Inland Seas Boat Co. v. Brown

• Decision Date: 08 February 1979
• Citation: 61 Ohio App.2d 120,399 N.E.2d 579,15 O.O.3d 142
• Parties: , 15 O.O.3d 142 INLAND SEAS BOAT COMPANY, Appellant, v. BROWN, Appellee. *
• Court: Ohio Court of Appeals

Page 120

61 Ohio App.2d 120

399 N.E.2d 579, 15 O.O.3d 142

INLAND SEAS BOAT COMPANY, Appellant, v. BROWN, Appellee. ^*

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

Feb. 8, 1979.

Syllabus by the Court

1. A statutory agent whose agency has not been terminated but who had no communication with his corporation for approximately eighteen years is nonetheless negligent if he fails to forward suit papers to the corporation or make reasonable efforts to ascertain its location for forwarding.

2. Where a corporation seeks to recover damages from its statutory agent for such agent's negligence in failing to forward suit papers or make reasonable efforts to ascertain the location of the corporation for forwarding, the corporation's claim is defeated by its own contributory negligence in failing to inform the agent of a change in location of its principal place of business to another county occurring more than ten years earlier.

3. A plaintiff may escape the consequences of his own negligence under the theory of last clear chance only when such negligence has ceased in time to allow the negligent defendant to avoid the injury to the plaintiff.

4. The doctrine of last clear chance will not allow a corporation to escape the consequences of its own negligence, in failing either to designate a new agent under R.C. 1701.07 or to inform its existing statutory agent of the relocation of its principal place of business to another county until after such existing agent has negligently failed to forward suit papers or make reasonable efforts to ascertain the location of the corporation.

Frederick P. Vergon, Jr., Cleveland, for appellant.

Thomas O. Gorman, Cleveland, for appellee.

DAY, Judge.

Defendant-appellee, George M. Brown (defendant), was appointed statutory agent for plaintiff-appellant, Inland Seas Boat Company (plaintiff or Company). For a short time after June 1951, defendant performed legal services for the Company but had no further contact with plaintiff until the matters involved in the instant case arose in 1969.

Plaintiff maintained its principal office in Cleveland until 1957 when it moved its operation to Sandusky, Ohio. Defendant was not informed of the move. Plaintiff's articles were not amended to reflect the change in its principal place of business until 1970. A new statutory agent was appointed at that same time.

On October 10, 1969, a complaint was filed in the Common Pleas Court of Cuyahoga County under Levan v. Inland Seas Boat Co., Case No. 877,818. The return of service indicated that the Sheriff had served defendant on October 28, 1969. Defendant called Levan's office, spoke to an attorney Wagner and advised him that defendant knew nothing about Inland Seas Boat Company. On December 19, 1969, a default notice in the case Levan v. Inland Seas Boat Co. was forwarded to defendant. He made no attempt to locate the Company. Instead he threw away the papers. A default judgment was rendered for Levan against the Company on December 31, 1969. The amount of the judgment was $3,000.

The Company first learned of Levan's suit against it when execution was levied on its property at the Cleveland Boat Show in January of 1970.

Efforts to vacate the judgment failed. The Company paid $3,794.20 to satisfy the Levan judgment and sued Defendant Brown alleging negligence and malpractice. ¹

A bench trial on stipulated facts resulted in a judgment for the defendant. Plaintiff appealed assigning five errors which are set out in the margin. ² The majority finds none of the assignments well taken. The judgment is affirmed.

I.

A formal opinion would probably not be justified in this case were it not for the unique application of negligence principles in the court below.

II.

Although the legal conclusions of the trial court are somewhat murky, a fair rendering supports this summary:

(1) Company was negligent in removing its principal place of business from one county to another without advising its statutory agent.

(2) The Company was negligent in not designating a new agent when it changed its principal place of business from one county to another. ³

(3) The statutory agent originally designated continued as agent until a successor was named despite the Company's dereliction and was negligent in not continuing to act in a manner "consistent with that of a reasonable prudent statutory agent."

(4) Although the statutory agent was negligent in throwing away suit papers without notifying the Company, the Plaintiff Company was contributorily negligent for noncompliance with R.C. 1701.07, and, therefore, cannot prevail. ⁴

III.

