Continuum Transp. Servs., Ltd. v. Elite Internatl. Corp., L.L.C.

2024 Ohio 340, 235 N.E.3d 523

• Court: Ohio Court of Appeals
• Decided: February 1, 2024
• Docket: 112640
• Status: Published

Opinion

[Cite as Continuum Transp. Servs., Ltd. v. Elite Internatl. Corp., L.L.C., 2024-Ohio-340.]

COURT OF APPEALS OF OHIO

EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA

CONTINUUM TRANSPORTATION : SERVICES, LTD., : Plaintiff-Appellee, : No. 112640 v. : ELITE INTERNATIONAL CORP., LLC, ET AL., :

Defendants-Appellants. :

JOURNAL ENTRY AND OPINION

JUDGMENT: REVERSED, VACATED, AND REMANDED RELEASED AND JOURNALIZED: February 1, 2024

Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-19-917738

Appearances:

Mansour Gavin LPA, Brendon P. Friesen, and Kenneth E. Smith, for appellee.

Mayle LLC, Andrew R. Mayle, and Benjamin G. Padanilam, for appellant.

SEAN C. GALLAGHER, J.:

Salvatore (Sam) Marcello appeals the trial court’s decision denying

his motion for relief from judgment based on the insufficiency of process. For the following reasons, we reverse the decision of the trial court, vacate the judgment

entered against Marcello and remand for further proceedings.

Continuum Transportation Services filed an action against several

defendants, including Elite International Corp. LLC and its purported “owner”

Marcello, in his individual capacity, based on fraud and breach of contract arising

from the parties’ business relationship — Continuum provided transportation

services to the defendants. As is pertinent to this appeal, Continuum served the

complaint on Elite’s statutory agent Sheryl Canty at her 2118 South Plum Grove

Road, Suite 282, Rolling Meadows, Illinois, address (“Rolling Meadows”) in

accordance with Civ.R. 4.1(A) and 4.2(F). Continuum also used Canty’s Rolling

Meadows address to serve Marcello in his individual capacity, sending service of

process to “SAM MARCELLO c/o Sheryl L. Canty, Agent, 2118 South Plum Grove

Road, Suite 282, Rolling Meadows, Illinois 60008.” Throughout the proceedings,

Continuum claimed that Canty’s address was a business address associated with

Marcello.

There are several other related entities. According to Continuum’s

supporting documentation, MMS Holding, Inc. is the designated “manager” of Elite,

with MMS being a reverse anagram of Marcello’s initials. It is unclear who owns

MMS Holding. The documentation presented by Continuum simply notes that the

president and officer of MMS Holding is Michael Grimes, who is located at

271 E. North Avenue, Glendale Heights, Illinois (“Glendale Heights”). No

shareholder for the corporation is listed. Canty was also the statutory agent for MMS Holding and MMS Holding 2 Inc., the latter of which indicated that Marcello

was the president and officer of the corporation, which is also located at the Glendale

Heights address. Canty used the Rolling Meadows address as the statutory agent

for the MMS Holding entities.

Canty withdrew as statutory agent for Elite in April 2021, after

Continuum completed service of the second amended complaint to her on behalf of

Elite and Marcello individually.

Continuum filed a motion for default against Elite and Marcello after

they failed to appear in the action. The trial court granted default judgment in

Continuum’s favor, entering a judgment of $51,003.57 in compensatory damages,

$102,007.14 in punitive damages, $26,043 in attorney fees, and $350.10 in costs

against Elite and Marcello, jointly and severally.

Continuum sought to collect the judgment in an Illinois state court

action. Marcello eventually appeared in that action and filed a document captioned

as “Motion to Dismiss Rule to Show Cause and Citation to Discovery Assets and a

Motion to Vacate Foreign Judgment as Void with the Illinois Court,” claiming that

he was never properly served in the Ohio action. The Illinois state court denied the

motion but stayed the proceedings pending Marcello’s attempt to vacate the

judgment in the underlying action. Marcello filed a motion styled as a Civ.R. 60(B)

motion for relief from judgment, which included an affidavit wherein he swore that

he never received the underlying complaint, that he never worked or maintained an

office at the Rolling Meadows address, and that he never appointed Canty “to be my ‘agent’ to accept personal service on my behalf.” Marcello also provided several

statements that are best described as vacuous truths:1 (1) that he never “lived” at the

Rolling Meadows address; (2) that Canty was once a registered agent for “Kal-El

Consulting,” but that entity was dissolved; (3) that he was never personally served

with the complaint at his residence; and (4) that he never lived at 101 Driscoll Lane,

Unit 7, in Wood Dale, Illinois.

