[Cite as State ex rel. DeWine v. 9150 Group, 2012-Ohio-3339.]
STATE OF OHIO ) IN THE COURT OF APPEALS )ss: NINTH JUDICIAL DISTRICT COUNTY OF SUMMIT )
STATE OF OHIO, ex rel. Mike DeWine, C.A. No. 25939 Attorney General of Ohio
Appellee APPEAL FROM JUDGMENT v. ENTERED IN THE COURT OF COMMON PLEAS 9150 GROUP L.P., et al. COUNTY OF SUMMIT, OHIO CASE No. CV-2006-07-4740 Appellees
v.
EDWIN M. ROTH
Appellant
DECISION AND JOURNAL ENTRY
Dated: July 25, 2012
MOORE, Judge.
{¶1} Appellant, Edwin M. Roth, appeals from the judgment of the Summit County
Court of Common Pleas. This Court reverses.
I.
{¶2} In 2006, the State of Ohio brought suit alleging environmental violations against
9150 Group and members of the 9150 Group, as the owners of record of real property located in
Macedonia, Ohio. These defendants (“Appellees”) filed a third–party complaint for
indemnification against the companies that operated at the Macedonia facility from 1988 through
2002, including Aerosol Systems (“Aerosol”) and Specialty Chemical Resources, Inc.
(“Specialty”). In the third party complaint, Appellees named Roth, who had served as a director 2
and as an officer of Aerosol and Specialty, as a third party defendant in his individual capacity.
Roth, who had not resided in Ohio since 1984, did not answer the complaint and did not appear
at the proceedings in this matter.
{¶3} In 2010, the State and Appellees settled the State’s claims against Appellees and
entered into a consent order. Thereafter, Appellees moved for default judgment against certain
third party defendants, including Roth. Appellees attached to their motion the affidavit of an
environmental consultant, who set forth estimates pertaining to the costs of implementing the
environmental actions agreed to in the 2010 consent order. The trial court granted the motion,
entering judgment in the amount of $1,740,974.56 in favor of Appellees and against Roth and
others.
{¶4} Roth filed a motion to vacate the default judgment, arguing that the court lacked
personal jurisdiction over Roth in his individual capacity, or, alternatively, that the default
judgment should be vacated under Civ.R. 60(B) for excusable neglect in failing to answer the
third party complaint. The trial court denied Roth’s motion to vacate and Civ.R. 60(B) motion
without a hearing. Roth timely filed a notice of appeal and presents one assignment of error for
our review.
II.
ASSIGNMENT OF ERROR
THE TRIAL COURT ERRED BY DENYING THE MOTION TO VACATE DEFAULT JUDGMENT.
{¶5} In his sole assignment of error, Roth argues that the trial court erred in denying
his motion to vacate the default judgment rendered against him, as the trial court lacked personal
jurisdiction over Roth in his individual capacity. Alternatively, Roth argues that he made 3
sufficient showing of excusable neglect to establish that the default judgment should be vacated
pursuant to Civ.R. 60(B).
{¶6} A judgment rendered by a court that lacks personal jurisdiction over a defendant
is void. Maryhew v. Yova, 11 Ohio St.3d 154, 156 (1984). An objection to the lack of
jurisdiction over a person generally must be raised either in the defendant’s answer or in a
motion filed prior to the filing of an answer. Franklin v. Franklin, 5 Ohio App.3d 74, 75-76 (7th
Dist.1981). However, if the defendant does not appear in the action, the defense is not waived
for failing to object. Maryhew, 11 Ohio St.3d at 156-159 (defendant had not submitted to the
court’s jurisdiction, where submission to jurisdiction would have waived the issue of lack of
personal jurisdiction), and Mortgage Lenders Network USA, Inc. v. Riggin, 9th Dist. No. 22901,
2006-Ohio-3292 (trial court acquired personal jurisdiction over appellant when she made a
voluntary appearance in the matter).
