Hamm v. Thunderbird Global Development, LLC

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF OHIO

EASTERN DIVISION

H. JOSEPH HAMM, et al.,

Plaintiffs, :

Case No. 2:22-cv-2068

v.

Judge Sarah D. Morrison

Magistrate Judge Kimberly A.

Jolson

THUNDERBIRD GLOBAL

DEVELOPMENT, LLC, et al., :

Defendants.

OPINION AND ORDER

Plaintiffs1 filed this action in the Jefferson County Court of Common Pleas,

asserting claims for Ineffective Transfer, Fraudulent Transfer, Conversion, Fraud,

and Conspiracy. (Compl., ECF No. 3.) A short time later, Defendants2 removed the

matter to this Court (ECF No. 1) and filed their Counterclaim for

Restitution/Unjust Enrichment, Conversion, and Slander of Title (Countercl., ECF

No. 2).

The case is now before the Court for consideration of Plaintiffs’ Motion to

Dismiss the Counterclaim. (Mot., ECF No. 9.) Defendants responded in opposition

(Resp., ECF No. 13) and Plaintiffs filed a reply (Reply, ECF No. 19). On the Court’s

1 Plaintiffs are H. Joseph Hamm; D. Joyce Yazombek, as Trustee of the D.

Joyce Yazombek Revocable Living Trust; David A. Ellison; Elizabeth L. Ellison; and

Alex J. Kolb, II. (Compl.)

2 Defendants are Thunderbird Global Development, LLC, TEXANOUSHA

LLC, Cheyenne Oil Gas & Minerals, LLC, Christopher E. Banik, and Anousha

Banik. (Compl.)

request (ECF No. 26), the parties filed additional briefs on whether Colorado River

abstention applies and, if not, whether the case should be stayed pending resolution

of ongoing state court litigation. (See ECF Nos. 27, 28, 30, 32.) For the reasons set

forth below, Plaintiffs’ Motion is GRANTED in part and DENIED in part.

I. BACKGROUND

The following draws from the allegations in the Counterclaim3 and the

dockets and filings in related state and bankruptcy court proceedings.4

A. January 2019–May 2021: The Belmont County Litigation

In January 2019, Plaintiffs filed suit against Thunderbird and others in the

Belmont County Court of Common Pleas over the ownership of certain oil and gas

rights in Belmont County, Ohio (the “Belmont County Litigation”). (Countercl., ¶

17.) See Hamm v. The Lorain Coal & Dock Co., No. 19-CV-17 (Ohio Ct. C.P. filed

Jan. 14, 2019). A Belmont County jury returned a $ 1.3 million verdict against

Thunderbird alone. (Countercl., ¶ 20.) The court awarded Plaintiffs an additional

$ 133,037.75 in attorney fees. (Id., ¶ 21.) The verdict and fee award are collectively

referred to as the “Belmont Judgments.” Plaintiffs recorded certificates evidencing

3 The factual allegations, but not legal conclusions, in the Counterclaim are

considered as true for purposes of the pending motion. See Gavitt v. Born, 835 F.3d

623, 639–40 (6th Cir. 2016).

4 This Court can consider and take judicial notice of facts in the public record

without converting the Motion to Dismiss into one for summary judgment. See

Scarso v. Cuyahoga Cty. Dep’t of Human Services, 1990 WL 169645, at *2 (6th Cir.

1990) (“In determining the legal efficacy of plaintiffs complaint, the lower court

properly took judicial notice of facts in the public record, specifically the records of

state court proceedings.”) (citations omitted).

the Belmont Judgments in Belmont and Monroe Counties (the “Certificates of

Judgment”). (Id., ¶¶ 24–25.)

Thunderbird appealed the Belmont Judgments to the Seventh District Court

of Appeals. (Id., ¶ 23.) See Hamm v. The Lorain Coal & Dock Co., No. 20 BE 0030

(Ohio Ct. App. filed Oct. 9, 2020). Though Thunderbird moved to stay execution of

the Belmont Judgments or reduce the required bond, those motions were denied.

