Richard and Paula Gensemer v. Macy and Clare Hallock

In the early 1960s, appellants Hallock, appellees Gensemer, and
another individual, Mel Gerspacher, jointly purchased several
parcels of commercial real estate with the intended purpose of
leasing it to other businesses. They incorporated their
enterprise under the name GerHalGen, Inc., and proceeded to
function under this ownership arrangement for approximately ten
years. In the early 1970s, Gerspacher's shares were purchased by
the corporation and GerHalGen, Inc. continued to operate with
Macy and Clare. Hallock and Richard and Paula Gensemer each
owning one-quarter of the stock. Although the corporation was
formally dissolved in 1988, its assets were equally distributed
to the four shareholders and the business continued to operate.

It appears that at the inception of the business relationship,
Mel Gerspacher was primarily responsible for the administration
and management of the business and Paula Gensemer was responsible
for handling the financial records, daily books, and business
expenses. Once Gerspacher was bought out, Macy Hallock assumed
nany of his responsibilities, including insurance coverage for
the GerHalGen properties. Richard Gensemer apparently handled
various miscellaneous

tasks relating to the upkeep of the properties. Clare Hallock
never actively participated in the management of the business.

In 1983, anticipating his future retirement, Macy Hallock began
to turn over some of his managerial responsibilities to Medina
Management Company ("MMC"), which was a property management
company owned and operated by his son, Alan Hallock. MMC
gradually began to take over the day-to-day operational
management and maintenance of the GerHalGen properties, and it
billed GerHalGen for the services provided and expenses incurred.

In approximately 1992, the Gensemers began to suspect MMC's
billing practices. They also began to retroactively question the
insurance premiums submitted to and paid by GerHalGen subsequent
to Gerspacher's departure. The relationship between the Gensemers
and the Hallocks began to dissolve. In approximately January
1993, GerHalGen ceased to use MMC's services and Richard Gensemer
began to manage the properties himself. (By this time, the
Hallocks were spending a good portion of the year residing in
Florida.)

In May 1993, the Gensemers filed an action for partition of the
GerHalGen properties. This action eventually resulted in a
December 1994 sheriff's sale, at which the Gensemers were the
successful bidders.

Judgment finding that Macy Hallock had breached his fiduciary duty with regard to the insurance charges and awarded the Gensemers damages for excessive payments. The court denied all other claims and counterclaims.

Unknown

Unknown

Affirmed by the Court of Appeals of Ohio, Ninth District, Medina County. See: 707 N.E.2d 1156 (Ohio App. 9 Dist. 1997). The date shown above is the date of the appellate court decision and not the trial date.