Build Realty - Class Cert. Decision

Case: 1:19-cv-00133-DRC Doc #: 223 Filed: 02/21/23 Page: 1 of 65 PAGEID #: 10479
UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
COMPOUND PROPERTY
MANAGEMENT LLC, on behalf of
itself and all others similarly
situated, Case No. 1:19-cv-133
JUDGE DOUGLAS R. COLE
Plaintiffs,
v.
BUILD REALTY, INC., d/b/a,

GREENLEAF FUNDING, et al.,
Defendants.
OPINION AND ORDER
Plaintiffs Compound Property Management LLC, Leone1, LLC, R&G Cincy
Investments, LLC, Pyramid Investment Group, LLC, and Ratio Models, LLC
(collectively “Plaintiffs”) contend that Defendants Build Realty, Inc., Edgar
Construction, LLC, Cincy Construction, LLC, McGregor Holdings, LLC, Cowtown
Holdings, LLC, Build NKY, LLC, Greenleaf Support Services, LLC, Build SWO,
LLC, Gary Bailey, George Triantafilou, G2 Technologies, LLC, GT Financial, LLC,
and First Title Agency, Inc. (collectively “Defendants”) violated the 1961 Racketeer
Influenced and Corrupt Organizations (“RICO”) Act, along with the Ohio Corrupt
Practices Act, trust law, and various equitable doctrines, when they allegedly
engaged in a pattern of defrauding investors through the Defendants’ property-
flipping business enterprise. Seeking to vindicate their own rights, as well as the
rights of all others similarly swindled (or so Plaintiffs claim), Plaintiffs now move
the Court to certify this matter as a class action under Federal Rule of Civil
Procedure 23. (See Mot. for Class Certification, Doc. 155).
For the reasons explained more fully below, the Court GRANTS IN PART
and DENIES IN PART Plaintiffs’ Motion to Certify (Doc. 155). Specifically, the
Court GRANTS certification for Plaintiffs’ civil RICO claim (part of Count I) and
breach of fiduciary duties claim (Count II), but DENIES certification for Plaintiffs’
Ohio Corrupt Practices Act (part of Count I), civil conspiracy (Count III), and unjust
enrichment (Count IV) claims. Finally, the Court finds Plaintiffs lack standing to
pursue their declaratory relief claims and so DISMISSES Plaintiffs’ Count V,
Count VI, and Count VII WITHOUT PREJUDICE.
The Court APPOINTS Plaintiffs Compound Property Management LLC,
Leone1, LLC, R&G Cincy Investments, LLC, Pyramid Investment Group, LLC, and
Ratio Models, LLC as class representatives for the class, and APPOINTS Plaintiffs
Compound Property Management LLC, Leone1, LLC, R&G Cincy Investments,
LLC, and Ratio Models, LLC as class representatives for the subclass. The Court
APPOINTS the Finney Law Firm, LLC, and Markovits, Stock & DeMarco, LLC as
class counsel.
BACKGROUND
Plaintiffs, a collection of small real-estate investor LLCs, allege that
Defendants engaged in a complex scheme to defraud them and others like them.
(Doc. 155). They contend that Defendants’ labyrinthine business model maximized
opportunities to generate money for Defendants by violating investor expectations,
2
contractual agreements, and (at least as to some Defendants) fiduciary duties. (See
id.). Defendants, meanwhile, argue in their Response that they operated a
legitimate enterprise with many satisfied investors and they fully advised investors
of the risks and rewards their system offered. (Doc. 183, #7579–88). Because the
arrangement’s specifics matter, the Court begins there.
A. Build Realty’s Business Model
Defendants’ business model (what Plaintiffs call the “Build Scheme”) is to
help investors purchase, rehab, and resell homes (a practice sometimes called
“flipping”). Defendants began by identifying and acquiring rights to purchase
“properties with rehab potential.”1 (Id. at #7573). After acquiring a right to
purchase a property for a set price, Build Reality prepared an estimate of the
improvement costs needed to “flip” it for profit. (Doc. 183-1, #7640–41). Defendants
simultaneously solicited investors for these properties through various means,
including roadside signs, a website, mailed brochures, seminars, and word-of-
mouth. (Reply, Doc. 219, #10344). Signage included the phrases “$10k down,
including rehab $$$” and “no credit check!” (Doc. 193-10, #9728; Doc. 185, #8027).
Advertisements also trumpeted that “Build purchases properties in bulk from over
20 different sources and then passes the savings on to you.” (Doc. 193-8, #9723).
After recruiting investors, Defendants paired each investor to a property (or
multiple properties) for that investor to “purchase,” rehab, and resell. (Doc. 183,
1From what the Court can tell, Build Realty does not formally purchase the property until
confirming an investor. Before that time, Build executes option contracts that give Build
the rights to purchase once an investor is secured.
3
#7574). About 200 to 250 investors enrolled. (See Doc. 193-12, #9735–58; Doc. 185,
#8031–32; Doc. 193-9, #9726).
With property and investor paired, a set of transactions unfolded. Defendants
refer to this as “the double closing.” (Doc. 183, #7574). First, Defendant Build Realty
closed on the property from the initial seller using short-term funding Defendant
GT Financial provided. (Id.). Defendants call this the “Buy Side” of the double
closing. (Id.). Soon after, Build Realty sold the property’s title to its subsidiary,
Defendant Edgar Construction (which Defendants call the “Sell Side”). (Id.).
That latter transaction is key to the dispute here. The Sell Side transaction
was not a straightforward sale. Rather, Build transferred legal title in the property
to Edgar Construction (“Edgar”) as trustee of a state-law trust.2 (Id.). The property
was the corpus of the trust, Edgar the trustee, and an investor-created LLC (LLCs
like Plaintiffs here) the trust’s beneficiary. (Id.). In connection with this Sell Side
transaction (from Build to Edgar, as trustee), the investor LLCs received and signed
settlement disclosures, including notice that Edgar took legal title to the property
as trustee. (See Doc. 180-25, #6190). Investors also agreed to “reimburse actual
closing costs incurred by Seller [i.e., Build] for the purchase of this property from
the owner of record.” (See, e.g., Doc. 192-7, #9387). In other words, the investors
agreed to pay Build’s Buy Side closing costs. This obligation, however, was subject
to a “cap” on the total “closing costs and funding fees associated with this property.”
2 In the Complaint, Plaintiffs seemingly allege some trusts are governed by Ohio law and
some by Kentucky law. (See Doc. 1, #93 (discussing both Ohio and Kentucky trust law)).
Now, Plaintiffs appear to argue Ohio law alone governs. (See Doc. 155-1, #3194 (alleging
Defendants violated “federal and Ohio law”); Doc. 191, #9295–96 (complaining Defendants
failed to license the trusts in Ohio)).
4
(Doc. 192, #9327–28; Doc. 192-8, #9407). First Title Agency, Inc., typically
conducted both the Buy Side and Sell Side closings. (Doc. 183, #7575).
Also at the Sell Side closing, Edgar (now holding legal title as trustee)
executed a mortgage agreement with its parent, Defendant Build Realty. (Doc. 183,
#7576; Doc. 180-21, #6157). As part of that same transaction, Edgar executed a note
with Build Realty3 in which it agreed to pay to Build Realty the total of (1) the Sell
Side price, plus (2) the amount Build Realty estimated the investor needed to make
improvements, plus (3) various costs tacked on by Build Realty, minus (4) the
$10,000 payment the investor made. (Doc. 183, #7576). To use an example, imagine
Build transferred the property to Edgar Construction on the Sell Side at a stated
price of $100,000, and Build estimated the structure required $50,000 in
remodeling. Further, ignore briefly the third category—tacked on costs. The note
would be in an amount of $100,000 + $50,000 - $10,000 = $140,000. Afterward,
Build Realty would assign the note and mortgage to GT Financial to secure GT’s
interest in the property (recall GT put up the initial purchase funding). (Doc. 186,
#8204). Even after assignment, though, the borrower paid Build Realty directly and
Build Realty then used that same money to pay GT (until, as described below, GT
sold its interest in the note). (Id. at #8217).
3 Defendants represent to the Court that “investor companies executed mortgage

