[Cite as Ohio Dept. of Transp. v. Storage World, Inc., 2012-Ohio-4437.]
STATE OF OHIO ) IN THE COURT OF APPEALS )ss: NINTH JUDICIAL DISTRICT COUNTY OF MEDINA )
OHIO DEPARTMENT OF C.A. No. 11CA0002-M TRANSPORTATION
Appellee APPEAL FROM JUDGMENT v. ENTERED IN THE COURT OF COMMON PLEAS STORAGE WORLD, INC., et al. COUNTY OF MEDINA, OHIO CASE Nos. 01 CIV 0331 Appellants 01 CIV 0396 01 CIV 0445
DECISION AND JOURNAL ENTRY
Dated: September 28, 2012
MOORE, Judge.
{¶1} Appellants, Michael DeMarco and Storage World, Inc., appeal from the judgment
of the Medina County Court of Common Pleas. This Court reverses in part and affirms in part.
I.
{¶2} The Ohio Department of Transportation (“ODOT”) filed three petitions to
appropriate various parcels of real property in 2001. Storage World, Inc. was a named defendant
in all three actions. DeMarco was the President of Storage World and the sole shareholder.
ODOT deposited what it determined to be the fair market value of the properties with the clerk
of courts. Storage World answered the petitions and requested a jury trial to determine the fair
market value of the properties. Subsequently, Storage World filed motions to withdraw the
funds deposited with the court. The trial court granted the motions and the funds were
distributed to Storage World. 2
{¶3} The three cases were consolidated and the parties conducted discovery. ODOT
deposed DeMarco and learned that Storage World did not own all of the parcels the State sought
to acquire. Storage World had built storage units on some of the parcels and had sold the
individual units. While each unit was individually owned, a condominium association had been
established to govern the property as a whole. Because the property was still under development
and the condominium association had not been properly formed, ODOT moved the court to
determine the necessary parties to the appropriation action. The court determined that all
individual storage unit owners must be added as named defendants. For various reasons, it took
several years to accomplish this task. In 2007, ODOT filed an amended petition for
appropriation and included all of the individual owners and the now properly formed Storage
World Condominium Association (“Condominium Association”). Storage World still had some
property interest at stake and remained listed as a defendant. Storage World was properly
served. DeMarco, however, was not listed as an individual defendant and was only served as
President of Storage World.
{¶4} In March 2010, long after having determined that Storage World did not have any
property interest in parcels 99 and 100, ODOT filed a motion requesting the court to order
“Storage World, Inc., Michael DeMarco, President of Storage World, Inc. and/or Storage World
Condominium Association to return” the associated funds that were withdrawn from the court.
In its memorandum in support, ODOT stated that the Condominium Association had filed a law
suit against DeMarco and Storage World in 2005 seeking to recover the funds Storage World had
withdrawn from the court related to the parcels owned by the Condominium Association.
According to ODOT, DeMarco, Storage World, and the Condominium Association had entered 3
into a consent decree, which required DeMarco and Storage World to pay the Condominium
Association $15,438. ODOT attached pleadings from the separate case to its motion below.
{¶5} On December 30, 2010, the court ordered “Michael DeMarco and/or Storage
World, Inc. return to the Clerk of Courts of Medina County Court of Common Pleas the deposit
of Fifteen Thousand Four Hundred and Thirty Eight Dollars ($15,438.00) which had been
incorrectly released to Michael DeMarco in his capacity as agent for Storage World, Inc.”
DeMarco and Storage World now appeal and present two assignments of error for our review.
II.
ASSIGNMENT OF ERROR I
THE TRIAL COURT HAD NO JURISDICTION TO ENTER A JUDGMENT AGAINST MICHAEL DEMARCO OVER WHOM THE COURT HAD NO PERSONAL JURISDICTION.
{¶6} In the first assignment of error, DeMarco argues that the trial court did not have
personal jurisdiction over him and therefore could not enter a judgment against him. We agree.
{¶7} In order to render a valid judgment against an individual, the court must have
jurisdiction over that person. See Maryhew v. Yova, 11 Ohio St.3d 154, 156 (1984). “A trial
court is without jurisdiction to render a judgment or to make findings against a person who * * *
was not a party in the court proceedings. A person against whom such judgment and findings are
made is entitled to have the judgment vacated.” State ex rel. Ballard v. O’Donnell, 50 Ohio
St.3d 182 (1990), paragraph one of the syllabus. Challenges to a trial court’s jurisdiction present
questions of law and are reviewed by this Court de novo. Kennedy v. Kennedy, 9th Dist. No.
09CA009645, 2010-Ohio-404, ¶ 6, quoting Lorain Cty. Treasurer v. Schultz, 9th Dist. No.
