Addison Clipson Associated Architects, Inc. v. Consulting Engineers Corp.
| Decision Date | 12 June 2012 |
| Docket Number | A1010713 |
| Parties | ADDISON CLIPSON ASSOCIATED ARCHITECTS, INC, et al. Plaintiffs v. CONSULTING ENGINEERS CORP. Defendant |
| Court | Ohio Court of Common Pleas |
DECISION
This case is before the Court on Plaintiffs' Motion for Leave to File a Second Amended Complaint and to Dismiss Defendant's Counterclaim and For Summary Judgment in Favor of Plaintiffs on all of Plaintiffs' Claims. For the reasons discussed below, the motion is granted in part and denied in part.
In order to dismiss a complaint pursuant to Civ. R. 12(B)(6) for failure to state a claim upon which relief can be granted, "it must appear beyond doubt from the complaint that the plaintiff can prove no set of facts entitling him to recovery." O'Brien v. University Community Tenants Union, Inc., 42 Ohio St.2d 242, 327 N.E.2d 753 (1975), syllabus. When ruling on a motion to dismiss, the Court must accept all allegations of the Complaint as true and make all reasonable inferences in favor of the non-moving party. Vail v. Plain Dealer Publishing Co., 72 Ohio St.3d 279, 280, 649 N.E.2d 182, 184 (1995) (citing Mitchell v. Lawson Milk Co., 40 Ohio St.3d 190, 192, 532 N, E.2d 753, 756 (1988)).
Summary judgment is appropriate when there are no genuine issues of material fact that remain to be litigated and the moving party is entitled to judgment as a matter of law. Civ. R. 56(C); Celotex Corp. v. Catrett, 477 U.S. 317 (1986). Summary judgment should be granted if the pleadings, depositions, answers to interrogatories, written admissions, affidavits, transcripts of evidence in the pending case, if any, timely filed in the action and construed most strongly in favor of the non-moving party, show that there is no genuine issue as to any material fact. Civ. R. 56(C). The burden of establishing that the material facts are not in dispute, and that no genuine issue of fact exists, is on the party moving for summary judgment. Vahila v. Hall, 77 Ohio St.3d 421, 674 N.E.2d 1164 (1997). If the moving party asserts that there is an absence of evidence to establish an essential element of the non-moving party's claim, the moving party cannot discharge this burden with a conclusory allegation, but must specifically point to some part of the record which affirmatively demonstrates this absence of evidence. Dresher v. Burt, 75 Ohio St.3d 280, 662 N.E.2d 264 (1996).
The Ohio Supreme Court has established three factors to be considered upon a motion for summary judgment. These three factors are:
(1) That there is no genuine issue as to any material fact; (2) that the moving party is entitled to judgment as a matter of law; and (3) that reasonable minds can come to but one conclusion, and that the conclusion is adverse to the party against whom the motion for summary judgment is made, who is entitled to have the evidence construed most strongly in his favor.
Bostic v. Connor, 37 Ohio St.3d 144, 146 N.E.2d 881 (1988) (quoting Harless v. Willis Day Warehousing Co., 54 Ohio St.2d 64, 375 N.E.2d 46 (1978)).
Once a motion for summary judgment has been made and supported as provided in Civ. R. 56(C), the non moving party then has a reciprocal burden to set forth specific evidentiary facts showing the existence of a genuine issue for trial and cannot rest on the allegations or denials in the pleadings. Wing v. Anchor Media, Ltd. Of Texas, 59 Ohio St.3d 108, 111, 570 N.E.2d 1095 (1991).
Civ. R. 15(A) provides that leave of court to amend a complaint shall be freely given when justice so requires. "While the rule allows for liberal amendment, motions to amend pleadings pursuant to Civ. R. 1.5(A) should be refused if there is a showing of bad faith, undue delay or undue prejudice to the opposing party, " Turner v. Central Local School Dist., 85 Ohio St.3d 95 (1999).
Plaintiffs' entire motion arises out of the fact that Defendant CEC is not licensed to practice engineering as required by law in Ohio.
Plaintiffs seek to have Defendant's counterclaim for unjust enrichment dismissed on the basis of Defendant's failure to be properly licensed under Ohio Revised Code § 4733.16. Ohio Revised Code § 4733.16 (B) states:
No firm, partnership, association, limited liability company or corporation, except a corporation that was granted a charter prior to August 7, 1943, to engage in providing professional engineering or professional surveying services in this state or that was otherwise lawfully providing engineering services in this state prior to November 15, 1982, shall engage in providing professional engineering or professional surveying services, hold itself out to the public as being engaged in providing professional engineering or professional surveying services, or use a name including one or more of the words '"engineer, " " engineering, " "surveyor, " or "surveying" or any modification or derivation of those words, unless the firm, partnership, association, limited liability company, or corporation obtains a certificate of authorization from the state board of registration for professional engineers and surveyors and files all information required to be filed under this section with the state board of registration for professional engineers and surveyors and otherwise complies with all requirements of this chapter...
Defendant assert that there is no private cause of action under the statute and Plaintiffs' only remedy is a proceeding initiated by the Engineers and Surveyors Board, citing Dempsey v. Chicago Title Ins. Co, 20 Ohio App.3d 90 (8th Dist. 1985). However, even when there is no private right to action under the statute, failure to be licensed as required by law may be asserted as a defense when an unlicensed person or corporation attempts to collect fees for those services. Greenspan v. Third Federal, 122 Ohio St.3d 445 (2009)
As a general rule, professional contracts which violate registration statutes are unenforceable. McClennan v. Irvin & Company, 1978 WL 217728 at *4 (8th Dist. 1978). One who has himself participated in a violation of the law cannot be permitted to assert in a court of justice any right founded upon or growing out of a violation of law. Martineau v. Gresser, 182 N.E.2d 48 (Ohio Com. Pl. 1962).
Courts have found that an unlicensed architect cannot recover for services rendered in violation of the licensing statute. Elephant Lumber Co. v. Johnson, 120 Ohio App. 266 (4th Dist. 1964); see also McClennan at *5. The First District Court of Appeals has held that where a person violated the Ohio statutes requiring a securities dealer to be licensed, the unlicensed broker could not recover the commission under the contract. Carrousel North, Inc. v. Chelsea Moore Co., 9 Ohio App.3d 344 (1st Dist. 1983).
As to Defendant's counterclaim, Plaintiffs are not bringing a cause of action under Ohio Revised Code 4733.16. Instead, they are raising Defendant's failure to obtain the proper licensing under the statute as a defense to Defendant's unjust enrichment claim.
Defendant admits it was not licensed to perform engineering services at the time the services were performed. Defendant has raised a counterclaim for unjust enrichment based on services provided to Plaintiffs. While the counterclaim is brought under a quasi-contract theory and the cases cited above involve work done under a contract, it would undermine the general principle of the cases to allow an unlicensed corporation to recover for services under a quasi-contract principle when they would be unable to recover under a contract. See, e.g. Leatherbury v. Reagan, 34 Ohio App.3d 291 (2nd Dist. 1987). Because Defendant cannot recover for services performed in violation of the licensing statute, and therefore cannot prove any set of facts entitling it to relief, Defendant's counterclaim for unjust enrichment is dismissed.
Next, Plaintiffs move for summary judgment on all of their...
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