State ex rel. Dewine v. S&R Recycling, Inc.
| Decision Date | 30 June 2011 |
| Docket Number | No. 09 CO 45.,09 CO 45. |
| Citation | 195 Ohio App.3d 744,961 N.E.2d 1153,2011 -Ohio- 3371 |
| Parties | STATE ex rel. DeWINE, Atty. Gen., et al., Appellants, v. S & R RECYCLING, INC. et al., Appellees. |
| Court | Ohio Court of Appeals |
OPINION TEXT STARTS HERE
Mike DeWine, Attorney General, and Amanda K. Sturm, James A. Carr, and Brian Ball, Assistant Attorneys General, for appellant state of Ohio.
Pelini, Campbell, Williams & Traub, Craig G. Pelini, and Raymond C. Mueller, for appellants Melvin and Frances Toalston.
Oldham Kramer, Matthew W. Oby, and Caryn L. Peterson, for appellees Simon DiPasquale and Romeo Maffei.WAITE, Presiding Judge.
[Ohio App.3d 748] Summary
{¶ 1} Appellants, the state of Ohio and Melvin A. and Frances Toalston, appeal the decision of the Columbiana County Court of Common Pleas granting appellees', Simone DiPasquale and Romeo Maffei's, motion to quash service of summons and motion to dismiss pursuant to Civ.R. 12(B)(2), lack of personal jurisdiction. The main issue in this case is whether the trial court had competent, credible evidence to find that the long-arm statute of Ohio did not confer jurisdiction over these defendants. The record supports the trial court's decision not to disregard the corporate form and not to assert personal jurisdiction over DiPasquale and Maffei for the alleged Ohio Environmental Protection Agency (“OEPA”) violations. Accordingly, we affirm the lower court's ruling.
Case History
{¶ 2} The property that is the subject of this litigation is a 30–acre parcel located at U.S. Route 30 and State Route 644, Campbell Road, Kensington, County of Columbiana. S & R Recycling, Inc. bought the property from Melvin and Francis Toalston by a land contract on August 27, 2002. Prior to 2000, Tri–State Materials owned the property and operated a hazardous-waste recycling landfill for a number of years. S & R is a New York corporation authorized to do business in Ohio. Appellees Simon DiPasquale and Romeo Maffei each own 50 percent of S & R. Both DiPasquale and Maffei are residents of New York. DiPasquale is the president of S & R; Maffei holds no official title.
{¶ 3} S & R also owns a 120–acre parcel adjacent to the property at issue. S & R obtained a permit from OEPA to operate a construction-debris landfill on the 120–acre parcel. S & R purchased the 30–acre property to allow for better highway access to this 120–acre parcel.
{¶ 4} After purchasing the property, S & R hired Bowser–Morner, an environmental consulting firm, to analyze it. Bowser–Morner informed S & R that the property might be in violation of several of Ohio's hazardous-waste and solid-waste laws.
{¶ 5} OEPA conducted a complaint investigation at the property. The inspection discovered several violations of R.C. Chapter 3734. OEPA informed S & R of these violations by sending eight notices of violation to S & R and to appellee DiPasquale between August 21, 2003, and August 26, 2005. OEPA then revoked the permit previously issued for the adjacent 120–acre parcel. Because of this revocation, S & R never began operating a landfill, did not conduct business on the property, never hired any employees, and never made any profit as a result of its ownership of the property.
[Ohio App.3d 749] Procedural History
{¶ 6} The attorney general, at the request of the OEPA, filed a complaint on August 7, 2008, against S & R, Simone DiPasquale, and Romeo Maffei, for violations of R.C. Chapter 3734. Appellees filed a motion to quash service of summons and to dismiss pursuant to Civ.R. 12(B)(2), for lack of personal jurisdiction. An evidentiary hearing was held and both appellants and appellees filed posthearing briefs. On September 30, 2009, the court granted appellees' motion to quash service, finding that DiPasquale and Maffei were not subject to personal jurisdiction under Ohio's long-arm statute. In the judgment entry, the court concluded that although the corporate entity, S & R, was subject to personal jurisdiction under Ohio's long-arm statute, DiPasquale and Maffei were merely principals or shareholders in the defendant corporation, had not personally conducted any business in Ohio, and were therefore not subject to personal jurisdiction. The attorney general filed a motion seeking a final, appealable order and then filed this timely appeal.
{¶ 7} Appellants Melvin A. and Frances Toalston also filed a notice of appeal, but they do not raise any assignments of error or arguments. They rely on the arguments made by the attorney general.