08CA009487, 2009-Ohio-1828, ¶ 10. 4
{¶8} At the outset, we note that Appellants’ first assignment of error is limited to
DeMarco personally. No argument has been made that the court lacked jurisdiction over Storage
World. We limit our review accordingly.
{¶9} The record shows that DeMarco was not named as an individual defendant in any
of the consolidated appropriations cases, and was not served a summons that was addressed to
him individually. DeMarco was served a summons addressed to Storage World Inc., c/o Michael
DeMarco, President. However, because he was not named as a defendant, DeMarco would not
have been on notice of any potential personal liability, such that he would need to individually
defend.
{¶10} Because DeMarco was not a named defendant, the trial court did not have
personal jurisdiction over him. See O’Donnell at paragraph one of the syllabus. Without
personal jurisdiction over DeMarco, the trial court could not enter a judgment against him. See
Maryhew at 156. Accordingly, Appellants’ first assignment of error is sustained.
ASSIGNMENT OF ERROR II
THE TRIAL COURT ERRED IN ENTERING A JUDGMENT AGAINST STORAGE WORLD INC. AND MICHAEL DEMARCO WITHOUT DUE PROCESS OF LAW.
{¶11} In the second assignment of error, Appellants argues that the trial court erred in
entering a judgment without conducting a hearing. Because we have already concluded that the
trial court did not have jurisdiction over DeMarco individually, we limit our review to whether
the court violated Storage World’s due process rights when it entered the repayment order
without a hearing.
{¶12} “Before the state may deprive a person of a property interest, it must provide
procedural due process consisting of notice and a meaningful opportunity to be heard.” Ohio 5
Assn. of Pub. School Emp. v. Lakewood Cty. School Dist. Bd. of Edn., 68 Ohio St.3d 175, 177
(1994), citing Cleveland Bd. of Edn. v. Loudermill, 470 U.S. 532 (1985). “The inquiry into what
process is due depends on the facts of each case.” Ohio Assn. of Pub. School Emp., 68 Ohio
St.3d at 177, citing Brock v. Roadway Express, Inc., 481 U.S. 252 (1987).
{¶13} In 2001, before all of the individual defendants were identified and named,
Storage World withdrew the deposit for parcels 99 and 100. In 2002, ODOT learned, through its
deposition of DeMarco, that Storage World did not have any ownership interest in these two
parcels. It took several years to identify and serve process on all of the necessary parties.
{¶14} In March 2010, ODOT filed a motion asking the court to order the repayment of
$15,438, the deposit made for the appropriation of parcels 99 and 100. ODOT argued that the
court was required to order a repayment of any money withdrawn in excess of the final award
pursuant to R.C. 163.17. ODOT’s motion for repayment requested the court to order “Storage
World, Inc., Michael DeMarco, President of Storage World, Inc. and/or Storage World
Condominium Association to return the sum of $15,438.00, plus interest.” In its memorandum
in support, ODOT explained that the Condominium Association had previously filed a lawsuit
against DeMarco and Storage World seeking recovery of the deposit withdrawn by Storage
World. According to ODOT’s memorandum, DeMarco, Storage World, and the Condominium
Association had entered into a consent agreement in December 2006. The consent agreement
required DeMarco and Storage World to pay the Condominium Association $15,438 for the
appropriation of parcels 99 and 100. The memorandum continues on to say that counsel for the
Condominium Association had informed ODOT that no payment had been made. There is no
evidence in the record that DeMarco or Storage World responded to this motion. Nine months 6
later, in December 2010, the court ordered Michael DeMarco and/or Storage World to repay
$15,438 to the Clerk of Courts within 30 days.
{¶15} Storage World has not presented any argument that it has a property interest in
parcels 99 or 100. Instead, Storage World argues that due process required the court to hold a
hearing. Under the facts of this case, we disagree.
{¶16} Storage World argues that “the court entered a judgment against [it] without a
trial and with no pending motions for summary judgment or other dispositive motions.”
However, ODOT’s motion for repayment was pending. In its motion, ODOT informed the court
that Storage World had entered a consent agreement to pay the withdrawn funds to the
Condominium Association, but it had failed to make any payments. ODOT’s motion had been
pending for approximately nine months when the court entered its order. Storage World had
ample opportunity to request a hearing on ODOT’s motion, but instead it chose not to respond.
{¶17} Storage World did not have any property rights in parcels 99 or 100, and
therefore, it had no rights to the associated funds. The settlement agreement lists two categories
of defendants. The first category lists all defendant-owners that have failed to respond or
otherwise defend, and enters a default judgment as to those named defendants. The second
category lists “the remaining [d]efendant-owners” as agreeing to the settlement amount. Storage
World is not listed in either category, nor does the Court allude to any outstanding defendant.