The trial court denied the motion for relief from judgment against

Marcello, and this appeal followed.

A court must obtain personal jurisdiction over a defendant before a

final judgment may be rendered. Youngstown City Demolition v. Rainy Day

Rentals, 7th Dist. Mahoning No. 22 MA 0112, 2023-Ohio-3601, ¶ 12, citing

Maryhew v. Yova, 11 Ohio St.3d 154, 156, 464 N.E.2d 538 (1984). Personal

jurisdiction is obtained through perfecting service of process or a voluntary

appearance and submission to the jurisdiction of the court. Id. A judgment

rendered without jurisdiction is void.

For this reason, and although insufficiency of service of process may

be raised in a Civ.R. 60(B) motion, the party seeking relief “need not meet the

requirements of establishing a meritorious defense or that the motion was timely

filed under Civ.R. 60(B).” Adams v. McElroy, 8th Dist. Cuyahoga No. 105399,

2018-Ohio-89, ¶ 12-15, citing Hook v. Collins, 8th Dist. Cuyahoga No. 104825,

1 Although the statements are arguably true, they have no bearing on any fact of

consequence related to arguments in favor of Continuum having perfected service. 2017-Ohio-976, ¶ 12, and CompuServe, Inc. v. Trionfo, 91 Ohio App.3d 157, 161, 631

N.E.2d 1120 (10th Dist.1993). Granting a default judgment without first obtaining

service over the defendant renders that judgment to be void. Id. In that situation,

the party seeking relief is entitled to have the judgment vacated and the case

reopened. Id., citing Broadvox, L.L.C. v. Oreste, 8th Dist. Cuyahoga No. 92064,

2009-Ohio-3466, ¶ 12. Appellate review of a decision denying a motion to vacate a

purportedly void judgment is for an abuse of discretion. Adams, citing Hook at ¶ 10;

Miley v. STS Sys., 153 Ohio App.3d 752, 2003-Ohio-4409, 795 N.E.2d 1254, ¶ 7

(10th Dist.); and Hoffman v. New Life Fitness Ctrs., 116 Ohio App.3d 737, 739, 689

N.E.2d 84 (3d Dist.1996).

Nothing within Civ.R. 4.1 requires service to be completed on the

individual defendant to whom the mailing is addressed, nor is it tied to any one

location. “Service of process must be made in a manner reasonably calculated to

apprise interested parties of the action and to afford them an opportunity to

respond.” Hook, 8th Dist. Cuyahoga No. 104825, 2017-Ohio-976, at ¶ 13, citing

Akron-Canton Regional Airport Auth. v. Swinehart, 62 Ohio St.2d 403, 406, 406

N.E.2d 811 (1980). Individuals can be served at their “usual place of residence” or a

business address, and any person residing at that address who is of “suitable age and

discretion” may receive such service. Civ.R. 4.1(A); Civ.R. 4.2(F). Service of process

is, therefore, not limited to being completed on the named defendant to whom the

summons is directed. New v. All Transp. Solution, Inc., 177 Ohio App.3d 620,

2008-Ohio-3949, 895 N.E.2d 606, ¶ 11 (10th Dist.). In New, for example, service of process was completed when the returns demonstrated that the certified mail to the

individual defendant and the corporate entity he owned were received at their legal

addresses, both being the defendant’s residence, even though the certified mail was

received by the defendant’s wife. Id.

In order for the service on an individual to comply with due process

requirements, the service of process must be made “in a manner reasonably

calculated to apprise interested parties of the action and to afford them an

opportunity to respond.” Hook at ¶ 13, citing Swinehart. The reasonably calculated

analysis bears on “where” service must be sent, not to whom. Swinehart at 405

(concluding that although service is deemed complete when received by “someone

other than the named addressee, thus dealing with the question of who may be

served, it does not speak to the issue of where service by certified mail may be sent”

(Emphasis sic.)). “The plaintiff bears the burden of obtaining proper service on a

defendant.” Carter-Jones Lumber Co. v. Meyers, 2d Dist. Clark No. 2005-CA-97,

2006-Ohio-5380, ¶ 11, citing Cincinnati Ins. Co. v. Emge, 124 Ohio App.3d 61, 63,

705 N.E.2d 408 (1st Dist.1997). “In those instances where the plaintiff follows the

Civil Rules governing service of process, courts presume that service is proper unless

the defendant rebuts this presumption with sufficient evidence of non-service.” Id.

