COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 68715 PATRICIA A. CORCORAN, ET AL. : : ACCELERATED DOCKET Plaintiff-appellant : : JOURNAL ENTRY -vs- : AND : OPINION VICTORIA M. LINDIC, ET AL. : : PER CURIAM Defendant-appellee : : DATE OF ANNOUNCEMENT OF DECISION: SEPTEMBER 28, 1995 CHARACTER OF PROCEEDING: Civil appeal from Court of Common Pleas Case No. CV-270273 JUDGMENT: Affirmed in Part Reversed in Part and Remanded. DATE OF JOURNALIZATION: APPEARANCES: For plaintiff-appellant: For defendant-appellee: ROBERT M. DUNN, ESQ. EDWARD HEINDEL, ESQ. MICHAEL P. MCGUIRE, ESQ. 800 Standard Building 3130 Mayfield Road, #GW105 1370 Ontario Street Cleveland Hts., Ohio 44118 Cleveland, Ohio 44113 - 2 - PER CURIAM: Sister and brother, Patricia Corcoran and Peter J. Lindic III, plaintiffs-appellants, appeal a judgment of the Court of Common Pleas which granted the Civ.R. 12(B)(6) Motion of their mother and sister, Victoria M. Lindic and Laura Lindic Brodek, Defendants- Appellees. The trial court dismissed their action which sought declaratory judgment that a purchase money resulting trust came into existence in July, 1954 when their father purchased and titled certain real property in himself and their mother with proceeds from the sale of U.S. Savings Bonds alleged to belong to them. Appellants advance the following assignment of error in their accelerated appeal. I THAT THE COMPLAINT HEREIN WAS SUFFICIENT TO STATE A CLAIM UPON WHICH RELIEF COULD BE GRANTED AND, THEREFORE, THE TRIAL COURT WAS IN ERROR WHEN IT GRANTED THE DEFENDANTS' CIVIL RULE 12(B)(6) MOTION. Appellants claim that the trial court erred in granting appellees's Civ. R.12(B)(6) motion because their complaint was not, on its face, barred by the statute of limitations or the doctrine of laches and because it stated a claim for fraud and for the existence of a purchase money resulting trust. Appellants' argument is meritorious in part. Upon review, we find the trial court did not err in dismissing appellants' fraud claim as it was not pled with particularity - 3 - 1 pursuant to Civ.R. 9(B). However, we find the court did err in dismissing appellants' declaratory judgment action because the allegations stated in their complaint, to wit., that the property was purchased with their funds; that it was continuously held in recognition of their equitable rights and that they had no notice of repudiation until May 9, 1994 when they discovered their 2 3 mother's intent to sell the property must be taken as true and do 1 Appellants made a general allegation that Laura Brodek conspired with their mother to defraud them by telling them that only a fraction of the property would be sold when they had reason to believe the entire parcel would be sold. Appellants however, failed to state the time and place of this alleged communication and have further failed to establish that Ms. Brodek had any fiduciary duty to disclose information about the property as she is not named on the deed and had no funds invested in the property. 2 Appellants sued the City of Highland Heights for entering into negotiations to purchase the property from Victoria Lindic. However, the trial court granted the City's Civ.R. 12(B)(6) motion based upon appellants' failure to plead their claim with particularity pursuant to Civ.R. 9(B). Appellants have not elected to appeal this ruling. 3 For a court to dismiss a complaint for failure to state a claim upon which relief can be granted under Civ.R. 12(B)(6), it must appear beyond doubt from the complaint that the plaintiff can prove no set of facts entitling him to recovery. Greely v. Miami Valley Maintenance Contrs., Inc. (1990), 49 Ohio St.3d 228, 230, 551 N.E.2d 981, 982; O'Brien v. Univer. Community Tenants Union, Inc. (1975), 42 Ohio St. 3d 242, 245, 71 O. O.2d 223, 224, 327 N.E.2d 753, 754. While relating of facts which gave rise to the claim is not necessary to survive a Civ.R. 12(B)(6) motion, the complaint must, at the very least state the operative grounds which created the claim. Stephens v. Boothby (1974), 40 Ohio App.2d 197, 198-199, 69 O.O.2d 189. 189-190, 318 N.E.2d 535, 536. - 4 - state operative grounds consistent with a claim for the existence 4 of purchase money resulting trust. Appellants' complaint is also sufficient, on its face, to overcome appellees' four-year statute of limitations defense as appellees' contention that the statute began to run in 1954, 1980 and 1984 when the property was purchased, when it became an estate in the entireties and when title passed to their mother upon their father's death is erroneous and contrary to law. A purchase money resulting trust is created, not repudiated or breached when title to property is taken by one 5 party and consideration is paid by the other. See, Lewis v. When a court entertains a motion to dismiss, the complaint is to be construed in a light most favorable to the plaintiff and the allegations contained therein taken as admitted. Slife v. Kundtz Properties, Inc., (1974), 40 Ohio App.2d 179, 182, 69 0.0.2d 178, 180, 318 N.E.2d, 557, 560. Gumpl v. Bost (1993), 88 Ohio App.3d 325, 327. Mitchell v. Lawson (1988), 40 Ohio St.3d 190, 192. 