Binder v. Trinity OG Land Development and Exploration, LLC et al

Filing 33

Memorandum Opinion and Order For the reasons stated, the Court grants Defendant's motion for judgment on the pleadings on all counts and dismisses the Complaint in its entirety 25 . Judge Benita Y. Pearson on 5/31/2012. (S,L) Modified docket relationship on 6/1/2012 (BR,S).

PEARSON, J.
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION
RALPH BINDER,
Plaintiff,
v.
TRINITY OG LAND DEVELOPMENT
AND EXPLORATION, LLC, et al.,
Defendants.

)
)
)
)
)
)
)
)
)
)

CASE NO. 4:11-cv-02621

JUDGE BENITA Y. PEARSON

MEMORANDUM OF OPINION AND
ORDER [Resolving ECF No. 25]

Before the Court is Defendants Trinity OG Land Development and Exploration, LLC and
Matthew Laine and Suzanne Laine’s Motion for Judgment on the Pleadings pursuant to Rule
12(c) of the Federal Rules of Civil Procedure. EFC No. 25. Defendants filed a motion for
judgment on the pleadings (EFC No. 25) to which Binder responded in opposition (EFC No. 27),
the Defendants replied (EFC No. 28), and Binder filed a sur-reply (EFC No. 32). The motion for
judgment on the pleadings is ripe for consideration.
For the reasons provided below, the Court grants Defendants Trinity OG Land
Development and Exploration, LLC and Matthew Laine and Suzanne Laine’s motion for
judgment on the pleadings and dismisses the Complaint in its entirety.
I. Factual and Procedural Background
Plaintiff Ralph Binder (“Binder”) filed a lawsuit against Defendants Trinity OG Land
Development and Exploration, LLC (“Trinity”) and Matthew Laine and Suzanne Laine
(collectively “Defendants”) alleging that Trinity entered into an oral agreement with Binder, in
which Binder agreed to identify landowners to Trinity with whom Trinity could negotiate to

obtain mineral rights. EFC No. 23 at 2, ¶ 10. Binder alleges that, in consideration, Trinity
agreed to pay Binder from $50.00 to $200.00 per acre for all land identified to Trinity, by Binder,
for which Trinity obtained mineral rights. Id. Binder alleges that the amount to be paid was no
less than $50.00 per acre and would be adjusted upward depending upon on the price Trinity paid
for the mineral rights and the price it obtained upon the sale of such rights. EFC No. 23 at 3, ¶
11. Binder alleges that, based upon his reliance on the agreement, Binder identified no fewer
than 10,000 acres of land to Trinity for which Trinity obtained mineral rights. EFC No. 23 at 3, ¶
12. Based upon the terms of the agreement, Binder alleges that he is entitled to compensation
from Trinity in the amount of at least $500,000. EFC No. 23 at 3, ¶ 13. Binder acknowledges
receiving a check from Trinity, on or about June 3, 2011, in the amount of $22,012.94. EFC No.
23 at 3, ¶ 14. However, Binder has declined to cash the check since, he alleges, it contains a
restrictive endorsement stating “Full & Final Referral Fee All OH/PA Acre” that is intended to
induce Binder to forfeit certain rights of his under the alleged agreement between himself and
Trinity. EFC No. 23 at 3, ¶¶ 15-17.
Defendants allege that Binder’s claims fail as a matter of law since Ohio law does not
permit a real-estate broker to seek compensation for referring interests in real estate unless the
broker is licensed at the time the referrals took place. EFC No. 25 at 1. Since Binder has not
claimed that he held a real-estate license at the time of the referrals, Defendants allege that all of
Binder’s claims are barred. EFC No. 25 at 1. Binder alleges that he was not acting as a realestate broker, but instead in a role similar to that of a “finder” in corporate acquisitions, and
therefore he was not required to hold a real-estate license at the time of the referrals. EFC No. 27
at 1-3. Defendants respond that Binder’s actions fall within the broad statutory definition of a
2

(4:11-CV-2621)
“real-estate broker” under Ohio Rev. Code § 4735.01(A)(7). EFC No. 28 at 2-3. Binder alleges
that “a genuine issue of material fact” exists as to whether his actions fall under the definition of
a real-estate broker under Ohio Rev. Code § 4735.01, and thus, Defendant is not entitled to
judgment on the pleadings. EFC No. 32 at 2.
II. Legal Standard
After the pleadings are closed but within such time as not to delay the trial, either party
may move for judgment on the pleadings. Fed. R. Civ. P. 12(c). A Rule 12(c) motion for
judgment on the pleadings is governed by the same legal standard as a Fed. R. Civ. P. 12(b)(6)
motion to dismiss for failure to state a claim upon which relief may be granted.1 Tucker v.
Middleburg-Legacy Place, 539 F.3d 545, 549 (6th Cir.2008). “For purposes of a motion for
judgment on the pleadings, all well-pleaded material allegations of the pleadings of the opposing

1

In deciding a motion to dismiss under Rule 12(b)(6), the Court must take all well-plead
allegations in the complaint as true and construe those allegations in a light most favorable to the
plaintiff. Erickson v. Pardus, 551 U.S. 89, 94 (2007) (citations omitted). “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.’” Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949, (2009) (quoting
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “While legal conclusions can provide
the framework of a complaint, they must be supported by factual allegations. When there are
well-pleaded factual allegations, a court should assume their veracity and then determine whether
they plausibly give rise to an entitlement to relief.” Id. at 1950. The factual allegations in the
complaint “must be enough to raise a right to relief above the speculative level.” Twombly, 550
U.S. at 555 (citing authorities).
In other words, claims set forth in a complaint must be plausible, rather than conceivable.
Twombly, 550 U.S. at 570. “[W]here the well-pleaded facts do not permit the court to infer more
than the mere possibility of misconduct, the complaint has alleged–but it has not ‘show[n]’–‘that
the pleader is entitled to relief.’” Iqbal, 129 U.S. at 1950 (citing Fed.R.Civ.P. 8(a)(2)).
However, “[w]hen there are well-pleaded factual allegations, a court should assume their veracity
and then determine whether they plausibly give rise to an entitlement to relief.” Id..
3

