live on the land until his death. The Bakers agreed to those terms. They executed a sales agreement and mortgage, under which the Bakers would pay $240,000 for the property and Virgil would receive the first $50,000 in mortgage payments to reimburse him for improvements he had made to the farm with the rest to be divided between him and his sisters as provided in Fred Ward’s will.

After learning about the sale, some of Virgil’s sisters and their descendants sued Virgil, the Bakers, and anyone else who might have an interest in the land, seeking a declaration that the sale was void. The trial court dismissed the action because it determined that Fred Ward’s will gave Virgil power to sell the land under whatever terms he desired. This Court reversed, however, because we determined that, under the Ohio Supreme Court’s holding in Johnson v. Johnson, 51 Ohio St. 446 (1894), Virgil owed a fiduciary duty to his sisters and their descendants “as their implied, quasi trustee.” Weygandt v. Ward, 9th Dist. No. 09CA0050, 3 2010-Ohio-2015, ¶ 12. We remanded the case to the trial court for it to determine whether Virgil acted within his authority when he conveyed the property to the Bakers. Id. at ¶ 13, 15.

At trial, Virgil’s sisters presented evidence that, at the time Virgil sold the property for $240,000, its fair market value was $1,170,000. They argued that, even though Virgil had discretion to sell the land at “such prices and upon such terms as he * * * may deem advisable,” he had breached his duty of good faith to them. The trial court agreed, concluding that Virgil “did not have the authority to convey the real property for insufficient consideration, reserve a life estate for himself, grant an agricultural easement on the property, and take a note and mortgage on the property whereby he received the first $50,000 in payments before any monies were to be paid to Plaintiffs and others.” It, therefore, declared all of the documents that were involved in the conveyance null and void. 

Virgil and the Bakers filed the appeal alleging seven assignments of error. The first assignment of error concerned the trial court's decision that Virgil didn't have the power to sell the land at such a price and on such terms as he decided. The Court of Appeals overruled this assignment of error. The Court of Appeals overruled this assignment of error because under the law of the case resulting from the prior appeal Virgil didn't have the right to question the Court of Appeals determination that he didn't have unbridled discretion to sell the property. 

The second assignment of error concerned whether the trial court erred in finding that the consideration that the Bakers paid Virgil was insufficient. The Court of Appeals affirmed the trial court's decision on the theory that when he was given a life estate, Virgil became a quasi-trustee to manage the property as a fiduciary to his sisters. The Court of Appeals pointed out that although its language concerning the existence of such a duty was dicta in the first appeal decision, the trial court acted correctly in following that language. 

The third assignment of error concerned whether the trial court had failed to ascertain the intent of the testator in interpreting the will. The Court of Appeals held that the law of the case meant that the trial court had to consider Virgil as a quasi-trustee, thus making testator's intent irrelevant. 

The fourth assignment of error was that the trial court should have awarded damages instead of invalidating the sale of the Ward farm. The Court of Appeals sustained this assignment of error because under Ohio law while a trial court can void a transfer by a fiduciary acting in violation of his or her fiduciary duties, a purchaser who makes a bona-fide purchase without knowledge of the violation of the fiduciary duties may retain the property. The Court of Appeals remanded for further evidence regarding those issues. 

The fifth assignment of error dealt with whether the trial court erred in admitting parol evidence. The Court of Appeals found that it had not. 

The sixth assignment of error concerned whether the trial court erred in admitting evidence of the value of a fee simple interest in the Ward farm. The Court of Appeals held that it did not. 

The seventh assignment of error concerned whether the trial court erred in issuing a protective order to bar depositions of out of state witnesses in Ohio. The appellate court held that it did not. 

The other decision regarding an appeal from a Wayne County case was Daugherty v. Daugherty, 2013-Ohio-1934. This case also involved an appeal from a domestic relations case. In this case, the Court of Appeals affirmed in part and reversed in part. 

In this case the wife filed an appeal which listed two assignments of error.  In discussing the first assignment of error, the appellate court wrote the following: "The crux of Wife’s argument is that the parties had not reached an agreement regarding the allocation of certain real property in which Husband had an interest. She argues that, accordingly, the trial court erred by enforcing the parties’ alleged consent agreement to temporary orders regarding such property while the divorce action was pending." 

The Court of Appeals went on to note that at trial the wife stated that the only issue in dispute was the amount of spousal support. The Court found that making this stipulation acted as a waiver of the issue raised in the first assignment of error. Consequently that assignment of error was overruled. 

In the second assignment of error the appellate court dealt with the issue of whether the amount of spousal support awarded by the trial court was unreasonable. The Court of Appeals found that it was and reversed the spousal support award and remanded the case back to the trial court for proceedings consistent with the opinion. 

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