2013 Ohio 3919
Ohio Ct. App.2013Background
- TKS obtained a revived Ohio judgment (2006) against SPU and related defendants for breach and collection efforts; collection attempts failed and TKS alleged assets were concealed/transferred to avoid payment.
- In April 2011 TKS sued SPU, Safety Protection Universal (SPU2), and individuals including Vera (a UK citizen residing in California), alleging fraud, conspiracy, conversion, tortious interference, and fraudulent conveyance.
- Service on Vera was not completed until April 2012 by publication; TKS moved for default judgment and the trial court initially entered default judgment after denying Vera’s first jurisdictional challenge for procedural reasons.
- Vera moved to vacate the default judgment, arguing it was void for lack of personal jurisdiction; the court vacated the default but later dismissed TKS’s amended complaint for lack of personal jurisdiction after Vera’s second motion to dismiss.
- On appeal, the Eighth District addressed (1) whether the trial court properly vacated the default judgment and (2) whether Ohio courts had personal jurisdiction over Vera based on allegations she wound up SPU and transferred assets to avoid satisfying an Ohio judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether trial court erred in vacating default judgment without Civ.R. 6(B) showing | TKS: Vera waived procedural defenses by not requesting leave to plead; court lacked authority to vacate absent excusable neglect showing | Vera: Default judgment was void for lack of personal jurisdiction; a void judgment can be vacated without complying with Civ.R. 6(B) or Civ.R. 60(B) | Court: Vacatur proper — a judgment void for lack of jurisdiction may be vacated under the court’s inherent power; Vera need not show excusable neglect |
| Whether Ohio’s long-arm statute (R.C. 2307.382) reaches Vera for acts outside Ohio causing injury in Ohio | TKS: Vera, as SPU/SPU2 manager and shareholder, purposely wound up/transferred assets to avoid an Ohio judgment, fitting R.C. 2307.382(A)(6) | Vera: Never visited Ohio or conducted personal business in Ohio; lacked sufficient contacts for jurisdiction | Court: TKS met prima facie showing that Vera’s alleged out-of-state acts were committed with intent to injure Ohio creditor and thus fit R.C. 2307.382(A)(6) |
| Whether exercise of specific jurisdiction would comport with due process | TKS: Vera purposefully caused consequences in Ohio by concealing assets to avoid an Ohio judgment; specific jurisdiction is proper | Vera: Lack of contacts and no purposeful availment; exercising jurisdiction would violate due process | Court: Due process satisfied — purposeful, non-random conduct causing injury in Ohio supports specific jurisdiction |
| Proper procedural posture for next steps after dismissal for lack of jurisdiction | TKS: Trial court wrongly dismissed on jurisdictional grounds | Vera: Dismissal appropriate because TKS failed to make prima facie showing | Court: Reversed dismissal — remanded for further proceedings consistent with finding that personal jurisdiction exists based on the complaint’s allegations |
Key Cases Cited
- Cincinnati School Dist. Bd. of Edn. v. Hamilton Cty. Bd. of Revision, 87 Ohio St.3d 363 (2000) (courts possess inherent power to vacate void judgments)
- Patton v. Diemer, 35 Ohio St.3d 68 (1988) (a judgment rendered by a court lacking jurisdiction is void and may be vacated independent of Civ.R. 60(B))
- Maryhew v. Yova, 11 Ohio St.3d 154 (1984) (personal jurisdiction defense not waived by failure to plead where defendant has not submitted to the court’s jurisdiction)
- Giachetti v. Holmes, 14 Ohio App.3d 306 (1984) (plaintiff must establish prima facie personal jurisdiction when defendant moves to dismiss)
- Mitchell v. Lawson Milk Co., 40 Ohio St.3d 190 (1988) (in ruling on a jurisdictional motion courts accept as true factual allegations in the complaint)
- Kauffman Racing Equip., L.L.C. v. Roberts, 126 Ohio St.3d 81 (2010) (trial court may resolve jurisdictional questions on affidavits, depositions, and interrogatories absent an evidentiary hearing)
- Goldstein v. Christiansen, 70 Ohio St.3d 232 (1994) (when no evidentiary hearing, pleadings and documentary evidence viewed in light most favorable to nonmoving party)
- Cincinnati v. Beretta U.S.A. Corp., 95 Ohio St.3d 416 (2002) (personal jurisdiction is a question of law reviewed de novo)
- U.S. Sprint Communications Co. Ltd. Partnership v. Mr. K’s Foods, Inc., 68 Ohio St.3d 181 (1994) (two-step analysis: long-arm statute then federal due process inquiry)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) (specific jurisdiction requires purposeful availment and that the cause of action arise from the forum-related activities)
- Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408 (1984) (distinguishing general and specific jurisdiction)