{¶7} Therefore, where the defendant has not made an appearance in the matter, the
defendant may challenge the judgment as void for lack of personal jurisdiction by filing a
common law motion to vacate or to set aside the judgment. Compuserve v. Trionfo, 91 Ohio
App.3d 157, 161 (10th Dist.1993). “A party should not file a Civ.R. 60(B) motion for relief
from judgment in order to have the void judgment vacated or set aside, since Civ.R. 60(B)
motions apply only to judgments that are voidable rather than void.” Beachler v. Beachler, 10th
Dist. No. CA2006-03-007, 2007-Ohio-1220, ¶ 18; see also Thomas v. Fick, 9th Dist. No. 19595,
2000 WL 727531, *2 (June 7, 2000). This is because “[t]he power to vacate a void judgment
does not arise from Civ.R. 60(B), but rather, from an inherent power possessed by the courts in
this state.” Thomas, quoting Patton v. Diemer, 35 Ohio St.3d 68 (1988), paragraph four of the
syllabus. Therefore, a common law motion to vacate a void judgment need not meet the 4
standards applicable to a Civ.R. 60(B) motion. See Thomas; see also Compuserve, 91 Ohio
App.3d at 161 (insignificant that a common law motion to vacate is mistakenly styled as a Civ.R.
60(B) motion).
{¶8} In his motion to vacate for lack of personal jurisdiction, Roth argued that the trial
court lacked personal jurisdiction over him in his individual capacity. “Challenges to a trial
court's jurisdiction present questions of law and are reviewed by this Court de novo.” (Citation
and quotations omitted). Eisel v. Austin, 9th Dist. No. 09CA009653, 2010-Ohio-816, ¶ 8. “Once
a defendant has challenged the trial court’s personal jurisdiction over him or her, the plaintiff
bears the burden of proving jurisdiction by a preponderance of the evidence.” (Internal citations
and quotations omitted.) ComDoc v. Advance Print Copy Ship Ctr., 9th Dist. No. 24212, 2009-
Ohio-2998, ¶ 3.
{¶9} In determining whether a state court has personal jurisdiction over a non-resident
defendant, courts engage in a two-prong analysis. U.S. Sprint Communications Co. Ltd.
Partnership v. Mr. K’s Foods, Inc., 68 Ohio St.3d 181, 183 (1994). As to the first prong, we
must determine if Ohio’s “long-arm” statute and civil rules apply to confer personal jurisdiction.
Id. at 184. If so, we must determine if application of personal jurisdiction “would deprive the
defendant of the right to due process of law pursuant to the Fourteenth Amendment to the United
States Constitution.” Id.
{¶10} Ohio’s long-arm statute is set forth in R.C. 2307.382. This statute authorizes
personal jurisdiction of Ohio courts over persons who take certain actions creating relationships
with Ohio, including transacting business or causing tortious injury in this state. R.C.
2307.382(A)(1), (A)(3), and (A)(4); see also Civ.R. 4.3(A)(1), (A)(3), and (A)(4) (allowing
service of process on nonresident defendants who transact business or cause tortious injury in 5
Ohio). As used in the long-arm statute and Civ.R. 4.3, “‘transacting business in this state’
connotes a broad statement of jurisdiction.” Joffe v. Cable Tech, Inc., 163 Ohio App.3d 479,
2005-Ohio-4930, ¶ 15 (10th Dist.), citing Kentucky Oaks Mall Co. v. Mitchell’s Formal Wear,
Inc. 53 Ohio St.3d 73, 75 (1990). However, when jurisdiction over a party is based upon the
long-arm statute, “only a cause of action arising from acts enumerated in th[at] section may be
asserted against him.” R.C. 2307.382(C).