(Resp., 2.)

B. May 2021–February 2022: The Bankruptcy Proceedings

Unable to satisfy the Judgments or post bond, Thunderbird filed for Chapter

11 Bankruptcy. (Countercl., ¶ 28.) See In re Thunderbird Global Development LLC,

2:21-bk-03962-DPC (Bankr. D. Ariz. filed May 20, 2021). Thunderbird continued to

operate its business—including buying and selling mineral rights—while the

bankruptcy was pending. (See Countercl., ¶¶ 29–33.) On December 15, 2021,

Thunderbird sold certain oil and gas rights in Jefferson County, Ohio (the “Stringer

Interest”) to TEXANOUSHA. (Id., ¶ 34.)

Thunderbird’s bankruptcy was dismissed effective February 15, 2022. (Id.,

¶ 39.) Before the case was closed, the Bankruptcy Court issued a Payment Order

directing Thunderbird to transfer $ 67,856.33 (the “Funds”) to Plaintiffs, through

bankruptcy counsel.5 (Id., ¶ 40.) See also In re Thunderbird, 2:21-bk-03962-DPC

(Bankr. D. Ariz., ECF No. 123). Thunderbird complied (Countercl., ¶ 41), but later

5 Pursuant to the Payment Order, an additional $ 9,000 was paid to the

Trustee. (Countercl., ¶ 40.) See also In re Thunderbird, 2:21-bk-03962-DPC (Bankr.

D. Ariz., ECF No. 123).

moved to have the Funds returned, see In re Thunderbird, 2:21-bk-03962-DPC

(Bankr. D. Ariz., ECF No. 130). The Bankruptcy Court denied the motion. Id.

(Bankr. D. Ariz., ECF No. 138).

C. March 2022–Present: Concurrent Federal and State Litigation

1. Belmont County Litigation

On March 30, 2022, Ohio’s Seventh District Court of Appeals reversed the

Belmont Judgments. Hamm, No. 20 BE 0030, 2022 WL 1166615, at *12 (Ohio Ct.

App. Mar. 30, 2022) (the “Reversal Decision”), reh’g denied, 2022 WL 3076220 (Ohio

Ct. App. July 5, 2022), appeal denied, 199 N.E.3d 554 (table) (Ohio 2022). The

Belmont County Litigation was remanded for a new trial. Id.

On remand, the parties filed several motions concerning the appropriate

disposition of the Funds. Plaintiffs first filed a Combined Motion for Interpleader of

Funds or Appointment of a Receiver, to Maintain the Status Quo, and to Stay the

New Trial. The Belmont County Court of Common Pleas sustained Plaintiffs’

motion and, on June 13, 2022, ordered the Funds to “be paid to the Belmont County

Clerk of Courts . . . to be retained” until the court’s further order. (Id., PAGEID

# 722–24.)

Thunderbird then filed a Motion for Restitution or, in the Alternative, Motion

for Reconsideration of the Judgment Entry filed June 13, 2022. The Belmont

County court overruled Thunderbird’s motion, holding:

• The Funds were paid pursuant to the Payment Order and in partial

satisfaction of the Belmont Judgments. Accordingly, Thunderbird’s

request for return of the Funds was denied;

• In the event the Ohio Supreme Court declined to hear Plaintiffs’ appeal

from the Reversal Decision, Plaintiffs were directed to file releases of the

Certificates of Judgment recorded in Belmont and Monroe Counties.6

Thunderbird’s request for restitution relating to the release of those

certificates was therefore conditionally sustained; and

• The Belmont County Clerk of Courts was appointed receiver of the Funds,

and Thunderbird’s motion for reconsideration of the June 13, 2022

Judgment Entry was denied.

(ECF No. 31-1, PAGEID # 726–27.)

The Belmont County Litigation is set for a new trial on July 13, 2023. (See

ECF No. 28-4.)