agreements with and received a construction loan from Build Realty’s in-house mortgage
lender Greenleaf Funding.” (Doc. 183, #7576). That is perhaps a bit of a misstatement for
two reasons. First, as Defendants clarify in a footnote: “More precisely, Edgar Construction
as trustee executed the mortgage agreement and the investor agreed to assume the
obligations under the mortgage agreement.” (Id.). Second, Greenleaf Funding is not an “in-
house mortgage lender” of Build Realty—it is Build Realty. (Doc. 186, #8154 (“Build Realty,
Inc., and Greenleaf Funding is one and the same.”)).
5
Build Realty structured the note as a “Balloon Payment Promissory Note.”
(Doc. 180-19). Under the note, the borrower needed to pay monthly installments on
the full amount at a 15% interest rate, with a balloon principal payment at the end
of the loan term when the investor sold the rehabbed property. (Doc. 180-19, #6143).
As discussed, Build Realty originally executed the loan with Edgar. But at
the Sell Side closing, the investor LLC assumed Edgar’s obligations under the
mortgage agreement and note, making that LLC liable for the loan. (Id.; Doc. 88-1,
#871–72). But because it was the LLC, rather than the LLC’s individual owner, that
assumed the obligations, the individual owner could walk away from the loan and
investment at any time. (Doc. 88-1, #871–82). If so, the investor LLC would default
and lose the right to sell the property, but the individual owner lost only the money
already spent (typically the $10,000 and any interest payments the LLC made) and
incurred no further liability. (Id.). In other words, Build did not require individual
owners to personally guaranty the loan.
Although the note’s total amount included the estimated rehab costs
(suggesting that the lender had made those funds available), Build Realty/GT
Financial did not immediately fund an escrow account containing that rehab cost
amount. Rather, the rehab funding emerged when GT Financial sold its interest in
the note to a third-party lender. (Doc. 186, #8198). From the money it received
selling the note (presumably the face amount of the note), GT Financial reimbursed
itself the amount it had advanced to Build for the original property acquisition (the
Buy Side price). (See id. at #8198, 8210). Build, meanwhile, kept for itself the
6
difference between its Buy Side price and its Sell Side price (the markup on the
property). And the estimated rehab amounts (which made up the rest of the loan
sale proceeds) went into escrow. (See id.). Build Realty served as the loan servicer
and held the escrowed rehab funds (once funded) for later disbursement. (Id. at
#8210; Doc. 192-1, #9335).
When GT Financial4 sold its interest in the note to a third-party lender, it did
so at a stated interest rate ranging from 8% to 15%, although most often 12.5%.
(Doc. 186, #6216–18, 8227). As described above, the investor LLC was paying Build
Realty monthly interest payments calculated as 15% of the loan amount. The
difference between that 15% rate and the interest rate specified in the third-party
note generated some more profit for Build as the loan servicer. That rate difference
continued to generate a monthly profit for Build Realty until the investor completed
the rehab, sold the property, and paid off the balloon note. (See id.).
During the life of the loan, the investors rehabbed their properties. Using the
Build Realty estimate as a guide, the investor LLCs submitted “draw requests” to
Build Realty to receive the escrowed rehab funds. (Doc. 192-1, #9335; Bailey Decl.,
Doc. 183-1, #7641). Although giving investors latitude in determining how to carry
out the work, Build Realty would issue checks only after inspecting the property to
4One of the difficulties in this case is that the parties often use “Build” or “Build Realty” to
refer to the entire group of Defendants. That sometimes obscures exactly which Defendant
allegedly did what. To illustrate, although Plaintiffs allege “Build sold the loan to the
permanent lender” (Doc. 191, #9291), from the Court’s review of the materials, it appears
GT Financial, rather than Build Realty, that actually held and sold the note. (Doc. 186,
#8183, 8211). For purposes of this Opinion, though, it does not particularly matter exactly
which corporate defendant did so.
7
ensure they completed the work. (Doc. 183-1, #7641). Build Realty issued checks to
the investor’s LLCs directly. (Doc. 180-34, #6307).
Once the investor concluded remodeling, the investor chose a list price and
listing agent and then marketed the property. (Doc. 183-1, #7641). If a buyer
emerged, the investor LLC directed Edgar (as trustee, and thus legal title owner) to
sell the property to that buyer. (Id.). Sale proceeds first satisfied the loan (any
outstanding interest plus the principal) and the closing costs (e.g., real estate
commissions, title fees, etc.) associated with the ultimate sale, with any excess
proceeds then going to the investor as profit for the investor’s rehabbing efforts.
(Id.).
As the description shows, there are many moving parts. The Court
acknowledges it may have misstated some aspects of the transaction along the way.
But for current purposes, that is largely irrelevant—what mainly matters is each
investor experienced the same structure. To summarize that structure: (1) investors
paid $10,000 to Build Realty to receive a loan to “purchase” and remodel a house;
(2) during the duration of the loan, investors paid only interest5 and fronted rehab
expenses to be reimbursed by Build Realty from the loan; and (3) investors then
marketed and sold the property, reaping any profits above their accrued obligations
5 So far as the Court can tell, Build Realty effectively extended investors a line of credit for
the funds needed for improvement. Investors apparently paid interest on the entire amount
of the line of credit, starting at closing, rather than on the disbursements they received
from the line of credit. Moreover, investors fronted the actual improvement costs, receiving
reimbursement from the line of credit only once they had approval from Build inspectors
(even though the investors were already paying interest on the full amount of the
improvement funds). Of course, individual investors also had the luxury to walk away from
the loan without incurring further personal liability.
8
under the loan and other fees. But neither the investor nor his or her LLC ever held
legal title to the property. Rather, during the entire process, an investor’s only
interest in the property was as a beneficiary (technically, the LLC was the
beneficiary) to a trust in which Build Realty’s subsidiary, Edgar Construction,
served as trustee.6
Build Realty and its affiliates identified both properties and investors,
acquired the properties, “loaned” funds to investors to “purchase” the properties,7
held rehab funds in escrow, disbursed those same funds as investors performed the
specified improvements, and oversaw the process. Throughout, Build Realty’s
subsidiary, Edgar Construction, maintained legal ownership of the property, while
the investor used Build’s “loan” proceeds to improve it. Build Realty then recouped
its expenses when the investor sold the property. And if the investor walked away
or defaulted, no trouble. Build Realty already owned the property through Edgar.
Finally, as explained below, Build Realty profited at many steps along the way.
B. Plaintiffs’ Allegations About The Build Business Model
Plaintiffs refer to the above business model as the “Build Scheme,” painting a
portrait of an enterprise aimed at misleading and defrauding investors. They
6The Court notes that some documents seem to describe Edgar Construction as a seller and
the investor as a buyer. (See, e.g., Doc. 192-7, #9395). Yet both parties represent to the
Court that investors never took legal title to the property at closing. (See Doc. 183, #7574–
7579; Doc. 191, #9303 (“[N]o Plaintiff actually received a deed or title.”)).
7 The Court puts “loan” and “purchase” in quotation marks because these transactions do
not function like traditional real estate loans or purchases. Namely, investors did not
receive a loan, but instead assumed a loan that Build Realty issued to its own subsidiary,
Edgar Construction. Further, investors never “purchased” any interest in the property
other than a beneficial interest. The Court, however, take no position at this time as the
legality or propriety of these arrangements.
9
advance nine main claims of misrepresentation and wrongdoing against Build
Realty, and its affiliates and subsidiaries. (Doc. 191, #9286–93). The Court
discussed those claims in an earlier Opinion. (See Doc. 131, #2232–37). But because
Plaintiffs have tweaked their claims preceding two years and because the
mechanics of Plaintiffs’ claims are relevant for class certification, the Court will
again briefly describe each.
First, Plaintiffs contend that Build Realty secretly inflated purchase prices
between its initial purchase of the property and its subsequent “sale” to the investor
(between the Buy Side and the Sell Side of the double closing). (Doc. 191, #9286).
While Build touted its process created savings for investors compared to a direct
purchase, Plaintiffs claim that was not true. Despite Build Realty claiming it
bought in bulk or “volume,” creating discounts for investors, Plaintiffs say Build
made one-off purchases from publicly available property sources. (Id.). In other
words, Build paid market prices for the property and then surreptitiously inflated
the purchase price on the Sell Side for investors. Thus, Plaintiffs say, investors were
paying above-market prices, rendering Build’s claim that it “passed the savings
along to investors” untrue. (Id. at #9286–87). And, as each investor agreed to a “cap”
on closing costs and funding fees, Plaintiffs also contend this hidden markup from
Buy Side to Sell Side (amounting to an undisclosed profit for Build Realty at the
investor’s expense) should have counted toward that cap. (Id.). In effect, Plaintiffs
claim that Build Realty exceeded the contractual limit once you account for that
hidden markup. (Id.). Finally, Plaintiffs contend that the fiduciary duties arising
10
from the trust arrangement created on the Sell Side required Build Realty (or at
least Edgar Construction, as trustee) to disclose the markup and purchase-method
information. (Id.).
Second, Plaintiffs argue that Build Realty “misapplied” the $10,000 that
investors paid at closing. (Id. at #9288). Plaintiffs say investors expected the “down
payment” to contribute to, and thus reduce, the principal the investor owed on the
property. (Id.). But Plaintiffs allege that Build Realty instead used the entire
$10,000 to pay costs and its own largely undisclosed fees—creating no actual equity
in the property for the investor. (Id. at #9289; Doc. 192, #9325). And, by doing so,
Build further exceeded the capped “closing costs and funding fees.” (Doc. 191,
#9288–89).
Third, Plaintiffs contend that Build Realty wrongly charged investors
interest on not-yet-obtained funds. (Id. at #9290). Recall that, at the second closing,
Plaintiffs assumed a 15%-interest loan meant to cover the “purchase” of the
property, plus the estimated rehab expenses and closing costs. (Doc. 183, #7576).
Closing documents certified that funding supported that entire loan amount at time
of closing. (See, e.g., Doc. 192-3). And interest payments based the full loan
amount—including undisbursed rehab amounts—began to accrue immediately
following closing. (Doc. 185, #8076). But investors did not have immediate access to
those funds. (Bailey Decl., 183-1, #7641). Instead, investors had to submit draw
requests as work progressed. (Id.). Perhaps more importantly, Plaintiffs argue that,
in most cases, Defendants did not even immediately acquire the funding allocated
11
for rehab. (Doc. 192, #9325–26). Rather, Build secured that rehab funding only
when GT Financial sold the loan to a third-party lender, which could take days or
weeks. (Doc. 186, #8198). Yet, during that interim, Build Realty still allegedly
charged the investors “interest” on the full “loan,” including those not-yet-in-
existence rehab funds. (See Doc. 185, #8073–74).
Fourth, Plaintiffs contend that Build Realty violated the fiduciary duties it
owed to investors by surreptitiously profiting off an interest rate markup. (Doc. 191,
#9291). After the investor’s LLCs assumed the 15% interest loan, GT Financial
routinely resold the notes at a lower rate, typically 12.5%, allowing Build Realty as
loan servicer to pocket the difference. (Doc. 186, #6216–18, 8227). Plaintiffs argue
this hidden practice violated duties of loyalty and disclosure that Build Realty, as
“trustee” through its relationship with the actual trustee Edgar Construction,
allegedly owed to the investor beneficiaries. (Doc. 191, #9291). That is, Plaintiffs
believe that Build Realty’s actions can be imputed to Edgar, given that Edgar is “a
wholly-owned subsidiary of Build with the same business address and no separate
employees.” (Id. at #9287).
Fifth, Plaintiffs return to their charge that Build Realty and its affiliates
routinely charged costs and fees over the contractual limit agreed to at closing. (Id.
at #9292). Plaintiffs incorporate here many complaints described above.
Sixth, Plaintiffs argue that Build Realty harmed investors in connection with
a credit check fee. (Id.). Build Realty advertised it would not check potential
investor’s credit (Doc. 193-10, #9729), and Build executives attested no such check
12
ever occurred (Doc. 187, #8507). Yet Plaintiffs say investors uniformly paid $50 for a
purported “Credit Check” at closing. (See Doc. 193-11, #9732).
Seventh, Plaintiffs complain that investors paid a $400 to $450 “document
preparation fee” to “Jack Donenfeld” at closing. (Doc. 191, #9292–93; Doc. 193-11,
#9732). But Plaintiffs argue Donenfeld played no part in preparing documents for
closing beyond the work he did to create the initial templates. (Doc. 191, #9292–93).
Thus, they say, the fee “was a sham charge” (presumably retained by Build Realty).
(Id.).
Eighth, Plaintiffs conclude that Build Realty intentionally structured its
operations to deprive investors of their state-law rights as mortgagees. (Id.).
Without the trust arrangement, investors would enjoy traditional foreclosure rights,
like the right of redemption and the right to excess proceeds. (Id.). According to
Plaintiffs, Build Realty illegally structured its business model as a trust to deprive
investors of these rights.8 (Id.).
Based on these allegations of misrepresentations and wrongdoing, Plaintiffs,
investors into the Build Realty business model, advanced a litany of legal claims.
These include: a civil RICO claim predicated on mail fraud (part of Count I), an
8 In their Memorandum in Support of their Motion to Certify, Plaintiffs also allege

Defendants “[had] Class Members sign a purchase contract stating that they will take legal
title in their LLC name ‘by deed of warranty,’ but then put[] the property at issue into a
trust completely controlled by Defendants,” “misuse[d] … escrow monies entrusted to
Defendants,” and “use[d] … fraudulent and photoshopped checks, certified checks, and
bank statements to effectuate the buy side transactions.” (Doc. 155-1, #3199–200).
However, Plaintiffs only cite to their Complaint to substantiate these allegations. Absent
factual support, the Court declines to credit these assertions for purposes of class
certification.
13
Ohio Corrupt Practices Act claim (part of Count I), claims for breach of fiduciary
duties (Count II), civil conspiracy (Count III), and unjust enrichment (Count IV),
along with declaratory judgment claims seeking a declaration that Defendants
violated investors’ foreclosure rights (Count V) and that Edgar’s trusts are void or
voidable (Counts VI & VII). (Doc. 1, #52–95).
Now over three years into litigation, Plaintiffs seek to certify a class action to
press the above claims. (See Doc. 155). Plaintiffs propose the following class:
Plaintiffs and all other persons and entities in Ohio and Kentucky,
individually and collectively, that invested in real property and were
named as beneficiaries to a trust created through a real estate
transaction engaged in by, through, or with any of the Defendants
named herein, using the Build Scheme further described and defined
herein, for the longest period allowed by law (the “Class”).
(Doc. 155-1, #3195).9 Separately, Plaintiffs propose the following subclass:
Members of the Class that had their properties reclaimed and resold as
a result of default, without access to judicial foreclosure proceedings
and the opportunity to redeem, and without receiving the excess
proceeds (if any) upon subsequent sale of the property by Build.
(Id.).
9 In their memorandum in support of class certification, Plaintiffs initially proposed the

following class:
Plaintiffs and all other persons and entities in Ohio and Kentucky,
individually and collectively, that invested in real property and were named
as beneficiaries to a trust created through an unlawful real estate transaction
engaged in by, through, or with any of the Defendants named herein, using
the Build Scheme further described and defined herein, for the longest period
allowed by law (the “Class”).
(Doc. 155-1, #3195). After Defendants accused Plaintiffs of proposing an improper “fail-safe”
class (see Doc. 183, #7603–06), Plaintiffs revised their proposed class by removing the word
“unlawful” before “real estate transaction.” (See Doc. 191, #9297).
14
As they have throughout this case, Defendants vigorously dispute all the
accusations. They claim they fully informed investors of the proposed arrangement,
that the investors were sophisticated, and that they knew enough to understand the
risks and rewards entailed. (Doc. 183, #7573–75). More relevant for class
certification, Defendants chiefly contend that the individualized nature of the
investors’ experiences makes Plaintiffs’ claims unfit for class resolution. (Id. at
#7579–98). Defendants highlight multiple differences, including among the
properties themselves, the various investors’ characteristics, the way investors
learned of Build Realty, each individual investor’s understanding of the trust model,
side-agreements various investors had, their individual rehabbing experiences, and
even differing effects from disruption that Plaintiffs’ counsel Chris Finney allegedly
caused (more on that later). (Id.). Separately, Defendants argue Plaintiffs failed to
carry their burden to show the other prerequisites of certification, including
numerosity, commonality, typicality, adequacy, predominance, and superiority. (Id.
at #7601–34).
LEGAL STANDARD
A class action represents “an exception to the usual rule that litigation is
conducted by and on behalf of the individual named parties only.” Wal-Mart Stores,
Inc. v. Dukes, 564 U.S. 338, 348 (2011) (quoting Califano v. Yamasaki, 442 U.S. 682,
700–01 (1979)). To justify departing from the typical named-parties-only rule, a
putative class representative must make certain showings. First, under Federal
Rule of Civil Procedure 23(a), the named plaintiff(s) must show that: (1) the class is
15
so numerous that joinder of all members is impracticable (numerosity); (2) there are
questions of law or fact common to the class (commonality); (3) the claims or
defenses of the representative parties are typical of the claims or defenses of the
class (typicality); and (4) the representative parties will fairly and adequately
protect the interests of the class (adequacy). Fed. R. Civ. P. 23(a). These
requirements limit the potential abuse of the class action mechanism by ensuring
that the class claims are “fairly encompassed by the named plaintiff’s claims.”
Dukes, 564 U.S. at 349 (quoting Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 156
(1982)).
Beyond satisfying the four factors Rule 23(a) identifies, though, a putative
class also must meet one provision of Rule 23(b). Here, for reasons discussed below,
the Court addresses only one of those provisions—Rule 23(b)(3). Certification under
this provision requires consideration of two issues—predominance and superiority.
As to the former, to certify under this subsection, the court must “find[] that
the questions of law or fact common to class members predominate over any
questions affecting only individual members.” This “predominance” inquiry is like,
though “more stringent” than, Rule 23(a)(2)’s “commonality” requirement, with
predominance said to “subsume[]” or “supersede[]” commonality. Amchem Prods.,
Inc. v. Windsor, 521 U.S. 591, 609 (1997). In other words, “Rule 23(b)(3)’s
predominance criterion is even more demanding than Rule 23(a)[‘s commonality
requirement].” Comcast Corp. v. Behrend, 569 U.S. 27, 34 (2013) (citing Amchem,
521 U.S. at 623–24).
16
Superiority, on the other hand, requires the court to determine whether “a
class action is superior to other available methods for fairly and efficiently
adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3). This “superiority”
requirement aims to “achieve economies of time, effort, and expense, and promote ...
uniformity of decision as to persons similarly situated, without sacrificing
procedural fairness or bringing about other undesirable results.” Amchem, 521 U.S.
at 615 (quoting Fed. R. Civ. P. 23 adv. comm. n. to 1966 amend.).
Rule 23(b)(3) lists four non-exhaustive factors “pertinent” to the
“predominance” and “superiority” analyses. These include—(1) “the class members’
interests in individually controlling the prosecution or defense of separate actions,”
(2) “the extent and nature of any litigation concerning the controversy already
begun by or against class members,” (3) “the desirability or undesirability of
concentrating the litigation of the claims in the particular forum,” and (4) “the likely
difficulties in managing a class action.” See Fed. R. Civ. P. 23(b)(3)(A)–(D).
Whether a court may appropriately certify a class is separate from whether
the putative class, as defined, will succeed on the merits of the claims. That said, “it
may be necessary for the court to probe behind the pleadings before coming to rest
on the certification question.” Comcast, 569 U.S. at 33 (quoting Dukes, 564 U.S. at
350). Indeed, the Supreme Court has directed courts to undertake a “rigorous
analysis” before certifying a class—an analysis that “frequently entail[s] ‘overlap
with the merits of the plaintiff’s underlying claim.’” Id. at 33–34 (quoting Dukes,
564 U.S. at 350). While this “rigorous analysis” might involve some consideration of
17
the merits, though, courts do not have “license to engage in free-ranging merits
inquiries at the certification stage.” Amgen Inc. v. Conn. Ret. Plans & Tr. Funds,
568 U.S. 455, 466 (2013).
At bottom, a “district court has broad discretion to decide whether to certify a
class. [The Sixth Circuit] has described its appellate review of a class certification
decision as ‘narrow,’ and as ‘very limited.’” In re Whirlpool Corp. Front-Loading
Washer Prods. Liab. Litig., 722 F.3d 838, 850 (6th Cir. 2013) (citations omitted).
LAW AND ANALYSIS
As described above, Plaintiffs must clear multiple hurdles to succeed on their
motion for class certification: Rule 23(a)’s requirements of numerosity,
commonality, adequacy, and typicality, as well as at least some subset of Rule
23(b)’s various requirements.10 And Plaintiffs must make those showings as to each
claim for which they seek certification. See Bolin v. Sears, Roebuck & Co., 231 F.3d
970, 976 (5th Cir. 2000) (“[A] court should certify a class on a claim-by-claim basis,
treating each claim individually and certifying the class with respect to only those
claims for which certification is appropriate.”); Dominguez v. United Parcel Serv.,
Co., No. EDCV 18-1162, 2020 WL 4390376, at *3 (C.D. Cal. June 12, 2020); D.O. v.
10 Rule 23(b)(3) also contains an “implied ascertainability” requirement. See Sandusky

