Richard L. Kinzel, Individually and as Trustee of the Richard L. Kinzel Revocable Trust; Judith A. Kinzel, Individually and as Trustee of the Judith A. Kinzel Revocable Trust, Plaintiffs-Appellants,
Bank of America, et al., Defendants, Merrill Lynch Bank U.S.A.; Merrill Lynch, Pierce, Fenner and Smith, Inc.; Merrill Lynch Bank & Trust Company; Bank of AmericaCorporation, Defendants-Appellees.
Argued: January 25, 2017
from the United States District Court for the Northern
District of Ohio at Toledo. No. 3:10-cv-02169-Jeffrey James
Helmick, District Judge.
Patrick Murray, MURRAY & MURRAY, CO., L.P.A., Sandusky,
Ohio, for Appellants.
Matthew A. Fitzgerald, MCGUIREWOODS LLP, Richmond, Virginia,
Patrick Murray, Dennis E. Murray, Jr., William H. Bartle,
MURRAY & MURRAY, CO., L.P.A., Sandusky, Ohio, for
Matthew A. Fitzgerald, Lena L. Busscher, MCGUIREWOODS LLP,
Richmond, Virginia, for Appellees.
Before: BOGGS, GILMAN, and DONALD, Circuit Judges.
ticker symbol for Cedar Fair Entertainment Company- operator
of Cedar Point and other amusement parks-is, fittingly,
"FUN, " and it thus reveals little about the nature
of the collateral-liquidation dispute presently before us.
April 2008, Richard Kinzel, then CEO of Cedar Fair, borrowed
nearly $8, 000, 000 from Merrill Lynch to finance his
exercise of FUN stock options and to pay the estimated income
and payroll taxes that would be due immediately upon
exercise. To secure the loan, Kinzel pledged as collateral
various assets, including the shares of FUN that he would be
acquiring, and Kinzel entered into a Loan Management Account
(LMA) agreement that allowed Merrill Lynch, "in its sole
discretion and without prior notice, " to
"liquidate" the collateral upon any of twelve
events, including "if the value of the . . . collateral
is in the sole judgment of [Merrill Lynch]
stock market then crashed. Along the way, the market value of
FUN tumbled from the exercise price of $23.19 per share in
April 2008 to $6.99 per share on March 2, 2009. Having set a
$7.00-per-share "trigger" to liquidate shares of
FUN, the Merrill Lynch account managers responsible for
Kinzel's account began selling off shares on March 3,
2009, without advance notice to Kinzel and without first
making demand upon Kinzel for repayment of the loan.
that his long-time bank would sell his shares of FUN even
though he was "doing everything right, " Kinzel
(and his wife, both individually and as trustees of trusts in
their names) sued Merrill Lynch (and Bank of America, which
acquired Merrill Lynch in 2009) on various theories,
including breach of contract and breach of the covenant of
good faith and fair dealing. The Kinzels now appeal two
district-court decisions: the court's denial of leave to
file a third amended complaint to reassert a
breach-of-contract claim that did not survive a previous
motion to dismiss, and the court's final judgment in
favor of Merrill Lynch on the breach-of-good-faith claim,
which the court entered following a bench trial on that claim
only. For the reasons that follow, we affirm.