State ex rel. Dann v. R & J Partnership, Ltd.
Ohio Court of Appeals
2007 WL 4615956 (2007)
- Written by Abby Roughton, JD
Facts
Reece and Janice Powers ran R & J Partnership, Limited (Powers) (defendants), which rented and sold gambling equipment. Powers rented poker tables and other items to two charitable organizations for use in a Monte Carlo night and poker tournament. Powers also volunteered to help the organizations advertise and operate their events and solicit participants. The State of Ohio (the state) (plaintiff) brought an action against Powers, asserting violations of Ohio’s Gambling Act and Charitable Organizations Act based on Powers’s involvement in the organizations’ gambling activity. The state sought injunctive relief prohibiting Powers from assisting the organizations. The trial court granted a temporary restraining order but denied further injunctive relief, finding that (1) Powers likely had not violated the Gambling Act, because the organizations had not compensated Powers for promoting and operating the organizations’ gambling activities, and (2) Powers likely had not violated the Charitable Organizations Act, because Powers was an unpaid solicitor. The state appealed, asserting that Reece was acting as a fiduciary with respect to the organizations and that he had breached his fiduciary duties by, among other things, charging the organizations excessive fees and misappropriating the organizations’ funds. The state asserted that Reece had raised the poker-table rental charge from $50 to $150, though evidence showed that Reece’s rental charge depended on the anticipated size of the event and that the organizations’ poker tournament qualified for the higher charge. The state also asserted that Reece’s son had charged nearly $7,600 for flyers advertising the poker tournament, though the state did not provide any comparable pricing information. Additionally, the state claimed that Reece had improperly set poker-tournament registration fees and dictated the organizations’ expenses, though there was no evidence supporting those assertions, and the organizations themselves were pleased with the results of their events. The state also alleged that Reece and his family had purchased personal items using the organizations’ money, though the state failed to connect the money used on the personal purchases to the organizations’ charitable activities. Finally, the state presented evidence that Reece had borrowed $1,500 from poker-tournament proceeds and given the money to his son for a car-related expense. However, the record showed that Reece’s son had promptly repaid the charity.
Rule of Law
Issue
Holding and Reasoning (Brogan, J.)
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