1003 CIRDY CARPE! i BUTLER COUN| YCOURT OF COMMON PLEAS: CLERK OF COURTS BUTLER COUNTY, OHIO STEPHEN W. ELLIS 30 Hampton Road Chatham, NJ 07928, and STEPHEN W. ELLIS AS TRUSTEE, for the Irrevocable Trust of Claire Smith dated May 11, 2009 30 Hampton Road Chatham, NJ 07928, Case No.: (Refiling of CV 2008 03 1356) JUDGE CREHAN COMPLAINT FOR INJUNCTIVE RELIEF, QUIET TITLE, AND DAMAGES Plaintiff, vs 1717 N. Breiel Blvd. Middletown, OH 45042, and FRANCES A. ELLIS 1717 N. Breiel Blvd. i i i i THOMAS W. ELLIS i i i i i Middletown, OH 45042, i Defendants. Now comes the Plaintiff Stephen W. Ellis, individually and as Trustee for the Irrevocable Trust of Claire Smith dated May 11, 2009, and for his causes of action against Defendants Thomas Ellis and Frances A. Ellis, hereby states and alleges EACTUAL BACKGROUND 1. This is the refiling of an action that was originally captioned Ellis v. Ellis, Butler County, Ohio, Court of Common Pleas Case No. CV 2008 03 1356. Certain allegations and parties have been changed from the original action. 2. Claire J. Smith (‘Smith’) is an individual who resides at 1620 Cambridge Drive, Middletown, Ohio 45042, in Butler County, Ohio. Claire Smith is the mother of Defendant Thomas Ellis and Plaintiff Stephen Ellis.3. __ Plaintiff Stephen W. Ellis is an individual who resides at go Hampton’ Road, Chatham, New Jersey 07928. Stephen Ellis is the brother of Defendant ‘Thofastkilis.0 § 2699 4. Defendant Thomas Ellis (“Tom Ellis”) is an individual who resid wean Breiel Bld, Middletown, Ohio 45042, in Butler County, Ohio. Defendant Ellis isthe son of Smith and the brother of Plaintiff Stephen Ellis. Tom Ellis is also a licensed real estate broker in the State of Ohio, license no. 222538. 5 Defendant Frances A. Ellis (“Frances Ellis”) is an individual who resides at 1717 N. Breiel Blvd., Middletown, Ohio 45042, in Butler County, Ohio, Defendant Frances Ellis is the wife of Defendant Tom Ellis. Defendants Tom Ellis and Frances Ellis are jointly referred to herein as “Defendants.” Upon information and belief, Frances Ellis is employed ina marketing and sales capacity with Oracle Corporation. rity Gri from Smi 6. Claire Smith has executed a power of attorney granting her son, Plaintiff Stephen Ellis, the right to handle her financial affairs, including the management of the Seven Mile Apartments, discussed below. The most recent Power of Attorney was executed on May 7, 2009. 7. Claire Smith has executed an assignment of all of her claims relating to the Seven Mile Apartments and the recovery of such funds to Plaintiff Stephen Ellis pursuant to an Assignment Agreement dated April 18, 2008. 8. _ Inaddition, Claire Smith executed the Claire J. Smith Irrevocable Trust dated May 11, 2009 (the “Trust”) and named Stephen Ellis as Trustee. Pursuant to the Trust, the ‘Trustee is authorized to pursue and protect Claire Smith’s interests with respect to the assets in the Trust, including the Seven Mile Apartments and certain loans from Claire ‘Smith to Tom Ellis, discussed below.‘The Sale of the Seven Mile Apartments 9. Prior to 2003, Defendants Tom Ellis and Frances A. Ellis, purchased and owned a 20-unit apartment complex on Rt. 127 in the Village of Seven Mile, Wayne ‘Township, Butler County, Ohio (the “Seven Mile Apartments”). ‘The Seven Mile Apartments consist of ten (10) detached duplexes situated on ten (10) contiguous parcels. 10. Defendant Tom Ellis was the principal manager of the Seven Mile Apartments during the time that the Defendants owned the property. 11. In late 2003, Defendants arranged for the sale of the Seven Mile Apartments to Tom Ellis's mother, Claire Smith for a gross sales price of approximately $1,386,200.00. 12. As a result, in September through November 2003, the ten (10) deeds underlying the Seven Mile Apartments were transferred from Defendants to Claire Smith and duly recorded as such in Butler County, Ohio. 13. Claire Smith's 2003 purchase of the Seven Mile property was financed 100% by three separate mortgage lenders: Chase Home Finance, CitiMortgage, and Flagstar Bank. ‘As of November 2003, the three lenders collectively held ten (10) separate mortgages (totaling $1.25 million), each corresponding to one of the ten (10) detached structures and parcels on the property. 14. The 2003 sale of the Seven Mile Apartments by Tom and Frances Ellis to Claire Smith was for an inflated price and did not represent the value of the property. 1. The net cash-out generated by the sale of approximately $251,000.00 was conveyed to Defendants as the sellers. The ultimate disposition of these proceeds by Defendants is unknown. 16. Upon information and belief, Defendants did not recognize a capital gain on their jointly-filed taxes related to the 2003 sale.