4 Under the rules of notice pleading a plaintiff is not required to prove his or her case at the pleading stage. York v. Ohio State Highway Patrol, (1991), 60 Ohio St.3d 143, 145. Consequently, as long as there is a set of facts, consistent with the plaintiff's complaint, which would allow the plaintiff to recover, the court may not grant a defendant's motion to dismiss. Id., at 145. 5 The resulting trust of the purchase money type arises at the time of the delivery of the deed or other instrument of conveyance passing title to one other than the payor. The trust is not dependent on a decree of court for its establishment. The court may later recognize it and enforce it but equity - 5 - 6 Akerberg (1954), 100 Ohio App. 209; John Deere Indust. Equip. Co. v. Gentile (1983), 9 Ohio App. 3d 251 and In Re Bernice Tice (Feb. 14, 1989) Jefferson App. No. 86-E-430, unreported. Additionally, the clarification and passing of title cited by the appellees, represent merely ministerial events. These events do not, without more, constitute an open repudiation of the trust. The presumption treats it as having been in existence from the time of the conveyance. Bogert, The Law of Trusts and Trustees, Resulting Trusts (2 Ed. 1995) Chapter 23, Section 454 at 259. Where a child pays for property and vests title in a parent, the courts have presumed a trust for the child and not a gift to the parent. Id., Section 460 at 369. 6 Where a daughter enters into a oral agreement with her parents to join them in the purchase of real estate to be used as a home by her parents, or the survivor, during their respective lives, she to furnish a portion of the purchase price of the property, for which she is to own an undivided interest in proportion to the part of the purchase price which she advances and the title to the premises to be taken in the name of the father, and at the time of such purchase, her parents and her brother have full knowledge of the terms of the purchase agreement and of that part of the consideration which is furnished by the daughter; a resulting trust is created and where the father convey title in fee simple to the mother, the mother takes such title as trustee for the daughter for her interest therein... . Id., paragraph one of the syllabus. - 6 - is against repudiation, particularly where a trust is alleged to result between or among family members. See, Lewis, supra, at 215. Since, appellants discovered the proposed sale of the property on May 9, 1994 and filed their complaint on May 10, 1994, their action is timely and appellees' statute of limitation and laches defenses 7 8 must fail. See, also Campbell v. Kirby (1976) 195 Neb. 610. 7 The elements of a laches defense are:(1) conduct on the part of the defendant giving rise to the situation of which complaint is made and for which the complainant seeks a remedy; (2) delay in asserting the complain- ant's rights, the complainant having had knowledge or notice of defendant's conduct and having been afforded an opportunity to institute a suit; and (3) lack of knowledge or notice on the part of the defendant that the complainant would assert the right on which he bases his suit; and (4) injury or prejudice to the defendant in the event relief is accorded to the complainant. Smith v. Smith (1950), 168 Ohio St. 447, 455. (citations omitted) Stevens v. Natl. City Bank (1989), 45 Ohio St.3d 276, 285. Appellee's motion to dismiss fails to prove the affirmative defense of laches. Specifically, appellees have presented no evidence that appellants had notice of an affirmative repudiation of the trust prior to May, 1994 and have also failed to prove that they were without knowledge or notice that appellants would sue for breach of such trust. 8 In Campbell, the Supreme Court of Nebraska, citing 76 Am.Jur.2d, Trusts, Section 206, Pg. 436 stated that: The presumption of a purchase money trust arises in favor of a person from whom the consideration comes for a conveyance of property to another. Since men in their affairs seldom give consideration to receive nothing, the intent to make a trust is presumed. This presumption is rebuttable by proof of a contrary intention of a person - 7 - Accordingly, we affirm the dismissal of appellants' fraud claim against Laura Brodek but reverse the dismissal of their declaratory judgment action. We remand this cause for further proceedings which will enable the trial court to declare whether a purchase money resulting trust exists in appellants' favor and if so, whether Victoria M. Lindic's proposed sale of the property constitutes a breach of that trust. It is so ordered. supplying the consideration. Id., at 796. - 8 - This cause is affirmed in part, reversed in part and remanded for proceedings consistent with the opinion herein. It is, therefore, ordered that appellants recover of appellee their costs herein taxed. It is ordered that a special mandate issue out of this Court directing the Common Pleas 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. _________________________________ JOHN T. PATTON, CHIEF JUSTICE CONCURRING IN JUDGMENT ONLY _________________________________ ANN DYKE, JUDGE _________________________________ JOSEPH J. NAHRA, JUDGE N.B. This entry is made pursuant to the third sentence of Rule 22(D), Ohio Rules of Appellate Procedure. This is an announcement of decision (see Rule 26). Ten (10) days from the date hereof this document will be stamped to indicate journalization, at which time .