2007 Ohio 6614 | Ohio Ct. App. | 2007
Lead Opinion
{¶ 2} Mr. Culver and Ms. Belfance have argued to this Court that the trial court should have awarded them damages against Messrs. Ference and Moore. Messrs. Ference and Moore have cross appealed and argued that the trial court should have granted them relief from the default judgment it entered against them. This Court affirms the trial court's determination that Mr. Culver and Ms. Belfance are not entitled to damages against Messrs. Ference and Moore, but for a *3 different reason than the one relied upon by the trial court. While the trial court determined that Mr. Culver and Ms. Belfance were not entitled to damages from Messrs. Ference and Moore because Mr. Culver had not dealt directly with them, this Court has determined that Mr. Culver and Ms. Belfance failed to state a claim against Messrs. Ference and Moore because Mr. Culver's prior judgments were against only Resash and not against Messrs. Ference and Moore. In view of this Court's determination that Mr. Culver and Ms. Belfance failed to state a claim upon which relief can be granted against Messrs. Ference and Moore, Messrs. Ference and Moore's assignment of error is moot and is overruled on that basis.
{¶ 5} While failure to answer is an admission of facts alleged in a complaint, it is not an admission of liability. "A default judgment on a complaint which fails to state a claim should not be upheld."Michael D. Tully Co. L.P.A. v. Dollney,
{¶ 6} Mr. Culver and Ms. Belfance have argued to this Court that the trial court incorrectly determined that Messrs. Ference and Moore did not violate the Consumer Sales Practices Act because they had not "personally [dealt] with" Mr. Culver. They have asked this Court to overrule its decisions in Tully and Ross to the extent those decisions require direct dealing as a prerequisite to liability under the Act. This Court, however, declines to consider in this case whetherTully and Ross should be overruled. Even if direct dealing is not a prerequisite to liability under the Consumer Sales Practices Act, the trial court's decision in this case would still have to be affirmed. "[A] reviewing court is not authorized to reverse a correct judgment merely because erroneous reasons were assigned as a basis thereof."In re Trust Estate of CNZ Trust, 9th Dist. No. 06CA008940,
{¶ 8} In the trial court, Mr. Culver and Ms. Belfance cited a large number of orders from other trial courts in support of the proposition that continuing in business without paying a prior adverse judgment under the Consumer Sales Practices Act is a new violation of the Consumer Sales Practices Act. They did not cite any appellate decisions in support of that proposition, and this Court has not found any. Further, although the trial court orders cited by Mr. Culver and Ms. Belfance do say that it is a violation of the Act to continue in business without paying a prior judgment, none of those orders contains any analysis. In fact, they do not even specify whether such action is a violation because it is "unfair" or "deceptive," as those terms are used in Section
{¶ 9} Mr. Culver and Ms. Belfance have correctly argued that Messrs. Ference and Moore fall within the definition of "supplier" for purposes of Sections
{¶ 10} In their first cause of action, Mr. Culver and Ms. Belfance alleged the existence of the prior judgments against Resash. They further alleged that they asked Resash to pay those judgments, but that it had not done so. They then alleged that "defendants" engaged in consumer transactions without paying the two prior judgments and that the "defendants" were aware of those judgments.
{¶ 11} If it is a violation of the Consumer Sales Practices Act for a supplier to engage in business without paying a prior judgment, in order for a plaintiff to establish that violation, he or she must prove three things: (1) a prior judgment against the supplier; (2) the supplier's failure to pay that judgment; and (3) the supplier's continuing in business. Although Mr. Culver and Ms. Belfance alleged that Messrs. Ference and Moore had continued in business without paying the *9 prior judgments against Resash, they did not allege that those prior judgments were against Messrs. Ference and Moore. Mr. Culver and Ms. Belfance, therefore, failed to state a claim against Messrs. Ference and Moore upon which relief can be granted for a violation of the Consumer Sales Practices Act.
{¶ 12} Mr. Culver and Ms. Belfance have argued to this Court that, even if Messrs. Ference and Moore did not themselves violate the Consumer Sales Practices Act, they are liable as Resash's alter egos for its violation of the Act. They did not, however, allege facts in their complaint that would entitle them to pierce Resash's corporate veil. They are not, therefore, entitled to reversal of the trial court's judgment based on this argument.
{¶ 13} Mr. Culver and Ms. Belfance's assignment of error is overruled. The trial court's judgment is affirmed.
Judgment affirmed.
The Court finds that there were reasonable grounds for this appeal.
We order that a special mandate issue out of this Court, directing the Court of Common Pleas, County of Summit, State of Ohio, to carry this judgment into execution. A certified copy of this journal entry shall constitute the mandate, pursuant to App.R. 27.
Immediately upon the filing hereof, this document shall constitute the journal entry of judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the period for review shall begin to run. App.R. 22(E). The Clerk of the Court of Appeals is instructed to mail a notice of entry of this judgment to the parties and to make a notation of the mailing in the docket, pursuant to App.R. 30.
Costs taxed to appellants/cross-appellees.
*11 CONCURS IN JUDGMENT ONLYMOORE, J.
Concurrence Opinion
{¶ 16} Although I agree that appellants have abandoned causes of action numbers two through five in their complaint, in my opinion cause of action number six still needs to be addressed. In their sixth cause of action, appellants reincorporate their allegations in causes of action numbers one through five and assert that these allegations constitute a violation of the Consumer Sales Practices Act ("CSPA"). In essence, appellants are alleging that appellees Richard Ference and Thomas Moore are personally liable under the CSPA for fraudulently transferring and/or concealing funds. Even accepting as true, as the majority does, that a corporation's failure to pay a judgment under the CSPA constitutes a separate violation of the CSPA, appellants are asking us to extend that rationale a step further to hold that officers or shareholders of a corporation are individually liable for their role in not paying the judgment. Appellants have not provided this Court with any case law to this effect. I would affirm on this basis. *1