In this appeal, Continuum largely ignores the fact that service of

process was sent to Canty on behalf of Marcello, indicated by the use of the “c/o” or

“care of” designation in the complaint and summons. “Use of the phrase ‘c/o,’ which

means ‘care of,’ is commonly used to designate mail that should be sent to a person through a third party.” Maggio v. Wisconsin Ave. Psych. Ctr., Inc., 417

U.S.App.D.C. 320, 327, 795 F.3d 57 (2015) (Rogers, J., dissenting), citing Webster’s

Third New International Dictionary 338 (1993); Buckeye Foods v. Cuyahoga Cty.

Bd. of Revision, 78 Ohio St.3d 459, 462, 678 N.E.2d 917 (1997). That designation

bears on the question of who may be served. Thus, Continuum attempted to serve

Marcello by directing service to be made through a third party or agent. That

distinguishes this case from New, in which service was addressed and sent to the

individual defendant but was received by the defendant’s wife at the defendant’s

legal address, which under the express language of Civ.R. 4.1(A)(1)(a) is deemed

complete because it was received by “any person.” See New at ¶ 1. In this case, the

service of process for Marcello was directed through Canty; it was not sent to

Civ.R. 4.2(A) provides that service of process “shall be made * * *

upon an individual * * * by serving the individual.” Under Civ.R. 4(B), the summons

and complaint “shall be * * * directed to the defendant.” See King v. Hazra, 91 Ohio

App.3d 534, 536, 632 N.E.2d 1336 (9th Dist.1993) (service of complaint directed

through defendant’s attorney did not comply with Civ.R. 4.1 through 4.6); Gooch v.

Toth, 8th Dist. Cuyahoga No. 71061, 1997 Ohio App. LEXIS 1054, 8 (Mar. 20, 1997)

(approvingly citing Hazra). There are notable exceptions for persons under the age

of 16 years of age or those deemed incompetent. Service of process for those classes

of individuals must be made upon an agent, defined as a guardian, parent or

individual having care of the person unless certain exceptions apply. Civ.R. .2(B)-(E). Civ.R. 4.2(A) does not contemplate sending service of process

through an agent or third party, as demonstrated by the rule’s express allowance for

service on a guardian or agent in certain circumstances but omitting that exception

for an individual under division (A) of the rule.2 Castellano v. Kosydar, 42 Ohio

St.2d 107, 110, 326 N.E.2d 686 (1975) (service of process sent through certified mail

need not be signed by the addressee for service to be deemed complete).

By way of illustration, the Federal Rules of Civil Procedure permit

individual defendants to be served through an agent. See Fed.R.Civ.P. 4(e)(2)(c);

Harris v. Smith, 6th Cir. No. 22-1682, 2023 U.S. App. LEXIS 8152, 4 (Apr. 5, 2023).

Harris involved a plaintiff’s attempt to serve several individually named defendants

through the corporate counsel. Service in that case was made by sending the service

to the individual defendants “c/o” their general counsel, which implicated the

agency question. Unlike its federal counterpart, Civ.R. 4.2(A) does not include

express authorization for service of process on an individual to be made through that

individual’s agent.

Canty was the authorized agent to receive service of process on behalf

of several corporate entities; however, Continuum has presented no authority that

authorizes service upon the statutory agent on behalf of an individual or employee

2 There are statutory exceptions to this general notion, such as R.C. 2703.20. That

statute, creating a special statutory proceeding, authorizes service of process through the Ohio Secretary of State for nonresident owners and operators of motor vehicles. Anson v. Tyree, 22 Ohio St.3d 223, 225, 490 N.E.2d 593 (1986). Continuum has not cited any applicable statutory exception authorizing service of process through an agent for its purposes. See App.R. 16(A)(7). This decision is constrained by the arguments presented. associated with the corporate entity. See R.C. 1701.07(A) (“Every corporation shall

have and maintain an agent, sometimes referred to as the “statutory agent,” upon

whom any process, notice, or demand required or permitted by statute to be served

upon a corporation may be served.” (Emphasis added.)). Under general principles,

“any information received by a corporation’s statutory agent is imputed to the

corporation, [but] not to any specific officer, director, employee or agent of the

corporation.” Cent. Funding, Inc. v. Compuserve Interactive Servs., Inc., 10th Dist.

Franklin No. 02AP-972, 2003-Ohio-5037, ¶ 34, citing Akron-Canton Waste Oil, Inc.

v. Safety-Kleen Oil Serv., Inc., 81 Ohio App.3d 591, 603, 611 N.E.2d 955 (9th

Dist.1992).

