Opinion
Case No. C2-09-CV-377.
November 19, 2009
OPINION AND ORDER
I. INTRODUCTION
This matter is before the Court on Plaintiff Celerity Q, Ltd.'s ("CelerityQ") Motion for Prejudgment Attachment (No. 7). Because Defendant CSDC Systems, Inc. ("CSDC") is now licensed to do business in the State of Ohio, Plaintiff's motion is DENIED.
II. BACKGROUND A. FACTUAL BACKGROUND
On February 11, 2008, CelerityQ entered into a Teaming Agreement (the "Agreement") with Defendant CSDC Systems, Inc. ("CSDC"). The Agreement related to a Request for Proposal ("RFP") from the State of Ohio, Department of Commerce ("ODOC"). CSDC intended to respond to the RFP, and the Agreement stated that CSDC would include CelerityQ as its subcontractor in its response. (Agreement at 1.) In addition, the Agreement stated that if CSDC were awarded the ODOC project, CelerityQ would provide resources to assist CSDC with implementing an Inspection Licensing and Certification Application for the project. (Id.) CelerityQ was to provide "resources equal to a minimum of 20% of the final contract amount." (Id.) CSDC was awarded the ODOC project, but failed to allow CelerityQ to work on the project.B. PROCEDURAL BACKGROUND
On May 11, 2009, CelerityQ filed a complaint against CSDC, alleging breach of contract for CSDC's failure to allow CelerityQ to work on the ODOC project, despite the terms of the Agreement. (No. 2.) On September 11, 2009, CSDC filed a Motion to Dismiss, alleging that the Agreement is unenforceable. (No. 5.) On September 16, 2009, CelerityQ filed this Motion for Prejudgment Attachment, requesting that the Court order CSDC to deposit 20% of the contract amount, or $392,536.50 with the Court. (No. 7.) On October 2, 2009, CSDC filed its Notice of Dispute and Request for Hearing regarding the Motion for Prejudgment Attachment. (No. 12.) Subsequently, on October 16, 2009, CSDC obtained a license to do business in the State of Ohio. On October 30, 2009, CSDC contacted CelerityQ and asked that CelerityQ withdraw its Motion for Prejudgment Attachment. CelerityQ refused, and a hearing was held on November 13, 2009. The evening before the hearing, CSDC filed a Memorandum in Opposition to Plaintiff's Motion for Prejudgment Attachment (No. 20), in which it notified the Court for the first time of its license to do business in Ohio.
On November 9, 2009, the Court ordered the parties to submit supplemental briefing on the Motion to Dismiss. (No. 19.) The Agreement states that it governed by Ontario law, but the parties' briefs on the Motion to Dismiss analyzed the issue under Ohio law. The Court therefore ordered the parties to re-brief the issue under Ontario law.
CSDC has completed work on the ODOC project and will soon receive $1,962,683 from ODOC for its work.
III. LAW ANALYSIS
Federal Rule of Civil Procedure 64(a) provides: "At the commencement of . . . an action, every remedy is available that, under the law of the state where the court is located, provides for seizing a person or property to secure satisfaction of a potential judgment." Pursuant to Rule 64, in attachment proceedings, federal courts in Ohio apply Chapter 2715 of the Ohio Revised Code. See, e.g., Nationwide Mut. Ins. Co. v. Whiteford Sys., Inc., 787 F.Supp. 766, 768 (S.D. Ohio 1992). Under Ohio law, "[a] plaintiff in an action for the recovery of money, upon or at any time after the commencement of the action, may apply to the court by written motion for the attachment of property, other than personal earnings, of the defendant." O.R.C. § 2715.03. In order to attach a defendant's property, a plaintiff must prove the existence of probable cause, that is, that it is "likely that [the plaintiff] will obtain judgment against the defendant . . . that entitles the plaintiff to a money judgment that can be satisfied out of the property that is the subject of the motion." O.R.C. § 2715.011(A). Upon such a showing, "[a]n attachment against the property, other than personal earnings, of a defendant may be had in a civil action for the recovery of money, at or after its commencement, upon [the grounds that]: (1) Excepting foreign corporations which by compliance with the law therefore are exempted from attachment as such, that the defendant . . . is a foreign corporation." O.R.C. § 2715.01(A).CelerityQ alleged in its motion that CSDC was subject to attachment under section 2715.01(A)(1), because it was a foreign corporation. However, "[a] foreign corporation holding an unexpired and uncanceled license under sections 1703.01 to 1703.31, inclusive, of the Revised Code, shall not be subject to process of attachment under any law of this state on the ground that it is a foreign corporation nonresident of this state." O.R.C. § 1703.20. At the time CelerityQ filed its motion, CSDC was not licensed to do business in Ohio. Subsequent to CelerityQ's filing of its motion, CSDC became licensed. As a result, CSDC is no longer subject to attachment.
IV. CONCLUSION
For the foregoing reasons, CelerityQ's Motion for Prejudgment Attachment is DENIED.