2. Federal Litigation

Less than a month before the Reversal Decision issued, Plaintiffs filed this

lawsuit, principally alleging that the December 2021 Stringer Interest transfer was

fraudulent. (Compl.) Six weeks later (a month after the Reversal Decision issued),

Defendants removed the action to this Court and filed their Counterclaim. (ECF

Nos. 1, 2.)

The Counterclaim asserts Defendants’ claims against Plaintiffs for

Restitution/Unjust Enrichment (Count I), Conversion (Count II), and Slander of

Title (Count III). (Countercl.) These claims stem from four alleged wrongs:

(1) Plaintiffs’ failure to release the Certificates of Judgment after the Reversal

Decision (see id., ¶¶ 51, 54, 58); (2) Plaintiffs’ failure to return the Funds after the

6 In a January 17, 2023 Brief on the application of the Colorado River

abstention doctrine, Plaintiffs state that they “released the applicable Judgment

Liens after the Ohio Supreme Court declined jurisdiction” of their appeal. (ECF No.

28, 4.) The brief does not include copies of any filings or recorded documents

accomplishing that purpose, however.

Reversal Decision (see id., ¶¶ 53, 54, 57); (3) Plaintiffs’ failure to dismiss its

Complaint in this litigation after the Reversal Decision (see id., ¶ 56, 59); and (4)

Plaintiffs’ February 2022 letter (the “Ascent Letter”) to Thunderbird’s lessee, Ascent

Resources – Utica, LLC, “contain[ing] slanderous and untrue statements regarding

Thunderbird’s title” to Ascent’s leased interest, and Plaintiffs’ further failure to

inform Ascent of the Reversal Decision (see id., ¶¶ 45–50). Plaintiffs now move to

dismiss each claim. (Mot.)

II. MOTION TO DISMISS THE COUNTERCLAIM

Federal Rule of Civil Procedure 8(a) requires a plaintiff to plead each claim

with sufficient specificity to “give the defendant fair notice of what the claim is and

the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555

(2007) (internal alteration and quotations omitted). A complaint which falls short of

the Rule 8(a) standard may be dismissed if it fails to state a claim upon which relief

can be granted. Fed. R. Civ. P. 12(b)(6). The Supreme Court has explained:

To survive a motion to dismiss, a complaint must contain sufficient

factual matter, accepted as true, to state a claim to relief that is

plausible on its face. A claim has facial plausibility when the plaintiff

pleads factual content that allows the court to draw the reasonable

inference that the defendant is liable for the misconduct alleged. The

plausibility standard is not akin to a probability requirement, but it

asks for more than a sheer possibility that a defendant has acted

unlawfully. Where a complaint pleads facts that are merely consistent

with a defendant’s liability, it stops short of the line between

possibility and plausibility of entitlement to relief.

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal citations and quotations

omitted). The complaint need not contain detailed factual allegations, but it must

include more than labels, conclusions, and formulaic recitations of the elements of a

cause of action. Directv, Inc. v. Treesh, 487 F.3d, 471, 476 (6th Cir. 2007).

“Threadbare recitals of the elements of a cause of action, supported by mere

conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678 (citing Twombly, 550

U.S. at 555).

A. The Counterclaim fails to state a claim for Restitution/Unjust

Enrichment (Count I) or Conversion (Count II).

Defendants allege that Plaintiffs’ failure to return the Funds after the

Reversal Decision constitutes both unjust enrichment and conversion. (Countercl.,

¶¶ 62–81.) Plaintiffs argue that Defendants fail to state either claim. (Mot.) The

Court agrees.

