Rita Ann Distrib. v. Brown Drug Co., 2005 CA 12.

• Decision Date: 28 October 2005
• Docket Number: No. 2005 CA 12.,2005 CA 12.
• Citation: 841 N.E.2d 400,164 Ohio App.3d 145,2005 Ohio 5786
• Parties: RITA ANN DISTRIBUTORS, Appellee, v. BROWN DRUG COMPANY, Appellant.
• Court: Ohio Supreme Court

841 N.E.2d 400

164 Ohio App.3d 145

2005-Ohio-5786

RITA ANN DISTRIBUTORS, Appellee, v. BROWN DRUG COMPANY, Appellant.

No. 2005 CA 12.

Court of Appeals of Ohio, Second District, Clark County.

Decided October 28, 2005.

COPYRIGHT MATERIAL OMITTED

Eric F. Spade, for appellee.

Jerome M. Strozdas, for appellant.

WOLFF, Judge.

{¶ 1} Brown Drug Company ("Brown Drug") appeals from a judgment of the Clark County Court of Common Pleas, which afforded full faith and credit to a default judgment rendered by a Maryland court in favor of Rita Ann Distributors ("Rita Ann") and against Brown Drug.

{¶ 2} Rita Ann is a division of AmerisourceBergen Corporation, which has its principal place of business at 8410 Kelso Drive in Baltimore, Maryland. Brown Drug operated a chain of discount drug stores under the trade name "Drug Castle" until closing its stores in April 2002.

{¶ 3} In September 2000, Brown Drug completed a credit application and began to purchase certain products, primarily cosmetics, from Rita Ann. The credit application showed Rita Ann's preprinted address and telephone number in Baltimore; an Ohio facsimile number was handwritten on the application. Brown Drug faxed the application to Earl Jones, an account manager for Rita Ann who worked from his home office in Massillon, Ohio.

{¶ 4} From September 2000 to early 2002, Jones periodically assisted Brown Drug in ordering goods from Rita Ann. According to Kirk Box, a vice-president of Brown Drug, Jones would visit the Drug Castle stores periodically. While at the stores, Jones would refill displays and restock the shelves. Jones would then cause an invoice to be generated for the additional product that he had furnished. When certain products remained unsold, Jones would remove them from the stores and credit the cost of those products back to Brown Drug. Brown Drug did not operate any stores in Maryland or make any sales in Maryland. Brown Drug employees did not travel to Maryland for any purpose related to Rita Ann. Rather, Rita Ann's agents and employees sold product to Brown Drug by visiting the stores and offices in Ohio or by taking orders over the telephone.

{¶ 5} According to Jones, the representatives of Brown Drug with whom he dealt knew that Rita Ann was located in Baltimore and that Brown Drug was conducting business with Rita Ann in Baltimore. The payments made by Brown Drug for the goods that it had ordered from Rita Ann were sent to Rita Ann in Baltimore. Jones further indicated that representatives of Brown Drug understood that the credit application that they completed in September 2000 had to be approved by Rita Ann in Baltimore.

{¶ 6} On September 16, 2002, Rita Ann brought suit against Brown Drug in the Circuit Court for Baltimore County, Maryland, alleging that Brown Drug had not paid several invoices from February through April 2002. Rita Ann served the complaint by certified mail, return receipt requested. Although the parties corresponded regarding the lawsuit, Brown Drug did not file an answer to the complaint. Consequently, Rita Ann sought a default judgment, which was granted. On June 5, 2003, the circuit court entered judgment against Brown Drug in the amount of $30,925.36.

{¶ 7} On June 25, 2004, Rita Ann filed the Maryland judgment with the Clark County Court of Common Pleas. On July 22, 2004, Brown Drug filed an "Objection to the Filing of Foreign Judgment and Motion to Dismiss," arguing that the judgment was void because Brown Drug had not been properly served by Rita Ann and the Maryland court lacked personal jurisdiction over the company. On January 13, 2005, the court of common pleas concluded that Brown Drug had been properly served and that the Maryland court had properly exercised personal jurisdiction over the company. The court therefore ordered that the Maryland judgment be afforded full faith and credit.

{¶ 8} In its sole assignment of error, Brown Drug claims that the trial court erred in failing to find that the Maryland judgment was void. We agree.

{¶ 9} Ohio's Uniform Enforcement of Foreign Judgment Act, R.C. 2329.021 through 2329.027, sets forth this state's obligations under the Full Faith and Credit Clause of the United States Constitution. "The doctrine of full faith and credit requires that the state of Ohio give to these acts, records, and judicial proceedings of another state the same faith and credit `as they have by law or usage in the courts of such State * * * from which they are taken.'" Holzemer v. Urbanski (1999), 86 Ohio St.3d 129, 132, 712 N.E.2d 713. R.C. 2329.022 provides:

{¶ 10} "A copy of any foreign judgment * * * may be filed with the clerk of any court of common pleas. The clerk shall treat the foreign judgment in the same manner as a judgment of a court of common pleas. A foreign judgment filed pursuant to this section has the same effect and is subject to the same procedures, defenses, and proceedings for reopening, vacating, or staying as a judgment of a court of common pleas and may be enforced or satisfied in same manner as a judgment of a court of common pleas."

