State Ex Rel. DeWine v. S & R Recycling, Inc.
961 N.E.2d 1153
Ohio Ct. App.2011Background
- State of Ohio, acting through the Attorney General, sues S&R Recycling, Inc. and individual principals DiPasquale and Maffei for OEPA violations.
- S&R is a New York corporation owned 50/50 by DiPasquale and Maffei, both New York residents.
- Property at issue is a 30-acre parcel; S&R bought it in 2002 via land contract from Toalstons; S&R sought to operate on it to support an adjacent landfill project.
- OEPA issued eight notices of violation (2003–2005) and later revoked the adjacent parcel’s permit; this resulted in no operations, employees, or profits by S&R on the property.
- The trial court granted a Civ.R. 12(B)(2) motion to quash service and dismiss for lack of personal jurisdiction, concluding DiPasquale and Maffei were not subject to Ohio’s long-arm statute; the state appeals.
- The appellate court reaffirms, holding competent, credible evidence supported the trial court’s determination that personal jurisdiction over DiPasquale and Maffei did not exist and that piercing the corporate veil was not warranted.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether DiPasquale and Maffei are subject to Ohio’s long-arm statute. | State argues they transact business/ownership justify jurisdiction. | DiPasquale and Maffei are not conducting Ohio business. | No personal jurisdiction over DiPasquale and Maffei. |
| Whether piercing the corporate veil could establish personal jurisdiction over DiPasquale and Maffei. | Veil-piercing could extend liability to individuals. | Belvedere test not satisfied; individuals are merely shareholders. | Belvedere not satisfied; no piercing of the veil; no jurisdiction. |
Key Cases Cited
- Belvedere Condominium Unit Owners’ Assn. v. R.E. Roark Cos., Inc., 67 Ohio St.3d 274 (1993) (establishes three-prong Belvedere test for piercing the corporate veil)
- Dombroski v. WellPoint, Inc., 119 Ohio St.3d 506 (2008) (clarifies Belvedere prong two requires fraud/illegal act for piercing)
- In re Blue Flame Energy Corp., 171 Ohio App.3d 514 (2006) (supporting analysis that corporate officers are not automatically subject to jurisdiction)
- Humitsch v. Collier, No official reporter cited in text (2001) (recognizes corporate veil concepts in Ohio)
- LeRoux's Billyle Supper Club v. Ma, 77 Ohio App.3d 417 (1991) (factors for alter ego inquiry)
- Univ. Circle Research Ctr. Corp. v. Galbreath Co., 106 Ohio App.3d 835 (1995) (alter ego/veil piercing considerations)