{¶11} Here, the trial court determined that “[t]he same facts that give rise to jurisdiction
over the corporations – that the parties engaged in the generation, storage and disposal of
hazardous waste in violation of environmental law within Summit County, Ohio – are the same
facts which justify jurisdiction over[ ]Roth as an individual.” However, Roth argues that
personal jurisdiction over him was precluded by the fiduciary shield doctrine. Roth contends
that this doctrine prevents a court from exercising personal jurisdiction over a corporate agent,
when the claims are based upon the agent’s official actions. Therefore, Roth maintains that the
trial court could not exercise jurisdiction over him in his individual capacity where the
jurisdiction was premised upon alleged activities that Roth performed in his official capacity.
{¶12} Similar to Roth’s interpretation of the fiduciary shield doctrine, the Seventh
District Court has described the doctrine as preventing “the court from considering an
individual’s acts done in an official capacity when analyzing whether the individual is subject to
personal jurisdiction in the forum state.” State ex rel. DeWine v. S & R Recycling, Inc., 195 Ohio
App.3d 744, 2011-Ohio-3371, ¶ 27 (7th Dist.); see also Interior Servs., Inc. v. Iverson, 1st Dist.
No. C-020501, 2003-Ohio-1187, ¶ 12 (“in determining personal jurisdiction over Iverson as an
individual, we must look at his actions taken only as an individual”). However, other districts
have phrased the doctrine to provide that “jurisdiction over individual officers of a partnership or 6
corporation cannot be based merely on jurisdiction over that partnership or corporation.”
(Emphasis added.) Galloway v. Lorimar Motion Picture Mgmt., Inc., 55 Ohio App.3d 78, 83
(5th Dist.1989). See also Balance Dynamics Corp. v. Schmitt Industries, Inc., 204 F.3d 683,
698, (6th Cir.2000) quoting Weller v. Cromwell Oil Co., 504 F.2d 927, 929 (6th Cir.1974).
Based upon the latter phrasing of the doctrine, courts have determined that an individual’s status
as a director or officer of a corporation alone does not preclude a court’s exercise of jurisdiction
over the officer individually. Intera Corp. v. Henderson, 428 F.3d 605, 616 (6th Cir.2005), and
Balance Dynamics, 204 F.3d at 698. Although these interpretations appear to be in conflict, the
United States District Court for the Northern District of Ohio reconciled similar interpretations
by determining that, “while Ohio courts recognize the fiduciary shield doctrine, they would not
apply it in the [case before it] where Defendants, unlike the defendants in Galloway, personally
involved themselves in a transaction giving rise to the cause of action, and were physically
present in the state.” Walker v. Concoby, 79 F.Supp.2d 827, 832 (N.D.Ohio 1999), citing
Heritage Funding & Leasing Co. v. Phee 120 Ohio App.3d 422 (10th Dist.1997).
{¶13} Here, in the third party complaint, Appellees alleged that Roth, in both his
individual and corporate capacities, “directed and authorized the generation, storage, and
disposal of hazardous waste” at the Macedonia facility causing damages to Appellees. Thus, the
pleadings set forth that Roth transacted business in Ohio and directed activities that caused a
tortious injury in Ohio, and that the Appellees’ claims against Roth arose from these actions. See
R.C. 2307.382. However, in his affidavit in support of his motion to vacate judgment, Roth
disputed that he, in any capacity, directed or authorized the generation, storage, and disposal of
hazardous waste at the Macedonia facility. Therefore, Roth’s affidavit directly disputes the
operative facts upon which Appellees alleged personal jurisdiction over him. Appellees contend 7
that this factual dispute must be resolved in their favor and that they needed to make only a
prima facie showing of personal jurisdiction. In support, Appellees cite the Tenth District’s
opinion in Joffe, 163 Ohio App.3d 479, 2008-Ohio-4930.