{¶18} Furthermore, we note that Storage World declined to respond to ODOT’s pending
motion seeking repayment at any point during the nine months it was pending. Under the
circumstances of this case, we cannot conclude that the trial court violated Storage World’s right
to due process when it entered the order for repayment without a hearing. 7
{¶19} Appellants’ second assignment of error, as it relates to Storage World, is
overruled. Appellants’ second assignment of error, as it relates to DeMarco, is sustained because
the court had no jurisdiction over him individually.
III.
{¶20} Appellants’ first assignment of error is sustained; the second assignment of error
is overruled in part and sustained in part. The judgment of the Medina County Court of
Common Pleas is affirmed in part and reversed in part.
Judgment affirmed in part, reversed in part.
There were reasonable grounds for this appeal.
We order that a special mandate issue out of this Court, directing the Court of Common
Pleas, County of Medina, State of Ohio, to carry this judgment into execution. A certified copy
of this journal entry shall constitute the mandate, pursuant to App.R. 27.
Immediately upon the filing hereof, this document shall constitute the journal entry of
judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the
period for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is
instructed to mail a notice of entry of this judgment to the parties and to make a notation of the
mailing in the docket, pursuant to App.R. 30.
Costs taxed equally to both parties.
CARLA MOORE FOR THE COURT 8
DICKINSON, J. CONCURRING IN JUDGMENT ONLY:
BACKGROUND
{¶21} Storage World Inc. built a number of storage buildings along State Route 18 in
Medina County. Each of the buildings contains 50 to 60 individual storage units, which have
been sold to others as storage condominiums. According to Storage World’s president, Michael
DeMarco, Storage World still owns some of the units in each of the buildings.
{¶22} In 2001, the Ohio Department of Transportation decided to widen State Route 18
and needed to take a strip of the land on which the storage buildings sit. Because of the size of
the facility, not all of the storage buildings are on the same tax parcel. Accordingly, the
transportation department filed a separate appropriation action against Storage World in the
Medina County Court of Common Pleas for each of the parcels. The actions were later
consolidated.
{¶23} Because the transportation department did not want to wait to begin expanding the
road, it used the “quick-take” procedure authorized under Section 163.06(A) of the Ohio Revised
Code. Under that procedure, the department deposited what it believed was the value of the
taken land with the common pleas court. Storage World subsequently moved for permission to
withdraw the deposits for all of the parcels, which the common pleas court granted. See R.C.
163.06(C) (“Any time after the deposit is made . . . , the owner may apply to the court to
withdraw the deposit . . . .”).
{¶24} Although Storage World withdrew the deposits, it contested whether they
represented the actual value of the taken land. Discovery commenced, and the department took
the deposition of Mr. DeMarco. During his deposition, the department learned that each of the 9
individual storage condominium unit owners may have a property interest in the land taken from
parcels 99-WD and 100-WD. Mr. DeMarco testified that, under the condominium purchase
agreements, each of the unit owners received a property interest in “common areas.” He
explained that the storage buildings are a considerable distance from the road and that it was his
understanding that the “common areas” described in the purchase agreements only included land
immediately adjacent to the buildings, not the entire parcel. He said that he had consulted with
his lawyers about the issue, however, and that they were in the process of determining whether
the common areas extended all the way to State Route 18. Following the deposition, the
transportation department amended its complaints to name all of the individual storage
condominium unit owners for parcels 99-WD and 100-WD as defendants in case they have an
interest in the taken land. It also named the condominium association that represents the unit
owners’ interests in common areas as a defendant.
{¶25} In March 2010, the transportation department moved the common pleas court to
order Storage World to return the deposits it had withdrawn for parcels 99-WD and 100-WD.
Relying on Mr. DeMarco’s deposition, it noted that there was a dispute regarding who was
entitled to the deposits for those parcels. Over the next several months, the transportation
department, the condominium association, and the individual storage condominium unit owners
who had entered appearances negotiated a settlement in which they agreed that the value of the
land taken of parcels 99-WD and 100-WD was the amount the department deposited with the
court. The common pleas court entered a corresponding order, which, as to the settling parties
and the unit owners who did not appear, set the value of the taken land at the amount of the
deposits. The order also indicated that, once Storage World returned the deposits, it would hold
a distribution hearing. Two days later, by separate entry, it ordered Storage World and/or Mr. 10
DeMarco to return the deposits it had withdrawn as to parcels 99-WD and 100-WD. Storage
World and Mr. DeMarco have appealed, assigning two errors.