Under Ohio7 law, the “elements of a conversion cause of action are

(1) plaintiff’s ownership or right to possession of the property at the time of the

conversion; (2) defendant’s conversion by a wrongful act or disposition of plaintiff’s

property rights; and (3) damages.” Lee v. Ohio Educ. Ass’n, 951 F.3d 386, 393 (6th

Cir. 2020) (internal quotation marks and citation omitted). And the elements of

unjust enrichment are: “(1) a benefit conferred by a plaintiff upon a defendant;

(2) knowledge by the defendant of the benefit; and (3) retention of the benefit by the

defendant under circumstances where it would be unjust to do so without

7 Federal courts sitting in diversity apply state substantive law. Erie R. Co. v.

Tompkins, 304 U.S. 64 (1938). The forum state’s choice-of-law rules determine

which state’s substantive law will apply. Miller v. State Farm Mut. Auto. Ins. Co.,

87 F.3d 822, 824 (6th Cir. 1996). Where, as here, “‘neither party argues that the

forum state’s choice-of-law rules require the court to apply the substantive law of

another state, the court should apply the forum state’s substantive law.’” Wilkes

Assocs. v. Hollander Indus. Corp., 144 F. Supp. 2d 944, 949 n.4 (S.D. Ohio 2001)

(quoting ECHO, Inc. v. Whitson Co., Inc., 52 F.3d 702, 707 (7th Cir. 1995)).

Consequently, the Court applies Ohio substantive law.

payment[.]” Johnson v. Microsoft Corp., 834 N.E.2d 791, 799 (Ohio 2005) (quoting

Hambleton v. R.G. Barry Corp., 465 N.E.2d 1298 (Ohio 1984)).

The Funds were paid to Plaintiffs in partial satisfaction of the then-valid

Belmont Judgments, and pursuant to an Order of the Bankruptcy Court. Unable to

dispute that Plaintiffs legally came into possession of the Funds, Defendants argue

that they became entitled to the Funds’ return “at the time the Reversal Decision

was rendered.” (Resp., PAGEID # 582.) In other words, Defendants would have the

judicial system make a “hot potato” of the Funds, bouncing them back-and-forth

between the parties with each entry on the appeals court’s docket. Crucially,

though, Defendants cannot demonstrate a right to possession of the Funds at the

time of the alleged conversion or Plaintiffs’ unjust retention of them. Promptly upon

receipt of the Reversal Decision, Plaintiffs moved the Belmont County court to

interplead the Funds or to appoint a receiver. The court could have denied

Plaintiffs’ motion, and ordered that the Funds be returned to Defendants. But it

chose, instead, to order the Funds be deposited with the Clerk of Courts. That was

perfectly appropriate, given the posture of the Belmont County Litigation.

Plaintiffs’ motion to dismiss Defendants’ claims for Restitution/Unjust

Enrichment (Count I) and Conversion (Count II) is GRANTED. Those claims are

hereby DISMISSED.

B. Defendants’ claim for Slander of Title (Count III) survives to

the extent it is based on the Ascent Letter.

Defendants further allege that Plaintiffs committed slander of title by

refusing to release the Certificates of Judgment when the Reversal Decision was

entered, by maintaining the instant action, and by sending the Ascent Letter.

Except as to the Ascent Letter, Defendants fail to state a claim.

“Slander of title is a tort action which may be brought against any one who

falsely and maliciously defames the property, either real or personal, of another,

and thereby causes him some special pecuniary damage or loss.” Green v. Lemarr,

744 N.E.2d 212, 224 (Ohio Ct. App. 2000) (internal quotations and citation omitted).

The claim requires proof that “(1) there was a publication of a slanderous statement

disparaging claimant’s title; (2) the statement was false; (3) the statement was

made with malice or made with reckless disregard for its falsity; and (4) the

statement caused actual or special damages.” McClure v. Fischer Attached Homes,

882 N.E.2d 61, 70 (Ohio Ct. App. 2007) (quotation and citation omitted).

Failing to release Certificates of Judgment. Defendants first allege that

Plaintiffs committed slander of title by failing to release the Certificates of

Judgment when the Reversal Decision was issued. “The relevant time period for a

cause of action for slander of title is the time of publication”—ordinarily, when the

allegedly slanderous document is filed with the county recorder. Cairelli v. Brunner,

