Opinion
09 CVH-05-6637
01-06-2012
PROSEARCH INTL., CO., Plaintiff, v. PLOTE CONSTRUCTION, INC., Defendant.
Kevin W. Brown, Esq.Counsel for Plaintiff Robert J. Behal, Esq. John M. Gonzales, Esq.Counsel for Defendant
Kevin W. Brown, Esq.Counsel for Plaintiff
Robert J. Behal, Esq. John M. Gonzales, Esq.Counsel for Defendant
JOURNAL ENTRY
DENYING MOTION TO DISMISS FOR LACK OF JURISDICTION OVER THE PERSON (Motion Filed June 25, 2009) DENYING MOTION TO MODIFY TRIAL DATE (Motion Filed October 2, 2009) And ASSIGNING ADDITIONAL PRE-TRIAL DEADLINES
RICHARD A. FRYE, JUDGE
I. Introduction
This breach of contract case involves a search firm or "headhunter's" fee allegedly not paid. Plaintiff ProSearch Intl., Co. filed suit on May 1, 2009 and alleged causes of action for Breach of Contract, Promissory Estoppel, and Quantum Meruit.
On June 25 defendant Plote Construction, Inc. moved to dismiss this action pursuant to Civ. R. 12(B)(2) for lack of jurisdiction over the person. Attached to the Motion was an Affidavit of Daniel R. Plote, President of Plote, and the Fee Schedule signed by the Mike Waller, Vice President of Plote and James Huddleston, President of ProSearch. The first line of that "Fee Schedule" states "ALL POSITIONS SECURED THROUGH PROSEARCH INTL., CO. ARE ON AN EMPLOYER PAID BASIS ONLY." (Emphasis in original.)
On July 7 the plaintiff opposed the Motion to Dismiss. Attached to plaintiff's Memorandum is an Affidavit of James Huddleston, President of ProSearch. A Reply Memorandum in support of dismissal was filed by defendant on July 16.
On October 2 defendant moved to modify the current trial assignment date. Plaintiff opposed this request on October 7; defendant filed a Reply Memorandum on October 15.
II. Additional Factual Background
ProSearch is an Ohio corporation. (Huddleston Affidavit, ¶1) Plote Construction is an Illinois corporation. It is in the business of highway and heavy construction including excavation, underground, concrete construction, asphalt construction, repair, and reconstruction work. (Plote Affidavit, ¶¶2, 3) It is unclear what geographic territory Plote serves, and specifically whether it regularly does heavy and highway work in Ohio.
James Huddleston has been President of ProSearch since 1997. (Huddleston Affidavit, ¶1) Mr. Huddleston testified by affidavit that there has been a business relationship with Plote since 2005. (Id. at ¶2) In 2005, a "Fee Schedule" was executed by the parties, whereby ProSearch would be compensated by Plote Construction for all employment positions secured through ProSearch. (Id. at ¶2; attached to Complaint; attached to defendant's Motion to Dismiss) This Fee Schedule was prepared by Mr. Huddleston in Ohio and sent to Plote Construction. (Huddleston Affidavit, ¶2) The document was countersigned by Mike Waller in Plote Construction's office in Illinois and sent back to ProSearch in Ohio. (Plote Affidavit, ¶6) The document contains no forum selection clause.
According to Huddleston, ProSearch placed one candidate with Plote Construction in 2006 and another in 2007. (Huddleston Affidavit, ¶2) In both instances ProSearch was paid pursuant to the terms of the Fee Schedule. (Id. at ¶2)
In June 2007, Michael Waller, the Vice President of Plote Construction, initiated contact with Mr. Huddleston about a new position. He did so by placing a telephone call to Huddleston's Dublin, Ohio office to discuss finding an employee for the position of Asphalt Operations Manager. (Id. at ¶3) In August 2007, Mr. Huddleston introduced Richard Lyons to Plote Construction for that position. (Id. at ¶3) Until Plote Construction hired Mr. Lyons, Mr. Huddleston remained in contact with both Mr. Lyons and Plote via "numerous" telephone calls and e-mails. (Id. at ¶4)
Mr. Huddleston claims Plote Construction failed and refused to pay ProSearch according to their Fee Schedule. (Id. at ¶5)
Mr. Plote contends that at no time has it kept or maintained any of the following within the State of Ohio: (1) an office; (2) a telephone listing; (3) advertisements; (4) employees; or (5) assets. (Plote Affidavit, ¶5) Furthermore, Mr. Plote contended that he is not aware of Plote Construction having ever signed any contracts or agreements while located in Ohio, having ever had any communications with Richard Lyons or any employee of Plote Construction while physically present in Ohio, or having ever engaged in any business activities located in Ohio. (Id. at ¶5)
II. Motion to Dismiss Analysis