In addition, Civ.R. 4.2(F) differentiates between two types of service.

Service of process may be made upon the corporation by serving the authorized

agent or by serving the corporation at any of its usual places of business.

Civ.R. 4.2(F). The use of the disjunctive indicates mutually exclusive alternatives.

State ex rel. Rear Door Bookstore v. Tenth Dist. Court of Appeals, 63 Ohio St.3d

354, 361, 588 N.E.2d 116 (1992), citing Webster’s Third New International

Dictionary 651 (1986). Civ.R. 4.2(F) contemplates separate methods and locations

to initiate service on a corporate entity: either serve an employee at the corporation’s

usual place of business or serve the statutory agent at the address provided by the

agent. Under Civ.R. 4.2(A), however, service is completed on an individual by

serving that individual. Absent authority demonstrating otherwise, it does not appear that service upon a statutory agent of a corporate entity is an authorized

method of service as it relates to an individual defendant under Civ.R. 4.2(A).

Notwithstanding, the primary argument in this appeal is focused on

where service of process was made. Our focus is not on who was served in this case,

which was Canty who was purportedly to accept the service on behalf of Marcello,

but instead it is where that summons was directed. Under Swinehart, if service is

directed to a defendant at an address at which they live, regularly conduct business,

or are employed, service of process can be found to be reasonably calculated to reach

the named defendant.

Marcello offered evidence that he neither resided nor maintained an

office at the Rolling Meadows address. Continuum claims that Canty’s address was

a business address associated with Marcello. According to Continuum’s

documentation, Elite’s place of business is located at the Glendale Heights location,

the same address Marcello used for the purposes of the other corporate entities to

which he is associated. Continuum’s primary argument in favor of maintaining the

judgment against Marcello in his individual capacity is that the service of process

was delivered to Marcello’s usual place of business, a type of location deemed to be

reasonably calculated to apprise an individual of the pending action.

No one disputes that service upon an individual that is sent to a usual

place of business can comport with due process requirements because the party

being served has a habitual, continuous, or highly continual and repeated physical

presence at the business address. Chuang Dev. LLC v. Raina, 2017-Ohio-3000, 91 N.E.3d 230, ¶ 35 (10th Dist.), citing Swinehart at 406. Service of process at such a

location is reasonably anticipated to provide the defendant with the requisite notice.

The statutory agent’s address, however, does not necessarily establish a place of

business for a corporate entity’s employees because service upon a person under

Civ.R. 4.2(A) contemplates individual service. See, e.g., A.O. Smith Corp. v.

Perfection Corp., 10th Dist. Franklin No. 03AP-266, 2004-Ohio-4041, ¶ 16 (service

of a subpoena upon a corporation’s statutory agent does not effectuate service upon

an individual employee since Civ.R. 45 contemplates individual service).

There is no evidence that Marcello ever frequented Canty’s address,

much less that he had a continuous and repeated presence at that address for the

purposes of service of process. Although we agree with Continuum that an

individual may be served at their usual place of business in order to perfect service

of process, it has not been established that the Rolling Meadows location was such

a place with respect to Marcello. The Ohio Supreme Court concluded that service

was not reasonably calculated to apprise the defendant of the pending action

because service was sent to a location for which the defendant “did not maintain an

office on the premises of the business,” and his usual place of business was in fact in

another location.” Swinehart, 62 Ohio St.2d at 406-407.

The service of process addressed to Canty on behalf of Marcello,

which in this case was sent through certified mail under Civ.R. 4.1(A), was

insufficient to perfect service against Marcello in his individual capacity because Continuum failed to establish that Canty’s Rolling Meadows address was a usual

place of business for Marcello.

Service was never perfected according to the civil rules, so the

presumption of proper service never arose. The motion for relief from judgment

should have been granted, and the trial court erred in concluding otherwise. The

judgment against Marcello is hereby vacated, and the matter remanded for further

proceedings consistent with this opinion.

Reversed, vacated, and remanded.

It is ordered that appellant recover of appellee costs herein taxed.

The court finds there were reasonable grounds for this appeal.

It is ordered that a special mandate issue out of this court directing the

common pleas court to carry this judgment into execution.

A certified copy of this entry shall constitute the mandate pursuant to Rule 27

of the Rules of Appellate Procedure.

______________________ SEAN C. GALLAGHER, JUDGE

ANITA LASTER MAYS, P.J., and MICHELLE J. SHEEHAN, J., CONCUR