{¶14} In Joffe, the court held that, when a trial court makes a finding as to personal
jurisdiction without holding an evidentiary hearing, the court must “view allegations in the
pleadings and the documentary evidence in a light most favorable” to the plaintiff and construe
“all reasonable competing inferences” in the plaintiff’s favor. Id. at ¶ 10. Under these
circumstances, the court held that a plaintiff’s prima facie demonstration of personal jurisdiction
will defeat a motion to dismiss for lack of personal jurisdiction. Id. In support, the Tenth
District cited Goldstein v. Christiansen, 70 Ohio St.3d 232, 236, Giachetti v. Holmes, 14 Ohio
App.3d 306, 307 (8th Dist.1984), and Robinson v. Koch Refining Co., 10th Dist. No. 98AP900,
1999 WL 394512 (June 17, 1999). However, Joffe and each of these cases cited in support
pertained to situations where the trial court ruled on personal jurisdiction in the context of
pretrial motions to dismiss pursuant to Civ.R. 12(B)(2). See Joffe at ¶ 7, Goldstein, 70 Ohio
St.3d at 236, Giachetti, 14 Ohio App.3d at 307, and Robinson, at *2; see also Herbruck v.
LaJolla Capital, 9th Dist. No. 19586, 2000 WL 1420282, *2 (Sept. 27, 2000) (inferences
construed in plaintiff’s favor when reviewing motion to dismiss for lack of personal jurisdiction).
Appellees have directed us to no support for their position that these standards should be utilized
in regard to a common law motion to vacate default judgment.
{¶15} In the context of motions to dismiss under Civ.R. 12(B)(2) for lack of personal
jurisdiction, courts have noted that the personal jurisdiction determination involves a seemingly
“lopsided standard” in favor of the plaintiff. Copeland Corp. v. Choice Fabricators, Inc., 492
F.Supp.2d 783,786 (S.D.Ohio 2005). However, courts have justified these standards by noting 8
that any other rule would allow for pretrial dismissal of claims based merely on a defendant
presenting an affidavit refuting the allegations of personal jurisdiction. Serras v. First Tennessee
Bank Natl. Assn., 875 F.2d 1212, 1214 (6th Cir.1989), Barile v. University of Virginia, 2 Ohio
App.3d 233, 234 (8th Dist.1981), fn. 2. In such a situation, the defendant could invoke the trial
court’s power to conduct an evidentiary hearing, at which the plaintiff would be required to
demonstrate personal jurisdiction by a preponderance of the evidence. See Serras 875 F.2d at
1214; see also Civ.R. 12(D). However, even where the trial court decides personal jurisdiction
absent an evidentiary hearing, the plaintiff continues to bear “the burden of proving, in its case-
in-chief at trial, existence of facts upon which jurisdiction is based by a preponderance of
evidence.” Id. Therefore, the defendant is not prejudiced by the lower threshold standard for
determination of personal jurisdiction because this preliminary determination is not dispositive
of the issue. Id.
{¶16} However, if we were to adopt these pretrial standards in the context of a motion to
vacate decided absent hearing, the plaintiff would be relieved of producing evidence establishing
personal jurisdiction by a preponderance of the evidence, as final judgment has already been
entered. We thus are disinclined to adopt the standards applicable to a Civ.R. 12(B)(2) motion in
the present context. Therefore, Appellees bear the burden of proving personal jurisdiction over
Roth by a preponderance of the evidence. ComDoc v. Advance Print Copy Ship Ctr., 9th Dist.
No. 24212, 2009-Ohio-2998, ¶ 3 (when properly challenged, a plaintiff must demonstrate
personal jurisdiction over the defendant by a preponderance of the evidence).
{¶17} In his affidavit, Roth denied that he in any capacity generated, stored, or disposed
of hazardous waste, the act upon which Appellees relied to demonstrate personal jurisdiction
under the long-arm statute. The Appellees responded by relying on the allegations in their 9
complaint, and thus we cannot determine the basis upon which the trial court determined that
application of Ohio’s long-arm statute over Roth was appropriate.
