Wilkerson Shoe Co. v. National Super Markets, Inc.

• Decision Date: 26 July 1994
• Docket Number: 94APE01-116,94-LW-5369
• Parties: Wilkerson Shoe Co. et al., Plaintiffs-Appellants, v. National Super Markets, Inc., Defendant-Appellee.
• Court: Ohio Court of Appeals

Wilkerson Shoe Co. et al Plaintiffs-Appellants, v. National Super Markets, Inc. Defendant-Appellee.

No. 94APE01-116

94-LW-5369 (10th)

Court of Appeals of Ohio, Tenth District Franklin.

July 26, 1994

Harris Harris & Field, Irving Harris and Christine B. Hill; Schottenstein Law Office, and Edwin E. Schottenstein, for appellants.

Robertson, Ross, Zeglen & Pidcock, and Monty Donohew, for appellee.

APPEAL from the Franklin County Court of Common Pleas.

OPINION

YOUNG J.

This matter is before this court upon the appeal of Wilkerson Shoe Co. and Shonac Corp., appellants, from the November 15, 1993 decision and December 22, 1993 entry of the Franklin County Court of Common Pleas which granted appellee's Civ.R. 12(B) motion to dismiss. On appeal, appellants assert the following assignment of error:

"The trial court erred to the prejudice of appellants in granting appellee's motion to dismiss pursuant to Civ. R.12(b) for lack of personal jurisdiction over appellee.

The facts of this case are as follows: appellant, Wilkerson Shoe Co., ("Wilkerson") is a Missouri corporation with its principal place of business in Ohio. The parent corporation of Wilkerson is Shonac Corp., which is an Ohio corporation with its principal place of business in Ohio. Appellee is National Super Markets, Inc., which is a Michigan corporation with its principal place of business in Missouri. Wilkerson entered into a lease with appellee for property in Missouri. Several negotiations of the lease went back and forth between appellee and the lessee, Wilkerson. Appeliee also required Wilkerson's parent company, Shonac, to execute a guarantee which provided that Shonac would indemnify and hold harmless the appellee from any shortfall in insurance coverage. Shonac has maintained insurance coverage on the subject property. (Affidavit of Lisa Dinger, para. 8.) Appellant Shonac also provided appellee with a letter agreement whereby Shonac agreed that in the event that Wilkerson should be in default, then at the election of appellee, Shonac would become the assignee of the sublease agreement. (Affidavit of Lisa Dinger, para. 9.)

On August 25, 1989, appellant Shonac executed both the insurance coverage guarantee and the letter agreement demanded by appellee. The affidavit of Dinger states that these agreements were prepared by her in Ohio. The underlying action involves an alleged breach of this lease agreement by appellee. Appellants Wilkerson and Shonac attempted to bring an action in Ohio. Appellee claimed that Ohio did not have jurisdiction and moved for dismissal pursuant to Civ.R. 12(B). Thereafter, the trial court dismissed this action, finding that it lacked personal jurisdiction over appellee.

Civ.R. 12(B) provides that an action may be dismissed for lack of jurisdiction over the person. A two-part test is generally utilized in order to determine if personal jurisdiction is available. As stated by this court: "*** [f]irst, it must be determined if the defendant's conduct falls within Ohio's 'long-arm statute' or applicable civil rule, giving rise to personal jurisdiction, and then the court must determine whether a grant of juris(fiction to Ohio courts comports with the Due Process Clause of the Fourteenth Amendment to the United State Constitution." Columbus Show Case Co. v. CEE Contracting, Inc. (1992), 75 Ohio App.3d 559, 563; see, also, Kentucky Oaks Mall Co. v. Mitchell's Formal Wear, Inc. (1990), 53 Ohio St.3d 73.

Thus, in order to establish in personam jurisdiction, sufficient minimum contacts with the forum state must exist. The trial court found that sufficient minimum contacts existed for purposes of establishing personal jurisdiction over appellee, because appellee was transacting business in Ohio. Both Civ.R. 4.3(A)(1) and R.C. 2307.382(A)(1) specify that a court may exercise personal jurisdiction over a cause of action arising from a defendant's "transacting any business in this state." Appellants have demonstrated that negotiations between the parties via telephone calls, letters and fax transmittals, ultimately resulted in the execution of the sublease agreement, the insurance guarantee and the letter agreement. We agree with the trial court's conclusion that sufficient minimum contacts existed to meet the first prong of the test set forth in Columbus Show Case; Kentucky Oaks, supra.

Next, in order to subject a nonresident defendant to a judgment in personam, there must exist certain minimum contacts with the forum state such that the maintenance of the suit does not offend traditional notions of fair play, and substantial justice under the Due Process Clause of the fourteenth Amendment. International Shoe Co. v. Washington (1945), 326 U.S. 310, 316. Generally, this requires that the defendant purposely avail itself of the privilege of conducting activities in the forum state. Hanson v. Denckla (1958), 357 U.S. 235, 253. Another primary factor to be considered is foreseeability. Anilas, Inc. v. Kern (1987), 31 Ohio St.3d 163, 164; World-Wide Volkswagon Corp. v. Woodson (1980), 444 U.S. 286, 297. This foreseeability derives from defendant's conduct in connection with the forum state, making it reasonable that it should anticipate being haled into court there. Id. Further, even if minimum contacts exist, the court should balance the relevant interests to determine if jurisdiction is fair and reasonable in any event. See Indus. Comm. of Ohio v. First Natl. Bank of St. Paul (May 16, 1989), Franklin App. No. 88AP-1013, unreported (1989 Opinions 1673). In the instant action, the trial court found that minimum contacts existed, but then held that exerting personal jurisdiction over appellee would not comport with due process.

We initially note that appellants are entitled to have the factual allegations that sustain personal jurisdiction construed in their favor, for purposes of withstanding a Civ.R. 12(B) (2) motion to dismiss. Glass v. McCullough Transfer Co. (1953), 159 Ohio St. 505, 509; Jurko v. Jobs Europe Agency (1975), 43 Ohio App.2d 79, 85. Appellants have the burden of establishing the court's jurisdiction. Giachetti v. Holmes (1984), 14 Ohio App.3d 306. This burden is met by a "prima facie showing that jurisdiction is conferred by the long arm statute. United States v. Montreal Trust Co., 358 F.2d 239 (2nd Cir. 1966)." Jurko at 86. In deciding the merits of the defense of lack of personal jurisdiction, the court may consider deposition testimony, interrogatories, oral testimony, or affidavits, Giachetti; Jurko, supra, and must assume the truth of the facts in the nonmoving party's affidavits and complaint for purposes of the motion to dismiss. Jurko at 86; Woodworkers Tool Works v. Byrne (C.A.9, 1951) 191 F.2d 667, 673; Boston Super Tools, Inc. v. RW Technologies, Inc. (1979), 467 F.Supp. 558. Thus, appellants must only make a prima facie showing of jurisdiction in order to withstand a motion to dismiss. Jurko, supra; Bowman v. Grolsche Bierbrouwerij B.V. (1979), 474 F.Supp. 725; Hoster v. Monongahela Steel Corp. (1980), 492 F.Supp. 1249; Reiner v. Durand (1985), 602 F.Supp. 849 (S.D.N.Y.). We find that appellants Wilkerson and Shonac have made a prima facie showing of jurisdiction sufficient to withstand a motion to dismiss.

The fact that Wilkerson's parent company, appellant Shonac was required to execute a letter agreement and a...