{¶ 8} When a trial court conducts an evidentiary hearing before ruling on a motion to dismiss for lack of personal jurisdiction under Civ.R. 12(B)(2), the nonmoving party must establish the jurisdiction of the court by a preponderance of the evidence. Giachetti v. Holmes (1984), 14 Ohio App.3d 306, 308, 14 OBR 371, 471 N.E.2d 165. We review the trial court's ruling granting a motion to dismiss or vacate for lack of personal jurisdiction under a de novo standard. Snyder Computer Sys., Inc. v. Stives, 175 Ohio App.3d 653, 2008-Ohio-1192, 888 N.E.2d 1117, ¶ 1.
{¶ 9} When making a determination whether a court has personal jurisdiction over a defendant, the court applies a two-step test. First, the court determines whether Ohio's long-arm statute, R.C. 2307.382, and corresponding civil rule, Civ.R. 4.3(A)(1), confer personal jurisdiction. U.S. Sprint Communications Co. Ltd. Partnership v. Mr. K's Foods, Inc. (1994), 68 Ohio St.3d 181, 183–184, 624 N.E.2d 1048. If the court determines that the long-arm statute confers jurisdiction, the next step is to determine whether granting personal jurisdiction would deprive the defendant of the right to due process of law pursuant to the Fourteenth Amendment. Id. Appellants' first assignment of error addresses the two steps of this test as Issue No. 1 and Issue No. 2.
[Ohio App.3d 750] Assignment of Error Number One
{¶ 10} “The trial court erred in dismissing defendants Dipasquale and Maffei for lack of personal jurisdiction under Ohio's long-arm statute.”
{¶ 11} For the first part of the analysis in determining personal jurisdiction, Ohio's long-arm statute, R.C. 2307.382, sets forth the requirements for finding personal jurisdiction over a nonresident defendant. The statute provides:
{¶ 12} “(A) A court may exercise personal jurisdiction over a person who acts directly or by an agent, as to a cause of action arising from the person's:
{¶ 13} “(1) Transacting any business in this state;
{¶ 14} “(2) Contracting to supply services or goods in this state;
{¶ 15} “(3) Causing tortious injury by an act or omission in this state;
{¶ 16} “(4) Causing tortious injury in this state by an act or omission outside this state if he regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered in this state;
{¶ 17} “(5) Causing injury in this state to any person by breach of warranty expressly or impliedly made in the sale of goods outside this state when he might reasonably have expected such person to use, consume, or be affected by the goods in this state, provided that he also regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered in this state;
{¶ 18} “(6) Causing tortious injury in this state to any person by an act outside this state committed with the purpose of injuring persons, when he might reasonably have expected that some person would be injured thereby in this state;
{¶ 19} “(7) Causing tortious injury to any person by a criminal act, any element of which takes place in this state, which he commits or in the commission of which he is guilty of complicity.
{¶ 20} “(8) Having an interest in, using, or possessing real property in this state.”
{¶ 21} The attorney general asserts that jurisdiction over appellees exists under subdivisions (1), (3), and (8) of R.C. 2307.382(A).
{¶ 22} “Whether Defendants DiPasquale and Maffei are subject to Ohio's long-arm statute because they transacted business in Ohio or caused tortious injury or used or possessed real property in this state.”
[Ohio App.3d 751] {¶ 23} Appellants challenge the trial court's finding that it lacked personal jurisdiction over the appellees, arguing statutory liability and personal participation in wrongful acts and that the corporate veil should have been pierced. Appellants circuitously assert that the same acts that constitute liability under these theories also show that appellees should be subject to personal jurisdiction. Appellants provide no further analysis of this argument other than to say that “Defendants' actions maintaining the ongoing violations at the Facility also prove that they were transacting business in the State of Ohio, causing tortious injury to the citizens of Columbiana County and using or possessing real property in this state.”
{¶ 24} The trial court is able to exercise jurisdiction over S & R in this case because the corporation owns land and transacts business in the state. However, the issue here is whether appellees DiPasquale and Maffei, in their personal capacities, fall under the jurisdiction of the court. Jurisdiction over officers, directors, and shareholders of a corporation cannot be based solely on jurisdiction over the corporation itself. In re Blue Flame Energy Corp., 171 Ohio App.3d 514, 2006-Ohio-6892, 871 N.E.2d 1227, ¶ 31; Dombroski v. WellPoint, Inc., 119 Ohio St.3d 506, 2008-Ohio-4827, 895 N.E.2d 538, ¶ 16.
{¶ 25} There are three theories under which appellants claim that the court should exercise personal jurisdiction over appellees. First, under the theory of statutory liability, appellants assert that Ohio's environmental statutes provide for liability against the person committing the violation. Appellants further state that these statutes define “person” to include both individuals...
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