{¶18} Further, the Appellees bear the burden of proving that personal jurisdiction over
Roth comported with due process. To comport with due process requirements, a defendant must
“have certain minimum contacts with it such that the maintenance of the suit does not offend
‘traditional notions of fair play and substantial justice.’” International Shoe Co. v. Washington,
326 U.S. 310, 316 (1945), quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940). This due
process requirement may be satisfied where the forum state has either specific or general
jurisdiction over a nonresident. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S.
408, 414-415 (1984), fns. 8 and 9.
{¶19} Three requirements must be met to establish specific jurisdiction. “First,
defendant must purposely avail himself of the privilege of acting in the forum state or causing a
consequence in the forum state. Second, the cause of action must arise from the defendant’s
activities there. Finally, the acts of the defendant or consequence caused by the defendant must
have a substantial enough connection with the forum state to make the exercise of jurisdiction
over the defendant reasonable.” Southern Mach. Co. v. Mohasco Industries, Inc., 401 F.2d 374,
381 (6th Cir.1968). See also In re Blue Flame Energy Corp., 171 Ohio App.3d 514, 2006-Ohio-
6892, ¶ 18 (10th Dist.2006). The first two of these requirements establishes a defendant’s
“minimum contacts” with the forum. The last of these requires the court to determine if exercise
of jurisdiction over the defendant comports with the ideas of “fair play and substantial justice.”
See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477 (1985). “So long as it creates a
‘substantial connection’ with the forum, even a single act can support jurisdiction.” Burger
King, 471 U.S. at 475, fn. 18. 10
{¶20} Here, Roth does not deny that he served as director and officer of Aerosol and
Specialty. Aerosol and Specialty operated from the Macedonia facility during the times at issue.
The Macedonia facility is located in Ohio, and thus Roth purposely availed himself of the
privilege of acting in Ohio. See Burger King at 472. Further, Roth does not dispute that 9150
Group’s cause of action arises from the activities of Aerosol and Specialty, for which he served
as director and officer. However, Roth contends that he did not personally oversee or direct the
disposal of hazardous waste, and thus was not personally involved in the actions giving rise to
the dispute. In support, Roth averred in his affidavit that another corporate officer of Aerosol
and Specialty oversaw and directed the disposal of hazardous waste.
{¶21} With respect to corporate agents, “[w]here an out-of-state agent is actively and
personally involved in the conduct giving rise to the claim, the exercise of personal jurisdiction
should depend on traditional notions of fair play and substantial justice; i.e., whether she
purposefully availed herself of the forum and the reasonably foreseeable consequences of that
availment.” Blue Flame at ¶ 31, quoting Balance Dynamics Corp. at 698. In Blue Flame, the
Tenth District concluded that a corporate officer purposefully availed himself of Ohio when he
“signed the Form Ds and filed them in Ohio.” Id. at ¶ 31. In that case, representations made on
the Form Ds gave rise to the complaint. Id. at ¶ 3-4.
{¶22} Here, aside from Appellees’ allegation that Roth “individually” directed the
disposal of hazardous waste in contravention of environmental laws, nothing in the record
indicates that Roth personally engaged in tortious activity. Therefore, absent construction of the
allegations in the complaint in favor of Appellees, we cannot discern from the record whether
Roth was personally involved in the dumping of hazardous waste, from which this action arises, 11
as Roth’s affidavit specifically denies that he was personally involved in the disposal of the
waste at the facility.
{¶23} However, Appellees further argued that Roth had “essentially conceded that he
has the requisite ‘minimum contacts’ with Ohio to be subject to jurisdiction here” by appearing
in litigation in other Ohio suits brought by 9150 Group against Roth in his individual capacity for
actions he had taken in regard to Aerosol and Specialty. However, the present dispute does not
“arise from” Roth’s appearances in other suits. Further, we note that each of these suits included
claims to “pierce the corporate veil” and hold Roth personally liable for the actions of Aerosol
and Specialty. Pursuant to the “corporate shield” doctrine, shareholders are not liable for the
actions of the corporation. Belvedere Condominium Unit Owners' Assn. v. R.E. Roark Cos., Inc.,
67 Ohio St.3d 274, 287 (1993). However, an exception exists where litigants may “pierce the
corporate veil” and hold individual shareholders liable when the following three conditions are
present:
(1) [C]ontrol over the corporation by those to be held liable was so complete that the corporation has no separate mind, will, or existence of its own, (2) control over the corporation by those to be held liable was exercised in such a manner to commit fraud or an illegal act against the person seeking to disregard the corporate entity, and (3) injury or unjust loss resulted to the [Appellees] from such control and wrong.
