Knowlton Co. v. Knowlton

590 N.E.2d 1219, 63 Ohio St. 3d 677, 1992 Ohio LEXIS 999

• Court: Ohio Supreme Court
• Decided: May 27, 1992
• Docket: Nos. 91-261 and 91-528
• Status: Published

Opinions

Sweeney, Acting C.J.

While the factual context underlying the cause sub judice is somewhat complex, the determinative issue before this court is easily stated, viz., whether the Mercer County Court of Common Pleas or the Franklin County Court of Common Pleas has jurisdiction over Huffy’s attempt to exercise a purchase option of the leased property owned by appellant MRED, successor in interest to the Knowlton Company. For the reasons that follow, we hold that the Mercer County Court of Common Pleas has exclusive jurisdiction.

In State, ex rel. Phillips, v. Polcar (1977), 50 Ohio St.2d 279, 4 O.O.3d 445, 364 N.E.2d 33, this court held in the syllabus:

“As between courts of concurrent jurisdiction, the tribunal whose power is first invoked by the institution of proper proceedings acquires jurisdiction, to the exclusion of all other tribunals, to adjudicate upon the whole issue and to settle the rights of the parties. (John Weenink & Sons Co. v. Court of Common Pleas [1948], 150 Ohio St. 349 [38 O.O. 189, 82 N.E.2d 730], approved and followed.)”

Appellant MRED and intervening appellant Huffy contend that under the priority doctrine set forth in Polcar, supra, the Mercer County Court of Common Pleas has jurisdiction over issues as to the validity of the option to purchase the leased property, as well as entitlement to the proceeds from the sale of such property. Huffy points out that, as holder of the purchase option, it was never a party to any of the Franklin County litigation involving appellee, and that the Franklin County Court of Appeals therefore held there was no jurisdiction over Huffy’s purchase option when its validity was called into question during the extensive litigation involving appellee, Austin Knowlton, and the Knowlton Company. See Knowlton Co. v. Knowlton (1983), 10 Ohio App.3d 82, 85, 10 OBR 104, 108, 460 N.E.2d 632, 636.²

Appellee, Austin Knowlton, argues that the Franklin County Court of Common Pleas possesses continuing exclusive jurisdiction over certain reciprocal leases between himself and Knowlton Company in addition to the lease between Huffy and Knowlton Company. Appellee asserts that the Franklin County Court of Common Pleas reserved such jurisdiction in several court orders when it determined distribution of lease payments payable by Huffy under its lease with Knowlton Company. Appellee submits that the Franklin County Court of Common Pleas does not lose jurisdiction over the lease simply because a previously unlitigated issue emerges. In any event, appellee maintained during oral argument that the validity of Huffy’s purchase option has never been an issue in the Mercer County litigation. Appellee contends that the reciprocal leases are at issue herein and that the Franklin County Court of Common Pleas necessarily has exclusive jurisdiction over such leases, given that court’s express reservation of jurisdiction.

Both sides to this action present legitimate reasons supporting their respective positions. In our view, however, appellants’ arguments are more persuasive than those advanced by appellee and, therefore, we reverse the judgment of the court of appeals below. Our reasoning for this conclusion is based on several factors. First of all, the property in issue is located in Mercer County. With all other things being equal, jurisdiction over the disposition of the property would naturally arise where it is located, i.e., in Mercer County. Second, while the Franklin County litigation produced orders and entries referring to the reciprocal leases between appellee and the Knowlton Company, such orders concerned only distribution of lease payments that Huffy was making under the terms of its lease with the Knowlton Company. Huffy was never a party, indispensable or otherwise, to any of the prior Franklin County litigation involving appellee, the Knowlton Company and MRED. Third, the action commenced by Huffy in Mercer County involves the exercise of its purchase option provided in the 1971 addendum to the 1969 lease. As mentioned before, the Franklin County Court of Appeals found in 1983 in Knowlton Co., supra, that the issue of the validity of the purchase option under the lease could not be litigated without Huffy as a party.

Thus, in invoking the priority doctrine set forth in Polcar, supra, we hold that the Mercer County Court of Common Pleas, first acquired jurisdiction over the purchase option sought to be exercised by Huffy, and that the Franklin County Court of Common Pleas, therefore, does not have jurisdiction, as found by the Franklin County Court of Common Pleas itself. In our view, judicial economy compels a holding that the Mercer County Court of Common Pleas has exclusive jurisdiction over the issues raised in this case.

Accordingly, the judgment of the court of appeals is hereby reversed.

Judgment reversed.

Harsha, Nahra, Donofrio and Resnick, JJ., concur. Holmes, J., separately dissents without opinion. Douglas, J., dissents. William H. Harsha III, J., of the Fourth Appellate District, sitting for Moyer, C.J. Joseph J. Nahra, J., of the Eighth Appellate District, sitting for Wright, J. Joseph Donofrio, J., of the Seventh Appellate District, sitting for H. Brown, J.

2 . Therein, the Franklin County Court of Appeals stated in relevant part:

“ * * * It is alleged that, by an addendum to a lease dated November 1, 1971, Huffman was granted an option to purchase certain real estate exercisable in 1979, but that the option was granted without consideration. Assuming the allegations of the complaint are correct and no consideration was given, the option would not be enforceable by Huffman, and any action should be against Huffman. As of the time of the filing of the complaint, the option was not exercisable, and there is no indication by supplemental complaint or otherwise that Huffman has yet attempted to exercise the option, much less successfully done so. Even assuming that there otherwise could be a valid claim against defendants, it had not yet arisen at the time of the filing of the complaint.”