A-1 Nursing Care of Cleveland, Inc. v. Florence Nightingale Nursing, Inc.

• Decision Date: 17 October 1994
• Docket Number: No. 66328,A-1,66328
• Citation: 97 Ohio App.3d 623,647 N.E.2d 222
• Parties: NURSING CARE OF CLEVELAND, INC., Appellant, v. FLORENCE NIGHTINGALE NURSING, INC. ET AL., Appellees.
• Court: Ohio Court of Appeals

Page 623

97 Ohio App.3d 623

647 N.E.2d 222

A-1 NURSING CARE OF CLEVELAND, INC., Appellant, v. FLORENCE NIGHTINGALE NURSING, INC. ET AL., Appellees.

No. 66328.

Court of Appeals of Ohio, Eighth District, Cuyahoga County.

Decided Oct. 17, 1994.

Howard M. Hackman, Westerville, for appellant.

Michael R. Perme, Euclid, for appellees.

HARPER, Presiding Judge.

I

Appellant, A-1 Nursing Care of Cleveland, Inc. ("A-1"), appeals from the summary judgment granted in favor of appellees, Florence Nightingale Nursing, Inc. ("Nightingale"), Karen Peters and Diane Hass, on its complaint for interference with a contract. For the reasons that follow, we reverse and remand.

A-1 was incorporated under the laws of Ohio on July 30, 1987 as a nursing care agency. Karen Peters was employed by A-1 as its director of nursing on September 12, 1988. On the date of employment Peters signed a nondisclosure agreement with A-1. The disclosure agreement prohibits Peters from soliciting "for employment of any facility or client whose name has been supplied to me by the Agency or to whom I have been assigned through the Agency." ¹ It also forbids Peters to accept "any employment from any client or facility whose name has been supplied to me or to whom I am or have been assigned to by the Agency within 90 days from and after my termination of employment with the Agency, I shall request written consent to do so from the Agency."

A-1's complaint alleged that Peters violated the agreement by incorporating Nightingale on September 14, 1989, soliciting clients of A-1 and luring a number of A-1 clients to Nightingale. She was also alleged to have used a confidential client list of A-1 to her own advantage, in violation of the agreement.

On June 23, 1993 appellees filed a motion for summary judgment claiming that A-1 had no standing to sue. They reasoned that since the Ohio legislature amended R.C. 1785.01(B) to allow only licensed individuals to operate professional associations, A-1 cannot sue because its sole shareholder was not a licensed nurse. The trial court granted appellees' motion based on appellant's lack of standing to sue.

II

Appellant assigns the following errors for our review:

"The trial court erred when it found as a matter of law that appellant, A-1 Nursing Care of Cleveland, Inc., did not have standing and dismissed its claims in contravention of Ohio R.Civ.P. 17

"A. The defendant is not entitled to summary judgment pursuant to Ohio R.Civ.P. 56, as Ohio R.Civ.P. 17 controls.

"B. The trial court erred when it found that the appellant, A-1 Nursing Care of Cleveland, Inc., lacked standing."

Appellant challenges the trial court's grant of summary judgment for the reason that it did not have standing to file a complaint against appellees.

The law of summary judgment is settled in Ohio. Summary judgment cannot be granted absent a showing by the moving party that (1) the opposing party has not presented any material issue of fact for litigation, (2) the moving party is entitled to judgment as a matter of law, and (3) in weighing the evidence in the light most favorable to the nonmoving party, reasonable minds can come to but one conclusion and that conclusion must be adverse to the nonmoving party. Johnson v. New London (1988), 36 Ohio St.3d 60, 521 N.E.2d 793; Civ.R. 56(C); see, also, Morris v. Ohio Cas. Co. (1988), 35 Ohio St.3d 45, 47, 517 N.E.2d 904, 906. A trial court commits a reversible error in granting a summary judgment where the moving party is not entitled to judgment as a matter of law, Temple v. Wean United, Inc. (1977), 50 Ohio St.2d 317, 324, 4 O.O.3d 466, 470, 364 N.E.2d 267, 272.

There is a foregone legal conclusion that a party filing a motion for summary judgment premises his motion on the understanding that the court has jurisdiction to entertain the motion; hence, the issue before the court is not that of jurisdiction but whether there are sufficient issues of material significance in the complaint to submit to the trier of fact. It is this unique requirement of Civ.R. 56 that makes a motion for summary judgment an improper procedure for challenging standing. A review of appellant's complaint reveals that there are unquestionably genuine issues of material fact as to whether appellee violated the disclosure agreement. Thus, a motion to dismiss pursuant to Civ.R. 12 rather than a motion for summary judgment is the appropriate procedure for raising the defense of lack of standing to sue. See Kowalezyk v. Walsh (1979), 482 F.Supp. 959.

Summary judgment terminates a party's action on the merits and a subsequent filing of an action decided on summary judgment is prohibited by the doctrine of res judicata, whereas the motion to dismiss for lack of standing terminates the action other than on the merits and affords proper parties the opportunity to refile without fear of the effects of res judicata. Therefore, Civ.R. 56 is inapplicable to decide a legal issue of standing and a court faced with this issue must rule on it within the framework of Civ.R. 12. See Lin v. Gatehouse Constr. Co. (1992), 84 Ohio App.3d 96, 616 N.E.2d 519. The trial court, therefore, was in error in granting summary judgment.

III

We are also not persuaded by appellees' argument that appellant lacked standing to sue because its sole shareholder is not a licensed nurse and therefore it could not legally operate as a business under the provisions of R.C. 1785.01 as amended.

In GMS Mgt. Co. v. Axe (1982), 5 Ohio Misc.2d 1, 5 OBR 53, 449 N.E.2d 43, the court held that "the legal existence of a corporation begins with the filing of the articles of incorporation. R.C. 1701.04(D). It is this legal existence that gives the corporation the legal capacity to sue. R.C. 1701.13(A)." A review of the record in the instant case shows that appellant's articles of incorporation were not cancelled, and there is no indication that appellant has ceased to carry on the business for which it was incorporated, that of nursing care agency.

R.C. 1.58 provides as follows:

"(A) The reenactment, amendment, or repeal of a statute does not, except as provided in division (B) of this section:

"(1) Affect the prior operation of the statute or any prior action taken thereunder;

"(2) Affect any validation, cure, right, privilege, obligation, or liability previously acquired, accrued, accorded, or incurred thereunder;

"(3) Affect any violation thereof or penalty, forfeiture, or punishment incurred in respect thereto, prior to the amendment or repeal;

"(4) Affect any investigation, proceeding, or remedy in...