"Once a defendant moves to dismiss for lack of personal jurisdiction, the plaintiff must prove that the trial court has jurisdiction over the defendant. Joffe v. Cable Tech, Inc., 163 Ohio App.3d 479, 2005 Ohio 4930, at ¶10, 839 N.E.2d 67; Benjamin v. KPMG Barbados, Franklin App. No. 03AP-1276, 2005 Ohio 1959, at ¶27. If a trial court does not hold an evidentiary hearing before considering the defendant's dismissal motion, the court must 'view allegations in the pleadings and the documentary evidence in a light most favorable to the plaintiff[], resolving all reasonable competing inferences in [its] favor.' Goldstein v. Christiansen (1994), 70 Ohio St.3d 232, 236, 1994 Ohio 229, 638 N.E.2d 541. Moreover, in the absence of an evidentiary hearing, the plaintiff need only make a prima facie showing of jurisdiction to withstand the motion to dismiss. State ex rel. Attorney General v. Grand Tobacco, 171 Ohio App.3d 551, 2007 Ohio 418, at ¶13, 871 N.E.2d 1255; Ricker v. Fraza/Forklifts of Detroit(10 District), 160 Ohio App.3d 634, 2005 Ohio 1945, at ¶5, 828 N.E.2d 205. A plaintiff satisfies this burden by presenting sufficient evidence to allow reasonable minds to conclude that the trial court has personal jurisdiction. Joffe, at ¶10." Barnabas Consulting Ltd. v. Riverside Health Sys. (10 District), Case No. 07AP-1014, 2008-Ohio-3287, ¶12
District), 174 Ohio App.3d 122, 2007-Ohio-6501. As such, R.C. 2307.382 and Civ.R. 4.3(A) confer jurisdiction over defendant Plote.
District), Case No. 2008-L-161, 2009-Ohio-1439, 2009 Ohio App. LEXIS 1188, ¶ 36. Arrow also recognized that although it is a factor, whether or not the foreign litigant initiated the negotiations resulting in a contractual agreement is not dispositive. Id . at ¶ 41. Here, it appears, the Fee Schedule that marks the initiation of the contractual relationship in 2005 probably originated in Ohio, and was countersigned in Illinois. Further, the court accepts the inference favorable to defendant that the underlying solicitation of this business relationship probably came from ProSearch in Ohio to the out-of-state party. Nevertheless, given the several separate transactions in which people were referred by ProSearch and hired by Plote, spanning several years, the exercise of jurisdiction over defendant relative to events in this case from the summer of 2007 fully comports with Due Process. Ohio, as the forum selected by ProSearch in initiating this action, is a fair forum.
"When determining whether Ohio has jurisdiction over a foreign corporation, courts must engage in a two-step inquiry. State ex rel. Toma v. Corrigan (2001), 92 Ohio St.3d 589, 592, 2001 Ohio 1289, 752 N.E.2d 281; U.S. Sprint Communications Co. Ltd. Partnership v. Mr. K's Foods, Inc. (1994), 68 Ohio St.3d 181, 183, 1994 Ohio 504, 624 N.E.2d 1048; Kentucky Oaks Mall Co. v. Mitchell's Formal Wear, Inc. (1990), 53 Ohio St.3d 73, 75, 559 N.E.2d 477. First, a court must determine whether Ohio's long-arm statute, R.C. 2307.382, and the applicable Ohio Rule of Civil Procedure, Civ.R. 4.3(A), confer jurisdiction. Toma, at 592; U.S. Sprint, at 184; Kentucky Oaks Mall Co., at 75. If the court affirmatively answers the first inquiry, it then must determine whether granting jurisdiction would deprive the foreign corporation of due process of law under the Fourteenth Amendment of the United States Constitution. Id." Barnabas Consulting, supra, ¶13.
With regard to the first inquiry, R.C. 2307.382(A)(1) states that "[a] court may exercise personal jurisdiction over a person who acts directly or by an agent, as to a cause of action arising from the person's *** [t]ransacting any business in this state." Rule 4.3(A) of the Ohio Rules of Civil Procedure, allows service of process upon any person "who, acting directly or by an agent, has caused an event to occur out of which the claim that is the subject of the complaint arose, from the person's [t]ransacting any business in this state." '"Transacting any business' encompasses more than just contracting; it also includes business negotiations that the parties have only partially brought to a conclusion. Barnabas Consulting, supra, ¶14 (citations omitted.)
Ohio courts have looked at several factors to determine whether litigation arose from a foreign corporation that transacted business in this state, such as whether the foreign corporation has solicited business in Ohio, which jurisdiction the parties undertook their discussions and communications and on what terms, and whether the foreign corporation submitted payments to an Ohio-based plaintiff. See, Ricker, supra; see also, Hammill Mfg. Co. v. Quality Rubber Products, Inc. (1992), 82 Ohio App.3d, 369.
