Patterson v. V & M Auto Body, 91-552

• Citation: 589 N.E.2d 1306,63 Ohio St.3d 573
• Decision Date: 06 May 1992
• Docket Number: No. 91-552,91-552
• Court: United States State Supreme Court of Ohio
• Parties: PATTERSON, Appellant, v. V & M AUTO BODY, Appellee.

Page 573

63 Ohio St.3d 573

589 N.E.2d 1306

PATTERSON, Appellant, v. V & M AUTO BODY, Appellee.

No. 91-552.

Supreme Court of Ohio.

Submitted Feb. 11, 1992.

Decided May 6, 1992.

On October 23, 1987, Frederick Patterson, plaintiff-appellant herein, was in a vehicular accident. His 1979 Chevrolet van was later broken into at V & M Auto Body, defendant-appellee, in Girard, Ohio. The car was being stored awaiting repair. Some items were stolen and others damaged. Plaintiff brought suit in the Girard Municipal Court against V & M Auto Body, seeking damages.

The complaint and summons were served on June 2, 1988 and defendant filed a general denial on July 28, 1988. Subsequently defendant sought leave to amend its answer and on February 16, 1989 an amended answer was filed. This answer specifically set forth the defense that defendant lacked the capacity to be sued. A second amended answer, setting forth the same defense, was sought to be filed on June 13, 1989. Although the trial court did not grant leave to file the second amended answer, the motion and second amended answer were served on plaintiff. At no time prior to or during trial did plaintiff move to amend his complaint.

The evidence at trial disclosed that V & M Auto Body was a sole proprietorship owned by Victor Searfoss. Defendant moved to dismiss after plaintiff rested, again asserting defendant's incapacity to be sued. The trial court overruled the motion, and the jury returned a verdict for plaintiff in the amount of $750. Defendant appealed, assigning as error the failure of the trial court to sustain its motion to dismiss. The Court of Appeals for Trumbull County held that, inasmuch as V & M Auto Body was an entity without real or legal existence, the lawsuit had never been properly commenced. Defendant's proper remedy was therefore not a motion to dismiss but a motion to strike, and if plaintiff did not move to amend his complaint, the trial court should have stricken the action sua sponte from its docket.

The cause is now before this court on the allowance of a motion to certify the record.

Joan L. Turner, Youngstown, for appellant.

Richards & Meola, Charles L. Richards and Jeffrey V. Goodman, Warren, for appellee.

HERBERT R. BROWN, Justice.

In this case we are asked to decide whether a lawsuit may be knowingly maintained against a defendant solely under the fictitious name in which the defendant does business. For the following reasons, we hold that it may not.

It is well established that both plaintiff and defendant in a lawsuit must be legal entities with the capacity to be sued. Cf. Civ.R. 17(B); Barnhart v. Schultz (1978), 53 Ohio St.2d 59, 61, 7 O.O.3d 142, 143, 372 N.E.2d 589, 591, overruled on other grounds, Baker v. McKnight (1983), 4 Ohio St.3d 125, 4 OBR 371, 447 N.E.2d 104. A sole proprietorship has no legal identity separate from that of the individual who owns it. It may do business under a fictitious name if it chooses, but " * * * [d]oing business under another name does not create an entity distinct from the person operating the business. The individual who does business as a sole proprietor under one or several names remains one person, personally liable for all his obligations. * * * " Duval v. Midwest Auto City, Inc. (D.Neb.1977), 425 F.Supp. 1381, 1387. The proper defendant in this case was Victor Searfoss, doing business as V & M Auto Body.

The Ohio Rules of Civil Procedure provide for liberal amendment of pleadings, under certain circumstances as of right, otherwise by leave of court. Leave of court "shall be freely given when justice so requires. * * * " Civ.R. 15(A). Amendments to claims or defenses ordinarily relate back to the date of the filing of the original pleading and an amendment to the parties will also relate back to the original complaint if "the party to be brought in by amendment (1) has received such notice of the institution of the action that he will not be prejudiced in maintaining his defense on the merits, and (2) knew or should have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against him." Civ.R. 15(C). Relation back avoids unnecessary problems caused by statutes of limitations and corrects technical defects caused by misnomer. See Baker v. McKnight, supra.

In this case plaintiff was notified on at least three occasions that he had sued the wrong defendant. The first was upon the filing of the first amended answer, and the second was when the second amended answer was served (though not filed). The third was at the close of plaintiff's case-in-chief when defendant moved to dismiss. Plaintiff had more than sufficient time to amend after the first amended answer was filed. ¹ Victor Searfoss's appearance and vigorous defense in this matter amply demonstrate that he received notice, was not prejudiced and knew the lawsuit should have been brought against him. It would therefore have been within the trial court's discretion to grant a motion to substitute Searfoss's name for "V & M Auto Body," if such a motion had been made. " * * * Although the grant or denial of leave to amend a pleading is discretionary, where it is possible that the plaintiff, by an amended complaint, may set forth a claim upon which relief can be granted, and it is tendered timely and in good faith and no reason is apparent or disclosed for denying leave, the denial of leave to file such amended complaint is an abuse of discretion. * * * " Peterson v. Teodosio (1973), 34 Ohio St.2d 161, 175, 63 O.O.2d 262, 269-270, 297 N.E.2d 113, 122. The same reasoning applies to an amendment to correct a name or substitute the proper party. See, e.g., Hardesty v. Cabotage (1982), 1 Ohio St.3d 114, 117, 1 OBR 147, 149, 438 N.E.2d 431, 434.

If a defendant in a lawsuit is not an actual or legal entity, then any judgment rendered against that entity is void. Cobble v. Farmer's Bank (1900), 63 Ohio St. 528, 59 N.E. 221. No action has been commenced pursuant to Civ.R. 3(A), which provides that an action is begun by filing a complaint "if service is obtained within one year from such filing upon a named defendant, or upon an incorrectly named defendant whose name is later corrected * * *." (Emphasis added.) See Kossuth v. Bear (1954), 161 Ohio St. 378, 53 O.O. 280, 119 N.E.2d 285; GMS Mgt. Co. v. Axe (Mun.1982), 5 Ohio Misc.2d 1, 5 OBR 53, 449 N.E.2d 43, and cases cited therein. The only exception to this rule has been when the defendant uses the mistake in an attempt to deceive the other parties and the court. Boehmke v. Northern Ohio Traction Co. (1913), 88 Ohio St. 156, 102 N.E. 700. ² Victor Searfoss, however, did not attempt to conceal the fact that this lawsuit was brought against a misnamed defendant or that he was the proper party defendant.

The plaintiff has urged that Searfoss's appearance and defense enabled the court to reach the merits of the case, and that amendment of the complaint was an unnecessary technicality. This court has said: "The spirit of the Civil Rules is the resolution of cases upon...