Wellness Ctr., LLC v. ASD Specialty Healthcare, Inc., 863 F.3d 460, 471 (6th Cir. 2017) (“[A]
‘class definition must be sufficiently definite so that it is administratively feasible for the
court to determine whether a particular individual is a member of the proposed class.’”
(quoting Young, 693 F.3d at 537–38). The Court has determined the class is ascertainable
because discovery has produced an investor list containing all potential class members.
(Doc. 193-12). Defendants protest that Plaintiffs’ proposed class is not ascertainable
because it is an improper “fail-safe” class. To Defendants, the class is a “fail-safe” as it is
defined based on Defendants’ “unlawful” conduct. (Doc. 183, #7603–07). But even if
Plaintiffs’ initial class improperly used the term “unlawful” before, that issue became moot
when Plaintiffs amended and removed that term.
18
Haddonfield Bd. of Educ., No. 10-cv-631, 2012 WL 860669, at *2 n.3 (D.N.J. Mar.
21, 2012).
In objecting, Defendants don’t give an inch. They contest certification at
every step and as to every claim.
The Court, however, determines it should certify the class for Plaintiffs’ civil
RICO and breach of fiduciary duties claims—but only those claims. Both claims
satisfy each of the Rule 23(a) requirements, and each also falls within the scope of
Rule 23(b)(3). That is not to suggest that the Court believes it likely (or unlikely)
that Plaintiffs will prevail on those claims. Rather, the Court merely determines
that it is appropriate to address Plaintiffs’ civil RICO and fiduciary duties claims,
whether meritorious or not, on a class-wide basis. That is not true, however, for the
remaining claims.
Thus, the Court GRANTS IN PART and DENIES IN PART Plaintiffs
Motion to Certify (Doc. 155-1). Specifically, the Court GRANTS certification for
Plaintiffs’ civil RICO and breach of fiduciary duties claims and DENIES
certification for Plaintiffs’ Ohio Corrupt Practices Act, civil conspiracy, and unjust
enrichment claims. Finally, the Court finds Plaintiffs lack standing to pursue their
declaratory relief claims and so DISMISSES Plaintiffs’ Count V, Count VI, and
Count VII (Doc. 1).
19
A. Plaintiffs Lack Standing To Pursue The Three Declaratory

Judgment Claims.
The Court begins with a threshold issue—subject-matter jurisdiction.
Plaintiffs pursue seven claims using eight theories11—five theories seek damages
for past harms and three seek declaratory relief. (Doc. 1, #52–95). As to the latter,
Plaintiffs seek two declarations: (1) Defendants violated Plaintiffs’ rights as
mortgagees to redemption and excess proceeds, and (2) the trusts are void or
voidable. (Doc. 1, #92–95). Now, with the benefit of discovery, the Court sua sponte
determines Plaintiffs lack standing to pursue their declaratory judgment claims.
Federal courts are courts of limited jurisdiction. Kokkonen v. Guardian Life
Ins. Co. of Am., 511 U.S. 375, 377 (1994). Under the Constitution, their jurisdiction
extends solely to “cases” or “controversies.” U.S. Const. art. III. One aspect of that
limitation is that a plaintiff must have standing to proceed. And standing is not
dispensed in gross. Rather, a plaintiff must show they have standing for each claim
they intend to pursue. Town of Chester v. Laroe Estates, Inc., 137 S. Ct. 1645, 1650
(2017). Because standing is an aspect of subject-matter jurisdiction, courts may
raise standing sua sponte. Bench Billboard Co. v. City of Cincinnati, 675 F.3d 974,
983 (6th Cir. 2012). Moreover, a court can raise the issue at any time. Cranpark,
Inc. v. Rogers Grp., Inc., 821 F.3d 723, 730 (6th Cir. 2016). No matter when the
issue is raised, however, the Court must evaluate standing as of the time plaintiffs
filed suit. Ohio Citizen Action v. City of Englewood, 671 F.3d 564, 580 (6th Cir.
2012).
11Count I puts forward both Plaintiffs’ civil RICO claim and their Ohio Corrupt Practices
Act claim.
20
These standards apply with full force to class actions, or more accurately to
the named plaintiffs who seek to proceed on behalf of a putative class. Lewis v.
Casey, 518 U.S. 343, 357 (1996). “It is well settled that, at the outset of litigation,
class representatives without personal standing cannot predicate standing on
injuries suffered by members of the class but which they themselves have not or will
not suffer.” Rosen v. Tenn. Comm’r of Fin. & Admin., 288 F.3d 918, 928 (6th Cir.
2002).
To have standing, a plaintiff must have an injury-in-fact. Carney v. Adams,
141 S. Ct. 493, 498 (2020). The injury must be concrete and particularized, actual or
imminent. Id. And it must be fairly traceable to the challenged conduct and
redressable by a favorable judicial decision. Lujan v. Defs. of Wildlife, 504 U.S. 555,
560–61 (1992). Here, Plaintiffs’ Complaint named three original plaintiffs:
Compound Property Management LLC, Leone1, LLC, and R&G Cincy Investments
LLC. (Doc. 1, #1). As to these Plaintiffs’ civil RICO, Ohio Corrupt Practices Act,
breach of fiduciary duties, civil conspiracy, and unjust enrichment claims, they say
they lost money because of Defendants’ conduct, and they now seek to recover
money damages. Money damages are a quintessential example of a concrete and
particularized injury that is redressable by judicial decision. See Uzuegbunam v.
Preczewski, 141 S. Ct. 792, 798 (2021).
The same is not true, however, for Plaintiffs’ declaratory judgment claims.
“Past harm allows a plaintiff to seek damages, but it does not entitle a plaintiff to
seek injunctive or declaratory relief.” Kanuszewski v. Mich. Dep’t of Health & Hum.
21
Servs., 927 F.3d 396, 406 (6th Cir. 2019). “When seeking declaratory … relief, a
plaintiff must show actual present harm or a significant possibility of future harm
… .” Id. (quoting Nat’l Rifle Ass’n of Am. v. Magaw, 132 F.3d 272, 279 (6th Cir.
1997)). Plaintiffs cannot do so for their declaratory relief claims here.
Start with the declaration they seek as to their mortgagee rights. When filing
the Complaint, the three original Plaintiffs lacked an identifiable ongoing or future
injury from Defendants’ alleged violations of their mortgagee rights. In Plaintiffs’
own Complaint, they allege that Defendants “took [Plaintiffs’] property without any
judicial procedure, retaining all funds paid by [Plaintiffs] and the excess proceeds
from the subsequent sale.” (Doc. 1, #9–10). What the Complaint alleged, discovery
confirmed: Each named Plaintiff has long since lost control of (or at least whatever
minimal interest they had in) the property they sought to flip. (See Doc. 183, #7638
(listing the “[r]eason(s) [Plaintiffs were] unable to resell property prior to default”
(emphasis added)); Doc. 180, #5913 (acknowledge property had been resold to third-
party); Doc. 176, #3802 (same); Doc. 214, #10246). So to the extent that “reclaiming”
the property violated Plaintiffs’ rights, that violation occurred and cannot now be
undone by any declaration the Court may enter. To be sure, Plaintiffs could (and
perhaps do) seek damages for the harm they suffered in connection with the default.
But a declaratory judgment is an improper vehicle for such retrospective relief.
Turn to Plaintiffs’ request to have the trusts declared void or voidable. The
only asset ever placed in trust was the property each named Plaintiff intended to
rehab. (See, e.g., Doc. 185-25). This appears to have been the trusts’ sole purpose.
22
But as discussed, before the filing the Complaint, Edgar Construction had long
since resold each original Plaintiff’s property. (Doc. 1, #9–10). To the extent the
trusts even still exist, nobody has ever suggested their mere continuing existence
poses an actual or imminent risk of concrete harm to Plaintiffs. To be sure,
Plaintiffs are upset that the trusts were created, but “purported indignation” is not
a concrete injury. See Glennborough Homeowners Ass’n v. U.S. Postal Serv., 21
F.4th 410, 415 (6th Cir. 2021).
The bottom line is the three original named Plaintiffs have never articulated
a concrete injury they are now suffering or will suffer in the future from the ongoing
existence of their single-purpose trusts. Their Complaint only demands that the
trusts be dissolved so that any money in them can be returned to Plaintiffs and
other class members. (See Doc. 1, #93–95). There is no suggestion, though, that such
funds even exist. In fact, despite thousands of pages of documents and testimony,
the Court remains uncertain whether the original Plaintiffs’ trusts themselves
continue to exist or instead already have been terminated by Edgar Construction.
See Ohio Rev. Code § 5804.14 (permitting a trustee, in limited circumstances, to
terminate a trust where the costs to maintain the trust exceed its value).
In fairness, Plaintiffs seek class wide relief, and some class members could
have value remaining in their trust. Arguably those class members have an
imminent potential injury. But the three original Plaintiffs do not. “That a suit may
be a class action ... adds nothing to the question of standing, for even named
plaintiffs who represent a class ‘must allege and show that they personally have
23
been injured, not that injury has been suffered by other, unidentified members of
the class to which they belong and which they purport to represent.’” Lewis, 518
U.S. at 357 (quoting Simon v. E. Ky. Welfare Rts. Org., 426 U.S. 26, 40 n.20 (1976)).
In sum, the named Plaintiffs have standing to pursue their civil RICO, Ohio
Corrupt Practices Act, breach of fiduciary duties, civil conspiracy, and unjust
enrichment claims. But they lack standing to demand the requested declaratory
relief described in Count V, Count VI, and Count VII. The Court thus DISMISSES
those counts WITHOUT PREJUDICE.
B. Plaintiffs Do Not Even Attempt The Necessary Showings To Certify

Their Ohio Corrupt Practices Act And Civil Conspiracy Claims.
Before exploring the merits of the remaining claims, the Court next turns to
another threshold issue. In order to obtain class certification, a plaintiff must
“affirmatively demonstrate” its entitlement to class certification at every step.
Dukes, 564 U.S. at 350. Plaintiffs have not even attempted to do so for their Ohio
Corrupt Practices Act and civil conspiracy claims. Nowhere in their briefing do
Plaintiffs argue, or even discuss, how those claims meet the requirements under
either Rule 23(a) or any category of Rule 23(b). Given their failure to address these
matters, the Court DENIES Plaintiffs’ Motion to Certify as to their Ohio Corrupt
Practices Act and civil conspiracy claims.
C. The Court Finds Plaintiffs Meet The Requirements Of Rule 23(a) For
Their Remaining Claims.
The Court now turns to the remaining claims to consider the merits of the
certification issue. On that front, the Court first addresses Rule 23(a)’s
24
requirements. As noted, the Court must undertake the analysis on a claim-by-claim
basis. Plaintiffs make that somewhat difficult, however, as they largely eschew a
claim-by-claim analysis under Rule 23(a), preferring instead to discuss compliance
on a case wide basis. That said, the Court finds that Plaintiffs satisfy all of Rule
23(a)’s requirements as to the claims that remain—civil RICO, breach of fiduciary
duties, and unjust enrichment.
1. The Proposed Class And Subclass Satisfy The Numerosity

