Opinion
No. CI91-3867.
Decided November 4, 1992.
Dave Zoll, for plaintiff.
Kathleen W. Kolodgy, for defendant.
This case is now before the court on a motion for dismissal pursuant to Civ.R. 41(B) filed by St. Vincent Medical Center ("St. Vincent") on grounds that plaintiff does not possess legal capacity to maintain this action. The court agrees and grants the motion.
Plaintiff Acton Sell Associates ("Acton Sell") is a legal alias for Medical Marketing Management, Inc., a corporation organized under the laws of the state of Michigan that is in the business of recruiting professional medical employees. Acton Sell filed a breach of contract suit against defendant St. Vincent alleging that it was owed a fee for recruiting an Ohio physician to a practice in Toledo, Ohio. St. Vincent bases its motion to dismiss on grounds that Acton Sell lacks capacity to sue in Lucas County.
R.C. 1703.03 provides that a foreign corporation, that is, a corporation incorporated under laws of a state other than Ohio, shall not transact business in Ohio until obtaining a license to do so. As a penalty for transacting business in Ohio without a license, foreign corporations which are not exempt are prohibited from maintaining a cause of action in any court in Ohio. R.C. 1703.29 specifically warns:
"No foreign corporation * * * shall maintain any action in any court until it has obtained such license."
Acton Sell admits that it is not licensed in Ohio. It argues instead that it is engaged in interstate commerce and thus is exempt under R.C. 1703.02, which excludes from licensing a corporation "engaged in this state solely in interstate commerce."
Whether a corporation engages solely in interstate commerce so that it is exempt from Ohio's licensing requirements is largely factual, dependent upon the totality of the relevant circumstances surrounding the corporation's business operations. See Contel Credit Corp. v. Tiger, Inc. (1987), 36 Ohio App.3d 71, 73, 520 N.E.2d 1385, 1386; Cocon, Inc. v. Botnick Bldg. Co. (1989), 59 Ohio App.3d 42, 43, 570 N.E.2d 303, 304. If however, the non-Ohio corporation transacts a substantial part of its ordinary or customary business within Ohio, that corporation may be appropriately subjected to the laws of the state. See Contel Credit Corp. v. Tiger, Inc., 36 Ohio App.3d at 73, 520 N.E.2d at 1386; Dot Sys., Inc. v. Adams Robinson Ent., Inc. (1990) 67 Ohio App.3d 475, 480, 587 N.E.2d 844, 847.
Here, Acton Sell's alleged recruitment of Dr. Allen Murnane concerns a transaction that essentially remained within the state of Ohio. The deposition of Steven Sell shows that practice opportunities for Dr. Murnane were investigated in Norwalk, Sandusky, Fremont, Findlay, Wilmington, Defiance, Mansfield, Anderson, Columbus, and Toledo, Ohio. Acton Sell has not alleged that it performed any services regarding recruitment outside the state of Ohio for the doctor.
Although Acton Sell maintains that use of mail and telephones across state line is interstate commerce, the court finds that the company transacts substantial parts of its ordinary and customary business in Ohio through its Ohio agents. As such, Acton Sell is not engaged "solely" in interstate commerce within the meaning of R.C. 1703.02. Without the appropriate license, plaintiff as a foreign corporation lacks capacity to pursue this action in Lucas County Common Pleas Court and the case must be dismissed.
JOURNAL ENTRY
It is ORDERED that this case be dismissed without prejudice due to plaintiff's lack of legal capacity to maintain an action pursuant to R.C. 1703.29. Costs are assessed to plaintiff.
Judgment accordingly.