(4:11-CV-2621)
party must be taken as true, and the motion may be granted only if the moving party is
nevertheless clearly entitled to judgment.” Id. (quoting JPMorgan Chase Bank, N.A. v. Winget,
510 F.3d 577, 581 (6th Cir.2007)).
III. Analysis
According to the Ohio Revised Code:
No right of action shall accrue to any person, partnership, association, or corporation
for the collection of compensation for the performance of the acts mentioned in
section 4735.01 of the Revised Code, without alleging and proving that such person,
partnership, association, or corporation was licensed as a real estate broker or foreign
real estate dealer.

Ohio Rev. Code § 4735.21 (2011). As highlighted by the Defendants, § 4735.21 has been
“strictly enforced against persons who, although not licensed by Ohio, have sought to recover
brokerage commissions through litigation in Ohio.” Landmark Commercial Realty, Inc. v.
Developers Diversified, Ltd., 163 F.3d 389, 391 (6th Cir. 1998). In addition, the courts of this
state “have consistently held that an unlicensed broker cannot avoid the statute’s reach by
asserting equitable causes of action sounding in promissory estoppel, quantum meruit, or the
like.” Id. All four of Binder’s claims are premised upon Defendants’ alleged failure to fully
compensate him for identifying owners of land with whom Defendants could negotiate for the
purchase of mineral rights. EFC No. 23. As such, Binder’s ability to recover for breach of
contract, unjust enrichment, fraud, and negligent misrepresentation depend upon whether his
actions constituted those of a real estate broker under Ohio Rev. Code § 4735.01 and, thus,

4

(4:11-CV-2621)
whether his failure to hold a real estate license during the time of the referrals bars his claims for
compensation.
Binder alleges that he was not acting as a real estate broker during his dealings with the
Defendants and, therefore, he was not required to hold a real estate license during that time. EFC
No. 27 at 1. Binder claims that he did not “assist or direct in the procuring of prospects” but
rather “merely identified parcels of land that might result in Trinity’s acquisition of mineral
leases.” EFC No. 27 at 3. Binder claims that his role was not that of a real estate broker, but
instead similar to that of “a ‘finder’ in corporate acquisitions.” Id. In distinguishing a “finder”
from a “broker,” Binder cites Legros v. Tarr, 540 N.E.2d 257 (Ohio 1989). As mentioned by the
Defendants, however, Legros involved the acquisition of business entities, not real-estate
transactions. This distinction has been pointed out by the Ohio Court of Appeals. See Lefta, Inc.
v. The Peck Co., 1991 Ohio App. LEXIS 6236, *7 (Ohio Ct. App.1991) (not designated for
publication) (noting that “Legros dealt with misappropriation of information in the acquisition of
a business, and did not involve considerations of Chapter 4735.”). Therefore, Binder’s argument
that his actions constituted those of a finder, rather than a broker in real estate, are unsupported
by legal authority.
Even if Binder had presented controlling case law that distinguished the roles of a finder
and a broker in real estate transactions, the actions that Binder alleges in his second amended
complaint squarely fall within the broad definition of a real estate broker under Ohio Rev. Code §
4735.01. The Ohio Revised Code defines a “[r]eal estate broker” as including any person “who
for another” and “who for a fee, commission . . . or upon the promise of receiving or collecting a

5

(4:11-CV-2621)
fee, commission, or other valuable consideration” performs a specified function. Ohio Rev.
Code § 4735.01(A) (2011). One of these specified functions is directing or assisting “in the
procuring of prospects or the negotiation of any transaction . . . which does or is calculated to
result in the sale, exchange, leasing, or renting of any real estate.” Id. at § 4735.01(A)(7). Under
Ohio law, “[r]eal estate includes leaseholds as well as any and every interest or estate in land
situated in this state, whether corporeal or incorporeal, whether freehold or nonfreehold.” Id. at §
4735.01(B). Real estate, under Ohio law, has been held to include mineral rights, specifically
“rights to coal, oil and gas.” Colucy v. D & H Coal Co., 1961 Ohio Misc. LEXIS 261, *2 (Ohio
Ct. Of Common Pleas 1961).
The actions that Binder admits to in his second amended complaint illustrate that his
interactions with the Defendants fall under the statutory definition of a real-estate broker via §
4735.01(A)(7). In that complaint, Binder alleges that Trinity approached Binder and requested
that he “assist its efforts to acquire mineral rights leases for land in Northeastern Ohio.” EFC
No. 23 at 2, ¶ 8. Binder’s complaint further states that the parties “entered into an oral agreement
whereby Binder agreed to identify landowners to Trinity with whom it could negotiate to obtain
mineral rights.” EFC No. 23 at 2, ¶ 10. Based upon this agreement, Binder alleges that he
“identified no fewer than 10,000 acres of land to Trinity for which it obtained mineral rights.”
EFC No. 23 at 3, ¶ 12. Binder’s actions--identifying landowners and parcels of land to Trinity,
with the expectation that Trinity would pursue negotiations to obtain mineral rights--constitutes
assisting “in the procuring of prospects or the negotiation of any transaction . . . [which] is
calculated to result in the sale, exchange, leasing, or renting of any real estate.” Ohio Rev. Code

6