Requirement.
“There is no strict numerical test for determining impracticability of joinder.”
In re Am. Med. Sys., 75 F.3d 1069, 1079 (6th Cir. 1996). Still, the “sheer number of
potential litigants in a class, especially if it is more than several hundred, can be
the only factor needed to satisfy Rule 23(a)(1).” Bacon v. Honda of Am. Mfg., Inc.,
370 F.3d 565, 570 (6th Cir. 2004). That said, “while ‘the exact number of class
members need not be pleaded or proved, impracticability of joinder must be
positively shown, and cannot be speculative.’” Golden v. City of Columbus, 404 F.3d
950, 965–66 (6th Cir. 2005) (quoting McGee v. E. Ohio Gas Co., 200 F.R.D. 382, 389
(S.D. Ohio 2001)).
As noted above, Plaintiffs propose a class of all Ohio and Kentucky investors
named as beneficiaries to a Build Realty trust going back for the longest term
permitted by law. (Doc. 191, #9297). Separately, Plaintiffs propose a subclass of all
class members whose properties Build Realty reclaimed and resold because of
default. (Doc. 155-1, #3195).
25
Both Plaintiffs’ class and subclass meet the numerosity requirement.
Plaintiffs’ putative class contains between 200 and 250 members. This
determination stems from an investor list and Defendant testimony. (See Doc. 193-
12, #9735–58; Doc. 185, #8031–82; Doc. 193-9, #9726). Moreover, Plaintiffs’ putative
subclass approximates two dozen. (See Doc. 193-12, #9738–42). With over two
hundred potential class members and two dozen subclass members, the Court
agrees “that joinder of all members is impracticable.” Fed. R. Civ. P. 23(a)(1).
Defendants urge a different result, arguing Plaintiffs failed to support their
claims of class size. (Id.). But the Court has examined the list of investors produced
by Defendants in discovery and determined that the class appears to comprise
between 200 and 250 members. (See Doc. 193-12, #9735–58). Indeed, Build Realty
executive Gary Bailey admitted as much at his deposition. (Doc. 185, #8031–82).
Plaintiffs’ class and subclass meet numerosity.
2. Plaintiffs’ Putative Class Members Share Common Questions

Of Fact And Law.
“To demonstrate commonality, the plaintiffs’ ‘claims must depend on a
common contention … of such a nature that it is capable of class wide resolution—
which means that determination of its truth or falsity will resolve an issue that is
central to the validity of each one of the claims in one stroke.’” Young v. Nationwide
Mut. Ins. Co., 693 F.3d 532, 542 (6th Cir. 2012) (quoting Dukes, 564 U.S. at 350).
“[W]hen the legality of the defendant’s standardized conduct is at issue, the
commonality factor is normally met.” Castellanos v. Worldwide Dist. Sys. USA,
LLC, No. 2:14-cv-12609, 2016 WL 11678220, at *6 (E.D. Mich. June 20, 2016)
26
(quoting Gilkey v. Cent. Clearing Co., 202 F.R.D. 515, 521 (E.D. Mich. 2001)).
Although similar to Rule 23(b)’s predominance requirement, commonality presents
a lower threshold of inquiry. See Amchem, 521 U.S. at 609.
The Court agrees that Plaintiffs have met the commonality requirement. As
Plaintiffs show, Defendants carried out a uniform business plan with investors for
years, using similar advertising, forms, practices, and legal entities. (See, e.g., Docs.
117-1, 117-2, 117-3, 117-4, & 117-5). Put differently, Plaintiffs attack Defendants’
overarching business practices, practices that all putative class members
experienced—allegedly inflated property costs, misapplied “down” payments, fees
above the contractual cap, etc.
Indeed, it strikes the Court that much of the debate between the parties boils
down to the legal meaning of certain payments and representations. For example,
Plaintiffs categorize certain expenses, like the $10,000 payment, as falling within
the capped “costs and fees.” (Doc. 191, #9291–92). For their part, Defendants do not
categorize those expenses as such. (Doc. 183, #7609–10). Thus, the legal meaning of
the contractual cap and what expenses fall within its terms will probably resolve
much of the parties’ debate. That is, if certain expenses do not properly fall within
that cap, then Plaintiffs have not been damaged by paying those amounts nor have
Defendants been unjustly enriched in receiving them. And that result will be
common to all who took part in the same set of transactions. That satisfies
commonality.
27
Defendants push back. First, Defendants claim that while some overlap may
exist, too many factual differences pervade among putative class members’
experiences. (Doc. 183, #7579–98, 7612–15). But right from the outset, Defendants
undermine their own argument. Before attempting to distinguish among individual
class members, Defendants open by offering a seven-page “overview of Build
Realty’s general operations under the trust model.” (Id. at #7572–79). That
overview illustrates class wide commonality by outlining the similarities in
investor’s experiences with Build Realty. And that is the point—Plaintiffs’ view is
that these “general operations” themselves defrauded investors, allegedly giving
rise to liability under civil RICO.
Turning to the fiduciary duties claim, it likewise attacks conduct that applies
to the class. Edgar served as trustee for all class members and interacted with each
similarly, at least as to disclosing any “hidden markups” or things of that nature.
The same is true for the unjust enrichment claim. As noted, a basis for that claim is
that Defendants exceeded the cap as to the investors, therefore being unjustly
enriched. But the investors’ payments were credited in the same manner, and
against the same types of expenses, in each case. That meets commonality as to
those claims. And if Defendants allege not enough commonality exists, that
argument more properly sounds in predominance, a separate inquiry the Court
addresses below.
Next, Defendants attempt a sleight of hand. They shift the commonality
analysis from whether common questions exist to instead asking whether resolution
28
of the common questions will “materially advance the litigation” based on what
Defendants say the answers should be. (Id. at #7608–10). In essence, Defendants ask
the Court to find no common questions exist because Defendants disagree with the
tacit assumptions underlying Plaintiffs’ proposed common questions. Certainly, the
Court must consider whether the proposed common questions will “advance the
litigation.” Sprague v. Gen. Motors Corp., 133 F.3d 388, 397 (6th Cir. 1998). It would
not advance the litigation, for example, for Plaintiffs to allege that all class
members have a common hair color or taste in music. But that is not the case here.
Plaintiffs allege meaningful common questions related to Defendants’ potential
liability. That is enough. If Defendants are asking the Court to use the commonality
analysis to resolve factual disagreements, the Court declines.
Defendants next turn from fact to law. They cite a wealth of case law to
support their understanding of the law on the merits of the claims. (Id. at #7608–
12). No doubt this research will come in handy later, but the Court need not
consider it at this stage. In fact, by presenting case law to dispute the merit of
Plaintiffs’ claims as a whole, Defendants tacitly concede their legal position can be
resolved on a class wide basis.
Defendants’ citation to Chaz Concrete Co., LLC v. Codell, No. 3:03-52, 2006
WL 2453302 (E.D. Ky. Aug. 23, 2006), does not bolster their commonality argument.
(Doc. 183, #7612). In Chaz, plaintiffs attempted to certify a class for a civil RICO
claim predicated on mail fraud where the defendants fraudulently bid on
government construction contracts. 2006 WL 2453302, at *2. But while the action
29
failed on the predominance prong, the court acknowledged the “action clearly meets
the commonality requirement” because all putative class members uniformly
alleged defendants knowingly fraudulently bid on government contracts. Id. at *10–
11. Here too, Plaintiffs, also proceeding under a mail fraud civil RICO claim, allege
Defendants carried out a uniform scheme to defraud and mislead investors. If
anything then, Chaz supports Plaintiffs’ commonality argument.
Defendants also highlight Maas v. Maas, 161 N.E.3d 863, 871 (Ohio Ct. App.
2020), and Johnson v. Microsoft Corp., 834 N.E.2d 791 (Ohio 2005), to show that the
claims cannot be completely resolved on a class wide basis. (Doc. 183, #7612).
Perhaps so. But again, in pressing that argument, Defendants are challenging
predominance, not commonality. Commonality does not require the common issue
to be dispositive. See Am. Med. Sys., 75 F.3d at 1080. As stated previously, the
Court finds at least some common issues, and so Plaintiffs’ proposed class satisfies
commonality as to the civil RICO, breach of fiduciary duties, and unjust enrichment
claims.
3. Plaintiffs Are Typical Of The Proposed Class.
“[T]ypicality determines whether a sufficient relationship exists between the
injury to the named plaintiff and the conduct affecting the class, so that the court
may properly attribute a collective nature to the challenged conduct.” Beattie v.
CenturyTel, Inc., 511 F.3d 554, 561 (6th Cir. 2007) (quoting Sprague, 133 F.3d at
399). Typicality and commonality “tend to merge in practice.” In re Whirlpool, 722
F.3d at 853 (cleaned up). “[A] necessary consequence of the typicality requirement is
30
that the representative’s interests will be aligned with those of the represented
group, and in pursuing his own claims, the named plaintiff will also advance the
interests of the class members.” Young, 693 F.3d at 542 (quoting Sprague, 133 F.3d
at 399).
The named plaintiff’s claim need not “always involve the same facts or law,
provided there is a common element of fact or law.” Beattie, 511 F.3d at 561
(quoting Senter v. Gen. Motors Corp., 532 F.2d 511, 525 n. 31 (6th Cir. 1976)). And,
as a general matter, “a plaintiff’s claim is typical if it arises from the same event or
practice or course of conduct that gives rise to the claims of other class members,
and if his or her claims are based on the same legal theory.” Am. Med. Sys., 75 F.3d
at 1082.
Plaintiffs here are typical of the class as to their remaining three claims—
civil RICO, breach of fiduciary duties, and unjust enrichment. All named Plaintiffs
invested in Build Realty. (Doc. 155-1, #3201). All named Plaintiffs paid $10,000
“down” to buy into the investment. (Id.). All named Plaintiffs had trusts established
with their LLCs as beneficiaries. (Id.). All named Plaintiffs paid interest
immediately on rehab funds. (Id.). In short, all named Plaintiffs experienced the
same transactional structure that Plaintiffs claim systematically defrauded them
while enriching Defendants. Their common experiences, coupled with their
invocation of common legal theories to remedy the harms they allegedly suffered,
give the named Plaintiffs typicality within the class. See Am. Med. Sys., 75 F.3d at
1082.
31
True, some differences no doubt exist between the named Plaintiffs and other
class members, depending on their exact investment, rehabbing, and resale
experience. For example, some investors in the putative class may have made
money flipping the rehabbed homes, others may have lost the properties to
foreclosure. Yet, all the investors’ core fraud and fiduciary duty allegations overlap.
As to those who profited, or those who did not, if the “Build Scheme” fraudulently
misrepresented the nature of the $10,000 down payment, then each has been
harmed. If Build took more than that to which it was entitled, then presumably
even those who profited received less than they otherwise would have. That is
enough to satisfy the low bar that typicality imposes.
Defendants take a different view. They contend that “[e]very named Plaintiff
has unique and individual issues that put their claims, and defendants’ defenses to
those claims, in a different position than other putative Class members.” (Doc. 183,
#7615). To illustrate, they point to alleged differences among even the named
Plaintiffs, including each named Plaintiff’s anticipated use, time of buy in, rehab
challenges, contractual addendums, and understanding of the “trust structure.” (Id.
at #7615–16).
Especially given typicality’s lenient standards, though, such differences do
not make the named Plaintiffs atypical, either as to each other or as to the other
putative class members. See Am. Med. Sys., 75 F.3d at 1082. “Where the class
representative’s claims vary from those of the class, a court will deny class
certification only when the variation ‘strikes at the heart of the respective causes of
32
actions.’” 1 Newberg & Rubenstein on Class Actions § 3:29 (2022) (quoting Deiter v.
Microsoft Corp., 436 F.3d 461, 467 (4th Cir. 2006)). And here, any differences
between the named Plaintiffs and the larger class do not “strike at the heart” of
their common claims; those claims attack the structure of the transaction itself, not
merely the way that structure gave rise to particular harms in a given case. For
much the same reason that the class has commonality, then, the named Plaintiffs
also satisfy typicality—each experienced the same, allegedly illegal and fraudulent,
Build Realty business model. See In re Whirlpool, 722 F.3d at 853 (noting
commonality and typicality overlap).
Defendants strike somewhat closer to home by noting four of the five named
Plaintiffs defaulted on their investment obligations. (Id. at #7616–17). By all
accounts, the proposed class did not default at that rate. (See Doc. 193-12). And the
allegations suggest that those who did default experienced different and additional
harms (through the loss of the property) as compared to those who completed the
process without default.
Plaintiffs respond by arguing they “suffered the [typical] injuries at the core
of their Complaint … at the time of closing,” well before any default. (Doc. 191,
#9305). But “at the time of closing” may be an overstatement. Any breach of
fiduciary duties by Edgar Construction and/or Build Realty presumably could not
occur before establishing the fiduciary relationship, which only occurred upon
closing.12
12As discussed below, Plaintiffs may mean to argue that Edgar Construction and/or Build
Realty violated their fiduciary duties by not disclosing the overarching fraudulent nature of
33
Still Plaintiffs’ underlying point is that the allegedly fraudulent set-up and
structure of the arrangement itself, rather than any investor’s experience with that
arrangement, is what gives rise to liability. Just because some putative class
members did not default does not alter that Defendants still (allegedly) defrauded
those putative class members out of their rights as mortgagees. Thus, named
Plaintiff’s claims “arise[] from the same … course of conduct … and … are based on
the same legal theory” as the claims of the other class members. Am. Med. Sys., 75
F.3d at 1082. That is enough to show typicality.
Granted, the differences Defendants highlight, including default rate, could
factor into potential damages, but that does not alter the nature of the named
Plaintiffs’ (allegedly) typical injuries. See In re Whirlpool, 722 F.3d at 854 (noting
that individualized questions of damages do not defeat class certification). And
anyway, Plaintiffs have proposed a subclass of those who has defaulted. This
further ensures the effect of some members’ default will be separated out from the
non-default class members in the minds of any potential jury.
4. Named Plaintiffs Are Adequate.
That leaves the last Rule 23(a) requirement—adequacy. As the Sixth Circuit
has explained, “commonality and typicality tend to merge with the requirement of
adequate representation.” In re Whirlpool, 722 F.3d at 853. To be adequate, two
the scheme to the investors once that trust was created. That is, even if the injuries began
with closing, Plaintiffs may contend that Edgar’s breach was in allowing the Plaintiffs (who
were beneficiaries to whom Edgar owed duties as trustee) to move forward with their rehab
activities—thereby incurring additional liabilities—without disclosing to those investors
the risks inherent in doing so. The Court takes no position at this time whether such non-
disclosure could violate a trustee’s fiduciary duties to a beneficiary.
34
criteria must be met: “1) the representative must have common interests with
unnamed members of the class, and 2) it must appear that the representatives will
vigorously prosecute the interests of the class through qualified counsel.” Am. Med.
Sys., 75 F.3d at 1083 (quoting Senter, 532 F.2d at 525)). “The adequacy inquiry …
serves to uncover conflicts of interest between named parties and the class they
seek to represent.” Beattie, 511 F.3d at 562 (quoting Amchem, 521 U.S. at 625–26).
“When the defendants have [a] defense unique to the named plaintiff, the named
plaintiff will not meet the adequacy of representation element,” at least where the
defendant has “put forth sufficient evidence to establish that the issue would be a
focus of the litigation.” Washington v. Rossen, Varchetti & Oliver, PLLC, No. 1:11-
cv-945, 2016 WL 11631241, at *4 (W.D. Mich. Jan. 25, 2016) (citing O’Neil v. Appel,
165 F.R.D. 479, 493 (W.D. Mich. 1996)); see also Schuh v. HCA Holdings, Inc., No.
3:11-1033, 2014 WL 4716231, at *11–12 (M.D. Tenn. Sept. 22, 2014) (refusing to
find class representative inadequate when defendant’s proposed defenses did not
threaten to become the focus of litigation).
Separately, this inquiry also includes a peek into the competence and
qualifications of class counsel and any potential conflicts of interest. Gen. Tel. Co. of
Sw., 457 U.S. at 157 n.13 (1982); Senter, 532 F.2d at 525; see also Bentley v.
Honeywell Int’l, Inc., 223 F.R.D. 471, 584 (S.D. Ohio 2004). “In the absence of a
showing to the contrary, adequacy of counsel is often presumed.” Int’l Union, United
Auto., Aerospace, & Agr. Implement Workers of Am. v. Kelsey-Hayes Co., No. 2:11-cv-
35
14434, 2015 WL 1906133, at *3 (E.D. Mich. Apr. 28, 2015) (quoting Abby v. City of
Detroit, 218 F.R.D. 544, 548 (E.D. Mich. 2003)).
Here, Plaintiffs are adequate representatives. They appear to be vigorously
prosecuting their claims. Since filing on February 20, 2019, named Plaintiffs have
consistently litigated their claims against Defendants. Moreover, as detailed supra,
named Plaintiffs have common claims to the members of the class. Finally, named
Plaintiffs proceed with the aid of qualified counsel in the Finney Law Firm, LLC,
and Markovits, Stock & DeMarco, LLC, both experienced firms with class-action
experience before this Court and elsewhere.
Defendants challenge adequacy on three fronts relating to both the class
representatives’ and putative class counsel’s adequacy. (Doc. 183, #7617–25). First,
Defendants argue that at least some of the class representatives are subject to
individualized defenses. (Id. at #7623–24). Second, Defendants contend that class
counsel is inadequate because counsel Chris Finney has a conflict of interest and
has harmed the interests of the class as a whole. (Id. at #7618–23). Third,
Defendants argue that named Plaintiffs are improperly abandoning post-closing
damages potentially available to the class members. (Doc. 219, #10369). None have
merit.
a. Potential Individual Defenses Against The Named