No. 18 AP 000164, 2019 WL 2005922, at *5 (Ohio Ct. App. May 7, 2019); see also

Green, 744 N.E.2d at 224 (“Typically, slander-of-title cases involve documents filed

against a particular piece of property by parties who claim an interest in the

property.”). The Certificates reflected valid judgments at the time they were

recorded. Accordingly, they cannot form the basis of Defendants’ claim. Defendants’

argue for the opposite conclusion, citing Mann v. Resolution T Co., L.L.C., No. 2015-

CA-5, 2014 WL 2567993 (Ohio Ct. App. June 6, 2014) for support. But Mann is

distinguishable. There, the court overturned summary judgment on a slander of

title claim by noting that the offending lien “may have been accurate when it was

filed, [but] it became false once the debt was paid and [defendant] refused to remove

the lien.” Id. at *7–8. No such circumstance is alleged here. Plaintiffs sought

reconsideration of, and thereafter appealed, the Reversal Decision. Until the Ohio

Supreme Court declined to exercise jurisdiction, the Certificates of Judgment

reflected valid judgments.

Filing suit. Defendants next allege that Plaintiffs’ Complaint in this lawsuit

is slanderous to TEXANOUSHA’s title to the Stringer Interest. Defendants’

Response offers nothing supporting this leg of their slander of title claim. Though

Defendants have arguably abandoned the claim, see Doe v. Bredesen, 507 F.3d 998,

1007–08 (6th Cir. 2007), Plaintiffs are entitled to Ohio’s “litigation privilege [that]

provides absolute immunity . . . from future lawsuits for statements made during

and relevant to judicial proceedings.” Reister v. Gardner, 174 N.E.3d 713, 715–16

(Ohio 2020) (citations omitted) (emphasis omitted); see also State v. Brown, No.

2021-0392, 2022 WL 17478559, at *4 (Ohio 2022) (publication forthcoming).

Ascent Letter. Finally, Defendants allege that Plaintiffs sent a letter to Ascent

containing slanderous statements about Thunderbird’s title to the interest that

Ascent leased from Thunderbird. Plaintiffs argue only that Defendants “cannot

establish any damages from th[is] alleged slander.” (Mot., 11.) But the

Counterclaim alleges that the Ascent Letter caused Ascent to deposit lease

payments in a suspense account, thereby depriving Thunderbird of access to those

funds. (See Countercl., ¶ 48.) This allegation is sufficient to survive a motion to

dismiss.

Plaintiffs’ motion to dismiss Defendants’ claim for Slander of Title (Count III)

is GRANTED to the extent such claim is based on the Certificates of Judgment and

the filing of this lawsuit and DENIED to the extent it is based on the Ascent Letter.

Accordingly, the claim is hereby DISMISSED in part.

III. ABSTENTION OR STAY

Because the Belmont County Litigation is ongoing and involves many of the

same parties (or their privies), the Court sought the parties’ input on:

• whether the Colorado River abstention doctrine applies, see Colorado

River Water Conservation Dist. v. United States, 424 U.S. 800 (1976)

(allowing a federal court to refrain from exercising jurisdiction for reasons

of “wise judicial administration” and “comprehensive disposition of

litigation” when there is a concurrent parallel action in a state or foreign

court), or

• whether this case should otherwise be stayed pending the outcome of the

Belmont County Litigation.

(ECF No. 26.) Neither party seeks the Court’s abstention or a stay. (See ECF Nos.

27, 28, 30, 32.) Accordingly, the matter will proceed according to the case

management schedule set on November 15, 2022 (see ECF No. 24). The deadline for

submitting dispositive motions will not be continued.

IV. CONCLUSION

For the reasons set forth above, Plaintiffs’ Motion to Dismiss the

Counterclaim is DENIED as to Defendants’ Slander of Title (Count III) claim to the

extent such claim is based on the Ascent Letter. The balance of the Motion is

GRANTED.

IT IS SO ORDERED.

/s/ Sarah D. Morrison

SARAH D. MORRISON

UNITED STATES DISTRICT JUDGE