The plaintiff seeks to avoid the trial court's negligence conclusions by the argument that it was not negligent in not complying with R.C. 1701.07, but that if it were, the doctrine of last clear chance absolves it of the consequences.

A reviewing court will not go behind a trial court's conclusions unless those conclusions could not find support in a reasonable mind. It is clear that reasonable minds could differ on the negligence issues in this case. Accordingly, the trial court's determination of plaintiff's negligence as a proximate cause of plaintiff's loss must stand. Thus, the plaintiff's contributing negligence defeats his cause unless the doctrine of last clear chance applies.

However, the last clear chance contention avails the plaintiff nothing. For its negligence continued up to and including the negligent conduct of its then statutory agent the defendant in the instant case. The doctrine of last clear chance is unavailable to a plaintiff whose own negligence has not ceased in time to allow the negligent defendant to avoid the injury. It is not " * * * available for the purpose of excusing contributory negligence continuing up to and at the time of the accident. * * * " Pennsylvania Co. v. Hart (1920), 101 Ohio St. 196, 199, 128 N.E. 142, 143.

While an "accident" is not involved in the instant case, the analogy from the Hart decision is obvious and compelling. Moreover, it was reasonably foreseeable by the plaintiff that the defendant statutory agent would consider his agency terminated and act accordingly after more than eighteen years of inactivity which included no communication.

The majority concludes that the first three assignments of error are without merit.

IV.

The fourth and fifth assignments argue a right to recover on a contract theory. However, the pleadings do not allege and the stipulated facts do not support a claim in contract.

The fourth and fifth assignments of error are without merit.

Judgment affirmed.

THOMAS J. PARRINO, P. J., concurs.

KRUPANSKY, J., dissents.

KRUPANSKY, Judge, dissenting.

The majority is willing to accept without question the conclusions of the trial court concerning appellant's negligence i. e., that appellant failed to comply with R.C. 1701.07, and that this failure constituted contributory negligence barring his recovery in this action. As its reason for not upsetting these conclusions, the majority states that "A reviewing court will not go behind a trial court's conclusions unless those conclusions could not find support in a reasonable mind."

What the majority is saying is that it will not analyze the foundations of a trial court's decision unless those foundations are clearly unreasonable. How the majority could ever determine if a trial court's conclusions are reasonable or unreasonable without first analyzing them is beyond my understanding.

Furthermore, by using the term "conclusions" the majority is abdicating its responsibility and that of the court to determine whether the trial court correctly applied the law. Certainly a reviewing court will not reverse a reasonably supportable factual finding. However, this standard is inapplicable to conclusions of law, which must be correct as opposed to reasonable.

The majority would have us believe that all the issues decided below, except the issue of last clear chance, were strictly factual determinations. However, this is clearly not the case. The trial court rendered both findings of fact and conclusions of law. Appellant's assignments of error attack the legal conclusions of the trial court and not its factual findings. Several legal issues are raised which should be determined by this court, but the majority has avoided them.

I.

The first issue to be determined is whether R.C. 1701, the Ohio Corporations Code, requires a corporation to appoint a successor statutory agent when it moves its principal place of business from one county to another. R.C. 1701.07(A) states, in relevant part:

"Every corporation shall have and maintain an agent (sometimes referred to as the 'statutory agent'), upon whom any process, notice, or demand required or permitted by statute to be served upon a corporation may be served. Such agent may be a natural person who is a resident of the county in this state in which the principal office of the corporation is located. * * * "

The "principal office" is defined by R.C. 1701.01(H) as follows:

"The location of the 'principal office' of a corporation is the place named as such in its articles."

The various circumstances which allow or require the removal of one agent and, or, the appointment of a new agent are set out in R.C. 1701.07, as follows:

"(D) If any agent dies, removes from the county, or resigns, the corporation shall forthwith appoint another agent and file with secretary of state a written appointment of such agent. If an amendment to the articles changes the principal office of the corporation in this state to another county, the corporation shall forthwith appoint another agent and file in the office of the secretary of state a written appointment of such agent unless the agent is a corporate agent and has a business address in such other county, in which event the corporation shall forthwith file with the secretary of state a written statement setting forth the business address of such corporate agent in...