Plaintiffs Do Not Make Them Inadequate.
Defendants allege they plan to raise two individual defenses against named
Plaintiffs. (Doc. 183, #7623). Defendants plan to accuse Compound Property
Management, Leone1, and R&G Cincy Investments of spoliation of evidence, and
36
Leone1 and Pyramid Investment Group of pressing claims barred by the statute of
limitations. (Id. at #7624).
According to Defendants, courts can find class representatives inadequate if
subject to individualized defenses. (Id. at #7623–25). But the question is not
whether individual defenses exist, but whether Defendants “put forth sufficient
evidence to establish that the [defenses] would be a focus of the litigation.”
Washington, 2016 WL 11631241, at *4. And even that may not be enough. At least
one court in this Circuit, responding to an allegation of spoliation of evidence, has
cast doubt on whether a unique defense alone renders a representative party
inadequate. See Compressor Eng’g Corp. v. Thomas, 319 F.R.D. 511, 527–28 (E.D.
Mich. 2016) (“Critically, Defendant has failed to cite to any case law from the Sixth
Circuit holding that a possible unique defense would render a party an inadequate
class representative.”).
In fairness to Defendants, though, some courts have found named plaintiffs
inadequate where defendants credibly accused them of spoliation of evidence, at
least where such claims “threaten to become the focus of the litigation.” See Falcon
v. Philips Elecs. N. Am. Corp., 304 F. App’x 896, 897 (2d Cir. 2008). Defendants’
problem, though, is that its spoliation defenses are unlikely to steal the spotlight
here.
The spoliation allegations consist of the following:
Here, the depositions of the principals of Compound Property

Management, Leone1, and R&G Cincy Investments reveal several
significant spoliation issues. Compound Property Management’s
principal, Theresa Robinson, admitted she did not fully search her
37
filing cabinets for documents, discarded a phone with relevant text

messages and made no effort to preserve them, and even admitted she
deleted relevant emails after the initial state court case was filed.
Likewise, Richard Hardin, the principal of Leone1, testified that he
used text messaging to communicate about Build Realty-related
matters, but none were produced, and his counsel never asked him to
preserve those document, and, when asked if he would gather them, he
said he does not have them anymore. R&G Cincy Investment’s
principal Gwendolyn Broadnax similarly testified that she did not
preserve relevant documents, and was never instructed to by counsel.
Ms. Broadnax’s husband, also a principal in R&G Cincy Investment,
also testified that he was never instructed to preserve relevant
documents. These plaintiffs’ failure to preserve relevant documents
and, in some instances, their admitted affirmative destruction of those
documents, render them inadequate to serve as representatives of the
putative class.
(Doc. 183, #7624) (internal citations omitted).
The Court can likely resolve this spoliation issue through straightforward
inquiries that will not derail the overall litigation. See, e.g., Forest Lab’ys, Inc. v.
Caraco Pharm. Lab’ys, Ltd., No. 6-cv-13143, 2009 WL 998402, at *5–7 (E.D. Mich.
Apr. 14, 2009) (describing and applying the three-part test for assessing spoliation of
evidence). Moreover, the evidence alleged to be lost does not appear to implicate
absent class members’ claims. Therefore, even if subject to a partial spoliation
defense, these Plaintiffs are adequate to represent the class.13 The Court is satisfied
Defendants’ spoliation defenses will not derail the action.
Second, Defendants allege they plan to bring a statute of limitation defense
against Leone1 and Pyramid. (Doc. 183, #7624–25). Plaintiffs’ civil RICO claim has
13 Granted, if a named Plaintiff is found subject to a total bar on recovery based on a bad-
faith spoliation of evidence, see Adkins v. Wolever, 554 F.3d 650, 653 (6th Cir. 2009), that
would make that Plaintiff no longer adequate. But any potential sanction turns on proving
the Plaintiff’s culpable mental state. See Forest Laby’s, 2009 WL 998402, at *5–7. For
purposes of class certification, the Court cannot and will not delve so deeply into the merits.
38
a four-year statute of limitations. Agency Holding Corp. v. Malley-Duff & Assocs.,
Inc., 483 U.S. 143, 156 (1987). Off the bat, the Court notes that Pyramid falls within
the statutory timeline—Pyramid closed on April 22, 2015, and joined this suit on
February 20, 2019. (Doc. 193-13, #9760). Instead, Defendants accuse Fatima Jones,
the principle of Pyramid, of “struggl[ing] to recall even basic facts about the
representations made to her or her rehab project generally,” calling the Court’s
attention to four pages out of Jones’ 293-page deposition. (Doc. 183, #7625). But the
Court has reviewed Jones’ deposition and satisfied itself that she understands the
core allegations well enough to be an adequate class representative. (Doc. 193-13,
#5370, 5431).14
As for Leone1, Defendants contend it filed outside the four-year statute of
limitations. (See Doc. 183, #7625). Plaintiffs concede that Leone1 closed on July 31,
2014, while Plaintiffs filed this action February 20, 2019. (Doc. 193-14, #9764). This
nominally falls outside the four-year limit. But Plaintiffs argue that a similar state-
level class action—see Hamilton County Court of Common Pleas No. A1700624—
filed on November 2, 2017, tolled the clock. (Doc. 191, #9305). The Court takes
notice that counsel voluntarily dismissed that state action on February 20, 2019,
the same day this action was filed.
14For example, Jones testified: “So I remember one of the key points was … we [i.e., Build
Realty] buy this … property very low, and then we sell it to you wholesale. And … there’s
no credit check. You only need $10,000. … Build told me that they were selling me a
property. They told me that. They didn’t sell me a property. They sold it to the trust.” (Doc.
193-13, #5370, 5431). That understanding is enough to make Jones adequate. (See Doc. 183,
#7572–79)
39
“[T]he commencement of a class action suspends the applicable statute of
limitations as to all asserted members of the class who would have been parties had
the suit been permitted to continue as a class action.” Am. Pipe & Const. Co. v.
Utah, 414 U.S. 538, 554 (1974). “The limitations period ‘remains tolled for all
members of the putative class until class certification is denied.’” Potter v. Comm’r
of Soc. Sec., 9 F.4th 369, 374 (6th Cir. 2021) (quoting Crown, Cork & Seal Co. v.
Parker, 462 U.S. 345, 354 (1983)).
At least as an initial matter, the Court determines Leone1’s claim falls within
the statute of limitations with tolling accounted for. Defendants fail to respond to
this argument. Accordingly, Defendants’ timeliness arguments do not render
Leone1 an inadequate named Plaintiff.15
b. Proposed Class Counsel Are Adequate.
Defendants next contend proposed class counsel are inadequate—directing
their ire mainly against Chris Finney. First, Defendants argue Finney directly
injured the interests of the putative class by disrupting individual class member’s
abilities to find underwriters to insure their Build Realty transactions. (Doc. 183,
#7618–19). Finney repeatedly contacted Stewart Title, a title underwriter, allegedly
threatening them with “reputational harm and litigation.” (Id.; Doc. 183-3, #7679).
Stewart Title balked at underwriting Build Realty sales, and thus many investors
could not offload their properties. (Id.).
15 Although neither party raised the issue, it appears Plaintiffs’ breach of fiduciary duties
claim, which the Court certifies below, also has a four-year statute of limitations. Ohio Rev.
Code § 2305.09(D); Antioch Co. Litig. Tr. v. Morgan, No. 3:10-cv-156, 2013 WL 1338834, at
*1 (S.D. Ohio Apr. 1, 2013) (“It is undisputed that the breach of fiduciary duty claims are
subject to a four-year statute of limitations.”).
40
Second, Defendants accuse Finney of having a financial conflict of interest.
Finney operates his own title Agency, Ivy Pointe, which allegedly competes with
Defendant First Title. (Id. at #7620). Defendants allege Finney secretly desires to
put First Title out of business to capture its market share. (Id. at #7621–22). And
Defendants say if Finney runs Defendants out of business, the investors cannot
then recover on their investments, placing Finney’s interests in further conflict with
the class. (Id. at #7622).
Third, in their Surreply, Defendants accuse Markovits, Stock & DeMarco, the
other firm representing Plaintiffs, of its own infidelity by “do[ing] nothing to control
[Finney’s] actions.” (Doc. 219, #10371).
Finally, Defendants question the representative Plaintiffs’ judgment and
adequacy by employing such counsel. (Id. at #10372).
The Court begins by noting that Defendants do not challenge class counsels’
competence, experience, or ability as attorneys. Instead, boiling down the four
allegations above, Defendants question Finney’s litigation tactics and potential
personal conflict of interest.
First, Finney’s tactics do not create antagonism against the putative class
members. While Finney did repeatedly warn Stewart Title of litigation and
reputational harm (Doc. 183-3, #7679), the record also shows Finney tried to
minimize damage to the class. Finney emailed Stewart Title to assure it that this
suit did not challenge the properties’ title’s validity. (Doc. 183-32, #7894). Indeed,
Frank Long of Stewart Title emailed:
41
[Finney] offered to place an entry of record stating that nobody is

making any title claims against the roughly 130 titles we have agreed
to insure to end buyers. He agrees that these homes need to be sold
and out of the hands of the alleged bad actors, is not interested in
harming third parties by creating title problems.
(Id.). Based on this email, the Court finds, at least for the preliminary inquiry at the
certification stage, that Finney has not taken an antagonistic position against the
class membership.
Second, the Court is uncertain if Rule 23(a)(4) is the appropriate vehicle for
probing Finney’s alleged personal conflict of interest with First Title. Whether
Finney has a personal conflict of interest strikes the Court as a challenge to his
adequacy as class counsel. But as a textual matter, such concerns appear to sound
in Rule 23(g), rather than Rule 23(a). Rule 23(a)(4), by contrast, calls on the Court
only to determine whether “representative parties will fairly and adequately protect
the interests of the class.” Fed. R. Civ. P. 23(a)(4) (emphasis added). Given that
language, allowing a freewheeling inquiry into the adequacy of class counsel pre-
certification seemingly collapses Rule 23(g) into 23(a)(4), rendering the former
redundant.
To the extent that the Court should consider potential counsel conflicts under
23(a)(4)—an issue on which courts seem to take differing views16—the Court further
16 Compare Creative Montessori Learning Centers v. Ashford Gear LLC, 662 F.3d 913, 918
(7th Cir. 2011) (recognizing severe misconduct by counsel can prevent a class from being
certified), Mandalevy v. Bofl Holdings, Inc., No. 3:17-cv-667, 2022 WL 4474263, at *5 (S.D.
Cal. Sept. 26, 2022), and Newburg & Rubenstein § 3:72 (“In 2003, Congress adopted … Rule
23(g), creating an explicit textual mooring for the class counsel analysis. However, many
courts continue to employ the substantive standards courts had generated under Rule
23(a)(4) prior to Rule 23(g)’s adoption in their analysis of counsel’s adequacy.”), with Baffa
v. Donaldson, Lufkin & Jenerette Sec. Corp., 222 F.3d 52, 60 (2d Cir. 2000) (cabining the
42
notes that Finney’s conflict here appears minimal. Ivy Pointe occupies a very small
market share in the greater Cincinnati title market. (See Doc. 194-2, Doc. 194-3,
Doc. 194-4, Doc. 194-5). Finney attests he knows of no current lender that refers
business to both Ivy Pointe and First Title. (Doc. 194, #9770). For their part,
Defendants offer a declaration from Dan Orner to argue an unnamed bank is a
common referral source for both First Title and Ivy Pointe. (Doc. 183-33, #7897).
Finney believes Orner refers to Center Bank, but Finney argues that Center Bank
ceased doing business with Ivy Pointe long ago. (Doc. 194, #9770). Defendants do
not dispute this. Ultimately, Finney persuades the Court he does not suffer a
personal conflict that would preclude him from serving as class counsel. And
because Finney may serve as counsel, Defendants’ derivative arguments
questioning the judgment of Markovits, Stock & DeMarco, LLC, and plaintiffs for
associating with Finney also fall flat.
c. Named Plaintiffs Do Not Undercut The Proposed Class

