TRITON SERVICES, INC., Plаintiff-Appellant, v. GRADY D. REED, et al., Defendants-Appellees.
CASE NOS. CA2016-04-028, CA2016-08-068
IN THE COURT OF APPEALS, TWELFTH APPELLATE DISTRICT OF OHIO, WARREN COUNTY
11/21/2016
2016-Ohio-7838
S. POWELL, J.
CIVIL APPEAL FROM WARREN COUNTY COURT OF COMMON PLEAS, Case No. 14CV85882
Crowe and Wеlch, Robert H. Welch, II, 1019 Main Street, Milford, Ohio 45150, for defendants-appellees
S. POWELL, J.
{¶ 1} Plaintiff-appellant, Triton Services, Inc. (“Triton“), appeals from the Warren County Court of Common Pleas decision dismissing its сomplaint brought against defendants-appellees, Grady D. Reed, II (“Reed“), Reed‘s wife, Shelia Reed, and Reed‘s father-in-law, Fred Mintkenbaugh (collectively, “appellees“), pursuant to the jurisdictional-priority rule. For the reasons outlined below, we affirm.
{¶ 2} This case presents a lengthy, convoluted set of facts involving a dispute between Reed, Reed‘s family members, Triton, and other Triton shаreholders, regarding appellees’ purported wrongdoing during Reed‘s employment with Triton and Reed‘s alleged ownership of ten shares of Triton stock. This includes a prior appeal tо this court where we reversed and remanded a decision of the Clermont County Court of Common Pleas entering a directed verdict to Reed finding he was entitled to money damages totaling $581,470. See Reed v. Triton Servs., Inc., 12th Dist. Clermont Nos. CA2013-07-055 and CA2013-07-060, 2014-Ohio-3185 (”Reed I“). The relevant facts as it relates to this appeal are summarized as follows.
{¶ 3} After filing its direct appeal in Reed I, but prior to this court issuing our decision, Triton filed a complaint against appellees in the Warren County Court of Common Pleas seeking compensatory and punitive damages on claims alleging conversion, civil conspiracy, and breach of fiduciary duty for appellеes’ supposed wrongdoing while Reed was employed by Triton. The record is clear that these are the same basic claims Triton originally brought in the Clermont County Court of Common Pleas that Triton later voluntarily dismissed in order to file its direct appeal in Reed I challenging the Clermont County court‘s decision to issue a directed verdict in Reed‘s favor.
{¶ 4} After we issued our opinion in Reed I reversing and remanding the Clermont County court‘s deсision, Triton filed a motion with the Clermont County court seeking leave to amend its answer to include a counterclaim against Reed for breach of contract, promissory estoppеl, and unjust enrichment, among others, including a request for declaratory judgment, all relating to Reed‘s alleged ownership of ten shares of Triton stock. The Clermont County court denied the motion to amend as untimely finding the “proposed amendments are basic
{¶ 5} After the Clermont County court issued its decision, Triton filed a second complaint in the Warren County Court of Common Pleas alleging the same breach of contract claim against Reed, as well as similar claims alleging promissory estoppel and unjust enrichment. Triton also filed a request for a declaratory judgment against Reed. At Triton‘s request, because both complaints arose out of Reed‘s relationship with Triton, the two complaints then pending before the Warren County court were consolidated.
{¶ 6} While Triton‘s motion to consolidate was pending, appellees filed a motion to dismiss, or alternatively, a motion to transfer the case baсk to Clermont County, pursuant to the jurisdictional-priority rule. After taking the matter under advisement, the Warren County court issued a decision granting appellees’ motion to dismiss finding it “has been divested of jurisdictiоn by the Clermont County case” in accordance with the jurisdictional-priority rule. In so holding, the Warren County court stated:
The allegations and parties in the Warren County action when compаred to the allegations and parties in the Clermont County action are virtually the same. Further, because the judge in the Clermont County action has resolved some of the claims on procedural and/or equitable grounds (i.e. because they were not timely raised, because they were the result of legal strategy or for other reasons), it would not be just for this Court to revisit those issues in a slightly repacked version.
{¶ 7} Triton now appeals, raising a single assignment of error that challenges the Warren County court‘s application of the jurisdictional-priority rule.
