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Great Lakes Medieval Faire beer sales victory over Ohio Attorney General affirmed
TRACEY BLAIR
Legal News Reporter
Published: October 23, 2017
The operator of the Great Lakes Medieval Faire in Rock Creek did not misappropriate hundreds of thousands of dollars in beer proceeds as alleged by the Ohio Attorney General, according to a recent 11th District Court of Appeals decision.
The state and Trumbull Township Trustees appealed a ruling by a Trumbull Township trial court finding Lawrence Rickard did not owe those entities damages or attorney fees.
Case summary shows that Rickard operated the beer concession at the summer Faire from 2004 through 2008 to benefit various charitable trusts.
Previously, the Montville Fire Department in Geauga County was granted the exclusive right to procure permits, dispense beer and receive the net proceeds from the beer concession.
Trustees claimed Rickard demanded that unreasonable expenses and other unlawful payments from the Fire Fepartment be deducted from the beer proceeds, and that Rickard was refusing to allow the Fire Department to operate the concession.
Trustees also argued they had a right to the alleged unlawful payments and expenses during the time the Fire Department operated the concession.
Trustees asked the trial court to enter a declaratory judgment to enforce the contract and order Rickard to pay 50 percent of the beer concession net proceeds to them and the rest to the Fire Department. The proceeds would then be donated to the Auxiliary (less any net proceeds previously received by the Fire Department, plus any unlawful amounts previously paid to the defendants).
Trustees also wanted an order allowing the Auxiliary to operate and manage the beer concession, which has not been sold at the Faire since 2009.
Trustees claimed Rickard was unjustly enriched of $35,000, including $10,000 in labor from the Fire Department to build permanent structures and improve the Faire property.
Meanwhile, the Attorney General filed a cross-claim on behalf of charitable trusts that they alleged was supposed to receive 100 percent of the profits from the beer concession.
The Attorney General claimed Rickard misled the public that the proceeds would benefit the charities.
The state also requested the trial court impose a constructive trust over all wrongfully collected proceeds to redistribute the money to the appropriate charities. It also asked the trial court to attach Rickard’s assets “as a result of his fraudulent and criminal behavior.”
The Attorney General also requested civil penalties of $10,000 per day of violation, punitive damages, attorney fees and expenses.
In its final order in 2016, the trial court found no evidence a written contract ever existed. Therefore, no damages or attorney fees were awarded to trustees.
The trial court concluded that the charities should have received a total of $160,900 from 2004 through 2008. The defendants paid just $22,500 to the charities.
However, the lower court did not find the defendant liable for civil fines and punitive damages.
“The trial court found Defendants received little guidance from the state of Ohio regarding appropriate expenses and regulations,” 11th District Judge Diane V. Grendell wrote in her majority opinion. “… The trial court further found no evidence of malicious conduct or intentional violation of any fiduciary duties and no evidence of improper fund tracing from beer-sales profits to the purchase of specific assets. … The trial court also declined to impose a constructive trust because it was not established that Defendants committed some wrong or fraud that required confiscation of their property.”
The trial court found that the charities suffered a loss of $138,400 from 2004 through 2008. The judge awarded $118,900 to the Attorney General against Rickard, plus interest. Rickard was also enjoined from operating charitable beer sales in the future.
The appellate court affirmed the trial court’s entire judgment, with 11th District judges Thomas R. Wright and Colleen Mary O’Toole concurring.
“The law in Ohio is clear that the scope of the sanctions imposed is left to the sound discretion of the trial court,” Judge Grendell stated. “Notably, the trial court did not state that a contract did not exist nor did it state that Defendants were not liable on the contract. Rather, it found a year-to-year, oral agreement did exist and then determined … that both the Fire Department and Defendants complied with that agreement on a yearly basis and that no amount of contractual damages was proven for any other period of time.
“… It is apparent the Board was committed to receiving a windfall based on its interpretation of the trial court’s sanction, while the trial court was committed to reaching a just decision based on what the parties had actually agreed upon.”
The case is cited Trumbull Twp. Bd. of Trustees v. Rickard, 2017-Ohio-8143.