By Forfeiting Post-Closing Damages.
In their Surreply, Defendants accuse the Plaintiffs of forfeiting all post-
closing damages in their Reply. (Doc. 219, #10368). Because Plaintiffs’ Reply focuses
on liability arising from conduct at closing, Defendants argue that Plaintiffs
foreclose class members’ ability to recover on any damages that arose after the
closing. (Id.). Defendants believe this makes Plaintiffs antagonistic to the interests
of the proposed class. (Id.). And to their credit, Defendants correctly note that a
Rule 23(a)(4) inquiry of counsel to issues directly affecting litigants), and In re Chocolate
Confectionary Antitrust Litig., 289 F.R.D. 200, 218 (M.D. Pa. 2012).
43
named plaintiff may be inadequate “when the class representative abandons
particular remedies to the detriment of the class.” W. States Wholesale, Inc. v.
Synthetic Indus., Inc., 206 F.R.D. 271, 277 (C.D. Cal. 2002); see also Thompson v.
Am. Tobacco Co., 189 F.R.D. 544, 550 (D. Minn. 1999).
But the Court does not read Plaintiffs’ Reply as forfeiting anything. To be
sure, Plaintiffs’ Reply emphasizes the closing. (Doc. 191, #9284–85). But so far as
the Court can tell, Plaintiffs were focusing on Defendants’ allegedly unlawful
actions that give rise to liability—not the calculation of damages. Plaintiffs argue
individual post-closing differences, like rehab experiences and profit from resale, do
not change the alleged misrepresentations and fraud that culminated at the closing.
The focus on the closing makes some sense. After all, at closing investors
ratified their formal relationship with Defendants, paid the $10,000, and agreed to
the cap on costs and fees. Therefore, if Plaintiffs ultimately prevail and show that
Defendants’ business model defrauded the class, all commercial damages
proximately flowing from the closing may be potentially recoverable. 18 U.S.C.
§ 1964(c); see Reiter v. Sonotone Corp., 442 U.S. 330, 339 (1979) (recognizing that
consumers can recover for civil RICO for property losses “arising directly out of” the
tainted sale). Of course, this is not to say that Plaintiffs will recover anything. The
Court simply acknowledges that Plaintiffs did not “waive” these damages by
focusing on the closing.
In sum, as to each of the three remaining claims, Plaintiffs have carried their
burden of showing that they meet the four requirements that Rule 23(a) imposes.
44
D. The Court Finds Plaintiffs Meet Rule 23(b)’s Requirements As To