The Jurisdictional-Priority Rule
{¶ 8} “The jurisdictional-рriority rule provides that as between state courts of concurrent jurisdiction, the tribunal whose power is first invoked acquires exclusive
{¶ 9} The determination of whether two cases concern the same “whole issue” requires a two-step analysis. Centerburg RE, LLC v. Centerburg Pointe, Inc., 5th Dist. Knox No. 13 CA 28, 2014-Ohio-4846, ¶ 45. “First, there must be cases pending in two different courts of concurrent jurisdictiоn involving substantially the same parties.” Michaels Bldg. Co. v. Cardinal Fed. S. & L. Bank, 54 Ohio App.3d 180, 183 (8th Dist.1988). “Second, the ruling of the court subsequently acquiring jurisdiction may affect or interfere with the resolution of the issues before the court where suit was originally commenced.” Id. Thus, the jurisdictional priority rule effectively “breaks the tie” by giving exclusive jurisdiction “to adjudicate upon the whole issue and to settle the rights of the parties” to the court that obtained sеrvice of process first. Primesolutions Securities, Inc. v. Winter, 8th Dist. Cuyahoga No. 103961, 2016-Ohio-4708, ¶ 13, citing Miller v. Court of Common Pleas, 143 Ohio St. 68, 70 (1944). “When the test is satisfied, the court whose power was last invoked should dismiss the claims for lack of subject-matter jurisdiction.” Holmes Cty. Bd. of Commrs. v. McDowell, 169 Ohio App.3d 120, 2006-Ohio-5017, ¶ 27 (5th Dist.).
Analysis
{¶ 10} After a thorough review of the record, we find no еrror in the Warren County court‘s decision to dismiss the action pursuant to the jurisdictional-priority rule. In so holding, we note that the jurisdictional-priority rule does not require that both actions have identical parties in order to satisfy the identity-of-parties requirement. “Rather, the identity-of-parties requirement is satisfied as long as the claim or matter sought to be precluded in the second action is between the same parties.” Crestmont Cleveland Partnership v. Ohio Dept. of Health, 10th Dist. Franklin No. 98AP-1272, 1999 WL 694742, *4 (Sept. 9, 1999). This is true even when the first cause of action involved parties not named in the second. See id. (holding that the jurisdictional-priority rule applies even if the first action involved parties not named in the second action). That is clearly the case here as all of the causes of action originally brought in Clermont County and subsequently brought in Warren County involve Reed and Triton or Triton‘s shareholders, as well as Reed‘s wife and Reed‘s father-in-law. Therefore, because the causes of action at issue involve claims betwеen either the same or substantially similar parties, we find the first requirement of the “whole issue” analysis is satisfied.
{¶ 11} Furthermore, as it relates to the second requirement of the “whole issue” analysis, i.e., whether the “ruling of the court subsequently acquiring jurisdiction may affect or interfere with the resolution of the issues before the court where the suit originally commenced,” we find, as did the Warren County court, that thе causes of action “are virtually the same” in that they all relate to the underlying dispute regarding appellees’ purported
{¶ 12} Despite this, Triton argues it was improper for the Warren County court to dismiss the entire action because it was not provided with proper notice that the entire case could be dismissed. However, we find Triton was provided suffiсient notice that the entire action was subject to dismissal pursuant to the jurisdictional-priority rule, as that rule divests the trial court with jurisdiction to hear any claim related to the “whole issue.” It is well-established that “[a] trial court must dismiss for lack of subject-matter jurisdiction if the complaint fails to raise a cause of action cognizable by the forum.” Mosque v. Salim, 10th Dist. Franklin No. 12AP-807, 2013-Ohio-2746, ¶ 15, citing State ex rel. Bush v. Spurlock, 42 Ohio St.3d 77, 80 (1989).
Conclusion
{¶ 13} Pursuant to the jurisdictional-priority rule, the Clermont County court has exclusive jurisdiction to adjudicate upon the whole issue and to settle the rights of the parties as it relates to appellees’ purported wrongdoing during Rеed‘s employment with Triton and
{¶ 14} Judgment affirmed.
M. POWELL, P.J., and RINGLAND, J., concur.