{¶24} Id. at 289. The first prong of the Belvedere test is known as the “alter ego
doctrine,” which requires a demonstration that the individual and the corporation are
fundamentally indistinguishable. See Willoway Nurseries v. Curdes, 9th Dist. No. 98CA007109,
1999 WL 820784, *4 (Oct. 13, 1999); Belvedere, 67 Ohio St.3d at 288. Although the alter ego
doctrine pertains to liability, pleading allegations giving rise to piercing the corporate veil is
“periodically used as a vehicle to obtain personal jurisdiction over an officer of a corporation that
cannot otherwise be reached in a certain state.” State ex rel. DeWine v. S & R Recycling, Inc., 12
195 Ohio App.3d 744, 2011-Ohio-3371, ¶ 27 (7th Dist.). Unlike the prior lawsuits which Roth
has defended in Ohio, in the present case, nowhere in the complaint did Appellees allege that
Roth was the alter ego of Aerosol or Specialty.
{¶25} Based upon the foregoing, we cannot discern from the record evidence
demonstrating specific jurisdiction over Roth in his individual capacity. Roth’s affidavit sets
forth averments that he was not personally involved in the actions giving rise to the complaint.
These averments are directly contrary to Appellees’ allegations that Roth directed the disposal of
hazardous waste. However, there exists no evidence in the record to support Appellees’
allegations of Roth’s personal involvement in the disposal of hazardous waste.
{¶26} As to general jurisdiction, a defendant who maintains “continuous and
systematic” contacts with the forum state may be subject to its jurisdiction, even where the
conduct complained of did not arise from the continuous and systematic contacts. Helicopteros
at 415, International Shoe, 326 U.S. at 318. See also Keeton v. Hustler Magazine, Inc., 465 U.S.
770, 774 (1984). However, here, Appellees have directed us to no contacts that Roth had with
Ohio which were both “continuous and systematic.” See Helicopteros at 415.
{¶27} Based upon the foregoing, the conflicting assertions in the complaint and in
Roth’s affidavit concerning his involvement in the disposal of hazardous waste at the Macedonia
facility should have been resolved by an evidentiary hearing. See Compuserve Inc. v. Trionfo, 91
Ohio App.3d 157, 165 (10th Dist.1993) (concluding that the trial court erred in failing to hold an
evidentiary hearing to resolve conflict in pleadings pertaining to personal jurisdiction over a
corporate agent and remanding for a hearing on this issue). Therefore, we remand this issue to
the trial court to conduct a hearing on the issue of personal jurisdiction over Roth in his 13
individual capacity. Further, based upon our remand, we decline to address Roth’s argument
pertaining to excusable neglect pursuant to Civ.R. 60(B), as it is not ripe for review.
III.
Roth’s assignment of error is sustained to the extent that it challenges the trial court’s
determination of personal jurisdiction. The judgment of trial court is reversed, and this matter is
remanded for further proceedings consistent with this opinion.
Judgment reversed and cause remanded.
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 Summit, 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 to Appellee.
CARLA MOORE FOR THE COURT 14
WHITMORE, P. J. CARR, J. CONCUR.
APPEARANCES:
DAVID W. MELLOT and E. MARK YOUNG, Attorneys at Law, for Appellant.
ROBERT J. KARL and R. BENJAMIN FRANZ, Attorneys at Law, for Appellees.
BRIAN A. BALL, Assistant Attorney General, for Appellee.