Their Civil RICO And Fiduciary Duties Claims Only.
Besides meeting the Rule 23(a) requirements, Plaintiffs must show that each
claim qualifies under at least one Rule 23(b) category. As to the three remaining
claims—civil RICO, breach of fiduciary duties, and unjust enrichment—Plaintiffs
proceed solely under Rule 23(b)(3). The Court agrees that this subdivision works as
to the civil RICO and breach of fiduciary duties claims but not the unjust
enrichment claim.
1. Plaintiffs Meet Rule 23(b)(3) As To Their Civil RICO Claim.
The Court opens the analysis with Plaintiffs’ civil RICO claim because the
parties dedicate much of their briefing to that topic. (Doc. 183, #7630; Doc. 191,
#9314). Rule 23(b)(3) has two components: predominance and superiority. Both are
present here. The Court concludes that common class wide questions will
predominate in the civil RICO litigation even if some individual questions remain,
and that class treatment is a superior method of adjudication.
a. Predominance
Predominance “tests whether proposed classes are sufficiently cohesive to
warrant adjudication by representation.” Amchem, 521 U.S. at 623. “To meet the
predominance requirement, a plaintiff must establish that issues subject to
generalized proof and applicable to the class as a whole predominate over those
issues that are subject to only individualized proof.” Young, 693 F.3d at 544
(quoting Randleman v. Fid. Nat. Title Ins. Co., 646 F.3d 347, 352–53 (6th Cir.
2011)). But “[a] plaintiff class need not prove that each element of a claim can be
45
established by classwide proof.” In re Whirlpool, 722 F.3d at 858 (citing Amgen, 568
U.S. at 468). Indeed, “[a] class may be certified based on a predominant common
issue even though other important matters will have to be tried separately, such as
damages or some affirmative defenses peculiar to some individual class members.”
Hicks v. State Farm Fire & Cas. Co., 965 F.3d 452, 460 (6th Cir. 2020) (citation and
internal quotation marks omitted).
In deciding whether individual issues predominate over common questions, a
court cannot rely on mere “speculation and surmise” that individual issues may
arise. Bridging Cmtys. Inc. v. Top Flite Fin. Inc., 843 F.3d 1119, 1125 (6th Cir.
2016) (quoting Waste Mgmt. Holdings, Inc. v. Mowbray, 208 F.3d 288, 298 (1st Cir.
2000)). Rather, a court “should consider only those issues that would likely arise if
an individual class member’s claims were being adjudicated on the merits.” Bais
Yaakov of Spring Valley v. ACT, Inc., 12 F.4th 81, 89 (1st Cir. 2021) (emphasis
added). “In so doing, a court considers ‘the probable course of the litigation’ so as to
‘formulate some prediction as to how specific issues will play out in order to
determine whether common or individual issues predominate.’ Id. (quoting
Mowbray, 208 F.3d at 298); see also Sandusky Wellness Ctr., LLC v. ASD Specialty
Healthcare, Inc., 863 F.3d 460, 468 (6th Cir. 2017) (“[T]he key is to ‘identify[] the
substantive issues that will control the outcome,’ in other words, courts should
‘consider how a trial on the merits would be conducted if a class were certified.’”
(quoting Gene & Gene, LLC v. BioPay, LLC, 541 F.3d 318, 326 (5th Cir. 2008)).
46
Turning to Plaintiffs’ civil RICO claim, in order to prevail on the merits at
trial, they must prove four elements: “(1) conduct (2) of an enterprise (3) through a
pattern (4) of racketeering activity.” Moon v. Harrison Piping Supply, 465 F.3d 719,
723 (6th Cir. 2006) (quoting Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479, 496
(1985)); 18 U.S.C. § 1962(c). A “pattern of racketeering activity” must include at
least two predicate acts within a ten-year period. 18 U.S.C. § 1961(5). “The alleged
predicate acts may consist of offenses ‘which are indictable’ under any of a number
of federal statutes, including the mail (18 U.S.C. § 1341) and wire fraud statutes (18
U.S.C. § 1343).” Moon, 465 F.3d at 723 (citing 18 U.S.C. § 1961(1)).
Further, the Plaintiffs must show the asserted predicate act was both a but-
for and a proximate cause of their injury with “some direct relation between the
injury asserted and the injurious conduct alleged.” Hemi Grp., LLC v. City of New
York, 559 U.S. 1, 9 (2010). Finally, the Plaintiffs need to show they suffered a
commercial injury. 18 U.S.C. § 1964(c); see Jackson v. Sedgwick Claims Mgmt.
Servs., Inc., 731 F.3d 556, 562 (6th Cir. 2013) (holding plaintiffs must “‘allege that
they were ‘injured in [their] business or property,’ … to state a claim for a civil
RICO damages action” (quoting 18 U.S.C. § 1964(c))).
In terms of the required predicate acts, Plaintiffs focus this Motion for
Certification on the crime of mail fraud. (Doc. 191, #9279–80). As a crime, mail
fraud contains three elements: “(1) a scheme or artifice to defraud; (2) use of
interstate [mail or] wire communications in furtherance of the scheme; and (3)
intent to deprive a victim of money or property.” United States v. Daniel, 329 F.3d
47
480, 485 (6th Cir. 2003) (quoting United States v. Prince, 214 F.3d 740, 747–48 (6th
Cir. 2000)); 18 U.S.C. § 1343. “A scheme to defraud is ‘any plan or course of action
by which someone intends to deprive another of money or property by means of false
or fraudulent pretenses, representations, or promises.’” In re ClassicStar Mare
Lease Litig., 727 F.3d 473, 484 (6th Cir. 2013) (quoting United States v.
Faulkenberry, 614 F.3d 573, 581 (6th Cir. 2010)). Any mailing sent “incident to an
essential part of the scheme satisfies the mailing element even if the mailing itself
contains no false information.” Bridge v. Phoenix Bond & Indem. Co., 553 U.S. 639,
648 (2008) (citation and internal quotes omitted).
Plaintiffs need not prove reliance. To be sure, courts once held that mail
fraud as a predicate for civil RICO included an additional element of reliance,
mirroring common law fraud. See Chaz, 2006 WL 2453302, at *2. But in 2008 the
Supreme Court clarified that mail fraud as a predicate for civil RICO does not
include the element of a plaintiff’s first-person reliance on any one
misrepresentation. Bridge, 553 U.S. at 649. “Because an individual can commit an
indictable act of mail or wire fraud even if no one relies on his fraud, he can engage
in a pattern of racketeering activity, in violation of § 1962, without proof of
reliance.” Id. (quoting Anza v. Ideal Steel Supply Corp., 547 U.S. 451, 476 (2006)
(Thomas, J., concurring)). That said, some reliance by somebody may be needed to
satisfy RICO’s causation element. Id. at 478; see Anza, 547 U.S. at 478 (“Reliance is
doubtless the most obvious way in which fraud can cause harm, but it is not the
only way.”) (quoting Sys. Mgmt., Inc. v. Loiselle, 303 F.3d 100, 105 (1st Cir. 2002)).
48
In other words, causation, not reliance, is an element of civil RICO predicated on
mail fraud, but reliance offers a way to establish causation.
The upshot is that Plaintiffs, alone or as a class, must prove ten elements to
prevail in their civil RICO claim against Defendants. In particular, they must show
that Defendants engaged in (1) conduct, (2) of an enterprise, (3) through a pattern,
(4) of racketeering, through (5) at least two acts of mail fraud, in which Defendants
created (6) a scheme or artifice to defraud, (7) that used interstate mail or wire
communications in furtherance of the scheme, and (8) that intended to deprive a
victim of money or property, ultimately (9) causing Plaintiffs an (10) injury to their
commercial interests. As claims go, it’s no walk in the park.
While complex, the Court agrees that common questions predominate over
this analysis. Of the above elements, the majority can be proven or disproven on a
uniform class wide basis because they revolve around the operations of Build Realty
and its affiliates, under their common business plan. As Plaintiffs contend, and the
Court agrees, the core inquiry is the legality of Build Realty’s business practices and
the legal meanings of certain agreements. These central questions are subject to
class wide resolution with one opinion by this Court or one verdict by a jury. Indeed,
only two of the ten elements must be proven by an individualized showing of the
class membership: causation and injury (as well as damages17). For these reasons,
common questions predominate over individual questions as to Plaintiffs’ civil RICO
claim.
17 Plaintiffs will also need to show damages, but that inquiry can be addressed individually
if and when Defendants are found liable.
49
Defendants respond in various ways. First, Defendants argue that individual
questions of reliance, either for their own sake or to prove causation, will
overwhelm any common questions. (Doc. 183, #7630). They argue that “[a]t heart,
all of Plaintiffs’ claims rely on a purported series of oral and written
misrepresentations about the structure and nature of Build Realty’s business model
upon which the putative Class members purportedly relied to their detriment.”
(Id.). In short, Defendants warn that to recover, every class member needs to testify
as to the exact statement that they relied on to their detriment.
But this misunderstands Plaintiffs’ cause of action. Plaintiffs do not bring a
common law fraud claim where reasonable reliance must be shown based on a
specific misrepresentation. Instead, Plaintiffs allege Defendants engaged in a
scheme to routinely and uniformly defraud investors through deceptive marketing,
ambiguous contract terms, and illegal trusts. After all, mail fraud criminalizes
creating a “scheme or artifice to defraud”—not fraud itself. Therefore, causation
need only stem from the scheme overall, not from an isolated misrepresentation. See
Heinrich v. Waiting Angels Adoption Servs., Inc., 668 F.3d 393, 404 (6th Cir. 2012)
(“A RICO plaintiff is not required to plead or prove first-party reliance on an
allegedly false statement.”); Peterson v. H.R. Block Tax Servs., Inc., 174 F.R.D. 78,
84 (N.D. Ill. 1997) (“The mail fraud statute, 18 U.S.C. § 1341, focuses on the
defendant’s conduct in devising or intending to devise a scheme to defraud, not the
individual experiences of each defrauded person.”). With this standard in mind, the
50
Court believes an individualized showing of causation will not overwhelm common
issues, and that common issues will still predominate.
Moreover, in a civil RICO action predicated on mail fraud, the causation
element is often based on a plaintiff’s participation in the fraudulent scheme,
without need to show reliance on an isolated misrepresentation. See Wallace v.
Midwest Fin. & Mortg. Servs. Inc., 714 F.3d 414, 420 (6th Cir. 2013) (“Thus, the
appropriate inquiry in this case is not whether Wallace actually relied on the
allegedly inflated appraisal, but whether the fraudulent scheme furthered by that
appraisal proximately caused his financial injuries.”); Torres v. S.G.E. Mgmt., LLC,
838 F.3d 629, 640 (5th Cir. 2016) (“Whether the Plaintiffs relied on a
misrepresentation about the scheme is thus not determinative of whether the
Plaintiffs can prove proximate causation under Bridge. … The participants’ injuries
arise from the scheme’s payment structure, and the inherent concealment of the
inevitableness of those injuries.”); Williams v. Duke Energy Corp., No. 1:08-cv-46,
2014 WL 12652315, at 14 (S.D. Ohio Mar. 13, 2014) (“[B]ecause Plaintiffs allege
that the conduct of Duke and the other alleged conspirators was part of the same
illegal pattern and scheme, the common issues of fact and law arising from that
conduct predominate over any individual issues and satisfy the predominance
requirement of Rule 23(b)(3).”); Castellanos, 2016 WL 11678220, at *3–5 (certifying
a mail fraud civil RICO class action based on a scheme to enticed immigrants to
seek jobs that were not guaranteed).
51
And some courts have even held reliance can be inferred class wide in
situations similar to those alleged here. See Orlowski v. Bates, No. 2:11-cv-01396,
2018 WL 7272053, at *4 (W.D. Tenn. Dec. 19, 2018) (presuming reliance based on
non-disclosure that investment payments were not buying coins as promised);
Cohen v. Trump, 303 F.R.D. 376, 385 (S.D. Cal. 2014) (“Courts have found that
reliance can be established [in civil RICO] on a class-wide basis where the behavior
of plaintiffs and class members cannot be explained in any way other than reliance
upon the defendant’s conduct.”); Peterson, 174 F.R.D. at 84–85 (“[C]ourts will
presume class members’ reliance when it is logical to do so or when the complaint’s
allegations make reliance apparent.”). To be sure, at this stage the Court takes no
position on whether causal reliance can be inferred. Rather, the point is merely that
there are reasons to doubt individualized causation issues will pose a significant
problem here.
Defendants contend that the caselaw supports their view that individual
showings of causation and reliance will swamp common questions. Defendants cite
to Bradberry v. John Hancock Mut. Life Ins. Co., 222 F.R.D. 568, 571–72 (W.D.
Tenn. 2004), for the proposition that “non-uniform oral presentations and issues of
reliance are generally unsuited for class certification.” (Doc. 183, #7630). But
Bradberry concerned common law fraud—where first-person reliance must be
reasonable—not mail fraud. Bradberry, 222 F.R.D. at 571–72. As discussed, Bridge
v. Phoenix Bond & Indem. Co. rejected first-person reliance as an essential element
for a mail fraud civil RICO claim.
52
Defendants also point to cases where courts found issues of individualized
reliance and causation overwhelmed common issues and defeated class certification
for a mail fraud civil RICO claim. (Doc. 183, #7630–31). But these cases all
preceded, and so appear undermined by, Bridge. For example, Defendants direct the
Court to McLaughlin v. Am. Tobacco Co., 522 F.3d 215 (2d Cir. 2008), which held
the plaintiffs could not show the necessary reliance to proceed in a class action
under civil RICO when predicated on mail or wire fraud. But Bridge directly
abrogated McLaughlin’s understanding of the RICO statute. See In re Zyprexa
Prods. Liab. Litig., 671 F. Supp. 2d 397, 444 (E.D.N.Y. 2009) (“McLaughlin has been
partially abrogated by the Supreme Court’s subsequent decision in Bridge v.
Phoenix Bond & Indem. Co. … with respect to McLaughlin’s interpretation of the
federal civil racketeering statute.”). Many of Defendants’ other citations on this
point hit the same dead end.
Defendants next point to a handful of post-Bridge cases to show that
individual questions of reliance and causation can still prevent class certification.
These too are distinguishable. For example, Defendants analogize to Johnson v. ITS
Fin. LLC, 314 F.R.D. 441 (S.D. Ohio 2015). (Doc. 219, #10348). In Johnson, the
plaintiff sought to certify a mail fraud civil RICO claim based on “additional taxes,
penalties, and interest” charged on class members because of fraudulent tax
preparation services. Id. at 448. The court denied the motion because the class
member’s injuries “may have resulted from any number of errors, omissions, or
irregularities—including mere negligence, oversight, or even the taxpayer’s own
53
fraud.” Id. Here, by contrast, each class member’s alleged injuries can be traced
back to the scheme’s structure itself. So, unlike in Johnson, Plaintiffs’ injuries
resulting from the scheme will be ascertainable. (Assuming, of course, Defendants
are liable.)
Moving beyond reliance and causation, Defendants next argue injury cannot
be uniformly shown. They cite Lester v. Percudani, 217 F.R.D. 345 (M.D. Pa. 2003),
which denied a motion for civil RICO class certification, in part because “the very
fact of injury, apart from the amount of damages, depends almost entirely on
individual circumstances.” Id. at 352–53. That is not so here as to the civil RICO
claim. If the underlying structure of the transaction and the mailing associated with
it constituted fraud, then that same injury occurred to each class member. To be
sure, determining the quantum of harm suffered, if any, requires an individualized
assessment. But that is often the case in class actions, and it rarely prevents
certification.
That also answers Defendants’ final argument, in which they claim that
“individual issues unquestionably predominate on the question of damages.” (Doc.
183, #7633). That may well be, but “individual damages calculations do not preclude
class certification under Rule 23(b)(3).” In re Whirlpool, 722 F.3d at 850. Assuming
Plaintiffs can show class members overpaid for their investments or lost money
because of Defendants’ fraudulent and unlawful actions, individual damages can be
readily calculated.18
18As Plaintiffs propose, damages calculation would be largely rote and formulaic. (Doc. 191,
#9284). For example, if Defendants exceeded the capped “closing costs and funding fees”
54
In sum, the Court agrees that each class member ultimately must show
causation, injury, and damages to recover under the civil RICO claim. But the Court
believes these determinations will not swamp the more predominant questions
presented by the legality or illegality of Defendants’ business model. Causation can
be shown (maybe even presumed) from general reliance on the scheme itself; the
fact of injury likewise arises on a class wide basis from the structure itself; and
damages, while individualized, are formulaic. Thus, the Court agrees that, with
respect to the civil RICO claim, common questions predominate over individual
questions within the class.
b. Superiority
On to superiority. Under Rule 23(b)(3), a plaintiff must show “that a class
action is superior to other available methods for fairly and efficiently adjudicating
the controversy.” Fed. R. Civ. P. 23(b)(3). Pertinent here, a court should consider—
(1) “the class members’ interests in individually controlling the prosecution or
defense of separate actions,” (2) “the extent and nature of any litigation concerning
the controversy already begun by or against class members,” (3) “the desirability or
undesirability of concentrating the litigation of the claims in the particular forum,”
and (4) “the likely difficulties in managing a class action.” See Fed. R. Civ. P.
23(b)(3)(A)–(D).
with the $10,000 down payment, class members could recover the difference. Further, if
Edgar/Build Realty violated their fiduciary duties by surreptitiously profiting off of the
interest rate markup, class members could recover the ill-gotten profits paid over fair
market value. If individual class members intend to seek further recovery from
individualized harm, the Court can address that when it arises.
55
The superiority analysis “aims to ‘achieve economies of time, effort, and
expense, and promote ... uniformity of decision as to persons similarly situated,
without sacrificing procedural fairness or bringing about other undesirable results.’”
Martin v. Behr Dayton Thermal Prods. LLC, 896 F.3d 405, 415 (6th Cir. 2018)
(quoting Amchem, 521 U.S. at 615). “Use of the class method is warranted
particularly because class members are not likely to file individual actions—the cost
of litigation would dwarf any potential recovery.” In re Whirlpool, 722 F.3d at 861.
Potentially small individual recoveries to class members support the use of class
treatment. See Beattie, 511 F.3d at 567.
Plaintiffs have shown a class action is superior to other methods to litigate
their civil RICO claim. First, Plaintiffs argue that many of the class members will
be entitled to “relatively small individual recoveries,” although conceding that some
members suffered larger harms. (Doc. 155-1, #3206). The Court agrees the potential
recovery to many in the class may be minor, supporting the use of a class action.
Second, the Court takes note that no other actions have been filed, besides the
related state action brought by largely the same parties and counsel. This supports
the notion that individual class members have minimal interest in controlling their
own actions. Third, the Court agrees that a class action is a desirable and efficient
manner to dispose of Plaintiffs’ allegations—individual actions relating to the
Defendants’ same business model would be redundant and time consuming.
Defendants do not meaningfully argue that a class action is not superior.
Instead, Defendant summarily argue “[f]or all the reasons stated above [i.e.,
56
referring to the predominance arguments], a class action is not the superior way to
resolve the controversy.” (Doc. 183, #7634). But the Court has already rejected these
reasons. So the Court agrees a class action is a superior method to adjudicate
Plaintiffs’ civil RICO claim.
2. Plaintiffs Meet Rule 23(b)(3) As To Their Breach Of Fiduciary

Duties Claim.
Plaintiffs also request certification for their breach of fiduciary duties claim
under Rule 23(b)(3). Plaintiffs allege that Defendants (either Build Realty or Edgar
Construction) violated their fiduciary duties, owed as a trustee, to the investor LLC
beneficiaries. (Doc. 191, #9281–82). Violations allegedly include charging
undisclosed fees from the purchase price markup and self-dealing through profiting
off the resold loan interest. (Doc. 1, #78–82). As with the civil RICO claim, the Court
finds this claim meets Rule 23(b)(3).
Trust law is a creature of equity established in state law. Fulton v. Gardiner,
186 N.E. 724, 725 (Ohio 1933). As a bedrock principle, a trustee owes the highest
duty of loyalty to its beneficiary. Ohio Rev. Code § 5801.04; id. § 5808.02; see also
Muth v. Maxton, 119 N.E.2d 162, 167 (Ohio Ct. Com. Pl. 1954) (“The highest degree
of good faith is a well established rule. It prohibits the trustee from gaining any
personal advantage or from accepting any responsibility inconsistent with his duty
to the trust.”).
The duty calls for “scrupulous integrity and fair dealing.” In re Binder’s
Estate, 27 N.E.2d 939, 947 (Ohio 1940). “The law is jealous to see that a trustee
shall not engage in double dealing to his own advantage and profit.” Id. This duty
57
cannot be offloaded onto others. See Wayne Sav. Cmty. Bank v. Gardner, No.
08CA0016, 2008 WL 4901700, at *5 (Ohio Ct. App. Nov. 19, 2008). To recover on a
claim for breach of fiduciary duties, a beneficiary must show “(1) the existence of a
duty arising from a fiduciary relationship; (2) a failure to observe the duty; and (3)
an injury proximately resulting from that failure.” Maas, 161 N.E.3d at 871.
Plaintiffs allege that, in every trust Defendants established, the trustee
uniformly violated its duty of loyalty to each investor beneficiary. (Doc. 191, #9282–
83). Indeed, Plaintiffs argue the trustee did not even realize it owed duties to the
investor beneficiaries. (Doc. 193, #9619 (alleging Gary Bailey emailed the “trust
model ‘was developed to protect the Lender’s interest in the property above all
else’”)). And because it is unclear to what extent this duty can be waived, Plaintiffs
argue that individual factual discrepancies cannot alter the circumstances
underlying each breach. (See id.). Finally, Plaintiffs contend Defendants failed to
properly license these trusts under Ohio law, rendering them per se unlawful. (Doc.
191, #9295–96).
The Court agrees that Plaintiffs’ breach of fiduciary duties claim can be
properly resolved through class treatment under Rule 23(b)(3). Take predominance.
Common trust-law questions will predominate over individual questions. In the
Court’s view, one of this claim’s operative question is whether Edgar, as trustee,
violated a duty by not disclosing to its beneficiaries (e.g., Plaintiffs) the scheme’s
allegedly fraudulent nature. Answering that question will require the Court to
determine whether trust law created a duty for Edgar to inform the investors of
58
Build Realty’s (allegedly) fraudulent dealings. Separately, the Court will need to
assess whether Edgar’s wrongful inaction may be imputed onto, and so create
liability for, Build Realty. And if Edgar and/or Build Realty had some duty of
disclosure (or other intervention) to protect the beneficiaries, they violated that duty
uniformly class wide.
True, no trust named Build Realty trustee. And the nominal trustee, Edgar,
did not create the scheme, nor did it directly benefit at the Plaintiffs’ expense. To
illustrate, Edgar did not profit from an inflated loan interest rate. Rather, any
(allegedly) improper profits ran to Build Realty. Moreover, Plaintiffs’ injuries relate
to the “scheme” itself—a scheme set in motion before Edgar took on any fiduciary
duty. Perhaps these facts absolve Edgar and/or Build from trust liability. But these
questions cut to the merits of the fiduciary duties claim, not predominance. For
now, it is enough for the Court to recognize that the answers to those questions
affect Defendants’ liability class wide.
For their part, Defendants argue fiduciary claims can only be certified “when
a reasonable person in the same position as one of the plaintiffs would repose
special confidence and trust in a defendant.” (Doc. 219, #10354). To Defendants,
such an inquiry would require mini-trials into each class member’s circumstances,
defeating predominance. (Id.). In support, they cite Cope v. Metro. Life Ins. Co., 696
N.E.2d 1001, 1009 (Ohio 1998), a fraud case involving a potential fiduciary
relationship between insurance salesmen and consumers. But there, the parties
disputed the very existence of a fiduciary relationship. See id. at 1008–09. Here, the
59
existence of fiduciary duties can be resolved class wide—either the trusts created
such duties or they didn’t. And anyway, the court in Cope found the fiduciary
relationships could be inferred class wide based on common facts, further showing
no “mini-trials” need occur here. Id. at 1009–10.
That leaves superiority. The Court finds that a class action is the superior
method to adjudicate Plaintiffs’ fiduciary duties claim for essentially the same
reasons as the civil RICO claim. Importantly, Edgar’s conduct is entirely uniform
across the class, meaning individual suits would create needless duplication of
litigation. No party seriously disputes this.
Thus, the Court finds Plaintiffs’ breach of fiduciary duties claim properly falls
within Rule 23(b)(3).
3. Common Questions Do Not Predominate Over Plaintiffs’ Unjust