{¶ 11} A valid judgment rendered in a foreign jurisdiction will be recognized and enforced in Ohio even though the strong public policy of Ohio would have precluded recovery in its courts on the original claim. Speyer v. Continental Sports Cars, Inc. (1986), 34 Ohio App.3d 272, 276, 518 N.E.2d 39. A foreign judgment is subject to collateral attack in Ohio only if there was no subject-matter or personal jurisdiction to render the judgment under the law of the foreign state. Litsinger Sign Co. v. Am. Sign Co. (1967), 11 Ohio St.2d 1, 40 O.O.2d 30, 227 N.E.2d 609; Reyna v. Escobar, Seneca App. No. 13-04-39, 2005-Ohio-424, 2005 WL 280355, ¶ 10.

{¶ 12} Brown Drug contends that the trial court improperly found that the Maryland court had personal jurisdiction over the company. First, Brown Drug asserts that it was not properly served with summons in accordance with the Maryland law. It further argues that it lacked minimum contacts with Maryland so that Maryland courts could not exercise personal jurisdiction over it under the long-arm statute and the Due Process Clause.

{¶ 13} "When a court's personal jurisdiction is properly challenged * * *, the jurisdictional question thus raised is one for the judge, with the burden on the plaintiff ultimately to prove the existence of a ground for jurisdiction by a preponderance of the evidence. See generally 2A Moore's Fed. Prac. ¶ 12.07[2.-2]. If the existence of jurisdiction turns on disputed factual questions the court may resolve the challenge on the basis of a separate evidentiary hearing, or may defer ruling pending receipt at trial of evidence relevant to the jurisdictional question. But when * * * the court addresses the question on the basis only of motion papers, supporting legal memoranda and the relevant allegations of a complaint, the burden on the plaintiff is simply to make a prima facie showing of a sufficient jurisdictional basis in order to survive the jurisdictional challenge. Id. In considering a challenge on such a record, the court must construe all relevant pleading allegations in the light most favorable to the plaintiff, assume credibility, and draw the most favorable inferences for the existence of jurisdiction. Id." Combs v. Bakker (C.A.4, 1989), 886 F.2d 673, 676.

{¶ 14} "Service of process is a method of formally commencing an action by giving the defendant notice of the action." CPI Corp. v. Seasonings Etcetera, Inc. (June 8, 2000) Franklin App. No. 99AP-590, 2000 WL 739437. "It is an elementary principle that no valid proceeding can be had against a person until he has been notified of the proceeding by proper summons, unless he voluntarily waives such constitutional right." Harvey v. Slacum (1942), 181 Md. 206, 210, 29 A.2d 276.

{¶ 15} Maryland Rule of Civil Procedure 2-121 sets forth the procedures for service of process in the circuit court. The general service-of-process provision authorizes service within the state of Maryland "or, when authorized by the law of this State, outside of this State * * * by mailing to the person to be served a copy of the summons, complaint, and all other papers filed with it by certified mail requesting: `Restricted Delivery — show to whom, date, address of delivery.'" Md. Civ.R. 2-121(a). Service outside of Maryland may also be made as prescribed by the court or prescribed by the foreign jurisdiction "if reasonably calculated to give actual notice." Id. Service is made upon a corporation by serving its resident agent, president, secretary, or treasurer. Md.Civ.R. 2-124(d). "A proper return of service serves as prima facie evidence of valid service of process." Pickett v. Sears, Roebuck & Co. (2001), 365 Md. 67, 84, 775 A.2d 1218, citing Sheehy v. Sheehy, 250 Md. 181, 185, 242 A.2d 153, 155 (1968); see, also, Harvey, 29 A.2d at 278.

{¶ 16} Brown Drug asserts that it was not properly served under Maryland law because Rita Ann failed to request "Restricted Delivery," and the certified-mail receipt was signed by Cindy Foster, an individual who was not associated with Brown Drug. We need not decide, however, whether Rita Ann's service of Brown Drug complied with the general requirements of Md.Civ.R. 2-121(a) for in-state defendants. It is apparent that Brown Drug, an out-of-state defendant, was served by a method prescribed by Ohio, the foreign jurisdiction, and in a manner "reasonably calculated to give actual notice." Md.Civ.R. 2-121(a); Miserandino v. Resort Properties, Inc. (1997), 345 Md. 43, 691 A.2d 208.

{¶ 17} In Ohio, Civ.R. 4.1(A) and Civ.R. 4.3(B) provide that service of parties "shall be by certified or express mail unless otherwise permitted by these rules" as "[e]videnced by return receipt signed by any person." The rules require the clerk to "affix adequate postage and place the sealed envelope in the United States mail as certified or express mail return receipt requested with instructions to the...