Viewing the allegations in the pleadings and the documentary evidence in a light most favorable to the plaintiff, the court finds that in this instance, defendant did several different things which collectively considered constituted transacting business in Ohio. First, the parties mutually executed the "Fee Schedule" in September 2005. (Plote Affidavit ¶ 6). Second, Plote operated pursuant to that Fee Schedule contract in 2006 and again in 2007. (Huddleston ¶ 2). Third, without altering the existing contractual arrangement Plote contacted Mr. Huddleston in Ohio in 2007 relative to finding another new employee. The record is unambiguous that Plote initiated contact with plaintiff in Ohio. Furthermore, although the parties appear to have negotiated at longdistance between Ohio and Illinois, respectively, plaintiffs work necessarily occurred in and had an impact within Ohio, such that effectively ProSearch was acting as Plote's agent to find a new employee. This was not, in other words, a single isolated transaction comparable to those discussed in Malone v. Berry (10
Turning to the second prong, whether exercising jurisdiction violates the Due Process Clause of the Fourteenth Amendment of the United States Constitution, the question becomes whether Plote has had minimum contacts in the forum state so that "the suit does not offend traditional notions of fair play and substantial justice." International Shoe Co. v. Washington 1945), 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95. "Despite the absence of face-to-face meetings in Ohio, and the absence of a physical place of business by [a defendant] in Ohio, Ohio courts may nonetheless retain jurisdiction in this case based upon other forms of contact or communication[.]" Ricker, supra, 160 Ohio App.3d 634 at ¶17.
In Ricker, the court found minimum contacts that do not offend traditional notions of fair play and substantial justice where there was a lack of presence by the defendant in Ohio and lack of meetings in Ohio, but where there was a continuous business relationship with the plaintiff in Ohio using electronic and telephone communications addressed to the Ohio office, followed by partial payment on the purported obligation. Id. at ¶18. The court also noted that "[t]he loss of convenience to [the defendant] by having to litigate the matter in Ohio is counterbalanced by the corresponding inconvenience for [the plaintiff] if the matter were litigated in Michigan; moreover, the case does not appear to be one likely to develop an enormous need for Ohio testimony or documentary discovery. The relative proximity of the two states also militates against the finding of inconvenience to [the defendant] in being subjected to the Ohio forum.
As another court of appeals recognized earlier this year, both the United States Supreme Court and the Ohio Supreme Court "have consistently rejected the notion that a physical presence in the forum state is necessary for the exercise of personal jurisdiction." Arrow Machine Co., Ltd. v. Array Connector Corp. (11
Defendant shall Answer the complaint no later than NOVEMBER 25, 2009.
III. Motion to Modify Trial Assignment Date
On June 12, 2009 this court entered a pretrial order setting the trial date. Defendant made no objection to the December trial date, or suggested there would be any difficulty meeting it. The defendant's October 2, 2009 Motion to Modify the Trial Assignment Date is therefore DENIED.
Plaintiff's only identified witness is James Huddleston, who is located in Central Ohio. He can be readily deposed by counsel for defendant who is also located in Central Ohio. Defendant's representatives and Richard W. Lyons (the employment candidate) are the only other obvious witnesses.
The December 10, 2009 Final Pretrial Conference and the December 15, 2009 Trial Assignment shall therefore remain in place.
IV. Additional trial preparation matters
Counsel shall cooperate to complete discovery by the Final Pretrial Conference. James Huddleston should be made available for a discovery deposition if requested (as plaintiff's October 7 Memorandum represented he would be.) Likewise, defendant shall make any trial witnesses it proposes to call available for deposition by plaintiff no later than December 9.
Counsel are strongly encouraged to consult one another and attempt to stipulate to as many facts as possible before embarking on discovery.
Currently there is no jury demand. If one (or both) parties demand a jury trial, then no later than 24 hours prior to the Final Pretrial Conference, counsel for the party first demanding a jury trial shall supply other counsel and the court at chambers with their requested jury charge language specific to this case. (That is, without boilerplate already on the court's standard civil set of instructions about burden of proof, credibility, and the like.) Simply saying "We'll use OJI" is not sufficient. A jury charge will be submitted in writing and must, therefore, be completed so as not to delay trial.
Likewise, any proposed jury interrogatories to be requested shall be drafted and exchanged, and supplied to the court, 24 hours prior to the Final Pretrial Conference.
Counsel will be expected to pre-mark and exchange full sets of their trial Exhibits no later than 12:00 noon on December 10. Absent good cause, failure to exchange all Exhibits or to supply jury charge language or jury interrogatory language by these deadlines may result in the exhibits being ruled inadmissible, or result in a refusal to charge on the points of law or submit interrogatories that are omitted.
IT IS SO ORDERED.