Enrichment Claim.
On the other hand, Plaintiffs’ unjust enrichment claim does not meet Rule
23(b)(3). Here again, Plaintiffs only seek certification through Rule 23(b)(3). In
particular, they argue that questions surrounding the legality of Defendants’
practices predominate and so can be resolved on a class wide basis. (Doc. 191,
#9303). But their argument is half-hearted at best. Plaintiffs do not even bother to
brief the elements of an unjust enrichment claim. And the reason for that is clear.
Unjust enrichment, at least on the facts here, is too individual specific to satisfy the
predominance inquiry.
“In Ohio, unjust enrichment is a claim under quasi-contract law against a
person in receipt of benefits that he is not justly and equitably entitled to retain.”
60
U.S. Bank, Nat’l Ass’n v. Mitchell, 2018 WL 6436727, at *6 (Ohio Ct. App. Dec. 7,
2018) (quoting Crawford v. Hawes, 995 N.E.2d 966, 975 (Ohio Ct. App. 2013)). To
prevail on a claim for unjust enrichment, “a plaintiff must that: (1) the plaintiff
conferred a benefit upon the defendant; (2) the defendant knew of such benefit; and
(3) the defendant retained the benefit ‘under circumstances where it would be
unjust to do so without payment.’” Anderson, Inc. v. Consol, Inc., 348 F.3d 496, 501
(6th Cir. 2003) (quoting Brown-Graves Co. v. Obert, 648 N.E.2d 1379, 1383 (Ohio Ct.
App. 1994)). “[T]he plaintiff must show that enrichment that is unjust [because] the
plaintiff has a superior equity so that, as against ... [the plaintiff], it would be
unconscionable for the ... [defendant] to retain the benefit.” Id. (internal citations
omitted).
Plaintiffs haven’t shown predominance as to this claim. Perhaps common
issues arise as to the first two elements—whether a plaintiff conferred a benefit and
whether a defendant knew of it. But the real work of unjust enrichment occurs at
step 3, and that inquiry is simply too fact specific. It relies on issues such as
“superior equity” and “unconscionability,” issues that make each class member’s
individual circumstances highly probative. As with most equitable claims, assessing
liability here will require a fact-sensitive, totality-of-the-circumstances analysis.
And Plaintiffs do not even attempt to provide factual support that each class
member’s circumstances are sufficiently common to meet the predominance inquiry.
Instead, Plaintiffs substitute case law for facts, citing to instances where
courts have certified claims for unjust enrichment. (Doc. 191, #9303). But so what?
61
The Court is not saying that an equitable claim can never be certified under Rule
23(b)(3). Rather, the point is merely that parties seeking certification must do a
thorough job of explaining why each class member’s individual circumstances justify
class treatment. Plaintiffs here have not.
In sum, the Court finds that Plaintiffs have made the necessary showings
under Rule 23(b)(3) to obtain class certification as to Plaintiffs’ civil RICO and
breach of fiduciary duties claims but not as to Plaintiffs’ unjust enrichment claim.
E. The Court Appoints The Finney Law Firm, LLC, And Markovits,
Stock & DeMarco, LLC, As Class Counsel.
After certifying a class action, a Court must appoint class counsel under Rule
23(g). Plaintiffs request the Court appoint the Finney Law Firm, LLC, and
Markovits, Stock & DeMarco, LLC, as class counsel. (Doc. 155-1, #3196).
Defendants for their part object to Chris Finney for the reasons discussed above but
do not argue that Finney, the Finney Law Firm, LLC, or Markovits, Stock &
DeMarco, LLC, are incompetent, inexperienced, or otherwise unable to serve as
class counsel.
A court must consider several factors in appointing counsel. Fed. R. Civ. P.
23(g). The rule states:
(1) Appointing Class Counsel. Unless a statute provides otherwise, a court

that certifies a class must appoint class counsel. In appointing class
counsel, the court:
(A) must consider:
(i) the work counsel has done in identifying or investigating potential
claims in the action;
(ii) counsel’s experience in handling class actions, other complex
litigation, and the types of claims asserted in the action;
62
(iii) counsel’s knowledge of the applicable law; and

(iv) the resources that counsel will commit to representing the class;
(B) may consider any other matter pertinent to counsel’s ability to fairly
and adequately represent the interests of the class;
(C) may order potential class counsel to provide information on any
subject pertinent to the appointment and to propose terms for
attorney’s fees and nontaxable costs;
(D) may include in the appointing order provisions about the award of
attorney’s fees or nontaxable costs under Rule 23(h); and
(E) may make further orders in connection with the appointment.
Id.
The Court concludes that Finney Law Firm, LLC, and Markovits, Stock &
DeMarco, LLC, are fit to serve as class counsel. First, counsel identified and
investigated the claim. (Doc. 194, #9767). Before filing this action, counsel pursued
a similar state court action, demonstrating their efforts to recover on the class’s
behalf. See Hamilton County Court of Common Pleas No. A1700624. Second, the
Court notes that the two firms are experienced in conducting class litigation. Third,
the Finney Law Firm specializes, in part, in commercial real estate law, while
Markovits, Stock & DeMarco specializes in class actions, making the combination of
the two effective given the nature of the claims here. Fourth, the Court finds that
counsel have the resources to carry out this litigation effectively.
As noted, Defendants contend that Finney has taken a position antagonistic
to the class as a whole, that Finney has a conflict of interest, and that Markovits,
Stock & DeMarco are tainted by affiliation. For the reasons discussed above, the
Court rejects these allegations.
63
F. The Court Adopts The Proposed Class Definitions.
The Court further adopts the above amended class and subclass definitions
put forth by Plaintiffs. And, the Court will, for now, permit the class to include both
Ohio and Kentucky plaintiffs. If Defendants have reason to believe either certified
claim cannot proceed with citizens of both states, or that the citizens of the two
states should be separated into subclasses for one or both claims certified, the Court
can entertain that motion at a later date.
Finally, although Plaintiffs request the Court appoint all five named
Plaintiffs as class representatives for both the class and subclass (Doc. 155, #3191),
the Court cannot appoint Pyramid Investment Group, LLC, as a subclass
representative. Pyramid is not a member of the subclass because Build Realty did
not reclaim Pyramid’s property as a result of default. (See Doc. 179, #5440).
CONCLUSION
For the reasons discussed, the Court GRANTS IN PART and DENIES IN
PART Plaintiffs’ Motion to Certify (Doc. 155). Specifically, the Court GRANTS
certification with respect to Plaintiffs’ civil RICO claim (part of Count I) and breach
of fiduciary duties claim (Count II), but DENIES certification with respect to
Plaintiffs’ Ohio Corrupt Practices Act (part of Count I), civil conspiracy (Count III),
and unjust enrichment (Count IV) claims.
The Court APPOINTS Plaintiffs Compound Property Management LLC,
Leone1, LLC, R&G Cincy Investments, LLC, Pyramid Investment Group, LLC, and
Ratio Models, LLC as class representatives for the class, and APPOINTS Plaintiffs
64
Compound Property Management LLC, Leone1, LLC, R&G Cincy Investments,
LLC, and Ratio Models, LLC as class representatives for the subclass. The Court
APPOINTS the Finney Law Firm, LLC, and Markovits, Stock & DeMarco, LLC as
class counsel.
The Court ORDERS counsel for the parties to meet and confer and submit a
proposed agreed class notice to this Court within fourteen (14) days of this Opinion’s
issuance. If counsel cannot reach agreement, Plaintiffs shall file their proposed
notice by the same deadline, and Defendants shall file their specific objections to the
proposed notice within fourteen (14) days after Plaintiffs file. If desired, Plaintiffs
may respond to Defendants’ objections within five (5) days after Defendants object.
Finally, the Court finds Plaintiffs lack standing to pursue their declaratory
relief claims and so DISMISSES Plaintiffs’ Count V, Count VI, and Count VII
WITHOUT PREJUDICE.
SO ORDERED.
February 21, 2023

DATE DOUGLAS R. COLE
UNITED STATES DISTRICT JUDGE
65

Build Realty - Class Cert. Decision

Uploaded by

Copyright:

Available Formats

Build Realty - Class Cert. Decision

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Build Realty - Class Cert. Decision

Uploaded by

Copyright:

Available Formats

Case: 1:19-cv-00133-DRC Doc #: 223 Filed: 02/21/23 Page: 1 of 65 PAGEID #: 10479

UNITED STATES DISTRICT COURT

BUILD REALTY, INC., d/b/a,

OPINION AND ORDER

Plaintiffs Compound Property Management LLC, Leone1, LLC, R&G Cincy

(collectively “Plaintiffs”) contend that Defendants Build Realty, Inc., Edgar

Construction, LLC, Cincy Construction, LLC, McGregor Holdings, LLC, Cowtown

LLC, Gary Bailey, George Triantafilou, G2 Technologies, LLC, GT Financial, LLC,

engaged in a pattern of defrauding investors through the Defendants’ property-

Procedure 23. (See Mot. for Class Certification, Doc. 155).

pursue their declaratory relief claims and so DISMISSES Plaintiffs’ Count V,

Count VI, and Count VII WITHOUT PREJUDICE.

The Court APPOINTS Plaintiffs Compound Property Management LLC,

Compound Property Management LLC, Leone1, LLC, R&G Cincy Investments,

Plaintiffs, a collection of small real-estate investor LLCs, allege that

opportunities to generate money for Defendants by violating investor expectations,

id.). Defendants, meanwhile, argue in their Response that they operated a

arrangement’s specifics matter, the Court begins there.

A. Build Realty’s Business Model

Defendants’ business model (what Plaintiffs call the “Build Scheme”) is to

“flipping”). Defendants began by identifying and acquiring rights to purchase

“properties with rehab potential.”1 (Id. at #7573). After acquiring a right to

simultaneously solicited investors for these properties through various means,

including roadside signs, a website, mailed brochures, seminars, and word-of-

After recruiting investors, Defendants paired each investor to a property (or

#8031–32; Doc. 193-9, #9726).

With property and investor paired, a set of transactions unfolded. Defendants

to Edgar Construction (“Edgar”) as trustee of a state-law trust.2 (Id.). The property

price of $100,000, and Build estimated the structure required $50,000 in

would be in an amount of $100,000 + $50,000 - $10,000 = $140,000. Afterward,

sold its interest in the note). (Id. at #8217).

3 Defendants represent to the Court that “investor companies executed mortgage

Build Realty structured the note as a “Balloon Payment Promissory Note.”

owners to personally guaranty the loan.

#8210; Doc. 192-1, #9335).

the investor’s LLCs directly. (Doc. 180-34, #6307).

beneficiary) to a trust in which Build Realty’s subsidiary, Edgar Construction,

acquired the properties, “loaned” funds to investors to “purchase” the properties,7

specified improvements, and oversaw the process. Throughout, Build Realty’s

subsidiary, Edgar Construction, maintained legal ownership of the property, while

B. Plaintiffs’ Allegations About The Build Business Model

portrait of an enterprise aimed at misleading and defrauding investors. They

advance nine main claims of misrepresentation and wrongdoing against Build

again briefly describe each.

least Edgar Construction, as trustee) to disclose the markup and purchase-method

Third, Plaintiffs contend that Build Realty wrongly charged investors

Plaintiffs assumed a 15%-interest loan meant to cover the “purchase” of the

amount—including undisbursed rehab amounts—began to accrue immediately

existence rehab funds. (See Doc. 185, #8073–74).

employees.” (Id. at #9287).

at #9292). Plaintiffs incorporate here many complaints described above.

purported “Credit Check” at closing. (See Doc. 193-11, #9732).

Seventh, Plaintiffs complain that investors paid a $400 to $450 “document

Eighth, Plaintiffs conclude that Build Realty intentionally structured its

operations to deprive investors of their state-law rights as mortgagees. (Id.).

investors of these rights.8 (Id.).

Based on these allegations of misrepresentations and wrongdoing, Plaintiffs,

8 In their Memorandum in Support of their Motion to Certify, Plaintiffs also allege

along with declaratory judgment claims seeking a declaration that Defendants