PERSONAL JURISDICTION
{¶26} I agree with the majority’s conclusion that the common pleas court did not have
personal jurisdiction over Mr. DeMarco. The majority correctly concludes that, because the
common pleas court did not have personal jurisdiction, it could not order Mr. DeMarco to return
the deposits that were withdrawn by Storage World.
MOTION TO RETURN DEPOSITS
{¶27} Storage World has appealed the common pleas court’s journal entry that ordered
it to return the appropriation deposits for parcels 99-WD and 100-WD to the court. I agree that
this order should be affirmed. During his deposition, Mr. DeMarco indicated that there is a
question of fact regarding whether the individual storage condominium unit owners have a
property interest in the land that was taken by the transportation department for parcels 99-WD
and 100-WD. If Storage World is not the sole owner of the taken property, it is not entitled to
the entire deposit. In addition, although the court entered an order granting Storage World
permission to withdraw the funds deposited for all the parcels, its decision was merely an
interlocutory order that was subject to revision at the discretion of the common pleas court. See
Pitts v. Ohio Dep’t of Transp., 67 Ohio St. 2d 378, 379 n.1 (1981); Civ. R. 54(B).
DUE PROCESS
{¶28} Storage World’s remaining argument is that the common pleas court incorrectly
entered judgment against it without due process of law. While the court entered an order
adopting the settlement agreement entered into by the transportation department, the 11
condominium association, and some of the individual storage condominium unit owners, it could
not enter judgment against a party that was not a party to the agreement.
{¶29} I believe Storage World’s concern arises from one particular sentence in the
journal entry, which is that “[t]he Court is further advised by the parties that the remaining
Defendant-owners of the property appropriated in this action . . . have agreed with the
[transportation department] upon the amount of compensation and damages, if any, to the residue
due . . . by reason of the appropriation . . . .” Storage World is not named in the sentence as one
of “the remaining Defendant-owners.” I can understand how that sentence could be construed as
a judicial determination that Storage World is not an owner of the land appropriated from parcels
99-WD and 100-WD. The sentence is preceded, however, by a paragraph regarding the storage
condominium unit owners who have not entered an appearance. The more reasonable
interpretation of the sentence, therefore, is that it merely distinguished the unit owners who
appeared in the case and are part of the settlement agreement from the owners who did not
appear. The sentence merely recognizes that the parties who appeared and are part of the
settlement agreement believe that they are the only remaining owners of the appropriated
property. It is not a judicial determination that those parties are, indeed, the only owners of the
property taken from parcels 99-WD and 100-WD. In particular, the sentence does not mean that
Storage World does not have a property interest in those parcels.
{¶30} The fact that the common pleas court has not yet decided who has a property
interest in the land taken from parcels 99-WD and 100-WD is supported by the language in the
journal entry describing what will happen after Storage World returns the deposits it withdrew
for those parcels. According to the journal entry, after Storage World returns the withdrawn
deposits, the clerk of courts “shall give notice . . . to [the condominium association], to the 12
attorney for Defendant Storage World Inc. . . . [and to the individual storage condominium unit
owners] . . . that the [returned deposits are] in the custody of the Court and [are] available for
distribution . . . .” If the court had determined that Storage World does not have a property
interest in the land appropriated from parcels 99-WD and 100-WD, it would have no reason to
give Storage World notice that the funds deposited for those parcels were available for
distribution.
{¶31} Contrary to Storage World’s fear, the common pleas court has not determined that
Storage World does not have a property interest in the land appropriated from parcels 99-WD
and 100-WD or the value of the appropriated land as to Storage World. It appears from the
court’s journal entry that those issues will be set for hearing after Storage World returns the
deposits for the parcels. I, therefore, agree with the majority that the common pleas court has not
denied Storage World its right to due process. The majority correctly concludes that the
common pleas court’s order should be reversed as to Mr. DeMarco, but affirmed as to Storage
World. Accordingly, I concur in the judgment.
CARR, J. CONCURRING IN PART, AND DISSENTING IN PART:
{¶32} I concur with the majority in sustaining the first assignment of error. In regard to
the second assignment of error, however, I respectfully dissent.
{¶33} Although there may be a disagreement as to whether Storage World had a
property interest in parcels 99 and 100, there is no disagreement that Storage World had a
property interest in the $15,438 the court unconditionally released to it in 2001. As the majority
indicates, the State may not deprive a person of a property right without due process of law. As
a result, Storage World was entitled to notice and an opportunity to be heard before the trial court 13
ruled on the return of the funds almost nine years after they were released to Storage World. I
would sustain Storage World’s second assignment of error and remand for a hearing on the
return of the funds.
APPEARANCES:
KENNETH L. GIBSON, Attorney at Law, for Appellants.
KEVIN W. DUNN, Attorney at Law, for Appellee.